Australian Citizen resident in China leaves a “note” for mum

Update! This case was successfully appealed in June 2017.  Read my article on the appeal here.

Documenting your wishes is simple in theory, but quite a different story in real world.  The Supreme Court of Victoria had quite the job recently in  deciphering whether a note a man left behind was considered to be his “Will” and which law was to apply to the gentleman’s estate, who was an Australian citizen and a resident in the People’s Republic of China (since 2003).  In Re Tang [2017] VSC 59, shortly before his death, at the young age of 41, the deceased wrote a note to his mother telling her of his two bank accounts in Australia and that she was to use them for her personal use only.   The deceased was survived by his wife, with whom he was was separated from and his parents.  Interestingly, the was also survived by an alleged “secret child” the deceased, nor his family, knew about.

The applicant in the matter was the deceased’s mother who claimed that the note was her son’s last Will. The estate was comprised of approximately $150,000 in Victorian assets and approximately $415,000 in Chinese assets. Taking into account his liabilities, the estate was valued at approximately $566,000 with 3/4 of the estate based in China.

The Court was asked to determine various factors in the case, namely:

  • whether the “note” was the last Will of the deceased;
  • whether the “note” may have constituted a donatio mortis causa (a gift made in contemplation of death);
  • whether the “note” may have been a valid will executed in a foreign place;
  • which law applied to the administration of the deceased’s estate;
  • whether the deceased had testamentary capacity at the time he made the document.

Whether the “note” was a Will and what law applies

In probate cases, the onus of proof is on the applicant to prove that the purported Will should be propounded by the Court as the last will of the deceased.  In doing so, the Court referred to the case of Fast v Rockman [2013] VSC 18 where Habersberger J stated that the applicant “must establish the requisite elements on a balance of probabilities. Furthermore, because of the nature of probate, the consequences of any findings that may be made and the inability to hear any evidence from the deceased as to his actual intentions, the Court needs to evaluate the evidence with great care in accordance with the Briginshaw v Briginshaw principle“. (at [48]).

The Briginshaw v Briginshaw principle provides that reasonable satisfaction of something should not be obtained by “inexact proofs, indefinite testimony, or indirect inferences” (Briginshaw v Briginshaw (1938) 60 CLR 336 at 362.)

The Court also had to be satisfied that if the Note was the deceased’s Will, that the deceased had testamentary capacity, that he had knowledge of and approved the contents of it and there was no undue influence impacting upon the making of the Will. The Court received affidavit evidence from the deceased’s mother stating that she had hoped he would make a full recovery, upon first seeing him in hospital. However, the medical reports suggested that the deceased was very ill the whole time he was in hospital.

The Court has the power to admit an informal document as  the last Will of the deceased, however, if the Court is to do so, the Court must be satisfied that there is a “document”, that the document must express or record the testamentary intentions of the deceased AND that the document must have been intended by the deceased to be their last will: section 7 of the Wills Act 1997 (Vic).

 Where a Will is executed in a foreign place, the Will can be held to be validly executed provided that it conforms to the internal law in force in the place either of (1) where it was signed; or (2) which was the testator’s domicile or habitual residence, either at the time the will was executor, or at the testator’s death; or (3) of which the testator was a national, either at the date of execution of the will, or at the testator’s death: section 17 Wills Act 1997 (Vic). This is a question of fact. In the normal course, the proving of such a fact is supported by the exhibiting of expert evidence.  In this case there was no such evidence available to the Court to be satisfied of the explanation of how Chinese law would treat such a note (paragraph 44).

In conducting it’s own research, the Court revised the succession law as it applies in China, noting the application of the General Principles of Civil Law (“the GPCL”).  Pursuant to article 15 of the GPCL, “The domicile of a citizen shall be the place where his residence is registered; if his habitual residence is not the same as his domicile, his habitual residence shall be regard as his domicile.” Further, article 149 of the GPCL states: “In the statutory succession of an estate, movable property shall be bound by the law of the decedent’s last place of residence, and immovable property shall be bound by the law of the place where the property is situated.”

The GPCL noted two separate chapters, one dealing with intestate estates and anther dealing with testamentary succession (which included dealing with formal requirements of a Will).  In Article 17, the formal requirements of a Will were stated as (and set out in paragraph 52 of the judgement):

  • a notarial will is one made by a testator through a notary agency;
  • a testator-written will is one made in the testator’s own handwriting and signed by him, specifying the date of it’s making. 
  • A will written on behalf of the testator shall be witnessed by two or more witnesses, of whom one write the will, dates it and signs it along with the other witness or witnesses and with the testator;
  • a will made in the form of a sound-recording shall be witnessed by two or more witnesses.
  • a testator may, in an emergency situation, make a nuncupative will, which shall be witnessed by two or more witnesses.  When the emergency situation is over and if the testator is able to make a will in writing or in the form of a sound-recording, the nuncupative will he has made shall be invalidated.

