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Welker v Rinehart (No 2)

Welker v Rinehart (No 2)

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Case Copied 7 October 2011 46 min read

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Supreme Court

New South Wales

Medium Neutral Citation: Welker & Ors v Rinehart & Anor (No 2) [2011] NSWSC 1238
Hearing dates: 23 September and 7 October 2011
Decision date: 07 October 2011
Jurisdiction: Equity Division - Duty List
Before: Brereton J
Decision:
First and second defendants' motions dismissed with costs.
Interim suppression order made pending application for leave to appeal pursuant to (NSW) Court Suppression and Non-Publication Orders Act, 2010, s 10, and alternatively pursuant to the inherent jurisdiction of the court, upon the ground referred to in s 8(1)(a) of that Act, that such order is necessary to prevent prejudice to the administration of justice, prohibiting disclosure by publication or otherwise of information as to any relief claimed in the proceedings or any pleading evidence or argument filed read or given in the proceedings.
Such order has effect, subject to revocation by this Court, until the expiration of 7 days from the date on which my written reasons for judgment given orally on 7 October 2011 are published on the Court's website, and thereafter if within that period the first defendant or second defendant has filed a summons for leave to appeal until the determination of that application or further order of this Court or of the Court of Appeal.
Pursuant to s 9(4), this order does not prohibit:
(a) Disclosure or publication of any judgment given in these proceedings to date nor of any orders made in the proceedings.
(b) Pursuant to s 11, it is specified that this order applies throughout the Commonwealth of Australia.
(c) Disclosure to Hancock Prospecting Pty Ltd nor to the professional advisers and potential witnesses or funders of any party to the proceedings (including Hancock Prospecting Pty Ltd), in every case only for the purposes of the proper conduct of these proceedings and/or the proposed appellate proceedings and provided that prior to such disclosure the person to whom the disclosure is to be made has been informed of this order and has acknowledged that they are bound by this order.

Catchwords: PRACTICE AND PROCEDURE - Stay of proceedings - court has jurisdiction to stay proceedings to enforce agreement by parties to refer disputes to mediation and arbitration - defendants invoke confidential mediation and arbitration clauses of deed - whether first and third plaintiffs bound by deed - condition precedent to certain parties being bound by deed that they provide letters acknowledging entered into deed without coercion or undue influence - issue whether first and third plaintiff provided such letters - no evidence from these plaintiffs disputing provision of letters - recital to subsequent deed recognises plaintiffs bound.
PRACTICE AND PROCEDURE - Stay of proceedings - application by beneficiaries to remove trustee - whether such a dispute susceptible to "private justice" - subject matter of dispute susceptible to mediation and arbitration.
PRACTICE AND PROCEDURE - Stay of proceedings - confidential mediation and arbitration procedure applicable to "disputes under this deed" - "under this deed" connotes dispute dealing with enforcement or invocation of…

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: [2011] NSWSC 1238
Decision Date: 07 October 2011

CaseChat Overview and Summary

In the case of Welker v Rinehart (No 2), the plaintiffs sought to enforce certain rights under a deed, and the defendants countered by invoking a stay of proceedings in accordance with the deed's mediation and arbitration clauses. The dispute was heard in the Supreme Court of New South Wales. The primary issue before the court was whether the first and third plaintiffs were bound by the mediation and arbitration clauses in the deed. This hinged on whether the plaintiffs had provided letters acknowledging their voluntary entry into the deed without coercion or undue influence. The court found that there was no evidence from these plaintiffs disputing the provision of such letters, and that a subsequent deed recognised their binding nature.

Another legal issue was whether the dispute about the removal of a trustee was susceptible to mediation and arbitration under the deed's terms. The court ruled that the dispute was indeed susceptible to such private justice mechanisms, as it dealt with the enforcement or invocation of rights created by the deed. The court also examined the scope of the mediation and arbitration clause, determining that it applied to disputes "under this deed", which meant disputes concerning the enforcement or invocation of rights created by the deed, and not disputes arising after the deed was executed.

The court found that the dispute about the removal of a trustee did not fall within the scope of the mediation and arbitration clause, as it was not a dispute "under this deed" but rather a dispute about the vesting date of the trust. Furthermore, the court held that the proceedings did not contravene the non-disparagement provision or the undertaking not to challenge the first defendant's right title or interest in the Group or any trust of which she was a beneficiary. The court also granted an interim suppression order under the Court Suppression and Non-publication Orders Act 2010, contingent on the determination of the stay application.

In summary, the court found that the first and third plaintiffs were bound by the mediation and arbitration clauses in the deed, but that the dispute about the removal of a trustee was not subject to those clauses. The court also granted an interim suppression order to protect the defendants' right to confidentiality in the event of an appeal.

Orders