- Unreported Judgment
 QSC 48
SUPREME COURT OF QUEENSLAND
In the matter of the Public Trustee of Queensland as Administrator of the estate of KH, deceased  QSC 48
THE PUBLIC TRUSTEE OF QUEENSLAND as Administrator of the estate of KH, deceased
BS No 753 of 2017
Supreme Court at Brisbane
5 April 2017
22 March 2017
Ann Lyons J
EQUITY – TRUSTS AND TRUSTEES – APPLICATIONS TO COURT FOR ADVICE AND AUTHORITY – where the deceased’s domicile at the time of death was Japan – where the deceased died Intestate – where the deceased left moveable property in Queensland – where the deceased was survived by a first cousin – where Japanese intestacy law does not recognise first cousins as next of kin – where Part 3 of the Succession Act 1981 (Qld) recognises first cousins as next of kin – where the Public Trustee of Queensland applies pursuant to s 134 of the Public Trustee Act 1978 (Qld) for advice and/or directions from the Court as to whether it should distribute the Queensland estate of the deceased to the persons entitled under Part 3 of the Succession Act 1981 (Qld) – whether the Queensland estate of the deceased should be distributed according to Queensland law
Succession Act 1981 (Qld), s 25, s 27
Public Trustee Act 1978 (Qld), s 134
Brown v New South Wales Trustee and Guardian  NSWCA 431
In re Barnett’s Trusts  1 Ch 847
G R Dickson for the applicant
Official Solicitor to the Public Trustee for the applicant
- At the hearing of this application on 22 March 2017 I made orders pursuant to s 134 of the Public Trustee Act 1978 (Qld) and indicated that I would publish my reasons at a later date. These are those reasons.
- KH died aged 63 years in Kochi City, Japan on 26 September 2010. He had been born in 1947. His only sibling, a sister, had been born in 1949 but she died the same year. His father died in 1991 and his mother in 1999. It would appear however that he had at least one maternal first cousin living in Japan at the time of his death.
- When he died he left an estate in Japan valued in excess of AUD $1.2 million dollars and moveable property in Queensland which is currently valued in excess of AUD $1.5 million dollars.
- KH died without leaving a will and as the Japanese Rules of Succession do not recognise first cousins he had no next of kin, as defined by the Rules, who were recognised by Japanese Law. Under Japanese Law the deceased’s estate in Japan was therefore deemed to belong to the Japanese Treasury.
- On 22 October 2010 Mr Nagatoshi Tsutsumi, a Japanese solicitor, was appointed by the Japanese Family Court to administer the deceased’s estate.
- On 14 February 2013 the Public Trustee of Queensland (PTQ) was appointed as Administrator of the deceased’s Queensland estate. Whilst first cousins are not recognised under Japanese intestacy laws as next of kin, first cousins are recognised as next of kin pursuant to Part 3 of the Succession Act 1981 (Qld).
- By application filed on 18 January 2017, the PTQ seeks advice and/or directions from the Court pursuant to s 134 of the Public Trustee Act 1978 (Qld) as to whether the PTQ should distribute the Queensland estate of the deceased to the persons entitled under the Succession Act 1981 (Qld).
- For the reasons that follow I am satisfied that the PTQ should be advised and directed that he can distribute the Queensland Estate of the deceased to the persons entitled pursuant to Part 3 of the Succession Act (Qld). The Japanese appointed Administrator therefore has no interest in the Queensland Estate as there are heirs to the Queensland Estate. There is therefore no unclaimed estate in Queensland which would pass to the Japanese Treasury bona vacantia.
- The deceased was born in Japan and between 1986 and 1995 he travelled regularly between Japan and Australia. He resided in Australia from 1997 to 1999 and returned to live in Japan in 1999 where he resided for eleven years before his death. He was never married and left no issue.
- At the date of the application the value of the deceased’s Queensland estate was $1,534,672.87. The estate is made up of three bank accounts.
- Mr Tsutsumi, the lawyer who has been appointed by the Japanese Family Court, engaged Hartnett Lawyers of Surfers Paradise to act on his behalf in Australia in relation to the Australian estate. On 27 June 2012, Hartnett Lawyers sent a letter to PTQ advising that they were acting on Mr Tsutsumi’s instructions to administer the deceased’s Queensland estate. Relevantly the letter provided that the deceased’s domicile of origin was considered to be Japan because the deceased was born in Japan and had only briefly resided in Australia before returning to Japan some 11 years before his death. As such, the letter stated that the deceased’s domicile at the time of his death was therefore Japan.
