Rinehart v Rinehart

Court of Appeal (NSW)|2019-03-20|Before: Basten JA, Mr P, Brereton J

Background to the proceedings

The background to the proceedings may be found in the 2015 and 2018 judgments of Brereton J. The key elements are as follows.
The Hope Margaret Hancock Trust ("the Trust") was created in 1988. Until 29 May 2015 Gina Hope Rinehart was the trustee of the Trust. The beneficiaries are her four offspring, including the first and second respondents (Bianca Hope Rinehart and John Langley Hancock). By order (1) made on 28 May 2015 the first respondent, Bianca Hope Rinehart, was appointed trustee in place of her mother.
The principal asset of the Trust is a 24% shareholding in Hancock Prospecting, which is the ultimate holding company of Hope Downs; Hope Downs' interest in an iron ore mining project in Western Australia provides the value of the Trust property. [7] Prior to her replacement as trustee, the applicant was the ultimate beneficial owner of all the shares in Hancock Prospecting other than those she held on trust for the Trust. [8] She then controlled 100% of the shares, and continues to hold beneficially some 76% of the shares, in Hancock Prospecting.
As noted above, order (1) made in May 2015 appointed Bianca Hope Rinehart the new trustee of the Trust. Consequential orders were made, including the following: "(2) Pursuant to (WA) Trustees Act, s 78, the assets and property of the Trust vest in the said Bianca Hope Rinehart as such trustee. (3) The first defendant [Gina Hope Rinehart] deliver up to the second plaintiff [Bianca Hope Rinehart] within 28 days all documents of the Trust in her possession custody or power, including all those referred to in paragraph 3 of the claims for relief in the third further amended statement of claim. (4) The first defendant have liberty to apply to be relieved from order 3 in respect of any particular document or class of documents."
By notice of motion filed on 3 September 2015 (as later amended) the plaintiffs in the proceedings below, being the new trustee and her brother John Langley Hancock, sought further orders. The first order sought the production of a list of documents identified in annexure A to the motion. Annexure A was not strictly limited to documents or classes of documents but sought, amongst other things, "[a]ccess to any electronic database or other electronic information retention system maintained by or for the Trust." The second order sought that Mrs Rinehart "do all things reasonably necessary on her part to procure that any third party who possesses, or who is likely to possess, documents of [the Trust], including [named] individuals and organisations …, provide all such documents to the Plaintiffs by 26 May 2016 …." The third order sought a direction that Mrs Rinehart swear an affidavit identifying the relevant steps taken in compliance with orders made pursuant to the notice of motion and the orders made on 28 May 2015.

Issues on proposed appeal

The draft amended notice of appeal contained detailed grounds extending over some seven pages. In substance, if granted leave to appeal, the applicant would seek to have this Court review every significant finding of fact and law, and each order made, by the primary judge. For example, ground 9 identified 21 separate categories of documents erroneously required to be delivered up to the new trustee. However, counsel for the applicant succinctly stated the issues sought to be raised on the appeal in their written submissions: [9] "The applicant contends that the primary judge was in error because he identified as 'documents of the Trust' documents that were not the property of the Trust. The effect of the primary judge's orders is that the applicant is obliged to deliver to the first respondent documents that do not belong to the Trust - necessarily interfering with the property rights of other persons. The error arose because the primary judge conflated the duty of an outgoing trustee to deliver all trust documents to her successor and the duty of an outgoing trustee to supply information to a new trustee in response to a reasonable request for information."
On the application for leave, senior counsel for the applicant identified the issues in slightly different terms: [10] "This case concerns the content and operation of three distinct and important obligations of trust law. They are, first, the obligation of an outgoing trustee to deliver up to an incoming trustee all documents belonging to the trust. The second is the obligation of an outgoing trustee to provide information to an incoming trustee, including information reflected in documents that do not belong to the trust. The third is the obligation of the trustee to permit beneficiaries to inspect trust documents. We submit that the primary judge conflated the first two of those obligations arising, in part, in consequence of his Honour's consideration of the third and that had the consequence that his Honour has ordered my client to deliver up documents that are not trust documents, are not documents that belong to the trust, which has consequences for third parties and imposes a burden on her."

