Cong v Shen (No 3)

[2021] NSWSC 947

Supreme Court

New South Wales

• Summary available
• Amendment notes

Medium Neutral Citation:

Cong v Shen (No 3) [2021] NSWSC 947

Hearing dates:

19 – 29 October, 2 – 9 November, 16 – 17 December 2020

Decision date:

03 August 2021

Jurisdiction:

Equity

Before:

Ward CJ in Eq

Decision:

1.   Declare that the Will dated 3 June 2016 (incorporating the Deed dated 3 June 2016 executed by the late Zi Li Cong and Yanjiao Shen) constitutes the valid last Will of the late Zi Li Cong (the deceased) and that the deceased had testamentary capacity at the time of execution of the said Will.

2.   Order that probate in solemn form of the said Will dated 3 June 2016 (incorporating the Deed dated 3 June 2016 as a statement of the testamentary intention of the deceased) be granted to the named executors of the deceased (Yanjiao Shen and Edmund Bede Hao San Cong).

3.   Order that the matter be remitted to a Registrar in Probate to complete the grant.

4. Declare that the Deed dated 3 June 2016 is unjust in all the circumstances and order pursuant to the Contracts Review Act 1980 (NSW) that the said Deed be set aside as against the first defendant.

5. Pursuant to s 59 of the Succession Act 2006 (NSW), order that provision be made out of the estate of the late Zi Li Cong in favour of the first and second plaintiffs in the sum of $700,000 each, in lieu of the provision made for the first and second plaintiffs under the deceased’s Will executed on 3 June 2016.

6.   Designate as notional estate so much of the proceeds of sale of the properties at 16 Nicholson Street, Burwood and 43 Amy Street, Campsie as is necessary in order to make provision for the first and second plaintiffs in accordance with order 5 (i.e., up to $1.4 million).

7.   Otherwise dismiss the plaintiffs’ amended statement of claim and the first and second defendants’ further amended cross-claim.

8.   Reserve costs.

9.   Direct the parties to file brief written submissions as to costs within 14 days with a view to dealing with the question of costs on the papers if possible.

10.   Liberty to apply on 3 days’ notice if issues arise in the implementation of these orders.

Catchwords:

CONTRACTS — Construction — Good faith — Implication of terms — Contracts Review Act — Whether unjust in all circumstances

DEEDS — Standing to sue — Whether multi-party deed poll or inter partes deed — Trust of benefit of promise

EQUITY — Trusts and trustees — Express trusts — Intention to create — Resulting trusts — Presumption of advancement — Secret and half-secret trusts — Fraud on a power — Equitable fraud

EQUITY — Equitable defences — Unconscionable Conduct — Undue influence — Yerkey v Jones — Catching Bargains

SUCCESSION — Construction — General principles — Construction of Will and incorporated Deed — Contested probate — Testamentary capacity — Whether knowledge and approval of Will — Whether delusional optimism as to estate — Standing to bring claims on behalf of estate — Doctrine of equitable election

SUCCESSION — Executors — Merger/release of Executor — Intermeddling — Executor de son tort — Whether either of named executors in Will should be passed over for misconduct

SUCCESSION — Family provision — Claim by adult children

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 56

Contracts Review Act 1980 (NSW), s 7(1)

Conveyancing Act 1919 (NSW), ss, 26, 37A, 71

Corporations Act 2001 (Cth), s 601AA

Evidence Act 1995 (NSW), ss 38, 97, 140

Family Law Act 1975 (Cth), s 90

Probate and Administration Act 1898 (NSW), ss 44, 61, 74

Succession Act 2006 (NSW), ss 6, 32, 59, 60, 65, 66, 78, 81, 83

Supreme Court Rules, r 78.19

Trade Practices Act 1974 (Cth), s 46

Uniform Civil Procedure Rules 2005 (NSW), r 7.10

Cases Cited:

Accordent Pty Ltd v Bresimark Nominees Pty Ltd (2008) 101 SASR 286; [2008] SASC 196

Ahmad v Ahmad [2002] NSWSC 579

Alexander v Jansson (2010) 6 ASTLR 432; [2010] NSWCA 176

Allen v Roughley (1955) 94 CLR 98

Amit Laundry Pty Ltd v Jain [2017] NSWSC 1495

Anderson v McPherson [No 2] [2012] WASC 19

Andrews v Australia and New Zealand Banking Group Ltd (2012) 247 CLR 205; [2012] HCA 30

Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54

Astridge v Pepper [1970] 1 NSWR 542

Australian Competition and Consumer Commission v Geowash Pty Ltd (2019) 368 ALR 441; [2019] FCA 72

Bailey v Bailey (1924) 34 CLR 558

Baltic Shipping Co v Dillon (1991) 22 NSWLR 1

Bank of Montreal v Stuart [1911] AC 120

Banks v Goodfellow (1870) LR 5 QB 549

Barns v Barns (2003) 214 CLR 169

Barry v Butlin (1838) 2 Moo PCC 480

Bechara v Bechara [2016] NSWSC 513

Berkeley v Hardy (1826) 5 B & C 355

Bertei v Feher [2000] WASCA 165

Beswick v Beswick [1968] AC 58

Birmingham v Kirwan (1805) 2 Sch & Lef 444

Birmingham v Renfrew (1937) 57 CLR 666

Black Uhlans Inc v New South Wales Crime Commission (2002) 12 BPR 22,421; [2002] NSWSC 1060

Blackwell v Blackwell [1929] AC 318

Bloch v Bloch (1981) 180 CLR 390; [1981] HCA 56

Boughton v Knight (1873) LR 3 P & D 64

BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266

Brand v Monks [2009] NSWSC 1454

Bridgewater v Leahy [1997] QCA 36

Broadlands International Finance Ltd v Sly (1987) 4 BPR 9420

Brown v Brown (1993) 31 NSWLR 582

Brown v Gregson [1920] AC 860

Brown v McEnroe (1890) 11 LR (NSW) Eq 134

Brown v New South Wales Trustee and Guardian [2012] NSWCA 431

Buffrey v Buffrey (2006) 12 BPR 23,619; [2006] NSWSC 1349

Bull v Fulton (1942) 66 CLR 295

Burger King Corporation v Hungry Jack's Pty Limited [2001] NSWCA 187

Burke v Burke [2015] NSWCA 195

Byers v Overton Investments Pty Ltd (2001) 109 FCR 554; [2001] FCA 760

Callaghan v Myers (1880) LR 1 (NSW) 351

Calverley v Green (1984) 155 CLR 242

Camernik v Reholc [2012] NSWSC 1537

Carr v Homersham (2018) 97 NSWLR 328

Cash v The Nominal Defendant (1969) 90 WN (NSW) (Pt 1) 77

Central Exchange Ltd v Anaconda Nickel Ltd (2002) 26 WAR 33; [2002] WASCA 94

Chelsea and Walham Green Building Society v Armstrong [1951] Ch 853

Chen v Marcolongo (2009) ALR 353; [2009] NSWCA 326

Clarence City Council v Commonwealth of Australia [2020] FCAFC 134

Collings v Vakas [2006] NSWSC 393

Commercial Bank of Australia Limited v Amadio (1983) 151 CLR 447; [1983] HCA 14

Commissioner of Stamp Duties (NSW) v Bone (1976) 135 CLR 223

Commonwealth Bank of Australia v Barker (2014) 253 CLR 169; [2014] HCA 32

Concrete Constructions Pty Ltd v Government Insurance Office of NSW [1966] 2 NSWR 609

Cong v Shen [2019] NSWSC 1675

Cook v Fountain (1676) 3 Swan 585; 36 ER 984

Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738

Coorey v Coorey (Supreme Court of New South Wales, Powell J, 22 February 1986, unrep)

Coote v Whittington (1873) LR 16 Eq 534

Cope v Keen (1968) 118 CLR 1

Corin v Patton (1990) 169 CLR 540

Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417

Craig-Bridges v NSW Trustee and Guardian [2017] NSWCA 197

Cropper v Smith (1884) 26 Ch D 700

Croton v R (1967) 117 CLR 326

Currie v Hamilton [1984] 1 NSWLR 687

D’Apice v Gutkovich (No 2) [2010] NSWSC 1333

Darmanin v Cowan [2010] NSWSC 1118

Day v Perisher Blue Pty Ltd [2005] NSWCA 110

De Bruyne v De Bruyne [2010] EWCA Civ 519

Deigan (as executrix for the estate of the late Lockrey) v Fussell (2019) 19 BPR 39,853; [2019] NSWCA 299

Delaney v Jones [2008] NSWSC 229

Delehunt v Carmody (1986) 161 CLR 464; [1986] HCA 67

Dellios v Dellios [2012] NSWSC 868

Derrington v Caldbeck (1990) 20 NSWLR 212

Dialog Pty Ltd v Addease Pty Ltd [2003] FCA 1359

Dovuro Pty Ltd v Wilkins (2003) 215 CLR 317; [2003] HCA 51

Drever v Drever [1936] ALR 446

Drivas v Jakopovic (2019) 100 NSWLR 505; [2019] NSWCA 218

Du Maurier v Wechsler [2001] NSWSC 4

Duggan v White [2018] NSWSC 364

Dyer v Dyer (1788) 2 Cox Eq Cas 92; (1788) 30 ER 42

E Co v Q [2018] NSWSC 442

Eade v R (1924) 34 CLR 153

Eastern Express Pty Ltd v General Newspapers Pty Ltd (1992) 35 FCR 43; 106 ALR 297

Elddin v Hamed (No 2) [2015] NSWSC 654

Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7

Elkofairi v Permanent Trustee Co Ltd (2002) 11 BPR 20,841; [2002] NSWCA 413

Ell v Hunter District Water Supply & Sewerage Board (1927) 27 SR (NSW) 437

Estate of Nitopi (No 2) [2021] NSWSC 748

Estate Reid; Roberts v Moses and Palmer [2018] NSWSC 1145

Ex parte Bear; Re Jones (1945) 46 SR (NSW) 126

Ex parte Callan; Re Smith (1968) 87 WN (Pt. 1) (NSW) 595; (1968) 1 NSWLR 443

Fell v Fell (1922) 31 CLR 268; [1922] HCA 55

Fincham v Edwards (1842) 163 ER 656

Fiorentini v O’Neill (New South Wales Court of Appeal, 4 December 1998, unreported

Fitness First Australia Pty Ltd v Fenshaw Pty Ltd (2016) 92 NSWLR 128; [2016] NSWCA 207

Forster v Elvet Colliery Company Ltd [1907] 1 KB 629

Fowkes v Pascoe (1875) LR 10 Ch App 343

Franklins Pty Limited v Metcash Trading Ltd [2009] NSWCA 407

Garcia v National Australia Bank Ltd (1998) 194 CLR 395; [1998] HCA 48

Gardner v Lachlan (1836) 8 Sim 123

Gate Gourmet Australia Pty Ltd (in liq) v Gate Gourmet Holding AG [2004] NSWSC 149

