A $500 million dispute between the descendants of one of Australia’s oldest and richest families, with links going back to the Rum Rebellion, has exploded into court, putting the development of 4300 home sites in Sydney’s west in doubt.
The Macarthur-Onslow family, whose ancestor, John Macarthur, was so famous in his day that streets and towns were named after him, are fighting over an immensely valuable parcel of land at Mount Gilead that has long been their home — and the subject of developer lust.
Their dispute has thrown open the books on a previous offer by developers to buy the estate for $175m, plus 7.5 per cent of the realised value, provided it can be rezoned, and resold for housing, a deal that would today make it worth about $500m.
The dispute has also seen the airing of dirty laundry, with claims that the family matriarch, Lady Dorothy Macarthur-Onslow, whose husband, Sir Denzil Macarthur-Onslow, was an Australian war hero, was so demented when she drew up her will that she could be seen driving erratically around her vast homestead with the car doors open and washing her dish towels in the dog bowls. There were also claims she dressed like a hobo and hit her daughter on the head with a broomstick or a rolled newspaper.
John Macarthur was a key player in the Rum Rebellion following his arrest over a land deal in the early 19th century. He is widely recognised as the pioneer of the Australian wool industry, having exported the first bale of merino wool to London in the 19th century. That bale of wool sold for a record price, launching the colony of NSW — and his family — towards untold riches.
John Macarthur’s great, great grandson, Sir Denzil Macarthur-Onslow, volunteered for the Australian Imperial Force in 1939 and, having been mentioned in dispatches, was knighted in 1964. Sir Denzil developed the property in Sydney’s west known as Mount Gilead.
In 1950, Sir Denzil, married a young medical practitioner, Dorothy Wolseley Conagher, who became Lady Macarthur-Onslow, and they had two children: Katrina and Lee, who were raised there.
When Sir Denzil died in 1984, Lady Macarthur-Onslow drew up a will that divided her estate, comprising the land at Mount Gilead, a $3m apartment overlooking Sydney Harbour at Darling Point, and grazing land at Goulburn, plus cash and jewellery, equally between her son and daughter.
Katrina Macarthur-Onslow subsequently travelled to England where, at age 39, she married an Eton man, Sir Charles Hobhouse, and became Lady Katrina Denzil Hobhouse.
That marriage failed after four years and no children, and during divorce proceedings, Lady Hobhouse told the court that she could not bear to return to Australia as the “failed daughter”.
She said she had “grown to love the English country and hunting scene” and “cannot now be expected to abandon her English way of life” because “the relationship between myself and my mother has changed. I don’t think there is any possibility of me going back.”
Having lost her claim for more than $1m from her ex-husband, Lady Hobhouse did return to Australia to live with her mother, who had become “extremely forgetful”.
Lady Hobhouse told the NSW Supreme Court that she had to become her mother’s principal carer at the old homestead at Mount Gilead because her mother couldn’t remember “where pots and pans and spoons were kept”. Around 2004, her brother, Lee Macarthur-Onslow, presented the family with a proposal by the property developers, Australand, to buy and develop the land at Mount Gilead for 4300 homes, for $175m plus 7.5 per cent of the realised value, once it had been rezoned, and resold.
An argument between brother and sister held up the project. Lady Hobhouse told the court that her mother began abusing her during the dispute, calling her a “silly bitch” and “hit me over the head and face with the newspaper”. A few days later she “hit me with a heavy broom handle with such force it broke in two”. She began to worry about her mother’s mental health, since she had also begun “washing tea towels in dog bowls” including one that had dog food in it. But there was evidence that Lady Onslow-Macarthur did understand what was at stake, since she would attend meetings with Australand with her son, Lee, saying things like: “When will this be rezoned?” and “How much money will we get?”
John Macarthur in an undated painting.
Around the same time, a second will was drawn up, shifting control of the family’s holdings away from Katrina, towards Lee.
The will gave Lee much greater control over the development of the 740ha property, the value of which “depends on whether it can be rezoned”. The “unimproved value” of Mount Gilead is a relatively modest $25m.
The development was later taken over by Lend Lease but its current status is not clear.
The court heard from Lady Onslow-Macarthur’s doctor, Dr Paul Darveniza, whose notes revealed that she knew “in detail what her assets are and their approximate value”.
Lady Macarthur-Onslow was admitted to society aged-care home Lulworth House in Sydney’s exclusive Elizabeth Bay, in 2008, suffering Alzheimer’s.
She died, aged 90, in 2013. The dispute over her will came before the Supreme Court on January 11, with the judge, Justice Stephen Robb, deciding that while Lady Macathur-Onslow had the capacity to make the 2004 will, it did not reflect her wishes, because it treated son and daughter differently, “with the effect of giving (the son) voting control”.
Justice Robb said “a high degree of animosity between sister and brother” meant that it was “ irrational for Lady Macarthur-Onslow to believe that her son would look after her daughter” and removed those portions of the will that gave him greater power.