Today, after two years of legal wrangling, the New South Wales Supreme Court was scheduled to hear claims that Australia’s richest person Gina Rinehart acted inappropriately in her role as head of a $5 billion family trust.
The Hope Margaret Hancock Trust, set up by Rinehart’s father Lang Hancock in 1988, contains a bulk of the wealth amassed by the mining dynasty over decades, and if the case proceeds an open court is expected to hear details of its inner workings.
(At the time of writing the hearing has been delayed to discuss a proposal by Rinehart for a new trustee, which would stop the hearings from going ahead.)
Even if the court hearings are abandoned at the last minute, the events that have led to this point have given a fascinating insight into the trust’s workings. Here are 10 key facts you should know about Australia’s biggest family legal tussle.
1. Rinehart’s children John Hancock and Bianca Rinehart are bringing the action, accusing their mum of changing the date at which they could access the trust without telling them.
2. The trust was established in 1988 by Rinehart’s father, Lang Hancock, with her children as beneficiaries. It was due to vest on September 6 2011, when the youngest child turned 25. Three days before that date Rinehart wrote to them saying they would face a capital gains tax bill which would leave them bankrupt, which was why she changed the date.
3. Before the case today, Rinehart’s other daughter Ginia — who has sided with her mum — lost an appeal to have the case taken to arbitration, which would have been private.
4. Last week Rinehart surprised a lot of people when her lawyers told a hearing she would be prepared to step down as head of the trust, in an attempt to prevent the case going to court. Her lawyers said this offer should have meant the matter was dealt with. Rinehart wanted to then help decide on a new head, who she thought should be a family member with knowledge of the resources sector. Ginia has been tipped as a potential option.
5. A claim against Rinehart was first lodged in in September 2011, and originally involved Hancock, Rinehart and Hope Rinehart Welker. Welker later pulled out of the case, with lawyers not providing a reason to the court.
6. Earlier this year, private emails were released as part of an affidavit that showed a starting back-and-forth between John Hancock and Jay Newby, the CFO and company secretary of Hancock Prospecting, in which they discussed the trust. Hancock also bragged about his luxury Thai villa — which has a water slide — and Newby warned that he could be chased by the ATO if he didn’t accept his mum’s tax advice.
“Please don’t think for one second this means you can enjoy your Thai palace should a court-appointed designate be appointed for your bankruptcy,” Newby wrote in one of the emails.
Emails also showed Rinehart accusing her kids of being lazy.
7. Jay Newby wrote in an email to PwC, according to court documents, that he wanted a “sanitised” version of the tax advice given to the children.
8. Hancock later received private advice from the tax office which said the trust would not be subject to a crippling capital gains tax.
9. In late 2012, Rinehart’s children were awarded 80% of their legal costs after their mum lost one of many attempts to have the case thrown out.
10. John Hancock has said he bringing the action against his mum to honour his grandfather’s (John Hancock) wish that he would one day be in charge of the mining empire he established, telling Fairfax that he “won’t give up.”
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