- Furthermore it was noted that as the estate in Queensland consisted entirely of the proceeds of bank accounts, under Japanese Law, they also belonged to the Japanese Treasury. Hartnett Lawyers also indicated that their understanding was that in Queensland when an intestate is not survived by issue, parent or next of kin, “the residuary estate shall be deemed to be bona vacantia and the Crown is entitled to it.” The also letter referred to the Articles of the Japanese Code.
- Translated copies of the Japanese Code were provided to the PTQ in a further letter dated 30 August 2012 as follows:
“Article 959 (Residual Assets Belong to the National Treasurer)
Inherited property that has not been disposed of pursuant to the provisions of the preceding Article shall belong to the National Treasury. In this case, the provisions of paragraph (2) of Article 956 shall apply mutatis mutandis.”
Article 956 (Extinguishment of Authority of Representation of Administrator of Inherited Property)
The authority of representation of an administrator of inherited property shall be extinguished from the time that an heir accepts inheritance.
In the case referred to in the preceding paragraph, the administrator of inherited property shall make an account of profit and loss to the heir without delay.”
What law governs the property in Queensland?
- The issue before the Court therefore is whether the deceased’s property in Queensland vests in the Japanese Treasury, pursuant to the Japanese Laws of Succession.
- The deceased clearly has property in Queensland and it is necessary therefore to consider the Queensland Succession Laws and other applicable law in circumstances where a person has died without a will but has left moveable property within the State.
- Section 35 of the Succession Act (Qld) is as follows:
“35 Distribution of residuary estate on intestacy
- Subject to subsection (2) and division 3, the person or persons entitled to take an interest in the residuary estate of an intestate, and the interest in that estate which that person is or those persons are entitled to take shall be ascertained by reference to schedule 2 according to the facts and circumstances existing in relation to the intestate.
(1A)For the purposes of this Act—
(a) the brothers and sisters of the intestate; and
(b) the grandparents of the intestate; and
(c) the brothers and sisters of a parent of the intestate; and
- the children of any brothers or sisters of an intestate who predecease the intestate; and
- the children of any brothers or sisters of a parent of an intestate who predecease the intestate;
are the next of kin of the intestate.
- Where a person entitled to take any part of the residuary estate of an intestate under this part does not survive the intestate for a period of 30 days that part of the residuary estate shall be treated as if that person had died before the intestate.”
- A full translation of the deceased’s family tree has been provided to the Court and is set out in the affidavit of Linda Blackburne sworn 27 February 2017 and I have sighted its contents. That document indicates that at the time of his death, the deceased was survived by at least one maternal first cousin - a Mr TT - who was a party to the Japanese Family Court proceedings. There could in fact be more than one first cousin as the full details of the deceased’s father’s family tree have not been provided.
- Accordingly if the deceased had been domiciled in Queensland at the time of his death then his Queensland assets would not have passed to the Crown bona vacantia as he had next of kin as defined by s 35(1A)(e) of the Succession Act (Qld), given that he had cousins being “the children of any brothers or sisters of a parent of an intestate who predecease the intestate”.
- Section 37 of the Succession Act is then in the following terms:
“37 Distribution of next of kin's entitlement
- Where, by virtue of this Act, the next of kin of an intestate are entitled to the residuary estate of the intestate, the persons entitled to that residuary estate shall be ascertained in accordance with the following paragraphs—
- the brothers and sisters of the intestate who survived the intestate, and the children of a brother or sister of the intestate who died before the intestate, being children who survived the intestate, are entitled to the residuary estate of the intestate;
(b) if the intestate is not survived by any persons entitled to the residuary estate under paragraph (a) but is survived by 1 or more of his or her grandparents—the grandparent is entitled to the residuary estate of the intestate, or the grandparents are entitled to the residuary estate in equal shares, as the case requires;
- if the intestate is not survived by any persons entitled to the residuary estate under paragraphs (a) and (b)—the uncles and aunts of the intestate who survived the intestate and the children of an uncle or aunt who died before the intestate, being children who survived the intestate, are entitled to the residuary estate of the intestate.
