Estate Litigation – the ademption principle in action
The principle of ademption provides that where a gift is left pursuant to a will and the subject matter of the gift is sold before death, the gift is considered adeemed or as having no effect. In Queensland, s 60(1) of the Guardianship and Administration Act 2000 (Qld) allows the Supreme Court to award compensation to persons whose gifts are lost by the dealings of an administrator.
One of the common law exceptions to the ademption principle is found in the decision in Re Hartigan where it was found that:
‘…if real estate is sold by an administrator and the testator is not capable of changing his or her will, then the gift of real estate is not automatically adeemed. The devisee is instead entitled, at face value, to the proceeds of sale. (JEB at ).
One of the aims of this exemption is to preserve a testator’s wishes from being defeated by the dealings of an administrator. This was utilized in JEB  WASAT 65 a recent decision from Western Australia. Relying on the exception outlined in Re Hartigan, the Public Trustee argued that the proceeds of sale should be held for the person who was initially intended to receive it as a gift. Therefore the Tribunal ordered that the net proceeds from the sale of the property be retained in a separate bank account.
This article was written by Emario Welgampola, Special Counsel, and Nicola Goodwin, Law Clerk.
 Ex parte The Public Trustee in the State of Western Australia (unreported, Supreme Court of Western Australia, 9 December 1997, Library No. 970736.