On 11 April 2001, the defendant (Yong Wei Gao (Mr Gao)) left his wife Wei Hong Guo (Wei Hong), at a bus stop on Pennant Hills Road, Carlingford. She was apparently intending to go to the airport and travel back to China. From that date, Wei Hong disappeared from the life of Mr Gao, her then infant daughter - the plaintiff Sijia Guo (Sijia) - and from the lives of her extended family and friends, never to be heard from again.
At the time her disappearance, Wei Hong owned a property as registered joint tenant with Mr Gao in Carlingford (the Carlingford Property).
On 10 September 2012, a State Coroner found:
"… Wei Hong Guo, who has been missing since April 11, 2001 from Carlingford cannot be found to be dead or alive from the evidence before me."
On 24 August 2021, by determining a separate question in these proceedings, Hallen J made this declaration (Guo v Gao [2021] NSWSC 1059 at [138(2)]):
"… the Court is satisfied that Wei Hong Guo, on presumption of death, is no longer alive."
Wei Hong left no will that has been able to be found. By her summons, Sijia sought orders including a declaration that Mr Gao holds the Carlingford Property on resulting trust for Wei Hong's estate (the Estate) and an order for provision out of the Estate (including notional estate) under the Succession Act 2006 (NSW) (the Act).
By his cross-claim, Mr Gao had sought to advance a case that the Carlingford Property was held on resulting trust for him and, in the further alternative, made a claim for provision under the Act. Both causes of action were abandoned by him.
Consequently, the only remaining issues were whether any part of the Carlingford Property was subject to a resulting trust in favour of the Estate and Sijia's claim for provision under the Act.
The Court has determined that no resulting trust arises because there was insufficient evidence to satisfy the Court on the balance of probabilities that Wei Hong and Mr Gao intended to hold their respective interests in the Carlingford Property other than as joint tenants. The fact that she had paid a significant portion of the purchase price could not, without more, cause equity to recognise a position different from that evidenced by the registration of the Carlingford Property as being held on a joint tenancy. What (little) additional evidence there was also tended to support a joint tenancy in the context of a happy matrimonial relationship.
As to Sijia's claim for family provision, the Court has determined that Sijia is entitled to A$500,000 which will provide her with sufficient funds to assist her in future living and education expenses and to provide a buffer for contingencies.
No disrespect is intended by the use of given names in these reasons. Unless otherwise stated, all monetary references are to Australian dollars.
Mr T Morahan of Counsel appeared for Sijia. Mr K Morrissey of Counsel appeared for Mr Gao.
[2]
Course of the hearing
At the conclusion of the five day hearing in October 2022, the Court was assured by both parties that certain facts would be agreed in the days after the hearing. These were the amount of CGT that would be payable on any sale of the Carlingford Property and the net rent which Mr Gao had received from the Carlingford Property. These were potentially important integers in enabling the Court to determine, among other things, the value of any notional estate.
Unfortunately, the parties' confidence was not borne out by events. When it became apparent that the parties were not going to agree on those matters, the Court granted leave to the parties to reopen, file further evidence (including updating the evidence as to costs) and fixed an additional day for hearing, being 10 March 2023. The additional hearing took place on that day, but Sijia's final updating affidavit as to costs was not received until 15 March 2023.
[3]
Dramatis personae
The events that precipitated these proceedings occurred more than two decades ago. There was very little documentary evidence available and the only witness with direct knowledge of the purchase of the Carlingford Property was Mr Gao.
Several of the witnesses gave evidence with the assistance of Mandarin interpreters. With the exception of Mr Gao, the credit of the other witnesses was not seriously in issue.
[4]
Sijia Guo
Sijia is the only child of Wei Hong and her former husband, Jin Hua Guo (Jin Hua). Because she was only six years old at the time of her mother's disappearance, and therefore unable to shed any light on the purchase of the Carlingford Property, Mr Morrissey's cross-examination of Sijia focused on her claim for a family provision order.
Sijia gave evidence remotely from China with the assistance of Mandarin interpreters who were present in the courtroom in Sydney, although she said that she often communicated "bilingually" between English and Chinese when preparing her affidavits.
Following her parents' divorce in 1999, Sijia lived with her maternal grandparents in China. She attested to the profound impact her mother's absence had on her life, particularly after discovering that her mother could not be located. Despite the physical separation between them when Wei Hong left China, it was evident from correspondence before the Court that Sijia's mother cared for her and sought their reunion (see [61] and [62] below).
[5]
Jin Hua Guo
Jin Hua is Sijia's father. He was married to Wei Hong from 1994 until their divorce in 1999. Like Sijia, he gave his evidence remotely from China with the assistance of Mandarin interpreters located in Sydney.
Jin Hua holds a bachelor's degree in geology and a master's degree in economics. In 2002, he founded a company that manufactures car accessories and parts. The company employs approximately 300 people and has an annual turnover of approximately US$50 million.
Much of the cross-examination of Jin Hua concerned his relationship with Wei Hong. Mr Morrissey placed particular emphasis on suspicions which Wei Hong had recorded in her diary that Jin Hua had been unfaithful during their marriage. Mr Morahan called for the originals of the diary pages to be produced, however nothing substantive turned on this because Jin Hua confirmed the handwriting on the documents belonged to Wei Hong and the authenticity of the documents was otherwise not in question.
At the time of his divorce from Wei Hong, Jin Hua had been experiencing a high degree of financial stress. One of the companies for which he was a shareholder was experiencing difficulties with cashflow and had to take loans from various individuals. One such loan for 2 million Yuan was provided by Wei Hong. Jin Hua could not recall if it was ever repaid, in part because he had left the company in 2001. That same year, Jin Hua was also convicted in relation to receiving "commercial kickbacks" and sentenced to a period of home detention. This occurred during the period Sijia resided with her maternal grandparents.
Jin Hua could not provide any direct evidence in respect of the Carlingford Property, but he was of the belief that Wei Hong had significant assets in Australia as a result of share trading. When asked during cross-examination, he stated that his understanding of his daughter's claim against Mr Gao was that it involved two issues: first, the disappearance of Wei Hong; second, the whereabouts of Wei Hong's assets.
[6]
Xian Guo
Xian Guo (Xian) is the brother of Wei Hong and the uncle of Sijia. He was not required for cross-examination and the Court accepts his evidence, such as it was.
Xian's evidence included conversations he had with Wei Hong and letters between Wei Hong and various relatives around the time the Carlingford Property was purchased. The letters had been written in Chinese; English translations were provided to the Court. That evidence suggested that Wei Hong may have participated in choosing the Carlingford Property and that she intended for Sijia to come to Australia to reside at the Carlingford Property with her and Mr Gao. Significantly, those letters also showed that there was a genuine and caring matrimonial relationship between Wei Hong and Mr Gao.
[7]
Zhi Li
Zhi Li is the solicitor for the Sijia in these proceedings. He was admitted to practice in about July 2020, having obtained his law degree from the University of New South Wales. These proceedings were his first estate matter as a junior solicitor (though not his first estate case overall).
The gravamen of Mr Li's cross-examination was simply to confirm how much, and on what basis, Sijia's lawyers had been paid in respect of the matter. The evidence of Mr Li corroborated Sijia's evidence that legal costs to the October 2022 hearing were approximately $413,000 paid on the indemnity basis.
[8]
Mr Gao
Mr Gao is 59 years of age. He has degrees in English and international marketing which he obtained at university in China. He has resided in Australia since 1992 and obtained Australian permanent residence in 1994. At the commencement of his evidence, Mr Gao was given the option to have the assistance of an interpreter but elected to give his evidence in English.
Mr Gao stated that he initially met Wei Hong in the early 1990s, at which time they formed a relationship. After he travelled to Australia, Wei Hong ended their relationship, informing Mr Gao that she intended to marry Jin Hua. Mr Gao did not hear from her again until they reconnected in about 1999, following the breakdown of her marriage to Jin Hua. Wei Hong travelled to Australia to be with Mr Gao and they were married in March 2000 in Sydney.
During the period of their separation, Mr Gao claimed to have left the balance of his life savings (an amount of approximately US$100,000) with Wei Hong. He claimed that she had invested these funds on his behalf. During cross-examination he conceded there was no evidence of the money, nor had he called for its return when Wei Hong married Jin Hua.
Mr Gao also stated that he had invested in several properties during the 1990s with another Chinese-Australian, Mr He Huang (Mr Huang). Mr Gao claimed to have used money from these investments to purchase the Carlingford Property. Enquiries had been made as to Mr Huang's whereabouts but, having now left Australia, he was unable to be located and did not give evidence.