Glynne v NSW Trustee & Guardian [2011] NSWSC 535

Gorton v Parks (1989) 17 NSWLR 1

Grant v Roberts [2019] NSWSC 843

Gregg v Perpetual Trustee Co (1918) 18 SR (NSW) 252

Grey v Australian Motorists & General Insurance Co Pty Ltd [1976] 1 NSWLR 669

Guthrie v Spence (2009) 78 NSWLR 225; [2009] NSWCA 369

Hall v Carney [2012] SASCFC 76

Hamed v Elddin [2016] NSWCA 9

Harmer v Armstrong [1934] 1 Ch 65

Harvey v Barton [2013] NSWSC 1779

Hayim v Citibank NA [1987] AC 730

Hewitt v Gardner [2009] NSWSC 705

Hilliard v Eiffe [1874] LR 7 HL 39

Hiralal v Hiralal [2013] NSWSC 984

Hobbs v Tinling (CT) & Co Ltd [1929] 2 KB 1

Hoff v Atherton [2004] EWCA Civ 1554

In Re Applebee; Leveson v Beales [1891] 3 Ch 422

In Re Berger (deceased) [1990] Ch 118

In Re Courage Group’s Pension Schemes [1987] 1 All ER 528

In Re Horrocks (deceased) [1939] P 198

In Re Keen; Evershed v Griffiths [1937] Ch 236

In the matter of Reserve Hotels Pty Limited [2021] NSWSC 376

In the Will of Severs (deceased) (1887) 13 VLR 572

In the Will of Steward (deceased) [1964] VR 179

Jack v Smail (1906) 2 CLR 684

Jeans v Commonwealth Bank of Australia Ltd (2003) 204 ALR 327; [2003] FCAFC 309

Jenkins v Wynen [1992] 1 Qd R 40

Jobson v Beckingham (1983) 9 Fam LR 169

Johnson v Buttress (1936) 56 CLR 113

Jones v Smith [2016] VSCA 178

Jones v Sutherland Shire Council [1979] 2 NSWLR 206

Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392; [2013] HCA 25

Kerr v Badran; Estate of Badran [2004] NSWSC 735

Korda v Australian Executor Trustees (SA) Ltd (2015) 255 CLR 62

Kowalczuk v Accom Finance Pty Ltd (2008) 77 NSWLR 205; [2008] NSWCA 343

Le Meilleur Pty Ltd v Jin Heung Mutual Savings Bank Co Ltd [2011] NSWSC 1115

Leary v NSW Trustee and Guardian [2017] NSWSC 1113

Ledgerwood v Perpetual Trustee Co Ltd (1997) 41 NSWLR 532

Lee v Russell [1961] WAR 103

Legal Profession Complaints Committee and Wells [2014] WASAT 112

Lindsay v McGrath [2015] QCA 206

Lord Napier and Ettrick v R F Kershaw Ltd [1999] 1 WLR 756

Lucent Technologies Inc v Krone Aktiengesellschaft (No 3) [2000] FCA 100

Mackay v Dick (1881) 6 App Cas 251

Macquarie Developments Pty Ltd v Forrester [2005] NSWSC 674

Malzy v Eichholz [1916] 2 KB 308

Manning v Hughes; Estate of Ludewig [2010] NSWSC 226

Marcolongo v Chen (2011) 242 CLR 546; [2011] HCA 3

Marley v Rawlings [2012] EWCA Civ 61; [2013] 2 WLR 205

Marshall v D G Sundin & Co Pty Limited (1989) 16 NSWLR 463

Martech Energy Systems Pty Ltd (in liq) v Bell [2005] VSC 198

Martin v Martin (1959) 110 CLR 297

Matouk v The Entrance Seabreeze Pty Ltd [2010] NSWSC 649

Mayfield v Public Trustee [2009] NSWSC 330

McFadden v Snow (1952) 69 WN (NSW) 8

Micheletto (Trustee) v El-Debel [2020] FCA 1031

Moate v Moate [1948] 2 All ER 486

Moody v Condor Insurance Ltd [2006] 1 WLR 1847

Mordecai v Mordecai (1988) 12 NSWLR 58

Morgan v Pike (1854) 14 CB 473

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37

Murtagh v Murtagh [2013] NSWSC 926

Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78

Napier v Public Trustee (WA) (1980) 55 ALJR 1

Nelson v Nelson (1995) 184 CLR 538; [1995] HCA 25

Nicholas v Tubb [2016] TASSC 53

Nock v Austin (1918) 25 CLR 519

Nolan v Nolan [2004] VSCA 109

Nominal Defendant v Gabriel (2007) 71 NSWLR 150; [2007] NSWCA 52

O’Connor v S P Bray Ltd (1936) 36 SR (NSW) 248

Ong v Lottwo Pty Ltd (in liq) [2013] SASCFC 57

Page v Hull-Moody [2020] NSWSC 411

Page v Page [2016] NSWSC 1218

Paraskov v Paraskos [2002] WASC 109

Pennimpede v Pennimpede [2009] NSWSC 85

Peters v Leeder (1878) 47 LJQB 573 at 574

Phillips v James (2014) 85 NSWLR 619; [2014] NSWCA 4

Phillips v Phillips [2017] NSWSC 280

Pitcher v Langford (1991) 23 NSWLR 142

Pratt v Estate of O’Sullivan [2005] NSWSC 1046

Ramage v Waclaw (1988) 12 NSWLR 84

Re Elsmore Resources Ltd (2016) 114 ACSR 297; [2016] NSWSC 856

Re Estate McNamara [2018] NSWSC 1661

Re Estate of Badger (deceased) [2021] SASC 25

Re Gordon’s Will Trusts [1978] Ch 145

Re Griffith; Easter v Griffith (1995) 217 ALR 284

Re Hodges; Shorter v Hodges (1988) 14 NSWLR 698

Re Kerrigan; Ex parte Jones (1946) 47 SR (NSW) 76

Re Smith (deceased) [1978] VR 596

Re the Estate of the late Marras [2014] NSWSC 915

Redglove Projects Pty Ltd v Ngunnawal Local Aboriginal Land Council (2004) 12 BPR 22,319; [2004] NSWSC 880

Reserve Hotels Pty Limited [2021] NSWSC 376

Riz v Perpetual Trustee Australia Limited [2007] NSWSC 1153

Rodda v Ian Rodda Pty Ltd [2015] SASC 95

Rosebanner Pty Ltd v Energy Australia [2009] NSWSC 43

Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 240 CLR 45; [2002] HCA 5

Ryan v Dries (2002) 10 BPR 19,497; [2002] NSWCA 3

Ryan v Ryan [2012] NSWSC 636

Sasson & Partners Pty Ltd v Fahevu [1999] NSWCA 400

Scallan v Scallan [2001] NSWSC 1129

Scott Fell v Lloyd (1911) 13 CLR 230

Seamez v McLaughlin [1999] NSWSC 9

Serwin v Dolso [2020] NSWSC 370

Sgro v Thompson [2017] NSWCA 326

Shepherd v Doolan [2005] NSWSC 42

Simon v Byford [2014] EWCA Civ 280

Singh v Singh [2015] NSWSC 1457

Smith v Johnson (2015) 14 ASTLR 175; [2015] NSWCA 297

Southern Foundries (1926) Ltd v Shirlaw [1940] AC 701

Steinberg v Federal Commissioner of Taxation (1975) 134 CLR 640

Stojanovski v Stojanovski [2019] NSWSC 1713

Stone v Stone [2019] NSWSC 233

Strong v Bird (1874) LR 18 Eq 315

Super Vision Resources Ltd v AC Holdings Co Pty Ltd [2020] NSWSC 65

Sze Tu v Lowe [2014] NSWCA 462

Telfer v Telfer (No 2) [2013] NSWSC 823

The Application of the NSW Trustee and Guardian; The Estate of Critchley [2020] NSWSC 1635

Thorne v Kennedy (2017) 263 CLR 85; [2017] HCA 49

Tillett v Varnell Holdings Pty Ltd [2009] NSWSC 1040

Timbury v Coffee (1941) 66 CLR 277

Tobin v Ezekiel (2012) 83 NSWLR 757; [2012] NSWCA 285

Toscano v Toscano [2017] NSWSC 419

Towson v Francis [2017] NSWSC 1034

Trident v McNiece (1988) 165 CLR 107

Tripodi v R (1961) 104 CLR 1

Underwood v Gaudron [2014] NSWSC 1055

Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429

Vagg v McPhee (2013) 85 NSWLR 154

Valverde v Inch (2019) 19 BPR 39421; [2018] NSWSC 366

Varma v Varma [2010] NSWSC 786

Vigolo v Bostin (2005) 221 CLR 191

Voges v Monaghan (1954) 94 CLR 231

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Watkins v Combes (1922) 30 CLR 180

Watson v Foxman (1995) 49 NSWLR 315

Watson v Kerridge (1888) 9 LR (NSW) Eq 35

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Category:

Principal judgment

Parties:

Edmund Bede Hao San Cong (First Plaintiff)
Teresa Mae Yin Cong (Second Plaintiff)
The estate of the late Laurence Xavier Xiao Ming Cong by its representatives Edmund Cong and Teresa Cong (Third Plaintiff)
Yanjiao Shen (First Defendant)
Yaqin Wu (Second Defendant)
The estate of the late Zi Li Cong by its representative Tamara Goodwin (Third Defendant)

Representation:

Counsel:
M Condon SC with P Sharp (Plaintiffs)
D Smallbone (Defendants)

Solicitors:
Mervyn Finlay Thorburn & Marshall (Plaintiffs)
Accuro Maxwell (Defendants)

File Number(s):

2017/00222405

Publication restriction:

Nil

INDEX

JUDGMENT – WARD CJ in EQ

[1]

Parties

[3]

Chronology of Events

[11]

Mr Cong’s first marriage

[17]

Companies in which Mr Cong and Ms Joyce carried on business

[20]

Acquisition of Haberfield and Woolwich properties

[23]

Matrimonial difficulties

[24]

Incorporation of Eastern Australian Sheep Products Pty Ltd

[26]

Office at 2-4 Barnes Avenue, Earlwood

[27]

Binding Financial Agreement – 11 May 2006

[29]

Relationship between Mr Cong and Ms Shen

[30]

Birth of Mr Cong and Ms Shen’s first son – June 2011

[31]

Jolly Trading incorporated June 2011

[33]

2011 Will

[34]

November to December 2011 – reports by Ms Joyce to the authorities

[35]

Acquisition of the Wu Property – January 2012

[37]

Renovation of the Wu Property

[50]

Birth of Mr Cong and Ms Shen’s second son

[62]

Further complaint to immigration authorities – January 2013

[63]

Acquisition of 9 Ethel Street Burwood – 2013

[64]

Cancer diagnosis – November 2013

[65]

2013 Will

[66]

Sale of Woolwich property in December 2013

[70]

Acquisition of 16 Nicholson Street, Burwood – January 2014

[71]

Divorce – April 2014

[78]

Birth of Mr Cong and Ms Shen’s third son

[79]

Deregistration of various companies

[80]

Marriage of Mr Cong and Ms Shen

[81]

2014 Will

[82]

Further complaint to immigration authorities – September 2014

[92]

Acquisition of 43 Amy Street, Campsie – October 2014

[94]

Further mortgage over the Wu Property – April 2015

[102]

Acquisition of 56 Duke Street, Campsie – May 2015

[106]

Acquisition of 58 Duke Street, Campsie – May 2015

[113]

Evidence as to conversations in relation to the Duke Street properties

[120]

Mr Cong’s testamentary intentions

[122]

Request for information regarding life insurance – June 2015

[125]

First meeting with Mr Glynn regarding Will – 30 June 2015

[128]

Communications in July 2015

[133]

Second meeting with Mr Glynn regarding 2016 Will – 3 August 2015

[137]

Entry into contract to purchase the Family Property – September 2015

[144]

Contracts for sale of the Barnes Avenue and Ethel Street properties – September/October 2015

[146]

October 2015 – Department of Planning and Environment rezoning proposal

[149]

Acquisition of 2 Duff Street, Burwood – December 2015

[150]

December 2015 – arrangements to finalise Mr Cong’s Will

[154]

Exchange of contracts for sale by Mr Cong and Ms Shen of 443 Amy Street – 14 December 2015

[156]

Instructions sought regarding Mr Cong’s Will – December 2015

[158]

January 2016 – proposed move to Woodside Avenue

[160]

January/February 2016 – Ms Shen’s knowledge of Mr Cong’s intention to make Will

[161]

Advice sought as to withdrawal from sale of 43 Amy Street, Campsie

[162]

Deregistration of Eastern Australian Sheep Products

[168]

9 February 2016 email forwarding draft testamentary documents

[169]

Ms Stefadouros’ evidence as to conversations with Mr Cong

[175]

Third meeting with Mr Glynn regarding 2016 Will – 17 February 2016

[181]

Ms Stefadouros’ recollection of the meeting

[189]

Ms Shen’s recollection of the meeting

[201]

March 2016 communications regarding Will/agreement

[206]

Mr Cong’s instructions regarding draft agreement – 15 March 2016

[209]

Acquisition of the Family Property – April 2016

[218]

Extension of time for completion of sale of 43 Amy Street, Campsie to November 2016

[223]

Fourth meeting regarding 2016 Will – 23 April 2016 at café in Randwick

[224]

26 April 2016 email

[238]

27 April 2016 telephone conversation with Mr Cong

[239]

Draft documents emailed to Mr Cong

[242]

Telephone conversation on 28 April 2016

[252]

Further emails attaching the documents

[255]

Ms Stefadouros’ evidence

[265]

Conversations to which Edmund has deposed as to Mr Cong’s testamentary intentions

[267]

Conversations to which Teresa has deposed as to Mr Cong’s testamentary intentions

[272]

Ms Shen’s account of conversations with Mr Cong regarding his testamentary intentions

[285]

Query regarding fees – May 2016

[298]

Hospitalisation in May 2016

[303]

Baoming Shen immigration application – 25 May 2016

[304]

Ms Lan’s assistance in May 2016

[310]

30 May 2016

[327]

31 May 2016

[332]

1 June 2016 – revised draft agreement

[333]

3 June 2016 – execution of documents

[337]

2016 Will

[365]

Deed

[371]

10 June 2016 – admission to hospital

[374]

Mr Cong’s transfer to palliative care – 28 June 2016

[376]

4 July 2016 social worker’s notes

[379]

Mr Cong’s visit to the Family Property – 22 July 2016

[382]

Text message from Ms Joyce to Teresa

[383]

Mr Cong’s death – 28 July 2016

[384]

Edmund’s conversations with Ms Shen as to the 2016 Will

[394]

Alleged loans from Mr Baoming Shen

[396]

Incorporation of Cong Australia International and Ugg Australia International

[411]

Attempted rescission of contract for sale of 43 Amy Street

[428]

Commencement of new relationship and instructions for pre-nuptial agreement

[429]

Withdrawal of moneys from Mr Cong’s bank account

[431]

Life insurance policy – September 2016

[435]

Commencement of proceeding in this Court by purchaser of 43 Amy Street

[438]

Letter dated 26 April 2017 from plaintiffs’ solicitors

[440]

Mediation of dispute regarding 43 Amy Street – June 2017

[442]

Evidence of Edmund and Teresa as to conversations with Ms Shen

[454]

Lillian Street, Campsie acquisition – July 2017

[459]

Sale of 43 Amy Street, Campsie – July 2017

[464]

Visit to burial site – July 2017

[469]

Deregistration of Jolly Trading 2017

[472]

Commencement of present proceeding

[473]

Application for Probate of 2016 Will – 2017

[474]

Transfer of the Wu Property to Ms Wu – 2017

[479]

Further steps in proceeding

[491]

Death of Laurence – 15 July 2018

[493]

Letter dated 24 July 2018 from plaintiffs’ solicitors

[494]

Defence to cross-claim

[496]

June 2019 – freezing orders by Henry J

[497]

Sale of Duke Street properties – July 2019

[501]

Further pleadings

[503]

Hearing

[504]

Pleaded Claims

[505]

Amended Statement of Claim

[505]

Defence to amended statement of claim

[511]

Reply

[542]

Amended cross-claim

[552]

Defence to amended cross-claim

[553]

Issues

[554]

Witnesses

[555]

Family members

[556]

Form of the plaintiffs’ affidavits

[556]

Edmund

[561]

Teresa

[574]

Ruling on Voir Dire

[590]

Ms Joyce

[594]

Laurence

[600]