- The residuary estate of an intestate shall be divided amongst—
- the brothers and sisters of the intestate and the children of those brothers or sisters who died before the intestate, in the same manner as the residuary estate would have been divided amongst those persons, if the brothers and sisters had been children of the intestate and the children of a brother or sister who died before the intestate had been children of a child of the intestate who died before the intestate; or
- the uncles and aunts of the intestate and the children of those uncles or aunts who died before the intestate, in the same manner as the residuary estate would have been divided amongst those persons if the uncles and aunts had been children of the intestate and the children of an uncle or aunt who died before the intestate had been children of a child of the intestate who died before the intestate.
- However, the said residuary estate of the intestate shall not be divided amongst the issue of a brother or sister or of an uncle or aunt who died before the intestate more remote than the children of any such brother or sister, uncle or aunt.”
The Law in relation to Moveable Property
- Where the estate of a person comprises moveable property in different jurisdictions, complications arise because different succession laws can apply to the same property. This is explained by Professor Lee in his text on Succession Law in the following terms:
“The succession laws of one or more jurisdiction can apply to the estate of a deceased person. So far as the moveable property of a deceased person is concerned the succession law applicable is the law of the deceased person’s domicile, called the lex domicilii. So far as any immovable property of a deceased person is concerned the succession law applicable is the law of the place where the immovable property is situate, called the lex situs.”
- The domicile of the deceased is governed by s 6 of the Domicile Act 1981 (Qld) and pursuant to the provisions of that Act there is no doubt that, as the deceased was born in Japan and returned there to live for the last 11 years of his life, his domicile at the time of his death was clearly Japan.
- Accordingly if the deceased at the time of his death had immovable assets in Queensland such as land, then pursuant to s 37 there is no doubt that under Queensland succession law those assets would have been distributed to his first cousin or cousins as surviving next of kin, even if he was domiciled in Japan at the time of his death.
- The deceased however did not have immovable assets but rather had had moveable assets in Queensland in the form of cash in bank accounts. The law that applies in relation to moveable assets is significantly more legally complicated when a person is domiciled in another country at the time of their death because, as Professor Lee points out, different succession laws can apply to the same property.
- The issue here is clearly whether Japanese Succession Law applies to the Queensland Estate such that it belongs to the Japanese Treasury, or whether Queensland Succession Law applies such that it can be distributed to those persons who are defined as next of kin in Queensland. This would include first cousins.
The relevant Japanese Law
- As administrator of the deceased’s Queensland estate the PTQ sought advice from an experienced counsel who has an extensive background in dealing with complex legal issues involving wills and estates. That counsel provided an extensive Advice in relation to the intersection of Japanese and Queensland succession law and also appears for the PTQ on this application for directions.
- It is necessary to first consider the current Japanese Law which was summarised by Judge Aliko Noda, the Chief Judge of the Maebeshi Family Court which counsel has helpfully extracted in his written submissions. The relevant provisions are as follows:
This brief report must start with some comments on the Japanese Constitution, because it is necessary to point out the constitutional principle that guarantees the human dignity and the equality of both sexes which in turn is the basic ides of the Japanese law of inheritance.
In Japan after World War if, a new Constitution was estate established, and came into effect in May, 1947. The new Constitution has brought about revolutionary changes to all Japanese law by in new democratic ideas and human doctrines.
The field of family law has, among others, been influenced and reformed. The family law provisions in the Japanese civil code were completely revised in 1948, and then the newly-born family law was nick-named ‘new’ civil law as distinguished from the ‘old’ family law.
JAPANESE STATUTORY INHERITANCE
The Japanese law of inheritance prescribes the statutory inheritance (or intestate succession) and succession by will. In Japan intestate succession is still practiced more widely than that by will, though the latter is gradually becoming popular. Therefore, the order and portions of statutory heirs are quite important in practice in Japan.
First of all the spouse is always entitled to be a successor. If there exist other heirs, the order of succession of the spouse shall be in the same rank with them. If no other successors exist, the spouse becomes the only successor.
(a) Statutory heirs other than the spouse are prescribed as children, the nearest lineal ascendants, brothers and sisters, and they have the right of succession in that order. If children or brothers and sisters have already died before the opening of succession, their children (or the nearest lineal descendants) become successors by representation.
