Few corporate disputes in Australia have been as high profile as the litigation between Lang Hancock and Peter Wright in relation to their mining partnership in far North Western Australia. Beginning as a highly profitable mining venture in the mineral-rich Pilbara region, it would evolve into a decades-long contest over wealth and control.
This article focuses on one aspect of the dispute; the role of fiduciary duties in circumstances where personal, family, and corporate interests intersect. This aspect of the judgment in Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd[1] (2026 Decision) is a timely reminder that fiduciary duties rank above one’s degree of successW and influence.
At its most basic, Australian incorporated companies are required to appoint directors. Responsible for the overall governance and strategic direction of the company, their role is to provide “overall superintendence” for stakeholders, overseeing both performance and compliance in accordance with the company’s purpose and objectives.[2] Private companies need at least one director, and public companies at least three.
The partnership between Lang Hancock and Peter Wright led to the discovery and development of vast iron ore deposits in the Pilbara region of Western Australia. The original partnership was formed between Mr Hancock’s primary partnership vehicle, Hancock Prospecting Pty Ltd (HPPL) and Wright Prospecting Pty Ltd. In 2025 alone, HPPL invested $1.6 billion to develop the Hope Downs 2 project.[3] The royalty interests in the mining tenements were hugely valuable.
Over time, the corporate structures through which the Pilbara mining interests were held became increasingly complex. Entities associated with Hancock and Wright controlled various aspects of the mining interests, often based on informal agreements and understandings rather than clearly documented arrangements.
General
The relationship between a director and a company is fiduciary in nature, fundamentally meaning that a director undertakes to act in the interests of the company and not in his or her own interests.[4] Under governance principles, these duties are considered central to maintaining trust in corporate structures.
Directors’ duties are grounded in both the common law and in statutory obligations under the Corporations Act 2001 (Cth) (Act).
At common law, directors have fiduciary duties to act loyally, avoid conflicts of interest, and not profit from their position without the informed consent of their co-directors and, if necessary, the shareholders of the company.
These principles are captured in key statutory provisions under the Act:
Conflicts with private interests
An important aspect of this framework lies in the distinction between personal and corporate interests. Directors may have multiple overlapping roles, including as founders and shareholders. At times it is inevitable that family relationships become entangled.
According to a 2022 survey, 67 percent of all Australian businesses can be classified as “family businesses”, and there are over 1.4 million of them. It is fair to say that almost none have been as valuable in sheer dollar terms as the one embroiled in the Hancock controversy.
Whilst it has famously been said that “blood is thicker than water”, where conflicts arise, the law is clear that one’s obligations to the stakeholders of the company must prevail over personal interests, including family bloodlines.
As Justice Smith noted in the 2026 Decision:
‘As a consequence of the fiduciary relationship between a director and company, the principles of equity impose a high standard of loyalty. Company directors must not, unless authorised, profit from the expense of the company or allow a private interest to conflict with their duty.’[6]
The 2026 Decision case illustrates the consequences of breaking that loyalty.
The parties ultimately fell into dispute over competing claims to ownership and royalty entitlements. As part of this, certain transactions occurred between Hancock-associated entities that came to be challenged. This included a ‘loan account system’ or ‘loan account mechanism’, by which payments were made primarily by HPPL to members of Mr Hancock’s family. This included ‘domestic and living expenses relating to Mrs Rinehart, Riverview Flats and Mrs Porteous and her companies… [being] paid, particularly by HPPL, and debited in HPPL’s books under the loan accounts…’.
Mr Hancock was the Life Governing Director of HPPL and held a controlling shareholding interest in the company until his death on 27 March 1992, at which time this was passed to his daughter, Gina. Mr Hancock also controlled an entity called Hancock Family Memorial Foundation Limited (HFMF), and assets and opportunities were directed by HPPL to this entity.
HPPL undertook a series of transactions that had the effect of transferring assets and opportunities out of HPPL, and into HFMF. After resigning as a director of HFMF in 1986, ‘…as found by Steytler P and Owen JA in The Hancock Family Memorial Foundation Ltd v Fieldhouse …Lang Hancock remained as a de facto director of HFMF and was also the dominant member and had effective power to control the board.’[7]
This allowed Mr Hancock to, amongst other things, pursue mining projects away from HPPL’s corporate governance structures, allow other entities to acquire various lucrative mining licenses and divert assets away from HPPL.
Smith J observed that ‘It is patently clear Lang Hancock used his fiduciary position as Life Governing Director of HPPL to then acquire and divert HPPL’s opportunities to acquire the East Angelas and Hope Downs exploration licences, and to divert other assets to support the exploration of these tenements.’[8]
This means that HPPL’s shareholders were not able to receive the benefit of mining opportunities and the realisation of assets, and Lang Hancock was able to increase his control over various assets without accountability to HPPL.
