Josifovski v Velevski
[2013] NSWSC 1103
•14 August 2013
Supreme Court
New South Wales
Medium Neutral Citation: Kiril Josifovski (aka Kiro Josifovski) as Administrator of the estates of the late Snezana Velevski (aka Snezana Velevska) and the late Daniela Velevska v Ljube Velevski [2013] NSWSC 1103 Hearing dates: 30 May, 12 August 2013 Decision date: 14 August 2013 Jurisdiction: Equity Division Before: Kunc J Decision: Declarations and orders for sale made
Catchwords: WILLS, PROBATE AND ADMINISTRATION - Forfeiture under public policy rule - Defendant killed wife and children - Joint tenancy - Intestacy - Order for sale Legislation Cited: Civil Procedure Act 2005 (NSW)
Conveyancing Act 1919 (NSW)
Evidence Act 1995 (NSW)
Forfeiture Act 1995 (NSW)
Wills, Probate and Administration Act 1898 (NSW)Cases Cited: Helton v Allen (1940) 63 CLR 691
Kelly v Kelly [2007] NSWSC 1076
Nay v Iskov [2012] NSWSC 598
Public Trustee v Fraser (1987) 9 NSWLR 433
Rasmanis v Jurewitsch & Anor (1970) 70 SR (NSW) 407
Regina v Velevski [1999] NSWCCA 96
Troja v Troja (1994) 33 NSWLR 269
Velevski v R [2002] HCA 4; (2002) 187 ALR 233; (2002) 76 ALJR 402Texts Cited: K. Mackie, The Forfeiture Rule: the Destination of Property Interests on Homicide (1997) 2(2) Newc LR 30 Category: Principal judgment Parties: Kiril Josifovski (Plaintiff)
Ljube Velevski (Defendant)Representation: Counsel: Ms K. Balendra (Plaintiff)
Solicitors: Whitelaw McDonald (Plaintiff)
File Number(s): 2013/92178 Publication restriction: No
Judgment
Summary
The defendant was the registered proprietor as joint tenant with his wife ("Mrs Velevski") of land at Berkley near Wollongong (the "Property"). The defendant was convicted of murdering his wife and their infant children. The plaintiff is Mrs Velevski's father and the administrator of her estate and of the estate of his youngest grandchild.
The plaintiff invokes the forfeiture rule. He seeks declarations and consequential relief to the effect that the defendant holds his late wife's interest in the Property on trust for the plaintiff as administrator of her estate and that the plaintiff be appointed trustee for sale of the Property. The plaintiff has made out his case for that relief.
Notice to the defendant
The defendant is a prisoner at the Goulburn Correctional Centre. He was served with the plaintiff's summons and supporting affidavit.
The defendant did not appear at the first return date of the summons before me for hearing. The proceedings have been adjourned on several occasions while steps were taken by the plaintiff to determine what, if any, role the defendant wished to play in these proceedings. At one point it was thought that he would be legally represented for the purposes of consenting to the relief in the summons.
The defendant apparently retained the services of Mr K.E. Becker of Counsel. When the proceedings were last mentioned before me, Ms K. Balendra of Counsel, appearing for the plaintiff, tendered a letter dated 5 August 2013 to her from Mr Becker in which he said:
This morning I have received communication from Mr Velevski, in Goulburn Correctional Centre, regarding the issue of the Court action over his property.
I am instructed that he does not wish to discuss this matter with me any further and that he is not interested in resolving this issue. He has said to, "let the Court do what it likes".
I have tried to assist Mr Velevski, however, due to his non-responsiveness to my advice I am no longer able to act for him in this matter and leave this in your hands to deal with for your clients.
The defendant is properly on notice of these proceedings. I have interpreted his statement to "let the Court do what it likes" as an indication that he does not wish to participate in the proceedings and neither consents to nor opposes the relief sought in the summons.
I shall now consider the matter on the basis of Ms Balendra's carefully prepared written and oral submissions on behalf of the plaintiff.
The facts
I find the facts to be as follows.