Mr John (Chris) Joyce

[601]

Shen family members

[609]

Ms Shen

[610]

Ms Wu

[670]

Mr Baoming Shen

[677]

Other witnesses

[686]

Ms Stefadouros

[687]

Ms Xiaoping (Vicky) Lan

[728]

Pastor Yip

[740]

Ms Dan Wang

[742]

Ms Alison Coombs

[743]

Mr Adrian Knox

[744]

Ms Ghuibin Zhu

[746]

Solicitors and accountants

[748]

Mr Glynn

[748]

Mr Allen

[760]

Mr Pirintji

[762]

Ms Bull

[763]

Experts

[776]

Professor Gorrell

[776]

Mr La Chang

[779]

The tendency evidence

[783]

Objection as to admission of audio tape recording

[787]

Factual findings sought by plaintiffs

[789]

Preliminary issue as to standing to sue on behalf of the estate

[853]

Merger or release by appointment of promisor as executor

[865]

Plaintiffs’ submissions

[872]

Determination as to merger/release

[880]

Issues for determination

[901]

Issues regarding 2016 Will

[901]

(i)    Validity of 2016 Will

[902]

Plaintiffs’ submissions

[902]

First and second defendants’ submissions

[914]

Plaintiffs’ reply submissions

[982]

Determination as to issue (i)

[988]

(ii)       Whether the terms of the 2016 Will incorporate the terms of the Deed

[992]

Plaintiffs’ submissions

[992]

First and second defendants’ submissions

[999]

Determination as to issue (ii)

[1001]

(xxi)    Whether Mr Cong lacked testamentary capacity

(xxiii)   Whether Mr Cong suffered from a delusional optimism as to Jolly Trading

[1009]

Plaintiffs’ submissions

[1010]

First and second defendants’ submissions

[1025]

Plaintiffs’ reply submissions

[1049]

Determination as to issues regarding testamentary capacity and delusional optimism

[1054]

Issues regarding the Deed

[1069]

(iii)    Whether the Deed is binding and contains the implied terms pleaded

[1070]

Plaintiffs’ submissions

[1070]

First and second defendants’ submissions

[1091]

The plaintiffs’ standing to seek declaratory relief

[1091]

Construction advanced by the plaintiffs

[1094]

Sale as a trigger – a penalty

[1104]

Contract of Wager

[1105]

Uncertainty

[1106]

Alternative approaches to construction of the Deed

[1115]

Sub-clause 2(a)

[1116]

Sub-clause 2(b) – sale as the trigger

[1135]

Sub-clauses 2(c) and (d) as limiting provisions, rather than distinct alternatives

[1146]

Plaintiffs’ reply submissions regarding alleged uncertainty of Deed

[1151]

Submissions as to implied terms

[1153]

Implied term at [16](a)

[1155]

Implied terms alleged at [16](b) and [16](c)

[1178]

Plaintiffs’ reply submissions

[1186]

Determination

[1187]

(iv)   Whether Ms Shen breached the Deed

[1221]

Submissions

[1226]

First and second defendants’ submissions

[1228]

Plaintiffs’ submissions

[1234]

Determination as to standing of Laurence’s personal representative

[1239]

Determination as to the alleged breaches

[1241]

(v)   Whether the plaintiffs are entitled to sue on the Deed as a multi-party deed poll; or Edmund is entitled to sue as named executor or on the basis that the benefit of the promises were held on trust for the plaintiffs

[1247]

Multi-party deed poll?

[1249]

Plaintiffs’ submissions

[1249]

First and second defendants’ submissions

[1259]

Plaintiffs’ reply submissions

[1274]

Further submissions by first and second defendants

[1281]

Determination

[1291]

Ability of Edmund to sue as named executor

[1295]

Ability to sue as beneficiary of trust of the benefit of the promises under the Deed?

[1296]

Plaintiffs’ submissions

[1296]

First and second defendants’ submissions

[1307]

Plaintiffs’ reply submissions

[1326]

Determination

[1328]

The annuities

[1333]

Ms Shen’s defences to claims under Deed

[1334]

(xviii) Contracts Review Act claim regarding Deed

(xix)    Whether unconscionable conduct of Mr Cong

(xx)    Whether undue influence of Mr Cong or presumed undue influence

(xxii)   Whether Ms Shen knew what she was doing when she signed Deed

[1335]

Plaintiff’s submissions

[1350]

Determination

[1361]

(vi)    The equitable relief sought by the plaintiffs

[1383]

First and second defendants’ submissions re equitable relief

[1402]

Plaintiffs’ reply submissions regarding equitable relief

[1403]

Determination

[1413]

Equitable fraud claims

[1414]

(vii)   Whether Ms Shen represented to Mr Cong that she knew and agreed to implement the provisions of the 2016 Will and Deed

(xi)    Half-secret trust

[1415]

First and second defendants’ submissions

[1421]

Determination

[1456]

Issues regarding Jolly Trading

(viii) Jolly Trading – financial position and depletion of assets

(xv)   Whether Ms Shen acted as trustee de son tort regarding Jolly Trading

[1473]

Plaintiffs’ submissions

[1477]

First and second defendants’ submissions

[1478]

Breach of implied covenant concerning Jolly Trading

[1479]

Breach of fiduciary duty owed to the estate of Mr Cong

[1492]

Plaintiffs’ reply submissions

[1509]

Determination

[1515]

(ix)      Equitable election

[1526]

First and second defendants’ submissions

[1531]

Determination

[1536]

(x)       Proceeds of sale of 43 Amy Street

[1547]

(xii)     Whether Deed conferred a power on Ms Shen and exercise of those powers

(xiii)    Whether the transfer of the Wu Property is voidable

[1549]

Plaintiffs’ submissions

[1556]

Fraud on a power

[1556]

Section 37A Claim

[1560]

First and second defendants’ submissions

[1567]

Fraud on a power

[1568]

Transfer to Ms Wu as agent and trustee; and the s 37A case

[1571]

Plaintiffs’ submissions in reply

[1581]

Determination

[1585]

(xiv) Resulting Trust claim regarding Campsie and Burwood properties

[1591]

Plaintiffs’ submissions

[1591]

First and second defendants’ submissions regarding resulting trusts

[1626]

The Wu Property

[1635]

16 Nicholson Street, Burwood

[1642]

43 Amy Street, Campsie

[1661]

56 Duke Street, Campsie

[1668]

58 Duke Street, Campsie

[1677]

The Family Property

[1680]

2 Duff Street, Burwood

[1694]

Determination of resulting trust claims

[1699]

(xvi) Succession Act claims – whether order for provision out of notional estate

[1750]

First and second defendants’ submissions

[1777]

Disclosure

[1777]

Notional estate

[1792]

16 Nicholson Street, Burwood

[1793]

43 Amy Street, Campsie

[1797]

Life insurance

[1802]

Joint bank accounts cash of $114,745.78

[1804]

Plaintiffs’ reply submissions

[1805]

Determination – Succession Act claims and notional estate

[1819]

Section 60(2) factors

[1825]

Section 60(2)(a) – any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship

[1826]

Section 60(2)(b) – nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person’s estate

[1831]

Section 60(2)(c) – nature and extent of the deceased person’s estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered

[1832]

Section 60(2)(d) – financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person’s estate

[1836]

Section 60(2)(e) – financial circumstances of any person with whom the applicant is cohabiting

[1846]

Section 60(2)(f) – any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person’s estate that is in existence when the application is being considered or that may reasonably be anticipated

[1847]

Section 60(2)(g) – age of the applicant when the application is being considered

[1848]

Section 60(2)(h) – any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person’s family, whether made before or after the deceased person’s death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant

[1849]

Section 60(2)(i) – any provision made for the applicant by the deceased person, either during the deceased person’s lifetime or made from the deceased person’s estate

[1850]

Section 60(2)(j) – any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person

[1851]

Section 60(2)(k) – whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person’s death and, if the Court considers it relevant, the extent to which and the basis on which the deceased person did so

[1853]

Section 60(2)(l) – whether any other person is liable to support the applicant

[1854]

Section 60(2)(m) – character and conduct of the applicant before and after the date of the death of the deceased person

[1855]

Section 60(2)(n) – conduct of any other person before and after the date of the death of the deceased person

[1856]

Section 60(2)(o) – any relevant Aboriginal or Torres Strait Islander customary law

[1857]

Section 60(2)(p) – any other matter the Court considers relevant, including matters in existence at the time of the deceased person’s death or at the time the application is being considered

[1858]

Conclusion as to adequacy of provision under the 2016 Will

[1859]

Notional estate

[1864]

Proper provision in all the circumstances

[1871]

Probate issues

(xvii)   Whether probate should be granted to Edmund or Ms Shen, to the exclusion of the other, or to both persons

[1878]

Plaintiffs’ submissions

[1878]

First and second defendants’ submissions

[1882]

Determination

[1890]

Costs

[1894]

Conclusion

[1895]

Orders

[1896]

Judgment

1. HER HONOUR: Before me for hearing late last year was a dispute between, on the one hand, the children of the late Mr Zi Li Cong’s first marriage to Ms Anastasia Joyce, and, on the other hand, Mr Cong’s second wife (the first defendant, Ms Shen) and her mother (the second defendant, Ms Wu). In simple terms, this is yet another unfortunate extended family dispute between the first and second families of the deceased (Mr Cong); unfortunate not least because it is clear that the deceased wished to provide for all of the claimants on his testamentary bounty and yet it seems apparent that (whatever might otherwise have been the case) the manner in which he intended to achieve this will not now be able to be fulfilled (for a combination of reasons, which I will explore in due course); and because, as is often the case with these kinds of disputes, it may have (perhaps inevitably) precipitated a breakdown in the relationship between the extended family members which will potentially have a lasting impact.

2. Although initially the claims brought by the plaintiffs were simply for further provision out of the late Mr Cong’s estate pursuant to s 59 of the Succession Act 2006 (NSW) (Succession Act), over the course of the proceeding the claims broadened to include claims invoking the principles in relation to resulting and constructive trusts (which necessarily must be considered before the family provision claims), as well as claims of breach of trust on the part of Ms Shen and to enforce an agreement entered into between Ms Shen and Mr Cong at the time of execution by him of his last Will in June 2016 (the 2016 Will). The plaintiffs have made clear, however, that the family provision claim is not simply an ancillary fallback or “backstop” claim; in that, although failure on the so-called Deed claims will bring the family provision claim to the fore, success on the Deed claims will not necessarily remove the family provision claim (having regard to the timing of payment under the Deed, as I will explain in due course). For their part, the first and second defendants have foreshadowed costs issues arising out of the expansion of the claims by the plaintiffs (those being matters to be dealt with after the determination of the substantive claims in the proceeding).

Parties

3. As adverted to above, the plaintiffs at the time of commencement of the proceeding were the three children of Mr Cong’s first marriage – Edmund Bede Hao San Cong (the first plaintiff), Teresa Mae Yin Cong (the second plaintiff) and Laurence Xavier Xiao Ming Cong (who is now deceased and whose estate is represented by his siblings) (the third plaintiff). I will refer to the various children of the deceased by their first names, with no intended disrespect. After the commencement of the proceeding, Laurence died of a drug overdose on 29 November 2018. Laurence’s mother, Ms Joyce, is the administrator of his estate (and inherits his estate on intestacy). On 21 May 2020, Slattery J made orders appointing Edmund and Teresa as representatives of Laurence’s estate in the present proceeding pursuant to r 7.10 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR).

4. As to the defendants, as noted above, the first defendant is Mr Cong’s second wife, Ms Shen, who is now re-married; and the second defendant is Ms Shen’s mother, Ms Wu. The third defendant, Ms Tamara Goodwin, is the appointed representative of Mr Cong’s estate (in circumstances where no order for probate or letters of administration has yet been made). The third defendant has not taken an active role in the proceeding and has filed a submitting appearance.

5. Mr Cong commenced a relationship with Ms Shen, who had immigrated to Australia from China on a student visa, in about 2009. They had three children together (Bruce Lin Cong, born in 2011; Leon Sen Cong, born in 2012; and David Shu Cong, born in March 2014), before marrying in June 2014.

6. By the time of Mr Cong’s death, and over the period in which Mr Cong was first in a relationship with and then married to Ms Shen, a number of properties were acquired, variously in one or both of their names: the four “Campsie properties” – namely, 43 Amy Street, Campsie (for the sum of $985,000); another property in Campsie to which I will refer (for privacy reasons) as the Wu Property (since Ms Wu is now the sole registered proprietor of that property and it is her home) (for $902,000) (the Wu Property); 56 Duke Street, Campsie (for $996,000); and 58 Duke Street, Campsie (for $1.1 million); as well as three Burwood properties – namely, 16 Nicholson Street, Burwood (for $1.72 million); 2 Duff Street, Burwood (for $2,430,000); and a third property in Burwood to which I will refer, again for privacy reasons, as the Family Property (which is Ms Shen’s family home). Of those properties, 43 Amy Street, Campsie and 16 Nicholson Street, Burwood were registered in the couple’s joint names; the rest were registered in Ms Shen’s sole name. Further, at the time of his death, 43 Amy Street was the subject of an exchanged (but not yet completed) contract for sale by Mr Cong and Ms Shen to a third party purchaser. Mr Cong had earlier held in his own name a property at 9 Ethel Street, Burwood and a property at 2-4 Barnes Avenue, Earlwood, both of which had been acquired before his relationship with Ms Shen and both of which were sold in order to finance the acquisition of the Family Property.

