A lawyer wanted more than $1 million to establish and run the $5 billion Rinehart family trust, despite admitting in court he knew little of its operation or administration.
Gary Reardon only asked whether the trust’s assets were inert and how often the beneficiaries would meet before nominating a $275,000 establishment fee and an $825,000 annual management charge.
There was also a clause allowing him to further invoice $300 per hour for work outside normal duties, the NSW Supreme Court heard on Wednesday.
Mr Reardon disagreed the fees were excessive.
“You don’t know a thing about this trust,” said Christopher Withers, the lawyer for John Hancock and Bianca Rinehart.
“They were the two matters that helped fill in some gaps,” Mr Reardon replied.
Mr Reardon is the latest person to give evidence in the bitter battle over the family’s billions after mining magnate Gina Rinehart’s eldest daughter Bianca took to the witness box on Tuesday.
The court heard the trust paid about $2.1 million annually to the beneficiaries.
But Mr Reardon couldn’t explain how the trust made its money despite asking for almost half its yearly distribution to establish and manage the entity.
He said he did understand that the money returned to the beneficiaries was linked to the price of iron ore and that it could also be used in litigation.
There’s “a reasonable risk” the future distribution would be less than $2.1 million if mineral prices dropped or the trust’s assets were caught up in legal action, the court heard.
Mr Reardon said he hasn’t managed other trusts worth $5 billion but he would act “as a prudent and diligent trustee” if he was given the job.
Mr Reardon was one of three independent trustees considered by the Rineharts.
The hearing continues.