The Forfeiture Rule: Consultation Paper

5. Options for legislative reform

The need for legislation

5.1 In Chapters 3 and 4, a number of complexities and ambiguities in applying the forfeiture rule were discussed, together with some of the ways in which they have been addressed in different jurisdictions. A recurring issue is that the application of the rule can lead to harsh outcomes. The issue notably arises in manslaughter cases where the killer has received an appropriately merciful sentence because of low moral culpability yet the rule has operated without leniency. These are often cases where a woman has killed her partner, in fear for her life or safety—and that of her children—after suffering his abuse and violence for many years.

5.2 As discussed in Chapter 2, there was a series of manslaughter cases of this nature during the 1980s where the court did not apply the rule. However, the traditional formulation of the rule was re-affirmed by the Supreme Court of New South Wales, in Troja v Troja,^[1] and by the Supreme Court of Victoria, in Estate of Soukup.^[2]

5.3 The law in Victoria is that the courts have no discretion to modify the rule. Justice Gillard observed in Estate of Soukup that ‘for a judge to abrogate or modify the rule in a manslaughter case on the ground that the level of moral culpability is small is to indulge in judicial legislation’.^[3] While the injustice that can be caused by the application of the rule is not denied, resolution is in the hands of the legislature, not the courts.

5.4 Commentators have said that the courts have abdicated responsibility for the ongoing suitability of a rule they created to the needs of modern society.^[4] In his dissenting judgement in Troja v Troja, President Kirby reasoned that the Court had a duty to revise the rule:

The knowledge of domestic violence allowed to judges, and of the circumstances in which conduct, although manslaughter, can sometimes be morally virtually blameless, requires of them a rule of sufficient flexibility which accords with the justice of the case. Otherwise, the law becomes a vehicle for serious injustice. That must not be allowed to occur—especially by the slavish adherence to the non-binding authority of another country. The rule in question has been made by judges. It has already been developed, in part, by judges. It is still in the process of refinement. It is not a breach of this Court’s duty to the law to clarify the stage which that refinement has reached.^[5]

5.5 An underlying reason for the difference of opinion is a divergence of views about the nature of the rule: whether it is a rule of law or a principle applied in equity.

5.6 One line of analysis characterises the rule as a rule of law. This means that, once the court has decided that the person has unlawfully killed the victim, the rule must be applied simply and strictly, without regard to the circumstances of the case. Lord Atkin described it as an ‘absolute rule’ in Beresford v Royal Insurance:^[6]

I think that the principle is that a man is not to be allowed to have recourse to a court of justice to claim a benefit from his crime whether under a contract or a gift. No doubt the rule pays regard to the fact that to hold otherwise would in some cases offer an inducement to crime or remove a restraint on crime, and that its effect is to act as a deterrent to crime. But apart from these considerations the absolute rule is that courts will not recognise the benefit accruing to a criminal from his crime.^[7]

5.7 This is the traditional formulation of the rule, as upheld in the line of authorities that were followed by the majority in Troja v Troja, and by Justice Gillard in Estate of Soukup. It follows from this reasoning that, as the court has no discretion not to apply the rule strictly and absolutely, any change to it is a matter for the legislature.

5.8 Alternatively, the forfeiture rule has been characterised as a principle of equity or equitable doctrine. On this view, the court can decide whether it would be in accordance with good conscience to allow the killer to obtain a benefit in the circumstances.^[8] The rule is taken into account and applied in accordance with established equitable notions of unconscionability and the prevention of unjust enrichment.^[9] This approach is consistent with that taken by President Kirby in Troja v Troja^[10] (in dissent) and by the court in Public Trustee v Fraser,^[11] Public Trustee v Hayles,^[12] Re Keitley^[13] and Miliankos v Miliankos.^[14] It is also the approach generally taken to the interpretation of the equivalent codified rule in the United States, the ‘slayer rule’.

5.9 Nevertheless, it is clear that in Victoria any modification of the forfeiture rule to address the issues raised in Chapters 3 and 4 can be achieved only through legislative intervention.

5.10 In this chapter, three approaches to legislative reform are discussed. The first two supplement the common law rule without modifying it. The third redefines the rule itself.

• Option 1 clarifies the effect of the rule on the distribution of the killer’s share of the deceased’s estate and other forfeited benefits arising from the victim’s death.

• Option 2 gives the court discretion to modify the effect of the rule, along the lines permitted by the Forfeiture Acts in the United Kingdom, the Australian Capital Territory and New South Wales.

