Source: https://www.lawreform.vic.gov.au/content/4-consequences-forfeiture-rule
Timestamp: 2019-04-19 02:57:49+00:00

Document:
4.1 Once the forfeiture rule has been applied, the courts must determine how to dispose of the benefits that the killer would have otherwise been entitled to receive upon the death of the victim. These may include inheritance or property rights transmitted to the killer from the deceased by will, intestacy or survivorship as well as from the victim’s superannuation fund or insurance policy. The killer’s entitlement to claim for family provision, or a pension, will also be forfeited.
4.2 There has been a variety of responses by the courts to this issue. These decisions have had consequences for the killer, the victim’s estate, and innocent third parties with an interest in the deceased’s property as well as those persons whose interest in the deceased estate derives from the person carrying out the killing.
Death benefits payable by a superannuation fund, as they will usually be disposed of only by a trustee of the fund. However, fund members often make a binding death benefit nomination asking the trustee to pay their superannuation death benefit to the person they appoint as executor under their will. When this happens, the executor can then distribute the money as directed by the fund member’s will.3 The trustee of a superannuation fund, in the exercise of its discretion, may also decide to pay the superannuation benefits to the estate of the member. The forfeiture rule would then apply to these funds in the same way as the rest of the estate.
Payment under a life insurance policy to someone nominated by the insured person. The payment is made in accordance with the agreement between the insurance firm and the insured person.
Jointly owned property, such as a house or a bank account, because this passes directly to the other owners.
4.5 The will-maker can leave gifts to chosen beneficiaries and then leave the estate that remains after debts are paid—the residuary estate—to be divided among other beneficiaries. They can also simply divide the entire estate among named beneficiaries.
4.8 An unlawful killer may be a member of a class of persons to whom the victim left a gift in their will. For example, the will could direct that the title of the family home should be transferred to ‘all my grandchildren’ as tenants in common in equal shares. If the killer is a grandchild, they forfeit their entitlement to an interest in that gift.7 Other members of the class will consequently take a greater share.
4.9 Some wills include provisions for a gift over to an alternative beneficiary upon a contingent event. For example, a will might provide that an alternative beneficiary will inherit in the event that the original beneficiary (the killer) predeceases the will-maker. However, the killer is still alive, although unable to inherit due to the forfeiture rule. The courts in Australia have taken a variety of approaches to the issue of how to distribute assets that are subject to a gift over. The resulting inconsistency in case law may create uncertainty for the executors of wills.
the gift is held on constructive trust by the killer for the benefit of an appropriate person.
4.11 Courts commonly interpret wills literally. If a condition of a gift over has not been fulfilled, the gift will fail.9 The gift will fall into the residue of the estate or, if there is no residue, be distributed as on intestacy. For example, in Davis v Worthington10 a gift was left to a friend who later unlawfully killed the will-maker. The will also provided that if the killer failed to survive her for 14 days then the gift was to go to the Muscular Dystrophy Research Association. Because the killer had survived the will-maker for 14 days, the gift failed and the Muscular Dystrophy Research Association was unable to take the gift.
4.12 This approach has been criticised as defeating the intention of the will-maker.11 It would seem likely that in most circumstances when a will-maker has preferred a particular person over others to take a benefit if the principal beneficiary has died, they would also prefer that person to take the same benefit in any other situation in which the principal beneficiary would be ineligible to inherit.
4.13 However, there are circumstances in which it might be reasonable to think that the will-maker would not want the beneficiary of the gift over to inherit. For example, in Public Trustee v Hayles12 the deceased gifted his estate to a friend and, in the event that this friend predeceased him, to the friend’s mother, Mrs Hayles. Both beneficiaries were unrelated to the will-maker and there was no evidence that the deceased knew Mrs Hayles. The principal beneficiary killed the will-maker and the forfeiture rule applied to deny the killer any entitlement to the estate. At issue for the court was whether Mrs Hayles could inherit as the alternate beneficiary of the gift. The court applied a constructive trust over the gift and sought to determine who would be the correct beneficiary of that trust. The court found that it was more appropriate for the estate to be held on trust for the deceased’s next of kin. The issue of whether it would be appropriate for the mother of the killer to inherit was not raised; however, Justice Young did refer to American cases that have limited the beneficiaries of a constructive trust to persons who are not related to the killer.13 Given the relationship between the potential beneficiary and the killer and the potential for the killer to benefit indirectly, a will-maker may not want the alternate beneficiary to inherit in these circumstances.
