Deliberate deception by siblings drove billion-dollar fraud, says lawyer
Lawyers have detailed a ‘deliberate and active deception’ by his siblings to defraud Julian Wright of his stake in the family’s multi-billion-dollar empire.
Lawyers for iron ore heir Julian Wright have detailed what they say was a “deliberate and active deception” by his siblings to defraud him of his stake in the family’s multi-billion-dollar iron ore empire.
Mr Wright is suing his sister, Angela Bennett, and the estate of his deceased brother Michael Wright over the 1987 sale of his one-third stake in Wright Prospecting for $6.8m.
Pat Zappia QC, representing Julian Wright, used his opening address in the West Australian Supreme Court on Monday to argue that his siblings and their advisers had withheld crucial information about the true value of their father’s estate in the lead-up to the deal. “In short, the strategy employed by the other siblings was, in Michael’s own words, ‘to trap him like a rat in a bottle’,” he said.
Mr Zappia said Michael Wright, Ms Bennett and their lawyers had breached fiduciary duties to Julian as they managed the estate of their father, Peter Wright, and “deliberate and reckless non-disclosure of material information may amount to fraud under common law”.
In particular, he said, they had represented to Julian that the estate was insolvent when it was not, and concealed their father’s entitlement to iron ore royalties from a list of disclosed assets.
The statement of assets and liabilities filed to the court after Peter Wright’s death listed his assets at $223,000 and his liabilities at $760,000. Mr Zappia said the amount owed was in fact owed to Peter Wright himself, so was not a true liability.
The Wright assets included royalties over the Mount Tom Price and Paraburdoo iron ore mines, which were in production at the time, and future mines including Marandoo and Channar, as well as an interest over the huge but undeveloped Rhodes Ridge iron ore deposit.
While Julian Wright was a director of Wright Prospecting at the time, Mr Zappia said the company’s mining assets were rarely discussed at board meetings. Instead, he said, those assets were discussed in a “secret committee” that he was not informed about.
Mr Zappia said Mr Wright would call former BHP and Wright Prospecting geologist Shankar Madan to testify about a “fact-finding tour” of the Pilbara by Michael. He said Mr Madan provided Michael with an insight into the “enormous potential worth” of Wright Prospecting’s Pilbara tenements and royalties.
“Hugely material information in relation to the value of the company and its future potential was not disclosed to Julian and was deliberately withheld from him.”
Wright Prospecting intends to fight the matter vigorously and issued a statement through a spokesman at the weekend reiterating its position.
“Given the nature of the allegations Julian is making, we have been seeking to get this matter heard and the claims tested in court as quickly as possible,” the spokesman said. “As we have said previously, Julian is attempting (retrospectively) to undo binding agreements he appears to now wish he had never entered into.”
Lawyers for Ms Bennett and the Michael Wright estate are expected to make their opening submissions on Tuesday.