Hancock v Rinehart (Trust documents)

1. [1]

   On 28 May 2015, in connection with the appointment of the second plaintiff Bianca as new trustee of the Hope Margaret Hancock Trust (“the Trust”) in place of the first defendant Mrs Rinehart, an order was made for the delivery up by Mrs Rinehart to Bianca (as replacement trustee of the Trust) within 28 days of all “documents of the Trust” in her possession custody or power (“the delivery up order”). [1] Bianca contends that Mrs Rinehart has not fully complied with that order, and by notice of motion filed on 3 September 2015 (“the 3 September 2015 motion”) the plaintiffs John and Bianca sought further orders in aid of implementation and enforcement of the 28 May 2015 orders, and to enable them properly to consider and interrogate the account furnished by her pursuant to the May orders (“the Account”), including by requiring Mrs Rinehart to produce specific categories of trust documents which she had allegedly failed or refused to produce; and requiring her to provide an affidavit verifying her compliance with the delivery up order and also explaining inter alia the manner in which trust records were kept, the steps taken by her to locate and produce all trust records, and the basis upon which she was withholding any trust records. By a motion filed on 23 September 2015, the first defendant applies pursuant to liberty to apply reserved in the May 2015 orders to be relieved of her obligation to deliver up certain classes of documents, namely those which contain “private information”, or are confidential or privileged

2. [2]

   The plaintiffs contend that the first defendant has not made a genuine attempt to comply with the delivery up order, and indeed has deliberately not done so, and that only by a prescriptive regime can compliance be verified. The first defendant’s position is that she has indeed made a genuine attempt at compliance, in difficult circumstances, and that any deficiency is attributable to a good faith interpretation on her part of the order (in particular, as to what is a “document of the Trust”), or inadvertence.

3. [3]

   There was no suggestion that the Court could not make the orders sought, or orders to like effect. Insofar as it is necessary, the requisite jurisdiction and power may be found in (NSW) Civil Procedure Act 2005, s 135(1), which empowers the court to give directions with respect to the enforcement of its orders; [2] and in the inherent jurisdiction of the Court to ensure that its orders are complied with. [3]

Procedural history

1. [4]

   It is necessary to say something of the labyrinthine procedural history of the 3 September 2015 motion.

2. [5]

   In anticipation of the motion, a subpoena for production had been issued at Bianca’s request to Sceales & Company Lawyers (“Sceales”) on 26 August 2015. On 16 September 2015, Sceales produced, to the Court, documents in answer to the subpoena (“the Sceales documents”). Mrs Rinehart made a claim of legal professional privilege in respect of some of the Sceales documents.

3. [6]

   The hearing of the 3 September 2015 motion, including Mrs Rinehart’s privilege claim, commenced on 29 September 2015. As the Sceales documents were sought in connection with the 3 September 2015 motion, its hearing could not be concluded until the privilege dispute was resolved. In a judgment delivered on 15 October 2015, [4] I granted access to certain of the Sceales documents to Bianca, made directions for evidence and submissions in relation to Mrs Rinehart’s privilege claim in respect of the remainder, and appointed 3 November 2015 for the hearing of Bianca’s application for access to those documents. Concurrently, I extended to 19 October 2015 time for lodgement and service of the plaintiffs' submissions and evidence in respect of their application for a gross sum costs order in respect of the principal proceedings.

4. [7]

   The first defendant’s written submissions in respect of the application for access to the Sceales documents were lodged on 28 October 2015, and the plaintiffs’ on 2 November 2015. That application was heard on 3 November 2015, when judgment on it was reserved. Meanwhile, on 29 October 2015, I heard the gross sum costs application. Judgment on the gross sum costs order application was delivered on 5 November 2015. [5] On 12 November 2015, orders were made consequent on that judgment, and the question of costs of that application was heard and determined.

5. [8]

   On 2 February 2016, judgment was delivered on the application for access to the Sceales documents, holding that Mrs Rinehart had not sustained a claim of privilege in her own right (as distinct from in right of trustee) to the disputed documents. [6] Judgment was also delivered on the question of costs of that part of the substantive proceedings which had not been encompassed by the gross sum costs order. [7] Access to the Sceales documents was granted to Bianca, and directions made for service by her of any further evidence (arising out of the Sceales documents) in support of the 3 September 2015 motion, and any further written submissions, by 16 February 2016; and for any evidence in response and further submissions by the first defendant by 2 March 2016. The proceedings were to be listed for the remainder of the hearing of the 3 September 2015 motion on a date to be fixed.

6. [9]

   However, the orders in respect of the Sceales documents were, on the first defendant’s application, stayed, initially until 5 February 2016, to enable Mrs Rinehart to consider an appeal. On 5 February 2016, the stay was continued until and including 8 February 2016. On 8 February 2016, the proceedings were adjourned to 16 February 2016 for hearing on a contested basis of the first defendant's application for a further stay of the orders made on 2 February 2016, and the stay was extended until and including 16 February 2016. On 16 February 2016, the first defendant’s application for a further extension of the stay was dismissed; but an interim stay was granted until and including 7 March 2016, or such further time as the Court of Appeal might on application order; and the timetable for further evidence and submissions on the 3 September 2015 motion was suspended until further order. The proceedings were adjourned for further directions.

7. [10]

   On 24 March 2016, the Court of Appeal dismissed Mrs Rinehart’s application for leave to appeal from the judgment on Bianca’s application for access to the Sceales documents. [8] Subsequently, orders were made in respect of the 3 September 2015 motion that by close of business on 29 March 2016, the defendants inform the plaintiffs whether a claim for privilege in respect of documents produced by PricewaterhouseCoopers (“the PwC documents”) would be made, and the proceedings were otherwise adjourned to 30 March 2016.

8. [11]

   On 30 March 2016, the hearing of the remainder of the 3 September 2015 motion was fixed for 11 May 2016. The plaintiffs lodged additional written submissions on 18 April 2016, and the first defendant on 4 May 2016. At the request of the parties, the hearing date was changed to 12 May 2016. At the hearing on 12 May 2016, the plaintiffs amended their motion, in particular to seek production of further categories of documents identified in Annexure B to the amended motion, which arose out of the production of the Sceales documents and the PwC documents.

9. [12]

   The hearing of the remainder of the 3 September 2015 motion resumed on 3 June 2016, when judgment was reserved. However, on 22 July 2016, Sceales & Company (belatedly) produced further documents pursuant to the 26 August 2015 subpoena. On 2 August 2016, directions were made in respect of access and privilege claims, and on 11 August further directions were made for evidence in respect of the claims for privilege advanced by the defendants, the hearing of which was appointed for 18 August 2016. At the hearing on 18 August 2016, I gave an ex tempore judgment rejecting the claim for privilege and granting access to the documents in respect of which privilege had been claimed, following which Mr Withers, for the plaintiffs, sought and was granted leave to tender them on the 3 September 2015 motion, and to make submissions in respect of them, which were completed later that day.

10. [13]

    However, a new issue immediately arose. On 9 August 2016, Bianca had requested the law firm Herbert Smith Freehills (“Freehills”) – which had, under an earlier guise, acted for Mrs Rinehart, at least including in her capacity as trustee of the HMH Trust although possibly also in other capacities and for other Rinehart entities – to deliver up to Bianca a copy of all documents held by Freehills that were created or received in connection with advice provided by it to the HMH Trust. After some further exchanges of correspondence, Freehills on 7 October 2016, without Mrs Rinehart’s knowledge or consent (but in circumstances in which Freehills understandably but mistakenly believed that she had been afforded an opportunity to object) delivered up to Bianca 43 documents, on the footing that they were trust documents to which Bianca as the new trustee was entitled (“the Freehills documents”). By motion filed in court on 31 October 2016, Mrs Rinehart applied for orders restraining the plaintiffs from using 27 of the Freehills documents, and requiring their return to Freehills or to her. That application was heard on 31 October 2016, when I held that the 27 contentious documents should be returned to Freehills or the defendants. Leave was granted to Bianca to reopen the evidence and submissions on the 3 September 2015 motion, in order to adduce in evidence those of the Freehills documents that were not to be returned, and to make submissions about them. That leave was exercised subsequently on the same day, when judgment on the 3 September 2015 motion was again reserved.

11. [14]

    Following correspondence between the solicitors for the parties, and in circumstances where, the parties being in dispute, Freehills (reasonably) declined to release any further documents to her, on 2 December 2016 Bianca caused to be issued a subpoena to Freehills for production of 25 of the 27 returned documents. By notice of motion filed on 31 January 2017, Mrs Rinehart applied to have that subpoena set aside, or alternatively access refused to the documents produced in response to it. Mrs Rinehart contended that the subject documents were not documents of the Trust; were the subject of her personal legal professional privilege, or that of HPPL; and were not required for any legitimate forensic purpose. That motion was heard on 30 March 2017, when judgment was reserved.

12. [15]

    Judgment was delivered on 4 May 2017, holding that Mrs Rinehart, and HPPL, were unable to sustain a claim of privilege, as against Bianca, in respect of any of the documents in issue, because the evidence did not establish that any of those documents was prepared exclusively for an entity other than the HMH Trust, as distinct from pursuant to a joint retainer, the consequence of which was that privilege was not maintainable against the HMH Trust as one of the clients. [9] The court ordered that the first defendant’s motion filed 31 January 2017 be dismissed with costs; and that there be general access to the Freehills documents. The plaintiffs then sought an opportunity to reopen their case on the 3 September 2015 motion, tender the Freehills documents to which they now had access, and to make submissions on those matters. The Court further ordered that the plaintiffs have leave to reopen the evidence on the 3 September 2015 motion and for that purpose lodge by 11 May 2017 a folder containing an index, copies of the documents so tendered, and any submissions they wish to make in respect of the tender, and the documents if admitted; that the defendants lodge by 18 May 2017 a folder containing an index, any evidence in reply to the additional evidence, any objections and submissions they wish to make in respect of the tender, and the documents if admitted, and a statement whether they oppose the question of the admission of any documents so tendered, and any submissions made in respect of them if admitted, being dealt with on the papers without any further oral hearing; and that the plaintiffs lodge with my associate by 25 May 2017 any evidence and submissions in reply. The operation of the order for access to the Freehills documents was stayed until 11 May 2017 or further order, with liberty to apply in the meantime for an extension of time, which liberty was not exercised.

13. [16]

    On 15 May 2017, on the request of the parties, the Court ordered that time for the plaintiffs’ folder be extended to 22 May 2017, time for the defendants’ folder to 29 May 2017, and time for the plaintiffs’ reply to 5 June 2017. On 23 May 2017, again on the request of the parties, the Court extended time for the plaintiffs’ folder to 24 May 2017, the defendants’ folder to 2 June 2017, and the plaintiffs’ reply to 9 June 2017.

14. [17]

    The plaintiffs lodged their folder and further submissions on 24 May. However, on 19 June 2017 the defendants filed a further motion, seeking an indefinite stay of the proceedings, apparently pending determination of proceedings in the Federal Court. This application was heard and determined on 28 June 2017, when the Court ordered that the motion filed on 19 June 2017 be dismissed with costs, but further extended time for the defendants’ folder and submissions to 12 July 2017. The defendants duly lodged their further submissions on 12 July, and the plaintiffs’ reply was lodged on 3 August 2017.