• Option 3 replaces the common law rule with a statutory code.

5.11 The Commission would welcome submissions on which option, combination of options, or other alternative is most suited to reforming the forfeiture rule in Victoria.

Option 1: Amend existing legislation to clarify the effect of
the rule

5.12 One approach to addressing the issues discussed in Chapter 4 concerning the effect of the rule on the distribution of the deceased’s assets could be to amend the legislation under which those assets are normally distributed. The common law rule of forfeiture would be unchanged but its effect would be clarified and modified. This option could be adopted alone, or in conjunction with either Option 2 or Option 3.

5.13 The following are examples of amendments that could be considered. They are presented to illustrate the option and do not reflect the Commission’s concluded view on any particular reform.

• Amend the Wills Act 1997 (Vic) and the Administration and Probate Act 1958 (Vic) to specify the effect on the distribution of the deceased’s estate. This would provide some clarity for the executor or administrator of the deceased’s estate, and could avoid the cost of seeking directions from the court. It would put beyond doubt the interaction of the rule and the statutory intestacy scheme, and assist in interpreting the provisions of a will when there is a gift over.

• Amend the Wills Act to enable the Supreme Court to alter the literal effect of a will to deal with unforeseen circumstances, along the lines of section 12A(2) of the Wills Act 1986 (ACT).^[15]

• Amend the Wills Act to clarify how the court should interpret a will that was revised in the killer’s favour by the victim after they had been fatally wounded, or that was prepared in contemplation of the act, such as in situations of assisted suicides or mercy killings.^[16]

• Amend the Administration and Probate Act to specify whether or when a killer beneficiary is entitled to make an application for family provision under Part IV of that Act.

• Amend the Property Law Act 1958 (Vic) to clarify the effect of the rule on property co-owned by the killer, the victim and any other person.

5.14 This option would not address questions about the scope of the unlawful killings that are encompassed by the rule but it would make the law clearer for the executor or administrator of the victim’s estate.

Question

12 Should issues about the effect of the forfeiture rule on the property and benefits that the killer would otherwise have derived on the death of the victim be addressed by amending the existing legislation under which the property of a deceased person is distributed?

Option 2: Empower the courts to modify the effect of the rule

5.15 Victoria could introduce legislation that is similar to the UK Act, the ACT Act and the NSW Act. The common law rule would be unaffected but interested parties could apply to a court for an order modifying the effect of the rule.

5.16 This model was favoured by the Victorian Attorney-General’s Law Reform Advisory Council. In May 1995, it recommended that:

Legislation be enacted similar to that in England, allowing the court to modify, in appropriate circumstances, the rule which precludes a person who has unlawfully killed another from acquiring a benefit in consequence of the killing.^[17]

5.17 Reporting nine years later on the results of its review of the forfeiture rule, the Tasmania Law Reform Institute recommended that Tasmania introduce a Forfeiture Act that would closely follow the same model, and particularly the NSW Act.^[18]

5.18 An advantage of this option is that the legislation could be consistent with that which has been introduced in other Australian jurisdictions.

5.19 However, although the UK Act, ACT Act and NSW Act have been in force for some time, it is not easy to determine their direct impact on the rule itself. They appear to have reinforced the status quo. As the court in those jurisdictions is able to modify the effect of the rule, it does not need to expressly decide the question of whether the rule applies at common law. Even if there is doubt about whether the rule applies, a court that considers that the rule should not apply in the circumstances can provide relief.

Question

13 Should Victoria introduce legislation, like that in the United Kingdom, Australian Capital Territory and New South Wales, that empowers a court to modify the effect of the forfeiture rule?

Specific considerations

5.20 Any new Victorian legislation that empowers a court to modify the effect of the rule would need to establish a scheme for applications to be made to the court, and processed, for this purpose. The UK Act, ACT Act and NSW Act contain relevant provisions that Victoria could consider adopting­—or adapting where they have been shown to require improvement.

5.21 Some of these considerations are set out below. The Commission would welcome submissions on these or other considerations that should be taken into account if this option were adopted.

