Hancock Prospecting's executive chair instructed John Hancock's solicitor, Robert Butcher, to issue a damning media release after he started asking questions about the company's assets in 2003, said Christopher Withers SC, representing Mrs Rinehart's two eldest children.
"Basically urging John's solicitor to throw him under the bus and publish the statement," he told the Supreme Court trial over mining assets and royalties in Western Australia's northwest on Thursday.
Mr Withers said the media release Mrs Rinehart wanted sent to The Sydney Morning Herald and The West Australian newspaper said Mr Hancock made false assertions about how she had allegedly manipulated mining assets left by her father for his grandchildren.
Mr Hancock had just been interviewed by the media outlets for an article about the feud, which is in arbitration in the Federal Court amid claims Mrs Rinehart breached her fiduciary duties to her children and committed fraud.
"So that really, we say, speaks to the power that Gina believed that she wielded that a solicitor would do something like this and issue a statement of that kind, obviously without their consent," Mr Withers said.
Mr Butcher refused to send the release to the media.
Mrs Rinehart and her lawyer were accused of lying, bullying, threatening and blackmailing Mr Hancock as he "heroically" attempted to unravel the complex web of business transactions that allegedly undid Lang Hancock's 1988 plan to leave his grandchildren 49 per cent of the family's assets.
"John knew in 2004 enough to be able to commence proceedings and make the allegations that he now makes in these proceedings," Mr Withers said referring to Mrs Rinehart's alleged financial breaches, which included "destroying" a trust that held a 33 per cent share in Hancock Prospecting for the children.
"What is perhaps even more significant is the way that Gina and (Hancock Prospecting) responded to John's allegations, which, we say, was to lie to him and threaten him and his lawyer."
Mr Withers read multiple letters to back up his claim, which he said illustrated the power imbalance between Mr Hancock and his mother, including one from February 2005 that said he and Mr Butcher could be sued if they took legal action or spoke to the media.
"We remind your client that if he institutes a writ against Gina or any family member or any related company or director ... he will not be receiving anything from Gina ... but will be receiving extensive damages claim and legal bills," Mr Withers said reading another.
"Your client, with his present activities and demands, is on very thin ice."
Another titled "crackpot claim" said any that asserted mining assets had been removed from a trust would be wrong and fail.
"He was met at every turn with lies bullying, intimidation, designed to stop him making further inquiries," Mr Withers said.
The claims were made in a high-stakes legal stoush in Perth in which Mrs Rinehart's company and her children are defending the claims of Wright Prospecting and DFD Rhodes.
Wright Prospecting is suing for a share of some Hope Downs tenements and royalties amid a claim that it never relinquished the assets and Hancock Prospecting has breached a series of partnership agreements.
The family company of the late prospector Don Rhodes, DFD Rhodes, says it is entitled to 1.25 per cent royalty share of the Hope Downs production following 1969 deal.
The Hope Downs mining complex near Newman is one of Australia's largest and most successful iron ore projects, comprising four open-pit mines.
Mrs Rinehart, Australia's wealthiest person, secured the development of the mines after signing a deal in 2005 with Rio Tinto - which has a 50 per cent stake in the project.
The hearing has been adjourned to September 1.