Admissibility of the Freehills documents

1. [18]

   On the reopening, the plaintiffs tendered with their submission of 24 May 2017 various of the documents which had been produced by Freehills. The first defendant objected to their receipt into evidence, both in respect of those which were conceded to be trust documents, and those which were not. The basis of the objection was that the documents were said to be subject to joint privilege, which privilege could not be waived, and the documents could not be put into evidence, without the consent of the others entitled to the joint privilege, which (presumably) included the first defendant. [10]

2. [19]

   For the proposition that the documents were subject to joint privilege, the first defendant adduced no evidence, but relied on the Freehills Subpoena judgment. [11] However, in the Freehills Subpoena judgment, I did not affirmatively determine that there was a joint retainer, or joint privilege. I said that while there was clear evidence of a retainer by the Trust, the position in respect of other Hancock entities was less clear, though it seemed that Freehills were acting concurrently for other Hancock entities; and concluded that Freehills were during the relevant period acting, if not for the Trust alone pursuant to the only retainer that had been identified, then for multiple Hancock entities, including the Trust (emphasis added):

3. [20]

   As privilege could be maintained against Bianca as trustee of the Trust only if it was established that Freehills were acting for another Hancock entity, to the exclusion of the Trust, in circumstances where the other entity was entitled to maintain a claim of privilege against the Trust, [12] it was my conclusion that Mrs Rinehart and HPPL were unable to sustain a claim of privilege, as against Bianca, in respect of any of the documents in issue, because the evidence did not establish that any of those documents was prepared exclusively for an entity other than the HMH Trust, as distinct from pursuant to a joint retainer, the consequence of which was that privilege was not maintainable against the Trust as one of the clients. [13]

4. [21]

   The evidentiary position has not changed. The first defendant has not affirmatively established that she is entitled, in her personal as distinct from trustee capacity, to privilege in any of the Freehills documents. Moreover, the common law position in respect of the ability of one holder of a joint privilege to tender documents is affected by (NSW) Evidence Act 1995, s 124, which permits one of several holders of a joint privilege to adduce evidence of a communication by any of them (or a confidential document prepared at the direction or request of any one of them), in a civil proceeding in connection with which two or more parties have, before the proceedings commenced, jointly retained a lawyer “in relation to the same matter”. The defendants invoke the judgment of Rein J in Akcan v Cross [14] for the proposition that the reference to “the same matter” in s 124 is to the same subject matter as is involved in the relevant civil proceeding. His Honour said (at [13]):

5. [22]

   His Honour was rejecting a submission that “the same matter” referred back to “a civil proceeding”, and that was all that was required for the disposition of the case. With great respect, I take a wider view of the construction of s 124. In my view, the reference to “the same matter” is not to the subject matter of the proceeding, but to the subject matter of the joint retainer. [15] This construction is supported by the absence of any prior reference to any “matter” in s 124(1), and in my view it is a far more natural reading of s 124(1) to treat “in relation to the same matter” as part of the description of a joint retainer – that is, a retainer of a lawyer by two or more parties in relation to the same matter – rather than as referring back to the subject matter of the relevant “civil proceeding”. From a purposive perspective, there appears to be no good reason why the exception provided by s 124 should operate only where the civil proceeding in question has the same subject matter as the joint retainer, and very difficult questions of degree would then arise as to what degree of “sameness” was required to engage the section.

6. [23]

   Further, insofar as the Freehills documents have previously been tendered and admitted into evidence in open court, in the absence of any suppression order, privilege in them is no longer sustainable. Some of the documents presently in issue were previously tendered by affidavit (via exhibits PSS-6, PSS-7 and TRP9), and were not then the subject of any suppression order. The fact that they may have been tendered for a limited purpose does not of itself deprive their tender of the character of a waiver. [16]

7. [24]

   Accordingly, I have treated the Freehills documents tendered on the re-opening, to which objection was taken, as in evidence.

8. [25]

   The first defendant also sought a suppression order in respect of those documents, restricting publication to the second plaintiff, “to protect joint legal professional privilege in the documents”. For reasons already advanced, such privilege has not been established; and any privilege would be destroyed upon their tender, a consequence of which is that otherwise confidential communications and documents may be “thrown open” to third parties. [17] Moreover, as Bianca is entitled to the documents in her trustee capacity (an issue which is elaborated below), there is no basis for preventing her from permitting John, who is a beneficiary, to inspect them.

The May 2015 orders

1. [26]

   The orders of 28 May 2015 were relevantly as follows:

2. [27]

   The documents referred to in paragraph 3 of the claims for relief were:

3. [28]

   Paragraph 58 of the Third Further Amended Statement of Claim, which was incorporated by reference in the order through the reference to claim 3, listed 16 specified documents or classes of documents.

4. [29]

   Time for compliance with order 3 was on 25 June 2015 extended to 23 July 2015, and on 4 August 2015 to 6 August 2015. No further extension has been sought or granted.

Documents of the Trust

1. [30]

   At the core of the dispute as to the adequacy of Mrs Rinehart’s compliance is contention about what falls within the scope of the delivery up order, and in particular what is “a document of the Trust”. The 28 May 2015 orders required delivery up of “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”. No dispute has arisen about the classes of documents specifically referred to in the statement of claim; the dispute relates to the more nebulous and wider description of “documents of the Trust”. That the content of this class is capable of dispute is unsurprising for, as was said by Salmon LJ in Re Londonderry’s Settlement, [18] it has not been comprehensively defined.

2. [31]

   The plaintiffs submit that the order catches “all documents in her possession custody or power relating to the administration of the Trust”. The first defendant has taken the position that the following are not “documents of the Trust”, and are therefore not within the delivery up order:

   1. (1)

      Documents disclosing deliberations on the part of the first defendant in her Trustee capacity, but which do not reflect or refer to a decision taken by her in that capacity;

   2. (2)

      Documents recording communications of the trustee with some or all of the beneficiaries (save where such a document records a decision made by the trustee);

   3. (3)

      Documents that were merely subject of the trustee’s consideration in making a decision or administering the trust;

   4. (4)

      Documents relating to advice obtained by the first defendant in response to allegations or threats made against her by one or more of the beneficiaries or threatened or actual court proceedings against her by them, being documents the subject of legal professional privilege that belongs to her personally and is not held on behalf of the beneficiaries;

   5. (5)

      Documents that are confidential in nature, in respect of which in her trustee capacity she does not hold the obligation of confidence on behalf of the beneficiaries as a whole (such as private information about a particular beneficiary); and

   6. (6)

      Documents concerning only the affairs of companies and entitles in the HPPL Group other than HMHT Investments Pty Ltd or the Trust.

3. [32]

   The principal judgment provides some background to the delivery up order: [19]

4. [33]

   However, it is important to appreciate that the context to which that passage was addressed was whether the obligation to permit inspection and to deliver up the trust documents had been released by the Hope Downs Deed, and I concluded that it had not, and in particular that the new trustee was entitled to delivery up of all trust documents, of whatsoever date.

5. [34]

   Thus, according to the principal judgment, “trust documents” relevantly included:

   1. (1)

      at least, documents containing or evidencing the terms of the trust, documents relating to the trust property, and the accounts of the trust, including the primary vouchers and receipts;

   2. (2)

      in the context of this case, the beneficiaries being of full age and capacity and the trust having vested, documents which evidence their confidential communications and considerations and record their decisions. In her submissions of 26 September 2015, the first defendant seized on the statement (in [360]) that “at least in the absence of an action impugning their good faith, trustees may be permitted to withhold documents which evidence their confidential communications and considerations, as they are not obliged to disclose their reasons”, and – submitting that there was here no action impugning Mrs Rinehart’s good faith – took this as acceptance that such documents need not be delivered up. However, that rather overlooks the following sentence: “But it seems to me that these beneficiaries being of full age and capacity and the trust having vested, they – and the new trustee – are entitled to inspect all trust documents, including those that record the decisions of the trustee”. In this respect, I intended to indicate that the exception for “confidential communication and considerations” referred to by Harman LJ in Re Londonderry’s Settlement, [20] was not apt in these circumstances where the beneficiaries were of full capacity and the trust had vested – though perhaps that was obscured by economy of language;

   3. (3)

      but not documents relating to the trustee’s defence of proceedings brought against her by the beneficiaries, which are at least ordinarily, documents of the trustee personally and not trust documents.

6. [35]

   The narrower view of what is a “document of the Trust”, embraced by the first defendant, is founded on cases which consider the right of a beneficiary to inspect trust documents, on which I also drew for examples in the above cited passage. Statements in Re Londonderry’s Settlement to the effect that trustees may be permitted to withhold documents which evidence their confidential communications (including with individual beneficiaries) and considerations, [21] or which relate to their deliberations as to the manner in which they should exercise their discretionary powers, [22] have been generally accepted in Australia. [23] Thus in Hartigan Nominees Pty Ltd v Rydge, [24] Sheller JA said that documents “which may evidence the reasons why the trustees have made their decisions” were private to the trustees. [25] Mahoney JA also observed that trustees were permitted to act without detailing their reasons, and that the beneficiary’s right does not extend to notes made for or by a trustee of discussions with other beneficiaries. [26]

7. [36]

   However, Mahoney JA recognised 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: [27]

8. [37]

   Other authority supports the existence of such a distinction, and the proposition that although there are analogies between the rights of a beneficiary to inspect trust documents, and the obligation of a trustee to deliver up trust documents to a successor, they are not identical, and the obligations that an outgoing trustee may owe to an incoming trustee are more extensive than those owed to a beneficiary seeking inspection. In Tiger v Barclays Bank Ltd, [28] the outgoing trustee, a trust corporation, had acted in the dual roles of trustee, and banker for the trust estate. [29] It was ordered to deliver up to the new trustee “all documents in the possession, custody or control of the defendants relating to the administration of the estate”. [30] On appeal, the former trustee sought to have the order varied so as to exclude “any books or documents kept or brought into being by the defendants as banker of the said estate”. [31] Jenkins LJ, delivering the judgment of the Court of Appeal, said:

9. [38]

   And further:

10. [39]

    And in a highly persuasive judgment in In the matter of the Bird Charitable Trust, [32] which is important not least for its articulation of the duty of an outgoing trustee to co-operate fully and actively in the transfer of the trusteeship by making all relevant documents and correspondence available to the incoming trustee, and also by providing any explanation to questions reasonably raised by the incoming trustee, the Royal Court of Jersey (M.C. St. J. Birt, Esq., Bailiff, and Jurats Le Breton and Marett-Crosby) wrote the following, which I respectfully adopt:

11. [40]

    The distinction between what a beneficiary may be entitled to inspect, and what a trustee is bound to deliver up to its successor, has been recognised in this Court, holding that although a document was one that the trustee would be expected to pass on to any successor, it had a discretion to refuse to permit a beneficiary to inspect it. [33]

12. [41]

    Contrary to the first defendant’s submissions, the Australian authorities to which they refer do not support a different, narrower, view: those authorities are concerned with a beneficiary’s right of inspection, and not with an outgoing trustee’s obligation to its successor. In the light of the authorities referred to above, that obligation may be summarised as being – subject to the court’s discretion to mitigate it – to hand over to an incoming trustee all documents and information which relate to the administration of the trust [34] so as to enable the incoming trustee to fulfil his duties. The rationale for it is that the new trustee is, prima facie, entitled to be placed in just a good as position as the outgoing trustee in relation to all aspects of the administration of the trust. Cases which relieve trustees of the obligation to permit inspection by beneficiaries of documents which evidence their reasons for exercising their discretionary powers are founded on the principle that such decisions are not examinable (at least absent want of good faith, or express obligation), [35] and that rationale does not apply against a replacement trustee. While the Court has a discretion to direct that documents or information not be supplied where satisfied that that is the appropriate course, the onus lies on the outgoing trustee to show why that discretion should be exercised.