This approach effectively means that the killer would be treated as having predeceased the will-maker. The gift would then be distributed to the beneficiary of the gift over.
4.15 There are circumstances in which the distribution of the gift over might indirectly benefit the killer. These include when the beneficiary of the gift over has a close relationship to the killer as mentioned above in reference to Public Trustee v Hayles. It might also be reasonable to conclude that the will-maker may not want the gift over to succeed in similar circumstances.
4.16 The Jones v Westcomb15 rule has also been applied. This rule allows for the condition attached to a contingent gift over to be interpreted as if it extends to all other situations where the gift failed. For example, in Re Keid16 the deceased left her estate to her son but if her son were to predecease her without issue, then the estate was to go to her sisters. The will was construed by the court so that the condition of the gift over was the failure of the gift to the son rather than the death of the son. This failure could be brought about by death or by the operation of the forfeiture rule alike. The deceased’s sisters were thereby able to inherit through the gift over.
to be held on constructive trust for a person considered appropriate by the court, having regard to any evidence of relationships and intentions that might affect the result of the trust. Where there is insufficient evidence, and in an appropriate case, the court may treat the disentitled beneficiary as if they had predeceased the will-maker by holding the trust to be in favour of those entitled as on the intestacy. Given the relationship of the beneficiary of the gift over with the killer and other circumstances of the case, the court held there was insufficient evidence that the constructive trust should be in favour of the killer’s mother. The beneficial interest in the gift was then distributed in accordance with the laws of intestacy.
4.19 However, legal title to other types of gifts under a will do not ordinarily vest in the killer unless the property was distributed in ignorance of the unlawful killing.
4.20 Other jurisdictions have developed legislative responses to clarify inconsistencies and the harsh effects of the common law.
4.21 England and Wales, New Zealand and most jurisdictions in the United States have legislation that provides that an unlawful killer who loses any entitlement under a will as a result of the operation of the forfeiture rule is to be treated as having predeceased the victim.20 A person named in the will as an alternative beneficiary will then normally acquire the property which was the subject of the gift over ahead of the victim’s estate.
4.22 Provisions that establish that a killer is to be treated as having predeceased the victim may have an undesirable result where a gift over provides some indirect benefit to the killer, which might have been the outcome in Public Trustee v Hayles if the gift over had succeeded.21 If the killer’s mother, who was unrelated to the victim, had been able to benefit from the gift over then she may have benefitted the will-maker’s killer. However, the possibility of an indirect benefit accruing to the killer also exists in relation to the primary beneficiaries of a will. Whether an indirect benefit to the killer is likely to occur can only really be determined on a case-by-case basis in accordance with the particular circumstances and relationships of the parties involved.
will-maker—and construe the will accordingly.24 As illustrated by the cases mentioned in this chapter, courts have found ways of varying the literal effect of a will to find a just and reasonable solution when a will-maker has died by the hand of a beneficiary. However, there is no clear authority for them to do so at common law or in legislation.
4.26 The National Committee for Uniform Succession Laws guided the National Uniform Succession Laws project, which was an initiative of the former Standing Committee of Attorneys-General. The aim of this project was to develop uniform succession law and practice across Australia. The Committee said that the rectification power in the Australian Capital Territory was ‘revolutionary’ and did not recommend that it be adopted nationally.26 It suggested that the rectification power, as articulated in the Australian Capital Territory legislation, may be too broad and might have the potential to destabilise the accepted rules for construing a will.27 This has not proved to be the case in the Australian Capital Territory, where it has been in place since 1991.
5 How should contingent gifts over be distributed upon the application of the forfeiture rule?
6 Should the courts have a discretion to rectify a will to fulfil the will-maker’s probable intent?
4.28 As a consequence of the forfeiture rule, anyone who claims through the killer would also be precluded from inheriting under intestacy laws.32 In Re DWS (deceased) an only son was convicted of murdering his parents, who both died intestate. The killer’s two-year-old son, and the victims’ grandchild, claimed the estate. If the killer had predeceased his parents, then their grandchild would have ordinarily inherited under intestacy laws. However, the court held that the forfeiture rule did not require the courts to treat the killer as having predeceased the victim and the intestacy rules under the Administration of Estates Act 1925 were to be given their literal meaning. The victim’s only grandchild was therefore precluded from inheriting the estate, which went to other relatives.