7. Mr Cong was diagnosed with cancer in about November 2013 (although it seems that he had some health issues earlier, in 2011 – see the notes taken by his solicitor, Mr Glynn, extracted in due course below). Mr Cong died in July 2016, leaving a Will dated 2 May 2016 (the 2016 Will). It is common ground that it was executed on 3 June 2016 (but it is not common ground that it incorporated a deed referred to in that Will that was also executed on 3 June 2016 (the Deed)). Under the 2016 Will, Mr Cong appointed Ms Shen and Edmund as his executors. I set out later in these reasons the relevant terms of the Will and of the Deed (under which provision was to be made for the three children of Mr Cong’s first marriage in varying amounts, at Ms Shen’s discretion although within specified ranges, depending on the outcome of anticipated zoning changes for properties in the Campsie area).

8. Suffice it at this stage to say that Ms Shen does not accept that the Deed is a duly attested testamentary instrument and denies that it is enforceable for a variety of reasons. Ms Shen also denies that the 2016 Will is Mr Cong’s true Will and asserts that he lacked testamentary capacity to execute that Will. By her amended cross-claim in the proceeding, Ms Shen seeks a grant of probate in respect of an earlier 2014 Will.

9. The nub of the dispute between the family members, as emerged very clearly during the course of the oral evidence, is that Ms Shen maintains that she was given absolute discretion by Mr Cong to make the decision as to how much (if, indeed, anything at all) should be given to the elder children; whereas the plaintiffs contend that Ms Shen bound herself to a particular arrangement to give effect to their late father’s testamentary wishes, which included that substantial provision be made for them (albeit the bulk of that to be paid to them no sooner than ten years after his death) and it is clear that Ms Shen does not consider herself bound (and does not intend) to honour those wishes (in circumstances where Ms Shen says that the estate is insolvent and all the assets from which Mr Cong contemplated that provision for the elder children would be made are hers).

10. With the above brief introduction, I set out below in more detail the chronology of events.

Chronology of events

11. Mr Cong was a Chinese businessman, who carried on various businesses over his lifetime (both with Ms Joyce and separately; and, much later, although the extent of this is disputed, with Ms Shen). Relevantly, at the time of Mr Cong’s death he was carrying on a business involving the exportation of sheep skins and leather products through an entity named Jolly Trading Pty Ltd (Jolly Trading) of which he was the sole director and shareholder.

12. It does not appear to be disputed that Mr Cong was not fluent in English.

13. As to his spoken English, various accounts were given by Edmund and Teresa, on the one hand, as to Mr Cong’s facility in the English language (see for example, Edmund’s first affidavit sworn 19 July 2017 at [8]; [28]; and his second affidavit sworn 9 October 2020 at [21]-[22]; and Teresa’s first affidavit sworn 2 July 2017 at [7]; [40]; and see also Teresa’s evidence in cross-examination on this issue) but it cannot be gainsaid that Mr Cong was able to speak English to the extent that he could converse not only with the members of his first family (who do not speak Chinese) but also with suppliers in Australia, various lawyers, his secretary or office assistant (Ms Vivian Stefadorous) and other persons (such as, it would seem, the social worker at the hospital responsible for recording a note as to Mr Cong’s perception of his financial circumstances when he was in palliative care – see below).

14. As to Mr Cong’s ability to read and understand written English, to my mind the most reliable indication of Mr Cong’s ability comes from the evidence of the solicitor who drafted Mr Cong’s earlier Wills (in 2011, 2013 and 2014), Mr Steven Pirintji, who was not only able to converse and communicate with Mr Cong without an interpreter present but whose evidence, in the context of the drafting of Mr Cong’s 2014 Will (see below), was that he observed Mr Cong reading the 2013 Will and that Mr Cong then gave him specific instructions as to the changes he wished to make to that Will.

15. Therefore, while I accept that Mr Cong’s ability to understand legal or medical jargon may have been more limited (and, indeed, even lay persons for whom English is their first language may struggle with some such jargon), and while there was at least one instance where the hospital records indicate that hospital staff found it difficult to communicate with Mr Cong (see Ex 1 at 203 – that being only a week after the execution of the 2006 Will and Deed), I am satisfied that Mr Cong was able to understand day-to-day English (including legal concepts explained in ordinary everyday terms) and was able to read and speak English at a sufficient level to communicate with business and professional people, and family, alike.

16. It was not disputed that Mr Cong’s computer literacy skills were not strong. Email communications to and from Mr Cong and Jolly Trading (through the “sheepproducts@gmail” address) were mainly conducted via his secretary or office assistant, Ms Stefadouros (and when Mr Cong was in hospital there was at least one communication sent on his behalf to a business contact, Ismail, via a text message from Teresa).

Mr Cong’s first marriage

17. Mr Cong and his first wife, Ms Joyce, married in 1990 and had three children (Teresa, born in 1991; Laurence, born in 1993; and Edmund, born in 1996) before separating in about late 2005 or 2006. There was conflicting evidence on the part of Edmund and Teresa as to the date of their parents’ separation. Both Edmund, in his first affidavit sworn 19 July 2017 at [1], and Teresa initially placed the date of separation as being in 2010, though they subsequently corrected that evidence (albeit that Edmund continued at one point in cross-examination to adhere to 2010 as the date of separation). However, to some extent, that conflicting evidence may be explicable by reference to the fact that even after Mr Cong left the matrimonial home there is evidence that he stayed overnight with the family from time to time and that he maintained social (and, Ms Joyce says, for some time intimate) contact with Ms Joyce. The evidence of Ms Joyce, consistent with the time at which the couple entered into a Binding Financial Agreement pursuant to s 90 of the Family Law Act 1975 (Cth) (Family Law Act), is that the separation was in 2006 and I accept that evidence as consistent with the overall chronology of events.

18. There was evidence in the proceeding of domestic violence on Mr Cong’s part both towards Ms Joyce and towards one or more of the children (the relevance of which was the subject of argument in the course of the hearing). I accept that evidence of this kind is of relevance at the very least when one comes to consider the family provision claims (having regard to the broad range of factors that the Court is required and/or permitted to take into account in such claims), although I accept that caution must be exercised in approaching the evidence of both Edmund and Teresa as to events that occurred in their childhood (and that, in some cases, they accept they did not directly observe). For present purposes, I simply note that it was not disputed that Mr Cong pleaded guilty to a charge of assault against Ms Joyce in around 2005 (for which a sentencing report was prepared by a psychiatrist, Professor Gorrell, who gave evidence in the present proceeding) and it is consistent with the timing of the couple’s separation that this incident precipitated their ultimate separation.

19. That said, as adverted to above, Ms Joyce’s evidence is that she and Mr Cong remained in contact until Mr Cong’s death; and there was certainly not only contemporaneous photographic evidence that Ms Joyce visited Concord Hospital when Mr Cong was in palliative care there towards the end of his life but also of a family holiday that occurred in Turkey in late 2012 and early 2013 – which corroborates Ms Joyce’s evidence that the couple remained in contact even after their separation. Ms Joyce’s evidence is that they continued to maintain a sexual relationship until about January 2013 – well after Mr Cong commenced cohabitation with Ms Shen (see Ms Joyce’s affidavit sworn 23 July 2018 at [10]); and that Mr Cong continued to refer to her as his “first wife” (to which Ms Joyce says that Mr Cong accorded a particular status under Chinese culture). It is impossible for me to make any concluded finding as to those assertions.

Companies in which Mr Cong and Ms Joyce carried on business

20. In the period from 1996 through to 2002, Mr Cong and Ms Joyce (at times with a third director and shareholder) were directors and shareholders of a number of companies (Australian General Farm Produce Pty Ltd, which was deregistered in 2002, Australian Farm Produce Pty Ltd and Eastern Australian Secondary Mutton Association Pty Ltd, both of which were deregistered in 2014).

21. There was evidence from Ms Joyce (objected to by the first and second defendants) as to unlawful business practices in which Ms Joyce says she and Mr Cong engaged during the running of the business of one or more of those companies – both the preparation of double sets of invoices (apparently to minimise the incidence of GST payable on transactions) and the false authentication of the origin of sheepskin products exported to China – about which Ms Joyce has made various disclosures to relevant authorities (such as disclosure in 2010 or 2011 in the context of “Project Wickenby”). There was also evidence from Teresa as to the payment of large sums of cash to business associates of Mr Cong.

22. The above evidence was relied upon by the plaintiffs in response to assertions by Ms Shen that Jolly Trading was insolvent or in financial difficulties at the time of Mr Cong’s death and to counter the suggestion that it was improvident or delusional for Mr Cong to have considered that the income from the Jolly Trading business would enable Ms Shen to meet the mortgage repayments on the properties to which reference was made in the 2016 Will and Deed (or other properties held in her name). I refer to those issues in due course. Suffice it at this stage to say that I do not make any findings as to unlawful or unethical business practices by companies with which Mr Cong and Ms Joyce were involved.

Acquisition of Haberfield and Woolwich properties

23. Together, as joint tenants, Mr Cong and Ms Joyce purchased a property in Haberfield in April 1997, which was sold in 2000; and a property in Woolwich in 2000, which at the time of their separation was the matrimonial home and over which Ms Joyce lodged a caveat in November 2005. The Woolwich property was later sold (see in due course below).

Matrimonial difficulties

24. In 2005, Mr Cong pleaded guilty to a charge of assault relating to an invoice involving Ms Joyce and at or around this time an apprehended violence order (AVO) was issued against him. As noted above, this apparently precipitated the couple’s separation in about 2006. The precise charge itself is not relevant to the proceeding (although I note that, when pressed in cross-examination, Ms Joyce divulged details of the assault which, if correct, make clear that it was indeed a violent incident). It also appears that Mr Cong was accused of a later breach of the AVO (see the evidence of a retired psychologist, Professor Gorrell, who prepared a report in connection with Mr Cong’s sentencing proceeding).

25. Little turns on this other than that it may be of relevance, in the context of Edmund and Teresa’s family provision claims, as going to the history of the relationships within the family (see the factors in s 60 of the Succession Act to which I will turn in due course) and it is of some relevance when assessing the reliability of the evidence of one of the witnesses called by the first and second defendants (Ms Vivian Stefadouros, Mr Cong’s personal assistant and later co-director of two companies with Ms Shen), since Ms Stefadouros (though aware of the charges and Ms Joyce’s complaints of violence) saw fit to depose in her affidavit evidence that she had never seen any evidence of violence by Mr Cong against Ms Joyce (a matter which casts doubt on her objectivity as a witness on matters concerning Ms Joyce at least).

Incorporation of Eastern Australian Sheep Products Pty Ltd

26. In May 2006, Mr Cong incorporated, as sole director and shareholder, Eastern Australian Sheep Products Pty Ltd. In the same month, Ms Joyce resigned from the remaining two companies of which she had been a co-director (Australian Farm Produce Pty Ltd and Eastern Australian Secondary Mutton Association Pty Ltd – as noted above, those companies were deregistered in May 2014).

Office at 2-4 Barnes Avenue, Earlwood

27. Towards the end of 2005, Mr Cong acquired a property in his sole name at 2-4 Barnes Avenue, Earlwood. When Mr Cong moved out of the Woolwich home, he moved into that property and for some time from then Mr Cong’s office was at the Earlwood property.

28. Ms Stefadouros (who had worked with Mr Cong when he was married and living with Ms Joyce) continued to work with Mr Cong at the Earlwood “office” and, indeed, Ms Stefadouros worked with Mr Cong through until Mr Cong’s death (after which she and Ms Shen together carried on business for a time that was to all intents and purposes the same as the Jolly Trading business). I refer in due course to Ms Stefadouros’ evidence. Also working for Mr Cong, for some of that period, as a bookkeeper, was a Ms Lisa Wu (not related to Ms Wu, the second defendant). There was no evidence from Ms Lisa Wu. It was Ms Shen’s evidence that she no longer has the contact details for Ms Lisa Wu.

Binding Financial Agreement – 11 May 2006

29. As adverted to above, Mr Cong and Ms Joyce entered into a Binding Financial Agreement pursuant to s 90 of the Family Law Act on 11 May 2006 (see [3] of Ms Joyce’s affidavit sworn 23 July 2018), under which, inter alia, they agreed that the Woolwich property was not to be listed for sale until Teresa attained the age of 18 years. (As already noted, they did not divorce, however, until 2014.) The solicitor who later drafted Mr Cong’s 2016 Will and Deed, Mr Glynn, acted for Ms Joyce in relation to the Binding Financial Agreement. It is relevant here to note that, under that agreement, the estimated worth of Jolly Trading was put at $2 (presumably at the value of the issued capital only, without any element for goodwill). In cross-examination at the hearing, Ms Joyce accepted “absolutely” that if Mr Cong left the company, it would undermine its worth (T 389). At the time of the instructions for Mr Cong’s 2016 Will, however, it appears that the worth of the company was estimated by Mr Cong himself as being around $1 million (see below) and Mr Cong identified the income stream of the company as being available to meet the mortgage liabilities over the properties or other expenses after his death.

Relationship between Mr Cong and Ms Shen

30. As noted above, the relationship between Mr Cong and Ms Shen commenced at some time in around 2009. It appears that they started cohabitation in around 2010. Certainly, there is evidence that discloses that from at least 2011, Ms Shen was living with Mr Cong in the 2-4 Barnes Avenue, Earlwood property (in that there are bank statements of Ms Shen which show this as her address from around 2011/2012 – there being some earlier bank statements for Ms Shen which show a Sydney address not apparently connected with Mr Cong in 2011). For completeness, I note here that there are joint bank statements in the names of Mr Cong and Ms Shen with the Barnes Avenue address during 2013/2014 and that by 2015, Ms Shen’s bank statements show the Wu Property address and, in 2016, the Family Property address.

Birth of Mr Cong and Ms Shen’s first son – June 2011

31. In June 2011, Mr Cong and Ms Shen’s first son, Bruce, was born. The evidence of Teresa is that Mr Cong did not tell her about her half-sibling until after he was born.

