Inside $500 million family feud between descendants of Australia’s richest pioneer John

A bitter family feud between descendants of Australia’s most prosperous colonial settler has exposed years of behind-the-scenes squabbling over a $500million fortune.

John Macarthur made his name as a pioneer of the nation’s wool industry in the early 1800s but his 21st century successors have been in dispute about inherited real estate including a Sydney waterfront property.

The quarrel has also involved what to do with farming land on the outskirts of the city which when developed could be worth $500million or more.  

Macarthur’s great-great-great granddaughter, Lady Katrina Denzil Hobhouse, this week won a legal victory over her late brother’s claim on a $4.5million Darling Point apartment. 

Lee Macarthur-Onslow died aged 69 in August last year believing he had won that battle against his younger sister but a Supreme Court ruling in his favour was overturned on Tuesday.

The latest instalment in the long-running family saga comes almost a decade after the death of the duelling siblings’ mother, Lady Dorothy Wolseley Macarthur-Onslow. 

The siblings’ father, Major General Sir Denzil Macarthur-Onslow – John Macarthur’s great-great grandson – had been a successful grazier, businessman and war hero.

Sir Denzil commanded the 1st Armoured Brigade in Syria in World War II and a gun carriage flanked by six army officers took his coffin down Sydney’s George Street to his funeral.

There had been four offspring from Sir Denzil’s first marriage in England but his considerable estate passed to his widow, then their son and daughter, neither of whom had children. 

The death of Lee Macarthur-Onslow – a 205cm (6’7″) tall farmer described as a ‘gentle giant’ – leaves Lady Hobhouse, aged in her mid 60s, with no one in the family left to fight.   

The Darling Point apartment is a sideshow compared with the fate of the family’s 740 hectare estate Mount Gilead near Campbelltown in the city’s south-west.

The original land grant had been named Gilead, after the biblical breadbasket on the River Jordan with its flourishing wheat fields, and ‘Mount’ was added after grazier Reuban Uther sold it to Thomas Rose in 1818. 

BUILDING AN EMPIRE 

Mount Gilead sat next to John and Elizabeth Macarthur’s extensive Camden Park Estate on which the enterprising couple built Australia’s first merino wool empire.

Macarthur, who arrived in Sydney as a member of the New South Wales Corps with the Second Fleet in 1790, would become the richest man in the colony through his connections and toil. 

He was also an instigator of the so-called Rum Rebellion of 1808 which saw the arrest of Governor William Bligh, whose ship Bounty had been taken by mutineers in 1789.

The rebels had objected to Bligh’s attempts to clean up a corrupt rum trade and took control of the colony until Lachlan Macquarie’s appointment as governor in 1810. 

Macarthur was acquitted of mutiny at a trial in London and in his absence Elizabeth ran their farming interests. He returned to NSW in 1817 and by the end of the 1820s Camden Park comprised 24,000 hectares.

Macarthur died at Camden Park in 1834 and his granddaughter Elizabeth eventually inherited the bulk of the family estate. She wed navy captain Arthur Onslow in 1867. 

The couple spent their married life at Camden Park and Elizabeth changed her surname to Macarthur-Onslow in 1892, ten years after her husband’s death. 

Her daughter-in-law Sylvia Macarthur-Onslow bought neighbouring Mount Gilead in 1941. Upon her death in 1950 it passed to eldest son Sir Denzil and  has remained with the family ever since. 

When Sir Denzil died in 1984 aged 80 the land at Mount Gilead was valued at a relatively modest $25million. 

ORIGINS OF A DISPUTE 

Four years after her husband’s death Lady Macarthur-Onslow drew up a will which divided her assets equally between her only two children.

Mr Macarthur-Onslow had left Mount Gilead after finishing university and spent much of his time grazing cattle near Goulburn. 

Lady Hobhouse, who gained her title after marrying Sir Charles Hobhouse while living in England in the 1990s, reluctantly returned to Australia after her divorce.

She had grown to love the English countryside and hunting scene but moved back to the Mount Gilead homestead in 1999 to live with her by now ‘extremely forgetful’ mother. 

