Public Trustee v Kehagias

Supreme Court of NSW|2009-04-17|Before: Dr J

CITATION : Public Trustee v Kehagias [2009] NSWSC 972

I find, upon inquiry, that Nikolaos Kehagias is entitled to succeed to the estate of the late Dimitrios Kehagias ("the Deceased") upon his intestacy. DECISION : 2. I order that the Plaintiff hold the estate of the Deceased for the said Nikolaos Kehagias. 3. I order that the costs of the Plaintiff on the indemnity basis and the costs of the Defendant on the party and party basis be paid out of the estate of the Deceased. 4. The exhibits may be returned.

CATCHWORDS : SUCCESSION - intestacy - next of kin inquiry - Deceased domiciled in New South Wales - effect of adoption of Deceased, as an adult, in Greece - whether under law of Greece adoptive parents were placed generally in relation to Deceased in the position of parents - whether intestate estate passes to son of Deceased's natural parents or to Crown as bona vacantia.

Probate and Administration Act 1898 LEGISLATION CITED : Adoption of Children Act 1965 Adoption Act 2000

Armitage v Attorney-General (Gillig cited); Gillig v Gillig [1906] P 135 Igra v Igra [1951] P 404 CASES CITED : MacAlpine v MacAlpine[1958] P 35 Re M and the Adoption of Children Act (1989) 13 FamLR 333 Labiche v Bouton (2 August 1993, unreported) Bouton v Labiche (1994) 33 NSWLR 225

TEXTS CITED : R W Leage, Roman Private Law (2 ed, 1930) P E Nygh and M Davies, Conflict of Laws in Australia (7 ed, 2002)

PARTIES : Public Trustee (Plaintiff) Nikolaos Kehagias (Defendant)

COUNSEL : Dr J. Kildea (Plaintiff) Mr B. Townsend (Defendant)

SOLICITORS : Anthony Lentini (Plaintifff) Pavlis & Co (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