The Court also noted that ‘… Lang Hancock was taking substantial funds out of HPPL though HFMF for his and Rose Porteous’ purposes.’[9]
Notably, the Court observed that:
‘When assets and opportunities were developed through HPPL, HPPL and its shareholders could benefit from the same, including through the ordinary rights of shareholders to participate in profits. When removed and put into HFMF, those assets and opportunities of HPPL were lost to it. HPPL and its shareholders could only benefit, if at all, should Lang Hancock so choose.’[10]
The 2026 Decision delivered a mixed outcome for the parties, resolving certain proprietary and contractual claims while leaving other claims partially unresolved.
The matter that this article focuses on is the Court’s view of directorial conduct in the context of disputes over control, asset allocation, and the restructuring of corporate interests. The Court closely scrutinised decisions by the Board that affected the ownership and benefit of the valuable mining assets, determining whether those decisions were made in the best interests of the relevant corporate entities, or for other purposes.
The evidence suggested that decisions relating to asset structuring and control were influenced by interests relating to the interests of Mr Hancock and his family rather than the corporate interest. The Court ultimately concluded that Mr Hancock had breached fiduciary duties owed as a director. The Court observed that the acts of Mr Hancock:
‘…were serious transgressions of ordinary standards of honest behaviour of a director standing in the shoes of Lang Hancock, so as to amount to a dishonest and fraudulent design.’[11]
The Court’s reasoning reflects a conventional but strict application of classic fiduciary principles. At its core, the breach involved a failure to prioritise the interests of the company over personal considerations.
Smith J emphasised that a director must not place themselves in a position where personal interests may conflict with their duties, nor derive unauthorised benefits from their position.
In assessing the relevant transactions, the Court identified a lack of proper corporate purpose and an insufficient separation between personal advantage and corporate decision-making. They noted that:
‘Lang Hancock took assets and opportunities out of a structure under which he was accountable to [Hancock Prospecting Proprietary Limited]’s shareholders and into a structure that he wholly controlled and could then deal with those assets at his whim.’[12]
One of the clearest lessons in this matter is the danger of treating corporate assets as extensions of personal wealth. This was a common theme within the judgment, fundamentally that ‘Lang Hancock used his powers as a director… to orchestrate the removal of valuable assets and opportunities into a structure controlled by [himself].’[13] The law maintains a strict conceptual separation between the company as a legal entity and the individuals who control it. Failure to respect that distinction exposes directors to substantial risk.
The 2026 Decision highlights the importance of formal documentation, transparent decision-making, and robust governance processes. Informal arrangements, though potentially convenient, are ill-suited to managing high-value assets and complex corporate relationships. Independent oversight, such as by an independent board member or external adviser, can play a critical role in mitigating conflicts and ensuring compliance.
The Hancock litigation carries significant implications for corporate governance, particularly in the context of family-owned or closely held corporations. It reinforces that fiduciary duties apply regardless of ownership concentration or personal history, and that control does not dilute accountability to the company itself.
The judgment may also signal an increased willingness for the Courts to scrutinise conduct within private companies and family-controlled entities. While such entities have traditionally operated with a degree of informality, the Hancock case suggests that courts will not hesitate to apply orthodox fiduciary principles rigorously where circumstances demand. Importantly, Smith J noted that:
‘As a matter of law, Lang Hancock owed his duties to [Hancock Prospecting Pty Ltd] in making decisions involving HPPL’s assets and interests, not to the ‘family’. The fact of [the subsidiaries] being companies created and operating in connection with a ‘family business’ has no bearing on Lang Hancock’s fiduciary duties to each of the companies as their director.’[14]
Are you an Australian director? For advice on meeting your director duties, please contact us below. Edwards + Co Legal provide corporate and commercial legal advice to modern Australian businesses and directors.
[1] [2026] WASC 101.
[2] See the AICD paper – General duties of directors at https://www.aicd.com.au/content/dam/aicd/pdf/tools-resources/director-tools/individual/director-tool-general-duties-of-directors.pdf.
[3] https://www.riotinto.com/en/news/releases/2025/rio-tinto-and-hancock-prospecting-to-invest-1-6-billion-to-develop-the-hope-downs-2-project-in-western-australias-pilbara
[4] Ibid.
[5] See the KPMG Australian Family Business Survey 2022 at https://kpmg.com/au/en/insights/strategy-operations/australian-family-business-survey-2022.html
[6] At [4498].
[7] At [3366].
[8] At [4497].
[9] At [4392].
[10] At [4334].
[11] At [4499].
[12] At [4334].
[13] At [4483].
[14] At [4414].
