Civil claims including fraudulent conduct and dishonest design allegations against billionaire heiress Gina Rinehart are set to be aired in a multi-family Supreme Court battle.
Mrs Rinehart’s eldest children Bianca Rinehart and John Hancock have accused her of breaching trustee obligations by moving Hope Downs assets from a structure trust her late father Lang Hancock set up for his grandchildren.
In a defence to litigation by the heirs of Mr Hancock’s late business partner Peter Wright, Mr Hancock’s two eldest grandchildren claim Mrs Rinehart used her trustee position to gain an advantage for herself.
A decision by Justice Rene Le Miere means these allegations stay part of a Supreme Court battle started in 2010 by Wright Prospecting.
At stake are cuts of the billions of dollars being generated by Hancock Prospecting from its joint venture with Rio Tinto covering the Hope Downs iron ore mines.
Wright Prospecting subsequently pulled John Hancock, Bianca Rinehart and their sisters Ginia Rinehart and Hope Welker as defendants in the action.
Descendants of late Pilbara prospector Don Rhodes are also claiming they are entitled to a 1.25 per cent royalty on Hope Downs production.
John Hancock and Bianca Rinehart, who have been at legal loggerheads with their mother for more than a decade, lodged defences and counterclaims against their mother over alleged dealings covering a big chunk of Lang Hancock’s legacy.
They allege a variety of deeds struck between 1992 and 1995 had the effect of securing the Hope Downs tenements for Hancock Prospecting and increasing her stake in the flagship company to 76.6 per cent.
Hancock Prospecting and Mrs Rinehart cried foul to the WA Supreme Court on the basis the children’s defence was virtually identical to allegations they had made against her in a Federal Court claim. Those Federal proceedings have been stayed pending arbitration.
Although Mrs Rinehart and Hancock have not filed a defence to the claims made against them in the Federal Court proceedings, the case has proceeded on the basis they denied every material allegation of wrongdoing.
Justice Le Miere upheld Mrs Rinehart and Hancock Prospecting’s application that John and Bianca’s counterclaim naming various related parties be sent to arbitration.
But the WA Supreme Court judge rejected their application for John and Bianca’s defence to be stayed and sent off to arbitration. “There is no abuse of process,” he said.
Justice Le Miere said the Wright and Rhodes interests were seeking outcomes inconsistent with the Hope Downs rights being claimed by John and Bianca.