Findings and reasoning of primary judge

Order (3) of the 2015 orders required that the applicant, as former trustee, deliver up to the new trustee "all documents of the Trust in her possession custody or power". That order was, like the order vesting the property of the Trust which preceded it, consequential upon the appointment of the new trustee. The basis for it was discussed in the 2015 reasons under the heading "Ancillary issues". [11] The discussion, under the heading "Production of Trust Documents", as to what fell within the concept of "trust documents" addressed the case law dealing with the right of beneficiaries to inspect trust accounts and trust documents. [12] The discussion ended with a consideration of whether a particular deed had released certain claims, including the right to inspect trust documents. The conclusion reached was that the deed "did not release [Mrs Rinehart] from the ongoing obligation, so long as she remained trustee, to permit the beneficiaries to inspect all trust documents, and (should she cease to be trustee) to deliver all trust documents to her successor - regardless of their date." [13] There was no discussion as to the particular content of the obligation of an outgoing trustee to deliver documents of the trust to her successor.
These paragraphs in the 2015 reasons were repeated in the 2018 reasons at [32]. The limited focus of the reasoning, by reference to the question of release, was noted at [33]. Referring to the reasoning of Mahoney JA in Hartigan Nominees Pty Ltd v Rydge [14] the judge noted that there was a distinction between "a beneficiary's right of inspection, and the duty of an outgoing trustee to deliver up trust documents to an incoming trustee". [15] Mahoney JA had stated in Hartigan Nominees that there was "no congruence between the obligations which in this regard an outgoing trustee may have to an incoming trustee and the right of a beneficiary or possible beneficiary to see documents or receive information in respect of the trust." [16] As the primary judge correctly noted, "the obligations that an outgoing trustee may owe to an incoming trustee are more extensive than those owed to a beneficiary seeking inspection." [17] The primary judge set out a lengthy extract from the judgment of the Royal Court of Jersey from In the matter of the Bird Charitable Trust. [18] That judgment concluded: "[29] In summary, an outgoing trustee will normally be under a duty to hand over to an incoming trustee all documents and information which relate to the administration of the trust so as to enable the incoming trustee to fulfil his duties. However, the Court has a discretion to direct that documents or information not be supplied where satisfied, in its supervisory role, that this is the appropriate course. The onus lies on the outgoing trustee to show why the normal rule should not be followed."
The primary judge accepted that principle and noted that the rationale for it was "that the new trustee is, prima facie, entitled to be placed in just [as] good [a] position as the outgoing trustee in relation to all aspects of the administration of the trust." [19]
It is convenient to set out the following further passages from the reasoning of the primary judge which the applicant (and the companies) submitted revealed error: "[43] The plaintiffs submit that the first defendant's obligation extends to deliver up 'all documents maintained, or relied upon, or otherwise used by her in connection with the administration of the Trust'. I do not accept that merely because a document was considered or adverted to in the course of making a decision, it thereby becomes a 'document of the Trust'. The first defendant correctly submits that the notion embraced by 'documents of the trust' is one of ownership, as distinct from relevance or having had regard to a document. As I indicated in the principal judgment (at [365]), it is inherent in the concept of trust documents that they are trust property. [20] … A trustee can only be required to deliver up what is in its possession, custody or power. The circumstance that a trustee sees, or even needs to see, a document for the purpose of making a decision, does not of itself make it a trust document which the trustee can be ordered to deliver up. [44] This makes significant, if not decisive, the capacity in which the trustee receives or holds the documents. I do not accept that - as the first defendant submitted - it is the intention of the creator or transferor of a document that is dominant, at least where the creator or transferor is not the trustee. Whether a document is a document of the trust depends on the capacity in which it is received and/or held by the trustee. That will often be informed by the purpose for which the document was obtained: if the document was obtained or retained by the trustee for the purpose of administration of the trust, it is a trust document. [45] One complexity is presented in the present case because, at least arguably, some documents (some in the possession or custody of Mrs Rinehart, and others in the possession or custody of external advisers and consultants) are jointly owned by the Trust and another, or other, Hancock entities. However, where there is joint ownership, the document does not cease to be a trust document just because someone else has an interest in it. Contrary to what appears to be the first defendant's position, I do not accept that she is not obliged to deliver up documents held jointly by the Trust and another entity, on the footing that one joint owner cannot claim possession against another. It may be that where she is not herself in possession of the original, she cannot be required to deliver up the original. However, given the fiduciary nature of her obligation to place the new trustee as far as possible in as good a position as herself with respect to all aspects of administration of the Trust, she must at least deliver up a copy of any such document. Where she (in some capacity other than trustee) is that other entity, she must deliver up the original document (retaining for herself, if she wishes, a copy). Where she is not the other entity, then she must at least deliver up a copy. [46] Another complexity arises from Mrs Rinehart's multiple capacities, in that she was not only trustee of the Trust, but also (inter alia) director of HPPL, and received and holds documents in her capacity as a director of HPPL which may nonetheless be relevant to the administration of the Trust. … [47] Mrs Rinehart has not adduced evidence as to the manner in which the affairs of the trust were conducted, or of any delineation between her management of the affairs of HPPL and those of the Trust, and so far as appears, she did not maintain a rigorous separation between trust documents and documents held by her in other capacities, or for that matter HPPL documents; trust documents apparently reside in or with records of HPPL. The plaintiffs submit that, on this basis, any document which the first defendant created, maintained, relied upon or otherwise used or considered in connection with the administration of the Trust - including documents within her control as Executive Chair or Director of HPPL - should be delivered up to the new trustee as documents of the Trust. [48] Tiger v Barclays Bank Ltd, [21] referred to above, supports the proposition that an incoming trustee is not to be denied access to documents which an outgoing trustee used or maintained in the administration of the trust, merely because those documents were obtained by the former trustee in some capacity other than as trustee, so as to leave the new trustee in a worse position than would have obtained had the trustee maintained a proper and strict delineation between its roles. The point of Tiger v Barclays Bank Ltd is that, where the outgoing trustee had acted as both trustee and banker, and so did not separately maintain banking records relevant to the trust, the incoming trustee should be entitled to receive those banking records which, had the outgoing trustee not also been the banker, it would have received from the bank. Applied to this case, Bianca is entitled to have provided to her documents received and held by Mrs Rinehart in her capacity as a director of HPPL but used in relation to the administration of the Trust, if they are documents which, but for being a director of HPPL, she would have obtained in her trustee capacity. As it may be assumed that a diligent trustee would have obtained for the purposes of the Trust any document which was in fact used in the administration of the Trust, though it was received in another capacity, that means any document which was received or held in her capacity as a director of HPPL (or in some other capacity), which she in fact used in the administration of the Trust."
This reasoning led the judge to conclude that the phrase "documents of the trust" included the material identified in pars (i)-(iv) of order (1)(a).

