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‘Bleeding money’: Meet the armies of lawyers pocketing millions from WA’s clash of dynasties

The only comparable case for length of time, number of parties, courts and lawyers involved was the 30-year wind down of the late Alan Bond’s Bell Group, which was the most costly case in the state’s history, at $328 million.

Its original trial, over 404 sitting days, awarded $82.5 million in costs.

In the case of Hope Downs, which is set to go to trial in 2022, the true cost may never be fully known as court-argued costs only represent 50 to 80 per cent of the winner’s actual costs and do not reflect the accumulated costs, for all parties, overall.

Murdoch University law lecturer Stephen Shaw, who also consults for Perth’s biggest cost litigation firm Coulson Legal, says: “I like to think of us [as] the guys that go around after the battle picking up the broken swords, prying out the gold teeth.”

Cost litigators are hired when fees can’t be agreed on behind closed doors and argue, based on varying scales of payments laid out by the Supreme Court, why their clients should get the biggest sum or pay the least possible.

The court’s Legal Practitioners Determination schedule of fees (2012) sets out the daily fee for counsel at $3630 and senior counsel at $6380.

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However, this pales against the $12,000-$22,000 a day charged by the most senior counsel representing the three main companies contesting Hope Downs – Hancock Prospecting (HPPL), Wright Prospecting (WPPL), and DFD Rhodes.

“[Costs] is a very small area of law,” Dr Shaw said. “Up until about five or six years ago no one did it much but there’s quite a lot of demand now because people are actually realising that the money counts.

“And for a firm like Coulsons that I work for, they would get briefed to do that kind of work (for Hancock or Wright Prospecting) and [these parties] may spend hundreds of thousands of dollars on us doing all that work.”

Lang’s premonition

The Hope Downs clash began with a series of writs lodged by WPPL in the early ’90s making claims to a greater stake in HPPL’s tenements shared under the ’60s Hanwright partnership between Lang and Peter Wright.

By calling into question the divvying up of assets, the Wright heirs’ initial inheritance of $900 million each grew into billions over a number of Supreme Court wins, particularly when the court awarded them a slice of Hancock’s mining map – Rhodes Ridge.

According to the late Supreme Court justice Michael Murray in his 2010 Rhodes Ridge decision, Lang “knew his health was failing and he wished to have everything settled before he died because he feared, prophetically perhaps, that if the matter of the best interests fell to an agreement between his daughter, [Gina] Rinehart, on the one hand and Michael Wright and [Angela] Bennett on the other, the prospect of agreement was remote”.

It’s been 28 years since Lang’s death in 1992, and Mrs Rinehart and Mrs Bennett, as the chief owners of HPPL and WPPL respectively, are still at it.

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Since 2019, Wright Prospecting has spent $7 million on legal expenses, mostly due to the Hope Downs stoush.

Hancock Prospecting has yet to reveal its litigation spend, with its last financial report in 2019 stating that the claims over Hope Downs were being “vigorously defended” and “it is not possible to reliably quantify what, if any, damages could be awarded if the claims were to be successful”.

“It is the opinion of the directors that there are currently no significant liabilities arising from such legal actions that would have a material adverse effect on the consolidated financial statement,” it reported.

Dr Shaw said companies were able to tax-deduct their legal costs since it was “just one of the costs of doing business”.

The parties’ bills tended to ramp up in the couple of months leading up to trial.

“Then at trial with a bunch of barristers who are charging out at $20,000 a day or whatever it happens to be, $10,000 a day, over the three, four, 20, 60 days trial you’re bleeding money really, really quick,” he said.

“You’re talking serious sums of money.”

He said the like lihood of the rival companies agreeing on the bill of costs at the end of what would be about 30 years of litigation was remote because of the animosity between the parties.

“They probably would rather the lawyers got the money rather than the other party,” Dr Shaw said.

“These are big sums of money to you and I, but for a lot of firms $10 million [in legal fees] is not so much to them – it’s no different to you and me arguing over $100.”

Million-dollar stand-offs

The parties have already had a series of million-dollar related costs awarded and appealed, with one hefty bill awarded to Hancock Prospecting against Mrs Rinehart’s two oldest children currently being contested in confidential arbitration before the Federal Court.

John Hancock and Bianca Rinehart are seeking to wrest ownership of Hope Downs from their mother and increase their share in HPPL, which could alter the dynamic of the Supreme Court trial with WPPL, which has teamed up with DFD Rhodes in seeking greater royalties.

Mr Hancock junior and Ms Rinehart, who are each estimated to be worth $1.7 billion based on their 6 per cent shares of HPPL, have argued their grandfather intended for the four Rinehart grandchildren to solely inherit Hope Downs in equal parts under the family trust.

Ms Rinehart, as trustee of the Hope Margaret Hancock Trust, has been trying to get a hold of more correspondence than the 30,000 pages provided by her mother as the former trustee, but has become embroiled in a standoff over the giant costs involved in wading through all the documentation.

Mrs Rinehart’s solicitors advised the New South Wales Supreme Court that searching through documents “’used’ by Gina in the administration of the trust, which were received or held by her in some other capacity”, would take four years and cost $10 million and to also look through 47 archive boxes of family documents (188 level-arch folders) and “200,000 emails in Gina’s ‘mailbox’ would take four to six months and would cost between $600,000 to $900,000”, recent court documents revealed.

So who are the courtroom warriors enjoying a legal picnic over Hope Downs and reaping the rewards of these iron ore fortunes?

More recently he has been zealously fighting on James Packer’s behalf before the Crown Casino inquiry.

