A court has heard that three of mining billionaire Gina Rinehart's children have withdrawn from legal action to try to stop their mother obtaining material from The West Australian newspaper.

Mrs Rinehart, Australia's richest person, has served subpoenas on the paper and journalist Steve Pennells, demanding that they provide her company with any material - including notes, recordings and text messages - involving her son John Hancock made on or after September 4 last year.

The newspaper has objected to the subpoenas, saying they are extraordinarily wide and oppressive.

A hearing in the West Australian Supreme Court was told the subpoenas relate to articles written by Mr Pennells involving Mr Hancock.

It is alleged that Mr Hancock may have disclosed information to the newspaper in breach of an earlier agreement.

The editor of The West Australian, Brett McCarthy, says the paper wants to ensure its sources are protected.

"We'll continue to do everything that we can as a newspaper to not have to reveal any confidential sources that any of our reporters might or might not have," Mr McCarthy said.

Lawyers for Mrs Rinehart's company Hancock Prospecting told the hearing that they want to put the newspaper's materials before confidential arbitration proceedings underway as part of legal action launched against Mrs Rinehart by her daughters Bianca and Hope and Mr Hancock over control of the family's fortune.

The lawyers also revealed that the three children were no longer contesting the validity of the subpoenas, and had withdrawn from the legal action objecting to them.

The case has been adjourned until next month.

Meanwhile, the corporate regulator has denied a request by Hancock Prospecting to be exempt from lodging financial reports.

The Australian Securities and Investments Commission (ASIC) has revealed that in late 2011 Hancock Prospecting had asked to be relieved from lodging the reports, including company accounts, as required under the Corporations Act.

Hancock Prospecting has appealed against the decision to the Administrative Appeals Tribunal.