When no successors exist at all, the property goes to the National Treasury.”
- In the letter to the PTQ dated 27 June 2012, Hartnett Lawyers indicated that the relevant Japanese law is the Japanese Code Article 959 (Residual Asset Belonging to the National Treasurer), which states:
“Inherited property that has not been disposed of pursuant to the provisions of the preceding Article shall belong to the National Treasury. In this case, the provisions of paragraph (2) of Article 956 shall apply mutatis mutandis.”
- I have been provided with a copy of Counsel’s Advice in relation to the relevant law which applies to the moveable property in Queensland and have read its contents. The issue which Counsel for the applicant addressed in the Advice is whether the passing of assets to the Japanese Treasury may not be a right of “succession” but rather a “prerogative right to ownerless property.” In this regard Counsel relies on the proposition, as examined in Nygh and Davies’ text on Conflict of Laws in Australia, that where the Crown or State “either in Australia, or abroad, takes property by virtue of the prerogative right to ownerless property…such a claim is territorial only and extends to property within the territory of the claimant sovereign regardless of the domicile of the foreign owner.”
- In Queensland, the common law principle by which property is applied as “bona vacantia” (when a person dies Intestate without next of kin or having failed to dispose of all of their property by Will) was replaced by legislation. Part 2 of Schedule 2 to the Succession Act 1981 (Qld) is the current form of this legislation.
- The issue of whether the Crown takes property of a deceased person who dies Intestate without any next of kin as a “prerogative right” or by a “statutory right” was considered by the New South Wales Court of Appeal in Brown v New South Wales Trustee and Guardian. Although it was not necessary for the question to be determined by the Court because the right to disputed property was determined on other grounds, the judgment of Campbell JA (with Bergin CJ and Sackville AJA agreeing) includes the following comments on the distinction between a “prerogative right’ and a “statutory right”:
“Under the common law, the right of the Crown to receive personalty that was bona vacantia was an aspect of the Royal prerogative. It depended upon the property in question being ownerless: In the estate of Musurus, deceased  2 All ER 1666 at 1668; In re Usines de Melle and Firmin Boinot's Patent  HCA 32; (1954) 91 CLR 42 at 48-9 per Fullagar J; British General Insurance Co Ltd v AG  LJCCR 113 at 121 per Judge Wethered; Re Wells, Swinburne-Hanham v Howard  Ch 29 at 55 per Romer LJ.
In Dyke v Walford, the Right Hon T Pemberton Leigh, (later Lord Kingsdown), delivering the advice of the Privy Council spoke, at 495-496, 580 of: "the right of the Crown to 'bona vacantia;' to property which has no other owner". He said, at 496, 580 that that right "was vested in the Crown, as one of its 'jura regalia,'". He also said, at 498, 581:
‘... the right to goods belonging to persons dying intestate, without leaving husband, or widow, and without kindred, was vested in the King, in right of His Crown’.”
In re Barnett's Trusts  1 Ch 847 concerned a legacy given under the will of an Englishman to two life annuitants, and then to an Austrian resident. The Austrian predeceased the last of the life annuitants, and died intestate and with no spouse or relative to whom his estate might pass under Austrian law. The fund in question was located in England. The case was decided on the basis that the Austrian legatee was domiciled in Austria, and that succession to moveables in his estate should be governed by the law of his domicile. Under the Austrian laws governing disposition of moveables after death if there was no spouse or relative who took under the Austrian law, "the succession is confiscated as heirless property" by a State official (849). Kekewich J held that the fund passed to the English Crown as bona vacantia. He said, at 857, that the relevant Austrian governmental official:
"...does not represent the deceased at all, except that by our law he is put in his place to defend actions by creditors or by persons claiming the estate against him. But he does not in any other sense represent the deceased. He does not claim through the persona of the deceased. He claims what is termed the 'glans caduca,' not the acorn on the tree, but the acorn which has fallen on to the ground from the tree. There is no possibility of getting at this property through the deceased. It is because there is no one who can claim through the deceased that the Crown steps in and takes the property. The Crown takes it because it is, as it is described in the cases, bona vacantia. It is property which no one claims - property at large - there is no succession. The Crown does not claim it by succession at all, but because there is no succession."
