Hancock v Rinehart
[2014] NSWSC 932
•27 June 2014
Supreme Court
New South Wales
Medium Neutral Citation: Hancock v Rinehart [2014] NSWSC 932 Hearing dates: 27 June 2014 Decision date: 27 June 2014 Jurisdiction: Equity Division Before: Brereton J Decision: Tender rejected
Catchwords: EVIDENCE - admissibility and relevancy - facts relevant to facts in issue - whether highly confidential commercial documents can be tendered to assist interpretation of a contract clause - whether the tender purpose is relevant to the proceedings - tender rejected principally on lateness Category: Procedural and other rulings Parties: John Langley Hancock (first plaintiff)
Bianca Hope Rinehart (second plaintiff)
Gina Hope Rinehart (first defendant)
Ginia Hope Frances Rinehart (second defendant)
Hope Rinehart Welker (third defendant)
Hancock Prospecting Pty Ltd (fourth defendant)
Hope Downs Iron Ore Pty Ltd (fifth defendant)Representation: Counsel:
C Withers w N Zerial & A Hochroth (plaintiffs)
NC Hutley SC w BR McClintock SC & CN Bova (first defendant)
RG McHugh SC w PW Flynn (second defendant)
M Deutsch (sol) (third defendant)
DB Studdy SC w C Colquhoun (fourth & fifth defendants)
Solicitors:
Yeldham Price O'Brien Lusk (plaintiffs)
Corrs Chambers Westgarth (first, fourth, fifth defendants)
Gadens Lawyers (second defendant)
Deutsch Miller (third defendant)
File Number(s): 2011/285907
Judgment (ex tempore)
HIS HONOUR: The first defendant - who has, to this point in this part of the case, tendered no evidence, and when effectively all the evidence is practically closed and the Court is about to embark on submissions - now seeks to tender two folders of documents, said to be highly confidential and to comprise transactional documents which provide the commercial background of the Hope Downs Joint Venture Agreement, the construction of clause 13.3 (being the "change of control" clause) in which is a critical issue in the proceedings.
The tender is said to be for two purposes: first, to support two arguments said to be relevant to the construction of the change of control clause; and, secondly, to answer a submission made by the plaintiffs that, in assessing the risk of the change of control clause being triggered, the Court must be mindful that it will not be pronouncing a decision on the construction of that clause that can bind the other party to the joint venture agreement, namely the Rio Tinto entity, and will not have before it all the evidentiary material that might be deployed to establish the contractual matrix and purpose that might be deployed in a suit between HDIO and Rio Tinto.
The documents are said to be highly confidential because of their commercial nature. They have not, at this stage, been provided to the plaintiffs' representatives who have, as officers of the Court, not unreasonably declined to give a confidentiality undertaking which was a condition of their provision.
The first defendant's counsel submits that, with the exception of their relevance to two arguments to which I shall come but in support of which it is said that two aspects of the documents will be deployed, the purpose of their tender is to demonstrate their irrelevance to the construction of clause 13.3.
The two positive arguments that are to be advanced in reliance on these documents are apparently, first, that the current corporate structure involving the interposition of Hancock Minerals between HDIO and HPPL was in place at the time of the joint venture agreement and was known to both parties to it. Mr Withers has indicated that so much is not in dispute, and, accordingly, it is unnecessary to tender evidence to make it good.
The second argument is said to be to identify, from a single document called the "Services and Co-Mingling Deed", the use of a concept of "indirect control" in a contemporaneous document. However, that document is already in evidence.
Thus the balance of the voluminous, highly confidential documentation is tendered at this belated stage for the purpose only of showing that it is irrelevant to the construction of clause 13.3. That, however, is not something which the plaintiffs must accept on the defendants say so, and the plaintiffs would be entitled - and one would think their lawyers practically bound - to read those documents closely to see in what if any way they might affect the issues.
The argument that the plaintiffs advance - that this Court would not be positioned to make a decision that there was no risk of triggering the change of control clause, in the absence of Rio Tinto and the evidence it might deploy - was founded on and, indeed mimicked that advanced by counsel for the first defendant at the hearing in October last year [T143.7 to 143.50].
On 30 May 2014, the plaintiffs' solicitors wrote to the defendants' solicitors requesting or indicating that they were prepared to give further consideration to their position concerning the question of risk associated with the defendants' trustee structure proposal and requested that the defendants provide information as to how it was contended that any such risk could be managed and that, if there was a clear legal argument as to why clause 13.3 would not be triggered, that that argument be provided. In addition, the plaintiffs proposed that Rio Tinto be approached to ascertain its attitude. There was no substantive or positive response to any of those requests.
To my mind, the absence of contemporaneous transactional documentation which, in any event, is said to be irrelevant to the construction of clause 13.3, while not irrelevant, is likely to be a factor of the very slightest significance in evaluating the question of risk associated with the defendants' trustee structure proposal. The absence of Rio Tinto and the arguments that Rio Tinto might deploy is of greater significance than the absence of contemporaneous matrix material which no-one contends is relevant, although the plaintiffs submit that one cannot be certain that it might not impact on the position.
In that context, and given that the plaintiffs do no more than mimic the first defendant's submission of eight months ago and the late stage at which this voluminous material comes, under a cloak of confidentiality, it seems to me that to expect the plaintiffs to deal with this now would be quite unreasonable.
Principally on the ground of its lateness, but fortified by the fact that the positive arguments which it is said to be addressed anyway, and the negative argument seems to be one of the slightest significance, the tender is rejected.
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Decision last updated: 16 July 2014
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