Who may apply

5.22 The UK Act and ACT Act do not specify who may apply for an order to modify the effect of the rule.

5.23 The NSW Act allows an ‘interested person’ to apply.^[19] An ‘interested person’ is defined as any of the following:

(a) an offender

(b) the executor or administrator of the estate of a deceased person

(c) a beneficiary under the will of a deceased person or a person who is entitled to any estate or interest on the intestacy of a deceased person

(d) a person claiming through an offender

(e) any other person who has a special interest in the outcome of an application for a forfeiture modification order.^[20]

5.24 The Tasmania Law Reform Institute prefers the New South Wales approach, observing that, if the killer cannot or does not wish to apply for an order, an application can be made by someone who could inherit through the killer, or the killer’s creditors.^[21] Applications under the forfeiture legislation could be seen as an alternative to making a claim for family provision under Part IV of the Administration and Probate Act, or as a way of drawing on the deceased victim’s estate to recover a debt owed by the disentitled beneficiary.

Time for applications

5.25 It would be desirable if the time period within which an application may be made for an order modifying the effect of the rule were determined in view of the timescale associated with administering and distributing a deceased estate. For example, an application for family provision must be made within six months of the grant of probate of the will or letters of administration.^[22] This could possibly be a useful timeframe for an application to be made where the person is not prosecuted, but much more time is needed in the event of criminal proceedings.

5.26 In the United Kingdom and the Australian Capital Territory, proceedings to modify the effect of the rule for a person convicted of an unlawful killing (or of aiding, abetting, counselling or procuring the death of the victim) must be brought within three months of the conviction.^[23] In New South Wales, the application must be made within 12 months of the date on which the forfeiture rule takes effect and the court may give leave for a late application.^[24]

Guidance for exercise of discretion

5.27 Providing the court with discretion allows for a decision to be made in view of the circumstances of the case, but increases the risk of uncertain and inconsistent outcomes. Any Victorian legislation of this type could specify the factors to which the court should have regard.

5.28 The UK Act and ACT Act provide little guidance as to how the discretion should be exercised. They state that the court is to have regard to the conduct of the offender and the deceased and to ‘other circumstances that appear to … be material’.^[25]

5.29 The NSW Act adds that the court should also have regard to ‘the effect of the application on the offender or any other person’.^[26]

Property interests affected

5.30 The legislation would need to clarify the property that is affected by an order to modify the effect of the forfeiture rule.

5.31 In the Australian Capital Territory, the court may modify the effect of the rule in respect of ‘any interest in property that the offender would have acquired but for the operation of the forfeiture rule’.^[27] ‘Property’ includes ‘any thing in action or incorporeal moveable property’.^[28]

5.32 In New South Wales, an order modifying the rule may apply to a ‘benefit’, which includes any interest in property and any entitlement under Chapter 3 of the Succession Act 2006 (NSW).^[29]

5.33 It may well assist in clarifying the effect of the forfeiture rule to include a clear description in any similar Victorian legislation.

Question

14 If Victoria introduced legislation that empowers a court to modify the effect of the forfeiture rule:

(a) Who should be able to apply for the rule to be modified?

(b) What should be the time limit for making an application?

(c) What principles, if any, governing the court’s discretion should be stated in the legislation?

(d) What guidance should the court be given in exercising its discretion?

(e) Which property and other interests should be able to be affected by the order?

Option 3: Codify the rule

5.34 Victoria could introduce legislation that replaces the common law rule with a statutory code that specifies the unlawful killings that attract the operation of the code and how the code affects the benefits that the killer would otherwise have derived on the death of the victim.

5.35 Legislation of this type would provide certainty to administrators and executors in administering and distributing the estate. As discussed in Chapter 3, there is some uncertainty about the ambit of the rule at common law. For example, when the New South Wales Attorney-General’s Department reviewed the NSW Act in 2002, the Public Trustee submitted that the Act should be amended to clarify when a legal personal representative can apply the rule. The Department’s response was:

If a legal personal representative is unsure whether the forfeiture rule applies to the administration of an estate, they are free to apply to the Supreme Court for clarification.^[30]

5.36 If the rule were codified, a personal representative may not have to apply to the court for clarification, saving time and costs to the estate. A codified rule could also clarify which property the killer forfeits and how it is to be distributed. This would assist in resolving uncertainty about many of the issues discussed in Chapters 3 and 4.