Alleged errors by primary judge

The applicant did not challenge [43], as set out above. The proposition that the primary judge in some way conflated or misconceived the duty of the outgoing trustee to provide trust documents to the incoming trustee, because of reliance upon the rights of a beneficiary to inspect documents, is patently untenable. [22] The primary judge relied upon the proposition that the incoming trustee had an entitlement to have delivered to her a greater range of documents than would have been available to her as a beneficiary. That proposition was not itself challenged.
The applicant submitted that the judge elided the distinction between trust documents and documents belonging to third parties which might contain information relevant to the administration of the Trust. The former were to be delivered up to the incoming trustee; the latter, presumably if within the custody of the outgoing trustee, need only be made available for inspection. The basis of the error, the submission proceeded, lay in the failure of the orders to define "documents of the Trust" "in terms that reflect property rights." [23] The judge, the submission continued, erred in rejecting the assertion that property in a document is to be identified by reference to "the objective intention of the creator or transferor of a document assessed by reference to all the surrounding circumstances"; ownership of a document "depends on the capacity in which, for whose benefit, its creator was acting". [24] The focus in the orders on the capacity in which a document is received demonstrated, the submission proceeded, legal error. The applicant drew support for its submission from a passage in Lewin on Trusts (18th ed) to the following effect: "23-97 A new trustee is entitled to require the former trustee to deliver up to him all records, books and other papers belonging to the trust. He is also entitled to inspect and copy other papers (not belonging to the trust) in the hands of the former trustees so far as they contain information relating to the trust." [25]
The applicant's submissions made little reference to documents held by her in her capacity as trustee (category (i)), but focused on category (iv) which referred to documents received or held by her in some other capacity but which were "used in the administration of the Trust." However, the fact that category (i) was barely challenged casts doubt on the exclusive nature of the test proposed, namely that the relevant documents can only be identified by reference to the intention of the creator or transferor.
There are three broad reasons why the applicant's challenge should not be the subject of a grant of leave to appeal. These may be characterised as factual, legal and procedural.
With respect to factual considerations, it was clear that the applicant had acted in her capacity as a director of Hancock Prospecting and in her capacity as trustee with no clear delineation of those roles. An example was to be found in proceedings in relation to a subpoena issued by the new trustee to the applicant's previous solicitors, then Freehills. With respect to a claim for client legal privilege, it was necessary to identify the capacity in which the instructions had been given, and whether she was acting in her personal capacity or as trustee. The judge concluded: [26] "[36] The position is complicated by the circumstance that, while Freehills undoubtedly were retained by Mrs Rinehart qua trustee of [the Trust], they appear also to have been retained by her in other capacities (and by other Hancock entities)."
That there was extensive comingling of the roles of the applicant appeared from both the fact, and the contents, of an affidavit prepared by Bradley George Ross dated 19 September 2015 and read in the proceedings below. Mr Ross was the chief legal counsel for Hancock Prospecting. He stated that, following the 2015 orders, he "gave consideration as to what was needed to be done on behalf of the first defendant to comply with the May 2015 orders and how." [27] On the basis of inquiries he made of the information manager employed by Hancock Prospecting (referred to in the affidavit as HPPL) he stated: [28] "• Since around 1992 the documents of the Trust (including the Trust's accounts) were administered by HPPL staff and in relation to the accounts, utilising in various forms HPPL's computer systems. … There was not, and never has been, a separate repository or area devoted solely to documents of the Trust other than a single file containing company secretarial documents. • From time to time, HPPL staff members, under the First Defendant's authority, retained external consultants and advisers … to advise and provide services on behalf of the Trust; • The administrative and accounts department at HPPL, and other staff members at HPPL, undertook this management and administration of the Trust documents without charge to the Trust; • The First Defendant did not maintain a separate email address for communications sent and received by her in her capacity as trustee of the Trust, and utilised the same email address as she utilised for HPPL for communications relating to the Trust - being an email address maintained on servers belonging to HPPL."