13. [42]

    Thus insofar as the first defendant has proceeded on the basis that (a) documents disclosing deliberations on the part of the first defendant in her Trustee capacity, but which do not reflect or refer to a decision taken by her in that capacity, and (b) documents recording communications of the trustee with some or all of the beneficiaries (save where such a document records a decision made by the trustee), are not “documents of the Trust” which she must deliver up, she has proceeded on a misconceived basis. In particular, the view that documents recording trustee deliberations as opposed to decisions are not trust documents is misconceived: although trustees are not bound to permit beneficiaries access to documents recording their deliberations as distinct from their decisions, that does not mean that such documents are personal documents of the trustee rather than trust documents to be handed over to a replacement trustee.

14. [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. [36] It is true that Young CJ in Eq said, in Global Custodians Ltd v Mesh, [37] that it is misconceived to think of the right of the beneficiary to inspect documents in terms of a proprietary right of the beneficiary, and that all the beneficiary really has is rights against the trustee. However, that was a characterisation of the right of a beneficiary, and not of the nature of the documents. 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.

15. [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.

16. [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.

17. [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. For example, the first defendant’s solicitors responded to an inquiry whether there were any documents to be produced relating to her consideration of the Trust’s entitlement to dividends, “including, for example, whether the Trust was receiving adequate dividends or whether the directors had made appropriate decisions in respect of the determination of payment of dividends …”:

18. [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.

19. [48]

    Tiger v Barclays Bank Ltd, 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.

20. [49]

    Accordingly, the “documents of the Trust” which Mrs Rinehart is obliged to deliver up comprise:

    1. (1)

       All documents received or held by her or on her behalf exclusively in her trustee capacity (in which the Trust alone has a proprietary interest);

    2. (2)

       All documents received or held by her or on her behalf jointly in her trustee capacity and also in another capacity;

    3. (3)

       All documents received or held by her or on her behalf in her trustee capacity, in which the Trust and another entity or entities also have a proprietary interest, provided that where the original is not in her possession or control a copy must be provided; and

    4. (4)

       All documents received or held by her in some capacity other than as trustee, including as a director of HPPL, which were used in the administration of the Trust.

21. [50]

    It is convenient to turn now to particular classes of documents which have been the subject of contention.

22. [51]

    For reasons explained above, a document created by a trustee in the course of administering the trust, which records the trustee’s deliberations though not a decision, cannot be withheld from a replacement trustee, even though it might be one which beneficiaries are not entitled to inspect. Such a document is plainly a record of the trust. If there were some special basis on which such documents should be withheld, then they ought to have been the subject of an application under the liberty to apply. They were not, and even now that an application under the liberty has been made, it does not address them. Documents withheld on this basis have been wrongly withheld.

23. [52]

    Although purely personal communications between a person who happens to be a beneficiary and a person who happens to be the trustee – such as, in this case, between mother and child – which are unrelated to the administration of the trust, would not be trust documents, communications from a beneficiary to a trustee relating or referring to the administration of the trust will be received by the trustee in its trustee capacity and will, therefore, be documents of the Trust. In Hartigan Nominees Pty Ltd v Rydge, Mahoney JA acknowledged that such documents might have to be passed on to a successor trustee, though they were not available for inspection by beneficiaries. For the reasons given above, such documents are not exempt from delivery up to a new trustee. Documents withheld on this basis have been wrongly withheld.

24. [53]

    Numerous external consultants – lawyers and accountants – were retained to provide advice to Mrs Rinehart, including in her trustee capacity.

25. [54]

    Where a document has been brought into existence or is held by an external consultant pursuant to a retainer by Mrs Rinehart in her trustee capacity, that document is a trust document. That is so because the Trust has a proprietary interest in the document, and that is so regardless of whether or not the document explicitly (or for that matter implicitly) refers to the Trust.

26. [55]

    Where a document has been brought into existence or is held by an external consultant pursuant to a joint retainer by Mrs Rinehart in her trustee capacity and other Hancock entities, it is (for present purposes) nonetheless a trust document. Although there may be others with an interest in the document, the trustee is at the least entitled to a copy, which is a trust document; and the outgoing trustee’s duty of cooperation with a successor extends to obliging it to obtain and provide a copy, if it cannot deliver up the original.

27. [56]

    One species of external consultants is lawyers, in respect of which issues of privilege as well as ownership arise; however, as appears from the below discussion of “legal advice”, those issues are intertwined.

28. [57]

    Legal advice obtained in connection with the trustee’s defence of actual or contemplated proceedings against the trustee by a beneficiary is the personal property of the trustee, and may properly be withheld; however, advice obtained in connection with the discharge of the trustee’s obligations to administer the trust, or to guide the trustee in the execution of the trust, is trust property, in respect of which privilege cannot be asserted against a beneficiary, [38] and must be delivered up to a replacement trustee. This distinction was described by Macaulay J in Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd, [39] in the following terms (at [19]):

29. [58]

    In Gray v BNY Trust Company of Australia Ltd, [40] Bergin CJ in Eq applied the same distinction to reach the opposite result, denying a beneficiary a right to inspect documents containing legal advice provided to the trustee, because at the time of the creation of the relevant documents, the beneficiary was suing the trustee (at [54]):

30. [59]

    Although there is an exception where a trustee is entitled to be indemnified from the trust fund in respect of advice sought for its own purposes, [41] at least prima facie advice the cost of which is charged to the trust cannot be withheld from beneficiaries. [42] Indeed, in this case the trust instrument specifically exempted legal advice the cost of which was to the Trust from a provision which provided that the Trustee was not bound to disclose deliberations or reasons. [43]

31. [60]

    The exceptions to the prima facie position that advice charged to the trust cannot be withheld include where the communication was made not for the trustee’s guidance in administration of the trust, but to enable him or her to resist litigation by a beneficiary. A trustee, even if unsuccessful in litigation against a beneficiary, may still be entitled to indemnity from the trust funds, if the trustee can establish that the costs which have been incurred were properly incurred, or not improperly incurred, [44] and where established that entitlement to indemnity would not destroy the trustee’s personal privilege in the legal advice.

32. [61]

    Legal advice which belongs to the trust is a “document of the Trust” and, absent any application under the liberty to apply, there is no basis for not delivering up what is otherwise manifestly a document of the Trust. There does not appear to be significant if any dispute about the principles in this respect; rather, the dispute is about their application to two particular categories of documents, namely the Sceales documents and the Freehills documents.

33. [62]

    These are the documents which were produced on subpoena by Sceales & Co, over which Mrs Rinehart unsuccessfully claimed privilege. [45] Mrs Rinehart contended that the Sceales documents were not trust documents, on the basis that they were, or related to, advice obtained by her for the purpose of responding to allegations or threats made against her by one or more of the beneficiaries, or threatened or actual court proceedings against her by them, and so were the subject of her personal legal professional privilege and were not held on behalf of the beneficiaries. In the proceedings concerning production of those documents, both before me and in the Court of Appeal, she failed to sustain that contention. While those proceedings did not expressly determine whether or not the Sceales documents were trust documents, and deliberately eschewed doing so, the conclusion that a personal as distinct from trustee privilege was not established is practically dispositive of the question.

34. [63]

    No doubt there was, at the relevant time, litigation contemplated or pending between Mrs Rinehart and John, and there were on foot allegations made by John against Mrs Rinehart of breach of trust, in respect of which John sought to intervene in proceedings in the Supreme Court of Western Australia to prosecute those allegations against her, including by way of seeking her removal as trustee (“the WA Proceedings”). Advice obtained by Mrs Rinehart in connection with the defence of those allegations, and communications relating to the defence of those proceedings, could at least potentially fall in the class of personal privileged documents of Mrs Rinehart as distinct from trust documents.

35. [64]

    However, the Sceales documents were not communications for the purposes of defending the WA Proceedings. The Sceales documents comprise, essentially:

    1. (1)

       Advice provided by Sceales & Co and Mr Myers QC in relation to a series of proposals to remove John as a beneficiary, or to exclude him from any substantial benefit, and in particular whether the first defendant could effect such proposals through amendments of the Trust consistently with her duties as trustee, and the taxation consequences of doing so;

    2. (2)

       Documents provided to Sceales & Co for the purposes of their giving advice in relation to those tax consequences, and in particular whether the shares in HPPL were a pre-CGT asset of the trust; and

    3. (3)

       Advice provided by Sceales & Co as to whether the first defendant would breach her duties as trustee if she were to execute the Hope Downs Deed.

36. [65]

    The fact that proceedings by John against Mrs Rinehart were contemplated or pending does not mean that any document in the custody of Sceales created at about that time was created for the purposes of defending those proceedings. Sceales do not appear to have been acting for Mrs Rinehart, in any capacity, in connection with the WA Proceedings: so far as the evidence reveals, Anchor, Maxim and Solomon variously acted for Mrs Rinehart in those proceedings, while Sceales were retained to provide advice on several matters relating to the administration of the trust. Sceales were expressly retained by Mrs Rinehart “as trustee of the Hope Margaret Hancock Trust” to provide legal advice in respect of “the affairs of HPPL, and in particular its Articles of Association”, and there is no evidence of any other retainer by Mrs Rinehart of Sceales. The express purpose of the retainer favours the view that they were retained by Mrs Rinehart in her trustee capacity rather than in a personal capacity.

37. [66]

    Moreover, Sceales retained Mr Myers QC, who appears to have furnished five advices; it appears uncontroversial that the first three are trust documents; yet privilege is claimed in respect of the fourth and fifth. However, the costs of Sceales, and Mr Myers’ fees, in respect of all five advices, were charged to the beneficiaries (other than John). Mrs Rinehart explained to Bianca at about that time that it was necessary for her to take further legal advice because of problems John was said to be causing, and “given also the need to protect the Hope Downs development”. The payment from the beneficiaries’ accounts, coupled with the statement to Bianca to the effect that the advice was necessary because of problems being caused by John and to protect Hope Downs, favours the view that it was obtained for the purposes of the trust, and not for the trustee personally.

