Kong v Yan

Case [2021] SASC 82

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

KONG v YAN

[2021] SASC 82

Judgment of the Honourable Justice Stanley  

PRIVATE INTERNATIONAL LAW - CHOICE OF LAW - ADMINISTRATION AND SUCCESSION - ADMINISTRATION OF ESTATE

PRIVATE INTERNATIONAL LAW - RESTRAINT OF PROCEEDINGS - OF FOREIGN PROCEEDINGS: ANTI SUIT INJUNCTIONS

PRIVATE INTERNATIONAL LAW - CHOICE OF LAW - DOCTRINE OF RENVOI

This is an application for direction pursuant to s 69 of the Administration and Probate Act 1919 (SA), or alternatively, a determination without administration pursuant to r 206 of the Supreme Court Civil Rules 2006 (SA) being relief which can be granted in proceedings for the judicial administration of the deceased estate of Hongtao Liu (the deceased).

The applicant is the widow of the deceased.  Pursuant to a grant of letters of administration made by this Court on 8 February 2019 she has been appointed the administrator of the deceased’s estate.  The respondent is the deceased’s mother.

Ancillary to the primary relief sought by the applicant she brings an application for an anti suit injunction permanently restraining the respondent, from taking any further steps to prosecute proceedings the respondent has instituted in the Peoples Republic of China (PRC) in relation to the moveable assets of the deceased’s estate. 

In these proceedings the applicant seeks a determination of the proper law by which the moveables of the deceased’s estate are to be distributed, wherever situated in the world.  The applicant contends that as the deceased was domiciled in South Australia at the date of his death, it is the law of South Australia that should determine the distribution of the moveable assets of his estate.  On the other hand, if the deceased, at the date of his death, was domiciled in China the Court is asked to determine the succession of the deceased’s intestate estate in accordance with Chinese law. 

Held in relation to domicle:

1.      the deceased and his family left China and moved to Australia in February 2012 with the intention of residing in Australia indefinitely;

2.      the intention of the deceased and his family, namely to reside in Australia indefinitely, did not change when the deceased and his family were granted permanent residency in Australia on 22 July 2013;

3.      the intention of the deceased and his family, namely to reside in Australia indefinitely, did not change when the deceased and his family were granted Australian citizenship on 26 August 2016;

4.      the deceased automatically lost Chinese citizenship on 26 August 2016 when he was granted Australian citizenship;

5.      at the date of his death on 9 November 2018, the deceased had not made any arrangements to return to China permanently in the near future, or at all;

6.      at the date of his death on 9 November 2018 the deceased’s place of residence was South Australia; and

7.      the deceased and his family had chosen Australia as their domicile of choice from at least 2013, and were domiciled in Australia at the time of the deceased’s death on…

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AGLC
Kong v Yan [2021] SASC 82
Case
[2021] SASC 82
Decision Date

CaseChat Overview and Summary

In the matter of Kong v Yan, the plaintiff sought an injunction to restrain the defendant from proceeding with legal actions in China that related to the estate of the deceased, Hongtao Liu. The dispute centred on the applicable law governing the administration and succession of Liu's estate, as well as the enforceability of an anti-suit injunction in respect of the Chinese proceedings. The Supreme Court of South Australia was tasked with determining the domicile of the deceased at the time of his death, which would dictate the jurisdiction with which the estate should be administered.

The court had to address several legal issues, primarily whether Liu's domicile at the time of his death was China or Australia, and whether the doctrine of renvoi should apply in determining the applicable law. Additionally, the court needed to assess the burden of proof in establishing domicile and the validity of an anti-suit injunction in the context of foreign proceedings. The plaintiff argued that Liu had maintained an Australian domicile and had no intention to return to China permanently, while the defendant contended that Liu intended to return to China and thus Chinese law should govern his estate.

The court found that Liu had indeed established an Australian domicile at the time of his death. The evidence showed that Liu and his family moved to Australia with the intention of residing there indefinitely, and this intention remained unchanged throughout his life. The court held that the respondent bore the onus to prove that Liu intended to return to China permanently, which the respondent failed to do. The court further determined that Australian law applied to the estate, and granted the plaintiff's request for a permanent injunction restraining the defendant from proceeding with the Chinese court proceedings. The court concluded that Liu's habitual residence and domicile were in South Australia, and thus, his estate should be administered according to South Australian law. The court also found that the doctrine of renvoi did not apply in this case, as the law of South Australia was clear and applicable to the circumstances.