5.37 The reasons why the New Zealand Law Commission recommended legislation that established a statutory code rather than a statutory discretion included:

• Uncertainty about precisely how the rule should be applied in particular circumstances.^[31]

• The expense and delay of having the judiciary deal with all cases as they arose.^[32]

• The desirability of having such a policy-based area of the law dealt with by parliament.^[33]

• An apparent lack of consistency in decisions made under the United Kingdom legislation.^[34]

5.38 In its review of the forfeiture rule, the Tasmania Law Reform Institute canvassed views on the legislation proposed by the New Zealand Law Commission. However, it found no support for this option and did not recommend it.^[35]

5.39 Codifying the rule in Victoria would be inconsistent with the style of legislative intervention taken in other Australian jurisdictions. However, as noted above, the introduction of the ACT Act and the NSW Act has drawn the attention of courts in those jurisdictions to the effect of the rule in the circumstances of the case, rather than on whether the rule applies at common law. More widely, problems with the application of the rule appear to arise infrequently and there are few opportunities presented to the courts to clarify the operation of the rule.

Question

15 Should Victoria codify the common law rule of forfeiture?

Specific considerations

5.40 Codifying the common law rule would enable a number of specific issues to be clarified in the legislation. The following are presented for comment and with a view to encouraging suggestions about other aspects of the rule that the legislation could usefully clarify.

Moral culpability

5.41 If codification of the rule replaces one inflexible law with another, it is unlikely to resolve the concerns about the effect of the common law rule in manslaughter cases where the killing was intentional but the level of moral culpability is low.

5.42 The common law rule of forfeiture does not allow a court to take moral culpability into account; nor does the Succession (Homicide) Act 2007 (NZ) (NZ Act). For the purposes of the NZ Act, a killer is someone who is ‘guilty, either alone or with another person or persons’ of homicide ‘or would be so guilty if the killing had been done in New Zealand’.^[36] It has been argued that the New Zealand Law Commission’s report indicates that ‘the rule is to be applied to all intentional killings’.^[37] It thus appears that there is no scope under the Act to modify or remove the effect of the rule in cases of lesser moral culpability.

5.43 To address concerns about the indiscriminate application of the codified rule, perhaps the legislation could allow for exceptions. For example, it could establish a scheme for a court to find, on application by a person convicted of manslaughter, that applying the rule would be inappropriate in the circumstances. However, those circumstances would need to be carefully specified so as to minimise uncertainty and not undermine the statute.

Application to a person who has not been convicted

5.44 The NZ Act allows for ‘any party’ to allege that a person is guilty of homicide for the purposes of the Act.^[38] In this way, the codified rule may be applied to a person who has not been prosecuted for the killing, or who has been acquitted in criminal proceedings.^[39] As discussed in Chapter 3, this is consistent with the common law rule as it operates in Victoria.

5.45 The court decides whether the alleged killing took place and whether, if there had been a New Zealand prosecution, the alleged killer would be guilty, or not guilty by reason of insanity, of the homicide.^[40] An alleged killer who wishes to plead that they are not guilty on grounds of insanity must prove that fact on the balance of probabilities.^[41]

5.46 If the alleged killer has been convicted of the homicide in a jurisdiction other than New Zealand, that conviction is admissible evidence concerning the person’s guilt or innocence of that homicide for the Act’s purposes.^[42] The court may give that evidence any weight it determines.^[43] The person alleging that another person is guilty of homicide for the purposes of the NZ Act bears the onus of proving that fact on the balance of probabilities.^[44]

5.47 The Commission welcomes submissions on whether a Victorian Act should include similar provisions.

Change of circumstances

5.48 When the Succession (Homicide) Bill was being debated in the New Zealand Parliament, one speaker noted that it does not make clear what would happen if the death was not ‘attributed to the killer’ until years after the killing, and the estate had been distributed in the interim, including to the killer.^[45] She thought that the legislation should address whether the estate would be redistributed in such a case.^[46]

5.49 This observation is relevant to the case of David Bain, who was acquitted of the murder of his parents, brother and two sisters on a retrial after serving part of a life sentence. The estate was distributed long before the eventual acquittal, and while Bain’s lawyer called for the beneficiaries to return the money to Bain, it is unknown whether this was pursued, and what the correct outcome would have been under the NZ Act.^[47]

5.50 It may be desirable for any codified rule in Victoria to specify how the property should be allocated in changed circumstances such as these, perhaps limiting the period within which a redistribution could be ordered.

Question

16 If Victoria introduced legislation that codified the common law rule of forfeiture:

(a) How should it allow for exceptions, such as where the code would normally be applied but in view of the circumstances of the killing it would not be justified?

(b) How should it provide for the code to be applied to a person who has not been prosecuted, or was found not guilty because of mental impairment?

