Rinehart's son bows out of trustee quarrel
Gina Rinehart's daughter Bianca has nominated herself as the new trustee of the multi-billion dollar family trust after her brother John Hancock withdrew his bid.PT1M39S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-2v83b 620 349 October 9, 2013
Bianca Rinehart has been nominated as the new trustee of a $5 billion family trust by her brother John, in a shock last-minute decision in the bitter feud between Gina Rinehart and her two eldest children.
On Wednesday morning, the NSW Supreme Court heard that Mr Hancock would stand behind Bianca Rinehart as trustee, in the interests of family harmony.
Family feud: Bianca Rinehart and Gina Rinehart. Photo: Facebook
“I made the decision last night to ask Bianca to nominate as replacement trustee,” John Hancock said in a statement. “I also decided to stand down as replacement, in the interests of family harmony, and support Bianca's nomination.”
On Tuesday, the NSW Supreme Court was to begin adjudicating the dispute between Ms Rinehart and her two eldest children, John and Bianca, over management of the family trust set up by their grandfather, Lang Hancock.
The children argue their mother had not acted in the best interests of the beneficiaries and deliberately deceived them.
The dispute erupted two years ago, days before youngest daughter Ginia was to turn 25 and the trust was due to vest.
Mrs Rinehart told her children they would be bankrupted due to capital gains liability if they did not extend the trust and grant her further powers.
On Wednesday, Christopher Withers, the barrister for John and Bianca, told the court that Ginia proposed a different system, whereby a custodian trustee would be appointed.
Mr Withers said there were a number of issues that remained in the trial, including amendments made to the constitution of Hancock prospecting in 2006 and whether the children could get access to accounts and trust documents.
Richard McHugh, SC, for Ginia Rinehart, told the court his client wanted a “genuinely independent professional trustee” to be appointed as the decision maker, “taking all questions of control out of the beneficiaries.”
He said “no objection of any substance” had been raised by John and Bianca.
Justice Paul Brereton questioned how Ginia's suggestion would deal with Mrs Rinehart's concerns that the trustee needed to be a lineal descendent, but was told that, as the children would ultimately own the company, it would be sufficient.
Justices Brereton asked if the parties had give consideration to "joint trustees with some sort of deadlock mechanism" with an arbitrator who would not be a trustee but would be in a position to resolve any disputes.
Mr McHugh said that Bianca Rinehart had formally withdrawn her application to be considered as trustee in April and therefore should not be allowed to recontest the issue now. He said Ginia would need to gather evidence about her sister's suitability for the role, which would mean the hearing would be delayed.
"Your Honour would require an explanation about the delay," Mr McHugh said, "and none has been forthcoming. If the plaintiffs wanted to have Bianca as trustee, they should have said so months ago."
The court also heard that Fortescue Metals founder Andrew Forrest, who has sworn an affidavit in support of John as trustee and was due to be cross-examined on Friday, would no longer need to appear in court, given John had withdrawn his nomination as trustee.