The reliability of Mr Gao's evidence was seriously undermined by his differing accounts as to the amounts he had contributed to the purchase of the Carlingford Property. The version of events that Mr Gao initially advanced in his affidavit evidence was (emphasis added):
"56. I located, inspected and negotiated the price for the house known as … [the Carlingford Property]. I signed the Contract on 3 October 2000. Wei Hong did not sign the Contract. She had no knowledge of this transaction …
57. All funds necessary to complete the purchase and related purchase expenses were moneys I received from Mr Huang.
58. My wife was overseas at the time of the purchase of the Property and had no knowledge of it until her return to Australia.
59. I only added her name on the Contract as I thought it would assist her application for permanent residency in Australia.
60. I had never been involved in any legal issues in my life before my wife went missing. I never expected that we would be separate again after being married. This is why I was not concerned about putting the property in joint names. I did not think what would happen on any sale of the property at that time.
61. I have made enquiries of Mr Lee [the solicitor who assisted on the conveyance] to obtain the conveyancing file but these were unsuccessful.
62. On her return from overseas on 22 October 2000, I asked my wife to pay me half of the total purchase amount …
63. … We told the Immigration Department she had paid 50% but she never paid me …"
Mr Gao elaborated in his affidavit affirmed 7 October 2022 (emphasis added):
"32. I saw the Carlingford Property advertised on internet and in the local paper by Peter Shipley Realty of Carlingford. I inspected the property twice before making an offer.
33. My first offer was $460,000. I eventually negotiated a price of $470,000.
34. I located a solicitor, Mr Michael Lee (then of Hurstville). I saw his advertisement and rang him. Mr Lee had not acted for me before this.
35. I paid the deposit of $47,000 by a bank cheque drawn against my bank account and I delivered that bank cheque to the agent. I cannot recall the sum or from which bank account the sum was drawn.
36. I paid the stamp duty of about $16,000 to Michael Lee. I cannot recall the exact sum nor from which bank account the sum was drawn.
37. I did not have access to my wife's HSBC Hong Kong account. The funds were transferred by He Huang to my wife's account and at my request my wife made the transfer to a NAB account in Australia in the joint names of myself and my brother Yong Yi Gao. This account was opened in the 12 months he lived in Australia in about 1997-1998.
38. Using the funds in this NAB account I then arranged for the purchase of bank cheques as specified by Mr Lee for the balance of funds payable on settlement."
Although he stated that Wei Hong came to Australia with approximately $700,000, he claimed that she was not in a good financial position because she had loaned 2 million RMB to Jin Hua Guo which had not been repaid and also she had incurred losses on her investments.
Mr Gao accepted that, at an interview with police in 2001 in relation to Wei Hong's disappearance, he told police that Wei Hong had paid about 50% of the purchase price for the Carlingford Property. During cross-examination, it was put to him that this was the true version of events, contrary to his affidavit evidence that she had contributed nothing to the purchase price. Mr Gao conceded that the information he had given to police was truthful.
Despite Mr Gao's frank admission during cross-examination, the fact that he had adamantly maintained in these proceedings that he had paid 100% of the purchase price for the Carlingford Property from his investments with Mr Huang cast real doubt on his reliability as a witness. This assessment was confirmed by examination of such contemporaneous records as still existed (which had been produced as part of the police investigation and coronial inquiry into Wei Hong's disappearance) that demonstrated Wei Hong had contributed about 70% of the purchase price for the Carlingford Property (see [60] below).
For this reason, I do not accept him as a reliable witness. To the extent that I accept any of his evidence, it is limited to those critical matters where his evidence has been against his own interest, the alternative is inherently improbable, or where his evidence is corroborated by contemporaneous documents or independent witnesses. Quite apart from his concession in the witness box, I record for completeness that there was no documentary evidence such as bank records or anything else to support the suggestion that any funds provided by Wei Hong had come from Mr Huang.
[9]
Justice Hallen's decision
On 22 March 2021, the parties made a joint application seeking a declaration that Wei Hong was deceased, the issue to be determined as a separate and preliminary question to the primary dispute (the separate question).
The parties were ad idem in their submissions on the separate question, asserting that the declaration should be made as there was "no dispute between them" that it was appropriate to do so. Hallen J also noted:
"131 Both counsel submitted that [the Wei Hong] was, ultimately, setting up a home in Australia for herself, her parents, and her daughter, the Plaintiff. They pointed to the sums of money which [the Wei Hong] brought from China to Australia, her joint purchase of the Carlingford Property, her enrolment in an English course, and her stated intentions to bring her family to Australia.
…
134 Counsel for the Plaintiff pointed to the "utility of making such a declaration now because there is obviously - there is no real contradictor. There is no interested person who may come forward in the future to screen the information or make any submissions to the contrary at the moment, and there does not appear to be any interested person who would have an interest to have a contrary result so there is utility in making the declaration" …"
Hallen J made these findings by his judgment published on 24 August 2021 (see [4] above):
"136. In this case, having carefully considered the evidence and the submissions of counsel, I am satisfied, on the balance of probabilities, that:
1. WG has been missing for more than 7 years; indeed, she has been missing for over 20 years.
2. WG's disappearance was unexpected and unexplained.
3. The body of WG has not been discovered or identified.
4. WG has not been heard of since her disappearance in April 2001.
5. The persons who would have been likely to have heard from her, being most importantly, the Plaintiff, WG's siblings, her parents, Mr Gao, and to a lesser extent, WG's former husband, have not heard from her. Each appears to have had a close and loving relationship with WG. She had remained in regular contact with her parents and brother and with the Plaintiff. She was living with Mr Gao in 2001.
6. All due inquiries were made, particularly between 2002 and 2012. WG has not been known to be alive for a period of at least 7 years. Monitoring since then has not altered the position.
7. Even though there was no public finding that she has died, there are no established facts that provide a reason, financial or otherwise, for WG to have wished not to be heard of for the last 20 years.
8. There is no evidence to raise an issue that WG is alive and neither of the parties have any reason to believe that she was alive, at any time during the last 20 years, or that she is currently alive, which would rebut the presumption of death.
137. While the law has provides the period of seven years as a yardstick to displace the inference that the missing person remains alive, the period during which WG has been missing is substantially longer. The effect of the presumption is to give rise to a conclusion that, at the time of the proceedings, WG is no longer alive."
His Honour made the declaration, referred to at [4] above, that Wei Hong is deceased, that she died intestate, and that Sijia and Mr Gao were the only two persons who may be entitled to her estate or notional estate. As to costs, Hallen J ordered that "the costs of each of the parties of the determination of the separate question be paid out of the estate or notional estate of [Wei Hong]".
Hallen J also appointed the second defendant in these proceedings, Mr Mark Peoples, as the independent administrator of Wei Hong's estate. Mr Peoples made no appearance during these proceedings and was silent in respect of the dispute between the parties other than providing an estimate of his costs to finalise the Estate.
[10]
Uncontroversial or otherwise incontrovertible facts
There was disagreement as to the circumstances of how the Carlingford Property was purchased and, in particular, who paid what. Those matters that were either agreed, unchallenged or were supported by documentary evidence are set out below.
On 4 January 2000, records from NAB showed a transfer of $190,000 from Wei Hong's HSBC account in Hong Kong to a NAB account ending in XX38. The NAB account was a joint account held by Mr Gao and Mr Huang.
Two days later, on 6 January 2000, two transactions were recorded relating to the joint NAB account ending XX38. The first transaction was a cash deposit of $2,200 into the account (there being no evidence as to the source of that cash).
The second transaction was a cheque signed by Mr Gao for the payment of $195,700 out of the NAB account into an investment account held with HSBC by Mr Gao's brother, Yong Yi Gao (Yong Yi). No account statement was produced for the joint NAB account.
On 18 January 2000, Wei Hong's divorce from Jin Hua was finalised in China.
On 15 February 2000, records from NAB showed a transfer of US$59,888 ($95,331) from Wei Hong's HSBC account in Hong Kong to a NAB account in the name Yong Yi ending XX58. An account statement for Yong Yi's account ending XX58 showed $94,708 was received on 16 February 2000.
On 18 February 2000, Wei Hong wrote to her parents, daughter and sister in China:
"Dear father and mother, everything goes well for me here and I'm having a very cosy life. MR GAO is very considerate and takes great care of me … When the time is ripe, I hope you could also live here."
On 18 March 2002, Wei Hong and Mr Gao were married.
Also in March 2000, Jin Hua attested (and the Court accepts) that that he had this exchange with Wei Hong:
"Me: "How is your life in Australia?"