The Chinese statutory succession rules (i.e. intestacy provisions), state that the estate shall be inherited by spouse, children and parents; in that order (Article 10 of the GPCL).

There was affidavit evidence provided by the applicant that the deceased had spoken often of his intention to return to Australia to live permanently.

In dismissing the application for the Grant of the “note”, the Court ultimately was not satisfied that the deceased had testamentary capacity, nor that the “note” was a document intended to be the deceased’s Will.

The Court said:

However, the note purports to deal with less than one quarter of the total value of the deceased’s assets and it does not deal with all of his assets in Victoria.  In Victoria, the deceased also owned a motor vehicle valued at approximately one quarter of the value of the combined total of the bank accounts.  Importantly, it purports to benefit the plaintiff in circumstances where the plaintiff is the only person who has provided the evidence in the application.  The note does not consider any other people who may have a claim on the deceased’s estate; namely, his father and  his allegedly estranged wife. (paragraph 67)

The note also appears to express a wish that the plaintiff use the money in an unspecified bank account for her own purposes although when she may do so is unclear.  Precatory documents do not evidence a will or a deceased’s testamentary intention and cannot be admitted to probate. (paragraph 68)

Domicile and Choice of Law

The Australian citizenship and residency in China are conflicting as it applies to choice of law and domicile.

The Court succinctly set out the conflict:

The central question that is determinative of the choice of law is the domicile of the deceased as the two other personal connecting factors, being Australian citizenship and residency in China are conflicting.  A person’s domicile of origin is based on the jurisdiction in which they were born, alternatively, their citizenship.  In this case, the deceased was originally from China but obtained Australian citizenship in 1997.  However, he had been habitually residing in China from 2003 until the date of his death.  Domicile of choice is established through lawful presence in a country combined with an intention to remain in that country indefinitely.  Questions of intention are of decisive importance. (paragraph 71)

Section 9 of the Domicile Act 1978 states that a domicile of choice is made with reference to the persons residence and intention to make a home indefinitely.

The Court determined:

There is no doubt that the deceased was an Australia citizen but his domicile of choice and habitual residence was undoubtedly China.  This is reinforced by the fact that the note was also executed in China.[32] Consequently, as the deceased’s habitual residence and domicile was China, the validity of the note must be determined under Chinese law.[33] In my view, the forum for dealing with the validity of the note is China, with Chinese laws determining the distribution of the estate of the deceased, both in China and Australia. (paragraph 78, citations omitted)

Accordingly, on this basis and in accordance with the conclusion that the deceased was domiciled in China, it is readily apparent that Victoria is not the appropriate forum to determine issues of succession and inheritance in respect of the estate of the deceased.[36] (paragraph 81, citations omitted)

Donatia Mortus Causa – gift made in contemplation of death

Finally, the Court was called to determine whether the “note” constituted a gift to the deceased’s mother made in contemplation of death.

In order to be satisfied as to whether the note constituted such a gift, the legal test as set out in Public Trustee v Bussell (1993) 30 NSWLR 111 must be met:

  • the gift must be made in contemplation of the donor’s death, although not necessarily in expectation of death;
  • there must be a delivery of the subject matter of the gift to the donee or a transfer of the means or part of the means of getting at the property, or as has been said, the essential indicia of title; and
  • the gift must be condition upon it taking effect on the death of the donor, being revocable until that event occurs.

The Court set out two particularly difficult issues that arose in the case of this note; whether delivery had taken place and whether the evidence was satisfactory.

The Court held that the claim of donatia mortis causa must fail on the basis that the deceased could not have taken to “deliver” the subject matter as there was lack of evidence of such a delivery and also that the deceased did not disclose the pin number for either of the accounts when he spoke with his mother about the note; the COurt going so far as to say, at paragraph 94:

Whilst he may not have wanted to verbalise the pin number for fear of being overheard as asserted by the plaintiff, he could have written down the pin number on the note or another piece of paper.  The failure to do so is another indication that delivery was not effected so as to give rise to a donatia mortis causa.

You can read the very interesting case here.

Update! This case was successfully appealed in June 2017.  Read my article on the appeal here.

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