Mining millions can’t protect Wrights against iron curse

The decades roll by without Wright family members coming any closer to settling their differences.

Julian Wright arrives at WA’s Supreme Court in Perth on Friday. Picture: Marie Nirme.

On March 24, 1986, little more than six months after their father died, ­Michael Wright sat down and wrote a letter to his sister ­Angela Bennett.

Their father, Peter Wright, had been one half of the duo who had identified the iron riches of Western Australia’s Pilbara region. His company, Wright Prospecting, like that of his business partner, Lang Hancock, had secured interests across a ­region that would ultimately ­become the world’s richest and most prolific iron ore province. But his sudden death on September 13, 1985, while overseas had plunged the family empire into ­uncertainty.

The pre-existing rift between Peter Wright’s youngest child, Julian Wright, and elder children Michael and Angela — which had long been on Peter’s mind — had grown only wider since the patriarch’s death, and the Wright children, and their lawyers and advisers, were scrambling to understand the implications for the family business.

Amid it all was a desire to avoid ending up in the legal system — as Michael wrote to his sister that day, “only bad cases go to court”.

“Assuming we do win, there will be mud flying around the countryside that none of us can ­afford to have,” Michael wrote.

It was prophetic to say the least.

The letter was one of several hundred documents, transcripts and memos tendered in the WA Supreme Court this week by the lawyers for Julian who, almost 35 years after his father’s death, is still disputing the way he came to sell his stake in the family’s lucrative iron ore holdings.

And the courtrooms of Perth have become a familiar stomping ground for the descendants of WA’s original mining magnates as the iron curse tore apart family bonds and lined the pockets of lawyers across the country.

Justice Rene Le Miere is tasked with deciding whether Julian was the victim of a conspiracy to fleece the family’s black sheep of his billion-dollar birthright or whether the high-stakes legal battle is simply the manifestation of a chronic case of seller’s remorse. It’s a case that has also given the public a rare insight into the deeply private Wright family, which has worked hard to maintain the lowest profile of all the WA mining dynasties.

For Julian, the deal that saw him offload his one-third stake in the family business to his two siblings in 1987 for $6.8m is one that would have felt increasingly painful as the rise of China exponentially amplified the value of what were already prized mineral assets and turned his estranged brother and sister into billionaires.

The burn would have intensified this week as his lawyer, Pat Zappia QC, tendered document after document that he said show a pattern by the siblings to starve ­Julian of the information he ­needed to establish the true value of his stake.

Julian will be among the first witnesses to take the stand when the trial enters its second week; his estranged sister Angela won’t be far behind him.

The lawyers for Angela and the estate of Michael have ­argued that Julian was aware of the value of his stake but recognised that his siblings were financially constrained over how much they could pay.

They also say a separate legal settlement struck in 2008 between the Wright siblings and Julian’s children — which ­delivered the latter $70m — included an agreement for the parties not to sue one another again.

Kristina Stern SC said this was deliberately written with the ­intent of drawing a line in the sand and was “utterly fatal” to the present action.

Michael died in 2012 but his presence has still been felt in the courtroom.

The documents tendered last week capture the eldest sibling’s voice, and his colourful turn of phrase is clear.

In one document, Michael ­describes how he intends to trap Julian “like a rat in a bottle”; ­another describes how Julian will be “stunned like a dead mullet” by the capital gains tax bill associated with one proposed deal.

A separate letter to Angela opened with a laconic lament: “The bloody experts, the bastards including our own, drive me to frustration sometimes.”

The voice of Michael hasn’t been the only one from the grave to be heard during the case so far. The transcripts of lengthy discussions with Hancock have been tendered showing the pioneering magnate counselling his dead business partner’s children on the inner workings of the iron ore business.

At one point, Hancock describes one of Wright’s joint venture partners, CRA, as “an impossible lot of bastards, just the same as I’ve got to deal with BHP”.

The court has also seen the personal writings of Peter. His letters reflect an authoritative patriarch with an eye for detail but also an appetite to see his children united.

A handwritten note by Peter, prepared in June 1980 ahead of a meeting with his three children, shows his clear concern for the tension felt between them.

“This is not a witch hunt. I am worried & I’m looking for the right answer,” he wrote.

In the note, he lamented what he saw as “the erosion” of his ­“philosophy” by the difficulties ­between his children.

“Every organisation is the shadow of one man — this is my organisation and while I’m in charge it must be my shadow and everyone particularly Michael & Julian (but also Angela) must ­accept it … it can be modified from within but not from without.”

The vast volumes of papers filed in court this past week are part of an effort by his legal team, headed by Zappia, to show that ­Julian was dudded out of a fair price for his stake.

He pointed to the statement of assets and liabilities lodged following Peter’s death that made no mention of the lucrative iron ore royalties and that suggested his ­father’s estate was insolvent.

Julian also claims to have been deliberately starved of the information that would have helped him better understand the true value of his Wright Prospecting stake. While he was a director of the company at the time, his lawyers say, the mining business was seldom discussed at board meetings and was instead explored at length by Michael and Angela through a special committee that was kept secret from him.

At the same time that Julian says he was being starved of information, Michael was busily building his understanding of Wright Prospecting’s mineral assets. A June 1986 itinerary showed he would visit the major iron ore tenements involved in the Hancock and Wright suite of assets.

The only information about the business that made its way to ­Julian, Zappia says, was that which cast the business in a negative light. On another piece of correspondence, Michael suggests that Wright Prospecting hold off paying any dividends while they try to resolve the Julian situation. “In short, we sit it out and wait,” he wrote.

There is one line in that March 1986 letter from Michael to Angela that Julian’s camp says is particularly revealing.

In the letter, Michael addresses what he says is a “fair degree of emotional turmoil” because they will not be able to meet their ­father’s wish of keeping all three children in the family business.

Michael writes that welcoming Julian back into the fold — a move that would not involve buying his stake — “will cost the two of us a lot of money”.

But the lawyers for Angela and the estate of Michael can point to the same letter to support their own position. The letter makes clear that the two siblings were grappling with anxiety over the situation facing them — in particular, the need to stump up several million dollars to increase their exposure to a business that was not yet the cash cow it is today.

“I get the feeling that your real problem is fear itself. The enormity of the problem seems to be overwhelming you — that I can understand,” Michael wrote as he attempted to rally his sister.

“Either way, you are still stuck with the problem of making decisions and the enormity of having to face the fact that you are ­responsible for several millions of dollars. As Franklin Roosevelt said, ‘We have nothing to fear but fear itself.’

“Right now you are motivated by fear. But you are not in this on your own. The risks that you are taking are exactly the same risks that I will be taking.”

Any fears the pair had about taking their later leap would have disappeared as the royalty cheques grew bigger and bigger.

The coming weeks will determine whether that was a leap that was built on deceit.