Rinehart & Anor v Rinehart & Anor [2015] NSWSC 1201

Supreme Court New South Wales

Medium Neutral Citation: Rinehart & Anor v Rinehart & Anor [2015] NSWSC 1201 Hearing dates: 23, 24 June 2015 Decision date: 28 August 2015 Jurisdiction: Equity Before: White J Decision: Refer to paras [110] and [111] of judgment. Catchwords: PRACTICE AND PROCEDURE – application for preliminary discovery – plaintiffs are two beneficiaries under a trust – first plaintiff succeeded the first defendant as trustee of the trust – shares held on trust entitled holder to dividends calculated on a certain basis – whether plaintiffs may have claims in respect of underpayment of dividends, inducing breach of contract, breach of trust, knowing involvement in a breach of trust, and breach of director duties – whether plaintiffs would have standing to bring potential claims against the former trustee and a third party – whether information obtained by plaintiffs to date is sufficient for them to decide whether or not to bring proceedings – whether plaintiffs made reasonable enquiries – held that an order for preliminary discovery should be made in respect of most categories sought by the plaintiffs

TRUSTS AND TRUSTEES – parties to suits – current trustee gave an undertaking not to commence proceedings on behalf of the trust – whether proceedings by a beneficiary against a former trustee would be brought on behalf of the trust – whether necessary to show 'special circumstances' – whether plaintiffs might be entitled to bring proceedings against a third party – held that the beneficiaries could have standing in their own right to bring proceedings against the former trustee and a third party

CORPORATIONS – constitutions and articles of association – amendment to constitution – doctrine of unanimous assent – whether members may vary the company's constitution by a course of dealing despite the formal requirements for amendment not being met – whether the Duomatic principle applies to variations of substantive rights – held that the plaintiffs could not rely on the Duomatic principle in support of their claim for preliminary discovery Legislation Cited: Corporations Act 2001 (Cth) Evidence Act 1995 (NSW) Iron Ore (Wittenoom) Agreement Act 1972 (WA) Iron Ore (Wittenoom) Agreement Amendment Act 1972 (WA) Cases Cited: Airways Corp of New Zealand v The Present Partners of PricewaterhouseCoopers Legal [2002] NSWSC 521 Alexander v Perpetual Trustees WA Ltd [2004] HCA 7; (2004) 216 CLR 109 Gibbins Investments Pty Ltd v Savage [2011] FCA 527; (2011) 84 ACSR 1 Hancock v Rinehart [2015] NSWSC 646; (2015) 106 ACSR 207 Hatfield v TCN Channel Nine Pty Ltd [2010] NSWCA 69; (2010) 77 NSWLR 506 Hope Rinehart v Rinehart [2015] NSWSC 205 Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432 Lidden v Composite Buyers Ltd (1996) 67 FCR 560 Morton v Nylex Ltd [2007] NSWSC 562 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2014] NSWCA 323 Re Duomatic Ltd [1969] 2 Ch 365 Vermillion Resources Pty Ltd v Gibbins Investments Pty Ltd [2011] FCAFC 149; (2011) 86 ACSR 246 Wambo Coal Pty Ltd v Sumiseki Materials Co Ltd [2014] NSWCA 326; (2014) 290 FLR 18 Wright Prospecting Pty Ltd v Hamersley Iron Pty Limited [2013] NSWSC 536 Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd (No 9) [2010] WASC 44 Young v Murphy [1996] 1 VR 279 Texts Cited: JD Heydon & MJ Leeming, Jacobs' Law of Trusts in Australia, 7th ed (2006), LexisNexis Butterworths KA Nagorney "A Noble Profession? A Discussion of Civility Among Lawyers" (1999) 12 Georgetown Journal of Legal Ethics Category: Procedural and other rulings Parties: Bianca Hope Rinehart (1st Plaintiff) John Langley Hancock (2nd Plaintiff) Georgina Hope Rinehart (1st Defendant) Hancock Prospecting Pty Limited (2nd Defendant) Representation: Counsel: C Withers with A Hochroth (Plaintiffs) B McClintock SC with S Lawrance (1st Defendant) D Studdy SC with A Shearer (2nd Defendant) M Izzo (Rio Tinto - Interested Party) R Hardcastle (Wright Prospecting Pty Limited - Interested Party)