32. The relevance of the timing of that disclosure is moot. I certainly do not accept that it reveals any lack of closeness in the relationship between Teresa and her father (more likely it may reveal the opposite). There seems to be little doubt that there was an element of some jealousy or ill-feeling on the part of one or more of Mr Cong’s first family members as to the development of his relationship with Ms Shen and the birth of first one and then other children in the course of that relationship; and this might explain the disparaging comments that have been attributed to Mr Cong as to Ms Shen and her background (in that it is conceivable, though this is little more than speculation, that Mr Cong was seeking to downplay that relationship in his conversations with members of his first family). Nothing turns on this for the purposes of determination of the substantive issues in dispute (although complaint is made by the first and second defendants in this context as to the manner in which the litigation has been conducted). It was not disputed by either side that Mr Cong loved and wished to provide for all his children (see, for example, the evidence of Pastor Yip to which I refer in due course and Teresa’s evidence at T 246); and I accept that he also wished to provide for Ms Shen both during his life and after his death.

Jolly Trading incorporated June 2011

33. In June 2011, Jolly Trading was incorporated, with Mr Cong as the sole director and shareholder.

2011 Will

34. Mr Cong made a Will at some stage in 2011. The contents of this Will are not in evidence. As noted above, it was prepared by Mr Pirintji, who gave evidence in the proceeding. I refer to this because, not only does it indicate (when taken in context with the later Wills) that Mr Cong had some familiarity with the formalities of making a Will, but also because (in the context by then of the birth of Mr Cong’s first son with Ms Shen) it indicates that Mr Cong was conscious of updating his testamentary intentions as and when there were changes in his family circumstances.

November to December 2011 – reports by Ms Joyce to the authorities

35. In late 2011, Ms Joyce made a number of reports (see Ex 23 at 9-62) to the Department of Immigration and Border Protection (Department of Immigration) as to Ms Shen’s visa status and that of a Chinese maid in her employ (in the course of which the first and second defendants say that Ms Joyce acknowledged Ms Shen’s ownership of the Wu Property). The first and second defendants say that the complaints to the immigration authorities was conduct that was intended to defeat Ms Shen’s application for permanent residency; to destroy the basis for her residence in this country; and thereby to break up Mr Cong’s relationship with Ms Shen (at a time when the couple had a young child). This, as I apprehend it, is relied on as a matter going to Ms Joyce’s credit.

36. As adverted to above, Ms Joyce also contacted the “Project Wickenby” investigators in around 2011 to make disclosure of alleged tax evasion practices in relation to Mr Cong. Ms Joyce says that there was a practice of double invoicing (the creation of one invoice for customers and another for tax purposes) that started with the introduction of the goods and services tax (GST) and ended in mid-2005 (T 370). Ms Joyce also gave evidence of false certification of origin certificates on goods shipped to China (the feasibility of which was disputed by a freight forwarding expert, Mr La Chang, called for the first and second defendants). As noted above, this evidence as to unlawful or unethical business practices was said to be relevant to the assertion by Ms Shen that, at the time of Mr Cong’s death, Jolly Trading was unprofitable or in financial difficulties (such that Mr Cong said that she should close it down). The plaintiffs maintain, to the contrary, that a large amount of money passed through the company’s accounts and funded the extensive property portfolio acquired during the time of Ms Shen’s relationship with Mr Cong. I address those allegations in more detail in due course.

Acquisition of the Wu Property – January 2012

37. Of the four Campsie properties referred to in Mr Cong’s 2016 Will and Deed (and which feature in this proceeding), the first to be acquired was the Wu Property. The property was purchased pursuant to a contract for sale of land dated 10 December 2011. Settlement took place on 27 January 2012. The purchase price was $902,500. The property was purchased in Ms Shen’s sole name. At this stage, it will be recalled, Mr Cong and Ms Shen were in a de facto relationship; and they had one child (Bruce).

38. The $90,250 deposit was by cheque drawn on a Commonwealth Bank of Australia (CBA) account in Ms Shen’s name (account ending #55242) on 13 December 2011. (There was evidence from Edmund/Teresa of conversations with Mr Cong in which he indicated an intention that this property was to be for Ms Shen’s benefit.)

39. The balance of the purchase price was funded by a $500,000 loan from Westpac (in Ms Shen’s name, with an offset account set up in her name) and the balance of $222,840.79 withdrawn from the Wu Property Westpac offset account.

40. I note that the loan application which was made in connection with the settlement of the sale due on 20 January 2012 (Ex G) (which Ms Shen initially accepted she made without Mr Cong’s assistance – see T 659.25 – and in respect of which she accepted that she told Westpac the truth when completing) contains a declaration as to Ms Shen’s current occupation that she was employed full time as “Finance Director/Manager” for a Chinese company, Mengzhou City Aotai Leather Co Ltd (which turns out to have been a client of Jolly Trading). Ms Shen accepted in cross-examination that she had never been employed at that company and said that she had never heard of it (see T 659). I note that the application also records, incorrectly, Ms Shen’s current home address as an address in Tianjin (but her mailing address as 2 Barnes Avenue, Earlwood) and (again incorrectly) her residential status as “Live with parents”.

41. Ms Shen disavowed any knowledge of the contents of that loan application on the basis that it was written by her agent (a client from her hair salon named “Betty”) (T 659). Ms Shen then said (contrary to her earlier evidence that the application had been made without Mr Cong’s assistance) that she had asked Mr Cong and that he had given her a company name which she provided to the agent (and that she did not know if the agent had used it). Ms Shen’s evidence was that the agent (Betty) had filled in the net income details (base monthly net income of $4,605), which Ms Shen accepted were also incorrect.

42. Pausing here, the plaintiffs say that Ms Shen must have known that the name of the Chinese company had nothing to do with any legitimate enquiry Westpac might make in relation to the loan application. It is submitted that Ms Shen lied when she said in cross-examination that she did not know why the agent wanted the name of that company and that “if she told me she was going to use the false information I wouldn’t agree”; and that Ms Shen also lied about how that loan application came to include the statement that her base monthly income (net) was $4,065. Suffice it at this stage to note that this was by no means the only document containing (on Ms Shen’s own evidence) false information but which Ms Shen says was signed or submitted by her without knowledge of its contents. If Ms Shen’s evidence is to be believed (and I find it hard to accept that someone so clearly concerned to protect her financial position would engage in this conduct), Ms Shen showed a remarkable tendency to sign business, company and financial documents with no concern whatsoever as to their contents (and without seeking or being given any explanation of those documents). I find that evidence inherently implausible when seen in the context of other matters (such as Ms Shen’s ability to argue persuasively against Mr Cong’s proposal that one of the properties be left unencumbered for the three elder children – as to which I say more in due course).

43. Ms Shen has deposed that the money for the deposit was either from her mother in China or from Mr Cong and that a further $400,000 was gifted to her by Mr Cong by way of transfer to the Westpac offset account set up in relation to the Wu Property and referred to above (see her affidavit affirmed 13 October 2017 at [47]; and her affidavit affirmed 22 June 2018 at [47], [51]).

44. Bank records show that the same day as the sum of $400,000 was deposited into the Westpac offset account, the same amount was withdrawn from Ms Shen’s Westpac #9147 account and that amount had been deposited into the #9147 account on 13 January 2012.

45. The plaintiffs say that it is not in dispute (and Ms Shen’s evidence supports this conclusion) that Mr Cong contributed at least $400,000 to the purchase of the Wu Property, and the plaintiffs submit that it can reasonably be inferred that Mr Cong contributed a further $90,250 (being the payment of the deposit). I deal with this in due course in relation to the resulting trust claims.

46. The plaintiffs track the source of the $400,000 from amounts deposited into two CBA accounts – an account ending #55242 and an account ending #3670; and say that the source of the deposits to those two accounts was: a direct deposit from KVB F/X Pty Ltd in China or Rongqiao Investments; and cash deposits or transfer from account #3670 and, for account #3570, primarily by transfer from account #5242.

47. The plaintiffs contend that Mr Cong further contributed $500,000 to discharge the mortgage. The mortgage was discharged on 31 December 2013 (the discharge of mortgage being registered on 15 January 2014). Ms Shen has deposed that Mr Cong gave her $500,000 on 9 December 2013 as a birthday gift. That amount was transferred from Mr Cong’s ANZ account #23909 deposited to #3765 and transferred to the Westpac loan account to discharge the mortgage. (I interpose to note that there was a second mortgage taken out over this property in 2015, as to which, see below.)

48. As at July 2016, the first and second defendants say that the sum of $980,000 was owing on this property, with a credit of $31,606.15 in the Westpac offset account.

49. The Wu Property was used as Mr Cong’s office from some point in time (a granny flat at the back of the property) and was the scene of various of the conversations that were deposed to in the evidence. It is now Ms Wu’s home (see below).

Renovation of the Wu Property

50. In around August 2012, application was made by Ms Shen for approval for renovations to the Wu Property (see Ex L). The renovations included the building of what was referred to in the evidence as a “granny flat”. In cross-examination, Ms Shen confirmed that a granny flat was built and that the main building was almost demolished (T 774.24-5). The relevant application was in Ms Stefadouros’ handwriting. The complying development certificate was dated 8 March 2012, with final approval dated 12 September 2013. The work was carried out over 2012 and 2013.

51. Ms Shen could not recall the estimated cost of the renovations (see T 775). The estimated cost of works on the certifying authority application form for a complying development certificate (Ex L) was stated to be $24,000 to “erect extension and covered verandah to rear of existing dwelling”. The council complying development application (also part of Ex L) specified the cost of the proposed development at $40,000 (describing this as an “[a]pproximately 59m self-contained 2 bedrooms, 2 bathrooms, with open kitchen cooking facility single storey flat”. Ms Shen’s evidence in cross-examination was that Mr Cong would have asked Ms Stefadouros to fill out the form (T 775) and Ms Shen said that her husband asked her to sign the application forms. Ms Shen said that all documents in English were done by Mr Cong (T 777).

52. Ms Shen’s evidence was that the renovations were done step by step (T 776) and that the costs were bigger than she had thought. Ms Shen said that her budget for the renovations (a figure which rather seems to have been plucked out of the air, since there is no suggestion that it was based on any considered costings) was $300,000 and the final cost about $450,000 to $500,000 (T 734.35-7). However, Ms Shen said in cross-examination that she thought that the cost was roughly $300,000 (T 776.38).

53. In her affidavit affirmed 4 September 2020 (at [106]-[108]), Ms Shen deposed that family money on behalf of Ms Wu paid for the renovations; that Ms Wu provided her with the money; that the money was deposited into her mother’s account by her brother (Mr Baoming Shen); and that she had no idea how the money came into that account.

54. Ms Shen deposed to a conversation with her brother, Mr Shen, in relation to the Wu Property (in about 2012) in which she says he agreed to lend the money (around $485,000) and that the money came out in individual payments which her brother arranged through a foreign currency exchange (T 737). Ms Shen said that sometimes if her mother needed money she took her to the bank to transfer cash (T 738). Ms Shen confirmed that the amount spent was $455,000 on renovations and furniture.

55. Ms Shen had included some receipts in relation to the renovation works. Asked about those receipts, Ms Shen said that when she moved house (a reference, I would assume, to the move to the Family Property), she did not know where they were put but then she had found a bundle of receipts and that she had put in her affidavit whatever was found. Then (displaying a knowledge of capital gains tax consistent with her being a commercially savvy property investor) Ms Shen added that, because it was not an investment property and they were “self living” there, even if they sold the property they would not have to pay tax – so she said that it was not a “big deal” to keep the receipts (T 735). Ms Shen then went on to say, in effect, that if she had lost them, it was inadvertent.

56. Ms Shen deposed in her affidavit evidence that, from April to May 2014, she received $300,000 from her mother for the building works. The building works themselves, however, seem to have been carried out in 2012/2013, which does not accord with the timing put forward by Ms Shen. At T 778, having been taken to the relevant documentation (Ex L) that demonstrates this inconsistency, Ms Shen pointed out that she did not in her affidavit say that all the money was used for renovation; and said that she had also purchased furniture and used money for that. At T 778.2-14, Ms Shen also said (seemingly, to explain her use of this money) that she needed to pay her debts and that she looked after her three young children (perhaps a slip, since as at August 2012 she had only one child and during the course of the building works she had her second child but the third was not born until 2014; or perhaps an error of translation – although there were only one or two errors in translation brought to my attention by Ms Shen’s Mandarin speaking solicitor during the hearing and this was not one of them).

57. In any event, Ms Shen ultimately accepted (T 777) that the payments in 2014 did not relate “entirely” to renovation. It was suggested to Ms Shen, but she did not appear to accept, that deducting $300,000 (the amount Ms Shen deposed she had received in 2013/2014) from the sum of around $455,000 that Ms Shen says was expended on the renovation (and furniture) might mean that the amount used to renovate the property was $155,000 (not the larger figure that Ms Shen claimed) (T 778-T 779).

58. As to how the money was paid, Ms Shen said (T 780) that an agent gave a Chinese bank account number to Mr Shen and that cash deposits were made in China and received here locally via a currency exchange agency. Relevantly, Ms Shen did not recall borrowing from Ms Wu before July 2016 (the date of Mr Cong’s death).