Lady Macarthur-Onslow could no longer do the farm’s bookwork and ceased to know where everyday kitchen items such as pots and pans were kept. 

Relative Susan Hayman said in June 2000 Lady Macarthur-Onslow had responded to the death of her husband by saying: ‘You must be pleased he is gone. You can do what you want with your life now. You can go overseas.’  

The Supreme Court heard by 2002 the matriarch’s Alzheimer’s disease was so advanced she drove around Mount Gilead with the car doors wide open. 

Lady Macarthur-Onslow would ask if her daughter wanted a cup of tea, then bring several cups in quick succession, or sometimes just hot water. By 2004 she began washing dish towels in dog bowls. 

THE FIRST BIG OFFER  

Property developer Australand approached Lee Macarthur-Onslow that year with a proposal to buy 610 hectares of Mount Gilead for $175million plus 7.5 per cent of the yield from selling 4,300 homes to be built on the site. 

That deal, which required the land to be rezoned and did not proceed, would today likely reap more than $500million. 

Conflicting views between Lady Hobhouse and Mr Macarthur-Onslow about the proposal led to their mother removing her daughter as a director the family company Kalemon.

On September 10, 2004 mother and daughter had a conversation which Lady Hobhouse secretly recorded and later revealed in court.   

‘… I don’t want you and Lee spending the rest of your lives fighting each other and getting nowhere,’ Lady Macarthur-Onslow told her daughter. 

‘You’ve been nothing but difficult all the way through, or complain bitterly about it, darling.’ 

Lady Macarthur-Onslow wrote a new will on October 15, 2004 giving her son a controlling interest in the family trust and how her estate would be distributed.

She was admitted to the aged care facility Lulworth House at Elizabeth Bay in 2008 and died there aged 90 in 2013. 

Three years later Lady Hobhouse challenged the 2004 will on the basis her mother had not understood what she was doing because of her dementia.

During the dispute about the property deal Lady Macarthur-Onslow had called her daughter a ‘silly bitch’ and hit her in the face with a rolled up newspaper.

Lady Hobhouse claimed her mother, who had been a doctor before her marriage, also ‘hit me with a heavy broom handle with such force it broke in two’. 

‘I had a huge red lump behind my ear,’ she said. ‘It was completely out of character for my mother to strike me with such a heavy instrument which could cause serious injury.’   

There was other evidence that Lady Macarthur-Onslow had attended meeting with Australand and her son asking questions such as ‘When will this be rezoned?’ and ‘How much money will we get?’

In 2017 Justice Stephen Robb found Lady Macarthur-Onslow had the capacity to make the 2004 will but it did not accurately reflect her wishes to treat her son and daughter equally. 

MAKING MORE MILLIONS 

Justice Robb noted a ‘high degree of animosity’ between the siblings and removed the clauses that gave Mr Macarthur-Onslow more power administering the will. 

Lady Hobhouse took further legal action against her brothers and others over a 2015 proposal by Leadlease to buy two large parcels of Mount Gilead for $200million.

Referring to the previous Australand proposal, Lady Hobhouse contended the Lendlease offer would be ‘tens of millions of dollars, and possibly several hundred million dollars’ less than the land’s market value.  

Last year Lady Hobhouse and Mr Macarthur-Onslow signed a deed conferring options for each of them to buy properties from the estate. 

Mr Macarthur-Onslow had a first call option to buy the Yarranabbe Road apartment but that option ran out while he sought a second valuation. 

Lady Hobhouse claimed she was then entitled to buy the apartment, leading to more Supreme Court action which ended with Justice Francois Kunc ruling Mr Macarthur-Onslow had the right to establish its market value with a second opinion.

Mr Macarthur-Onslow died two months after that judgment, which Lady Hobhouse successfully challenged in the Court of Appeal. 

Lendlease is building 1,700 dwellings for 5,000 residents on 216 hectares of Mount Gilead it will call Figtree Hill. The old homestead and surrounding 150 hectares are not part of that development.