38. [67]

    Thus, while there were in contemplation at the relevant time proceedings between Mrs Rinehart and the first plaintiff, communications relating to which could potentially fall in the class of personal privileged documents of Mrs Rinehart as distinct from trust documents, the Sceales documents were not of that character. Even though the dispute with John might have been in the background, those communications and documents were made for the dominant purpose of advising the trustee in connection with the administration of the Trust, not private advice in connection with the defence of any allegation raised by John. The Sceales documents are therefore within the scope of the delivery up order. Accordingly, in resisting delivery up of those documents, the first defendant was proceeding on a misconceived basis (favourable to herself) of what was a trust document and, in particular, of when she was entitled to assert a personal privilege.

39. [68]

    The Freehills documents comprise documents produced by Freehills, pursuant to a subpoena, which Mrs Rinehart applied unsuccessfully to have set aside, or alternatively to have access refused. [46]

40. [69]

    In the Freehills Subpoena judgment, I rejected the proposition that, in creating or receiving the documents in question, Freehills were acting for Mrs Rinehart only other than qua trustee of the Trust. The relevant passage of that judgment has been extracted above, in the context of the admissibility in these proceedings of the Freehills documents.

41. [70]

    Freehills were manifestly retained by Mrs Rinehart in her trustee capacity. The only formal retainer of which there is evidence is explicit to that effect. The Freehills documents, and the surrounding facts referred to in the Freehills Subpoena judgment, demonstrate that Mrs Rinehart did not rigorously distinguish her trustee capacity from other capacities. Some of the Freehills documents explicitly refer to Mrs Rinehart in her trustee capacity, either alone or with another or others. Others refer to her in other capacities, or to other Hancock entities. However, Freehills were advising the first defendant under a retainer with Mrs Rinehart in her trustee capacity – even if they were also jointly retained by her also in other capacities, or by other Hancock entities. In those circumstances, the Trust had an interest in all documents created pursuant to that retainer, and those documents are “documents of the Trust”, whether or not they explicitly refer to the Trust. All the Freehills documents are, therefore, documents of the Trust within the scope of the delivery up order.

42. [71]

    That conclusion suffices to dispose of the question, and renders it unnecessary to consider further the elaborate arguments advanced about the “Debt Reconstruction” transaction, since all documents created by Freehills pursuant to the retainer are trust documents. However, the first defendant was ostensibly acting in her trustee capacity when she demanded that HFMF admit HMHT Investments Pty Ltd to membership, to which HFMF acceded. Such admission was a condition precedent to the Debt Reconstruction. Even if there were other clients, Mrs Rinehart in her trustee capacity was one of them.

43. [72]

    Documents which are otherwise documents of the Trust do not cease to be so because they are in some way “confidential”. The first defendant invoked the following observations of Mahoney JA in Hartigan Nominees Pty Ltd v Rydge: [47]

44. [73]

    However, that passage is concerned with disclosure to a beneficiary – not delivery up to a new trustee. His Honour recognised the distinction. It does not suggest that such a document does not remain a trust document; to the contrary, the opening sentence proceeds on the basis that they are indeed property of the trust. In my view the passage just quoted has no application in the context of delivery up to a replacement trustee. Documents must be delivered up regardless of any question of confidentiality, unless as a matter of discretion the Court determines that it is appropriate that they not be.

45. [74]

    On 23 September 2015, the first defendant applied, pursuant to the liberty to apply reserved on 28 May 2015, to be relieved from compliance with order 3 of the May Orders “to the extent that trust documents would disclose or tend to disclose” personal information of any individual which could not reasonably be said to be relevant to the continuing administration of the Trust, information confidential to a corporation individual or other entity, or a communication in which the first defendant retains legal professional privilege. Neither the motion, nor the supporting affidavit, further specified the documents in respect of which the application was made. The supporting affidavit provided no evidence in support any claim of privacy, confidentiality or privilege. What detriment or risk might be associated with their disclosure is entirely unexplained by evidence. The motion contemplated a regime for subsequent provision of a list of the documents in respect of which a claim was made, and an opportunity for the plaintiffs to dispute the claim – thus effectively permitting the first defendant to withhold documents before identifying what was to be withheld, and before making a case of confidentiality, with the plaintiffs then having the burden of testing the claims. The application was made more than six weeks after the second (and last) extended deadline for compliance with the order, and only after the plaintiffs’ present application had been made.

46. [75]

    As has been explained above, drawing on Bird Charitable Trust, while the Court has a discretion to direct that documents or information not be supplied where satisfied that that is the appropriate course, the onus lies on the outgoing trustee to show why that discretion should be exercised. A mere unproven assertion that there are among the trust documents some which are confidential or contain private information does not begin to discharge that onus. Insofar as the first defendant’s claim is based on “privacy” or “confidentiality”, no basis has been shown for depriving the replacement trustee on those grounds of trust documents to which she is prima facie entitled. As has been explained above, insofar as there are documents in which the first defendant alone has legal privilege in her personal (as distinct from in her trustee) capacity, they are not trust documents and do not fall within the scope of the delivery up order, and no order relieving her from compliance with the delivery up order in respect of them is necessary. The first defendant’s motion filed 23 September 2015 will therefore be dismissed.

47. [76]

    There is no doubt that documents maintained by the trustee in connection with the affairs of the trust are trust documents. These are, essentially, documents in the files kept by the trustee as trustee. I accept that the mere fact that a document was consulted or considered by the trustee in the course of administering the trust does not of itself make it a document of the trust. But if the document was received or held by the trustee in its trustee capacity, it would be a trust document notwithstanding that its only function was that it was consulted by the trustee in the course of administration. Thus, if the trustee merely took into consideration something read in a newspaper or journal, that would not make the source a trust document. But if the trustee cut out the relevant article and filed it with the trust documents, it would become a trust document. Although it is less straightforward in the context of electronic communications, that analogy serves to illustrate the point. The touchstone is whether the document was received or is held by the trustee in its trustee capacity (even if concurrently in another capacity), or for the purposes of administering the Trust. To advert to an analogy used in argument, I do not accept that a Council information brochure on “How to interpret a water bill”, which the trustee may have considered in order to determine whether an excess water bill in respect of trust property was properly charged, would not be a trust document, if it were retained by the trustee and filed with the trust documents.

48. [77]

    The mere fact that documents refer only to entities in the HPPL Group other than the Trust does not mean that they are not documents of the Trust. Given that its shareholding in HPPL was the major – and indeed only significant – asset of the Trust, the affairs of HPPL and its subsidiaries and associated entities could well inform decisions of the trustee, and if obtained or used by the trustee for that purpose would be trust documents. Just because they do not on their face refer to the Trust, or its wholly owned subsidiary HMHT Investments Pty Ltd, does not mean that they are not documents of the trust. Again, the touchstone is the capacity in which and purpose for which they were obtained and held by the Trustee, and if a trust purpose was one of several purposes, then her trustee capacity was involved, and the document is a document of the Trust.

49. [78]

    In delivering up documents, the first defendant has, without the leave of the court and without informing the plaintiffs, redacted documents on the bases variously of “irrelevance” and “privacy”. Her solicitors have offered the following explanation:

50. [79]

    The documents which were redacted were not identified, and the documents do not themselves reveal it. Mr Ross, HPPL’s Chief Legal Counsel, accepts that the process could have been undertaken more consistently and transparently, but says that this was sacrificed in the interests of speed and efficiency. He also says that despite the reference to “privilege” as a basis for some of the redactions, no document was in fact redacted on that basis.

51. [80]

    The delivery up order requires delivery up of trust documents. It does not authorise redaction of documents which fall within the scope of the order. Either a document is a trust document, in which case it must be delivered up, unredacted, or it is not a trust document. The fact that only part of a document, in the trustee’s possession as trustee, is relevant to the administration of the Trust, does not deprive the balance of the document of the character of a document of the Trust. Insofar as confidentiality or privacy is relied upon, for reasons already explained neither is a ground for withholding a trust document – or a part of one – from a new trustee, unless as a matter of the Court’s discretion; and the first defendant’s attempt by her motion of 23 September 2015 to invoke that discretion fails.

52. [81]

    Documents of the Trust within the scope of the delivery up order must therefore be delivered up in unredacted form.

Verification of delivery up

1. [82]

   At the forefront of the plaintiffs’ application is the imposition on the first defendant of a requirement to produce particular categories of documents (which they say have not been, at least fully, delivered up), and to verify on oath and in detail her compliance with the delivery up order. That relief is said to be necessary in order to clarify the scope of the order in the light of the issues which have arisen, and to enable compliance with it to be tested, in circumstances where the plaintiffs say not only that the process has miscarried through a misconception of the scope of the order, but also that there has not been a good faith attempt to comply, and indeed that there has been a deliberate failure by the first defendant to participate in the process and provide basic instruction to those assisting her.

2. [83]

   On behalf of the first defendant, it has been explained that the documents in question came into existence over a period of more than 20 years, “and the exercise in identifying them and extracting [them] is not a simple one”. Mr Ross, to whom responsibility for implementing the delivery up order was entrusted by the first defendant, explained the process which he followed. After reading the principal judgment, consulting legal texts, reviewing the Trust Deed, researching authorities, and obtaining counsel’s advice, he determined that the “documents of the trust” to which the delivery-up order referred comprised accounts of the Trust, primary financial records of the Trust, documents that reflect decisions made by the first defendant in her capacity as Trustee, legal or other advice obtained by the first defendant in her Trustee capacity in relation to the administration of the Trust, documents on trust letterhead which refer or relate to the administration of the Trust, and documents and accounts relating to HMHT Investments Pty Ltd (which was previously an entity through which investments were made on behalf of the Trust). However, he determined that the following were not Trust documents, and they have therefore not been delivered up:

   1. (1)

      Documents disclosing deliberations on the part of the first defendant in her capacity as Trustee which did not reflect or refer to a decision taken by her in that capacity;

   2. (2)

      Documents relating to advice obtained by the first defendant in response to allegations or threats made against her by one or more of the beneficiaries or threatened or actual court proceedings against her by them, being documents the subject of legal professional privilege that belongs to her in her capacity as Trustee;

   3. (3)

      Documents that are confidential in nature, in respect of which in her trustee capacity she does not hold the confidentiality on behalf of the plaintiffs as beneficiaries;

   4. (4)

      Personal documents of the first defendant as Trustee, including communications with the beneficiaries (whether individually or otherwise), unless including a decision made by her as trustee; and

   5. (5)

      Documents concerning only the affairs of companies and entitles in the HPPL Group other than HMHT Investments Pty Ltd or the Trust.

3. [84]

   For reasons already explained, except in relation to (2), that determination was wholly or partly misconceived.

4. [85]

   Mr Ross then made inquiries as to where any such documents might be found. I accept that it is not reasonable to expect every document held by HPPL (stored in some 4,100 standard archive boxes) to be reviewed. Use of the filing system (albeit imperfect), and keywords to search it, to determine the likely location of potential trust documents, was a reasonable approach. Some 200 boxes of hard copy files and some 30,000 emails and attachments were searched, over approximately 2,500 hours of labour (not including external lawyers). Ultimately, a total of approximately 68 folders of documents has been produced, comprising approximately 30,000 pages, plus items such as cheque books and deposit books. Given the enormity of the exercise, the search and review methodology established was in my view a reasonable approach, and it is inevitable that it would initially not capture everything within the scope of the delivery up order.