Wei Hong: "It is good. I managed to get most my money into Australia. I have planned to use some money to buy properties there, some for investments and some for living. In the meantime, I am continuing to do shares investment in Australia to earn some money. How are you and Jiajia?" [Jiajia refers to the plaintiff, Sijia.]
Me: "It is good to hear that. It looks like you have settled well, I am relieved. The investigations in my previous company have not finished. Jiajia is now living with your parents, I need some money to support me to go through this."
Wei Hong: "I know life must be heard for you. The money I took is already enough for me to build a life in Australia, why not you take the remaining money in the stock accounts that I left. There is about two million [Chinese currency CNY, approximately equivalent to AUD $333,333 at the exchange rate of 6]. I know two million might be little help to you, but it is better than nothing."
Me: "Thank you, it helps me a lot."
Wei Hong's brother, Xian, deposed in his affidavit (and the Court accepts) that on or around 6 June 2000, he had this exchange with her:
"Me: "How is your life in Australia?"
Wei Hong: "It is good. I am going to buy a house so that Jiajia could come and live with me as soon as possible."
Me: "That's good. Mr Gao Yong Wei will put money in to purchase the property too right?"
Wei Hong: "He is a Qiongguangdan! ("Qiongguangdan" means very poor in Chinese)."
Me: "Since you are married to him, you and Mr Gao Yong Wei take care of each other and live a good life."
Wei Hong: "Okay."
Me: "How is the investment going in Australia?"
Wei Hong: "Not good, I had a fight with another man called Huang He (In Chinese, the family name is placed before a person's given name). We invested money together in Olympic Trading Shares. The shares were continuously dropping, and He Huang withdrew his investment money of $150,000 immediately and just left me there. I suffered all the loss. I was very upset with him, and [Mr Gao] sided with him and blamed this on me."
Me: "What? Who is Huang He?"
Wei Hong: "Don't worry, brother. These things have passed. I will buy a big house and live together with Yong Wei, and I will take our parents and Jiajia to live together with us."
It is convenient to note at this point that neither of the conversations just set out suggests (nor is there any other evidence) that a particular property had been identified at the time of those conversations. In my respectful opinion, that means that each of these conversations is only of slight persuasive force in ascertaining Wei Hong's intentions as to her interest in the Carlingford Property.
On 3 October 2000, the contract for sale of the Carlingford Property was signed and recorded that Mr Gao and Wei Hong were purchasers as joint tenants. The price was $470,000 with the deposit being $47,000. There were no bank or other contemporaneous records to prove the source of the deposit. Mr Gao's signature appeared on the contract for sale but Wei Hong's signature did not. The contract specified completion was to occur 42 days after the contract date. This meant completion was to occur on 14 November 2000.
On 23 October 2000, financial records from NAB showed a transfer of HK$2,000,000 ($491,207) from Wei Hong's HSBC account in Hong Kong to Yong Yi's NAB account ending XX58. The bank statement for that NAB account in evidence records that $485,113.97 was received into that account on 24 October 2000.
Prior to the receipt of that deposit Yong Yi's NAB account ending XX58 had a balance of $464.70. The bank statement for the account shows that on the same day the deposit was received, $150,300 was transferred to an account about which there is no evidence as to the owner.
The next day, 25 October 2000, Mr Gao signed a withdrawal form for Yong Yi's NAB account ending XX58 for $335,006, specifying on the form that it was for a bank cheque in favour of "Michael Lee solicitor" for $335,000 and $6 for a "fee".
On 29 November 2000 (recalling settlement will have occurred a fortnight before - see [54] above), Wei Hong wrote to her brother, including (emphases added):
"…Because this time we are moving home and there are exams, we don't have time to buy some gifts for you… The house in the photo is the new home which I'm living in now …I really love this house. It's just there are too many French windows…It looks nice, while as Chinese, we would just feel that it's a bit less secure. However, most Australian houses are like it and because we have insurance, there should be nothing to be afraid of…GAO is studying a MBA course…I do prefer that he could go back to China and develop his career, but he likes his life in Australia better. We will make a decision about that later…I only have one small photo of my house. You may post it to parents after viewing it so they could also have a look at my new home."
On 11 December 2000, the transfer of the Carlingford Property was registered, recording the transferees as Mr Gao and Wei Hong as joint tenants. The transfer was signed on behalf of the transferees by Mr Lee.
By reason of the matters set out in [52] to [57] above, the Court finds that the purchase of the Carlingford Property settled on or about 14 November 2000, and that the $335,000 bank cheque which had been bought with funds provided by Wei Hong was applied to the purchase.
On 9 January 2001, Wei Hong again wrote to her parents in China:
"In respect of Jiajia's custody, it certainly should belong to me. As for how to change custody, I need to learn more about it … You may also help me to ask about how to change custody before I deal with it.
You are already of old age and it is a very toilsome job to take care of a child. It will be best for my kid to live with her parents. I have a great relationship with GAO after we got married. He is also a very kind and generous person without any temper. Therefore, he is also very supportive of my idea of taking Jiajia to Australia.
Jiajia is attending primary school this year. If she could come to Australia for study, it would be no cost for her to study. Moreover there is one of the best public primary schools of Sydney near where I live. It will only take 5 minutes to walk there and it's really convenient. The main reason why I chose to buy a property in this suburb is for the kid's education, because the primary and secondary schools of this suburb are the best in Sydney and the environment here is really lovely …
The new property I bought is a two-storey house. There are four bedrooms, two study rooms, three bathrooms, one rumpus room, one living room, one dining room, one kitchen, one laundry room and two garages. The front and backyard gardens are of generous size. There is a swimming pool. The total area is more than 800m². You won't get bored if you are here. The land is spacious. You may plant flowers or trees as you want. Jiajia will also like it here."
On 10 January 2001, Wei Hong wrote a Christmas card to Sijia in which she stated:
"Mommy has prepared a very big swimming pool for you. Just come here!"
On 8 February 2001, Wei Hong again wrote to her parents in China:
"The photos are taken in the house which I bought."
Another letter was sent from Wei Hong to her parents on 11 February 2001 which stated:
"GAO and I are having a very good life in Australia. It's just that you are not by our side and we cannot take care of you, which makes me feel sorry about that, so I really hope you could visit us in Australia and live with us for a while. In respect of travel costs, we can pay them for you and you don't need to worry about it."
On 15 March 2001, Wei Hong again wrote to her parents in China and described her relationship with Mr Gao in these terms:
"GAO is basically the one who cooks meals and he really treats me well. I usually do some cleaning and he will be responsible for cleaning the pool and garden."
On 11 April 2001, Wei Hong was last seen by Mr Gao when he says that he dropped her at a bus stop in Carlingford. She has not contacted any family or friends since that date.
Since Wei Hong's disappearance, Mr Gao has continued to pay all outgoings for the Carlingford Property, including council and water rates, renovation and repair costs. He has also leased the Carlingford Property throughout the intervening years.
Mr Gao lodged an application for possessory title of the Carlingford Property with public notice of the application published on 22 March 2017.
On 22 May 2017, Sijia lodged a caveat against the Carlingford Property preventing Mr Gao's application for possessory title.
These proceedings were commenced by summons filed on 1 October 2019.
The critical fact that emerges from the matters set out above is that there are records which prove that Wei Hong contributed at least $335,000 (about 70%) of the purchase price for the Carlingford Property, contrary to Mr Gao's evidence of 50%.
[11]
Legal principles and submissions
There was no real dispute about the applicable legal principles in relation to resulting trusts. The parties were in agreement that it was a factual exercise to determine how the parties intended their shares of the Carlingford Property would be held.
The High Court recently considered the relevant principles in Bosanac v Commissioner of Taxation (2022) 115 ATR 35; [2022] HCA 34 (Bosanac). In that case, a wife purchased a property at Dalkeith, WA in her own name. Concluding that no resulting trust arose, Kiefel CJ and Gleeson J stated:
"[32] The question of intention is entirely one of fact, and concerns the intention manifested by the person or persons who contributed funds towards the purchase of the property. In Martin v Martin, it was observed that for the most part it can be assumed that proof of intention will be made out by the circumstances. Reference was made to what had been said by Cussen J in Davies v The National Trustees Executors and Agency Co of Australasia Ltd:
"It is impossible to try to arrange into certain sets of categories certain facts, and say beforehand they will or will not become decisive or immaterial. The attention must be kept steadily fixed on the one fact in issue - What was at the time the intention of the purchaser or transferor? Anything which is relevant to that issue is admissible."