(c) How should it accommodate changes in circumstances, such as where a crime is resolved many years after the event, or a person’s conviction is overturned?

(d) What other matters should be addressed in a codified rule (and how)?

1. (1994) 33 NSWLR 269.

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2. (1997) 97 A Crim R 103.

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3. Ibid 114.

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4. Nicola Peart, ‘Reforming the Forfeiture Rule: Comparing New Zealand, England and Australia’ (2002) 31(1) Common Law World Review 1, 33; Barbara Hamilton and Elizabeth Sheehy, ‘Thrice Punished: Battered Women, Criminal Law and Disinheritance’ (2004) 3 Southern Cross University Law Review 96, 128.

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5. Troja v Troja (1994) 33 NSWLR 269, 285.

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6. (1938) AC 586.

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7. Ibid 598.

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8. Charles Rowland ‘The Killer Beneficiary’ June 1999 (unpublished speaking notes provided by the author).

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9. No cause of action may be founded on an immoral or illegal act: Troja v Troja (1994) 33 NSWLR 269, 278.

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10. (1994) 33 NSWLR 269, 282.

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11. (1987) 9 NSWLR 433 (Kearney J).

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12. (1993) 33 NSWLR 154 (Young J).

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13. [1992] 1 VR 583 (Coldrey J).

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14. [1994] VSC 7993 (24 March 1994) (Nathan J).

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15. See C J Rowland ‘The Construction or Rectification of Wills to take Account of Unforseen Circumstances Affecting their Operation’ (1993) 1(2) Australian Property Law Journal 87; (1993) 1(3) Australian Property Law Journal 193.

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16. G E Dal Pont and K F Mackie claim that the common law recognises this as an exception but the law is nebulous and it is unclear whether it applies in Australia: G E Dal Pont, Law of Succession (LexisNexis Butterworths, 2013), 172. See also Lundy v Lundy (1895) 24 SCR 650.

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17. Victorian Attorney-General’s Law Reform Advisory Council, Annual Report 1995 (1995), 12.

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18. Tasmania Law Reform Institute, The Forfeiture Rule, Final Report No 6 (2004), 2–3.

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19. Forfeiture Act 1995 (NSW) s 5.

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20. Ibid s 3.

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21. Tasmania Law Reform Institute, above n 18, 25–26.

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22. Administration and Probate Act 1958 (Vic) s 99. The court may extend this timeframe.

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23. Forfeiture Act 1982 (UK) c 34 s 2(3); Forfeiture Act 1991 (ACT) s 3(4).

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24. Forfeiture Act 1995 (NSW) s 7.

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25. Forfeiture Act 1982 (UK) c 34 s 2(2); Forfeiture Act 1991 (ACT) s 3(2).

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26. Forfeiture Act 1995 (NSW) s 5(3).

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27. Forfeiture Act 1991 (ACT) s 3(3).

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28. Ibid Dictionary.

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29. Forfeiture Act 1995 (NSW) s 3. Chapter 3 of the Succession Act 2006 (NSW) provides for applications to be made for family provision orders.

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30. New South Wales, Report on the Review of the Forfeiture Act 1995: New South Wales Attorney-General’s Department, Parl Paper No 72 (2002), 9.

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31. Law Commission (New Zealand), Succession Law: Homicidal Heirs, Report No 38 (1997) 2.

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32. Ibid.

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33. Ibid, 5.

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34. Ibid.

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35. Tasmania Law Reform Institute, above n 18, 22.

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36. Succession (Homicide) Act 2007 (NZ) s 4(1).

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37. Nicola Peart, ‘Reforming the Forfeiture Rule: Comparing New Zealand, England and Australia’ (2002) 31 (1) Common Law World Review 1, 29; Law Commission (New Zealand), Succession Law: Homicidal Heirs, Report No 38 (1997) 5.

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38. Succession (Homicide) Act 2007 (NZ), s 16(1)(a).

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39. Ibid s 16(1)(b).

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40. Ibid s 16(2)(a).

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41. Ibid s 16(2)(c).

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42. Ibid s 16(2)(d).

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43. Ibid s 16(2)(d).

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44. Ibid s 16(2)(b).

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45. New Zealand, Parliamentary Debates, House of Representatives, 8 May 2007, 8990 (Kate Wilkinson).

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46. Ibid.

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47. ‘Case of Bain family estate remains cloudy’, The New Zealand Herald (online), 9 June 2009 <http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10577298>

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