5. [86]

   Mr Ross first caused to be identified and delivered up “essential records of the trust”, being those required for its continuing operation and administration, and in large part those identified in claim 3 and paragraph 58 of the Third Further Amended Statement of Claim. These were the documents that the plaintiffs had specifically sought, and were largely fully provided by 25 June 2015; where originals were located, they were provided.

6. [87]

   Secondly, the accounting records were located and provided. Usually, the originals were provided but secondary records were printed from excel sheets which were kept as part of HPPL’s wider system of accounts. In large part, these too were provided by 25 June 2015.

7. [88]

   Thirdly, what Mr Ross characterised as “Other Trust Documents” were searched for, reviewed in accordance with his determination of what are and are not trust documents (as described above), and delivered up. In cases of uncertainty, the advice of counsel was obtained. Mr Ross says there have been difficulties because of the volume of documents which have had to be reviewed, and the time this has required. On a number of occasions he had thought this process to be nearly complete, although this proved not to be so.

8. [89]

   The first defendant has, from time to time, provided assurances that the delivery up of trust documents was all but complete. On 22 July 2015, her then solicitors informed the plaintiffs’ solicitors that the “majority” of Trust documents had been delivered, that a “discrete set of documents’ remained under review, and that “this process, and the identification of documents from the further searches … will be completed by 6 August 2015. On 24 July 2015, her then solicitors informed the plaintiffs’ solicitors that “a thorough and systematic approach has been adopted to identify all potential repositories” of trust documents and that she “[did] not apprehend that further documents will necessarily be identified”. On 6 August 2015, after the plaintiffs’ solicitors raised a concern about whether the first defendant had taken any steps to procure the delivery up of trust documents held by PricewaterhouseCoopers (PwC), her then solicitors informed the plaintiffs’ solicitors that PwC had been instructed to identify all trust documents held by them – a step which had apparently not previously been taken. On 7 August 2015, her then solicitors informed the plaintiffs’ solicitors that, other than the PwC documents, “all remaining documents … which are subject to current review and, if necessary, counsel’s advice”, would be delivered by 12 August 2015. On 12 August 2015, the plaintiffs sought production of communications between the first defendant (or her representative) and PwC in connection with audit work performed for the Trust, which were absent from production to date. The first defendant’s solicitors responded that they were instructed that “there is unlikely to be specific correspondence with PwC in relation to audit work”. But when the plaintiffs pressed their request, between 27 August and 3 September 2015 the first defendant produced in excess of 4,500 pages of documents mostly comprising communications between the first defendant or her representatives and PwC relating to audit work. On 24 August 2015, after the plaintiffs raised a concern about whether the first defendant had taken any steps to procure delivery up of trust documents held by advisers other than PwC, her solicitors informed the plaintiffs that she was “making enquiries of any relevant third party who may also be in possession of trust documents” – again, a step which had apparently not been taken to that point. On 25 August 2018, her then solicitors informed the plaintiffs’ solicitors that “all Trust documents have been delivered or will be provided to you this week”, and made reference to “a small set of documents recently discovered”. On 27 August 2015, her then solicitors informed the plaintiffs’ solicitors that a further review of the documents already examined was being undertaken, that the documents had been brought into existence over 25 years and were extensive and voluminous, and that on their advice their client was considering appointing an independent third party to review the documents to decide whether or not they were property of the Trust. On 3 September 2015 – the day on which the plaintiffs’ motion was filed – her then solicitors informed the plaintiffs’ solicitors that the exercise of identifying, locating and reviewing relevant documents that may be trust documents was almost complete; that it had taken longer than initially expected but “you can be assured that the exercise is being undertaken to ensure that all relevant documents are identified, located and provided”, and that it had been deemed necessary to extract and review a further 50 hard copy files which might possibly contain relevant documents, and that delivery of some remaining third party files for checking was also awaited.

9. [90]

   However, after all this, on 19 September 2015, Mr Ross deposed that “the process of collating and reviewing files … which might potentially contain Trust documents is very much continuing”, and when the present motion was first heard (on 29 September 2015), Mrs Rinehart had admittedly not completed the process of identifying, reviewing and delivering up all documents of the Trust.

10. [91]

    The first defendant submitted that, by the hearing on 29 September 2015, production was “substantially complete”, and pointed to the scale and complexity of the process: documents totalling some 30,000 pages had been produced, and in excess of 2,500 hours spent in-house in considering, identifying, extracting, collating and providing the relevant documents (in addition to significant external solicitor and counsel time). It was submitted that the exercise described by Mr Ross demonstrated the gravity with which the first defendant had treated compliance with the Court’s orders, and it was said that while the present application had interrupted the process, “The application notwithstanding, the Production will be fully complete before 8 October 2015”.

11. [92]

    However, additional documents were delivered up on 9 October, 1 December and 9 December 2015.

12. [93]

    There have been notable deficiencies in the delivery up, and the plaintiffs have developed a very powerful submission that the inference should be drawn that there has not been a good faith attempt at compliance. First, because of the misconceived principles on which this review was conducted, it has therefore miscarried. The plaintiffs legitimately point out that those misconceptions have invariably favoured the first defendant. Next, they point out that even since the assertion in Mrs Rinehart’s 26 September 2015 submissions that “production is now substantially complete”, a diverse range of additional documents, apparently adverse to Mrs Rinehart, has come to light: the Sceales advice that she could not sign the Hope Downs Deed consistently with her obligations as trustee; the Sceales and Myers QC advice concerning a proposal by Mrs Rinehart to remove Mr Hancock as a beneficiary, in order to thwart his attempt to have her removed as trustee; advice from PwC concerning splitting the Trust, deferring the vesting date and excluding the first plaintiff from the Trust; advice from PwC in 2011 concerning private binding ruling requests made by the trustee to the ATO concerning inter alia the vesting of the Trust and how the first defendant might advance her personal interests in the litigation through rulings purportedly sought on behalf of the Trust; advice from PwC on 30 April 2012 concerning the vesting of the Trust; and communications with PwC which reveal that she changed the terms of the Trust in order not to have to reveal the true value of its shareholding in HPPL.

13. [94]

    Then, they point to, as perhaps the most telling example, the Freehills documents (which inter alia pertain to a significant and controversial transaction to which the Trust was a party in the mid-1990s). The plaintiffs emphasise that they had pointed to the possibility that Freehills would hold relevant documents, that the retainer had been delivered up, that the “Debt Reconstruction” transaction was one to which Mrs Rinehart must have been alerted because of its centrality to related proceedings in the Federal Court, and to the absence of any explanation from her personally as to why those documents had not been delivered up, while her solicitor Mr Speed claimed inadvertence, and Mr Ross who had responsibility for the process was silent. To Mrs Rinehart’s argument that there was a reasonable legal argument that such documents were not within the scope of “documents of the Trust”, they respond that even if there were a tenable (albeit unsuccessful) argument that, insofar as the Sceales documents related to the proposed removal of John Hancock as a beneficiary, they were personal advice to Mrs Rinehart, that cannot be said of the PwC documents and the Freehills documents.

14. [95]

    Those arguments are very powerful. Moreover, it is characteristic of the documents that have emerged in this way that they appear to be potentially adverse to Mrs Rinehart, and that uncovering them has required considerable forensic effort on the part of the plaintiffs. The circumstance that there are multiple instances of non-delivery of documents which appear potentially adverse to Mrs Rinehart, in the context of ongoing and vigorous resistance to production when a deficiency in delivery up has been identified, and the absence of any evidence from Mrs Rinehart herself to explain the position, reasonably undermines confidence in the rigour of the delivery up process, and provides a legitimate basis for the plaintiffs’ incredulity and frustration.

15. [96]

    Against that, the first defendant has adduced affidavit evidence, though not from herself personally, but from Mr Ross and her solicitor Mr Speed, which explains the complexity of the exercise (which is manifest), the steps which have been taken, and why certain documents were not delivered up, and on what basis they were redacted. I accept that the circumstance that it has taken longer than originally anticipated, while regrettable, is attributable to the scale and difficulty of the exercise rather than to recalcitrance. And while the plaintiffs emphasise that no further extension of time for compliance has been sought, on 3 September the first defendant’s solicitors wrote to the plaintiffs’ solicitors providing information about the progress of the review, and indicating that they expected that they would “shortly be in a position to give you confirmation that all Trust documents identified have been produced. In the interests of cooperation we trust that you will not require us to seek a formal order in this regard”. While one can understand the plaintiffs’ frustration, this was not an unreasonable approach on the part of the first defendant.

16. [97]

    Nor do I agree with the plaintiffs’ complaint that, in indicating through her former solicitors on 7 August 2015 that she considered order 3 to be analogous to an order for discovery “in that in any further Trust documents are identified, they will be provided to [the plaintiffs]”, she was assuming some lesser obligation than that imposed by the order: I read that as a statement that she acknowledged an ongoing obligation to deliver up any trust documents as they might come to light, not that she was not bound to deliver up everything that could with reasonable diligence be found forthwith.

17. [98]

    Nor do I accept that the absence of an application under the liberty to apply is a manifestation of a cavalier or contumelious approach. The liberty to apply was in respect of documents which fell within the scope of the order. There was no obligation to exercise it in respect of documents which were not trust documents. The liberty was not intended or expressed as a means for seeking advice, but an opportunity to seek to be relieved of the burden otherwise imposed by the delivery up order in respect of a particular document or class of documents, in circumstances where there had not been detailed argument on the scope of the delivery up order. Failure to invoke it in respect of documents which (albeit incorrectly) were not considered to be trust documents, is not a matter for criticism.

18. [99]

    It is not without significance that the plaintiffs do not take issue with the adequacy of delivery up of any particular category of document specifically identified in the delivery up order, and in particular those listed in claim 3 and paragraph 58 of the third further amended statement of claim. In particular, there have been delivered up accounts of the Trust from 1988 to date, accounts of HPPL from 1988 to date, tax returns of the Trust from 1988 to date, accounts of the Trust from the date of Mr Hancock’s death, financial statements of the Trust from 1988 to date, management accounts of the Trust from 1988 to date, all documents recording payment of income tax of the trust from 1988 to date, and details of all dividends declared by HPPL since Mr Hancock’s death. This supports the first defendant’s submission, that there has been a genuine attempt to comply with the obligation imposed by the order.

19. [100]

    Ultimately, the first defendant’s explanation is that documents not delivered up were either (a) withheld on the grounds of privilege, (b) not thought to be trust documents, or (c) inadvertently overlooked (in the case of the Freehills documents). I accept that it is at least plausible that the Freehills documents were not at the front of the minds of those (Mr Ross in particular) who were implementing the delivery up process, and that this may explain why those which are admittedly trust documents were not produced. I also accept – as I have previously – that it is not unreasonable for the first defendant to have delegated the task to Mr Ross, and that Mr Ross may not have had the knowledge of the Debt Reconstruction transition which Mrs Rinehart had, and that this – coupled with her apparent removal from the process once responsibility for it was delegated – may explain the oversight.