[33] Cussen J went on to say that evidence of that person's thinking at the time might be accepted, although it would be received "with caution". That circumstance does not arise for consideration in the present case. There is no direct evidence as to the intention of either Ms or Mr Bosanac. The question is what inference is to be drawn from the available facts and in particular the history of the parties' dealings with property.
…
[37] … It may be accepted that the Dalkeith property was to be the matrimonial home in which both spouses would reside and which they both would enjoy, but the Full Court did not suggest that that fact alone was sufficient for a conclusion as to intention.
…
[39] … There was no evidence of the use of joint loans to acquire property which was then jointly held. Indeed, apart from some shared bank accounts there does not appear to have been any substantial property in which Ms and Mr Bosanac had a joint interest.
[40] In some cases, an inference may be drawn that spouses intended to hold real property jointly and for the rule as to survivorship to apply. It will depend upon the evidence as to the parties' dealings. This is not such a case. There is nothing in the history of Ms and Mr Bosanac's dealings with property to suggest an intention that any substantial property was to be held jointly."
(Citations omitted)
Gageler J said in Bosanac:
"[64] The presumption of a resulting trust is a presumption of fact, functionally akin to a civil onus of proof. The presumption will yield to an actual intention to the contrary found on the balance of probabilities as an inference drawn from the totality of the evidence. The weight to be given to the fact of a contribution having been made to the purchase price in drawing an inference as to actual intention will vary according to the totality of the circumstances of the case.
…
[66] Whether any, and if so what, inference is then to be drawn about the actual intention of the contributor and the purchaser falls to be determined as an ordinary question of fact on the balance of probabilities. "It is the intention of the parties in such cases that must control and what that intention was may be proved by the same quantum or degree of evidence required to establish any other fact upon which a judicial tribunal is authorised to act." Just as the standard of proof of intention is the ordinary civil standard, there are no special rules about proving intention. No predetermined weight is to be given either to the fact of a contribution having been made or to the categorisation of the relationship between the parties. The significance of each of those circumstances falls to be assessed within the totality of the circumstances of the case.
[67] Where evidence relevant to intention is adduced, the presumption and the counter-presumption are therefore of practical significance only in rare cases where the totality of the evidence is incapable of supporting the drawing of an inference, one way or the other, on the balance of probabilities about what contributors and purchasers actually intended when they participated in the purchase transaction."
Gordon and Edelman JJ similarly considered that intention is to be inferred from the facts. Their Honours stated:
"[103] Whether it is classified as a presumption of fact or a presumption of law, and although described as "entrenched", given the now weak nature of the presumption of resulting trust, the objective facts determine its position and significance (if any)."
[12]
The parties' submissions
Sijia's submissions on the resulting trust claim may be summarised as:
1. Wei Hong had transferred a significant amount of funds to Australia, some of which had been applied to the purchase of the Carlingford Property, as evidenced by the financial records referred to at [55] to [57] above. These documents were tendered as business records on the final day of hearing after the close of evidence, however, their contents had been put to Mr Gao during cross-examination and he had accepted that Wei Hong had made significant transfers of money to Australia.
2. Although the Carlingford Property was registered as a joint tenancy, Mr Gao was the only person to have signed the contract for sale and it was his evidence that Wei Hong was unaware of the purchase at that time. Any decision relating to the registration was therefore made without her knowledge or participation and could not be considered evidence of her intention.
3. The contemporaneous letters and emails sent to relatives by Wei Hong around the time of the purchase indicated two things. First, that Wei Hong had plans to purchase property in Australia. Second, that she considered the Carlingford Property to be hers. The latter proposition was supported by her use of the first-person singular possessive when referring to the Carlingford Property. For example, referring to it as "my new home" or the property that "I bought" (see [58] and [63] above).
4. The case was unusual and there was limited evidence as a result. What statements of Wei Hong were available were not made in contemplation of title or ownership of the Carlingford Property. This justified the Court taking a less cautious approach than that suggested by Cussen J referred to in Bosanac (see [73] above). I set out in [87] below why, contrary to this submission, I consider those statements to be of little assistance to the Court's task.
In any event, I do not think the views of Cussen J are relevant to the case at bar because they are directed to a different point. The relevant sentence, not fully set out by Kiefel CJ and Gleeson J (unsurprisingly, given it was irrelevant to the case before them) is (emphasis added): "You may have the evidence of the purchaser or transferor himself, if he is alive, as to his mental condition in the past, and though in some circumstances such evidence should be received with caution, yet it may be accepted" (Davies v The National Trustees Executors and Agency Co of Australasia Ltd [1912] VLR 397 at 403).
In its context in the judgment it is clear that the "circumstances" his Honour had in mind were an absence of corroboration by contemporaneous conduct or other independent evidence of what the still living purchaser has given evidence was her or his state of mind at the time of the specific transaction. In this case, the need for caution is precisely because the statements were unrelated in their terms to the actual purchase of the Carlingford Property and Wei Hong is not available to be tested in relation to them.
Mr Gao had initially pressed his own claim of resulting trust on the premise that he had paid the entirety of the purchase price. Following Mr Gao's concession in cross-examination that Wei Hong had paid half, that claim was abandoned and Mr Morrisey's closing submissions focused on the resulting trust claim advanced by Sijia.
Mr Gao's submissions on the resulting trust claim may be summarised as:
1. Mr Gao was the only person with direct knowledge of the purchase of the Carlingford Property. His evidence should be preferred on the basis that, while he had contradicted his affidavit evidence, he gave open and honest responses in the witness box, including where these responses were against his interest. Furthermore, he had shown a "generosity of spirit" towards Sijia by abandoning his family provision claim.
2. Sijia had not discharged the onus of rebutting the joint tenancy. While there was evidence of Wei Hong having transferred funds to Australia, this did not amount to a conclusion that she had actually paid the entire purchase price. Irrespective, the register was the most important factor.
3. A solicitor, Michael Lee, had been engaged to act for the purchase of the Carlingford Property. Mr Morrissey placed particular reliance on these observations made by the High Court in Trustees of the Property of Cummins (a bankrupt) v Cummins (2006) 227 CLR 278; [2006] HCA 6 (Cummins):
"[72] … Solicitors acted for Mr and Mrs Cummins on the purchase in 1970. The conveyance was not uneventful. The contract was dated 14 April 1970 and was settled on 27 July 1970, but only after the issue by the solicitors for the vendor on 10 July of a notice to complete. It is unrealistic to suggest that the solicitor for the purchasers, Mr and Mrs Cummins, did not at any point advise his clients on the significance of taking title as joint tenants rather than as tenants in common."
Mr Morrissey submitted that it could be inferred that Mr Lee had advised Wei Hong as to a joint tenancy. However, this submission was untenable based on Mr Gao's own evidence (see [91] below).
1. The correspondence between Wei Hong and her relatives (see [49] to [52] above) showed that the relationship between Wei Hong and Mr Gao at the time of the purchase was a happy and positive one. Mr Morrissey drew specific attention to comments by Wei Hong which described their relationship as "great", that they had a "good life" together and described Mr Gao as "kind", "generous" and "treats me well". It followed that it was more likely than not that the Carlingford Property was intended to be held as a joint tenancy with the benefit of survivorship as is commonly (though not always) the case with spouses.
2. Reliance was also placed by Mr Morrissey on the equitable maxim that equity will not aid the indolent. Mr Gao had acted expeditiously by seeking to bring his application for possessory title whereas the delay in bringing the resulting trust claim by Sijia had caused him a significant evidentiary disadvantage.
[13]
Consideration
There was, from the outset, a clear hurdle for Sijia's case because she bore the onus of demonstrating that the intention of Wei Hong and Mr Guo was something other than the joint tenancy recorded in the register. The unusual nature of this case, with the considerable period of time since the purchase and the unavailability of Wei Hong to give evidence, has meant the evidence is sparse.
The critical primary facts that have been proven are:
1. Wei Hong and Mr Guo are the registered proprietors of the Carlingford Property as joint tenants.
2. They purchased the Carlingford Property to be their matrimonial home and with the intention of Sijia coming to live with them.
3. They had a warm and caring matrimonial relationship.
4. Wei Hong contributed $335,000 (about 70%) of the purchase price of the Carlingford Property.
It is also useful to set out potentially critical matters which have not been directly proven or about which the Court can make no finding by inference for otherwise proven facts:
1. There is no evidence about who paid the balance of the purchase price. Mr Gao has no corroboration for his evidence that he contributed to the purchase price. On the other hand, it cannot be shown that Wei Hong did so. Given the evidence that she had made losses in her Australian investments, the Court cannot even conclude that of her money that has been proven to have been transferred to Australia (about $776,000) there was enough left for to have paid that balance even if she had wanted to do so.
