Julian Wright ‘allowed to think estate insolvent’
Julian Wright sold his stake in the valuable Wright Prospecting empire as a result of a ‘material misrepresentation’, his lawyer has claimed.
Michael Wright knew the family’s mining business was likely to secure a lucrative iron ore royalty windfall at the time he and his sister, Angela Bennett, were negotiating to buy out their black sheep brother Julian’s interest in the empire, lawyers for Julian Wright have argued.
And the siblings’ father, Peter Wright, held a personal entitlement to a share of those royalties that would have ensured his estate was not bankrupt at the time of his death in 1985, according to Julian’s legal team.
Julian is suing his sister and the estate of Michael over the deal that saw him sell his one-third stake in Wright Prospecting and his father’s estate in 1987 for $6.8m. Wright Prospecting’s Pilbara iron ore royalties and assets are now worth billions, and have helped make Ms Bennett one of the richest people in the country.
In his closing submissions to the trial in Western Australia’s Supreme Court on Thursday, Pat Zappia SC — representing Julian — argued that key information that would have helped Julian better understand the potential value of the royalty and its implications for his father’s estate was not provided to him.
It meant that he entered into the deal to sell his interests as a result of a “material misrepresentation”, Mr Zappia said.
A royalty agreement between Hamersley Iron and Peter Wright, his business partner Lang Hancock and their respective businesses Wright Prospecting and Hancock Prospecting was the subject of arbitration proceedings at the time Julian and his siblings were negotiating the sale of his interests in the family business.
Mr Zappia argued that Michael and Keall Brinsden lawyer Wayne Martin were well aware that the arbitration was likely to go in the favour of Wright and Hancock at the time. He also argued that the arbitration found that 25 per cent of the Hamersley Iron royalty should fall to Peter Wright personally, and therefore his estate.
Instead of being given documents detailing the progress and implications of the arbitration process, Julian was presented with a draft affidavit prepared by Mr Martin — who would later go on to be WA’s chief justice — which described Peter Wright’s estate as “manifestly solvent”.
Mr Zappia said Julian believed the phrase was a typographical error, and contacted Wright Prospecting’s Doug Salt to get it changed. No one, he said, spoke up to tell Julian that the arbitration process was in fact a significant and valuable asset of the estate.
“They allowed him to labour under the misapprehension the estate was insolvent,” Mr Zappia said.
“He did not have access to the letter of the memorandum to conclude otherwise, but they did.”
The legal battle is the latest in a long line of Wright and Hancock family disputes to emerge in the decades since the death of the respective family patriarchs.
Earlier this week, Ms Bennett’s lawyer, Kristina Stern SC, argued in her closing address that Julian was well aware of the value of the family business, pointing out multiple records where Julian had established that Wright Prospecting was worth between $75m and $120m.
Ms Stern said Julian had been willing to accept $6.8m for his share given his inability to work alongside Michael, the limited resources of Michael and Ms Bennett at the time, and the existence of an option that could have potentially forced him to sell his interest for just over $1m.
The trial is expected to conclude on Friday.