It is clear from the passages from the reasons set out above that the primary judge had in mind, and sought to apply, the legal principles relied upon by the applicant. However, the orders, to be helpful, needed to be formulated against the background of the factual circumstances, no doubt well understood by all the parties, as to where the trust documents were located, how they were stored and how they might be recovered. So much appears from [47] of the 2018 reasons, set out above. A more complete understanding of how the difficult factual circumstances coloured the formulation of the orders may be seen in the extensive discussion by the primary judge of particular classes of documents at [51]-[77]. It was, no doubt, a complex and contestable task to determine which of the documents held by Hancock Prospecting were its documents and which were properly trust documents. If disputes were to be resolved, it must have been by reference to the nature of the particular documents and the use to which they were put. If a particular document was created by Hancock Prospecting, the applicant's test required one to ask what was the purpose of the company in transferring it to, say, the applicant who used it in the administration of the Trust. She being the controlling mind of the company (which had been described by the judge as her alter ego [29] ), the use to which she put the document was likely to be the best evidence of that intention - recalling that she kept no clear demarcation line between the exercise of her different capacities.
It is apparent from Mr Ross' affidavit that in practical terms Hancock Prospecting managed the affairs of the Trust. Accordingly, to ask what was the objective intention of the creator of a document was unhelpful; it merely removed the question from one point to another: the question thus became what was the objective intention of Hancock Prospecting in creating a document? Was it in its role as manager of the Trust's affairs or in some other role? As the applicant's separate roles as majority shareholder in Hancock Prospecting, Chairman of Directors of Hancock Prospecting, and trustee of the Trust were entirely intermingled, the form of the orders reflected that underlying factual situation.
The legal response to the applicant's submissions turns on two propositions. The first concerns the concept of "property" in trust documents; the second turns on the variable language used in the cases with respect to identifying documents which should be passed to an incoming trustee.
It has long been recognised that the concept of property is by no means singular or straightforward. As the High Court explained in Yanner v Eaton, [30] property "does not refer to a thing; it is a description of a legal relationship with a thing. It refers to a degree of power that is recognised in law as power permissibly exercised over the thing." The joint reasons adopted as apt Professor Kevin Gray's proposition that "the ultimate fact about property is that it does not really exist: it is mere illusion". [31] Further, as explained by Gummow J, [32] "[d]istinct corporeal and incorporeal property rights in relation to the one object may exist concurrently and be held by different parties." [33] In the present case, identification of "ownership" of a particular document might have been as elusive as identifying the capacity of the person who created it and for what purpose.
The concept of "property" as a basis for identifying the rights of the beneficiary has been criticised as "circular" [34] and as "either superfluous or truncated". [35]
Secondly, the language in which the entitlement of an incoming trustee is described is, unsurprisingly, imprecise and greatly variable. Thus, it is noteworthy that although in Bird Charitable Trust the Royal Court of Jersey picked up the language of Lewin on Trusts, relied upon by the applicant, the Court's own summary of principle adopted language relied upon by the respondents (and the primary judge). In Waters' Law of Trusts in Canada, [36] in considering the duties of a trustee upon acceptance of the role, it is said that "a trustee must seek information from the other trustees, or from the surviving trustee, concerning the past and ongoing business of the trust. Between the trustees, the rule in Re Londonderry's Settlement [37] does not apply, and a trustee is entitled to examine any documents which have been originated in connection with the administration of the trust. Correspondence between trustees, minutes of meetings, and memoranda have to be made available and the new trustee is also entitled to see internal correspondence between the departments of a corporate trustee."
The reason for the imprecision in statements of legal principle may be identified in the third objection to the applicant's submissions, namely that which may be described as procedural. The point may be illustrated by the concise and persuasive judgment of the Court of Appeal of England and wales in Tiger v Barclays Bank Ltd. [38] The appeal related to an order requiring a bank to deliver up "all documents relating to the administration of the estate". The challenge having been raised for the first time on appeal, the Court declined to entertain the new contention. [39] However, the Court noted that the reasons for not entertaining the issue "are no mere technical reasons." [40] The judgment continued: "Counsel for the bank did not maintain before us the contention originally advanced in the notice of appeal that production should be limited to documents actually belonging to the estate of the testator, and, indeed, it became apparent that this restriction clearly could not be justified as it would make production by a retiring trustee to his successor of information essential to the execution of the trust depend on whether the physical property in the book or other document in which it was recorded belonged to the trust estate or to the retiring trustee. For this restriction counsel invited us to substitute a qualification to the effect that the documents to be produced should have been brought into existence by or come into the possession of the bank in its capacity as administrator pendente lite or executor of the testator's estate."
The significance of the constraint was said to arise from two matters, the first depending on "the special position of a trust corporation and the second on the dual capacity of a trust corporation acting also as a banker to an estate or trust of which it is personal representative or trustee." [41]