59. Ms Shen’s brother (Mr Baoming Shen) recalled that Ms Shen had asked him for money for the Wu Property in early February 2012 (T 752). His evidence was that Ms Shen asked to borrow roughly $500,000 for renovations and that altogether he lent her until 2014 the sum of $450,000 in instalments; the money being deposited to the account of their mother (Ms Wu) (T 752). It was not clear why the money was said to have been deposited to Ms Wu’s account rather than directly to Ms Shen. Moreover, Mr Shen said he had no idea how it was sent – he said that every time Ms Shen told him who to transfer it to and he just did what his sister told him (T 752). There were limits on the transfer of money out of China (US$50,000 per year) (T 753). Taken to an application for funds transfer, Mr Shen’s evidence was that he had no idea about applications for the transfer of moneys overseas (T 758). Mr Shen’s evidence was that it was Ms Shen who arranged how to get the money out of China – he said that she just gave him an account and told him how much to transfer and he did that.

60. Mr Shen had attached a number of bank statements to his affidavit (see Annexures A to C to his affidavit affirmed 4 September 2020). He said (extraordinarily in my opinion given that, on his evidence, the moneys were deposited in a number of instalments) that “I remember the figure [of around $400,000] in my heart” (T 754.10-12).

61. The conclusion to be drawn from the above is that moneys from Ms Wu were not used to pay for the building works at the Wu Property (as Ms Shen had deposed). Moreover, I cannot accept that the amounts received from Mr Shen, transferred via Ms Wu’s account and listed at [108] of her affidavit affirmed 4 September 2020, accurately reflect the amounts expended for the building improvements. (Further, I would add that when one comes to consider the cost of improvements as, say, part of the resulting trust claims, on no view could the cost of acquiring household furniture form part of any such contribution – yet those amounts seem to have been included in what Ms Shen calculated as the renovation costs.)

Birth of Mr Cong and Ms Shen’s second son

62. Mr Cong and Ms Shen’s second son, Leon, was born in October 2012.

Further complaint to immigration authorities – January 2013

63. Ms Joyce made a further complaint to the immigration authorities about Ms Shen in January 2013 (Ex 23 at 63-66).

Acquisition of 9 Ethel Street Burwood – 2013

64. The property at 9 Ethel Street, Burwood, was acquired in 2013 by Mr Cong. Ms Joyce’s evidence (see T 417) was that there was a conversation (which she put as being at the time that the Woolwich property was being sold) to the effect that Mr Cong suggested that they could buy a property together and build a home for the couple and their children. By the time of the acquisition of 9 Ethel Street (which as I understand it was vacant land), Mr Cong had been living with Ms Shen since around 2010/2011 and already had two children with her (which one might well think would make such a suggestion by Mr Cong unlikely). However, Ms Joyce’s evidence was that Mr Cong envisaged that he could spend time between the two properties (i.e., the two families). In this context, Ms Joyce’s evidence as to her being referred to by Mr Cong as the “first wife” and his views as to the status of the “first wife” in Chinese culture were raised (see T 417). There is nothing to corroborate Ms Joyce’s account of this (nor is there any evidence of Chinese culture or custom in this regard) and I cannot make any findings to that effect.

Cancer diagnosis – November 2013

65. In November 2013, Mr Cong was diagnosed with cancer.

2013 Will

66. On 6 December 2013, Mr Cong made a new Will (the 2013 Will). It was drafted by the same solicitor who had prepared the 2011 Will (Mr Steven Pirintji). Mr Pirintji’s file note of his instructions from Mr Cong records Mr Cong’s instructions to the effect that “I want to leave a piece of land $2 million to my 3 kids [which must have been a reference to the three older children, since at that stage Mr Cong and Ms Shen only had two children], possibly some cash too, a hundred thousand to one hundred and fifty thousand” (see T 931).

67. Mr Pirintji is a solicitor who, by the time of the hearing before me, had some 35 years in practice, including some experience in probate matters. His evidence was that his usual practice when it came to the execution by a client of his or her Will was to go through the Will and read it over clause by clause, and then to give the final draft to the client and leave the conference room to allow the client to review the document (see T 923). However, his recollection as to the 2013 Will was that he did not leave the room; that he went through the Will at some length sitting in the boardroom with Mr Cong, discussing and explaining the Will to him and that, to his observation, Mr Cong then read the Will himself. Mr Pirintji’s evidence was that he spent at least half an hour on this occasion. Relevantly, Mr Pirintji said that Mr Cong’s “new wife” or “young wife” was with him and possibly some children. (Pausing here, Mr Cong and Ms Shen were not married at the time of the December 2013 Will but they were in a de facto relationship and by then had two children, which is consistent with Mr Pirintji’s recollection.)

68. In Mr Pirintji’s affidavit he deposed that Mr Cong had approached a few times to discuss employment and supplier contracts prior to 2013 and that on 6 December 2013 Mr Cong gave detailed instructions about his Will. Mr Pirintji’s evidence was that Mr Cong referred in English to concepts such as changing his will, past gifts (in one case “free of mortgage”) and to appointing Ms Shen as an executor. Mr Pirintji deposed that Mr Cong gave him clear instructions about the new will and he seemed to know what he wanted. Mr Pirintji deposed that he and Mr Cong discussed Mr Cong’s affairs generally at some length. His evidence was that Mr Cong had a Chinese accent but that his command of English was good. Mr Pirintji was not aware of Mr Cong having any difficulty reading or understanding the 2013 Will, and was never told by Mr Cong that he could not read or understand the 2013 Will.

69. Under the December 2013 Will, the three elder children were to be left 9 Ethel Street, Burwood, and a sum of $100,000 each (see T 929), and Ms Shen was to receive the residue, including the property at 2-4 Barnes Avenue, Earlwood.

Sale of Woolwich property in December 2013

70. In December 2013, Ms Joyce withdrew her caveat over the Woolwich property and it was sold for $6.42 million. The proceeds of sale were divided equally between Mr Cong and Ms Joyce. (Ms Shen’s evidence in cross-examination was that Mr Cong told her that Ms Joyce “had already got whatever she was entitled to” – see T 626. Ms Joyce herself accepted that she had received what she regarded as fair in respect of the division of the proceeds of sale of this property.)

Acquisition of 16 Nicholson Street, Burwood – January 2014

71. The property at 16 Nicholson Street, Burwood, was purchased pursuant to a contract for sale of land dated 7 December 2013 (i.e., a contract entered into the day after the December 2013 Will was executed). Settlement of the contract took place on 29 January 2014. The property was acquired in the names of Mr Cong and Ms Shen, as joint tenants. The purchase price was $1,722,500.

72. The deposit of $172,250 was paid by a cheque drawn on 10 December 2013 from Mr Cong’s ANZ bank account ending #23909. The balance of the purchase price was funded by a loan of $1,160,000 in Mr Cong and Ms Shen’s joint names from NAB/Homeside (via a joint NAB loan account ending #3349).

73. Ms Shen has deposed (in her affidavit affirmed 13 October 2017 at [48] and in her affidavit affirmed 22 June 2018 at [18]-[20]) that the property was acquired using “joint funds” including Mr Cong’s portion of the funds he received from the sale of the Woolwich property and the joint loan from NAB.

74. The bank records in evidence show that on 6 December 2013, Mr Cong received a sum of $1,144,747.44 into his ANZ #23909 account; and on 9 December 2013, another $251,122.87 into that account. On 28 January 2014, the sum of $492,115.15 was withdrawn from Mr Cong’s ANZ #23909 account; and a further sum of $25,000 was withdrawn from that account on 29 January 2014. On 30 January 2014, the sum of $271.90 was deposited into the ANZ #23909 account with the narrative “Interest 16 Nicholson”.

75. The loan was refinanced with a loan from NAB on 9 May 2016 of $1.3 million – another joint NAB loan account. The mortgage was discharged on 12 January 2017 on the sale of the property. The property was sold for the sum of $2,470,000 to an unrelated third party, Jianying Investments, and the sale settled on 12 January 2017.

76. As at July 2016, the sum of $1,300,000 was owing on this property, with a credit of $37,235.02 in an offset account.

77. Pausing here, it is relevant to note that for some time before his death Mr Cong had expressed the testamentary intention that the property at 16 Nicholson Street would be left to his three elder children although, as noted above, his interest in the property as recorded on the title was a half share as joint tenant with Ms Shen.

Divorce – April 2014

78. By decree nisi dated 12 April 2014, Mr Cong and Ms Joyce were divorced. As noted above, the couple remained in contact with each other (at least to some extent) up to the date of his death (and I have already referred to there being evidence as to Ms Joyce visiting Mr Cong in hospital towards the end of his life).

Birth of Mr Cong and Ms Shen’s third son

79. Mr Cong and Ms Shen’s third son, David, was born in March 2014. Prior to that it appears that a nomination form in relation to Mr Cong’s life insurance and superannuation had been signed nominating Ms Shen and each of the first two children (Bruce and Leon) as beneficiaries but (despite instructions apparently to that effect) the binding nomination form was not amended to include their third son, David (see T 490.5-21; T 491.5-7).

Deregistration of various companies

80. As noted above, in May 2014, Australian Farm Produce Pty Ltd and Eastern Australian Secondary Mutton Association Pty Ltd were deregistered.

Marriage of Mr Cong and Ms Shen

81. Mr Cong and Ms Shen married on 9 June 2014. The marriage had the effect of revoking the 2013 Will.

2014 Will

82. Not long after his marriage to Ms Shen, Mr Cong executed another Will, this being the Will dated 19 August 2014 that Ms Shen now contends is the last true Will of the deceased and in respect of which she now seeks probate (the 2014 Will). The 2014 Will was executed in the presence of two solicitors (Ms Alicia Therese Chung and Mr Pirintji).

83. By cl 5 of the 2014 Will, Mr Cong gave, devised and bequeathed the whole of his estate to Ms Shen, Ms Stefadouros and Ms Lisa Wu on trust for sale and conversion into money, for the payment of his just debts, funeral and testamentary expenses, provided that the direction for sale and conversion was subject to the gifts provided by cll 5(c)-(d) of the 2014 Will.

84. By cl 5(c), Mr Cong left his three elder children “all and any interest that I have at the date of my death in the property at 16 Nicholson Street, Burwood, free of any mortgage”, in equal shares as tenants in common, such property to be transferred when Teresa attained the age of 45 years and in the meantime that such interest and income should he held in trust for each of Teresa, Laurence and Edmund; and left “all and any interest that I have at the date of my death” in 2-4 Barnes Avenue Earlwood “free of any mortgage” to Ms Shen, with small legacies to Ms Stefadouros and Ms Lisa Wu and giving the residue to Ms Shen.

85. This Will omitted a gift of $100,000 (to vest at age 30 at the earliest – see cl 8) to each of the three elder children that had been made in the 2013 Will and substituted 16 Nicholson Street for 9 Ethel Street Burwood which had been provided to them in the 2013 Will. It also increased the age for transfer from age 40 to 45 years. 9 Ethel Street, Burwood was held in the sole name of Mr Cong.

86. I interpose to note that, as referred to above, the 16 Nicholson Street property was registered in the names of Mr Cong and Ms Shen as joint tenants. The initial version of the first and second defendants’ cross-claim, ironically in circumstances where Ms Shen now propounds this as the last true Will of Mr Cong, alleged that, by reason of the deceased’s failure to appreciate the nature and extent of his estate (including that the 16 Nicholson Street property was held in joint tenancy and not available to pass through his estate), the deceased did not have testamentary capacity at the time of making the 2014 Will and did not know and approve its contents and effect such that it was not his true Will.

87. Pausing here, the right of survivorship is an inherent and necessary incident of a joint tenancy, which cannot be defeated by a joint tenant attempting to leave his or her interest by Will – a provision to that effect in the Will is simply ineffective (Vagg v McPhee (2013) 85 NSWLR 154 at [27] per Tobias AJA (with whom I agreed); and see Brendan Edgeworth, Butt’s Land Law (7th ed, 2017, Lawbook Company) at [6.90]). However, the right of survivorship can be defeated by a disposition by a joint tenant during his or her lifetime. Thus the gift under the 2014 Will of Mr Cong’s interest in the property at 16 Nicholson Street could not have taken effect unless the joint tenancy was severed in Mr Cong’s lifetime.

88. Mr Pirintji’s evidence in relation to the 2014 Will was to the effect that Mr Cong came to him and gave him verbal instructions as to the amendments he wanted and that there was a brief conference in which he (Mr Pirintji) made handwritten amendments on a copy of the 2013 Will that he had printed out. Mr Pirintji said that he followed a similar practice to that which he had adopted for the 2013 Will but that the conference did not go for as long as it had with that Will.

89. Mr Pirintji’s recollection was that Mr Cong was sitting across the table; that he asked Mr Cong specifically what changes he wanted to make and that, to his observation, Mr Cong read the 2013 Will and either pointed to clauses or told him what changes he wanted to make. Mr Pirintji’s evidence was that Mr Cong explained the nature of the changes (clearly) and did not require “much input” from Mr Pirintji but did not specifically say why the changes were being made. Mr Pirintji said that the conference was for “maybe less than half an hour”; and there were just the two of them in the conference.

90. I note that the first and second defendants say that under the successive iterations of the Will, the elder children were to receive less of the estate, when considered on an arithmetical basis, having regard to the prices paid for the acquisition of the respective properties (i.e., from the 9 Ethel Street property, which was registered in Mr Cong’s sole name, which was to be left to them in the 2013 Will; to Mr Cong’s interest in the 16 Nicholson Street property, which was registered in both Mr Cong and Ms Shen’s names, in the 2014 Will).

91. The first and second defendants have submitted that Mr Pirintji’s dealings with Mr Cong involved comparatively simple transactions; and they suggest that Mr Cong could merely have read the names and numbers found in the straightforward wills that Mr Pirintji prepared. The plaintiffs say that none of this evidence suggests that Mr Cong concerned himself, merely, with comparatively simple matters or that he might have concerned himself, merely, with the names and numbers in the draft Wills; and that it is consistent with Mr Pirintji’s evidence that Mr Cong provided detailed instructions and read the Wills in front of him.