The court ordered that Liu's estate be administered according to South Australian law, and that the defendant be permanently restrained from taking further steps in the Chinese court proceedings. The court directed the plaintiff to bring in minutes of order reflecting these reasons and scheduled a hearing for the parties to address costs.

Orders

Orders of the court

Held in relation to domicle:

1. the deceased and his family left China and moved to Australia in February 2012 with the intention of residing in Australia indefinitely;

2. the intention of the deceased and his family, namely to reside in Australia indefinitely, did not change when the deceased and his family were granted permanent residency in Australia on 22 July 2013;

3. the intention of the deceased and his family, namely to reside in Australia indefinitely, did not change when the deceased and his family were granted Australian citizenship on 26 August 2016;

4. the deceased automatically lost Chinese citizenship on 26 August 2016 when he was granted Australian citizenship;

5. at the date of his death on 9 November 2018, the deceased had not made any arrangements to return to China permanently in the near future, or at all;

6. at the date of his death on 9 November 2018 the deceased’s place of residence was South Australia; and

7. the deceased and his family had chosen Australia as their domicile of choice from at least 2013, and were domiciled in Australia at the time of the deceased’s death on 9 November 2018.

It is determined that the deceased's domicile at the date of his death was Australia and in particular, South Australia. At the time of his death the deceased's place of residence was Australia and he intended to reside here indefinitely.

Article 31 of the 2010 Law on Application of Laws to Foreign and Related Civil Relations provides that statutory succession shall be governed by the laws of the habitual residence of the deceased person at the time of death subject to a specific exception for the statutory succession to real property. Pursuant to Article 20 of the 2010 Law where the laws of habitual residence apply but the habitual residence of the person is unclear, the laws of his current residence shall apply. The issue of current residence is to be determined on the basis of the place where the deceased was considered to be currently residing at the time of death after excluding any trips for “medical treatment, labour dispatch, official duty and other similar circumstances”.

Article 15 of the 2012 Interpretation defines habitual residence to mean the place a person has continuously lived for one year or more. However, this one year test does not mean one continuous unbroken year. Clearly there are exceptions to the one-year test, namely, medical treatment, labour dispatch, official duty and other similar circumstances.

Pursuant to article 25 of the General Provisions of the Civil Law of the PRC of 2017 if a person’s habitual residence is different from the person’s domicile, the habitual residence shall be deemed to be his or her domicile.

The evidence establishes that at the date of his death the deceased’s habitual residence for the purposes of Chinese law was Australia, in particular South Australia. The deceased was living in South Australia continuously for more than one year at the date of his death. The evidence establishes that in the last year of his life he spent 227 days in Australia. In the preceding year he spent 204 days in Australia. On each occasion he left Australia to travel, except for the final trip to Japan, he returned to Australia. He did so because Australia was his place of residence. That is where he lived continuously living since 2012, and in particular for the year preceding his death. He did not live anywhere else. His life’s centre was Australia.

A determination without administration is made pursuant to r 206 of the Supreme Court Civil Rules 2006 (SA) that the deceased, Hongtao Liu, who died intestate on 9 November 2018, and whose estate was subject to a grant of letters of administration by this Court on 8 February 2019, was domiciled in South Australia at the date of his death.

A permanent injunction is granted restraining the respondent from taking any further steps to prosecute the proceedings designated as (2019) Ji 0391 Civil 2420 in the People’s Court of Qinhuangdao Economic and Technical Development Zone, Hebei, People’s Republic of China, being the proceedings designated as (209) Ji 0302 Civil 5262 that were formerly in the Qinhuangdao, Haigang District People’s Court, Hebei, People’s Republic of China.

