Rinehart v Rinehart (No 3)
[2016] NSWSC 1645
•17 November 2016
Supreme Court
New South Wales
- Amendment notes
Medium Neutral Citation: Rinehart v Rinehart (No 3) [2016] NSWSC 1645 Hearing dates: 17 November 2016 Decision date: 17 November 2016 Jurisdiction: Equity Before: Stevenson J Decision: Plaintiffs granted leave to use discovered documents as set out at [15]
Catchwords: PRACTICE AND PROCEDURE – whether plaintiffs should be released from implied undertaking concerning documents disclosed pursuant to order for preliminary discovery – where second defendant has commenced proceedings in the Federal Court against the first plaintiff – where first plaintiff as trustee obliged to seek judicial advice as to whether she should defend those proceedings – where documents in question likely to be discoverable in Federal Court proceedings in any event – where all parties producing the documents in these proceedings consent to leave being granted Legislation Cited: Trustee Act 1925 (NSW) Cases Cited: Hancock v Rinehart [2015] NSWSC 646
Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3
Rinehart v Rinehart [2015] NSWSC 1201
Wellness Pty Ltd v Hamilton-Bond [2002] NSWSC 1259Category: Procedural and other rulings Parties: Bianca Hope Rinehart (First Plaintiff)
John Langley Hancock (Second Plaintiff)
Georgina Hope Rinehart (First Defendant)
Hancock Prospecting Pty Ltd (Second Defendant)Representation: Counsel:
Solicitors:
C H Withers (Plaintiffs)
B R McClintock SC (First Defendant)
J C Giles SC with T O’Brien (Second Defendant)
Yeldham Price O'Brien Lusk (Plaintiffs)
Speed And Stracey Lawyers (First Defendant)
Corrs Chambers Westgarth (Second Defendant)
File Number(s): SC 2014/353713
EX TEMPORE Judgment (REVISED)
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The plaintiffs, Ms Bianca Rinehart and Mr John Hancock, are beneficiaries of the Hope Margaret Hancock Trust.
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The plaintiffs brought these proceedings to seek preliminary discovery from the defendants, Mrs Gina Rinehart and Hancock Prospecting Pty Ltd, concerning the alleged underpayment of dividends to the Trust by reason of its shareholdings in Hancock Prospecting.
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When these proceedings were commenced, Mrs Gina Rinehart was the trustee of the Trust.
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On 28 May 2015, in separate proceedings, Brereton J appointed Ms Bianca Rinehart as trustee of the Trust in lieu of Mrs Gina Rinehart: Hancock v Rinehart [2015] NSWSC 646.
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On 28 August 2015, White J made orders for preliminary discovery: Rinehart v Rinehart [2015] NSWSC 1201.
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Such preliminary discovery has now been given, albeit only recently.
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On 21 September 2016, Hancock Prospecting commenced proceedings in the Federal Court of Australia against, amongst others, Ms Bianca Rinehart as trustee seeking declarations as to the proper construction of its constitution.
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The terms of Ms Bianca Rinehart's appointment as trustee of the Trust require her to obtain judicial advice under s 63 of the Trustee Act 1925 (NSW) as to whether she would be justified in defending the Federal Court proceedings and/or commencing proceedings against Mrs Gina Rinehart and Hancock Prospecting in relation to the alleged underpayment of dividends in Hancock Prospecting.
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Ms Bianca Rinehart, as trustee of the Trust, now seeks the Court's leave to be relieved from the implied undertaking that she has given this Court to use the documents disclosed in these proceedings only for the purpose of these proceedings.
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I have been greatly assisted by submissions from all parties on the question.
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The parties agree that Ms Bianca Rinehart should be given leave and agree on the terms on which the order should be made.
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I am satisfied that "special circumstances" exist to warrant, that is to say, that there is good reason to justify, the making of the order (see, for example, Wellness Pty Ltd v Hamilton-Bond [2002] NSWSC 1259 at [8] and Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3 at [31]).
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That is because, first, documents disclosed in these proceedings (especially concerning the dividends in question) are likely to be relevant to, and in any event discoverable in, the Federal Court proceedings.
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Second, the parties agree the release is appropriate. In particular Hancock Prospecting, whose documents are in question, and who is the applicant in the Federal Court proceedings, consents to the orders.
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In those circumstances, I make the following orders:
The first plaintiff be permitted to use the documents discovered by the defendants in these proceedings for the following purposes in her capacity as trustee of the Hope Margaret Hancock Trust:
considering whether to defend Federal Court of Australia proceeding NSD 1625 of 2016 commenced by the second defendant in the Federal Court of Australia (“Federal Court Proceeding”);
considering whether to bring any claims against one or both of the defendants in relation to the potential underpayment of dividends from the Cumulative Special Shares of the second defendant to the Trust;
taking legal and judicial advice in connection with 1(a) and 1(b) above; and
defending the Federal Court Proceeding or bringing any of the claims described in 1(b) above.
The first plaintiff be permitted to use the documents discovered by the defendants in these proceedings in her capacity as trustee of the Trust for the purpose of communications with the second defendant in relation to the subject matter of the Federal Court Proceeding.
Costs of the motion filed on behalf of the plaintiffs on 8 August 2016 be reserved.
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Amendments
22 November 2016 - Cathwords on coversheet amended
Decision last updated: 22 November 2016
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