Hannaford v Hannaford [2010] NSWSC 911

New South Wales Supreme Court

CITATION : Hannaford v Hannaford [2010] NSWSC 911

HEARING DATE(S) : 10, 11, 12, 13 and 14 May 2010

JUDGMENT DATE : 19 August 2010

JURISDICTION : Equity Division

JUDGMENT OF : Bergin CJ in Eq

DECISION : Provision to be made.

CATCHWORDS : SUCCESSION - where three adult sons worked a rural property for 25 years in partnership - where partnership dissolved - where intended share for departing partner not achieved - where deceased made no provision for son/departed partner on basis that he had already received his share - whether provision should be made - notional estate - whether prescribed transaction - whether order designating notional estate should be made

LEGISLATION CITED : Family Provision Act 1982 Succession Act 2006

Delaforce v Simpson-Cook [2010] NSWCA 84 Ford v Simes [2009] NSWCA 351 CASES CITED : Ngurli Ltd v McCann (1953) 90 CLR 425 Schaeffer v Schaeffer (1994) 36 NSWLR 315 Wentworth v Wentworth (Supreme Court of New South Wales, 14 June 1991, unreported)

PARTIES : Alan Varley Hannaford (Plaintiff) Geoffrey Lawrence Hannaford as Executor of the Will of the late Dorothy Broughton Hannaford (Defendant)

FILE NUMBER(S) : SC 2008/281381

COUNSEL : BMJ Toomey QC / G Underwood (Plaintiff) M Willmott SC / G Van Der Vlag (Defendant)

SOLICITORS : Johansson Solicitors (Plaintiff) Galland Elder Lulham (Defendant)

- 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BERGIN CJ in Eq

19 AUGUST 2010

2008/00281381 ALAN VARLEY HANNAFORD V GEOFFREY LAWRENCE HANNAFORD JUDGMENT Introduction 1 The late Dorothy Broughton Hannaford (the deceased), her late husband, Raymond Laurence Hannaford (Mr Hannaford), who died in 1982, and their three sons, Alan Varley Hannaford, the plaintiff, Geoffrey Lawrence Hannaford, the defendant, and their younger brother, Barry Broughton Hannaford (Barry), operated a very successful cattle business (the Business) for many years in Braidwood, New South Wales. The Business was conducted as a partnership known as the Hannaford Pastoral Co (the Partnership) on the properties known as Meroo in Braidwood owned by the family company, Hannaford Pastoral Co Pty Limited (the Company). 2 In 1992 a family disagreement led to the break up of the Partnership. Thereafter the deceased, the defendant and Barry operated the Business under a new partnership agreement until the deceased's death on 18 May 2007. By her Will dated 18 December 2003, Probate of which was granted to the defendant on 29 January 2008, the deceased appointed the defendant as executor of the Will, trustee of her estate and Governing Director of the Company. The deceased made no provision for the plaintiff and left the whole of her estate to the defendant and Barry in equal shares. 3 The plaintiff commenced these proceedings on 30 October 2008. By Amended Summons filed in Court during the trial the plaintiff seeks an order pursuant to s 7 of the Family Provision Act 1982 (the Act) that provision be made for his maintenance and advancement in life out of the estate of the deceased. The Act, as opposed to the Succession Act 2006, as amended, applies to these proceedings because the deceased died before 1 March 2009. The Succession Act applies to claims in relation to estates of testators who died after that date. The plaintiff also seeks declarations that for the purposes of sections 23 to 28 of the Act the notional estate includes: the issued capital in and the assets of the Company; the assets of the Partnership; the issued capital in and the assets of Chay Pty Ltd (Chay); the real property owned by the Company and Chay; and the real property owned jointly by the defendant and Barry. 4 The proceedings were heard on 10, 11, 12, 13 and 14 May 2010 when Mr BMJ Toomey QC, leading Mr G Underwood, of counsel, appeared for the plaintiff, and Mr M Willmott SC leading Mr G Van Der Vlag, of counsel, appeared for the defendant. The Company 5 Mr Hannaford and the deceased established the Company in 1957 for the purpose of operating the Business. By that stage Mr Hannaford and the deceased had already purchased the property Meroo in Braidwood and between 1957 and 1992 the Company acquired further properties in the Braidwood district: Cow Paddock, Wattle Paddock, Bedervale, Devon Farm, Pine View, Tumella and Inverness. Although the Company's land holdings comprised all of these properties, they have been referred to collectively as Meroo. 6 The Articles of Association of the Company provide relevantly: 4 It shall be no objection to any agreement which the Company may make in the course of acquiring any property or carrying on its business that any party to such agreement may be Raymond Laurence Hannaford and/or his wife Dorothy Broughton Hannaford or any of their children or that any of them may be governing director managing director director promoter shareholder in or otherwise stand in a fiduciary position to the Company or that there is no independent board to represent and act on behalf of the Company in respect of any such agreement and every member of the Company both present and future shall be deemed to have become such a member and to have joined the Company on this basis and subject to compliance with the provisions of section 129 of the Companies Act 1936 the said Raymond Laurence Hannaford and/or his wife Dorothy Broughton Hannaford or any of their children may as governing director managing director or director as the case may be vote in respect of such an agreement and may in all respects act as such governing director managing director or director in respect of any such agreement and on behalf of the Company and enter into give effect to and carry out any such agreement and any such agreement may be signed or executed as well by the said Raymond Laurence Hannaford and/or his wife Dorothy Broughton Hannaford or any of their children as by any other director or directors and/or secretary.