Julian Wright was defrauded out of iron ore fortune by siblings Michael Wright and Angela Bennett

Julian Wright’s siblings defrauded him out of his share of the family fortune, but he’s the one who may be liable to damages.

Julian Wright arrives at the Perth Supreme Court. Picture: Marie Nirme

For decades, the only thing as reliable as the dividend cheques flowing from the Pilbara iron ore mines to the families of Australia’s original iron ore pioneers has been the legal fights between their heirs.

The West Australian Supreme Court has made the extraordinary finding that two of those wealthiest offspring defrauded and ­deceived their brother out of his birthright. Reclusive Perth billionaire Angela Bennett and her late brother Michael Wright dudded the family black sheep Julian Wright out of a fair price for his stake in the family empire when they struck a deal to buy his interest in 1987 for $6.8m.

The deal effectively saw Julian give up a one-12th interest in billions of dollars of royalties from Rio Tinto’s vast Tom Price iron ore mine in the Pilbara.

But the same court also found that Julian had signed away his right to seek any sort of compensation from his siblings when he signed a deed of agreement with them in 2008. That agreement saw Julian’s two children receive $70m from their aunt and uncle, with Julian committing to not bring any legal actions against his siblings.

Now it is Julian who is likely to be dragged through the courts by his sister and Michael’s estate, after the court found he had breached the terms of that deed by starting the very legal process that found he had been defrauded.

The Wrights rank alongside the Hancocks as Australia’s original iron ore dynasty.

Lang Hancock, the father of Australia’s richest woman Gina Rinehart, and Peter Wright were the two business partners originally responsible for identifying and unlocking the vast iron ore ­reserves of the Pilbara.

Both men recognised not only the enormous value of what they had identified, but also its potential to spark generations of infighting among their descendants.

Their efforts to protect their ­estates from future legal battles well and truly failed. The legal battles between Gina Rinehart and her children are legendary and ongoing, and the Wrights have also done their best to keep Australia’s legal professionals in steady work for years.

Friday’s judgment may just be the most extraordinary to emerge from the many legal battles fought by the various iron ore heirs.

Supreme Court judge Rene Le Miere said Michael and Angela had breached their fiduciary duty and through their agents had used “deceit and equitable fraud” to ­acquire his interest in their ­father’s estate.

But Justice Le Miere also ruled that the deed of settlement signed in 2008 by Julian explicitly prohibited him from making further legal claims against his siblings.

Instead, it is Julian who could be on the receiving end of a damages claim, with a spokesman for Ms Bennett and the estate of ­Michael Wright flagging that the families would pursue him for breaching that 2008 agreement.

“The events out of which this action arose occurred some 35 years ago, and were the subject of a deed of settlement entered into by Julian Wright and members of his family in 2008, when similar claims were brought and settled by the payment of significant sums to Julian Wright’s children,” the spokesman said.

“The court found that Julian Wright’s claims were brought in breach of that settlement, and in any event barred by the delay in bringing this action. We are therefore entitled to seek damages for that breach.”

The spokesman said the findings about the conduct of Ms Bennett and Michael Wright were for the most part derived from inferences drawn from documents ­created in the 1980s.

“We believe that different inferences may be drawn from those documents but, most importantly, we are very satisfied with the court’s decision to dismiss Julian’s claim,” he said.

Julian, meanwhile, described the decision as “a very significant win”. “Angela and Michael have been found guilty of fraud and breach of fiduciary duty in their positions as executers of our ­father’s estate,” he said.

“The technicality which has enabled them to escape accountability in no way undermines the severity of their wrongdoing.”

He said he would never have sold out to his siblings in 1987 if he knew he was entitled to a share of the Tom Price royalties. He plans to take advice on whether he can appeal the decision.

Ms Bennett’s fortune was estimated at $2.39bn in the latest edition of The List, while the fortunes of Michael’s children, Leonie ­Baldock and Alexandra Burt, were valued at $1.8bn each.