The defendant and Mrs Velevski married in 1986. They had three daughters: one born in 1988 and twins born in 1994. The second born (and therefore technically younger) twin was Daniela, to whom I shall continue to refer by her Christian name without intending any disrespect.
On 20 June 1994 Mrs Velevski and the three children were found dead at the Property.
At the time of her death, Mrs Velevski and the defendant were registered as the joint tenants of the Property.
In about August 1995 the defendant filed a Notice of Death and the Property became registered in the defendant's name alone.
The defendant was convicted of the murder of his wife and three children. On 26 September 1997 he was sentenced on each count to a minimum of 19 years penal servitude with an additional term of six years. His sentences were to be served concurrently with the earliest date for his release being 14 July 2016.
During the defendant's trial the pathologists were unable to reach a conclusion as to the order in which Mrs Velevski and the children died.
On 10 May 1999 the Court of Criminal Appeal (by majority) dismissed the defendant's appeal against conviction: Regina v Velevski [1999] NSWCCA 96.
On 14 February 2002 a further appeal by the defendant to the High Court of Australia was dismissed: Velevski v R [2002] HCA 4; (2002) 187 ALR 233; (2002) 76 ALJR 402.
Each of Mrs Velevski and the children died intestate. On 28 March 2012 this Court made a grant of administration to the plaintiff of the estate of each of Mrs Velevski and Daniela.
Issues
These tragic facts give rise to four issues for consideration:
(1) Did the defendant unlawfully kill his wife and three children?
(2) Does the forfeiture rule apply?
(3) In what order did Mrs Velevski and the children die?
(4) How do the intestate succession provisions apply?
I shall deal with each of these questions in turn.
Did the defendant unlawfully kill his wife and three children?
The consequence of the decision of the High Court in Helton v Allen (1940) 63 CLR 691 is that on an application such as this, the plaintiff must re-prove the defendant's guilt to the civil standard and cannot rely on the defendant's conviction as conclusive evidence of guilt (see also Troja v Troja (1994) 33 NSWLR 269).
The plaintiff has tendered the defendant's Certificate of Conviction issued under s 178 of the Evidence Act 1995 (NSW) (the "EA"). That section provides:
(1) This section applies to the following facts:
(a) the conviction or acquittal before or by an applicable court of a person charged with an offence, ...
(3) A certificate given under this section showing a conviction, acquittal, sentence or order is also evidence of the particular offence or matter in respect of which the conviction, acquittal, sentence or order was had, passed or made, if stated in the certificate.
Accordingly, the certificate tendered by the plaintiff is evidence of the defendant's conviction for the murder of Mrs Velevski and their children.
Section 91(1) of the EA provides:
(1) Evidence of the decision, or of a finding of fact, in an Australian or overseas proceeding is not admissible to prove the existence of a fact that was in issue in that proceeding.
Section 92 of the EA makes (inter alia) certain exceptions:
...
(2) In a civil proceeding, sub-section 91(1) does not prevent the admission or use of evidence that a party, or a person through or under whom a party claims, has been convicted of an offence, not being a conviction:
(a) in respect of which a review or appeal (however described) has been instituted but not finally determined, or
(b) that has been quashed or set aside, or
(c) in respect of which a pardon has been given.
(3) The hearsay rule and the opinion rule do not apply to evidence of a kind referred to in this section.
Given that the defendant has exhausted all avenues of appeal, the certificate is admissible under s 92(2)(a) of the EA to prove that the defendant has been convicted of murdering Mrs Velevski and their children. I appreciate that is not precisely the same thing as proving that he in fact did so. However, there are before me other facts which are relevant to proof of the ultimate question of whether or not the defendant unlawfully killed Mrs Velevski and their children. Those facts are:
1. The defendant's unsuccessful appeal against conviction to the Court of Criminal Appeal, whose judgment discloses a very careful and extensive consideration of the evidence against the defendant;
2. The defendant's unsuccessful appeal to the High Court of Australia, whose judgment discloses a further detailed and extensive consideration of the case against the defendant; and
3. The fact that the defendant is not contesting these proceedings in the circumstances I have set out in paragraph 5 above.