2. There is no evidence of Mr Gao having any subjective intention underlying the nomination of a joint tenancy. His affidavit evidence is set out in [32] and [33] above. Even if the Court was to accept it as against his interest, it would shed no light on the present problem because it is to the effect that he had not thought about it.
3. There is no direct evidence of Wei Hong's intention. The fact that she did not sign the contract for sale of the Carlingford Property is sufficient corroboration for the Court to accept, as it does, Mr Gao's evidence that Wei Hong was not in the country when the contract was signed. Nor is there any direct evidence of what may have been her intention at the time she advanced the funds that were used in the purchase or when the purchase completed.
4. Unlike in Bosanac, there is no past history of dealings in property upon which the Court can draw any inference.
I have already dealt with the two conversations upon which Mr Morahan relied (see [53] above). What then is the Court to make of Wei Hong's correspondence?
Mr Morahan relied on the correspondence, especially between Wei Hong and her parents, and in particular her use of the first-person singular in relation to buying a house, as evidence of her intention. The earliest letter after the purchase is that to her parents of 9 January 2001 (see [61] above). It may be accepted that statements made after the date of purchase may be relevant to that question. However, there are four reasons why, in this case, I regard her usage in that correspondence (and also that to her brother) as too slender a reed to be a dispositive consideration in overcoming the prima facie position disclosed by the register.
First, even if they were written in English by a person born and raised in what without disrespect might be called the dominant Anglo-Australian culture, I would regard them as equivocal. The context of the letters are her plans for her own child and the use of the first-person singular would be explicable in that context without saying anything one way or the other about the formal ownership of the Carlingford Property. In any event, it is unremarkable in the Australian vernacular for a married, joint tenant owner to speak about "my house" or to say "I live at" depending on the context. Furthermore, she was literally correct to say "I bought" in circumstances where she had in fact contributed some of her own money.
Her letter to her brother of 29 November 2000 (see [58] above) is a good example. It is a mix of "we" and "I". It would be odd to read a reference to "the new home which I am living in" to support an intention of an individual interest in the Carlingford Property when she is clearly living happily in the home with Mr Gao and planning a future together. The same could be said in respect of her reference to "my new home". In context, and taken at face value, such expressions are too equivocal to carry the forensic weight contended for by Mr Morahan.
Second, and of particular relevance to the letters to her parents, the letters are written in Chinese, in a Chinese cultural milieu of which the Court knows nothing, and plainly exhibiting a tone of respectful address to elders, being her parents. Given the different language and cultural context, I do not think it would be appropriate to engage in uninformed cross-cultural speculation about what significance, if any, can be attributed to her use of the first-person singular in relation to the Carlingford Property in this correspondence.
Third, in all of the correspondence, the marriage between Wei Hong and Mr Gao was referred to positively by her. There is no indication that she sought to separate from him or to divide their assets. Even where it is alleged in a conversation that Mr Gao was the financially poorer of the two, the evidence indicates that Wei Hong accepted that they should "take care of each other and live a good life" (see [52] above). Even if the language of the first-person singular was not equivocal in the way I have described, its significance as evidence of Wei Hong's intention is at least neutralised by the references to a happy marriage and her evident intention to live in the Carlingford Property with Mr Gao and her daughter (see [58] and following).
Fourth, Mr Gao's affidavit evidence was unreliable for the reasons already stated at [36] above. However, to some extent, the objective evidence did corroborate the version of events given by him during cross-examination. This was that Wei Hong had brought an amount of approximately $700,000 into Australia with her (the evidence establishes it was $776,000) and that she had paid "half" the purchase price, noting the transfers at [44], [48] and [55] above. As I have already recorded, the Court is satisfied that $335,000 of those transfers was applied to the purchase of the Carlingford Property, but that is not in and of itself determinative to overcome the registered interests. As I shall next explain, the fact of the Carlingford Property having been purchased in their capacity as a married couple does not just neutralise what might appear in her correspondence (as I have concluded in the preceding paragraph) but supports the objectively drawn inference of an intention of joint tenancy in accordance with the register on the part of Wei Hong and, to the extent it is relevant, Mr Gao.
In Cummins, the High Court said:
"[67] Calverley v Green concerned the beneficial ownership of an improved property acquired as joint tenants by a man and a woman who had lived together for about ten years as husband and wife. The decision of this Court was that the presumption that they held the registered title in trust for themselves in shares proportionate to their contributions was not rebutted by the circumstances of the case. Mason and Brennan JJ referred to the statement by Lord Upjohn in Pettitt v Pettitt that, where spouses contribute to the acquisition of a property then, in the absence of contrary evidence, it is to be taken that they intended to be joint beneficial owners. Their Honours said that Lord Upjohn's remarks reflected the notion that both spouses may contribute to the purchase of assets through their marriage "as they often do nowadays" and that they would wish those assets to be enjoyed together for their joint lives and by the survivor when they were separated by death. However, Mason and Brennan JJ considered such an inference to be appropriate only between parties to a lifetime relationship, being the exclusive union for life undertaken by both spouses to a valid marriage, though defeasible and oftentimes defeated.
[68] It is unnecessary for the purposes of the present case to express any concluded view as to the perception by Mason and Brennan JJ of the particular and exclusive significance to be attached to the status of marriage in this field of legal, particularly equitable, discourse. It is enough to note that, as Dixon CJ observed fifty years ago in Wirth v Wirth, in this field, as elsewhere, rigidity is not a characteristic of doctrines of equity. The reasoning of the Privy Council in Malayan Credit is an example of that lack of rigidity.
[69] In the present case, Sackville J referred in the second judgment to the operation of statute law to produce divergent outcomes in particular classes of case. In particular, his Honour referred to the regimes established by the Family Law Act 1975 (Cth), s 79, and, in New South Wales, by the Property (Relationships) Act 1984 (NSW). The New South Wales statute provides for the declaration of title or rights in respect of property held by either party to a "domestic relationship". That term is broadly defined in s 5 as extending beyond the already broad definition of de facto relationship in s 4. The extent to which these statutory innovations may bear upon further development of the principles of equity is a matter for another day.
[70] The present case concerns the traditional matrimonial relationship. Here, the following view expressed in the present edition of Professor Scott's work respecting beneficial ownership of the matrimonial home should be accepted:
"It is often a purely accidental circumstance whether money of the husband or of the wife is actually used to pay the purchase price to the vendor, where both are contributing by money or labor to the various expenses of the household. It is often a matter of chance whether the family expenses are incurred and discharged or services are rendered in the maintenance of the home before or after the purchase."
To that may be added the statement in the same work:
"Where a husband and wife purchase a matrimonial home, each contributing to the purchase price and title is taken in the name of one of them, it may be inferred that it was intended that each of the spouses should have a one-half interest in the property, regardless of the amounts contributed by them."
(Footnote omitted.)
[71] That reasoning applies with added force in the present case where the title was taken in the joint names of the spouses. There is no occasion for equity to fasten upon the registered interest held by the joint tenants a trust obligation representing differently proportionate interests as tenants in common. The subsistence of the matrimonial relationship, as Mason and Brennan JJ emphasised in Calverley v Green, supports the choice of joint tenancy with the prospect of survivorship. That answers one of the two concerns of equity, indicated by Deane J in Corin v Patton, which founds a presumed intention in favour of tenancy in common. The range of financial considerations and accidental circumstances in the matrimonial relationship referred to by Professor Scott answers the second concern of equity, namely the disproportion between quantum of beneficial ownership and contribution to the acquisition of the matrimonial home."
(Footnotes omitted.)
Drawing on the High Court's observations in Cummins, Mr Morrissey submitted that the Court could take judicial notice that where purchasers of a property had been legally represented and had elected to purchase the property as joint tenants, it is likely that the solicitor would have explained the difference to the purchasers between a joint tenancy and tenancy in common. Without necessarily accepting that submission as a universally applicable proposition, given the fact sensitive nature of the inquiry, there will be many cases where such a submission would have force. This is not such a case.
Mr Gao's own evidence makes the submission inapplicable because he said Wei Hong knew nothing of the purchase until shortly before it was due to complete and was certainly absent when the contract for sale was signed. There is no reliable basis on which the Court could even begin to find that Wei Hong may have attended on the solicitor, Mr Lee, and what little evidence there is does not support the possibility.