Regular counsel: Charles Colquhoun, James Hutton and Christopher Mitchell

Beyond Hancock Prospecting, Mr Colquhoun, of Sydney’s Tenth Floor Chambers, has also defended solvent company Dick Smith in a class action brought by shareholders and Qantas in a claim arising from toxic foam spill at Brisbane airport.

Mr Mitchell, of Sydney’s Banco Chambers, was also briefed in Volkswagen’s “Dieselgate” class action; and is part of the team prosecuting ANZ, Deutsche Bank, Citigroup and others in relation to alleged cartel conduct.

Mr Hutton, of Sydney’s Eleven Wentworth Chambers, has 10 years of experience at the bar in commercial and property law, among others. He notably defended Lehman Brothers Australia in a 2007 action brought by three New South Wales councils who were deceived into buying very complex and high-risk financial products.

Solicitors: Corrs Chambers Westgarth

Acting on behalf of Hancock Prospecting and its subsidiary companies is Legal 500 top-tier solicitor firm Corrs Chambers Westgarth.

Corrs Chambers Westgarth declared $354 million in gross revenue for the last financial year, with 991 employees, of those 120 are partners and more than 600 are attorneys.

Gina Rinehart

Previous lead counsel: Peter Brereton SC

Peter Brereton SC.Credit:James Brickwood

The Banco Chambers commercial silk is considered a nationally “preeminent competition law counsel” and Sydney “leading commercial and dispute resolution senior counsel” by peer-reviewed Doyle’s Guide.

His clients include Optus, Vodafone, Facebook, Google, Apple, BHP, Grant Thornton, Westpac, CBA, Hancock Prospecting, Qantas, Transgrid, the National Competition Council, Toyota, Volkswagen, Consolidated Press Holdings and Tabcorp.

Regular counsel: Christian Bova SC and Tom O’Brien

Mr Bova, of Eleven Wentworth chambers, has regularly appeared for Mrs Rinehart, particularly against her oldest daughter Bianca in the NSW Supreme Court and Court of Appeal, as well as in the Hope Downs appeal in July. He was appointed a senior counsel last year by the NSW Bar Association.

Mr O’Brien’s CV is considerable and the fellow Eleven Wentworth barrister is currently instructed by Shine Lawyers in the ongoing class action concerning contamination of land surrounding Defence Force base at Oakey, Queensland.

Solicitors: Speed and Stracey

The boutique Sydney firm is known for its prominent but publicity-shy, politically conservative client list, including former High Court judge Dyson Heydon who stands accused of sexual harassment.

Wright Prospecting

Lead counsel: Steven Finch SC

Clayton Utz chief executive partner Bruce Cooper.

Clayton Utz chief executive partner Bruce Cooper.

Aside from WPPL, Mr Finch, of Tenth Floor Chambers, has notably appeared for the Commonwealth Bank in the 2018 banking royal commission into financial misconduct in which the nation’s biggest financial institutions were brought before former High Court justice Kenneth Hayne.

Mr Finch had also represented Westpac in its defence of ASIC’s case alleging the bank rigged one of Australia’s key interest rates and has remained one of the most well-regarded practitioners at the New South Wales Bar.

Regular counsel: Liam Kelly QC, Terry Mehigan SC and Will LeMass

Brisbane Queens counsel Liam Kelly, of Gerard Brennan Chambers, is recognised as a leading “bet the company” litigator.

Mr Mehigan is a senior counsel at prestigious Sydney chambers, 12 Wentworth Selborne. He also appeared in the Lehman Brothers case with NSW shire of Wingecarribee, before the High Court and full Federal Court of Australia.

Mr LeMass previously worked as a senior associate at Clayton Utz before joining the Queensland bar in 2017, where he works in close association with Gerard Brennan Chambers.

Solicitors: Clayton Utz

Clayton Utz is listed as one of Australia’s “Big Six” legal firms, with $386 million in gross revenue while employing 781 attorneys in 2018. It is ranked 124th on the 2019 Global 200 ranking, according to Law.com.

Its estimated revenue of $494,000 per lawyer is more than four times the average salary for a corporate or commercial lawyer, who earn between $80,000 to $119,000, plus superannuation, according to Seek.

Mr Stoljar was quickly defended by the legal fraternity as “a very honest and competent opponent”, who began his legal career working at the Consumer Credit Legal Centre “battling for the consumer”, and who had no political axe to grind.

Solicitors: Taylor and Taylor Lawyers

The Perth boutique firm is family-run, with brothers Michael and Simon Taylor at the helm, and specialises in commercial law and dispute resolution.

Rinehart Children

John Hancock and Bianca Rinehart

Gina Rinehart’s children to her first marriage are the primary agitators of family litigation being brought before the courts against the Hancock Prospecting and their mother as executive chair.

Barristers: Christopher H Withers and Adam Hochroth, of Banco Chambers.

Solicitors: Yeldman Price O’Brien Lusk.

Hope Welker

Born of Mrs Rinehart’s second marriage, Ms Welker initiated proceedings against her mother to remove her as trustee of the family trust but who now wishes for a mediated outcome and hasn’t always been represented by a barrister in recent proceedings.

Solicitors: Deutsch Miller.

Ginia Rinehart

Ms Welker’s younger sister, who is most aligned with her mother out of all the Rinehart children, doesn’t wish for the Hope Downs Supreme Court proceedings to advance or be made public.

Barristers: Patrick Flynn SC, of Eleven Wentworth, and Kate Lindeman, of Banco Chambers.

Solicitors: Dentons (NSW).

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