Intestate estate across two countries – conflict of laws over next of kin

In the matter of the Public Trustee of Queensland as Administrator of the estate of KH, deceased [2017] QSC 48

Lyons J

The Public Trustee of Queensland (the “PTQ”) sought directions and/or advice as to whether the PTQ should distribute part of an estate of the deceased to the persons entitled under the Succession Act 1981 (Qld) or under the law of Japan.

Background

The deceased was a Japanese national who, upon his death, left an estate in Japan valued in excess of AUD $1.2 million dollars and an estate in Queensland in excess of AUD $1.5 million dollars. The deceased’s father, mother and sister had died prior to the deceased’s death but had one first cousin living in Japan at the time of his death.

Relevantly, the deceased left no will and the Japanese Rules of Succession, unlike Queensland Succession Law, does not recognise first cousins as next of kin. As a result, the estate was deemed to belong to the Japanese Treasury.

A Japanese solicitor was appointed by the Japanese Family Court to administer the deceased’s estate, who in turn engaged Queensland solicitors to administer the Australian estate.

Consideration

The issue before Lyons J was whether the deceased’s moveable property in Queensland vests in the Japanese Treasury, pursuant to the Japanese Laws of Succession, or whether Queensland law applies resulting in the deceased’s first cousin acquiring the Queensland estate.

Her Honour went on to state:

[23] … The law that applies in relation to moveable assets is significantly more legally complicated when a person is domiciled in another country at the time of their death because, as Professor Lee points out, different succession laws can apply to the same property.

Lyons J went on to quote Judge Aliko Noda, Chief Justice of the Maebeshi Family Court, regarding Japanese Law:

[26] First of all the spouse is always entitled to be a successor. If there exist other heirs, the order of succession of the spouse shall be in the same rank with them. If no other successors exist, the spouse becomes the only successor.

(a) Statutory heirs other than the spouse are prescribed as children, the nearest lineal ascendants, brothers and sisters, and they have the right of succession in that order. If children or brothers and sisters have already died before the opening of succession, their children (or the nearest lineal descendants) become successors by representation.

When no successors exist at all, the property goes to the National Treasury.

Her Honour continued, stating:

[28] The issue which Counsel for the applicant addressed in the Advice is whether the passing of assets to the Japanese Treasury may not be a right of “succession” but rather a “prerogative right to ownerless property.” In this regard Counsel relies on the proposition, as examined in Nygh and Davies’ text on Conflict of Laws in Australia, that where the Crown or State “either in Australia, or abroad, takes property by virtue of the prerogative right to ownerless property…such a claim is territorial only and extends to property within the territory of the claimant sovereign regardless of the domicile of the foreign owner”.

[33] It was necessary then for Counsel in his Advice to consider the question as to whether the right of the Japanese Treasury to receive the funds was a prerogative right or a statutory right. In this regard Counsel set out the relevant law. Article 959 is in Part IV Relatives of the Japanese Civil Code Act No. 89 of 1896, which prescribes the succession rights of relatives when a person dies without a Will.

Relevantly, Article 725 of the Japanese Code lists a relative by blood within the sixth degree, a spouse and a relative by affinity within the third degree as the definition of relatives.

In finding that the Japanese National Treasury did not have a claim to the Queensland estate, Lyons J went on to state:

[36] Counsel for the applicant indicated in his Advice that the rights of the Japanese National Treasury to receive an estate appear to be different to the rights of the Queensland Crown because, under Article 959, the Japanese National Treasury is entitled to inherited property that has not been disposed of because the heir has not claimed their entitlement or no heir has been located, rather than being the last level of persons entitled to receive the estate under Article 725.

[37] Accordingly Counsel advised that this appears to be an unclaimed property right rather than a provision that gives the final level of succession rights to the Japanese National Treasury. In this regard Counsel indicated that the effect of this provision is similar to the Austrian law considered in In re Barnett’s Trusts referred to previously, where it was held that the English moveable property passed to the English Crown bona vacantia rather than under the Austrian law.

Pursuant to s 134 of the Public Trustee Act 1978 (Qld), the PTQ was advised to distribute the Queensland estate according to Queensland law.

David Cormack – Brisbane Barrister & Mediator

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