With respect to the second point, which is analogous to the circumstances in the present case, whilst acknowledging that "an investigation of the system of book-keeping used by the bank in cases in which it acts both as banker and trustee might justify the drawing of a line at some point between mere banking books or documents, on the one hand, and trust books or documents, on the other, the complete absence of evidence on the subject would make it impossible for us to vary the order by inserting a general exception of the kind suggested…". The Court proceeded, however: "We should, perhaps, add that where a trust corporation fills the double capacity of trustee and banker its successors in the trust should, at all events, be in no worse position as regards the obtaining of information with respect to the trust bank account than they would have been in if a third party had been the banker."
The Court also rejected the first proposition relating to the corporate nature of the trustee. In doing so it stated: [42] "This brings the matter down to a consideration of each individual document of the general description mentioned on its own merits. If such a document relates to the administration of the testator's estate and no more than that is known about it, then, at all events, it is potentially a document which would or might assist the plaintiffs in the administration of the estate. Whether it would in fact do so or not must depend on its actual contents, and of that question, prima facie, the plaintiffs, whose duty it is to carry on the administration, would be the best judges, and obviously they could only form an opinion by looking at the document itself. They would, moreover, have to see it for the purpose of conducting their side of any argument about its production which might ensue before the master. Accordingly, there seems to us from a practical point of view to be little, if any, substance in the partial and imprecisely defined exemption of internal correspondence and memoranda finally propounded by counsel for the bank."
This passage echoed a passage earlier in the reasons in the following terms: [43] "As the argument proceeded it became increasingly apparent to us that it was really impossible to evolve in vacuo and without evidence as to the particular documents in question in this particular case any general formula adequately defining the more restricted obligation as to the production of documents which the bank would have us substitute for the obligation imposed by the order under appeal."
As senior counsel for the applicant fairly pointed out, Tiger was not authority for the proposition that "an outgoing trustee ought to provide all documents relating to the administration of the estate." [44] That was true. It was also true that Tiger is distinguishable from the present case, in which the issue was raised below and on the basis of evidence. Nevertheless, Tiger illustrates with clarity the fundamental difficulty of formulating a test as to what should be provided to an incoming trustee and what should not, in a vacuum, and without reference to specific documents. Ultimately, the test must be whether particular documents were used by the outgoing trustee in the administration of the trust and would, for that reason, assist the incoming trustee in the continuing administration of the trust, for which purpose past events could not be ignored.
Tiger illustrates a further point, namely that if the trustee did not in a relevant sense have property in the document, but it was used in the administration of the trust, the document was properly "to be retained by the bank subject to the right of inspection and taking of copies." No doubt if that issue arose in the present case and Hancock Prospecting was able to claim ownership of a particular document (including an electronic record) to the exclusion of the Trust it would be entitled to retain the original, but would have to make it available for inspection and copying, if it had been used in the administration of the Trust.
The argument did not elucidate what practical difference, if any, there would be between the production of a document in accordance with the 2018 orders, and making it available for inspection and copying, such as to justify the intervention of this Court.
It is possible that some such documents may exist and fall within order (1)(a)(iv). It should also be noted that such documents may be documents with respect to which, pursuant to order (1)(c)(v), the applicant's affidavit must state that they have not been withheld on the basis that they are "[d]ocuments concerning only the affairs of companies and entities in the HPPL Group other than … the Trust". Clearly an affidavit which stated that such documents had been withheld would thereby bring the issue to the attention of the incoming trustee who could, if thought appropriate, exercise the liberty to apply to cross-examine the deponent.
The attempt to formulate an abstract description of a category of documents which might fall within a subparagraph of order (1)(a) and assert overreach is, in effect, an invitation to this Court either to reformulate the orders in the abstract and without evidence or, in the alternative, to undertake that task by reference to a specific document or class of documents. The former exercise is fundamentally misconceived for the reasons explained in Tiger; the latter exercise is one which should be undertaken in the Court below under the liberty to apply.
The proposition put forward by the applicant that there is an important issue of principle to be resolved by trying to formulate a different but abstract definition of the categories of documents which must be passed from an outgoing trustee to an incoming trustee is to create a chimera. It is not an invitation which this Court should accept. Accordingly, leave should be refused to the applicant to appeal from the orders of 5 November 2018.

