Hancock v Rinehart

[2014] NSWSC 860

Supreme Court

New South Wales

Medium Neutral Citation:	Hancock v Rinehart [2014] NSWSC 860
Hearing dates:	Thursday 26 June 2014
Decision date:	26 June 2014
Jurisdiction:	Equity Division
Before:	Brereton J
Decision:	Tender admissible
Catchwords:	EVIDENCE - relevance - tendency
Legislation Cited:	(NSW) Evidence Act 1995, s 94(3), s 97
Cases Cited:	Hancock v Rinehart [2014] NSWSC 844
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)

1. HIS HONOUR: On Tuesday I delivered a judgment which was published in written form yesterday morning in which I held that, in principle, a class of documents which the plaintiff proposed to tender was admissible and would, subject to any objections to individual documents, be admitted [2014] NSWSC 844. Counsel for the first defendant has, in his usual courteous way, sought leave to further argue the question and I have permitted him to do so, and have reconsidered the matters on which I then ruled.

1. Mr McClintock SC quite rightly points out that, contrary to what I said in that judgment, s 95(2) of the (NSW) Evidence Act 1995 means that evidence that is relevant for another purpose cannot be used to prove a particular matter under the tendency evidence provisions, so that the usual position that evidence in for one purpose is in for all purposes, does not extend to make it admissible for tendency purposes.

1. One of the issues which required consideration is whether it is relevant to prove in the present part of the case that the first defendant committed breaches of trust. The plaintiffs contend that it is relevant to establish that she is a defaulting trustee, and say that such a conclusion would reinforce the requirement that any replacement trustee be independent of her. The defendant's submission is that it is common ground that independence is a prerequisite, and its desirability in the context of this case at least, is not increased merely by establishing that breaches of trust preceded the resignation of the outgoing trustee.

1. At the hearing in October 2013 I rejected as irrelevant evidence that went to the question of the alleged breaches of trustin or about September 2011, as the first defendant had by then indicated that she would retire and pay the costs of the proceedings for her removal to date, so that proving grounds for her removal was no longer necessary or relevant.

1. The issues before the Court now are different, and relate to the fitness and appropriateness of the competing proposals for a replacement trustee. I accept that there is no longer a fact in issue in this litigation as to whether or not the first defendant has committed the breaches of trust particularised in the pleadings, because it is no longer necessary to prove a breach of trust to found her removal. That does not mean, however, that her past conduct is no longer relevant. There is very much a fact in issue in the present part of the hearing as to whether the first defendant is a person who is likely to attempt to overbear an apparently independent trustee. One of the plaintiffs' fundamental complaints about the defendants' proposals are that the defendants' nominees are insufficiently robust to resist the pressures from the first defendant to which the plaintiffs contend is likely that they will be exposed.

1. I am afraid I am unable to accept Mr McClintock's submission that the question is simply one of fact, whether the first defendant will or will not attempt to overbear an independent trustee. When the Court is dealing with future matters rather than past matters, it is ordinarily involved in assessing risks and likelihoods, rather than in finding whether something will or will not happen. In this case, there is a fact in issue as to whether the first defendant is or is not a person who is likely to attempt to overbear an independent trustee. That brings the matter squarely within s 94(3), so that Part 3.6 of the Evidence Act does not apply; in other words, the plaintiffs seek to prove the first defendant's tendencies, not so that it may be concluded from that tendency that she has committed some other act, but because that tendency is itself a relevant consideration.

1. There is also a fact in issue in the present part of the proceedings - as it is raised in the second defendant's notice of objection - as to or whether the second plaintiff lacks the capacity to be impartial. In support of her objection, the second defendant deploys the second plaintiff's alliance with the first plaintiff against their mother, their sisters the second defendant and (perhaps to a lesser extent) the third defendant, in the context of these proceedings. The second plaintiff's response is to say that, on the facts available to her, she acted reasonably and properly and was left with little choice or option but to embark on the course she did, so that her having done so should not be seen as disqualifying her on grounds of impartiality.

1. On that basis the second plaintiff is entitled to prove what were the matters and facts that she relied on in deciding to take the course of action she did in order to justify her position in response to the criticism of want of capacity to be impartial.

1. It seems, from various submissions made on behalf of the first defendant, that my acceptance of the material the subject of the present tender has come as some surprise to them. It is with great respect difficult to see how that could be so, since the plaintiffs have given very clear notice of their intention to tender that material - in the correspondence to which I referred in Tuesday's judgment, namely, a letter in October, another letter in February which contained a schedule specifying each document the subject of the tender, their notice of objection and, ultimately, their written submissions of last Friday. If the defendants have assumed that, because this material was rejected as irrelevant to the issues then before the Court in October of last year, it would, where very clear notice of the intention to retender it had been given, again be rejected as irrelevant to different issues nine months later, they may have miscalculated. But no legitimate claims of lack of notice can be made.

1. While that means that the basis of admissibility is somewhat different than that which I first articulated on Tuesday, for the reasons I have just given, I remain of the view that the material is admissible.

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