Hancock v Rinehart - [2013] NSWSC 1979

Supreme Court

New South Wales

Medium Neutral Citation: Hancock v Rinehart [2013] NSWSC 1979
Hearing dates: 10 October 2013
Decision date: 10 October 2013
Jurisdiction: Equity Division - Corporations List
Before: Brereton J
Decision:
Decline to permit plaintiffs to propound second plaintiff as candidate for replacement trustee.

Catchwords: TRUSTS AND TRUSTEES - Appointment of replacement trustee - where order made directing plaintiffs notify defendants as to identity of proposed replacement trustee by certain date - second plaintiff proposed as replacement trustee after deadline, on day before trial commenced - desirability that court have before it all reasonable available options - injustice of denying defendants opportunity to dispute fitness and appropriateness of proposed replacement trustee - not just to permit plaintiffs to belatedly propound second plaintiff.
Category: Interlocutory applications
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)
N Hutley SC w B McClintock SC, C Bova & J Hutton (first defendant)
R McHugh SC w P Flynn (second defendant)
M Deutsch (solicitor) (third defendant)
D Studdy SC w I 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

Plaintiffs' Application Regarding Appointment Of Replacement Trustee (T86)

HIS HONOUR: When the trial commenced, the plaintiffs sought to propose as a candidate for appointment as replacement trustee the second plaintiff, Bianca Rinehart. Leave to do so is opposed by the second defendant, Ginia Rinehart.

Although the following summary is incomplete, the essential relevant history is as follows. In the plaintiffs' original pleading, no replacement trustee was identified. The second defendant made a number of requests for particularisation of which of the plaintiffs was to be nominated as replacement trustee. The defence filed by the second defendant on 8 February 2012 she objected to "such of the plaintiffs as may subsequently consent to becoming trustee of the trust" on grounds specified in paragraph 84 of that defence. Ultimately, on 3 August 2012, the solicitors for the then plaintiffs indicated that, in the event of the first defendant's removal they would seek the appointment in her place of the then first plaintiff Hope Welker, and the then third plaintiff Bianca Rinehart.

Following Hope Welker's ceasing to be a plaintiff and becoming a submitting defendant in the proceedings, doubt arose as to whether she would still be nominated by the remaining plaintiffs as a replacement trustee. In that context, at a directions hearing on 12 March 2013, I made an order directing the then second plaintiff, John Hancock, and the then third plaintiff, Bianca Rinehart, to notify the defendants in writing as to the identity of their proposed replacement trustee or trustees by 9 April 2013. On 4…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2013] NSWSC 1979
Decision Date: 10 October 2013

CaseChat Overview and Summary

In the matter of Hancock v Rinehart, the court was asked to determine whether the appointment of a replacement trustee, proposed by the plaintiffs after a specified deadline, could be considered by the court. The defendants argued that the delay in proposing the replacement trustee denied them the opportunity to challenge the suitability of the individual in question. The plaintiffs, on the other hand, contended that the court should consider all reasonable options available to it to resolve the dispute.

The central legal issue before the court was whether it was appropriate to consider the appointment of the second plaintiff as a replacement trustee, given that this proposal was made after the deadline set by the court. The court needed to weigh the importance of having all reasonable options before it against the potential injustice of denying the defendants the opportunity to dispute the suitability of the proposed replacement trustee.

The court acknowledged that it is desirable for it to have before it all reasonable available options for resolving the dispute. The court also recognised the injustice of denying the defendants the opportunity to dispute the fitness and appropriateness of the proposed replacement trustee. Therefore, the court held that it was appropriate to consider the appointment of the second plaintiff as a replacement trustee, despite the late proposal, to ensure that all reasonable options were considered. The court emphasised that this decision was not just to permit the plaintiffs to belatedly propound the second plaintiff, but to ensure that all available options were considered to resolve the dispute.

The final orders of the court were to allow the appointment of the second plaintiff as a replacement trustee, while also recognising the importance of ensuring that all parties had the opportunity to challenge the suitability of the proposed replacement. The court's decision highlights the importance of considering all reasonable options in disputes involving the appointment of trustees and the need to ensure that all parties have the opportunity to challenge the suitability of proposed replacements.

Orders