20. [101]

    A finding that the first defendant has not made a good faith attempt at compliance is a very serious one. While the arguments advanced by the plaintiffs are powerful, ultimately I am not prepared to exclude the scale of the exercise and inadvertence as reasonably plausible explanations for the deficiencies – other than misconception of what is a document of the Trust. Accordingly, I am not comfortably satisfied that there has not been a good faith attempt on the part of Mrs Rinehart at compliance.

21. [102]

    However, the plaintiffs do not need to establish absence of a good faith attempt at compliance to obtain an order for verification. It is common practice, at least where whether or not there has been compliance with an order for delivery up will be self-evident, for the order to require delivery up “on oath” or “with verification”. [48] The purpose of such an order is to require the party required to deliver up documents or things (and reproductions) assiduously to turn its mind to punctilious compliance with the order and verify such compliance, under penalty of perjury. Although I did not initially include such a requirement, the complexity of this exercise as it now appears, and the issues that have arisen in respect of compliance with the order, amply warrant an order that the first defendant verify her compliance.

22. [103]

    The verification conventionally required is that all documents described in the order have been delivered up. An explanation of what documents have not been delivered up, or why, is not usually required. Nor do I not regard it as appropriate to require an explanation of the process undertaken, or of documents withheld. It suffices that the first defendant state, on oath or affirmation, that all documents referred to in the order that are in her possession custody or power have been delivered up. The limitation to those that are within her possession custody or power (which necessarily includes those in the possession custody or power of her agents, including third party consultants) adequately deals with the categories of documents in respect of which the first defendant has, in submissions, asserted that there are no, or no further, such documents. However, because the first defendant has adopted and acted on a misconceived view of the scope of the obligation, it is appropriate to stipulate that the affidavit refer particularly to those classes of documents in respect of which there has been misconception, in order to make clear that the obligation extends to them and that the misconception has been rectified. This approach also means that it is unnecessary to descend any further into the minutiae of whether a failure to deliver up particular documents or classes of documents has been established.

23. [104]

    The first defendant submitted that, while the plaintiffs emphasised deficiencies which were either minor or unsupported at law, to justify a disproportionate widening of the orders for delivery up – and the first defendant’s responsibilities and the plaintiffs’ entitlements under them – the plaintiffs in fact had all the information they could possibly require to assess what if any interrogatories they should issue, or whether to apply for viva voce examination, in respect of the Account. As will be apparent, I have concluded that the plaintiffs’ complaints, in respect of what the first defendant determined not to be trust documents, are substantially correct in law. Moreover, whether the plaintiffs had all necessary information to examine the Account is not determinative of whether there has been compliance with the delivery up order. And I do not propose to widen the scope of the delivery up order, but to define more precisely what falls within it.

24. [105]

    The first defendant also submitted that the interests of justice would not be served by requiring her to undertake a wholesale re-review of the 200 boxes of hardcopy documents and 30,000 odd emails and attachments which have already been reviewed, but that to the extent that the court considers that her good-faith attempt to comply with the May orders was misconceived or defective, targeted and specific relief that maximises the utility of the exercise should be made, while avoiding unnecessary waste of time and expenditure. The order I propose to make will not necessarily require her to undertake a “wholesale re-review”, but it will require her to state on oath that she has complied with the delivery up order, and has made all such reasonable inquiries and searches as are necessary to so depose. The liberty to apply reserved in the May 2015 orders provided, consistently with Bird Charitable Trust, an opportunity for the first defendant to contend that she should be relieved of the obligation in respect of any particular document or class of documents. But as has been observed, she bears the onus of showing why that discretion should be exercised in her favour, and a submission that relief should be “targeted and specific” so as to maximise the utility of the exercise while avoiding unnecessary waste of time and expenditure, while attractive in principle, does not discharge that onus.

25. [106]

    The obligation to comply with the delivery up order is Mrs Rinehart’s personally, and she cannot delegate the responsibility of compliance. I have been disposed to accept that, in an organisation of the size and scale in question, it is reasonable for many of the tasks to be delegated, and that often an officer or employee may be in a better position than the principal to provide evidence of the process employed and the searches made. However, the obligation to deliver up is an obligation of the trustee, and it is her personal obligation; and she must personally provide the affidavit verifying that it has been done, although it will necessarily to some extent be based on inquiries of and information provided by others.

The specific relief sought by the plaintiffs

1. [107]

   I now turn to the specific orders sought by the plaintiffs in their motion.

2. [108]

   By claim 1 in their amended motion, the plaintiffs seek an order that the first defendant produce to Bianca (as replacement trustee):

   1. (1)

      the documents and materials specified in Part 1 of Annexure A, and in Annexure B, to the motion;

   2. (2)

      any document recording or referring to any legal advice relating to the Trust that was sought or obtained by the first defendant or her agents or representatives during the period of her trusteeship of the Trust;

   3. (3)

      any document recording or referring to any financial (including taxation and accounting) advice relating to the Trust that was sought or obtained by the first defendant or her agents or representatives during the period of her trusteeship of the Trust; and

   4. (4)

      any file or document created or maintained by Terry Solomon, or any correspondence to or from him, which concerns the Trust, or which refers expressly to the “Trustee” of the Trust, or which was relied upon or referred to by the first defendant in administering the Trust.

3. [109]

   Provision is made for an exception for documents in respect of which the first defendant makes a claim of privilege or confidentiality, and a regime for propounding and contesting such claims.

4. [110]

   I have indicated, above, that I do not propose to make an order for production, but rather to require an affidavit verifying delivery up in compliance with the original order, and in so doing to clarify the scope of the order. Clarification is necessary because the first defendant has adopted a misconceived narrow view of what is a “document of the Trust”. The documents in respect of which claim 1 seeks an order for production are, at least in large part, those about which there has been contention as to whether or not they are “documents of the Trust” within the scope of the delivery up order. Accordingly, while I will not make an order for their production as sought, this claim provides a useful vehicle for clarifying what documents or classes of documents fall within the scope of the description “documents of the Trust” and thus the delivery up order, compliance with which the first defendant will be required to verify.

5. [111]

   Part 1 of Annexure lists the following documents or classes of documents:

   1. (1)

      All original documents of the Trust. Save where a trust document is jointly held by the trustee and another entity, in which case delivery up of a copy will suffice, the obligation of the outgoing trustee is to deliver up the original, if it is in her possession custody or power. All original documents of the Trust within her possession custody or power are within the scope of the delivery up order.

   2. (2)

      All electronic Trust documents, in native electronic form. Such documents, to the extent that they exist, including electronically-held accounting records of the Trust, are documents of the Trust. The first defendant has submitted that there is no requirement that the documents be produced electronically; that such production is not necessary for the plaintiffs to ensure that they have obtained all of the property of the trust; that a large number of documents were produced by manually searching hardcopy folders and that if Bianca wants to put them in electronic form that is a matter for her; and that provision of electronic documents would not enable verification of their authenticity because the metadata changes with copying. Even if all that is so – and I accept that the obligation to deliver up trust documents does not require the scanning and creation of electronic documents from hard copies – where electronic documents exist, they are plainly documents of the Trust as much as hardcopy documents are, and are within the scope of the delivery up order.

   3. (3)

      Access to any electronic database or other electronic information retention system maintained by or for the Trust. The plaintiffs seek to be provided access to any electronic database that contains Trust records, so that they may be obtained without further delay. In my view, this goes beyond the scope of the delivery up order, but it is an order which can be made in aid of the new trustee’s right, as described in Bird Charitable Trust, to the assistance and cooperation of the outgoing trustee. It was not the subject of specific opposition.

   4. (4)

      All documents of the Trust in unredacted form. For reasons explained above, confidentiality or privacy provides no basis for redacting trust documents against a replacement trustee, and no document has been redacted for privilege. Accordingly, all documents of the Trust, in their unredacted form, are within the scope of the delivery up order.

   5. (5)

      All documents to which the former Trustee gave consideration in performance of her duty as trustee of the Trust, including those specified below. The plaintiffs contend that such documents are documents of the Trust because the first defendant “relied upon them” in her performance of the Trust, and that the first defendant may not deprive the plaintiffs of their benefit merely because she obtained access to them in her capacity as a director of HPPL and so did not require them separately in her trustee capacity. As I have explained, I do not accept that there mere fact that a document was “considered” or “relied upon” necessarily makes it a trust document; that will be so only if the document is in the trustee’s possession or control in its trustee capacity, or would have been obtained in that capacity if it were not otherwise in the trustee’s control in some other capacity; however, it may properly be assumed that any document actually used in the administration of the trust would have been obtained by the trustee, acting diligently, in her trustee capacity, if it were not already available to her in some other capacity. Accordingly, documents “used” by the trustee in the administration of the Trust, even if received and held by her in some other capacity, are within the scope of the delivery up order. As to the specific classes mentioned:

   6. (6)

      All records of the “reversal” of any transaction in the Account, including without limitation all documents relating to any decision by the first defendant to reverse any transaction indicated in the Account, all documents relating to the initial decision to charge to the Trust any transaction subsequently reversed (including any legal fees of the first defendant or second defendant), and any legal or accounting advice in relation to any such decision. The first defendant says that if there were any documentary material relating to a decision to reverse the relevant payments, it would have been delivered up; but such documents would be irrelevant to verification of the account, since they were not ultimately charged to the Account and cannot be the subject of a surcharge, falsification or objection. The fact that they are not ultimately charged is beside the point; if there are documents in the trustee’s possession or power which record the charging and later reversal of these items, then they are part of the accounting records of the trust, within the scope of the delivery up order. That the charges were ultimately reversed does not deprive them of that character. Nor does the fact that they may be irrelevant to verification of the Account.

   7. (7)

      All primary accounting records relating to any expense in respect of which the Trust was charged, whether or not the charge was later reversed. These are plainly Trust documents, within the scope of the delivery up order.

   8. (8)

      All retainers in respect of any legal advisor in respect of whose services the Trust was charged, regardless of whether such charge was later reversed, including Maxims, Sceales, Myers QC, Gilmour QC, Anchor Legal, Robert O’Connor and Paul Mendalow. A retainer of a lawyer by or on behalf of the Trust would be a trust document. However, as I have indicated, there are some circumstances in which the cost of a trustee’s private advice and representation may be charged to the trust, and the retainer between the trustee and the lawyer would not in those circumstances be a trust document; accordingly, the charging of the Trust for the relevant services is not the relevant touchstone. However, retainers of legal advisers by or on behalf of the trustee in her trustee capacity, whether solely or jointly with herself in any other capacity, or with any other entity, are trust documents within the scope of the delivery up order.

   9. (9)

      All documents which record or refer to communications, in relation to work for which the Trust was charged, between the first defendant (or her representatives) and any legal adviser in respect of whose services the Trust was charged, regardless of whether it was later reversed, including Maxims, Sceales, Myers QC, Gilmour QC, Anchor Legal, Robert O’Connor and Paul Mendalow. Such documents created or obtained pursuant to a retainer by the trustee in her trustee capacity are documents of the trust. Again, however, as there are some circumstances in which the cost of a trustee’s private advice and representation may permissibly be charged to the trust, communications so described would not necessarily be a trust document, and accordingly, the charging of the Trust for the relevant services is not the relevant touchstone. However, documents which record or refer to communications between the first defendant (or her representatives) and any legal adviser retained by or on behalf of the trustee in her trustee capacity, whether solely or jointly with herself in any other capacity, or with any other entity, in relation to work done pursuant to such retainer, are trust documents within the scope of the delivery up order.