Companies' application

The companies submitted that they should be granted leave to appeal on four bases, namely that the primary judge: [45] "… (a) erred by determining that the Subject Documents were trust property; (b) failed to consider HPPL and HDIO's property rights adequately or at all; (c) misconstrued the scope of Mrs Rinehart's duty as trustee; or (d) denied HPPL and HDIO procedural fairness by not hearing them on an issue that affected their property rights."
Further, ground 2 in the proposed cross-appeal alleged error in requiring Mrs Rinehart to do all things necessary and convenient to give the new trustee access to electronic information maintained by or for the trust.
To the extent that the second ground relied upon a supposed interference with the companies' property rights, it raised the same issues as did ground 1. In so far as the written submissions otherwise asserted there was ambiguity in an aspect of the description of the electronic systems in question, that is a matter which patently falls within the proper scope of an application by way of liberty to apply.
Each of the observations with respect to "property rights" referred to above applies with respect to the companies' claims that their property rights in particular documents have been disregarded. The ultimate question in every case will be whether the companies are entitled to assert ownership in a particular document or class of documents as against the Trust. In circumstances where they appear to manage both the affairs and records of the Trust, that may be a difficult task, particularly if there is a basis for concluding that the documents were used in the administration of the Trust. Significantly, the companies' submissions with respect to ground 2 commenced "[i]f any of the databases … to which order 3 relates contain documents owned by [the companies], his Honour disregarded [the companies'] property rights in those documents". The court is thus asked to address the question by reference to an hypothetical situation. As noted above, the alternative is to address the situation by reference to evidence and thus undertake precisely that exercise which should have been the subject of liberty to apply.
There is one further answer in relation to the claims based on "property rights". It is that the judge accepted in several passages in his reasons that, while the documents of the Trust to be passed to the incoming trustee were not limited to those trust documents which a beneficiary might inspect, nevertheless, as stated at [43], "the notion embraced by 'documents of the trust' is one of ownership as distinct from relevance or having had regard to a document" and that "it is inherent in the concept of trust documents that they are trust property." The judge dealt with the question of joint ownership at [45], noting that a document "does not cease to be a trust document just because someone else has an interest in it." The judge rejected the proposition that the outgoing trustee is not obliged to deliver up documents to the incoming trustee where they are jointly held by the Trust and another entity on the footing that one joint owner cannot claim possession against another. Nevertheless, in category (iii), the judge accepted that, where the applicant as outgoing trustee did not have, or was not entitled to have, the original, it was sufficient that she provide a copy. It is arguable that the same qualification should apply in respect of paragraph (iv) if another entity asserts sole ownership of a particular document or class of documents, even though they were used in the administration of the trust. If some similar qualification as that found in (iii) should be included in (iv), that is an amendment which could readily be made pursuant to liberty to apply.
In the course of oral submissions, senior counsel for the companies submitted that the effect of order (iv) was that simply by being used in the administration of the Trust, company documents had become trust documents, by a legal process which had not been articulated and had no sound basis in law. [46]
With respect, that apparently troubling proposition elides a number of factual inquiries. If a director of the company obtained a document in that capacity and then, as trustee of the shares she held in the company, used the information in the document in administering the Trust, it is by no means clear that the company would lose its entitlement to assert ownership in the document as against the Trust. Nevertheless, the incoming trustee should be entitled to have access to the information in the document and could do so by obtaining a copy from the outgoing trustee. It is simply another factual circumstance which may require variation of order (iv) to include the qualification as to copies contained in order (iii).
An analogy was drawn in the course of argument in relation to company accounts provided to an auditor. Evidence or common practice might reveal that the company retained property in the documents, but that the auditor could claim property in copies which he or she had made and annotated in the course of the audit.
Further, senior counsel alleged that the process proposed in the present case would create a "huge problem" for corporate entities where a director is also a trustee of shares in the company. The trustee who uses a document obtained as a director in administering the trust will be required to pass on the document (or at least the information in it by way of a copy) to any replacement trustee.
However, the problem is not novel, nor are the consequences extraordinary. It arises whenever there is a shareholding which allows the holder of the shares to appoint a director to the board. A corporate entity is likely to have controls in place to regulate the use of confidential information and documents provided to directors. It is clear that the companies did not have such controls in place, but that was no doubt because Mrs Rinehart, in her own name and as trustee of the Trust, controlled 100% of the shareholding of the companies.