5509 of 2008 PUBLIC TRUSTEE -v- NIKOLAOS KEHAGIAS JUDGMENT 1 HIS HONOUR: These proceedings were instituted by summons filed by the Public Trustee on 3 November 2008. By that summons the Plaintiff seeks substantively that an inquiry be held as to the identity of the persons entitled to succeed to the intestate estate of the late Dimitrios Kehagias (to whom I shall refer as "the Deceased"). 2 The Deceased was born in August 1932 at St Athanasio (Agios Athanasios) in the Prefecture of Drama, in Greece, to Christoforos Kehagias and Fotini Kehagias. 3 On 24 April 1963, when aged 30, the Deceased was adopted by his maternal aunt Martha Zounis (née Mertzimeki) and her husband Georgios Zounis, in accordance with article 1568 of the Greek Civil Code (that adoption being effected by a decree of adoption of the Court of First Instance in Thessaloniki in Greece). 4 The Deceased died intestate on 6 October 1998, while domiciled in New South Wales. Letters of administration of the intestate estate of the Deceased were granted to the Public Trustee on 3 July 2000. 5 The Deceased left no spouse (legal or de facto) and no issue. 6 The Deceased's adoptive parents both predeceased him, and they left no other issue apart from the Deceased (either of the whole blood, the half blood, or adopted). The Deceased's natural parents both predeceased him, leaving only one other issue, being their son Nikoloas Kehagias (who was born in February 1935 and who is the Defendant to the present proceedings). 7 Apart from the Defendant, whose entitlement falls to be determined in the present proceedings, there is no other person who would qualify as next of kin of the Deceased upon his intestacy. If not to the Defendant, then, pursuant to section 61B(7) of the Probate and Administration Act 1898, the estate will pass to the Crown as bona vacantia. 8 The only assets held by the Deceased at the time of his death were two bank accounts, having a total value of $75,805. From those assets various costs and expenses (the latter including the costs of extensive international searches for persons who may have an entitlement to the intestate estate of the Deceased, and the costs of translation of certificates) have been paid. At the time of the hearing the Plaintiff held in the estate account an amount of $52,590 (of which $32,123 comprised capital and $20,466 represented interest). From the foregoing amount there must be deducted an estimated tax liability of $3,620, the Plaintiff's tax fees of $880, as well as outstanding legal costs in the present proceedings (estimated at about $8,800). Accordingly, the value of the distributable estate will be in the order of $39,300. 9 The Plaintiff has caused to be effected extensive searches, especially in Greece, and has obtained various certificates (and, where such certificates were in the Greek language, the Plaintiff has also obtained translations thereof), which substantiate the foregoing facts. 10 Succession to moveable property on intestacy is determined by the law of the domicile of the intestate at the time of death (see P E Nygh and M Davies, Conflict of Laws in Australia, 7 ed, 2002, p 679-680). 11 Since the Deceased was domiciled in New South Wales at the time of his death, it is the law of New South Wales which is determinative of the succession to his intestate estate. (It is understood that the Deceased owned real property in Greece. However, the entitlement to that property will be determined in accordance with the law of Greece, and has no bearing upon the matter which is presently before the Court.) 12 I have had the benefit of receiving a written outline of submissions from Counsel for the respective parties and a chronology from Counsel for the Defendant. Those documents will be retained in the Court file. 13 The essential question which the Court must determine in this case is the effect of the adoption of the Deceased in 1963, when he was an adult aged 30, by his maternal aunt, Martha Zounis, and her husband Georgios Zounis. 14 If that adoption has an effect equivalent to the effect of an adoption under the law of New South Wales, then the Defendant cannot be treated as being the brother of the Deceased, and thus, under the rules for the distribution of assets upon intestacy having application at the time of the death of the Deceased, the Defendant is not entitled upon the Deceased's intestacy to the entirety of his assets in New South Wales. If, however, the adoption in Greece does not have an effect equivalent to that of an adoption under the law of New South Wales, the Defendant should be regarded as continuing to be the brother of the Deceased, and is entitled to the entirety of the intestate estate of the Deceased in New South Wales, pursuant to section 61B(6)(a) of the foregoing statute. 15 The relevant law in New South Wales relating to adoption which has application in the case of the Deceased is the Adoption of Children Act 1965. Although that statute was repealed and replaced by the Adoption Act 2000 (which came into operation on 1 February 2003), nevertheless, in respect to adoptions in, relevantly to the instant case, Greece, recognition of those adoptions is governed by the provisions of section 116 of the 2000 statute. However, subsection (6) of that section provides, Nothing in this section affects any right that was acquired by, or became vested in, a person before the commencement of this section. 16 Accordingly, the Court in considering the rights of the Deceased and of the Defendant, acquired by or having become vested in those persons in consequence of the adoption of the Deceased in 1963 (that being before the commencement of section 116 of the 2000 statute), should confine its consideration to the 1965 statute. 17 Section 35 of the Adoption of Children Act 1965 sets forth the general effect of adoption orders. Subsection (1) of that section provides, relevantly, For the purposes of the laws of New South Wales, but subject to this Act and to the provisions of any law of New South Wales that expressly distinguishes in any way between adopted children and children other than adopted children, upon the making of an adoption order: (a) the adopted child becomes a child of the adopter or adopters, and the adopter or adopters become the parent or parents of the child, as if the child had been born to the adopter or adopters in lawful wedlock,

(b) the adopted child ceases to be a child of any person who was a parent (whether natural or adoptive) of the child before the making of the adoption order, and any such person ceases to be a parent of the child,

(c) the relationship to one another of all persons (including the adopted child and an adoptive parent or former parent of the adopted child) shall be determined on the basis of the foregoing provisions of this subsection so far as they are relevant,

…. 18 Section 46 makes provision for foreign adoptions. Subsection (1) of that section provides, For the purposes of the laws of New South Wales, the adoption of a person (whether before or after the commencement of this Act) in a country outside the Commonwealth and the Territories of the Commonwealth, being an adoption to which this section applies, has, so long as it has not been rescinded under the law of that country, the same effect as if it were an order for adoption under this Act or the former Acts, as the case may be, made in New South Wales on the date on which it was effected and has no other effect. 19 Subsection (2) of section 46 provides, This section applies to an adoption in a country if:

(a) the adoption was effective according to the law of that country,

(b) at the time at which the legal steps that resulted in the adoption were commenced, the adopter, or each of the adopters: (i) had been resident in that country for 12 months or more, or (ii) was domiciled in that country,

(c) in consequence of the adoption, the adopter or adopters had, or would (if the adopted person had been a young child) have had, immediately following the adoption, according to the law of that country, a right superior to that of any natural parent of the adopted person in respect of the custody of the adopted person, and

