Rinehart kids can have shares 'now': court

12 Sep 2012, 8:23 pm   -   Source: AAP
Gina Rinehart will meet her obligations as trustee of the family's multi-million dollar trust fund. (AAP)

Gina Rinehart will meet her obligations as trustee of the family's multi-million dollar trust fund. (AAP)

The NSW Supreme Court is not a forum for "troubled and wealthy children to vex and embarrass their mother", Gina Rinehart's lawyer says.

Gina Rinehart will meet her obligations as trustee of the family's multi-million dollar trust fund, and her children can claim their share of the family's trust "as of now", the NSW Supreme Court has heard.

But the court is not a forum for "troubled and wealthy children to vex and embarrass their mother", Ms Rinehart's barrister, David Russell, QC, told a hearing into the bitter family battle in Sydney on Wednesday.

"The beneficiaries are entitled as of now to say, give me my shares," Mr Russell said.

"This offer is made in open court."

But he added, "I think the beneficiaries would prefer not to for tax reasons".

Ms Rinehart's three eldest children, John Hancock, Bianca Rinehart and Hope Welker, are seeking to oust their mining magnate mother as trustee of the multi-million dollar family trust.

They claim she acted "deceitfully" and with "gross dishonesty" in her dealings with the trust, set up in 1988 by her father Lang Hancock, with her children being the beneficiaries.

Ms Rinehart is supported by her youngest daughter, Ginia, in the bitter family battle.

The court has heard Ms Rinehart contacted her three elder children in early September 2011, days before Ginia turned 25, when the trust was due to vest.

Ms Rinehart warned her children the vesting of the trust on September 6 would render them liable for a substantial amount of capital gains tax and lead to their bankruptcy.

However in April, she brought forward the vesting date of the disputed fund from 2068 without notice and despite her previous warnings, the court heard.

Andrew Bell, SC, representing the eldest children, said Ms Rinehart "instilled the fear of bankruptcy" in them and withheld financial advice on the issue from them.

But the court heard the children got their own advice and now believed they were never at risk of bankruptcy.

This further act of misconduct was a "breach of trust" and Ms Rinehart was "wholly unsuitable" to act as trustee, Mr Bell said.

"She is prepared to resort to deceit and dishonesty to these beneficiaries to get what she wants," Mr Bell said.

The court heard Ms Rinehart also told her eldest children that if they proceeded with the action against her, it would be held against them all their life.

Mr Russell said Ms Rinehart had already done "exactly what (her children) asked the court to do on their behalf" in relation to the trust.

"The law is clear as to her obligations and she will meet them," Mr Russell said.

But he added, "The mercurial destruction of (Ms Rinehart's) reputation as appears to be sought by their beneficiaries is the one thing that could seriously damage the trust assets.

"Bizarre does not begin to describe the extraordinary claims made here...It is simply, simply a matter of spite."

Earlier, Ginia Rinehart's lawyers were refused leave to seek to have the matter dealt with through mediation, after Justice Paul Brereton ruled it did not have "high prospects" at this stage.

The matter has been adjourned to a later date.

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