Add Category
Mining magnate Gina Rinehart's children would have benefited from the family's mining empire, as her father Lang Hancock wanted it, if she had acted "honestly" and not diverted assets to entities under her control, the WA Supreme Court has been told.
Key points:
- Lang Hancock changed his will twice in the months before his death, the court heard
- His daughter Gina Rinehart tried to stymie his planned BHP iron ore deal
- His March 1992 deed disinherited his wife Rose Porteous
Christopher Withers, SC, counsel for Mrs Rinehart's two eldest children John Hancock and Bianca Rinehart, made the comments during a civil trial into competing claims by three separate parties to a stake in the Hope Downs iron ore mines and tenements in Western Australia's Pilbara region.
John and Bianca claim they are owned a share of the assets because their grandfather, Mr Hancock, had put them in a family trust for their benefit before he died.
Mr Withers had previously accused Mrs Rinehart of "fraud" by taking the assets out of the trust and into Hancock Prospecting to enrich herself at the expense of her children
In court on Tuesaday, Mr Withers said an entity called Hancock Resources Limited (HRL) had been set up by Mr Hancock as the mining arm of the family's iron ore companies.
"It was well positioned to become a highly successful mining operation," Mr Withers said.
Rinehart 'took control over everything'
But after Mr Hancock's death in March 1992, Mr Withers said Mrs Rinehart took control and did not honour a 1988 agreement which was supposed to leave 51 per cent of the assets to her and 49 per cent to her children.
Mr Withers said if Mrs Rinehart had "acted honestly" and stuck to the agreement, HRL would have made substantial profits which would have flowed to the children, "which is what Lang had wanted and agreed with Gina," he told the court.
"That did not happen because when Lang died, Gina took control over everything and was able to divert the assets within (the family trust) and HRL to (Hancock Prospecting)."
Mr Withers said Mrs Rinehart then consolidated her control of the various Hancock entities and "stacked those boards with directors who were unquestioningly loyal to her, and as we will see, did whatever she wanted".
Lang Hancock tired of the pressure
Earlier, the court heard that in the months before his death, Mr Hancock appeared "worried, tired and an exhausted man" who said he had enough of the pressure from his then-wife Rose Porteous "and simply wanted some peace".
Mr Hancock wanted to change his will to give Ms Porteous a 50 per cent share in certain mining tenements, which he did in August 1991, despite his daughter's objection as it threatened her inheritance, the court was was told.
It was a radical change from a 1988 agreement, under which Mrs Rinehart would have received 51 per cent of mining assets and her children 49 per cent.
"I honestly believed he was distraught and had enough of Rose," Mr Hancock's late solicitor Carnegie Fieldhouse said in a proof of evidence lodged for a previous legal proceeding.
"He said to me that he wished to change his will and said, 'How do we get Rose 50 per cent of the big money'?"
End of Lang Hancock's life marred by tension
Mr Withers has been trying to demonstrate that Mr Hancock acted in the interests of his grandchildren and for their benefit when he placed Hope Downs assets into a family trust, and was not acting solely to enrich himself and Ms Porteous, as claimed by Mrs Rinehart's lawyers.
By 1991, the court was told, Mr Hancock knew he was very sick.
In October of that year, he collapsed on the floor of Prix d'Amour, the all-white 'Gone With the Wind'-inspired mansion overlooking the Swan River in Perth, that he shared with Ms Porteous.
People around him were concerned he may not survive another surgery, Mr Withers said.
But Mr Hancock was still also at odds with his daughter, Mrs Rinehart.
"Lang was gravely ill at that point and he had been fighting with Gina for years," Mr Withers said.
Gina Rinehart at odds with Lang over Rose
Mrs Rinehart had opposed his marriage to Ms Porteous, and the court was previously told he had referred to Mrs Porteous by "degrading names", including "oriental concubine" and had gone to the Department of Immigration in an effort to have her deported.
Mrs Rinehart had also been strenuously against an iron ore export deal Mr Hancock had struck with Romanian dictator Nicolae Ceaușescu's government in 1985, with then-WA Premier Brian Burke present at the signing ceremony in Romania.
In 1991, at the time of Mr Hancock's illness, he was also trying to sell another Pilbara mining tenement, then-known as McCamey's Monster, to BHP "as quickly as possible".
But the court was told Mrs Rinehart had acted to stymie the deal. Mr Withers said Mr Hancock knew the deal was at risk but did not know who was behind it.
Then in March 1992, Mr Hancock signed a deed in relation to the McCamey's deal, which again helped reverse his will arrangements.
Inheritance plan changed again
Mr Withers said Mr Hancock took the family shelf company Zamoever out of his estate in that deed "that had the effect of disinheriting Rose".
It meant, he said, that the inheritance arrangements reverted to the 1998 agreement, where Mrs Rinehart would receive a 51 per cent share of mining assets and his grandchildren, her children, 49 per cent.
"Gina would control (the family trust) upon Lang's death, as she would hold the shares in Zamoever, but be doing so in her capacity as trustee for the children," Mr Withers said.