Ademption & the wrongful sale

Judith Weir died in December 2008. Her last will was executed in September 2003. The will left a half interest in a property at Wollongbar to her daughter, Stephanie, the residue of her estate went to her grandchildren, George, Thomas, Patrick and Melissa, as tenants in common in equal shares, at the age of 18.

In June 2002, Judith granted an enduring power of attorney to her son Andrew, to be used only

” upon my treating Medical Practitioner certifying that I am no longer physically or mentally able to sign documents or look after my own affairs.”

Andrew took no legal advice before acting under the power of attorney, obtaining a letter from his mother’s treating medical practitioner, Dr Chiu in January 2006 stating that due to significant dementia

She has reached the stage which I feel that she may not be capable of looking after her own affairs.”

In July 2006, Andrew and the executor of June’s husband’s estate sold the Wollongbar property. The sale was registered in August 2006.

However in 2010 Dr Chiu referred to his conditional wording of ‘may not’ – as referring to Judith’s mental state at that time. He had been unable to access her medical records and without the necessary documents could not support or deny her ability to sign documents or look after her own affairs as of January 2006.

The power of attorney granted Andrew was not to be used unless the deceased’s treating medical practitioner gave a certificate that the deceased was no longer able to sign documents or look after her own affairs.

The Court took the view that there must be strict compliance with the condition or limitation. It did not require a medical opinion. It required certification and not a medical opinion. That requirement added to the protection of the deceased that the power of attorney would not be used prematurely.

Therefore, Andrew had no authority to act under the power of attorney to sell the Wollongbar property as there had not been compliance with the condition or limitation to which its authority was subject.

Where it can be shown that the property ceased to be a part of the testator’s estate because of the unauthorised action of an agent ademption does not occur.

The court held that is the position in this case; there was no ademption of the gift of June’s half share to Stephanie and $185,308.63 in a bank account represented what remained of the proceeds of sale. These proceeds will pass to Stephanie in substitution for the specific gift in  June’s will.