(d) under the law of that country the adopter or adopters were, by virtue of the adoption, placed generally in relation to the adopted person in the position of a parent or parents. 20 In the instant case it has been submitted on behalf of the Plaintiff that the foregoing four criteria set forth in section 46 (2)(a), (b), (c) and (d) have all been met in the case of the adoption of the Deceased in Greece in 1963. 21 Thus, so it was submitted on behalf of the Plaintiff, that adoption in Greece has the same effect as if it were an order for adoption under the relevant New South Wales legislation (being, in the instant case, the Adoption of Children Act 1965), with the consequence that (pursuant to section 35 (1)(a),(b) and (c)) the Deceased became the child of his adoptive parents, he ceased to be a child of his natural parents, and his relationship with the Defendant shall be determined upon the basis of the foregoing provisions of section 35(1)(a), (b) and (c); that is, that the Deceased upon adoption ceased to be the brother of the Defendant, and that thereafter the only relationship between the Deceased and the Defendant was that of first cousins (since the adoptive mother of the Deceased was the sister of the mother of the Defendant). 22 The Defendant, on the other hand, disputed that the adoption in Greece in 1963 had the foregoing effect. That submission was grounded upon the provisions of section 46 (2) of the Adoption of Children Act. Of the four criteria set forth in that subsection, the Defendant admits (a) that the adoption was effective according to the law of Greece; does not dispute (b) that at the time when the legal steps that resulted in the adoption were commenced, the adoptive parents had (i) had been resident in Greece for more than 12 months, and also (ii) were domiciled in that country. 23 Whilst the Defendant did not entirely concede (c) that, in consequence of the adoption, the adoptive parents had, immediately following the adoption, according to the law of Greece, a right superior to that of any natural parent of the Deceased in respect to the custody of the Deceased, nevertheless, he effectively admitted the content of that paragraph. 24 It would appear that the reason for the Defendant not absolutely conceding that the foregoing criterion (c) has been met in the circumstances of the instant case is grounded upon the effect of Article 1584 of the Greek Civil Code, and that, so it was submitted on behalf of the Defendant, it is not known whether this was the situation at the time when the Deceased was adopted in 1963. 25 However, it was the case for the Defendant that the criterion set forth in paragraph (d) of section 46 (2) has not been met in the circumstances of the instant case. The Defendant disputed that under the law of Greece the adoptive parents were, by virtue of the adoption, "placed generally in relation to [the Deceased] in the position of a parent or parents". 26 Regarding the meaning and effect of the foregoing phrase ("placed generally in relation to the adopted person in the position of a parent or parents") Counsel have relied on a number of decided cases. 27 In Re M and the Adoption of Children Act (1989) 13 FamLR 333, Young J (as he then was) said, at 334, There is not, as far as I am aware, any authority as to what "placed generally in relation to the adopted person in the position of a parent" means. Obviously, the words do not mean that every incident of the parent-child relationship must be present; but in contrast to paragraph (c) of section 46(2), it must mean that the so-called adopter has a greater right with respect to the child than a mere right of custody. 28 His Honour then noted the development from Roman law ideas of the English law relating to adoption, and continued, Accordingly, it was basic to the notion of adoption in Roman law, which Australian law has inherited, that the ties with the original family were severed and were replaced by ties in the adopted family. The problems involved in the status of persons adopted under the law of a foreign country may be immense. Usually such problems surface under the law of inheritance [citation of authorities]. 29 His Honour concluded in the case then before him that, although the contrary could be argued, it seemed to him that because the adoption under the law of Thailand neither severed the former bond between parent and child nor gave to the adopted child a right of inheritance in respect to immovables in Thailand, then, in respect of the estate of either of the adoptive parents, it could not be said, for the purposes of section 46(2)(d), that the adopted child was "placed generally in the position of a child to" the adoptive parents. 30 I was also taken to the decision of Powell J (as he then was) in Labiche v Bouton (2 August 1993, unreported). In that case, which turned upon its own facts, His Honour quoted, apparently with approval, the foregoing passage from the judgment of Young J in Re M and the Adoption of Children Act. 31 An appeal from Powell J's decision was upheld by the Court of Appeal in Bouton v Labiche (1994) 33 NSWLR 225. Whilst ultimately it was the denial of natural justice involved in connection with the adoption (section 46(3)) that was determinative of that appeal, nevertheless some assistance may be derived from the consideration by Kirby P of the effect of section 46(2) (and, in particular, paragraph (d) thereof). His Honour said of the foregoing paragraph, at 238, It must be remembered that the paragraph is designed to apply to a large variety of adoption orders in a wide variety of countries whose laws will necessarily differ in some respects from the local Act. To that extent, a test expressed in general terms has been adopted. This has been done out of recognition of the inevitability of a large variety in the particular incidents of the adoption relationship as established by the law of other countries. That is why the adverb "placed generally " has been adopted by the drafter. It permits the court to make a judgment concerning the post-adoption relationship and the ordinary relationship of parents to children. The fact that there was a nuance under the law of Mauritius by which some claims on Mauritian property could remain as against a natural parent would not, to my mind, remove a Mauritian adoption from the operation of section 46(2). 32 Somewhat earlier in his judgment, Kirby P observed (at 234) that, in many ways, section 46 of the Act merely restated the principles of the common law. His Honour said that those principles include the following: 1. The courts of the common law will recognise as valid the orders of a competent foreign tribunal (formerly "a foreign Christian tribunal") determining the status of a person who, for the purposes of international law, is domiciled in the jurisdiction of the foreign tribunal: see Armitage v Attorney-General ( Gillig cited ); Gillig v Gillig [1906] P 135 at 141;

