The Forfeiture Rule: Consultation Paper

1. Background

Referral to the Commission

1.1 On 29 October 2013, the Attorney-General, the Honourable Robert Clark, MP, asked the Victorian Law Reform Commission, under section 5(1)(a) of the Victorian Law Reform Commission Act 2000 (Vic), to review the common law rule of forfeiture. The terms of reference appear at page viii.

1.2 The forfeiture rule is a rule of public policy that a person who unlawfully kills another cannot acquire a benefit as a consequence of the killing. The killer forfeits any entitlement to inherit from the victim, either under the victim’s will or, if no will disposes of all of the victim’s estate, under intestacy law.^[1] If the killer and victim were co-owners of property as joint tenants, the rule prevents the property from passing to the killer.^[2]

1.3 The rule was created by the courts and has no statutory basis.^[3] It applies where the court is satisfied, in civil proceedings, that the killing was unlawful. There is no requirement for the person to have been convicted in criminal proceedings, where guilt must be proved beyond reasonable doubt. The rule may be applied to a person who has been acquitted, or has not been prosecuted at all, if it is proved to the court, on the balance of probabilities, that the person unlawfully killed the deceased.^[4] The only exception is if the person is not guilty because of mental impairment.^[5]

1.4 In Victoria, the rule applies equally and inflexibly in all circumstances but the outcome

can be harsh. Both a premeditated murder carried out with the intention of obtaining

a financial benefit, and a suicide pact in which one of the parties survived, would attract the application of the rule.

1.5 In the United Kingdom, the Forfeiture Act 1982 (UK) (the UK Act) gives a court the discretion to modify the effect of the rule if required by the justice of the case,

unless the offender was convicted of murder. The Australian Capital Territory and New South Wales have similar legislation, based on the UK Act: the Forfeiture Act 1991 (ACT) (the ACT Act) and the Forfeiture Act 1995 (NSW) (the NSW Act).

1.6 New Zealand has also introduced legislation but has taken a quite different approach.

The Succession (Homicide) Act 2007 (NZ) (the NZ Act) codifies and replaces the common law rule completely. It specifies when the rule may apply and how it affects the distribution of property to which the killer would otherwise have been entitled upon the victim’s death.

1.7 The terms of reference call for the Commission to review the circumstances in which the forfeiture rule is applied and make recommendations on the need for legislative or other reform to clarify or replace the common law in Victoria. In doing so, the Commission has been asked to consider judicial approaches and legislative developments both in Australia and overseas.

1.8 It is important to note that the scope of the Commission’s review is determined by the terms of reference and cannot extend to a wider examination of the law in Victoria concerning homicide, succession on death, the forfeiture of the proceeds of crime or any other related areas of law.

1.9 The Commission is to report by 15 September 2014.

Previous reviews of the rule by law reform bodies

1.10 Although this reference is the first public review of the forfeiture rule in Victoria, the Commission is able to draw upon the results of earlier reviews by law reform bodies,

both in this state and in other jurisdictions. These bodies include:

• the Law Commission of New Zealand^[6]

• the Scottish Law Commission^[7]

• the Law Commission for England and Wales^[8]

• the Tasmania Law Reform Institute^[9]

• the former Victorian Law Reform Advisory Council.^[10]

1.11 The reports and other papers that these bodies have produced provide a rich account of the law and are recommended reading for anyone who wishes to explore the issues arising from the Commission’s terms of reference in more detail.

Conduct of this reference

Division

1.12 The Chair of the Commission has exercised his powers under section 13(1)(b) of

the Victorian Law Reform Commission Act to constitute a Division to guide and

oversee the conduct of the reference.

1.13 Joining him on the Division are Commissioners Bruce Gardner PSM,

Dr Ian Hardingham QC, the Hon. David Jones AM, Eamonn Moran PSM QC,

Alison O’Brien and the Hon. Frank Vincent AO QC.

Consultation paper and submissions

1.14 This paper draws from the preliminary research conducted by Commission staff.

It describes the law, identifies and asks questions about the issues arising from the terms of reference and explores options for reform. The questions are listed on page 62.

1.15 The Commission is seeking submissions in response to the questions in the consultation paper by 28 April 2014. Information about how to make a submission is set out on

page vi.

1. In Victoria, property is distributed on intestacy in accordance with a scheme established by pt 1 div 6 of the Administration and Probate Act 1958 (Vic).

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2. Normally, when a joint tenant dies, the property passes to the surviving co‑owner or co‑owners and does not form part of the deceased’s estate. See Chapter 4 for discussion about the effect of the rule on a joint tenancy.

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3. See Chapter 2 for discussion about the development of the rule.

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4. Helton v Allen (1940) 63 CLR 691.

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5. Estate of Soukup (1997) 97 A Crim R 103, 115.

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6. Law Commission (New Zealand), Succession Law: Homicidal Heirs, Report No 38 (1997).

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7. Scottish Law Commission, Report on Succession, Scot Law Com No 124 (1989); Report on Succession, Scot Law Com No 215 (2009).

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8. Law Commission (England and Wales), The Forfeiture Rule and the Law of Succession, Cm 6625 (2005).

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9. Tasmania Law Reform Institute, The Forfeiture Rule, Final Report No 6 (2004).

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10. Richard Boaden, ‘The “Forfeiture Rule”’ (Discussion Paper, Law Reform Advisory Council, 1995).

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