Background
Janice Margaret Morrison died on 16 May 2025, leaving a will dated 1 December 2022. Clause 8 directed the sale of her Campbelltown unit and the distribution of the net proceeds in equal shares among three charities. Clause 9 dealt with the residuary estate.
Before her death, Morrison had contracted to sell the unit for $505,000, but completion was not yet due when she died. The contract gave “the vendor” a right to rescind upon her death. Ritchie Lyndon Hawley, an executor named in the will and a residuary beneficiary, obtained a limited grant of administration and completed the sale without notifying the charities. He then sought a ruling that the clause 8 gift had been adeemed and that the proceeds therefore passed under the residuary clause.
The Court’s Holding
Lindsay J held that the clause 8 gift did not fail by ademption. At Morrison’s death, she remained the registered proprietor and retained rights under the sale contract, including the death-triggered right of rescission. Because the contract was not then amenable to an unconditional order for specific performance, it had not conclusively converted her interest into a mere right to receive the purchase price.
The same result followed from the Succession Act 2006 (NSW), read with the Probate and Administration Act 1898 (NSW) and the Real Property Act 1900 (NSW). Morrison’s will operated upon her remaining interests in the unit and the contract, and property answering the testamentary gift remained in her estate at death. The net sale proceeds therefore passed under clause 8 rather than clause 9.
The Court did not make final orders in the judgment. Lindsay J proposed to declare that the charities were equally entitled to the net balance of the sale proceeds, but allowed the parties to submit draft orders addressing the amount of those proceeds and costs.
Key Takeaways
- A pre-death contract to sell specifically gifted land does not automatically adeem the gift; the will, contract, property rights at death, and governing statutes must be considered together.
- A death-triggered right of rescission and the absence of an unconditional entitlement to specific performance supported the conclusion that the gifted property remained identifiable in the estate.
- An administrator who is also a residuary beneficiary risks personal costs consequences by acting in a conflict of interest without notifying affected beneficiaries or seeking judicial advice.
Why It Matters
The decision limits mechanical reliance on equitable conversion as a basis for “ademption by contract” under modern New South Wales succession law. The central inquiry is whether, properly construing the will and the parties’ rights at death, property answering the testamentary gift remained in the estate.
It also underscores the need for estate representatives to disclose conflicts and obtain directions before taking steps that may favor their own beneficial interests. Although the substantive ademption issue was decided, the precise declaration, quantification of the net proceeds, and costs orders remained to be settled.