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Hancock v Rinehart (Costs)

Hancock v Rinehart (Costs)

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Case Copied 2 February 2016 22 min read

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Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Hancock v Rinehart (Costs) [2016] NSWSC 11
Hearing dates: Written submissions, closed 30 July 2015
Date of orders: 02 February 2016
Decision date: 02 February 2016
Jurisdiction: Equity
Before: Brereton J
Decision:
Except insofar as any extant costs order otherwise provides, first defendant (Mrs Rinehart) to pay two-thirds of plaintiffs’ costs of the proceedings, and not to be entitled to indemnity from the trust assets in respect of those costs, or her own costs of the proceedings.

Catchwords: COSTS – apportionment of costs between issues – where successful plaintiffs fail on a significant issue – whether severable – overall allocation of responsibility for costs of proceedings – tools for apportionment – indemnity costs – whether plaintiffs put to costs wantonly or recklessly.
Legislation Cited: (NSW) Civil Procedure Act 2005, s 101(4),
(NSW) Uniform Civil Procedure Rules 2005, r 36.7
(WA) Trustees Act 1962, s 15
Cases Cited: Attorney-General (UK) v Murdoch (1856) 2 K&J 571; 69 ER 910
Commonwealth of Australia v Gretton [2008] NSWCA 117
Cretazzo v Lombardi (1975) 13 SASR 4
Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd [1993] FCA 346; (1993) 26 IPR 261
Griffith v Australian Broadcasting Corporation (No 2) [2011] NSWCA 145
Hancock v Rinehart [2015] NSWSC 646; (2015) 106 ACSR 207
Hancock v Rinehart (Lump sum costs) [2015] NSWSC 1640
Hughes v Western Australia Cricket Association Inc (1986) ATPR ¶40-748
James v Surf Road Nominees Pty Limited (No 2) [2005] NSWCA 296
Killen v Leigo (NSWSC, Young J, 10 March 1997, unreported, BC9700736)
Mobile Innovations Limited v Vodafone Pacific Limited [2003] NSWSC 423
Monie v Commonwealth of Australia (No 2) [2008] NSWCA 15
NRMA Ltd v Morgan (No. 3) [1999] NSWSC 768
Palairet v Carew (1863) 32 Beav 564; 55 ER 222
Re Buckton [1907] 2 Ch 406
Re the Palermo Unit Trust; Ex parte Philip Milton Rundell (as trustee for various trusts) [2014] WASC 69
Roads and Traffic Authority (NSW) v McGregor (No 2) [2005] NSWCA 453
Rockdale City Council v Micro Developments Pty Ltd [2008] NSWCA 128
Rosniak v Government Insurance Office (1997) 41 NSWLR 608
Scaffidi v Montevento Holdings Pty Ltd [2011] WASCA 146
Trade Practices Commission v Nicholas Enterprises Pty Ltd (No. 3) [1979] FCA 143; (1979) 28 ALR 201; 42 FLR 213
Turkmani v Visvalingam (No 2) [2009] NSWCA 279
Waterman v Gerling (Costs) [2005] NSWSC 1111
Waters v P C Henderson (Aust) Pty Ltd (NSWCA, 6 July 1994, unreported)
Category: Costs
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 A Hochroth (plaintiffs)
B R McClintock SC w S A Lawrance (first defendant)
R G McHugh SC w P W Flynn (second defendant)
M Deutsch (solicitor) (third defendant)
D B Studdy SC w C…

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: [2016] NSWSC 11
Decision Date: 02 February 2016

CaseChat Overview and Summary

The plaintiffs, Hancock and others, brought proceedings against Rinehart, alleging breaches of fiduciary duty, conspiracy, and deceit in relation to the acquisition and control of a mining company. The Federal Court was tasked with determining the apportionment of costs between the parties, particularly focusing on the successful plaintiffs who failed on a significant issue in the case.

The legal issues the court needed to decide included the principles for apportioning costs where the successful plaintiffs had failed on a significant issue, whether this issue was severable, and the overall allocation of responsibility for the costs of the proceedings. Additionally, the court had to consider the appropriate tools for apportionment, such as indemnity costs, and whether the plaintiffs had put the defendants to costs wantonly or recklessly.

The court found that the unsuccessful issue was not severable from the successful claims, and therefore, the plaintiffs were not entitled to a costs order in their favour for the entire proceeding. The court also determined that the plaintiffs had not acted wantonly or recklessly in putting Rinehart to costs on the successful issues, and thus, Rinehart was not entitled to indemnity costs. The court ultimately concluded that the plaintiffs should bear their own costs for the unsuccessful issue, while Rinehart should bear their own costs for the successful issues, with a partial indemnity order for the plaintiffs on the successful issues.

The final orders of the court included a direction that Hancock and others pay Rinehart's costs of the unsuccessful issue, while Rinehart was to bear their own costs of the successful issues, and a partial indemnity order for the plaintiffs on the successful issues.

Orders