Further complaint to immigration authorities – September 2014

92. In September 2014, Ms Joyce made another complaint to the Department of Immigration, copying in the Minister at his Parliamentary and Electorate offices, in which reference is made to Ms Shen as being in charge of the family household, and it is said that she “has three children with an Australian citizen, with whom she lives” (Ex 23 at 69). The complaint made by Ms Joyce was that “it is in Australia’s border protection interests” to investigate an “overstay” by a Chinese maid living and working in Ms Shen’s household (Ex 23 at 69).

93. The first and second defendants say that this allegation was the pretended justification for “spying on Ms Shen and her family, and for making various comments and criticisms about Ms Shen, her activities, her employment, her funds, and her mother, her mother’s application for a visa, her children and her domestic arrangements”. More relevantly, for present purposes, the first and second defendants point out that, in her communications with the Department of Immigration (on 12 December 2013 and again on 11 September 2014), Ms Joyce asserted that the Wu Property was Ms Shen’s property (see Ex 23 at 65; 69), which they submit evidences that Mr Cong made it clear to Ms Joyce that the Wu Property was fully owned by Ms Shen.

Acquisition of 43 Amy Street, Campsie – October 2014

94. The property at 43 Amy Street, Campsie was purchased pursuant to a contract for sale of land dated 30 August 2014 (i.e., about two weeks after the 2014 Will was executed). Settlement took place on 13 October 2014. The property was purchased in the names of Mr Cong and Ms Shen, as joint tenants, with a purchase price of $985,000.

95. The deposit of $98,500 was paid by cheque drawn on the couple’s joint NAB account ending #3146. The couple obtained a joint loan from Westpac for $700,000, setting up a Westpac offset account. The balance of $228,235.24 was drawn from a joint account (Westpac #3500).

96. Ms Shen deposed that on 9 October 2014 she transferred $300,000 from the joint account #3146 to the Westpac offset account #693500 and that on 13 October 2014 the sum of $228,235.46 was withdrawn from Westpac account #3500.

97. As at July 2016, the first and second defendants say that the sum of $699,112 was owing on this property, with a credit of $73,635.67 in an offset account.

98. I note that the plaintiffs point to Ms Shen’s affidavit evidence in relation to the acquisition of this property as showing her “single-minded determination” (and as being inconsistent with Ms Shen “blindly following” Mr Cong’s wishes – c.f., particular (k) to the allegation at [145] of the pleaded defence that Ms Shen was accustomed to act in accordance with Mr Cong’s wishes). That is because Ms Shen’s affidavit evidence is that when she first wished to buy the property at 43 Amy Street, Campsie, Mr Cong said “no” but that she subsequently went and bid on the property (and then asked him to help her obtain a loan for the purchase price).

99. In cross-examination, Ms Shen said (for the first time) that she had spoken with Mr Cong about the acquisition of 43 Amy Street, Campsie before the auction – at a time when she says her husband was in hospital and that Mr Cong consented to the purchase. Ms Shen said that she needed Mr Cong’s assistance to obtain a loan from the bank (T 612) (though this of itself does not point to whether he agreed to the purchase prior to or after the auction).

100. The property at 43 Amy Street, Campsie was sold in 2017, after Mr Cong’s death, pursuant to the terms of a contract for sale of land entered into by Mr Cong and Ms Shen (prior to his death) for the sum of $1,375,000. As I refer to below, Ms Shen unsuccessfully attempted to rescind the contract for sale of this property after Mr Cong’s death.

101. For completeness, I note that the mortgage over this property was discharged on 17 July 2017 with payment of the sum of $707,717.28. On 18 July 2017, the sum of $578,812.21 was received into Ms Shen’s #1738 account and on 19 July 2017, a further $121,000 was received into that account from the sale of 43 Amy Street.

Further mortgage over the Wu Property – April 2015

102. I have already referred above to the discharge of the mortgage that had been taken out at the time of acquisition of the Wu Property. On 24 April 2015, a fresh mortgage was taken out over the property for a facility of $980,000 in Ms Shen’s name alone. An ANZ loan account and offset account were established in Ms Shen’s name in relation to this borrowing. The mortgage was registered on 13 May 2015.

103. The moneys from this facility were applied towards the purchase of two properties (see below): 58 Duke Street, Campsie (by transfers of sums totalling $400,000 on 18 and 25 May 2015); and the Family Property (by transfer on 29 June 2015 of $500,000 and a later transfer of $80,000).

104. This mortgage over the Wu Property was discharged on 16 December 2016. On 12 December 2016, the sum of $982,039.47 was received into Ms Shen’s ANZ account ending #48945. That same day, the same amount was withdrawn from the Westpac account ending #1738.

105. This property was transferred to Ms Wu (for a stated consideration of $1,675,000, although Ms Shen accepts that no money was in fact transferred) on 15 February 2017 (see below).

Acquisition of 56 Duke Street, Campsie – May 2015

106. The property at 56 Duke Street, Campsie was purchased pursuant to a contract for sale of land dated 28 March 2015, under which the purchaser was named as Mr Cong and Ms Shen. However, the property was registered in Ms Shen’s name alone. Ms Shen has deposed to a conversation with Mr Cong in which she says that he said he was afraid that his ex-wife (Ms Joyce) would try to “get a piece” of the property.

107. Cross-examined as to this, there was the following exchange with Ms Shen (at T 626):

Q.   You, yourself, did not want Anastasia Joyce to have any piece of the properties that were being bought, correct?

A.   INTERPRETER: I don't understand your question. My husband told me she had already got whatever she was entitled to. How come she would like to share the properties with me? I quite don’t understand what you mean.

Q.    Your husband said to you that he was afraid that Ms Joyce would try and get a piece of the properties, didn’t he?

A.   INTERPRETER: Yes, because he had a concern that after he passed away it would occur because, at that time, doctor said his condition was not well, so that’s why he said that, and also he did what he said.

Q.    And you went along with his concern, didn't you?

A.   INTERPRETER: Mm. I don’t understand till today that why she’s entitled to get something. She, she didn’t get anything because she had already got what she was entitled to, so I don’t understand that why she wanted to get something from my husband and I property.

108. Mr Cong signed a statutory declaration on 16 April 2015 directing that the sole purchaser was to be Ms Shen.

109. Settlement took place on 11 May 2015. The purchase price was $996,000. The deposit of $99,600 was drawn from the joint NAB account (ending #3146) of Mr Cong and Ms Shen. The balance of the purchase price came from: an ANZ loan in the name of Ms Shen in the sum of $700,000 and $238,236.84 from Ms Shen’s ANZ account ending #13004.

110. Ms Shen has deposed that on 4 May 2015 the sum of $260,000 was withdrawn from the joint NAB account #3146; that same day $260,000 was deposited into Ms Shen’s ANZ #13004 account and the sum of $232,236.84 was withdrawn from that account.

111. The plaintiffs submit that it can reasonably be inferred that the sum of $238,236.84 in joint funds was used in the purchase.

112. As at July 2016, the first and second defendants say that the sum of $700,000 was owing on this property, with a credit of $56,232.22 in an offset account. The mortgage was discharged on the sale of the property in 2019 with the sum of $673.862.64 received.

1856. There is no relevant conduct of any other person before the death of Mr Cong. I have referred above to the plaintiffs’ complaint that Ms Shen has failed to honour Mr Cong’s wishes in relation to the annuities and the allegations that she has sought to evade her contractual obligations in relation to the making of provision for them. I have also referred to the plaintiffs’ complaint that Ms Shen’s profligacy has been the cause of the insolvency of the estate.

Section 60(2)(o) – any relevant Aboriginal or Torres Strait Islander customary law

1857. None is here applicable.

Section 60(2)(p) – any other matter the Court considers relevant, including matters in existence at the time of the deceased person’s death or at the time the application is being considered

1858. There is nothing here to add beyond the matters already referred to in the body of these reasons.

Conclusion as to adequacy of provision under the 2016 Will

1859. As noted above, the adequacy of provision is the threshold test for the making of a provision order and it is to be determined at the time of the application.

1860. There is no doubt in my mind that the provision made for Edmund and Teresa under the 2016 Will is not adequate for their proper maintenance, education and advancement in life. Having regard to the assets (and potential notional assets) in Mr Cong’s estate, there was, in effect, almost no provision made for them – since the annuities were dependent on there being residue (and were in the relatively small amount of $10,000 per year for ten years) and the provision of any other amount as contemplated by reference to the Deed was dependent on little other than Ms Shen’s largesse (in circumstances where even the timing of the payments was likely to be dependent on her discretion as was the amount of the payments except in the event that the Campsie properties were not rezoned within ten years).

1861. Having regard to the findings I have made in relation to the resulting trust claims, the estate ultimately was not a large estate; and I accept that Mr Cong also had moral obligations to provide for his widow and three younger children. However, and this is significant, substantial provision had been made for Ms Shen (and the three younger children) in Mr Cong’s lifetime by way of the financial accommodation (and gifts) that permitted Ms Shen to acquire the extensive property portfolio that was in her sole name (including what Mr Cong himself referred to as the “big mansion” at the Family Property, which Mr Cong regarded as being “organised” for Ms Shen and the younger children); and the provision made for Ms Shen under the 2016 Will (which left to her the shares in and business of Jolly Trading, the company that had funded Mr Cong and his family’s comfortable lifestyle up to his death, and the residue (such as it was) of his estate). In contrast, Mr Cong’s three elder children were left with nothing other than charity from their step-mother; and the upshot in the present case is an illustration of the simile “as cold as charity”.

1862. I accept that it cannot generally be said that a parent has an obligation to provide an adult child with a home (see Fiorentini v O’Neill (New South Wales Court of Appeal, 4 December 1998, unreported) at 15; see also Delaney v Jones [2008] NSWSC 229). Nor is it the purpose of the statutory regime relating to family provision to ensure that there is an overall fair division of the estate (Gorton v Parks (1989) 17 NSWLR 1 at 6). However, I have concluded that in all the circumstances there was not adequate provision made for Edmund and Teresa (indeed there was, in effect, no provision made for them at all).

1863. This then enlivens the jurisdiction as to whether and what order for provision ought to be made; and the question whether any property should be designated as notional estate.

Notional estate

1864. Pursuant to s 78 of the Succession Act, an order may be made designating property as notional estate only: for the purposes of a family provision order to be made under Part 3.2 of the Act or for the purposes of an order that the whole or part of the costs of proceedings in relation to the estate or notional estate of a deceased person be paid from the notional estate of a deceased person.

1865. Section 80 of the Succession Act (which broadly replaces s 23 of the previous Family Provision Act) sets out the power of the court, on an application for a family provision order or on its own motion, to make a notional estate order designating property specified in the order as notional estate of a deceased person if satisfied that the deceased person entered into a relevant property transaction before his or her death and that the transaction is a transaction to which the section applies (see ss 75 and 76).

1866. Sub-section 80(2) provides that the section applies to the following relevant property transactions: (a) a transaction that took effect within 3 years before the date of the death of the deceased and entered into “with the intention, wholly or partly, of denying or limiting provision being made out of the estate of the deceased person for the maintenance, education or advancement in life of any person who is entitled to apply for a family provision order”; (b) a transaction that took effect within one year before the date of the death of the deceased and entered into when the person “had a moral obligation to make adequate provision, by Will or otherwise, for the proper maintenance, education or advancement in life of any person who is entitled to apply for a family provision order which was substantially greater than any moral obligation of the deceased person to enter into the transaction; and (c) a transaction that took effect on or after the deceased person’s death.

1867. In the present case, the assets sought to be designated as notional estate have been identified at [149] of the amended statement of claim. Relevantly, having regard to the findings made as to the resulting trust claims, the potential notional estate is limited to the following: Mr Cong’s half share of 16 Nicholson Street and 43 Amy Street; the life insurance proceeds; the joint bank accounts; and the assets of Jolly Trading.

1868. As to 16 Nicholson Street and 43 Amy Street, the relevant transaction giving rise to the claim that there be a notional estate order is not as at the date of acquisition of the properties – it is the date of Mr Cong’s death – because it is the failure to sever the joint tenancy during the deceased’s lifetime, which is the relevant transaction. Therefore it is not necessary to be satisfied of the matters that would be required if there was an application in relation to a transaction which took effect within the period of three years before the death (i.e., that it was entered into with the intention of wholly or in part denying or limiting provision for the maintenance, education or advancement in life of that or any other eligible person out of the deceased person’s estate or otherwise).

1869. I note the matters that must be considered under ss 83 and 87 before any such order is made (including the importance of not interfering with reasonable expectations in relation to property and the substantial justice and merits involved in making or refusing to make such an order). This is of particular relevance to the claim in respect of the life insurance proceeds, since (following the binding nomination) those were paid to Ms Shen and two of her infant sons (who, as the first and second defendants note, have not been joined to the proceeding). Any order designating the insurance proceeds as notional estate should be limited to Ms Shen’s one-third share of those proceeds.

1870. A notional estate order must not be made unless, relevantly, the deceased person’s estate is insufficient for the making of the family provision order, or any order as to costs that the Court is of the opinion should be made (see s 88). That is clearly satisfied in the present case.

Proper provision in all the circumstances

1871. I turn then to what I consider would, in all the circumstances, be the proper provision for Edmund and Teresa. I place significant weight in this regard on Mr Cong’s clear intention that there be substantial provision made for his three elder children – and in particular that Mr Cong considered that Ms Shen and the three younger children were adequately provided for by the arrangements made in his lifetime for the acquisition of the Family Property in Ms Shen’s sole name (and the provision made for Ms Shen under the 2016 Will).

