Rose Porteous’ desire for luxury fuelled Rinehart’s feud with father, court hears

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Rose Porteous’ desire for luxury fuelled Rinehart’s feud with father, court hears

By Jesinta Burton
Updated

Details of the feud between mining pioneer Lang Hancock and his daughter Gina Rinehart before his death have been laid bare, with the company she inherited accusing its founder of shifting lucrative mining assets to fund the luxurious lifestyle of his wife, Rose Porteous.

The events that led to Rinehart and her father’s souring relationship were aired by Hancock Prospecting as it fends off a multibillion-dollar claim by the descendants of Lang’s former business partner Peter Wright for a stake in Hancock Prospecting’s Hope Downs iron ore mines.

Late mining pioneer Lang Hancock’s actions towards the end of his life, and his relationship with wife Rose Porteous, have become a focal point of a multibillion-dollar Supreme Court case.

Late mining pioneer Lang Hancock’s actions towards the end of his life, and his relationship with wife Rose Porteous, have become a focal point of a multibillion-dollar Supreme Court case.Credit: Marija Ercegovac

On Thursday, Hancock Prospecting’s lawyer Noel Hutley, SC, told the court Lang embarked on a “textbook” breach of fiduciary duty in the final years of his life, transferring assets, including Hope Downs, from the company to family trust entities over which he had full control.

Lang did that, Hutley said, for his own benefit and that of Porteous, not for his company Hancock Prospecting, and in a way that kept shareholders, including Rinehart, in the dark.

The court was told Rinehart’s repeated requests for information were met with obfuscation by Lang, which ultimately cost her role in the family empire.

“He never divulged what he was doing. In fact, sadly and wrongly, Lang Hancock deliberately went about depriving Rinehart of the ability to obtain information by removing her from all positions with the trust and her director position with Hancock Prospecting,” Hutley said.

“It ultimately culminated in him attempting to leave the income, if not the tenements, to the trust.”

Hutley told the court Lang realised the error of his ways shortly before his death and began attempting to reverse it, but died in 1992 before that could be completed.

He said his client took “no joy” in revisiting the events of the 1980s and early 1990s, after Lang wed his former maid, but said it was a short period of his lengthy career and one in which he was at the behest of the desires of Porteous.

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“[Lang] succumbed to the pressures of Rose Porteous and her desire of a luxurious lifestyle and the events we come to today,” Hutley said.

“We submit this was all done at the behest of Rose Porteous ... he began expending vast sums of money on mansions and the like.”

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Hutley said it pained his client to admit its former founder’s fiduciary duty breaches, but said Lang showed no regard for the interests of Hancock Prospecting nor his former business partner’s company Wright Prospecting, despite its case he was acting on behalf of the partnership.

On the contrary, Hutley said Lang made the moves to exercise full control over the tenements and divert monetary benefits away from Hancock Prospecting without Rinehart scrutinising what he was doing.

Hancock calls on reclusive heiress to front court

The submissions came just hours after Hutley requested reclusive mining heiress Angela Bennett explain her absence in the battle her father’s company was waging against Hancock Prospecting after producing a flurry of documents he claimed rendered its claim “hopeless”.

But Hutley said memorandums exchanged in 1989 between several high-ranking Wright Prospecting executives, Peter’s son Michael Wright, and daughter Angela Bennett indicated they knew the company had no interest in it.

Documents exchanged in the days after those memos, Hutley said, showed the parties proposing that a portion of Hope Downs – known then as East Angelas – be made a joint asset to even out the value in a partnership carve-up.

“This document shows an acute awareness and appreciation by the four individuals who created it, and it was addressed to and received by Michael Wright and Angela Bennett,” he said.

“This case is hopeless, should never have been brought, and we would invite Wright Prospecting to rescind the claim to East Angelas. It must be dismissed.”

The position was further corroborated, Hutley claimed, by minutes of board meetings to that effect.

The court was told many of those involved in negotiations at the time had since died, with 78-year-old Bennett one of the few who could still give evidence.

Hutley questioned why she had not submitted a statement in the case, referencing court rules whereby it can be inferred that if a party chooses not to give evidence, it is because it would not have helped their case.

The court was told Bennett had given evidence in a previous case that she had suffered impairment of her memory following a surgery to remove a brain tumour in 2003. Regardless, Hutley said her absence should be explained.

“There has been no affidavit to explain [Bennett’s] absence in this case,” he said.

“If Wright Prospecting indicates Mrs Bennett is not in a position to give evidence, we will accept it, but otherwise, absent a proper explanation, there would be a Jones and Dunkel inference. We would like an explanation.”

Who is Angela Bennett?

Angela Bennett is the daughter of Peter Wright, who along with Lang Hancock pioneered the discovery of valuable iron ore deposits in Western Australia’s Pilbara region. 

Royalties from the tenements pegged by Wright and Hancock in the 1960s flow to Bennett and her nieces Leonie Baldock and Alexandra Burt, who together own Wright Prospecting.

The Australian Financial Review Rich List for 2023 put Bennett’s wealth at $4.63 billion.

Despite being one of the richest people in the country, Bennett maintains a low profile, with as few as two public photographs of her in existence.

Hutley said the court had been denied the ability of the best view of evidence and Hancock Prospecting had been denied the benefit of Bennett’s account courtesy of Wright Prospecting’s delay in bringing the action until 2010, which he said should also render the lawsuit void.

“The extraordinary delay, if this case was seriously believed to be true, by those two individuals [Michael Wright and Angela Bennett] ... they would have been the central witnesses to the Wright Prospecting case,” he told the court.

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The court was also taken through documents exchanged in the wake of Hancock Prospecting’s 2005 joint venture with Rio Tinto, in which it handed the mining giant a 50 per cent stake in Hope Downs.

A work diary of Wright Prospecting’s general manager indicated the company was contacted by the son of Don Rhodes – Wright and Hancock’s former business associate, whose company is now fighting for a 1.25 per cent stake in Hope Downs’ royalties.

Ken Rhodes raised his right to a royalty under a 1969 agreement his father had inked with the original pioneers, to which Wright Prospecting allegedly informed him not to look to them for a royalty for the portion of Hope Downs.

The documents appear to contradict evidence tendered by Wright Prospecting, which it said showed the lucrative Pilbara iron ore site was always meant to be shared.

Wright maintains it is entitled to a half-share of the royalties from Hope Downs – now home to four operational mines deemed the country’s most successful – because it never relinquished its partnership interest in the asset.

Gina Rinehart’s other legal opponents – her eldest children, John Hancock and Bianca Rinehart – are expected to begin arguments for their case that Hope Downs was a trust asset left to them by their grandfather on Monday.

The case continues.

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