The lawyer for the eldest children of mining magnate Gina Rinehart has told a court her attitude towards Rose Porteous was a key reason she was dumped as a director of her father’s company.
Christopher Withers SC is representing John Hancock and Bianca Rinehart in the Western Australian Supreme Court, starting his opening statements on Monday morning in the civil trial against their mother.
The case revolves around the distribution of mining royalties from six iron ore tenements in the Pilbara, known as Hope Downs, with Mr Withers representing the eldest Rinehart children because they claim they’re entitled to a slice of those royalties.
Mr Withers spent Monday afternoon detailing a growing rift between Gina Rinehart and her late father Lang Hancock, from the mid-eighties leading up to his death in 1992.
It was during this time Mr Hancock struck up a relationship with Rose Porteous, a Filipino maid in his employ who would later become his wife.
Mr Withers argued Ms Rinehart’s hostile attitude towards Ms Porteous led to Mr Hancock dumping Ms Rinehart as a director of the company he founded, Hancock Prospecting Pty Ltd (HPPL).
“[Mr Hancock] removed [Ms Rinehart] as a director of HPPL because she was saying disparaging things about Rose,calling her ‘an oriental concubine’ and repeatedly calling Rose a prostitute,” Mr Withers said.
Mr Withers said the matter escalated when Ms Rinehart took steps to have Ms Porteous deported.
He also detailed an incident in which Ms Rinehart allegedly stole and withheld a copy of her late mother’s will, so a 30 per cent stake she held in HPPL would be stuck in probate.
Mr Withers said by November 1985, Ms Rinehart’s attacks on Rose had gone too far, and submitted there were four reasons behind her father removing her as a HPPL director.
“First, she had not had any significant involvement in the management of HPPL,” Mr Withers said, noting Ms Rinehart had moved to the United States at that stage.
“Second, she had stolen Hope Margaret‘s will. Thirdly, she tried to have Rose deported. Fourthly, Lang was tired of Gina’s tirades against he and Rose, and was sick of having abuse hurled at him.”
In one letter from Ms Rinehart to her father she purportedly made some “bizarre comments,” but Mr Withers was stopped by Justice Jennifer Smith from reading it to the court.
“What we have here is a director of HPPL, Gina, trying to have the chairman’s wife deported and calling her all sorts of names, and stealing his deceased wife’s will so the 30 per cent shares belonging to Hope Margaret would be held in probate,” Mr Wither said.
Despite this, Mr Hancock had made arrangements to give 52 per cent control of HPPL to his daughter on his death.
Earlier, Mr Wither made explosive claims that Ms Rinehart had committed fraud.
Mr Withers told the court that Ms Rinehart purposely shifted assets between companies under the Hancock Group name in order to keep those assets out of the Hancock family trust, with allegations she committed “deliberate fraud”.
“We don’t use the word fraud lightly, but we say the evidence of fraud by Gina against her children is overwhelming, ” Mr Withers told Justice Smith.
Ms Rinehart’s children are among a number of entities suing HPPL, of which Gina Rinehart is executive chairman, over the Hope Downs tenements.
Noel Hutley SC, for HPPL, spent his opening address the previous week claiming Mr Hancock had several Pilbara mining tenements held in trust, and took steps to conceal this from Gina.
But Mr Withers told the court that Mr Hancock “kept Gina informed at every turn”.
Mr Withers also criticised Gina Rinehart for not giving evidence in the David Malcolm Justice Centre courtroom, despite the fact she was less than a kilometre from the court on Monday, delivering a keynote address to a mining conference.
“She won’t come to court to allow herself to be cross-examined about the critical matters central to this case,” Mr Withers said.
“Gina knew what Lang was doing because he told her … when Your Honour sees those documents, Your Honour will note the significance of these documents and in HPPL not calling on her to give evidence.”
Mr Withers spent much of Monday morning’s hearing detailing the rifts appearing in the relationship between Lang Hancock and business partner Peter Wright, founder of Wright Prospecting Pty Ltd, in the lead-up to Mr Wright’s death in September 1985.
Mr Hancock himself would die in less than seven years, with Mr Withers telling the court his final years were spent arguing with Gina and her then husband Frank Rinehart over developing a mine.
Mr Hancock wanted to develop a mine at the Hope Downs tenements, near the mining town of Newman, so the WA government at the time would grant him further exploration licences.
The government would only grant the licence if a new mine was developed and new overseas markets for iron ore were found.
However, Gina and Mr Rinehart were strongly opposed to this plan, wanting to sell off HPPL assets in exchange for ongoing mining royalties.
“Lang discovered the mining areas in the Pilbara, he was the driving force behind the decision to build a mine, which Gina was against,” Mr Withers said.
“If Gina had gotten her way, HPPL would have been dissolved in 1986.”
He told the court that Ms Rinehart committed fraud and breached her duty of care after her father’s 1992 death by giving herself more shareholder control over HPPL and awarding herself shares belonging to her children and hiding this from them – particularly John Hancock.
“Ultimately, Gina used entities in control of the assets … and in doing so breached her duties in terms of the (Hancock family) trust,” Mr Withers told the court.
Mr Withers alleges Gina Rinehart moved the assets around companies under the Hancock Group umbrella in a “classic family group” situation.
He told the court that Gina and Lang argued over control of HPPL right up until his death.
“Lang was not prepared to give Gina 33 per cent of HPPL … Gina was not prepared to take no for an answer,” Mr Withers said.
“Lang was simply not prepared to give Gina everything she wanted, which was everything.”
Bianca Rinehart was present in the courtroom on Monday, which marked the start of the fourth week of proceedings.
The case continues.