4.29 In Victoria, under the Administration and Probate Act 1958 an intestate estate is to be distributed in equal shares among the children of the intestate living at the time of their death and the living representatives of any children who predeceased the intestate.33 A literal interpretation of this provision would also preclude the descendants of unlawful killers, who are ineligible to inherit as a result of the forfeiture rule, from claiming an intestate estate in Victoria.
4.32 Treating the killer as having predeceased the victim is a pragmatic and simple solution that has been adopted in both England and New Zealand. In England and Wales, the Estates of Deceased Persons (Forfeiture Rule and Law of Succession) Act 2011 amended the law so that if a person is entitled to an interest in an intestate estate, or a under a will, and forfeits it under the forfeiture rule, the person is treated as having died immediately before the deceased.38 New Zealand also adopted a similar provision in their codification of the forfeiture rule.39 These reforms ensure that the children of a disentitled person are able to inherit despite the operation of the forfeiture rule.
7 Should Victoria’s intestacy laws permit an unlawful killer’s descendants to inherit from the victim, as representatives of the killer?
8 Are there any circumstances in which an unlawful killer’s descendants should be prevented from inheriting from the victim?
4.34 Succession rights give beneficiaries an expectation of obtaining an interest in a property. In contrast, when the deceased and their killer are joint tenants, the killer already has a stake in and existing rights over the property. In a joint tenancy between two people, the surviving joint tenant’s existing rights are enlarged by the death of the other joint tenant, as the entirety of the property would then vest in the survivor through the right of survivorship. Where there are more than two joint tenants, a victim’s interest would ordinarily vest jointly in the survivors.
4.35 However, under the forfeiture rule an unlawful killer cannot benefit from the death of their victim. Due to the nature of joint tenancies, the courts have had to contend with the particular problem of deciding how to ensure that the killer does not benefit from their crime, while not depriving the killer or third parties of their legal rights.
4.36 Australian case law has taken two distinct approaches to this issue.43 In earlier cases, the courts distributed the property as though the owners had been tenants in common.44 In Re Barrowcliff,45 Justice Napier did not decide whether this situation arises from a severance of the joint tenancy or as an exception to the ordinary rules of survivorship. Either way, the killer could be perceived as gaining the benefit of a severance of the joint tenancy while the victim has lost their right of survivorship.
4.37 However, this approach is no longer favoured by the courts in Australia.46 Instead, they have followed the approach adopted in Re Thorp and the Real Property Act,47which held that legal title to the property passed to the killer. As the forfeiture rule applied, the court also held that to prevent the killer from benefitting from their crime they were to hold the victim’s interest in the property on constructive trust for the benefit of the victim’s estate.48 It has been suggested that this approach has the advantage of certainty in regard to the legal title,49 but it also produces different results, depending on the number of joint tenants.
4.38 When the killer and the victim are the only joint tenants, legal title in the property will vest in the killer upon the death of the other joint tenant. A half interest in the property is to then be held on constructive trust for the benefit of the victim’s estate.50 The remaining half interest is to be held by the killer for his or her own benefit.
4.40 Where more than two people own a property as joint tenants, then a severance in equity would be necessary. In Rasmanis v Jurewitsch,52the court held that the interest of the victim was severed and the benefit of that interest then vested in the innocent joint tenants so that the killer could never benefit from the victim’s share of the property if the surviving joint tenants predeceased the killer.
4.41 For example, if there were five joint tenants and one of those joint tenants killed another, the interest of the victim would be held on trust for the benefit of the three remaining innocent joint tenants. The joint tenancy would remain between the killer and the innocent joint tenants over eighty per cent of the property (which excludes the interest of the victim). This outcome can advantage the unlawful killer in comparison to the victim’s estate because the victim’s interest in property vests in the innocent joint tenant rather than in the estate. In contrast, the killer is able to retain enjoyment of their interest in the property.
