International conflicts and the importance of having a valid Will

The Victorian Supreme Court has delivered judgment in the case of Re Tang [2017] VSC 59 concerning a Chinese resident individual leaving a handwritten note disposing of assets in Victoria but not all assets or any assets in China where he died. The case raises interesting issues regarding choice of law in succession cases and the matters to be addressed where this is unclear and the deceased does not leave a valid Will. It also emphasises why it is vital to take professional advice to ensure you have a Will that is valid and respected in any countries which you have connections to or own assets in.

Facts

Mr Tang died on 26 November 2014 in China. At the date of his death, he was an Australian citizen but resident in China. He owned movable assets in Australia and China but no real estate. He left a handwritten note in Chinese for his mother signed by him in China, but which did not name an executor and was not witnessed. The note referred to his bank accounts in Australia apparently being for his mother, but did not mention all his assets including his assets in China where the majority of his wealth was held. His mother, who lived in Victoria, sought a grant of letters of administration with the Will annexed on the basis that the note was his Will and she was the sole beneficiary.

The issue

The deceased also had a wife whom he had married in Australia in 2003. He then moved to China with her and had resided there since, but his wife argued they were separated ten years prior to his death and that they had a son. His mother was unaware of his son and disputed he was the father. The difference between the laws of China and Victoria meant that the potential beneficiaries stood to inherit different proportions of his estate depending upon which law applied, as the Court held the deceased did not intend the document to be his Will, so had died intestate and dismissed his mother’s application for a grant of letters of administration.

The Court held the key question in determining the applicable law was whether the deceased was domiciled in Victoria or in China, as the two other personal connecting factors, being Australian citizenship and residency in China, were conflicting. It held 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 had 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.

Although his mother said her son intended to move back to Australia, the vast majority of his assets were held in China, he lived in China, he worked in China and the balance of his family lived in China, so the Court held his domicile of choice and habitual residence was China. There was no evidence of him having an intention to return to Victoria by maintaining significant connections to Victorian organisations or applying for jobs there. This was reinforced by the fact that the note was executed in China. Therefore, the validity of the note was determined under Chinese law with Chinese laws determining the distribution of his estate, both in China and Australia.

The take away

The case highlights the importance of considering which succession law applies to an individual’s estate including real estate (the succession of which is determined according to the laws of the country in which it is situated) and movable assets (the succession of which is determined by the domicile of the deceased at the date of their death), where an individual owns assets in different countries and/or has other connections to both countries.

To avoid costly and time consuming disputes and estate administration, such individuals should ensure they obtain legal advice in both countries and if appropriate have valid Wills in both countries. These Wills should work with each other to ensure that one does not accidentally revoke or conflict with the other. Hall & Wilcox has extensive experience is assisting and advising clients with assets in and/or connections to multiple jurisdictions, and can provide valuable advice and insight to avoid the issues encountered in Re Tang.