In In the Estate of Maldonado; State of Spain v Treasury Solicitor  P 223, a Spanish subject domiciled and resident in Spain died intestate, leaving no next of kin. The deceased left personal property in England. The relevant Spanish legislation governing intestate succession said: "In default of persons having the right to inherit in accordance with the provisions of the foregoing sections the State shall inherit ..." (226). The Court of Appeal held that the Spanish law governing intestacy differed in a critical respect from the Austrian law that had been considered in Barnett, in that the Spanish State was a true successor of the deceased. For that reason, their Lordships held that the property did not pass to the English Crown as bona vacantia: 244-245. Evershed MR said, at 245:
‘If by the law of Spain it is possible to limit or define the individuals who can claim to be successors, namely, individuals having some connexion by blood or marriage with the deceased, I can see no reason why, in default of there being such an individual, the law of Spain should not nominate or constitute as heir any person or corporation, including the State itself. The idea of succession doubtless imports some notion of continuity, for example, continuity of title; but I see no reason why this conception should be inapplicable to the State which is constituted successor by its own laws.’”
- His Honour also made the following comments about the effect of statutory provisions for property to pass to the Crown on the prerogative right for the Crown:
“In re Mitchell deceased; Hatton v Jones  Ch 525 concerned a will under which a man left assets to his wife, and (in substance) if she predeceased him to whoever would have taken her estate if she had died intestate and without having married. The wife predeceased the testator. She was illegitimate, so her mother was not one of the next of kin under the statute. Wynn-Parry J held that the Crown took the property, not by virtue of a prerogative right, but because the 1925 English Act provided for the property passing to the Crown. He said, at 528-9:
"As Mr. Buckley pointed out in his argument, section 46 falls under Part IV, headed "Distribution of Residuary Estates," and is preceded by section 45 by which, inter alia, the right of the Crown to take by escheat is abolished. Then comes section 46, which from its form appears to me to be designed to set out in subsection (1) a complete and exhaustive code as to how the residuary estate of an intestate is to be distributed. There are six subparagraphs to subsection (1), and they proceed on the basis of dealing with the nearest relations in the first place, and, as they progress, with more and more remote relations. Then at the end subparagraph (vi) provides: 'In default of any person taking an absolute interest under the foregoing provisions, the residuary estate of the intestate shall belong to the Crown or to the Duchy of Lancaster or to the Duke of Cornwall for the time being, as the case may be, as bona vacantia, and in lieu of any right to escheat.' Those last words 'as bona vacantia' appear to me to be merely descriptive and fit in with the scheme of the subsection, which is only to bring the Crown in at the very end of what I have described as a complete and exhaustive code.
By section 57 it is expressly provided that the Crown is to be bound by this Act. Where, therefore, I find a subsection setting out a complete and exhaustive code, I think that the true view must be that the Crown takes directly under the statutory provision in section 46 (1) (vi), and not by any prerogative right under which, but for the statute to which the Crown submits, it would otherwise have taken."
Williams, Mortimer and Sunnucks op cit at 265, states:
"If an intestate dies without leaving a spouse, issue or the relatives set out above the Crown, the Duchy of Lancaster or the Duke of Cornwall, as the case may be, are entitled to his estate, by statute and not by the prerogative right."
The authors cite Re Mitchell for the last proposition.
A similar argument would be available in New South Wales, that the entitlement of the Crown under s 61B(7) P & A Act was by way of succession under the statutory right created by s 61B(7), not by way of the prerogative.”
- Counsel for the applicant indicated in his submissions that his Advice was that a similar conclusion would be reached if the right of the Crown under the Succession Act 1981 was considered by this Honourable Court, which is that the right of the Queensland Crown to receive an estate bona vacantia is a statutory right not a prerogative right.
Is Japanese Code Article 959 a “prerogative right” or a “statutory right”?
- It was necessary then for Counsel in his Advice to consider the question as to whether the right of the Japanese Treasury to receive the funds was a prerogative right or a statutory right. In this regard Counsel set out the relevant law. Article 959 is in Part IV Relatives of the Japanese Civil Code Act No. 89 of 1896, which prescribes the succession rights of relatives when a person dies without a Will.
- The definition of relatives in Article 725 is:
“The following persons shall be relatives
i a relative by blood within the sixth degree;
ii. a spouse; and
iii a relative by affinity within the third degree.”
