Where there’s a will, there’s a way

Lawyer Michael Hollingdale’s career has taken a new turn after being asked to help wealthy families with their estate planning.

It is not just the super-rich such as Lang Hancock, Robert Holmes a Court, and Len Buckeridge who leave behind complex family disputes over wills and estates when they die.

A quick scan of Supreme Court cases show they are a common occurrence, with two rulings from last month serving to illustrate the problems that can arise.

One concerned the family of the late Ron Lee, who was the founder of South West business Western Meat Packers.

Justice Kenneth Martin summed up a long-running legal fight between his two daughters, on one side, and his widow and son on the other, as follows.

“The underlying situation is that this is yet another sad case of a fractured family with grievances driven by money,” Justice Martin stated.

The legal dispute started in 2015 and worsened the following year.

Just days before Mr Lee’s death in July 2016, a share issue by family company Lee Bros left his daughters with a hugely diluted holding – an outcome they are still fighting.

A second ruling concerned the family of the late Barton ‘Boss’ Jones, who built Kalgoorlie-based Hampton Transport Services into a major business.

In this case, what worked for one generation did not work for the next.

Mr Jones, with his two brothers, ran a range of companies as a quasi-partnership with few directors’ meetings or other formalities.

After ‘Boss’ Jones’ death in 2006, his sons (Bart and Dave) and his brothers (John and Burchell) agreed they should split the trucking business from the family’s other interests, which include farms and motels in Esperance.

Master Craig Sanderson said all parties agreed on this goal.

“It was the mechanics of the separation which caused the problem,” he said.

The result was five years of sporadic negotiations followed by five years of court cases.

“These cases represent internecine warfare at its worst,” Master Sanderson stated last month.

The failure of the family members to negotiate a split meant Master Sanderson imposed a court-ordered solution, which included the sons having to fund a buy-out of Hampton Transport.

Lawyer Michael Hollingdale was not involved in either of these cases. In fact, they are precisely the kind of disputes he is seeking to avert through his new line of work.

Mr Hollingdale spent most of his career working in construction law, including at top tier firm Allens, but has been invited recently to act as facilitator for family groups grappling with succession planning and estate planning.

“These can be confronting and difficult conversations,” Mr Hollingdale said.

He distinguishes his work from that of a mediator, who is brought in to resolve known problem.

A facilitator, by contrast, would host a family conference and act as a neutral chair.

“You need to be really careful about treading a path of neutrality and facilitating a discussion so the testator can make an informed and effective will,” Mr Hollingdale told Business News.

Mr Hollingdale said one problem was strained relations between family members leading to poor communications.

This was underscored by the latest survey of family businesses by KPMG and Family Business Australia.

“If there’s one thing that was loud and clear from the 2017-18 survey of family businesses in Australia, it was that good communication and even healthy conflict between family members is vital to boost the sustainability of the business and the wellbeing of the family,” the report stated.

The FBA report also confirmed the persistent problem of families failing to plan for leadership and ownership succession.

Just more than half the businesses surveyed had no retirement plan for the current chief executive and no unifying strategy for how the family will participate or be recognised in the business.

Mr Hollingdale said while family members may appreciate the need or desirability for an orderly succession plan, they did not necessarily have the skills.

“I prepare an agenda, set out the ground rules and create a setting where people feel comfortable,” he said.

Mr Hollingdale said that, in his experience, it was important for family members to share their expectations.

“People often make assumptions about what their children want and their capacity to deal with certain assets,” he said.

“That may not be correct.

“It’s also useful to test whether the will can be effectively implemented.”

Mr Hollingdale said part of his role was to ensure appropriate experts, such as lawyers, accountants and valuers, were engaged.