An Australian court has rejected mining magnate Georgina Rinehart's motion to dismiss the lawsuit brought against her by three of her four children over control of a trust worth $4.5 billion.
The three -- Hope Welker, John Hancock and Bianca Rinehart -- are suing in New South Wales Supreme Court to remove their mother as sole trustee of the Hope Margaret Hancock Trust, which their late grandfather created to benefit them and youngest sister Ginia Rinehart. The plaintiffs sued Georgina Rinehart last September after she allegedly tried to delay the vesting date of the trust by several decades.
The trust holds an approximately 20 percent stake in Hancock Prospecting Pty. Ltd., one of the world's largest privately owned iron ore and coal developers. Rinehart, who is the world's richest woman with a fortune estimated at around $30 billion, owns the remaining shares in Hancock.
Rinehart decided to allow the trust to vest in April and moved to dismiss her childrens' lawsuits on the grounds that their claims had been rendered moot by the vesting.
But Judge Paul Brereton rejected that argument in a Wednesday decision, finding that Rinehart's discretion as trustee had narrowed with vesting but still endured in several respects.
"The trustee continues to hold the trust property, to exercise votes in respect of the trust shares, and to receive and distribute trust income," the judge wrote, "she could sell the trust property and reinvest the proceeds; she has all the usual rights, powers and duties of a trustee."
However, the judge denied plaintiffs' request to amend their complaint to seek reimbursement on the grounds that Rinehart's vesting action had put them at risk for capital gains tax liability. Brereton said any such liability would clearly be ascertainable and seeking reimbursement for the "risk" was "vexatious and embarrassing."
Sydney partner Austin Bell of Johnson Winter & Slattery is representing the plaintiffs in the action. Rinehart and Ginia, who is siding with her mother, are being represented by Corrs Chambers Westgarth and Gadens Lawyers, respectively.