- The rights of relatives are prescribed in Part IV in a similar way to Part 3 of the Succession Act 1981, although the class of relatives is more limited than the Queensland Act because cousins are not included as relatives.
- Counsel for the applicant indicated in his Advice that the rights of the Japanese National Treasury to receive an estate appear to be different to the rights of the Queensland Crown because, under Article 959, the Japanese National Treasury is entitled to inherited property that has not been disposed of because the heir has not claimed their entitlement or no heir has been located, rather than being the last level of persons entitled to receive the estate under Article 725.
- Accordingly Counsel advised that this appears to be an unclaimed property right rather than a provision that gives the final level of succession rights to the Japanese National Treasury. In this regard Counsel indicated that the effect of this provision is similar to the Austrian law considered in In re Barnett's Trusts referred to previously, where it was held that the English moveable property passed to the English Crown bona vacantia rather than under the Austrian law. The Austrian law in question was that “the succession is confiscated as heirless property" by a State official. Reliance is placed in particular on the statement by Kekewich J that the relevant Austrian governmental official:
“… does not represent the deceased at all, He does not claim through the persona of the deceased It is because there is no one who can claim through the deceased that the Crown steps in and takes the property The Crown takes it because it is, as it is described in the cases, bona vacantia. It is property which no one claims - property at large - there is no succession The Crown does not claim it by succession at all, but because there is no succession.” [Emphasis added]
- In his Advice Counsel argued that if the correct position is that the Japanese Article 959 is not a succession right of the Japanese National Treasury, then Mr Tsutsumi has no right to have the Queensland assets paid to him for remittance to the Japanese National Treasury.
Decision of the Kochi Family Court, Japan
- On 7 August 2014, the Kochi Family Court, Japan, considered a petition made by Mr Tsutsumi as the Administrator of the deceased’s Japanese estate and granted the Administrator permission to:
“…renounce the following deposits and savings claim, which constitute a part of the Decedent’s Estate, and to exclude the same from the Decedent’s Estate;-
1 Australia and New Zealand Banking Group Limited
(Account No. xxxx)
2 Westpac Bank (Account No xxxx)
3 Westpac Bank (Account No. xxxx)”.
- After a consideration of the extensive Advice of Counsel for the Applicant together with his submissions with respect to this application, the relevant Japanese Law, the decision of the Kochi Family Court Japan dated 7 August 2014 and the provisions of the Succession Act 1981 (Qld), I am satisfied that the Japanese Treasury does not have a claim to the Queensland Estate by succession and has no authority over the Queensland Estate.
- Accordingly I am satisfied that Mr Tsutsumi has no authority over the deceased’s Queensland Estate.
- I therefore consider that the effect of the decision of the Kochi Family Court, Japan, is that the deceased’s Queensland estate should be distributed to his next of kin under Part 3 of the Succession Act 1981 (Qld).
- The order of the Court is as per the Order which has been initialled by me and placed with the file. I also order that Counsel’s Advice, the Family Tree and the Statement of Assets as at 21 March 2017 be sealed in an envelope and marked not to be opened without an order of the Court.
- Pursuant to section 134 of the Public Trustee Act 1978 the Public Trustee of Queensland as Administrator of the Queensland estate of KH, is advised and directed to distribute the Queensland estate of the deceased to the persons entitled under Part 3 of the Succession Act 1981.
- The applicant’s costs of the application be assessed on the indemnity basis and be paid out of the estate.
- Counsel’s Advice, the Family Tree and the Statement of Assets as at 21 March 2017 to be sealed in an envelope and marked not to be opened without an order of the Court.
 Affidavit of Linda Fay Blackburne sworn 27.02.2017 (Court Document 3), Exhibit “LFB-4”.
 Ibid, Exhibit “LFB-5” pp 1-3.
 Ibid, at .
 Ibid, Exhibit “LFB-5”.
 5th Thomson Reuters 2013 at .
 Counsel’s Advice, page 5.
 7th Edition at p 680.
  NSWCA 431.
 Affidavit of Linda Fay Blackburne (Court Document 3), Exhibit “LFB-7” is a certified copy of the Administrative Correspondence issued by the Kochi Family Court on 11 August 2014 and an English translation of that Administrative Correspondence.
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