It is evident that Wei Hong was the source of $335,000 that was applied to the purchase price for the Carlingford Property. Although Mr Gao claimed to have been the source of the remaining funds, there is no evidence to establish the source of those monies. This lacuna is a problem for both parties. Mr Gao has been unable to satisfy the Court that he was the source of the balance of the purchase price. Sijia has been unable to demonstrate that her mother contributed the entire purchase price.
However, even if Wei Hong had paid the entire purchase price, I am unable to conclude that she and Mr Gao intended to hold the Carlingford Property other than as joint tenants with the benefit of survivorship as indicated by the register. This is because, as the High Court discussed in Cummins, the purchase was made in the context of a matrimonial relationship. While the evidence in a particular case may prove otherwise, in the absence of the Court being actually persuaded to the contrary in my respectful view paragraph [71] of Cummins as set out in [89] above applies to the case at bar. The fact that Wei Hong and Mr Gao were relatively newly married does not derogate from the point: the Carlingford Property was the home in which they intended to make their married lives together and, Wei Hong hoped, raise Sijia.
Sijia has not discharged the onus of actually persuading the Court on the balance of probabilities that the intention of Wei Hong and Mr Gao at the time the Carlingford Property was purchased was anything other than as registered joint tenants with the benefit of survivorship. The fact of Wei Hong's contribution, while an important piece of evidence, is not decisive on this point. What other evidence remained was insufficient for the reasons already stated at [82] to [87] above. To the extent that evidence demonstrates anything, it is more consistent with an intention to hold the Carlingford Property as joint tenants because it discloses a happy relationship in which Wei Hong intended to build a life together with Sijia and Mr Gao in Australia.
Although nothing turns on it because I have already determined that no resulting trust arises, I will refer briefly to Mr Morrissey's submission at [78(5)] above that equity will not aid the indolent. Many years had passed between the disappearance of Wei Hong and the commencement of these proceedings. Delay will inevitably burden the parties to litigation as memories fade and evidence is lost. Where there is no reasonable explanation for such delay, the Court should give serious consideration before allowing any such claim.
Sijia was a young child when Wei Hong was last seen. Her evidence was that she was too young to be made aware of the full circumstances of her mother's absence at that time and certainly too young to bring any cause of action for many years. She has resided in China for most of this time and, at least to some extent, delay was unavoidable while a police investigation and coronial inquiry were undertaken, added to which was the need for the separate question to be determined regarding whether Wei Hong was dead. In those circumstances, it is not unjust to allow such a claim to be brought now, though it has created evidentiary difficulties on both sides.
[14]
The Estate
Given the Court's conclusion that no resulting trust over the Carlingford Property arises in favour of the Estate, the parties accepted that if that was the outcome there can only be notional estate from the Carlingford Property calculated by reference to Sijia's half interest in it. No statutory hurdle to a notional estate order was raised by Mr Morrissey except in very general terms (see [139] below), such that the Court concludes that it was uncontroversial between the parties that an order may be made pursuant to s 78(1) of the Act. Were it necessary for me to decide, I would have reached the same conclusion in any event that this was an appropriate case to make a notional estate order. The parties' submissions were focussed on issues of quantum.
Wei Hong's joint share in the Carlingford Property passed to Mr Gao by survivorship upon Wei Hong's death. There was no dispute that there were otherwise no assets in the Estate and that the only property that could be designated as notional estate comprised half the value of the Carlingford Property in addition to half of any net rent received by Mr Gao in relation to it. The value of the Carlingford Property was agreed to be $1,700,000, being the midpoint of a market appraisal dated 4 October 2022 of between $1,650,000 and $1,750,000.
I have referred in [12] above to the two matters upon which the parties were unable to agree after the October 2022 hearing. As to CGT payable on the sale of the Carlingford Property, by the time of the hearing on 10 March 2023, the parties were agreed that assuming the value of $1,700,000 and that Wei Hong had, as the Court has found, only a 50% interest in the Carlingford Property, her estate would be liable to pay $41,564 dollars in CGT.
In relation to rent, the parties were agreed to the extent of net rental receipts of approximately $420,000 from 2004 until October 2022. However, there was a dispute about an additional $100,000 in expenses claimed by Mr Gao. I resolve this by accepting a calculation sworn to by Mr Gao upon which he was not cross-examined and made (save as to just under $10,000) by reference to the deductions he had claimed in his tax returns for the relevant years. This was, and the Court finds, a figure of $329,309.02 which I will round for the purposes of calculation to $330,000, of which 50% would be available for notional estate ($165,000).
On these figures, the available notional estate is $1,015,000 ($850,000 + $165,000). It was common ground that the Carlingford Property would have to be sold to meet any notional estate order. It was also therefore common ground that any amount to which Sijia might be entitled would be less any costs relating to the administration of the Estate and the costs of sale of the Carlingford Property. There was a debate about how the parties' legal costs in relation to the separate question should be treated, which I resolve in [109] to [115] below, with the result that those costs should also be deducted for the purposes of determining the amount that could be designated as notional estate to meet a family provision order in favour of Sijia.
The parties agreed that the Court could deduct these estimated figures:
1. $52,000 for the administration costs of Mr Peoples;
2. $45,400 for sale expenses; and
3. $41,564 for CGT.
To these I would add, for the reasons set out in [109] to [115] below, $161,000 being their combined costs on the ordinary basis of the separate question. Subtracting all these items from $1,015,000 gives an available notional estate of $715,036.
A real contest was foreshadowed about the costs of the present hearing. What costs orders should be made in respect of the present proceedings and whether an order designating property as notional estate to meet those costs will have to be the subject of argument after the parties have had an opportunity to consider these reasons. However, in considering Sijia's claim for provision, I take into account the completely adversarial character of the litigation since the decision of Hallen J and that, on the ordinary basis, the respective parties' costs are $188,672 (Sijia) and $179,000 (Mr Guo).
[15]
The parties' legal costs
The parties were not agreed on the legal costs to be subtracted from the notional estate. These were described by Mr Morahan as "unusually large" on both sides. This was partly due to the need for the parties to determine the separate question before Hallen J. The Court was provided with affidavits relating to the parties' legal costs, updated to include the costs of the final day of hearing on 10 March 2023.
By affidavits affirmed on 17 October 2022 and 15 March 2023, Mr Z Li, solicitor for the plaintiff, estimated Sijia's legal costs to be:
1. $131,218.70 on the ordinary basis relating to the separate question before Hallen J;
2. $251,562.57 on the indemnity basis for the remainder of the proceedings; and
3. $188,671.93 on the ordinary basis for the remainder of the proceedings.
By an affidavit affirmed on 24 February 2023, Mr G H Smith, solicitor for Mr Gao, estimated Mr Gao's legal costs to be:
1. $30,000 on the ordinary basis relating to the separate question before Hallen J;
2. $238,613 on the indemnity basis for the remainder of the proceedings; and
3. $179,000 on the ordinary basis for the remainder of the proceedings.
It was submitted for Sijia that the significantly higher costs she had incurred relating to the separate question before Hallen J were explicable on the basis that, despite the parties acting jointly, the bulk of the preparatory work was undertaken by her side of the record.
At the conclusion of the proceedings relating to the separate question, Hallen J made the following order as to costs:
"(14) Orders that the costs of each of the parties of the determination of the separate question be paid out of the estate or notional estate of Wei Hong Guo."
It was submitted by Mr Morahan that there was what he described as a "conundrum": the order as to costs did not permit Mr Gao to have his costs taken out of the notional estate to which Sijia was entitled. It would only be appropriate for Mr Gao to recover his costs of the separate question from notional estate declared for the purposes of his own family provision case (which is not pressed given the Court's decision on the resulting trust claim). He submitted Hallen J's order should be read as (emphasis in Mr Morahan's original): "orders that the costs of each of the parties of the determination of the separate questions be paid out of the estate (if any) or the notional estate (of the respective parties) of Weihong Guo".
Mr Morahan relied upon s 78(2) of the Act, which in context is:
"78 Notional estate order may be made only if family provision order or certain costs orders to be made
(1) The Court may make an order designating property as notional estate only-
(a) for the purposes of a family provision order to be made under Part 3.2, or
(b) 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 the deceased person.
(2) The Court must not make an order under subsection (1)(b) for the purposes of an order that the whole or part of an applicant's costs be paid from the notional estate of the deceased person unless the Court makes or has made a family provision order in favour of the applicant."
I do not accept Mr Morahan's submission for three reasons.
First, in my respectful opinion, the meaning of Hallen J's costs order is clear according to its terms. Both parties are to get their costs of the separate question out of the Estate or notional estate.