Background

Background to the litigation

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Evidence

Evidence Before The Court

While the onus lies on the party asserting a change of domicile, in this case, where the objective evidence indicates the fact and the intention of the deceased to change his domicile from China to Australia, the respondent bears an evidentiary onus to prove that, notwithstanding the objective evidence, the deceased intended to maintain China as his domicile and return to live there on an indefinite basis in the foreseeable future. Otherwise, given the manner in which the trial was conducted, the applicant was left to prove a negative, namely, that the deceased had no intention to return to live permanently in China and did not make statements that he intended to do so. The respondent’s case substantially relies, not on objective evidence, but on evidence of statements allegedly made by the deceased reflecting his subjective intention.Respondent’s evidence of the deceased’s intentions The respondent gave evidence that in 2010 the deceased said that he had some issues that required him to leave Qinhuangdao and that City Power was under investigation by the local People’s Prosecutorial office. As a result, he had to leave Qinhuangdao, but that when everything settled down he would return. She said that in February 2012 the deceased moved to Australia for the children’s education, the better air quality, and to avoid the investigation into City Power. She said he told her that when the children grew up, the family would return to China. Later in 2012 she said the deceased told her the investigation into City Power had finished. The respondent said that in February 2018 she came to Adelaide and stayed with the family for about two months. She said the deceased told her that he intended to return to China earlier than originally planned as he could not make big money in Australia, where he had lost a lot of money, and that he wanted the children to go to university in China to learn and retain traditional Chinese culture. He said that Daniel was quiet and did not fit in with Australian culture and was bullied. She said she had a further conversation with the deceased in October 2018 shortly before his death when he said that he was intending to return to China to make some more money for the three children, being Daniel, Shirley and Liu Liu.[11] [11] Liu Liu was the deceased’s niece. Hongbin Liu (Hongbin) is the deceased’s brother. He lives in Qinhuangdao. He is the father of Liu Liu. He gave evidence that between 2012 and 2018 he and the respondent spoke to the deceased on a number of occasions. The deceased said he had three main purposes for obtaining Australian citizenship. They were to transfer money from China to Australia, to avoid criminal charges, public prosecutions and other commercial issues associated with his businesses in China, and so that the children could enjoy good primary and secondary educations and better air quality in Australia. He said the deceased claimed that by having a foreign passport, his children would be exempted from the highly competitive entry exams for Chinese universities. He said that on a number of occasions the deceased told him his plan was to return to China by 2020 at the latest and the rest of the family would gradually return to China as the two children finished their high school studies. He claimed that in August 2018 the deceased said to him that he had suffered from depression and anxiety in 2016 due to loneliness and boredom in Australia and problems with his business. He said the deceased told him he had lost consciousness a few times for unknown reasons, once in Sydney and once at St Peters. This made him bring forward his plans to return to China. This would be convenient because the local government in Qinhuangdao was going to change the zoning of the land owned by City Power to commercial use. He claimed the deceased told him that in 2019 his life and business focus would return to China and that he was preparing to undertake a property development project using the City Power land. The deceased further said to Hongbin that the respondent is elderly and Hongbin has sacrificed too much caring for her while he has been managing the accumulated fortune of the Liu family. The deceased said he was using the family money to purchase a property for Liu Liu in Australia. He said the deceased told him that it was only Hongbin who had looked after their mother and it was time for the deceased to fulfil his duty as a son. The deceased said he would be spending more time with the respondent, and that the purpose of the children’s education in Australia was basically achieved. As the children had been receiving tutoring in Chinese, whenever they returned to China there would be no problem with them studying at a Chinese university.

Decision

Reasons for decision

For these reasons I would grant the injunction sought.Conclusion I make a determination without administration pursuant to r 206 of the Supreme Court Civil Rules 2006 (SA) that the deceased, Hongtao Liu, who died intestate on 9 November 2018, and whose estate was subject to a grant of letters of administration by this Court on 8 February 2019, was domiciled in South Australia at the date of his death. It follows that the distribution of the deceased’s moveable estate is to be determined in accordance with the law of South Australia. I would grant a permanent injunction that the respondent be restrained from taking any further steps to prosecute the proceedings designated as (2019) Ji 0391 Civil 2420 in the People’s Court of Qinhuangdao Economic and Technical Development Zone, Hebei, PRC, being the proceedings designated as (209) Ji 0302 Civil 5262 that were formerly in the Qinhuangdao Haigang District People’s Court, Hebei, PRC (PRC 1). I direct that the applicant bring in to Court minutes of order reflecting these reasons. I will hear the parties as to costs.

Ratio Decidendi

Legal Principle Established

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