The Public Trustee v Skeet

The Public Trustee, as executor of the estate of the late Mr. Skeet, appealed to the New South Wales Court of Appeal against a decision of the Supreme Court of New South Wales concerning the interpretation of the deceased's will. The dispute centred on whether a specific bequest of shares in a company, which had undergone a significant reconstruction prior to the testator's death, should be satisfied by the shares held by the testator at the time of his death, or by the shares that were the subject of the reconstruction.

The primary legal issue before the Court of Appeal was whether the bequest of shares in "Skeet Pty. Limited" had adeemed, or failed, due to the company's reconstruction. This required the court to determine the testator's intention at the time of making the will and whether the shares held at the time of death were substantially the same subject matter as those bequeathed, or if they represented a different entitlement. The court had to consider principles of ademption and the construction of wills in circumstances where the subject matter of a specific bequest has undergone a transformation.

The Court of Appeal held that the bequest had not adeemed. Applying established principles of will construction, the court found that the testator's intention was to bequeath his interest in the family company, regardless of its specific share structure at any given time. The reconstruction of the company, while altering the form of the shares, did not fundamentally change the nature of the testator's underlying interest in the business. The court reasoned that the shares held at the time of death were the direct continuation and replacement of the shares that existed at the time the will was made, and therefore the specific bequest was still capable of being satisfied. The appeal was allowed.