4.42 Other common law jurisdictions have adopted a range of approaches as to how the forfeiture rule will affect a joint tenancy. The most widely used approach is to treat the property subject to the joint tenancy as if the owners were tenants in common. This was the dominant approach in Australian common law prior to the decision in Rasmanis v Jurewitsch.
4.45 However, the nature of a joint tenancy is such that it only guarantees a life interest in a property to each of the joint tenants who then take the risk that their beneficiaries on death may not obtain an interest upon their death. A severance of a joint tenancy will therefore deprive other joint tenants who are innocent of the crime of an opportunity to acquire the property in its entirety by survivorship. In contrast, the killer, who could have taken steps to sever the joint tenancy while the victim was alive, is insulated from the risk inherent in their choice of property ownership and the value of their interest is preserved.
4.46 The approach more recently preferred by Australian courts is that in Rasmanis v Jurewitsch, where legal title in the property vests in the unlawful killer through the right of survivorship but the victim’s interest is held on constructive trust for the victim’s estate.
4.47 However, this outcome benefits the unlawful killer by providing for an immediate division of the property in equity.56 As seen in Rasmanis v Jurewitsch, a constructive trust is also not a workable solution for property held by multiple joint tenants. Differential treatment on the basis of the numbers of joint tenants could lead to the law being perceived as inconsistent, unnecessarily complex and unjust.
4.49 The New Zealand Law Commission recommended that New Zealand follow this approach as this outcome reflects the risk that the killer undertook when entering the joint tenancy arrangement.60 This simple solution prevents the killer from enjoying the benefit of the property in their lifetime.61 However, their recommendation was not followed by the New Zealand legislature, as it would have led to inconsistent outcomes because the killer could have used the Property (Relationships) Act 1976 (NZ) to reclaim an interest in the property if they were in a relationship with the victim, but not otherwise.62 This is not an issue in Victoria.
9 How should the courts distribute property subject to a joint tenancy once the forfeiture rule has been applied?
(a) Should an unlawful killer be able to retain their interest in the property?
(b) Should the victim’s estate be able to keep the victim’s interest in the property where there are multiple joint tenants?
4.50 An unlawful killer may also kill a person who is not the will-maker or outright owner of a property but from whose death they would benefit. The victim may be someone else in a ‘chain of gifts’.63 For example, the victim and the killer might both be beneficiaries of a trust, where the victim’s entitlements under that trust would transfer to the killer. Alternatively, the victim might have a lifetime interest in a property that will vest in the killer upon the victim’s death.
The public policy against benefiting from one’s crime is not limited to fixed categories. Nor does it focus upon the manner in which the felony results in benefit to the perpetrator.
4.52 The forfeiture rule will therefore apply to prevent these entitlements, which would not have gone to the killer but for the killing, from being transferred to the unlawful killer.
4.53 In Batey v Potts, the will-maker granted her husband a right to reside in the matrimonial home for the term of his life.Upon his death, the residential property was to be held on trust with the residue of her estate to pay the net income to her son until he turned 35 and thereafter to pay the capital and income to him. If that trust was to fail, then the property was to go to other relatives.
4.54 The son of the will-maker unlawfully killed his father. However, the gifts in the will to the unlawful killer did not flow to the killer as a result of the unlawful killing and were unaffected by the forfeiture rule. The killing did have the effect of accelerating the son’s interest in the residential property under his mother’s will and it was the benefit of that acceleration that the forfeiture rule prevented.
4.55 The court found that in such circumstances the appropriate remedy is to deprive the killer of the enjoyment of their interest for the period of the victim’s life expectancy. However, the court used its discretion under the NSW Act to modify the effect of the rule.
10 How should the forfeiture rule apply to other assets that are not within the deceased’s estate?
4.60 In making a decision on a family provision application, the court is required to have regard to a number of statutory factors including the character and conduct of the applicant.73 An unlawful killing is conduct that is likely to be viewed negatively by the court in any application for family provision.
11 Should the forfeiture rule prohibit an unlawful killer from applying for a share of the victim’s estate under family provision legislation?
1 An ownership of or interest in land, together with a house or another type of building or immovable object attached to the land. For a full description of the type of property that may be disposed of by will, see the Wills Act 1997 (Vic) s 4.