The interests of comity are not served if the courts of the common law are too eager to criticise the standards of the courts and tribunals of another jurisdiction or too reluctant to recognise their orders which are, and remain, valid by the law of the domicile: see Igra v Igra [1951] P 404 at 412; MacAlpine v MacAlpine [1958] P 35 at 45. 33 In the instant case it has been submitted on behalf of the Defendant that the proper approach in relation to paragraph (d) of section 46(2) is to consider the various effects of the foreign adoption and then to determine whether the cumulative effects of the adoption do indeed "generally" place the adopting parents in the position of "a parent or parents". That is, when considering the requirements of paragraph (d) the Court needs to come to a conclusion as to whether it is the adopters or the natural parents who are generally to be regarded as the parents of the adopted person. 34 In performing this exercise the Court should look to the actual situation, not to some hypothetical situation. The Defendant submitted that, apart from the authority of Re M, such an approach is common sense, especially in the light of the effect of an adoption order pursuant to section 35 (1), which results in what might be described as the complete severance of family ties and rights between the adopted child and the natural parents. 35 In considering this aspect of the matter, the Court must look to the effect of the relevant Greek law. That is a factual matter which must be determined by evidence given from appropriately qualified experts in that field. 36 In the instant case there was placed in evidence (part of Exhibit B) a document entitled "Pronouncement" dated 2 October 2003, by Dimitrios Anastasiadis, Attorney, of Drama in Greece. The certified translation of the document contains the following, According to the Provisions of the articles 1568 - 1587 of the Civil Code that are valid, the results of the adoption in connection to the adopted family and the family at law is as follows: Specifically according to the article 1579 of the Greek Civil Law from the adoption, the adopted child is a genuine child of the person who adopted him, but the person who adopted, and his relatives have no right over the adopted child. Furthermore, according to the article 1583 of the Greek Civil Code, since the adoption and later the relatives property rights remain unchanged for the family at law. Bearing in mind all the aforementioned evidence I decide that the adoption of Dimitrios Kehagias took place by verdict of the Court of First Instance of Thessaloniki, which is of course according the anticipated by the Greek legislation written procedure, which is included and cited in the decision with number 1929/1963. According to this evidence, and the adoption that took place the hereditary rights of the deceased's Dimitrios Kehagias brother at law Nikolaos Kehagias remain integral, invariable and powerful. 37 The foregoing relevant articles from the Greek Civil Code (translated into English) were admitted into evidence as Exhibit 1. 38 Whilst it is appreciated that the proper construction of those provisions of the Greek Civil Code is a factual matter which must depend upon admissible evidence from a properly qualified expert in that field, nevertheless I observe that Article 1583 is in the following terms, Consequences for the natural family: The rights and the obligations and the family relationship between the adopted child and his/her natural family remain unchanged insofar as the law does not provide differently. 39 Paragraph (c) of section 46(2) of the Adoption of Children Act does not appear to me to have any relevance or significance in the case of an adult adoption. It speaks of "a right superior to that of any natural parent in respect of the custody of the adopted person". I do not understand that upon their adoption of the Deceased his adoptive parents acquired any rights whatsoever in respect to the custody of the Deceased. It appears to me to be quite inappropriate, in the circumstances of the instant case, to consider the adoptive parents as acquiring, in consequence of the adoption, any right (be it or be it not superior to that of any natural parent of the Deceased) in respect of the custody of the Deceased. 