Second, I do not understand that order to be an order under s 78 of the Act designating notional estate for the purposes of costs. It cannot be such an order because at that stage no family provision order had been made in favour of anyone. It is an order in the general costs jurisdiction of the Court that anticipated the possibility that after the balance of the proceedings had been determined there would be something in the Estate or that a notional estate order would be made in relation to costs.
Third, because the Court has concluded below that a family provision order should be made in favour of Sijia, no conundrum of the kind posited Mr Morahan arises. The Court will make a family provision in her favour, so the limitation in s 78(2) is not engaged. The Court can and will designate some of half of the sale proceeds of the Carlingford Property and net rent received as notional estate for the purpose of satisfying Hallen J's costs order, being "part of the costs of proceedings in relation to the estate or notional estate of [Wei Hong]" pursuant to s 78(1)(b) of the Act. It is not, contrary to Mr Morahan's submission, the notional estate of one party or the other. It is notional estate of Wei Hong out of which costs can be ordered to be paid.
[16]
Legal principles
It was common ground between the parties that Sijia was an eligible person pursuant to s 59(1)(a) of the Act as Wei Hong's only child. Although she was a minor at the time her mother was last seen in 2001, the application is brought many years later and the principles in respect of adult children apply. For present purposes, those principles may be summarised as:
1. The community ordinarily expects a parent to provide for a child in their minority and to provide some assistance in their majority to give them a start in life. Community expectations do not generally require a parent to provide for their child throughout adulthood and into retirement, especially where there are other persons (such as a spouse) who have obligations to the applicant, except perhaps where a child falls on hard times and may require a buffer: Taylor v Farrugia [2009] NSWSC 801 at [57]-[58] (Brereton J as his Honour then was) (Taylor v Farrugia); Srekovic v Srekovic [2018] NSWSC 1597 at [144] (Hallen J) (Srekovic).
2. However, a moral duty to provide for an adult child may arise on the particular circumstances and each case must be assessed on the basis of its own merits and the evidence available to the Court: Grant v Roberts; Smith v Same; Roberts v Same; Curtis v Same [2019] NSWSC 843 at [166] (Ward CJ in Eq as her Honour then was) (Grant v Roberts); Bowditch v NSW Trustee and Guardian [2012] NSWSC 275 at [111] (Hallen AsJ).
3. Adequate provision for an adult child will generally not include the purchase of a home unencumbered, though there will be exceptions: Srekovic at [144]; Taylor v Farrugia at [57]; Salmon v Osmond (2015) 14 ASTLR 442; [2015] NSWCA 42 at [109] (Beazley P, McColl and Gleeson JJA agreeing). Adequate provision may be satisfied by the provision of money sufficient for a home deposit in a particular case: Taylor v Farrugia at [57].
4. Courts should not be inflexible when considering claims by adult children but should take into account relevant factors such as "the size of the estate, any competing claims, the applicant's conduct and the applicant's relationship with the deceased": Steinmetz v Shannon (2019) 99 NSWLR 687; [2019] NSWCA 114 at [37] (White JA) (Steinmetz v Shannon); see also Grant v Roberts at [168] (Ward CJ in Eq).
5. There is no requirement for an adult child to demonstrate any special need or claim: Taylor v Farrugia at [58] (Brereton J); Srekovic at [144] (Hallen J).
These principles are not rules of law but operate as a useful guide when applying the provisions of the SA: Steinmetz v Shannon at [106]-[108] (Brereton JA).
The Act sets out the applicable legal framework at s 59 and includes:
"59 When family provision order may be made
(1) The Court may, on application under Division 1, make a family provision order in relation to the estate of a deceased person, if the Court is satisfied that -
(a) the person in whose favour the order is to be made is an eligible person, and
…
(c) at the time when the Court is considering the application, adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made by the will of the deceased person, or by the operation of the intestacy rules in relation to the estate of the deceased person, or both.
(2) The Court may make such order for provision out of the estate of the deceased person as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made."
Matters to which the Court may have regard are enumerated in s 60(2) of the Act. Such matters include the nature of the relationship between the deceased and the applicant; the size of the deceased's estate; the financial resources and financial needs (including any future needs) of the applicant or any other beneficiary; the financial resources of any person with whom an applicant cohabits; the applicant's age; the conduct of any person before and after the deceased's death; and any other matter the Court considers relevant.
[17]
The financial and other circumstances of the parties
It is uncontroversial that there are only two possible claimants to the Estate, being Sijia and Mr Gao respectively. The circumstances of each are set out in what follows.
[18]
Sijia's circumstances
Sijia, who was born in March 1995, studied in the United States at Purdue University from 2015 to 2020, obtaining a double degree in psychology and marketing. Aside from a few internships, she did not work during this period. She had failed several classes due to managing a diagnosis for scoliosis, however no medical evidence was provided in respect of this.
Sijia owns no real estate or other assets of value.
She was previously engaged as an industry researcher in the agriculture and fisheries industry in Shanghai. Sijia now works as a share trader at her father's company earning approximately $2,083.33 per month. She has ambitions to pursue further post-graduate study and gain employment in the finance sector in Shanghai.
Sijia set out her estimated monthly expenses in an affidavit affirmed 6 October 2022:
Item Amount (AUD)
Rent (inclusive of water rates, electricity and gas) $791.67
Groceries/household and food $1,000
Telephone/Internet $200
Household supplies $100
Clothing and shoes of proper brand $600
Medical, dental and optical $400
Chemist/pharmaceutical $100
Entertainment/hobbies $600
Pet $200
Total $3,991.67
[19]
The figures were set out on the basis that Sijia was paying all of her own expenses, however it emerged during cross-examination that she resides with her partner in a property held in his name. The couple deposit funds into a joint account and have shared responsibility for rent and other expenses. There was no suggestion that she was suffering any hardship from what the mathematics suggests was an excess of expenses over income or how she was meeting any difference between the two.
Sijia has received a considerable degree of financial support from her father throughout her life. Her father paid her tuition and living expenses while she studied at Purdue at a total cost of approximately US$347,308. When she returned to China from the United States during vacations, she stayed with her father, stepmother and half-siblings free of charge. Her father had also paid her living expenses of approximately 20,000 RMB for ten months when she lived and worked in Shanghai, provided the equivalent of approximately A$37,500 while she was undertaking a semester of postgraduate study at the University of Sydney, and was paying a significant portion of the legal costs of these proceedings. In total, Sijia calculated that she had received the equivalent of more than $1,000,000 from her father. However, the money was considered an interest-free loan from her father's company and there was an expectation that Sijia would repay half of the amount when she was financially able.
Sijia attested that she wished to use any provision from the Estate to purchase two-bedroom accommodation in Shanghai, where she intended to gain employment, which she estimated would cost approximately $1,562,500. She also intended to purchase a car, estimating that she would need approximately $40-50,000 to purchase a Toyota Camry in China, plus an additional $18,750 for the cost of a number plate in Shanghai.
For her postgraduate study, Sijia sought provision in the amount of about $250,000 to $386,500 depending on whether she studied in Australia or the United States. That estimate would, in her view, cover her tuition in addition to any living expenses.
[20]
Mr Gao's circumstances
Mr Gao, who is currently 68 years old, has been unemployed since about 2009. He worked various jobs since his arrival in Australia, including casual employment in a factory making salads, a sandwich shop, and satellite equipment sales. Prior to coming to Australia, he had worked as a teacher and in an import/export company where he earned approximately US$30,000 per annum over three years before coming to Australia.
Mr Gao's main source of income now is rent from the Carlingford Property which provides approximately $730 per week. His taxable income for 2021 was $23,300. He estimated that his taxable income for 2022 would be approximately $25,037. Mr Gao's evidence was that this amount was only just sufficient to meet his financial needs. Because it is accepted that the Carlingford Property will have to be sold to meet any notional estate order, I take into account that he will lose this income, which will be replaced by the realisation of his half share valued at $850,000. However, against that amount I allow that he has what at least might be described as a non-current or future debt of $446,991 to his current partner, Shaorong (see [133] below).
Mr Gao resides rent-free in a property he owns as joint tenant with Shaorong in Woodvale, Western Australia. The couple do not live together because Shaorong resides with her parents in China. They communicate weekly over WeChat and otherwise maintain separate finances. Shaorong has paid all of the household bills in the last two years while Mr Gao contributes to the outgoings and power bills. Mr Gao described the relationship as "very strained". Mr Gao does not have any other assets of material value.
There was a lack of any financial information relating to Shaorong. During cross-examination, Mr Morahan and Mr Gao had this exchange:
"MORAHAN: … But you haven't given the Court the complete picture of your de facto partner's financial situation, have you?
