Cheetham v Heuzenroeder

In *Cheetham v Heuzenroeder*, the High Court of Australia considered a dispute concerning the interpretation of a will. The primary issue before the Court was whether a specific bequest of shares in a company, Cheetham Salt Limited, had lapsed due to the company's subsequent de-listing and acquisition by another entity prior to the testator's death. The testator had bequeathed "all my shares in Cheetham Salt Limited" to the respondent, Heuzenroeder.

The legal issues before the High Court were: (1) whether the bequest of shares in Cheetham Salt Limited was a gift of a specific asset or a gift of a class of shares, and (2) if it was a specific gift, whether the bequest had lapsed due to the company ceasing to exist in its original form before the testator's death. The Court had to determine the testator's intention regarding the subject matter of the gift in light of the company's transformation.

The High Court, applying principles of testamentary construction, held that the bequest was a specific gift of the shares as they existed at the time the will was made. However, the Court found that the testator's intention was to give the shares in the company as it was, and not to provide a substitute for them if the company ceased to exist. Given that Cheetham Salt Limited had been acquired and de-listed, and the testator no longer held shares in that specific entity at the time of death, the subject matter of the specific gift had fundamentally changed, leading to the lapse of the bequest. The Court reasoned that the testator's intention was tied to the specific shares in the named company, and the subsequent events meant that the subject matter of the gift no longer existed in the form contemplated by the testator.

The High Court allowed the appeal, finding that the bequest had lapsed.