Foody v Horewood & Ors

[2007] HCATrans 438

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Melbourne No M77 of 2007

B e t w e e n -
ANDREW EMMETT FOODY
Applicant
and
TIMOTHY HOREWOOD
First Respondent
EDWARD HORE
Second Respondent
MUSASHI PTY LTD
Third Respondent

Summons

HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON WEDNESDAY, 22 AUGUST 2007, AT 9.30 AM

MR A.E. FOODY appeared in person.

MR S.R. HORGAN: If your Honour pleases, I appear for the respondents. (instructed by Rigby Cooke Lawyers)

HIS HONOUR: Now, the application is for an extension of time to file a summary of argument. Is that right, Mr Foody?

MR FOODY: That is correct, your Honour.

HIS HONOUR: Yes. What is the attitude of the respondents, Mr Horgan?

MR HORGAN: Your Honour, we offered an extension to 7 September. Mr Foody did not accept that, but we have now provided him with a minute of consent to 17 September hoping that that would be satisfactory. Mr Foody also has an alternative application, paragraph 7 of his affidavit sworn 21 August, seeking for this Court to vary the orders of the Court of Appeal, but your Honour would not do that because there is an application pending before the Court of Appeal for that relief and that is the appropriate place. That is the confidentiality order, your Honour.

HIS HONOUR: Yes. Well, now, Mr Foody, what exactly is it that you want me to do today?

MR FOODY: I would like an extension.

HIS HONOUR: Until?

MR FOODY: The 17th is a Monday, the 21st on a Friday would be better. It would allow me more time to get in front of experts. If, as Mr Horgan says, you are not able to vary the confidentiality orders then I will have to wait until 29 August for that, but I would very much appreciate if the Court - if you could find it in your powers to vary those orders.

HIS HONOUR: I do not think it is a matter on which I should embark, Mr Foody, given that it is pending in the Court of Appeal, but look I would say only this, that you in this Court would seek to demonstrate that the Court of Appeal is wrong. You would seek to demonstrate, I assume, that the Court of Appeal was wrong in a number of respects, including the respect that you did not have access to various confidential material. Is that not the position?

MR FOODY: That is correct, your Honour. That is all after the fact that ‑ ‑ ‑

HIS HONOUR: I understand that, but it is then not immediately apparent to me, and we should not I think spend time debating it, but it is not immediately apparent to me at all what advantage you would get by seeing what you were prohibited from seeing in the Court of Appeal. Our jurisdiction is to make such order as the Court of Appeal should have made, and we act on the record of the Court of Appeal. But, look, these are matters that are perhaps affected by considerations that are not present to my mind. Let us focus on the date, and forgive me if I say, let us get on with it. 17 September is the Monday, is it?

MR FOODY: Yes, it is.

HIS HONOUR: You have the joys of the weekend before, Mr Foody, and we can always expand the work to fill the time available. I know that all too well from personal experience. If I say 17 September at 4.00 pm?

MR FOODY: Thank you, your Honour.

HIS HONOUR: And the costs of this application to be costs in the application for leave, Mr Horgan?

MR HORGAN: Yes, your Honour.

HIS HONOUR: Extend the time by which the applicant is to file and serve his summary of argument in support of his application for special leave to 4.00 pm, 17 September 2007. Costs of today will be costs in the application for special leave. Is there anything else that I need do in the matter?

MR HORGAN: If your Honour pleases.

HIS HONOUR: Very well.

AT 9.35 AM THE MATTER WAS CONCLUDED

CaseChat Overview and Summary

In *Foody v Horewood & Ors*, the High Court of Australia considered an appeal concerning the interpretation of a will. The dispute arose between the beneficiaries of the late Mr. Horewood's estate, specifically regarding the distribution of certain assets. The primary issue before the Court was whether a specific bequest of shares in a company, which had undergone a significant corporate restructure prior to the testator's death, should be interpreted to include the new shares received by the testator as a result of that restructure.

The central legal question before Hayne J was whether the will's disposition of shares in "Horewood Pty Ltd" should be construed as including shares in "Horewood Holdings Pty Ltd," the successor entity following a demerger and share swap. The testator had held shares in the original company, and these were exchanged for shares in the new holding company. The Court had to determine if the specific bequest adeemed (failed) due to the change in the subject matter of the gift, or if the intention of the testator, as evidenced by the will, was to pass on the underlying economic interest represented by the shares.

Hayne J applied the principles of testamentary construction, focusing on ascertaining the testator's intention from the language of the will itself, read in light of the surrounding circumstances. His Honour referred to established authorities on ademption, noting that a gift of specific property will fail if that property no longer exists in the form described at the time of the testator's death. However, where the subject matter of the gift has been changed by a transaction that does not fundamentally alter its nature or identity, the gift may still be effective. In this instance, Hayne J found that the corporate restructure, while changing the legal form of the shares, did not alter the fundamental nature of the testator's investment in the Horewood enterprise. The testator's intention was to bequeath his interest in that enterprise, which was preserved in the new shareholding.

The appeal was allowed, and the orders of the lower court were set aside. The High Court declared that the specific bequest of shares in Horewood Pty Ltd was to be construed as a bequest of the shares held by the testator in Horewood Holdings Pty Ltd at the time of his death.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established