2 Other assets, such as money, shares, vehicles and other movable personal possessions. For a full description of the type of property that may be disposed of by will, see the Wills Act 1997 (Vic) s 4.
3 Superannuation Industry Supervision Act 1993 (Cth) s 59(1A).
4 Re Pollock  Ch 219; Re Callaway  Ch 559; Re Dellow’s Will Trusts  1 All ER 771; Re Giles (deceased)  Ch 544.
5 Re Peacock  Ch 310; Re Worthington  WAR 144.
6 Re Pollock  Ch 219; Re Callaway  Ch 559; Re Dellow’s Will Trusts  1 All ER 771; Re Giles (deceased)  Ch 544.
7 Re Peacock; Midland Bank Executor & Trustee Co Ltd v Peacock  Ch 310;  2 All ER 98.
11 Australian Capital Territory, Parliamentary Debates, Legislative Assembly, 22 October 1991, 4105 (Bernard Collaery); Law Commission (England and Wales), The Forfeiture Rule and the Law of Succession, Report No 295 (2005) 28.
12 (1993) 33 NSWLR 154.
13 Ibid 166; In the Matter of Safran’s Estate 306 NW (2d) 27 (1981).
14 Re Barrowcliff  SASR 147.
15 (1711) Prec Ch 316.
17 Ekert v Mereider (1993) 32 NSWLR 729.
19 (1993) 33 NSWLR 154.
American Law Institute, Restatement (Third) of Property: Wills and Other Donative Transfers (2003) § 8.4 cmt (k).
21 Nicola Peart, ‘Reforming the Forfeiture Rule: Comparing New Zealand, England and Australia’ (2002) 31 Common Law World Review 1, 31–32.
22 Wills Act 1997 (Vic) s 31.
23 Charles Rowland, ‘The Construction or Rectification of Wills to take Account of Unforeseen Circumstances Affecting their Operation: Part 1’ (1993) 1 Australian Property Law Journal 87, 91.
24 Charles Rowland, ‘The Construction or Rectification of Wills to take Account of Unforeseen Circumstances Affecting their Operation’ (1993) 1 Australian Property Law Journal 87; (1993) 1 Australian Property Law Journal 193.
25 Wills Act 1968 (ACT) s 12A.
26 National Committee for Uniform Succession Laws, Consolidated Report to the Standing Committee of Attorneys-General on the Law of Wills, Queensland Law Reform Commission Miscellaneous Paper 29 (1997) 59–61.
27 National Committee for Uniform Succession Laws, Uniform Succession Laws for Australian States and Territories: First Issues Paper: The Law of Wills, Queensland Law Reform Commission Working Paper 46 (1994) 44–45.
28 Re Sangal  VLR 355.
29 Helton v Allen (1940) 63 CLR 691; Re Sangal  VLR 355.
30 Public Trustee v Fraser (1987) 9 NSWLR 433; Administration and Probate Act 1958 (Vic) s 55.
31 Administration and Probate Act 1958 (Vic) s 55.
32 Re DWS (deceased)  Ch 568.
33 Administration and Probate Act 1958 (Vic) s 52(f).
34 Law Commission (England and Wales), The Forfeiture Rule and the Law of Succession, Report No 295 (2005) 2.
36 New South Wales Law Reform Commission, Uniform Succession Laws: Intestacy Report No 116 (2007) 210.
37 Succession Act 2006 (NSW) s 139(b); Intestacy Act 2010 (Tas) s 40(b).
38 Estates of Deceased Persons (Forfeiture Rule and Law of Succession) Act 2011 (UK) c 7, s 1 (inserting s 46A into the Administration of Estates Act 1925 (UK)), s 2 (inserting s 33A of the Wills Act 1937 (UK)).
39 Succession (Homicide) Act 2007 (NZ) s 7(3).
40 UPC § 2-803(b) (2010).
41 Karen J Sneddon, ‘Should Cain’s Children Inherit Abel’s Property?: Wading into the Extended Slayer Rule Quagmire’ (2007) 76 University of Missouri at Kansas City Law Review 101, 131, 133; Cook v Grierson 845 A 2d 1231, 1232–3 (Md, 2004).
