Supreme Court New South Wales Medium Neutral Citation: Hancock v Rinehart [2013] NSWSC 1980 Hearing dates: 11 October 2013 Decision date: 11 October 2013 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Leave to propose managing and custodial trustee under (WA) Trustees Act 1962 as replacement trustees refused. Catchwords: TRUSTS AND TRUSTEES - Appointment of replacement trustee - second defendant proposes appointment of custodian trustee and managing trustee under (WA) Trustees Act 1962 - proposal aimed at overcoming any difficulty that might be occasioned by appointment of non-Hancock family member - consideration of proposal without injustice to plaintiffs not possible except at cost of an unacceptable adjournment - leave refused. Legislation Cited: (WA) Trustees Act 1962 Category: Interlocutory applications Parties: John Langley Hancock (first plaintiff) Bianca Hope Rinehart (second plaintiff) Gina Hope Rinehart (first defendant) Ginia Hope Frances Rinehart (second defendant) Hope Rinehart Welker (third defendant) Hancock Prospecting Pty Ltd (fourth defendant) Hope Downs Iron Ore Pty Ltd (fifth defendant) Representation: Counsel: C Withers w N Zerial & A Hochroth (plaintiffs) N Hutley SC w B McClintock SC, C Bova & J Hutton (first defendant) R McHugh SC w P Flynn (second defendant) M Deutsch (solicitor) (third defendant) D Studdy SC w I Colquhoun (fourth & fifth defendants) Solicitors: Yeldham Price O'Brien Lusk (plaintiffs) Corrs Chambers Westgarth (first, fourth, fifth defendants) Gadens Lawyers (second defendant) Deutsch Miller (third defendant) File Number(s): 2011/285907 Judgment - EX TEMPORE Second Defendant's Application Regarding Replacement Trustee (T101) 1HIS HONOUR: In the judgment I delivered yesterday afternoon I referred in passing to the circumstance that over the last weekend, or in the first days of this week, a proposal emerged from the second defendant involving an innovative, if somewhat complex, utilisation of provisions of the (WA) Trustees Act 1962, for the appointment of a custodian trustee and managing trustee which, in the context of co-operation by the first defendant to permit amendment of the constitution of HPPL, might overcome any difficulty that might be occasioned by the appointment of a non Hancock family member as replacement trustee. At that stage, the plaintiffs did not outright oppose the proposal being considered, but indicated that further detail of it was required before it could realistically be considered. This morning the second defendant has provided that detail, as a result of what is clearly a great deal of industry and effort in putting before the Court a realistic, workable and detailed proposal. 2As I said yesterday, all other things being equal, it is highly desirable that the Court have available to it all realistically open options for the appointment of a replacement trustee. On the other hand directions were made, as again I referred to in yesterday's judgment, to ensure that the issues concerning a replacement trustee were refined, confined and crystallised at an early stage. 3Ultimately, while a substantial part of what the second defendant now puts forward is "inanimate" in the sense that it involves the establishment and use of a number of corporate and trust structures, it depends on the placement of particular persons, corporate or individual, to manage those structures, in particular as managing trustee. 4The plaintiffs foreshadow that they wish to oppose the appointment of the proposed managing trustee because of a relationship between it and HPPL (and/or other related entities), and they wish to have an opportunity to investigate and oppose the particular individuals who would be responsible under that structure for managing the affairs of the trust. 5While, at first sight, it appears on the material put forward by one side of the argument, as it often does on material put forward by one side of an argument, that the proposal is an eminently reasonable one, it is just not possible to gainsay the possibility that investigation and further evidence might show it to be inappropriate for one or more reasons. This is in a sense, a fortiori the situation I dealt with yesterday concerning Bianca, because while Bianca had at least been nominated and considered at one stage of the proceedings, in this case the persons involved have been named for the very first time this morning, so that there has not even been the opportunity to investigate them that there, at least hypothetically, previously was in respect of Bianca. 6As I have said, it would be of much assistance to the Court to have available all reasonably open proposals, which include Bianca and the second defendant's proposal. But the rights of parties to contest proposals, especially where litigation had been structured and directions made in a way to crystallise those issues and provide those opportunities, are not lightly to be set to one side. 7I cannot see how this proposal can be allowed to be considered at this hearing, except at the cost of an unacceptable adjournment, without injustice to the plaintiffs. In those circumstances, again regrettably, I am compelled to the conclusion that it cannot be allowed to be advanced at this hearing. Again, as I indicated yesterday, if at the end of the hearing the Court is left in the position that it is unable to appoint any of the remaining candidates, then the Court may seek the further assistance of the parties. 8I should add that while these issues are not to be decided on the basis that what is good for one party is good for another, it is highly desirable that both the options that I have rejected be available to the Court. If the relevant parties were able to agree to that course, it would much facilitate the conduct of the proceedings; but, in the absence of the agreement between them, it seems to me that this proposal cannot be considered at this hearing. 9I therefore decline to permit it to be advanced. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 April 2014