In the estate of Pryor

In the estate of Pryor [2023] ACTSC 170
Supreme Court of the Australian Capital Territory
McWilliam J
Succession – a husband and wife died at almost the same time, leaving mirror wills, no children, and a joint estate of nearly $25million – they left 50% of their joint estate to the Australian National University to be used to support the Centre of Personalised Immunology for research into dermatomyositis an related diseases, 25% to the husband’s former Sydney University Hockey Club, and 25% to Wesley College at Sydney University, where the husband had resided while studying architecture and later became the architect for a new residential wing – shortly before the couple died, a company controlled by the couple made a donation to Wesley College in a form of a cheque signed by the couple for $2million – the executor of the husband’s estate sought a declaration that the donation had adeemed the testamentary gift – Wesley College opposed the application – the other beneficiaries were put on notice of the proceedings, and declined to take an active part – held: the overarching objective of the Court in an exercise of probate jurisdiction is to carry out the deceased’s testamentary intentions, and to see that beneficiaries get what is due to them – a declaration in the terms sought by the executor would mean that the $2 million donation to Wesley College would be treated as Wesley College receiving part of its share of the residue in advance, so that its entitlement in the residue would be reduced by $2 million – broadly, ademption concerns the destruction of the subject matter of a testamentary gift, whether by physical dealing (by the testator during their lifetime) or by operation of rules of equity – where there is destruction by physical dealing, the principle is that the beneficiary takes nothing and cannot trace the proceeds of the subject matter of the gift – the present case was concerned with the operation of rules of equity, which is analogous to the physical dealing case – it may be traced back to the equitable rule against double portions – the ultimate question is whether the deceased intended that gifts in his will should stand, notwithstanding financial arrangements into which he and the relevant beneficiary entered after making the will – a presumption of ademption only arises in these circumstances in the context of a legacy for a child (or a person similarly placed) or where there is a legacy for a particular purpose (express or implied) – where the legacy is for a particular purpose, the testamentary and inter vivos gifts must also be given by the same person – in equity, substance and not form govern the assessment of this, and, had it been necessary to decide, the Court would have held that the company was a mere extension of the couple for that purpose – however, the two gifts to Wesley College were not for the same purpose – therefore the presumption did not arise – the correct inference on the evidence was that the inter vivos donation was not intended to be in substitution for the testamentary gift – there was therefore no ademption – executor’s proceeding dismissed – all costs of the proceeding to be paid out of the estate.
In the estate of Pryor