Open Justice … WA Supreme Court … Iron Lady’s suppression application nixed … Carving up Pilbara mining tenements … Litigation bonanza … Making hay for at least three months … Reputational harm and embarrassment … Information already in the public domain … Alan Zheng reports 

The WA Supremes has rejected a bid by Gina Rinehart and Hancock Prospecting, for interim suppression and non-publication orders in respect of proceedings commenced by Wright Prospecting. 

Rinehart’s interests applied for suppression and non-publication orders pending the delivery of an arbitral award in a private arbitration which had been reserved before three arbitrators including former WA CJ Wayne Martin.

The orders were sought over various documents running into the thousands of pages including defences, submissions, and chronologies filed in the Supreme Court.  

The basic justification for those orders was to protect the integrity of the arbitral process, and to protect contractual promises between Rinehart and her children, Bianca Rinehart and John Hancock, as recorded in the so-called “Hope Downs Deed”.

The Deed provided for non-disparagement of the Hancock Group, the maintenance of confidentiality and a restraint which operated to prevent the children from “challeng[ing] the right of any member of the Hancock Group … at any time”.

The validity of the Deed is therefore an issue that has now been left to the arbitral panel.

Hancock’s application was opposed by the children as well as Wright Prospecting.

The trial, which commenced late last month, is the newest chapter in the long-running dispute about the disentanglement of Rinehart family interests over various iron ore mining tenements in the Pilbara, and Rinehart’s latest donation to Australian case law on open justice.

The story here is mostly the same, but now there’s a bigger cast.  

There are also a number of battlegrounds between the parties, which have been complicated by the referral of some aspects of the case to arbitration. 

First, there is the longstanding dispute between Mrs Rinehart and the children. 

Bianca and John are asserting proprietary interests in particular exploration licences. They also plead a Barnes v Addy claim that their mother breached her fiduciary duties as trustee of the family trust, Hancock Family Memorial Foundation, by engaging in a series of transactions which resulted in Hope Downs Iron Ore acquiring the legal interest in the exploration licences. 

Second, there is the dispute arising from the partnership first settled between Lang Hancock and Peter Wright in the 1980s, for the exploration and prospecting of minerals. 

That dispute has now fallen to the heiresses of both the Hancock and Wright families to resolve. 

Wright Prospecting is alleging that particular opportunities to acquire and prospect for minerals and acquire tenements in the Hope Downs and other areas were held jointly as a partnership asset. 

It follows, in Wright Prospecting’s case, that it has a proprietary right to half of the share in the Hope Downs tenements, as well as a right to the royalties received by the Hancock parties from their use of the mining tenements in a joint venture with Rio Tinto’s subsidiary, Hamersley Iron. 

Both the children and Gina are united in their opposition to Wright Prospecting’s case for their own reasons. Gina’s defence is that the opportunities were not partnership assets. 

The children argue that the opportunities were instead constructively held on the family trust for their benefit, and further that Wright Prospecting should be refused a remedy because of laches and acquiescence.

Third, the children and Gina Rinehart are also facing down a claim by DFD Rhodes for 1.25 percent of the royalties on ore produced from certain reserves pursuant to an agreement inked in 1969 between Don Rhodes and Lang Hancock. 

Gina denies that Hope Downs is one of the reserves captured by the 1969 agreement. The children also oppose DFD Rhodes’ case for reasons similar to those against Wright Prospecting.

In support of the suppression orders, Gina says an arbitral finding that the children could not make the allegations they were seeking in court would be rendered nugatory if the children’s allegations were aired in open court. 

Such an outcome, it was said, would defeat Hancock Prospecting’s contractual and arbitral rights. Pacta sunt servanda, in short. 

Meanwhile, senior counsel for Rinehart adopted Hancock Prospecting’s submissions but also made submissions concerning personal reputational harm, at [39]:

“Gina claims that her right to have the contractual undertakings dealt with and enforced in the Martin Arbitration should not be undermined by the reputational damage that will be caused to her by the allegations made by Bianca and John being revealed in public … Gina’s concern is about prejudice to her personal reputation in all her capacities in her life including as Executive Chair of [Hancock Prospecting], a successful female business leader, and as a public figure generally.” 

But reputational harm and embarrassment are not reasons to depart from open justice, Jennifer Smith J observed, particularly where the proper conduct of a trustee was in question.

Justice Smith recited the well-settled principles (cases like Hogan v Hinch (2011) 243 CLR 506), and considered that the contractual rights must give way to open justice. 

This was not a case where the orders were required to protect trade secrets or other commercially sensitive information, where there is a public interest to preserve privacy.

Simply because parties deem particular information to be commercially sensitive or confidential by contract is not determinative; the question of confidentiality is to be applied objectively.

Further, the allegations made by the children in this case were of a kind that were already detailed in previous court judgments. The earlier tsunami of appeals filed by Hancock had come back to bite. 

Those judgments meant the allegations, which had not been redacted in published judgments, had already entered the public domain, such that Smith J considered (at [138]):

“… the maintenance of confidentiality of Bianca and John’s allegations is not possible, it is clear that there is a substantial amount of repeated publicly known information about the issues raised in the Martin Arbitration and in Bianca and John’s defences in the curial proceedings.” 

Further, despite the sheer number of proceedings and repeated references to the allegations, Smith J also considered that the allegations had not prejudiced Hancock Prospecting’s commercial activities or Gina Rinehart’s personal reputation. 

Interlocutory disputes over discovery, strike out and the determination of separate questions have slowed the progress of the proceedings, which were first set down for hearing back in April 2022. 

The initial hearing dates were subsequently pushed back after five appeals were lodged against various interlocutory judgments. The five appeals were heard together and all were substantively dismissed. 

Such orders had also been previously refused in other proceedings including in Rinehart v Welker [2011] NSWCA 403 where John and Bianca had sought orders varying a deed of settlement to remove Gina from her position as trustee and appoint themselves as trustees. Mrs Rinehart had resisted the application on the basis that it breached alternative dispute resolution procedures provided by the trust deed, and that the proceedings should be suppressed. 

The Court of Appeal overturned a suppression order on the basis that it was not necessary to prevent prejudice to the administration of justice. In their joint judgment, Bathurst CJ and McColl JA observed (citations omitted) at [31]:

“Significantly, an order is not ‘necessary’ if it appears to the court ‘to be convenient, reasonable or sensible’, or to serve some notion of the public interest, still less that, as the result of some ‘balancing exercise’, the order appears to have one or more of those characteristics …” 

There were disproportionate impracticalities in the orders sought as well. If granted, the orders would have made the conduct of the trial extremely difficult and onerous for all the parties, and particularly Wright Prospecting which was not involved in the arbitral proceedings at all.

The trial is expected to continue for three months, with legal teams stretching over the horizon … 

Applicants: 

N Hutley SC, C Bova SC and J Kennedy, instructed by Corrs Chambers Westgarth (for Hancock Prospecting, and Hope Downs Iron Ore)

L A Warnick SC, instructed by Gilbert + Tobin (for Gina Rinehart as interested party)

Respondents: 

J Taylor SC and C McKay, instructed by Clayton Utz (for Wright Prospecting)

C Withers SC and A Hochroth, instructed by Yeldham Price O’Brien Lusk (for Bianca Rinehart and John Hancock)

C Wren, instructed by Allens (for Hamersley WA) 

Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 22] [2023] WASC 285