40 It was submitted that the foregoing provisions of the Greek Civil Code, and the expert evidence in that regard of Dimitris Plagianakos and of Professor K. D. Kerameus, as well as the pronouncement of Dimitrios Anastasiadis support the following effect under Greek law, that the adoption of the Deceased as an adult: (a) gave him the right to use the surname of his aunt and uncle, as well as his existing surname; (b) gave him the rights of a child in terms of inheritance from his adoptive parents; (c) gave no right of inheritance to his aunt and uncle to inherit from the Deceased; (d) created no family relationship between the Deceased and relatives of his adoptive parents, and no right of inheritance in such relatives; (e) created no family relationship between the adoptive parents and the relatives of the Deceased, and no right of inheritance between those two classes of persons. 41 It was submitted on behalf of the Defendant that, in a very limited sense, this adult adoption gave the Deceased two sets of parents. He still had his own natural parents. All his familial relationships, his obligations towards his natural parents and the rights of inheritance between the Deceased and his natural family were expressly preserved. 42 In these circumstances, it was submitted on behalf of the Defendant that the adoptive parents were not, by virtue of the adoption, placed generally in relation to the Deceased in the position of parents, but that the Deceased's natural parents remained in the position of his parents and were not supplanted by his adoptive parents. 43 In the circumstances of the instant case, I am not satisfied that there has been that severance of the ties with the original family and their replacement by ties in the adoptive family which is basic to the concept of adoption in Australian law. In Re M (at 334) Young J cites R W Leage, Roman Private Law, 2 ed, 1930, where the learned author, in speaking of adoption at Roman law, said, at p 83, It therefore involved two acts: the extinction of the agnatic tie in relation to the original family and the creation of an agnatic tie in relation to the acquired family… Agnates are those persons who are regarded as related to each other, either because they are in the common potestas of some ancestor, or because they would have been in such potestas were the ancestors still alive (p 78). 44 Where, as in the instant case, in consequence of the adoption of the Deceased, the rights and obligations of the family relationship between the Deceased and his natural family remained unchanged (Article 1583 of the Greek Civil Code) and where the adoptive parents have no right of inheritance in relation to the Deceased and there are no inheritance rights between the relatives of the adoptive parents and the Deceased, it does not seem to me that under the law of Greece the adoptive parents were, by virtue of the adoption, "placed generally in relation to [the Deceased] in the position of a parent or parents". 45 Since I am not satisfied that the criterion set forth in paragraph (d) of section 46(2) of the Adoption of Children Act 1965 has been complied with (and since I do not consider that the criterion contained in paragraph (c) of that subsection has relevance to the adoption of an adult, as the Deceased was at the time of his adoption), it follows that I am not satisfied that the adoption of the Deceased in Greece in 1963 was an adoption to which section 46 of the Adoption of Children Act applies. It follows, therefore, that that adoption does not have "the same effect as if it were an order for adoption" under the Adoption of Children Act. In consequence, therefore, the Defendant retains the relationship of brother to the Deceased. 46 There being no other persons who are entitled to take the intestate estate of the Deceased in precedence to the Defendant, the entirety of the intestate estate of the Deceased is held in statutory trust for the Defendant, pursuant to section 61B(6)(a) of the Probate and Administration Act 1898. 47 Accordingly, I make the following orders: 1. I find, upon inquiry, that Nikolaos Kehagias is entitled to succeed to the estate of the late Dimitrios Kehagias ("the Deceased") upon his intestacy. 2. I order that the Plaintiff hold the estate of the Deceased for the said Nikolaos Kehagias. 3. I order that the costs of the Plaintiff on the indemnity basis and the costs of the Defendant on the party and party basis be paid out of the estate of the Deceased. 4. The exhibits may be returned.

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