Procedural unfairness

The companies raised a separate issue from those raised by the applicant, alleging that they had been denied procedural fairness with respect to the hearing of the motion. That claim turned on the proposition that they were not named as "persons affected by orders sought" on the front sheet of the notice of motion, either in its original, or its amended, form.
It was correct to say that the companies, which were the fourth and fifth defendants in the proceedings, were not named on the notice of motion. It was also true that the precise form of the orders ultimately made and about which the companies complain were not in the same terms as those set out in the notice of motion. It does not follow, however, that the companies were denied procedural fairness. As the first and second respondents submitted, the evidence filed on behalf of the companies did not assert that the companies were unaware of the circumstances in which they might be affected by the orders sought, namely that, as the primary judge recorded, there appeared to have been an intermingling of documents held by the applicant as trustee, and as director of Hancock Prospecting. [47] (It was never made clear that Hope Downs had any separate - or indeed any - interest in the application.)
Further, as noted above, Mr Bradley Ross, the chief legal counsel of Hancock Prospecting, set out in an affidavit filed on behalf of the applicant, but sworn in his capacity as an employed officer of Hancock Prospecting, the extent to which it had been necessary, following the 2015 reasons, for searches to be undertaken of records held by the company. [48] It was the companies' case that even the 2015 orders imposed severe burdens on them (or at least Hancock Prospecting).
Finally, the first and second respondents relied upon an affidavit of their solicitor sworn on 14 March 2019 which set out in some detail the attendance of directors and officers of the companies at various hearings before the primary judge, and the exchange of information and submissions which occurred in preparation for the hearings in the Court below. Because there was no assertion that the companies were unaware of the steps taken in the course of the proceedings, the evidence tendered, or the submissions made, it is not necessary to detail the content of that affidavit evidence.
While it could not be said that the companies did not have an opportunity to be heard before the primary judge, senior counsel submitted that the High Court had made it clear that it is "not for the person who is on notice to apply to intervene, it's for the person who is seeking the [affecting] orders." [49] The authority relied upon was John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd [50] and in particular the concurrent appeal of Walker Corporation Pty Ltd v White City Tennis Club Ltd ("Walker Corporation"). The problem identified by Walker Corporation was that, as the mortgagee of land with respect to which the Court imposed a constructive trust on the registered owner, the mortgagee should have been joined as a necessary party to the litigation. [51] In circumstances where the Club, which held an option over the land, knew of Walker Corporation's interest, the Court held that "the Club was seeking to overreach by the imposition of a constructive trust." This Court was held to have erred in failing to allow Walker Corporation to intervene on appeal to set aside the order imposing the constructive trust.
Walker Corporation does not assist in resolving the present application for leave to appeal. First, in this case the companies were already parties to the litigation and were not required to intervene. They could have been heard at any stage in their own rights had they so sought. Furthermore, they have been heard in this Court in any event.
Secondly, apart from the fact that they were parties, their interest in the proceedings was not as an independent third party mortgagee, as with Walker Corporation. They were, as described by Brereton J in the 2015 reasons, the "alter egos" of the applicant. [52]
Thirdly, the matters raised by the applicant in her objections to the scope of the 2018 orders did not distinguish between the potential affectation of her personal interests as a shareholder of Hancock Prospecting and the interests of Hancock Prospecting, of which she was a director.
Fourthly, and in contradistinction to Walker Corporation where the property rights of the mortgagee were affected by final orders, these were interlocutory orders subject to liberty to apply. The liberty to apply in the event of any difficulty arising in the interpretation, application or implementation of the orders was conferred on "[a]ll parties": order (4). This should be understood as encompassing all parties to the proceedings, including the companies.