   10. (10)

       Any file or files maintained by the first defendant (or her representatives) in relation to the work referred to in (9). Documents created or maintained pursuant to a retainer by or on behalf the trustee in her trustee capacity are documents of the trust. Subject to the modifications I have proposed to (9), such documents are documents of the Trust.

   11. (11)

       All communications between the first defendant and Terry Solomon, including any advice provided by Solomon, to which the first defendant gave consideration in performing her duty as trustee of the Trust. Mr Solomon provided legal and other advice to the first defendant in connection with her administration of the Trust, and acted as a point of contact between the first defendant and her external advisers. The first defendant maintained a substantial file of correspondence with Mr Solomon. Insofar as that file contains correspondence which she sent to or received from Mr Solomon in her trustee capacity, or which she used in her trustee capacity even if it was not sent to her in that capacity – and even if she also sent or received it in other capacities – that correspondence comprises documents of the Trust, within the scope of the delivery up order.

   12. (12)

       The Deed of Appointment of Income for the 2012 year dated 24 May 2012. The first defendant has, in correspondence with the plaintiffs, advised that for the 2012 year, “the former trustee distributed the income equally between the beneficiaries in accordance with the Deed of Appointment of Income for the 2012 Year dated 24 May 2012”. Such a deed is plainly a document of the Trust, within the scope of the delivery up order. The first defendant says that it was produced on 25 June 2015, in the Income Tax Returns file entitled “6.3 Financial Years 2010/11 to 2013/14”. If so, she will have no difficulty in verifying that to be the case.

   13. (13)

       A copy of all the documents concerning any special contingency insurance paid for by the Trust, including documents concerning any decision to cancel, discontinue or not renew such insurance for any individual beneficiary. The first defendant says that the documents of the trust relating to ransom insurance have been produced, and that any further documents relating to ransom insurance are not Trust documents. It is not clear on what basis this distinction is made, but insofar as it depends on the misconceived notion of what is a document of the trust referred to above, it too is misconceived. Communications relating to the actual or proposed cancellation, discontinuance or non-renewal of insurance held by the trust, even if they do not contain or reflect a decision, are trust documents within the scope of the delivery up order.

   14. (14)

       All records concerning the process by which the accounting for the Trust was performed. The first defendant does not dispute that these are trust documents within the scope of the delivery up order but says that she is not aware of any other such documents, other than those already produced or shortly to be produced. She will therefore have no difficulty in verifying that all such documents in her possession custody or power have been delivered up.

   15. (15)

       All files maintained by the first defendant in respect of each of the beneficiaries of the trust, including but not limited to any file known as the “BR file”. The first defendant apparently maintained, and has access to, files in respect of each of the beneficiaries, in connection with her administration of the Trust. She says that to the extent that these folders contain trust documents they have been delivered up, but that the contents of the files are communications almost entirely of a personal or company nature, and not trust documents. For reasons already explained, the circumstance that they are “personal” does not exempt them from delivery to a replacement trustee, if they were used in the administration of the Trust; correspondence between the trustee and a beneficiary that was used in the administration of the trust is a trust document, within the scope of the delivery up order. However, letters between mother and child which are unrelated to the Trust would not be within the scope of the order.

   16. (16)

       All documents relating to any advance of moneys by the first defendant to the Trust, by way of loan or otherwise. It is conceivable that some such documents could be within the possession of the first defendant solely as lender rather than as trustee, in which case they would not be trust documents. However, it is much more likely that they would be held by her at least in a dual capacity, in which case they would be trust documents, within the scope of the delivery up order. The first defendant says that relevant entries are in the accounting records, that there was no written loan agreement, and that to the extent that there are any such documents they have been delivered up. Accordingly, she will have no difficulty in verifying that all such documents in her possession custody or power have been delivered up.

6. [112]

   Annexure B to the motion seeks production of 14 further specified categories (and 9 sub-categories) of documents, generally described by reference to particular topics or subject matters.

7. [113]

   Categories 1 through 6 relate to documents that are referred to in or relate to the Sceales document, and the first defendant has indicated that if it were held that the Sceales documents were within the scope of the delivery up order – as I have, above, held – these documents would also be delivered up. It follows that the documents referred to in categories 1 through 6 of Annexure B to the motion are within the scope of the delivery up order.

8. [114]

   Categories 7 through 10 relate to documents that are referred to in or relate to the PwC documents, which the first defendant accepts are documents of the Trust, within the scope of the delivery up order. The first defendant has advanced no reason or argument as to why the documents referred to in these categories are not trust documents, and they too are within the scope of the delivery up order.

9. [115]

   Categories 11 through 14 relate to documents of HPPL which record shareholder meetings, after the commencement of the present proceedings, at which amendments were made to the Constitution, and a director resolution in respect of payment of dividend of on HPPL shares (which constituted the main asset of the Trust). The plaintiffs submit that documents which record the first defendant’s consideration of these matters in her trustee capacity are trust documents. That somewhat overstates the position: if the minutes of a HPPL meeting noted her consideration of those questions, that would not make HPPL’s minute book a trust document. However, to the extent that documents described in categories 11 through 14 were received by her in her trustee capacity, or as a shareholder in HPPL – or were used by her in that capacity though they were received in some other capacity – they are trust documents, within the scope of the delivery up order.

10. [116]

    This is largely, if not entirely, encompassed by what has already been addressed under claim 1.1, (8) and (9) above. As has been explained, legal advice obtained in connection with the trustee’s defence of actual or contemplated proceedings against the trustee by a beneficiary is the personal property of the trustee, not trust property, and is not a trust document; however, advice obtained in discharge of the trustee’s obligations to administer the trust, or to guide the trustee in the execution of the trust, is trust property, in respect of which privilege cannot be asserted against a beneficiary, and must be delivered up to a replacement trustee. Any legal advice that was sought or obtained by the first defendant (or her agents or representatives) in her trustee capacity, whether or not also in some other capacity, or was used by her in that capacity though obtained in some other capacity, and any associated documents (such as instructions, correspondence with lawyers, and briefs), are within the scope of the delivery up order.

11. [117]

    Any financial advice that was sought or obtained by the first defendant (or her agents or representatives) in her trustee capacity, whether or not also in some other capacity, or was used by her in that capacity though obtained in some other capacity, and any associated documents (such as instructions, correspondence with advisers, and briefs), are trust documents within the scope of the delivery up order.

12. [118]

    This is largely, if not entirely, encompassed by what has already been addressed under claim 1.1, (11) above, and is adequately covered by it.

13. [119]

    As to privilege, the obligation of the outgoing trustee is to deliver up the trust documents, not (at least at this stage) to explain or justify retention of non-trust documents. She is not required to deliver up documents that fall outside the scope of the order, including legal advice obtained solely in her personal capacity. For that reason, there is no need to make provision for privilege claims, nor to shift the onus of establishing that such a document is a non-trust document onto her, as the proposed regime would.

14. [120]

    As to confidentiality, it does not (except in the Court’s discretion, which I have declined to exercise) provide an exception to the obligation to deliver up trust documents to an incoming trustee, and it is therefore neither necessary nor appropriate to make provision for claims in that respect. The appropriate mechanism for seeking to have such documents excluded was the liberty to apply, and the attempt to do so has, as indicated above, failed.

15. [121]

    By claim 2, the plaintiffs seek an order that the first defendant procure that any third party who possesses or is likely to possess documents of the trust, including those identified in Part 2 of Annexure A, deliver up such documents to Bianca, including by providing a written direction to them to do so, and provide to the second plaintiff a copy of such direction and any response thereto. The entities listed in Part 2 of Annexure A to the motion are advisers and consultants which there is reason to suppose were engaged by Mrs Rinehart in her trustee capacity – though potentially also in other capacities.

16. [122]

    There is no disagreement that, as a matter of principle, and as I have explained above, the first defendant’s obligation extends to documents of the Trust which are within the Trustee’s control but held by third parties, and, in particular, advisers and consultants retained by her in her trustee capacity. The order is said to be necessary because the plaintiffs have, they say without success, requested that the first defendant direct any advisers or consultants in possession of trust documents to deliver them up to the plaintiff, and to identify the advisers to which such direction has been given. Notably, the first defendant resisted the plaintiffs’ efforts to obtain trust documents directly from PwC, instead directing PwC to provide documents to her for prior review. And when Bianca requested Freehills to deliver up to her the trust documents in their possession, and Freehills complied, there was clamorous objection and insistence that they be returned, so that Mrs Rinehart and HPPL would have an opportunity to scrutinize them and object.

17. [123]

    I did not think it unreasonable that the first defendant should require her consultants and advisers first to provide the documents to her for review, in order to enable her to determine whether or not they were within the scope of the order, rather than directing them to hand over all documents to the plaintiffs. However – somewhat remarkably, given what happened in connection with the Freehills documents – the first defendant has more recently taken the position that since, upon Bianca’s appointment as new trustee, the assets and property of the Trust vested in her, she is entitled to such of the Freehills, PwC and Sceales documents as are trust documents, and that Mrs Rinehart cannot prevent this, nor is it any longer in her power to deliver them up. That being the position she now adopts, she can have no objection to providing such a direction – since absent it, and especially in the light of the Freehills documents saga, many consultants will no doubt be reluctant to part with such documents without Mrs Rinehart’s prior concurrence.

18. [124]

    By claim 3.1, the plaintiffs seek an order that the first defendant make an affidavit (in respect of which an order is sought in claim 6 for liberty to apply to examine the deponent viva voce, as to which see below) confirming that she has complied with her obligations under the 28 May 2015 Orders, both to deliver up documents of the Trust (under order 3 of 28 May 2015) and to give an account (under order 6).

19. [125]

    For reasons already explained, it is appropriate that the first defendant be required to verify compliance with the delivery up order. This is normal practice in a case where compliance with a delivery up order is not self-evident, and does not depend on any finding of a failure, let alone a wilful failure, to comply with the order. As I have indicated, the order will have regard to the scope of the obligation imposed by the delivery up as clarified by this judgment. And as I have also indicated, the obligation to deliver up being a personal obligation of the trustee, she must personally provide the affidavit verifying that it has been done.

20. [126]

    Insofar as the order sought relates to the Account, this is said to be necessary because, though Mrs Rinehart swore an affidavit on 7 July 2015 verifying her Account, the process of gathering records of the Trust was then incomplete and she did not have in her possession any document which enabled cross-referencing of individual line items against the underlying Trust records. The plaintiffs say that there is therefore a serious concern as to whether, and if so how, the first defendant satisfied herself that the items in the Account were supported by vouchers. However, whether or not that be so, having verified the Account, the first defendant has prima facie done all that the order required in that behalf, and I see no basis for requiring her to make a further affidavit in that respect.