1872. I also note that Mr Cong, when putting in place his testamentary scheme, clearly thought that he had Ms Shen’s concurrence with the proposal that provision for the three elder children could be made by reference to the value of the Campsie properties; but that this will not now be possible given that three of the four Campsie properties were in Ms Shen’s name (and the fourth was held as joint tenants and passed to her on survivorship) and Ms Shen has made it abundantly clear, by her conduct and stance in this litigation, that she has no intention of acting in accordance with the scheme that Mr Cong thought he had put in place by agreement with her for the provision to be made for the three elder children. The adamance with which Ms Shen made clear in the witness box that she was to have the discretion to give the three elder children nothing or $1 (and the fact that the discretion was qualified in her mind by whether at the time of its exercise she then thought that she had become very, very rich) makes it very clear that Edmund and Teresa cannot expect to receive anything out of Mr Cong’s estate (beyond the very small payments made to them in the first year after his death) without an order for provision.

1873. As to what is the proper provision, again I emphasise that Ms Shen and the three younger children have been well provided for in the financial accommodation and support made possible for Ms Shen during Mr Cong’s lifetime. The suggestion that Ms Shen and her children would be left destitute and on the street if Mr Cong’s wishes were honoured is in my opinion farcical. I accept that there was extensive debt secured over the respective properties. However, what Ms Shen has done has been to transfer, for no consideration at all, the Wu Property to Ms Wu (over which I infer that Ms Shen would have access were it necessary to meet her family expenses) and to cease the Jolly Trading business (albeit having paid its trading debts but also having had the benefit of the debts owing to it). Ms Shen has shown what to me is an extraordinarily casual attitude to the disbursement of large amounts of money (the loan to Ms Stefadouros and the Lillian Street acquisition, for example – apparently on no more than trust); and her philosophy that when one has a large amount of debt, it is immaterial if one expends large sums on luxury items (such as a luxury family car), is also remarkable; all of which suggests that Ms Shen has had considerable sums of money at her disposal and the wherewithal to fund her family’s lifestyle (with the support of her second husband no doubt).

1874. On the basis that a rough calculation of the notional estate would be around $2.3 million (half the sale value of each of the 16 Nicholson Street and 43 Amy Street properties plus half the amount held in the joint bank accounts and one-third of the life insurance proceeds), and leaving aside the position of Jolly Trading (the value of which has not to my mind been established particularly given the level of debts balanced against the value one would put on the likelihood of a continuing income stream without Mr Cong alive); and having regard to the wishes of Mr Cong as to the level of provision he wished to make for his elder children, taking into account that they are likely to face a large costs exposure in this litigation; and taking into account all of the circumstances outlined above, I have concluded that the proper provision for Edmund and Teresa is that each receive a lump sum legacy in lieu of the provision made for them in the Will in the sum of $700,000.

1875. While this is much less than Mr Cong intended (and led Edmund and Teresa to believe they would inherit out of his estate), his expectations as to the value to be derived from an increase in the rezoning of the Campsie properties have proven to be unrealistic and, in any event, cannot now sensibly be achieved (particularly without Ms Shen’s assent). Moreover, while Mr Cong intended that the provision be paid in ten years’ time, I consider that the obvious breakdown in the extended family relationships makes it appropriate that it be paid now.

1876. While this is no doubt much more than Ms Shen would wish, it seems to me that it will permit Edmund and Teresa to meet some or all of their debts in relation to costs and to have a buffer to set themselves up in their lives, in circumstances where neither is well provided for as it is; and although able to look to their mother for financial support, the extent of that support over the years is not assured. I do not consider it appropriate to defer fixing a final legacy amount (as was suggested in the plaintiffs’ submissions) until after submissions on costs for two reasons – first, the amount for which provision is to be made may well influence what costs orders are sought (especially in light of the intimation that the first and second defendants might seek special costs orders) and, second, that it was the plaintiffs’ forensic decision not to serve the requisite costs affidavits.

1877. For that purpose, I propose to designate as notional estate such of the proceeds of sale of the 16 Nicholson Street and 43 Amy Street properties (up to the maximum of Mr Cong’s half share in those properties) as is necessary to meet the order for provision (i.e., the sum of $1.4 million).

Probate issues

1. Whether probate should be granted to Edmund or Ms Shen, to the exclusion of the other, or to both persons

Plaintiffs’ submissions

1878. The plaintiffs seek (see [150] of the amended statement of claim) a grant of administration of the 2016 Will in favour of Edmund to the exclusion of Ms Shen (pursuant to r 78.19 of the Supreme Court Rules, i.e., passing over the rights of Ms Shen as co-executor; on the basis that Ms Shen is not a fit and proper person to carry out the duties of executor and that the administration of Mr Cong’s estate would be put in jeopardy if she were to be appointed.

1879. In the particulars to [150], the plaintiffs refer to Ms Shen’s denial (now vindicated) that she is liable under the Deed and assert that, in the premises, a conflict of interest would arise if she were to be appointed as executor. At [151] of the amended statement of claim, it is alleged that Ms Shen has misconducted herself (repeating the allegations at [27]-[38], in relation to Jolly Trading; at [49]-[65], in relation to the alleged breach of the Deed; and at [134]-[145], again in relation to Jolly Trading and Cong Australia International).

1880. The plaintiffs say that Ms Shen’s submission that she is entitled to avoid her obligations under the Deed is another reason why probate of the 2016 Will should be granted to Edmund. It is said that Ms Shen’s position of conflict is obvious; that it requires a decision by her as executor whether to accept the truthfulness of her claim that she had no knowledge of, and is not bound by, the Deed; and it is said that Ms Shen has, by her own conduct, evinced a preference for her own interest over her executorial duty to the estate.

1881. In reply submissions, the plaintiffs emphasise the alleged misconduct of Ms Shen as pleaded in the amended statement of claim relating to Ms Shen’s alleged breaches of the Deed and her dealings with Jolly Trading’s accounts to the detriment of the estate. It is said that, common to those paragraphs is the proposition that Ms Shen has advanced her own interests at the expense of beneficiaries. The plaintiffs note that an executor may be passed over where, because of disputation or otherwise, the proper administration of the estate will be prejudiced.

First and second defendants’ submissions

1882. In the cross-claim, Ms Shen seeks an order that probate of the 2014 Will be granted to Ms Shen (one of three executors named in the 2014 Will). It is noted that, of her co-executors, one (Ms Stefadouros) has renounced probate (Ex 24) and the other (Ms Lisa Wu) has failed to answer a Notice to Apply for Probate (Ex 25). Accordingly, it is said that the rights of both to representation of the estate have lapsed. This is on the basis of Ms Shen’s primary case (which has not succeeded) that the 2016 Will is not the true Will of Mr Cong.

1883. Alternatively, Ms Shen seeks probate of the 2016 Will, passing over Edmund, and with a declaration that the Deed is not testamentary and not to be included in the grant.

1884. Insofar as the plaintiffs seek to pass over Ms Shen as executor (see [150] of the amended statement of claim), the first and second defendants say that Ms Shen has a right to the grant of probate and that the particulars to [150] do not assist the plaintiffs (for the reasons set out below).

1885. First, as to the matter stated in the particulars at (i) (that Mr Cong was a party to the Deed), the first and second defendants reiterate their argument as to the release effected by naming Ms Shen as executor) and they maintain that this is also inconsistent with the plaintiffs’ deed poll case.

1886. Second, as to the matter stated in the particulars at (ii) (that the estate has standing to sue Ms Shen as the other party to the Deed and should do so), the first and second defendants say that this assumes that the rule in Commissioner of Stamp Duties v Bone does not exist and that it is contrary to the rule that an “estate” does not have standing. The first and second defendants accept that executors and administrators have standing but they say that this is not where there has been a release. As to the submission that the estate “should do so”, the first and second defendants say that this presumes a matter that (even if the first and second defendants’ primary submission were rejected) would still be a matter for the decision of the executors having regard to the interest of the beneficiaries (and not to the interest of volunteers and persons claiming not through the estate but as strangers to the estate, as it is said the plaintiffs are). The first and second defendants say that the plaintiffs’ interest as legatees of the annuities does not alter this, since it gives them no interest as beneficiaries of the estate in performance of the Deed.

1887. Third, as to the matter stated in the particulars at (iii) (that Ms Shen has denied that she is liable under the Deed), the first and second defendants say that this is not a valid objection; that being a question that the proceeding here is to resolve.

1888. Fourth, as to the matter stated in the particulars at (iv) (that a conflict of interest would exist if Ms Shen were appointed executor because her duties would extend to prosecuting the estate’s claim under the Deed against herself), the first and second defendants say that this assumes a conflict that does not exist because it is not possible for Ms Shen to sue herself.

1889. The first and second defendants further say that the plaintiffs have no standing to assert a conflict in which they have no interest. It is said that they are not residuary beneficiaries or creditors; that they are third party volunteers, “seeking to meddle without interest”; and that even their interest as legatees abates as the estate was left at Mr Cong’s death with substantial mortgage debts from the Nicholson Street and 43 Amy Street loan accounts, which Ms Shen afterwards paid off.

Determination

1890. I have already concluded that the 2016 Will is a valid Will and that it incorporates the Deed. Therefore, Ms Shen’s cross-claim insofar as it seeks probate of the 2014 Will cannot succeed; nor would I exclude from the grant of probate the terms of the incorporated Deed (albeit that it can stand in effect only as a statement of Mr Cong’s testamentary intention or wishes and is not contractually binding on Ms Shen having regard to the findings made above).

1890. The question is simply whether Probate should be granted to both of the named executors or only one and, if so, which one.

1891. Section 74 of the Probate and Administration Act 1898 (NSW) provides a discretion to pass over a named executor where such executor “is not willing and competent to take probate”. As the authors of Wills, Probate and Administration Law in New South Wales (2^nd ed, 2019, Thomson Reuters) explain (at 667):

The power to pass over the named executor is one necessary in order to prevent a person wholly unsuitable from assuming the office of executor and as such the power ought to be interpreted widely to ensure the due and efficient administration of the estate. Ordinarily, where a testator names a person as their executor, then it can be assumed that the testator expects the person will act properly. To pass over the named executor requires the proof of misconduct and not the mere existence of a conflict of interest. In Telfer v Telfer (No 2) [2013] NSWSC 823 the court passed over the named executor who had attempted to propound a codicil in circumstances where the court had concluded the executor must have known that the signature on the document was not genuine.

1893. I have concluded that Probate should be granted of the 2016 Will with the Deed attached to both of the named executors. The position of conflict to which the plaintiffs have referred will not arise in light of the findings that I have made in relation to Ms Shen’s liability under the Deed; the allegations of misconduct (on both sides) have not been established; and the risk of disputes in the future is not such that I would overrule Mr Cong’s testamentary intentions in this regard. Moreover, perhaps unduly optimistically, I would hope and expect that Ms Shen and Edmund, both properly advised, would hitherto act consistently with their obligations as executors and work together to honour Mr Cong’s testamentary wishes.

Costs

1894. As adverted to above, the first and second defendants have sought an opportunity after judgment to apply for special costs orders.

Conclusion

1895. To summarise, and in conclusion, for the reasons set out above, I have concluded that: the 2016 Will is a valid Will and incorporates the Deed; that Mr Cong had testamentary capacity at the time he entered into the 2016 Will and knew and approved the 2016 Will; that Mr Cong may indeed have had unrealistic expectations about the future value of what he considered to be his distributable estate but that he did not suffer from a delusional optimism such as would remove his testamentary capacity; that the 2016 Will should be admitted to Probate and Probate should be granted to both the named executors; that the Deed, as against Ms Shen, should be set aside by way of relief under the Contracts Review Act (which makes many of the other issues in relation to the Deed unnecessary for final determination, although they have been considered above); the claim for proper provision by Edmund and Teresa out of Mr Cong’s estate has been established (and notional estate should be designated for that purpose); that, otherwise, the various claims made by the plaintiffs have not been made good; and that, other than the Contracts Review Act claim, the cross-claim has not been made good.

Orders

1896. For the above reasons I make the following orders:

1. Declare that the Will dated 3 June 2016 (incorporating the Deed dated 3 June 2016 executed by the late Zi Li Cong and Yanjiao Shen) constitutes the valid last Will of the late Zi Li Cong (the deceased) and that the deceased had testamentary capacity at the time of execution of the said Will.

2. Order that probate in solemn form of the said Will dated 3 June 2016 (incorporating the Deed dated 3 June 2016 as a statement of the testamentary intention of the deceased) be granted to the named executors of the deceased (Yanjiao Shen and Edmund Bede Hao San Cong).

3. Order that the matter be remitted to a Registrar in Probate to complete the grant.

4. Declare that the Deed dated 3 June 2016 is unjust in all the circumstances and order pursuant to the Contracts Review Act 1980 (NSW) that the said Deed be set aside as against the first defendant.

5. Pursuant to s 59 of the Succession Act 2006 (NSW), order that provision be made out of the estate of the late Zi Li Cong in favour of the first and second plaintiffs in the sum of $700,000 each, in lieu of the provision made for the first and second plaintiffs under the deceased’s Will executed on 3 June 2016.

6. Designate as notional estate so much of the proceeds of sale of the properties at 16 Nicholson Street, Burwood and 43 Amy Street, Campsie as is necessary in order to make provision for the first and second plaintiffs in accordance with order 5 (i.e., up to $1.4 million).

7. Otherwise dismiss the plaintiffs’ amended statement of claim and the first and second defendants’ further amended cross-claim.

8. Reserve costs.

9. Direct the parties to file brief written submissions as to costs within 14 days with a view to dealing with the question of costs on the papers if possible.

10. Liberty to apply on 3 days’ notice if issues arise in the implementation of these orders.

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Amendments

02 September 2021 - [1873] 'elder' to 'younger'

Decision last updated: 02 September 2021