Conclusions

The Court makes the following orders: 1. Dismiss the applicant's summons seeking leave to appeal from the orders made in the Equity Division on 5 November 2018. 2. Direct that the cross-applicants' cross-summons seeking leave to cross-appeal be treated as an application for leave to appeal and dispense with the filing and service of any further notices. 3. Dismiss the application by the cross-applicants for leave to appeal. 4. Order that the applicant pay the first and second respondents' costs of her application for leave to appeal. 5. Order that the cross-applicants pay the first and second cross-respondents' costs of their application for leave to appeal.

Endnotes

Hancock v Rinehart (Trust documents) [2018] NSWSC 1684 ("2018 reasons").
Hancock v Rinehart [2015] NSWSC 646; (2015) 13 ASTLR 1 ("2015 reasons"); orders were entered on 29 May 2015.
Derrawee Pastoral Company Pty Ltd v McConochie [1995] NSWCA 123 (Handley JA); Kara Kar Holdings Pty Ltd v Brookton Holdings [1997] NSWCA 171 at p 13(5) (Beazley JA); Trad v Harbour Radio Pty Ltd [2017] NSWCA 64 at [9].
Referred to as "HPPL" in various documents.
Referred to as "HDIO" in various documents.
Uniform Civil Procedure Rules 2005 (NSW), rr 51.11, 51.17; Tomko v Palasty (No 2) (2007) 71 NSWLR 61; [2007] NSWCA 369 at [2], [30].
2015 reasons at [1].
2015 reasons at [7].
Applicant's substituted summary of argument, filed 1 March 2019, par 2.
Tcpt 20/03/19, p 1(40).
2015 reasons at [337].
2015 reasons at [357]-[366].
2015 reasons at [365].
(1992) 29 NSWLR 405 at 433.
2018 reasons at [36].
Hartigan Nominees at 433D-E.
2018 reasons at [37].
(2012) (1) JLR 62 at [23]-[29].
2018 reasons at [41].
O'Rourke v Darbishire [1920] AC 581; Re Londonderry's Settlement [1965] Ch 918; Schmidt v Rosewood Trust Ltd [2003] 2 AC 709, 734-5; [2003] 3 All ER 76; [2003] UKPC 26; McDonald v Ellis [2007] NSWSC 1068, [46] (Bryson J).
See fn 38 below.
See [16]-[17] above.
Applicant's substituted summary of argument, par 14.
Applicant's substituted summary of argument, pars 27-28.
See now, Lewin on Trusts (19th ed, 2015) at 23-105.
Hancock v Rinehart (Freehills subpoena) [2017] NSWSC 530.
Affidavit, par 9.
Affidavit, par 15.
2015 reasons at [224].
(1999) 201 CLR 351; [1999] HCA 53 at [17] (Gleeson CJ, Gaudron, Kirby and Hayne JJ) (footnote omitted).
K Gray, "Property in Thin Air" (1991) 50 Camb LJ 252 at 252.
Yanner at [85].
The footnote to the text referred to Breen v Williams (1996) 186 CLR 71 at 80-81 (Brennan CJ), 88-90 (Dawson and Toohey JJ), 101-102 (Gaudron and McHugh JJ) and 126-129 (Gummow J); [1996] HCA 57.
J D Heydon and M J Leeming, Jacobs Law of Trusts in Australia (8th ed, 2016, LexisNexis) at [17‑16], p 351.
D Ong, Trusts Law in Australia (5th ed, 2018, The Federation Press), p 268.
4th ed, 2012, Carswell.
[1965] Ch 918.
[1952] 1 All ER 85 (Jenkins LJ reading the judgment of the Court comprised of Somervell, Jenkins and Hodson LJJ).
Tiger at 86E.
Tiger at 86G.
Tiger at 87D-E.
Tiger at 88B-D.
Tiger at 86G-H.
Tcpt, 20/03/19, p 5(15).
Submissions on leave to appeal for cross-applicants filed 20 February 2019, par 5.
Tcpt, 20/03/19, p 17(1)-(10).
2018 reasons at [47].
See [25] above.
Tcpt, 20/03/19, p 18(7).
(2010) 241 CLR 1; [2010] HCA 19.
Walker Corporation at [137].
2015 reasons at [224]. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 27 March 2019

Solicitors: Speed and Stracey Lawyers (Gina Hope Rinehart) Yeldham Price O'Brien Lusk (Bianca Hope Rinehart and John Langley Hancock) Corrs Chambers Westgarth (Hancock Prospecting Pty Ltd and Hope Downs Iron Ore Pty Ltd) File Number(s): 2018/369661 Decision under appeal Court or tribunal: Supreme Court Jurisdiction: Equity Division Citation: [2018] NSWSC 1684 Date of Decision: 5 November 2018 Before: Brereton J File Number(s): 2011/285907

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