By Jane Wardell
SYDNEY Oct 31 Australia's richest woman Gina
Rinehart lost a court bid on Wednesday to throw out a lawsuit
brought by three of her children over control of a $4 billion
Justice Paul Brereton of the New South Wales Supreme Court
ruled that the case should go to a full trial at a date yet to
Rinehart's three eldest children are seeking to remove her
as the sole trustee of the trust that holds an almost
one-quarter share in Hancock Prospecting Pty Ltd, one of the
world's largest privately-owned mining companies.
The case has captured public attention in Australia as it
reveals details of the private life of Rinehart, the only child
of Lang Hancock, a household name after being credited with
discovering the world's largest deposit of iron ore in Pilbara,
Rinehart had tried unsuccessfully to have the hearings held
behind close doors after her three elder children -- Hope
Rinehart Welker, Bianca Rinehart and John Hancock -- accused her
of serious misconduct in her role as trustee.
In return, family emails made public as part of the case
showed Rinehart describing the three as lazy and spoilt.
Rinehart's youngest child, daughter Ginia, has sided with her
mother in the dispute.
The elder trio argued Rinehart was unfit to be trustee after
she extended the trust's vesting date to 2068, well into their
80s and 90s, claiming they would face "catastrophic financial
consequences" from tax dues if she did not.
After the lawsuit was launched last September, Rinehart
changed her mind and vested the trust in April, meaning she gave
up some of her discretionary powers.
She argued that meant the case should be thrown out,
claiming the children's case was frivolous and an abuse of
process given they could now call on their share at any time.
But the judge ruled that she was still in control of the
trust, holding the shares as trustee and having powers including
the ability to distribute its income and to sell property and
reinvest the proceeds.
Brereton said it was possible that Rinehart, who has a long
history of fighting bitter battles through the courts, could
"seek to extract some concession or benefit" if the children
sought to take their shares.
Brereton noted that to throw out the case he would have to
find its prospects "hopeless" or "doomed to fail."
The children do not want the trust funds paid out, but want
their mother replaced as the trustee.
It is not clear what impact, if any, the removal of Rinehart
as trustee would have on Hancock Prospecting and its iron ore,
coal and media empire. Shares in the company can only be held by
Rinehart and her direct descendants and cannot be pledged as
The judge also allowed the three elder children to enter
amendments to the original lawsuit to bring in actions by their
mother since the case was filed in September last year.
However, he denied a bid by the children to seek
compensation on the grounds Rinehart's decision to vest the
trust exposed them to tax risks, saying such a claim was
"vexatious and embarrassing."
Brereton will hear arguments on costs on November 7. No date
was set for the full trial.
The judgement comes a day after the Supreme Court of Western
Australia dismissed an appeal from Hancock Prospecting to
reclaim a 25 percent stake in the Rhodes Ridge iron ore deposit
in Western Australia from rival miner Wright Prospecting Pty
That decision left Wright Prospecting with 50 percent of the
Rhodes iron ore asset and joint venture partner Rio Tinto
the other half.