42 Karen J Sneddon, ‘Should Cain’s Children Inherit Abel’s Property?: Wading into the Extended Slayer Rule Quagmire’ (2007) 76 University of Missouri at Kansas City Law Review 101, 131–4. Sneddon argues that this was the likely motivation for the Maryland Court of Appeals’ strict interpretation of the Maryland intestacy statute in Cook v Grierson 845 A 2d 1231 (Md, 2004).
43 G E Dal Pont and K F Mackie, Law of Succession (LexisNexis Butterworths, 2013), 178.
44 Re Barrowcliff  SASR 147; Kemp v The Public Curator of Queensland  QdR 145.
46 Rasmanis v Jurewitsch 1 NSWR 650; Re Stone  1 Qd R 351; Nay v Iskov  NSWSC 598; Re Nicholson  QSC 480.
49 Re Stone  1 Qd R 351, 352.
50 Rasmanis v Jurewitsch 1 NSWR 650.
51 Property Law Act 1958, pt IV.
53 Succession (Homicide) Act 2007 (NZ) s 8(3); UPC § 2-803(c)(2) (2010).
54 American Law Institute, Restatement (Third) of Restitution and Unjust Enrichment (2011), § 45, reporter’s note (h). Statutes taking this approach include: Iowa Code §633.535(2) (2013) (as interpreted by the Supreme Court of Iowa in In re estate of Thomann 649 NW 2d 1 (Iowa, 2002)); Ala Code § 43-8-253(b) (2013); Cal Prob Code § 251 (LexisNexis 2014); Conn Gen Stat § 45a-447(a)(3) (2013); Fla Stat § 732.802(2) (2013); Nev Rev Stat Ann § 41B.320(2)(a) (2013).
55 American Law Institute, Restatement (Third) of Restitution and Unjust Enrichment (2011) § 45 cmt (h) illustration (15).
56 John Tarrant, ‘Unlawful Killing of a Joint Tenant’ (2008) 15 Australian Property Law Journal 224, 236.
57 Ibid 230; W Va Code § 42-4-2 (2013) (as interpreted in Lakatos v Billotti 509 SE 2d 594 (W Va, 1998)); Robert F Hennessy, ‘Property Note—The Limits of Equity: Forfeiture, Double Jeopardy, and the Massachusetts “Slayer Statute”’ (2009) 31 Western New England Law Review 159, 160; Mass Gen Laws ch 265 § 46 (2013).
58 Law Commission (England and Wales) above n 34, 33.
31 Western New England Law Review 159, 161.
60 Law Commission (New Zealand), Succession Law: Homicidal Heirs, Report No 38 (1997) 26; New Zealand, Parliamentary Debates, House of Representatives, 8 May 2007, 8986 (Ruth Dyson).
61 John Tarrant, above n 56, 235.
62 New Zealand, Parliamentary Debates, House of Representatives, 8 May 2007, 8986 (Ruth Dyson).
63 R F Croucher and P Vines, Succession: Families, Property and Death (LexisNexis Butterworths, 3rd ed, 2009), 537.
65 Cleaver v Mutual Reserve Fund Life Association  1 QB 147 (CA); Re Field and the Commonwealth of Australia (1983) 5 ALD 571, 574–575; R v National Insurance Commissioner, Ex parte Connor  1 QB 758.
66 Judiciary Act 1903 (Cth) s 80.
67 Re Fitter; Public Trustee v Fitter  NSWSC 1188.
68 See Fitter v Public Trustee  NSWSC 1487.
69 Succession (Homicide) Act 2007 (NZ) s 8(1).
71 Administration and Probate Act 1958 (Vic) s 91(1).
74 Re Royse (deceased)  Ch 22; Troja v Troja (1994) 35 NSWLR 182.
75 Troja v Troja (1994) 35 NSWLR 182, 186.
76 Re Royse (deceased)  Ch 22; Troja v Troja (1994) 35 NSWLR 182; Succession (Homicide) Act 2007 (NZ) s 9; UPC § 2-803(b). The ACT Act does not refer to family provision applications.
77 Forfeiture Act 1982 (UK) s 3; Forfeiture Act 1995 (NSW) ss 3, 5. It is unclear whether an application for family provision can be made in the Australian Capital Territory as family provision is not included within the definition of property in the Forfeiture Act 1991 (ACT) s 2.

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