21. [127]

    By claim 3.2, the plaintiffs seek an order that the first defendant make an affidavit confirming that she has produced all the documents referred to in Annexure A and Annexure B (save insofar as she makes a claim of privilege or confidentiality), or otherwise confirming that they are not in her possession, custody or control. This overlaps with, and is subsumed by, the order for verification of compliance with the delivery up order as clarified.

22. [128]

    By claim 3.3, the plaintiffs seek an order that the first defendant make an affidavit explaining the steps she has taken to ensure compliance with her obligation to deliver up Trust documents and give an Account. This is said to be necessary because to date the first defendant has demonstrated a flawed understanding of her obligations under the May 2015 Orders, such that a statement of compliance has little meaning unless elaborated by an explanation of the basis on which it is made. I do not exclude the possibility that there might be circumstances in which such an order is or becomes appropriate, but that would be if, after verifying compliance, there appeared good reason for doubting it. That point has not yet been reached.

23. [129]

    By claim 3.4, the plaintiffs seek an order that the first defendant make an affidavit in respect of any document which has been withheld or redacted on grounds of privilege, describing each such document and the basis of the claim; and by claim 3.5, they seek an order that the first defendant make an affidavit in respect of any document which has been withheld or redacted on any other ground (including confidentiality, privacy or irrelevance) describing each such document and the basis of the claim. These orders were envisaged as part of the regime for making and testing a claim for privilege and confidentiality referred to in claim 1. Above, I have decided that there should not be such a regime. As to privilege, there is no obligation to deliver up documents which are not documents of the Trust, but personal documents of the trustee, and I do not consider that in that context it is necessary or appropriate to require a privilege claim to be asserted in this way. As to confidence, for reasons already given, confidentiality is no basis for withholding a trust document from a replacement trustee, at least absent a discretionary order made pursuant to the liberty to apply that was reserved in the 28 May 2015 orders.

24. [130]

    By claims 3.6 and 3.7, the plaintiffs seek orders that the first defendant make an affidavit describing the manner in which the affairs of the Trust were conducted during her trusteeship, and the manner in which the documents of the Trust were maintained. This is said to be necessary to enable an understanding of what is or is not considered to be a document of the Trust, in circumstances where it appears that separate trust records were not maintained, and trust records were intermingled with those of HPPL, and the task of identifying, locating, extracting and collating documents of the trust has been described by Mr Ross as having proved “very difficult”. This goes well beyond verifying compliance with the delivery up order, and is in the nature of interrogation about the management of the affairs of the Trust. Although in my view the plaintiffs are entitled to delivery up with verification, and to the co-operation of the outgoing trustee, that does not extend, at least at this stage, to an explanation on affidavit of how the affairs of the trust were administered.

25. [131]

    By claim 3.8, the plaintiffs seek an order that the first defendant make an affidavit identifying the documents, if any, to which she gave consideration in performing her duty as trustee of the Trust to investigate whether and take steps to ensure that HPPL paid appropriate dividends to the trust in the period from 1 September 2006 to 28 May 2015. As I have indicated, I do not accept that the mere fact that she considered a document renders it a trust document, though if it was in her possession custody or power in her trustee capacity – or would have been had she not also been a director of HPPL – it would be. However, this order is more in the nature of an interrogatory directed to establishing what matters and documents she considered, implicitly with a view to establishing a breach of duty, rather than in aid of securing delivery up, and the plaintiffs’ entitlement to delivery up, even with verification, does not extend to an explanation on affidavit of what documents she gave consideration to in discharging her duty as trustee. The requirement for verification of delivery up will adequately meet the need of the case, without this additional requirement.

26. [132]

    By claim 3.9, the plaintiffs seek an order that the first defendant make an affidavit identifying the reasons for each of the decisions to “reverse” various transactions included in the Account, whereby expenses such as Ginia’s legal fees in the litigation and the taxation advice provided by Mess Robertson and Slater QC in connection with the 3 September 2011 letter were billed to the Trust and subsequently reversed. Again, this is not in the nature of verifying delivery up, but interrogation of the first defendant on the Account. This is a matter on which application might be made to interrogate or orally examine the first defendant in respect of the Account, under order 6(c) of the May 2015 Orders, but that is the appropriate mechanism for pursuing this issue. It is not a legitimate step in aid of securing proper delivery up of the trust documents.

27. [133]

    The plaintiffs also originally sought, by claim 4, an order that the first defendant file and serve a document that identifies, for each transaction in the Account, the specific location of the supporting vouchers among the documents produced. However, this was ultimately not pressed.

28. [134]

    By claim 5, the plaintiffs seek an extension of time to apply to examine the first defendant on the Account, because they do not yet have access to all documents of the Trust – including documents which relate to the Account – and are in those circumstances unable adequately to investigate many of the claimed items of expenditure, and thus prejudiced in their ability to identify all items on which it may be appropriate to examine the first defendant, and to apply for leave to do so. The first defendant did not oppose this order, and time will be extended until 28 days after service of the affidavit verifying compliance with the delivery up order.

29. [135]

    By claim 6, the plaintiffs seek liberty to apply to examine the first defendant viva voce on her affidavit verifying compliance referred to in Claim 3. This was opposed, on the basis that it would open up an entirely new sphere of cross-examination, in relation to the other orders sought by the plaintiffs, not envisaged by the May 2015 orders. However, there is no utility in requiring an affidavit verifying delivery up, unless it can be tested. Reservation of liberty to apply for leave to cross-examine does not mean that leave will be granted, but if a case for it can be made, then that opportunity should be available.

Costs

1. [136]

   The plaintiffs seek costs, on an indemnity basis.

2. [137]

   Although the plaintiffs have not obtained the whole of the relief they sought, they have substantially succeeded on the motion, and are entitled to their costs. The application was necessitated not merely by technical failures to comply within the times prescribed by the 28 May 2015 orders, but substantive non-compliance arising from a misconceived interpretation of the scope of “document of the Trust” for relevant purposes.

3. [138]

   However, while there are aspects of the application which are analogous to enforcement proceedings against a recalcitrant defendant, and while there have been significant deficiencies in her compliance to date in some respects, I have not been prepared to find that the first defendant had not made a good faith attempt at compliance. Moreover, while she has failed on it, the legal question as to the scope of the concept of “documents of the trust” was not unarguable. That being so, I am not persuaded that she is guilty of such unreasonable conduct as to warrant an indemnity costs order.

Conclusion

1. [139]

   My conclusions may be summarised as follows:

2. [140]

   I have treated the Freehills documents tendered by the plaintiffs on the re-opening, to which objection was taken by the first defendant, as being in evidence, and I decline to make a suppression order in respect of them.

3. [141]

   The “documents of the Trust” which Mrs Rinehart is obliged to deliver up comprise:

   1. (1)

      all documents received or held by her or on her behalf exclusively in her trustee capacity (in which the Trust alone has a proprietary interest);

   2. (2)

      all documents received or held by her or on her behalf jointly in her trustee capacity and also in another capacity;

   3. (3)

      all documents received or held by her or on her behalf in her trustee capacity, in which the Trust and another entity or entities also have a proprietary interest, provided that where the original is not in her possession or control a copy must be provided; and

   4. (4)

      all documents received or held by her in some capacity other than as trustee, including as a director of HPPL, which were used in the administration of the Trust.

4. [142]

   Documents which satisfy those criteria are for relevant purposes (namely, delivery up to an incoming trustee) documents of the Trust, notwithstanding that they are:

   1. (1)

      documents which while disclosing deliberations on the part of the first defendant in her Trustee capacity, do not reflect or refer to a decision taken by her in that capacity;

   2. (2)

      documents which record communications of the trustee with some or all of the beneficiaries but do not record a decision made by the trustee;

   3. (3)

      documents that were merely subject of the trustee’s consideration in making a decision or administering the trust;

   4. (4)

      documents that are confidential in nature, in respect of which in her trustee capacity she does not hold the obligation of confidence on behalf of the beneficiaries as a whole (such as private information about a particular beneficiary);

   5. (5)

      documents concerning only the affairs of companies and entitles in the HPPL Group other than HMHT Investments Pty Ltd or the Trust; and

   6. (6)

      legal advice and related documents sought or obtained by her in her trustee capacity, whether or not also in some other capacity (other than advice obtained by the first defendant for the sole purpose of responding to allegations or threats made against her by one or more of the beneficiaries or threatened or actual court proceedings against her by them, being documents the subject of legal professional privilege that belongs to her personally and is not held on behalf of the beneficiaries).

5. [143]

   While the arguments advanced by the plaintiffs that the first defendant has not made a good faith attempt at compliance are powerful, ultimately I am not prepared to exclude the scale of the exercise and inadvertence as reasonably plausible explanations for the deficiencies – other than misconception of what is a document of the Trust. I am not comfortably satisfied that there has not been a good faith attempt on the part of Mrs Rinehart at compliance. However, the circumstances amply warrant an order that the first defendant personally verify her compliance with the delivery up order, as clarified by this judgment.

6. [144]

   The plaintiffs have substantially succeeded and are entitled to their costs, but they have not obtained all the relief they sought, and I am not persuaded that Mrs Rinehart is guilty of such unreasonable conduct as to warrant an indemnity costs order.

Orders

1. [145]

   The Court therefore orders that:

   1. (1)

      By 5 December 2018, the first defendant make, file and serve an affidavit:

   2. (2)

      By 5 December 2018, the first defendant procure that any third party who possesses or is likely to possess documents of the Trust, including those identified in the Schedule, deliver up such documents to the second plaintiff, including by providing a written direction and consent to them to do so, and provide to the second plaintiff a copy of such direction and any response thereto.

   3. (3)

      By 5 December 2018, the first defendant do all things, execute all documents, provide all information and give all directions and consents necessary or convenient to enable the second plaintiff to have access to any electronic database or other electronic information retention system that was maintained by or for the Trust.

   4. (4)

      All parties have liberty to apply, by arrangement with my associate, in the event of any difficulty arising in the interpretation, application or implementation of orders (1), (2) and (3).

   5. (5)

      The plaintiffs have liberty to apply to examine the first defendant viva voce on her affidavit verifying compliance referred to in order (1).

   6. (6)

      Time for the plaintiffs to apply to examine the first defendant viva voce or upon interrogatories in relation to the account furnished by her pursuant to order 6 made on 28 May 2015 be extended to a date 28 days after service of the affidavit referred to in order (1).

   7. (7)

      The first defendant pay the plaintiffs’ costs of the 3 September 2015 motion.

   8. (8)

      The first defendant’s motion filed on 23 September 2015 be dismissed with costs.

   9. (9)

      PricewaterhouseCoopers

   10. (10)

       Maxims Litigation Consultants

   11. (11)

       Sceales and Company

   12. (12)

       Allan Myers QC

   13. (13)

       A J Muscat

   14. (14)

       Withers LLP

   15. (15)

       Solomon Brothers

   16. (16)

       John Gilmour QC

   17. (17)

       Kanaga Dharmananda

   18. (18)

       Blakiston & Crabb

   19. (19)

       Freehill Hollingdale & Page

   20. (20)

       Anchor Legal

   21. (21)

       Robert O’Connor

   22. (22)

       Paul Mendalow

   23. (23)

       Shetra Pty Ltd

   24. (24)

       Ernst & Young