MR GAO: No. Because I don't know all of them. I just know some of them.
MORAHAN: But you and your partner, [Shaorong], have made a conscious decision - well, for privacy reasons - not to give all her financial details and her information in these proceedings, haven't you?
MR GAO: Hm. Could you repeat again? Sorry.
MORAHAN: You and your defacto partner, [Shaorong] -
MR GAO: Yes.
MORAHAN: --have made a conscious decision between you, after discussion-
MR GAO: Yes.
MORAHAN: --that you don't want to present to this Court the full picture of [Shaorong's] financial situation.
MR GAO: She doesn't want.
MORAHAN: She doesn't want, and you've gone along with that?
MR GAO: Yeah."
An informal loan document between Mr Gao and Shaorong showed that he had never contributed to the mortgage of the property at Woodvale but was expected to repay half the principal amount to Shaorong. As at the date of the hearing, only $2,988 remained to be repaid on the mortgage over the Woodvale property. He estimated his debt to Shaorong to be $446,991.
In an affidavit affirmed by him on 7 October 2022, Mr Gao stated that his only monthly expenditure is $120 for food and purchases from the chemist. He struggled to afford food owing to the legal costs associated with the proceedings. He estimated that he had borrowed about $89,000 through his mother in order to pay his legal costs. He also attested to owing $245 in credit card debt. An ANZ bank statement dated 3 October 2022 showed an account balance of $305.42.
In terms of his future needs, Mr Gao anticipated that his medical needs would increase as he aged, but no objective evidence was tendered regarding any specific concerns. He attested to suffering from depression and insomnia, but again, no medical evidence was provided in support.
[21]
The parties' submissions
Sijia provided submissions addressing the family provision claims of both parties. It was submitted for Mr Gao that, if Sijia's resulting trust claim were to fail then Mr Gao would not press his family provision claim. Given that the Court has found the Estate has no interest in the Carlingford Property, it is necessary for the Court only to determine Sijia's claim for provision.
Sijia's submissions for a family provision order may be summarised as:
1. Adequate provision had not been made for Sijia because she had received nothing from the Estate.
2. The evidence demonstrated that, prior to Wei Hong's disappearance, she loved Sijia and wished to bring her to Australia. It could be inferred that Wei Hong would have wanted her daughter to share in her mother's estate. This would include, at the very least, money towards acquiring a residence and a buffer for contingencies.
3. Although Sijia had been assisted by her father, she was expected to repay this debt. It was also unlikely that she would receive further assistance from him in the future given that he had other children to provide for and his own medical issues.
4. It was not clear that her relationship with her partner was sufficiently serious to the extent that he would support her financially, especially as they did not mingle their finances in any strict sense.
5. Sijia was seeking a total sum of about $750,000 (which I note is more than the available notional estate - see [103] above) to cover what Mr Morahan described as "relatively modest" needs, including a housing deposit, car, postgraduate education and buffer, noting that Sijia's legal costs would be covered by the notional estate.
6. Mr Gao's competing entitlement was diminished because:
1. Adequate provision had already been made for Mr Gao by way of his share in the Carlingford Property;
2. The marriage between Mr Gao and Wei Hong was of relatively short duration, being little more than a year before Wei Hong's disappearance; and
3. Mr Gao had failed to provide full disclosure in respect of Shaorong's finances. Mr Morahan directed the Court to the exchange at [132] above as evidence that Mr Gao had made a conscious choice not to disclose. He also emphasised the decision of Hammerschlag J (as his Honour then was) in Stone v Stone [2019] NSWSC 233 in which an applicant for family provision failed to disclose the financial circumstances of a de facto partner.
Mr Gao's submissions in response to Sijia's claim for a family provision order may be summarised as:
1. Sijia had not been candid about her financial circumstances. In particular, she had failed to disclose that she lived with her partner or what his financial circumstances were.
2. Sijia had also conceded in cross-examination that, although she owed her father a significant debt, she was only liable to repay half. In any event, any award of provision would be fruitless as it would be used by Sijia to pay down her debt to her father and not for her own maintenance or advancement in life.
3. Irrespective of the length of the relationship between Mr Gao and Wei Hong, the evidence was that it was a happy union.
In his written submissions, Mr Morrissey briefly (in one sentence) submitted that Sijia's case did not overcome the hurdles posed by s 87 of the Act in respect of the designation of notional estate. Mr Morrissey did not elaborate as to how this was so and the submission was not referred to in oral argument. I do not consider it to have been pressed. As I have already said (see [97] above), had it been necessary to decide I would have been satisfied that all of the various statutory prerequisites (whether discretionary or not) to making a notional estate order had been satisfied, including after considering the matters referred to in s 87 of the Act.
There was no submission that adequate provision had been made for Sijia. In particular, it was not put that adequate provision in this case was no provision.
[22]
Consideration
Wei Hong was Sijia's mother and, at the time of her disappearance in 2001, it was clear that she felt a strong bond with, and affection for, her daughter. So much was agreed between the parties. Since her mother's disappearance, Sijia has received neither the emotional nor economic benefit of the relationship Wei Hong clearly wanted to have with her daughter. The Court is satisfied that the operation of the intestacy laws means that adequate provision has not been made for Sijia. All that remains is to determine what level of provision is appropriate. This is not a case in which adequate provision for Sijia would be satisfied by no provision at all.
I am not persuaded by Mr Morrissey's submission at [138(1)] above that Sijia failed adequately to disclose her financial circumstances. Her evidence during cross-examination was that she and her partner lived together in a property in his name and shared their household expenses. While this was contrary to her affidavit, I accept her explanation that, at the time she prepared her affidavit, she was uncertain about the relationship's future.
Nor am I persuaded by Mr Morahan's submission at [137(6)] above that Mr Gao failed to make adequate disclosure by not providing details of Shaorong's financial circumstances. Mr Gao's evidence was that Shaorong had declined to provide any financial information and there is nothing to indicate that she had changed her mind (as occurred in Stone v Stone at [123]-[124]). Shaorong resides in China, so it is by no means apparent that there was any way for Mr Gao to obtain such information without Shaorong's cooperation, noting it was also unchallenged that the couple had a fractious relationship.
As to Mr Gao's circumstances, these warrant some weight in considering Sijia's claim, given his age (68 years) and absence of prospects of employment. However, they only modestly derogate from what the Court considers to be the strength of Sijia's claim to her mother's testamentary bounty. The Court is satisfied that his circumstances as set out in [129] to [135] above are significantly, but not completely, outweighed by Sijia's moral claim on her mother's notional estate for a start in life, not least when it is recalled that the Court has found Wei Hong contributed at least about 70% of the purchase price of the Carlingford Property from which the notional estate (including rent from that property) will be drawn. Nor is there any basis in the evidence to conclude that Sijia can continue to rely on her father's generosity after the start in life he has given her by paying for her education, even on the terms identified in [126] above.
Bearing in mind the size of the notional estate ($715,036) and the parties' respective claims, the Court finds that adequate provision for Sijia is $500,000, representing a good start for a nearly 28 year old adult child who is still in the early days of their working life. That figure represents $60,000 for the purchase of a vehicle (including plate), $250,000 for further education, $150,000 for a home deposit (there being no particular basis proven as to why she would need a two bedroom apartment at this stage of her life), and $40,000 as a buffer for future contingencies, taking into account that she has a long working life ahead of her with every prospect of remunerative employment, and no medical or other reason to suggest that positive future will not be fulfilled.
The so-called debt from Sijia to her father has not been taken into account in these figures for three reasons.
First, the terms of the loan were speculative. Sijia's evidence was that there were some discussions between her and Mr Guo, but she has never received any formal statement or reconciliation about moneys owing.
Second, repayment of the loan is contingent upon Mr Guo calling for it. It was unclear when, if ever, this might occur.
Third, according to her own evidence, repayment for the loan is contingent on Sijia's financial circumstances. There were no set terms of the loan beyond the fact that she should repay half of it when she had the financial capacity to do so. It is unlikely that she will be in any position to do so in the near future. For these reasons, the Court cannot conclude in what amount and when, if ever, Sijia may be required to repay her father for his financial support.
Finally, any liability Sijia may have to her father for legal costs is at least partly subsumed by the orders of Hallen J that she will get her costs from the notional estate in relation to the separate question.
[23]
Conclusion
The parties are to bring in short minutes of order to give effect to these reasons, including as to costs (if they can be agreed between them). The designation of notional estate is to take into account each party's costs as ordered by Hallen J in relation to the proceedings before him.
[24]
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Decision last updated: 17 March 2023