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Lawyers for two of mining billionaire Gina Rinehart's children have asked the Supreme Court why their mother will not front court to answer key questions in a case over billions of dollars in Pilbara iron ore mines.
Key points:
- Legal action is being taken by Bianca Rinehart and John Hancock
- They claim Lang Hancock placed assets in a family trust, partly for them
- Their lawyers want Gina Rinehart to present for cross-examination
Bianca Rinehart, who was in court on Monday, and John Hancock claim their grandfather Lang Hancock, placed mining assets, including the Hope Downs tenements, in a family trust partly for their benefit.
But last week, lawyers for Gina Rinehart argued Mr Hancock had actually placed them in the trust behind his daughter's back, solely for his benefit and that of his then-wife Rose Porteous.
Bianca and John's lawyer Christopher Withers told the court today documents show that was not the case, and accused Mrs Rinehart of "calculated and deliberate fraud".
"Gina knew exactly what Lang was doing. Ultimately, we submit that [Hancock Prospecting] cannot prove its allegations," Mr Whithers told the court.
"For the same reason, the argument that Lang transferred assets into [Hancock Mining Limited] in order to avoid the scrutiny of Gina and in order to funnel money to Rose is particularly unpersuasive when one considers the fact that Lang kept her fully appraised of what he was doing."
'Where is Gina?'
Mr Whithers challenged Mrs Rinehart to front the court in Perth.
"We ask this. Where is Gina? She is very much alive and able to give evidence as to these events," he said.
"She won't come to court and allow herself to be cross examined about the critical events in this case .
Mrs Rinehart is today due to give a keynote address at a mining conference in Perth.
Mr Whithers was delivering his opening address in John and Bianca's case over the Hope Downs tenements, in what is the fourth week of a massive civil trial involving multiple parties' claims to Hope Downs.
Previously, the court heard a week-long opening address from Wright Prospecting, which is claiming royalties in some Hope Downs tenements and an ownership share in others, known as East Angelas.
Wright Prospecting brought John and Bianca into the case to bind them to any court decision.
There was also a week-long opening address by Mrs Rinehart's Hancock Prospecting, and several days of opening by DFD Rhodes, representing the heirs of another businessman and miner Don Rhodes, who also claims royalties from Hope Downs.
Hancock Prospecting last week argued in court Mr Hancock had breached his fiduciary duties by moving the Hope Downs and East Angelas tenements into a family trust to avoid scrutiny by Gina Rinehart and funnel money out under pressure from Ms Porteous to fund the luxury lifestyle she wanted.
Claims of 'calculated and deliberate fraud'
Mr Whithers, the lawyer for John and Bianca, said documents showed Mr Hancock in fact moved the assets into the family trust to benefit his grandchildren.
He also repeated a claim previous aired in a court that Mrs Rinehart had later acted to move the Hope Downs and East Angelas exploration licences into Hancock Prospecting "only as a result of calculated and deliberate fraud by Gina after Lang died".
"We don't use the word fraud lightly," Mr Withers said.
"The events after Lang died constituted an egregious and dishonest fraud, orchestrated by Gina, and carried out by people who did whatever Gina wanted without question.
"Lang was simply not prepared to give Gina everything she wanted — which was everything," he said. "But Gina was not prepared to take no for an answer."
Bianca and John have previously brought legal action on this issue, accusing their mother of "stealing" from them by removing assets from the family trust.
Query met with 'barrage of lies, threats'
Mr Whithers said this had left Mrs Rinehart with 76 per cent of all mining assets in Hancock Prospecting, rather than the 51 per cent as set out in a 1988 agreement.
He said when John Hancock confronted her about this, he was met with a "barrage of lies, threats and intimidation".
Mr Whithers told the court this was done with the intent of preventing John Hancock from finding out Mrs Rinehart had "defrauded" him and his siblings of their inheritance.
He went further, arguing in court Mrs Rinehart engaged in a series of transactions to "devalue and destroy" the family trust, "increasing her personal wealth at the expense of her children".
"This fraud was subsequently covered up by Gina with a false narrative to her children and the public generally, that [Hancock Prospecting's] success and her own personal success was simply the product of hard work rather than dishonesty," he said.
"The false narrative is that Lang dishonesty breached his duties and grossly mismanaged [Hancock Prospecting] and created a mess with the Romania project, which Gina had to clean up."
Lang Hancock's 1980s deal to export iron ore to Romania was also used by Mr Whithers to try to cut down the Wright Prospecting claim.
He recounted Mr Hancock had been told in the 1980s by then WA Premier Brian Bourke the only way he would be granted further exploration licences was if he developed tenements into mines and found new export markets, outside of Japan.
Wright case borne out of 'remorse'
The court heard Mr Hancock set about doing that, namely by developing a $600 million iron ore export deal with Romania, which was signed in Romania in April 1985 with Mr Bourke present.
Mr Whithers said Wright Prospecting founder Peter Wright did not want to be part of this project because he was "risk averse" and their prospecting partnership continued to fade, as set out in several partnership agreements during the 1980s.
He said Mr Wright was not interested in developing mines and the acquisition of Hope Downs tenements was not done for their partnership, as now claimed by Wright Prospecting.
He added that the current long-delayed case now brought by Wright Prospecting was borne out of "remorse" by Mr Wright's heirs, who wished he had been less risk averse and had joined Mr Hancock in the now-extremely valuable project.