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‘Idiot John’: Emails lay bare early days of Rinehart children’s failed coup

By Jesinta Burton

Rapid-fire emails between mining magnate Gina Rinehart’s children in the early days of a failed coup of the family trust have been laid bare in the West Australian Supreme Court amid a multibillion-dollar row over royalties from her iron ore mine.

On Tuesday, the court was read a string of emails exchanged in September 2006 as Rinehart’s son John Hancock attempted to rally the support of his siblings to remove their mother as head of a family trust set up by their pioneer grandfather Lang Hancock.

Western Australia’s mining dynasty, of which the nation’s richest person Gina Rinehart is the most famous member, is embroiled in a court fight over the rights to the Hope Downs projects in the state’s iron-rich Pilbara region.

Western Australia’s mining dynasty, of which the nation’s richest person Gina Rinehart is the most famous member, is embroiled in a court fight over the rights to the Hope Downs projects in the state’s iron-rich Pilbara region.Credit: Marija Ercegovac

In them, John contemplated inserting his own trustee after claims Rinehart had breached her fiduciary duty by removing assets from the Hope Margaret Hancock Trust, which housed Lang’s mining assets, including Hope Downs, and boosting her stake at their expense.

The emails were relied upon as evidence by Jeremy Stoljar SC, the lawyer helping the family of often-forgotten prospector Don Rhodes to retrieve a 1.25 per cent royalty from ore mined at the Hope Downs tenement and fight John and his sister Bianca Rinehart’s equitable relief claim.

Stoljar said other documents showed all of John’s other siblings were well aware of his plans.

In an email John sent to his sister Hope, he outlined his plans to sue their mother and the company she inherited, Hancock Prospecting, for rights to the trust, including the mine now at the centre of the high-stakes civil case to retrieve royalties.

“I have no doubt our grandfather always believed [the asset] would remain in the trust ... there was no reason to take Hope Downs out of the trust,” he wrote.

John said he assured Rio Tinto, the mining giant that had inked a joint venture with Hancock Prospecting to develop the mine just 12 months earlier, the court stoush would be kept under wraps with “no publicity” that could jeopardise the project or its financing.

This was welcome news to Hope, who expressed concern about the possibility of the deal falling apart and the project “being screwed”.

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“I hope it’s solid so it doesn’t mess up the Hope Downs deal. It is solid, right?” she wrote.

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John cautioned his sister to “just be careful what you sign”.

Stoljar said the email chain was then forwarded by John’s sister Bianca to an address understood to belong to their mother, Gina.

“That’s all that was in there. I’ll wait for idiot John to reply,” Bianca wrote.

It would be another four years before John and two of his sisters would actually take their bid to remove Rinehart as trustee to court, with Hope later backing out after inking a confidential settlement with her mother.

In 2015 the court handed the family trust to Bianca, but the battle has continued behind closed doors.

Almost 17 years on, John and Bianca are now working together to seek relief in the form of a proprietary interest in Hope Downs, which Stoljar argued would subsequently extinguish Rhodes’ interest.

Stoljar said their claim should fail because there was “ample documentation” showing they were well aware of the issues they now sought to ventilate but didn’t act fast enough.

Just as Wright Prospecting argued, Stoljar said holding a trust interest in the shares of a company did not automatically give one a proprietary interest in its assets.

“If the Commonwealth Banks owns a building on St Georges Terrace and I go and buy some shares in it, I don’t have a proprietary interest in the building,” he said.

The civil case has so far been dominated by testimony supporting the claim of the descendants of Peter Wright, the school friend-turned business partner of Rinehart’s pioneer father Lang Hancock.

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Wright Prospecting claims it is entitled to a portion of the royalties from the iron ore discoveries they made together, including Hope Downs, which is home to four operational mines owned by Hancock Prospecting and Rio Tinto.

The Wrights claim the asset was held jointly under a 1980s partnership deed.

Rhodes’ family company, DFD Rhodes, insists he also played a critical role in discovering the mammoth iron ore deposit, which entitled him to a 1.25 per cent stake in its proceeds under a separate 1969 agreement.

Hancock Prospecting and its executive chair Rinehart maintain the Hope Downs assets and royalties belong to them, insisting they put in the work to recover them and invest in their development after they were confiscated by the state government.

They have not had an opportunity to respond to Tuesday’s submissions.

The case continues.

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Original URL: https://www.smh.com.au/national/western-australia/idiot-john-emails-lay-bare-early-days-of-rinehart-children-s-failed-coup-20230801-p5dt3t.html