Relying on the facts which I have identified in the preceding paragraph, I am satisfied on the balance of probabilities that the defendant did in fact unlawfully kill Mrs Velevski and their children (including Daniela) on or about 20 June 1994 and so find. On the basis of the certificate I also find that these unlawful killings constituted murders.
Does the forfeiture rule apply?
In the following discussion of the forfeiture rule I am indebted to both Ms Balendra's submissions and to the detailed article by Mr Ken Mackie The Forfeiture Rule: the Destination of Property Interests on Homicide (1997) 2(2) Newc LR 30.
The forfeiture rule is based upon public policy. It provides that where a person who would otherwise obtain a benefit by the death of another, has brought about that other's death by violent means, the person is not entitled to take that benefit. In Troja v Troja (1994) 33 NSWLR 269 the Court of Appeal determined that the rule was not based upon unconscionability and should be rigidly applied. The motive and intention of the wrongdoer beneficiary were not relevant to the application of the rule.
Consequent upon that decision the Forfeiture Act 1995 (NSW) was enacted to give the Court power to modify the effect of the forfeiture rule in any given case. However, s4(2)(a) of that Act specifies it does not apply to an unlawful killing in the State that constitutes murder. By reason of my findings in paragraph 26 above this legislation does not apply to the case at bar.
But for the application of the rule, Mrs Velevski's interest as a joint tenant in the property would pass to the defendant in accordance with the law of survivorship. However, it is clear that the rule will operate to prevent the surviving joint tenant from taking the benefit of his wrongful act. In Rasmanis v Jurewitsch & Anor (1970) 70 SR (NSW) 407 the Court of Appeal said (at 412 per Jacobs JA; Wallace P and Mason JA agreeing):
... the primary rule to be enforced is that the felon must not be allowed to retain any benefit flowing to him from the slaying and that he is required to hold any such benefit which flows at law upon trust for someone other than himself. This someone may be either the estate of the victim or the third joint tenant.
This principle was applied by Barrett J (as his Honour then was) in Neubacher v Good [2003] NSWSC 379; (2003) 11 BPR 20,877:
[9] The operation of the forfeiture rule in circumstances of joint tenancy was examined by Jacobs JA (with whom Wallace P and Mason JA agreed) in Rasmanis v Jurswitsch (1969) 70 SR (NSW) 407. His Honour rejected the possibility that the felonious slaying of one joint tenant by the other had affected a severance of the joint tenancy:
I find difficulty in the concept of severance even in equity being affected simply by the homicide. This would, as it were, add a new category of severance by homicide.
Two parcels of land were in issue in that case. The wrongdoer and the victim held one parcel as joint tenants. The second parcel was held by those two persons and a third as joint tenants. In relation to the first parcel (the one held in circumstances corresponding with those assumed in this case), the Court of Appeal held that, in order to accommodate and give effect to the forfeiture rule, equity must deny the wrongdoer the benefit of the accretion that would, in the ordinary course, flow to him by survivorship and that this should be done by recognising or imposing a constructive trust requiring the wrongdoer to hold the accretion upon trust for the estate of the victim.
[10] That authority leads to the result in this case, at least according to the agreed assumption, that, immediately before his death, [the alleged felon] was recognised as entitled to be the sole registered proprietor (that being the effect of his right of survivorship) but that, while that position prevailed at law, the benefit of the enlargement did not accrue to him beneficially and the interest of [the alleged victim's] estate, pursuant to the constructive trust, prevailed in equity. In summary, therefore, [the alleged felon] was, immediately before his death, entitled to be recorded as the sole registered proprietor of the land but was regarded in equity as holding it upon trust for himself and [the alleged victim's] estate in equal shares. [The alleged victim's] estate must accordingly be regarded as the owner in equity of an undivided one half share in the land.
The most recent reported application of the principle to a joint tenancy in this State is the decision of Brereton J in Nay v Iskov [2012] NSWSC 598, where his Honour summarised the position in a way which is equally applicable to the present case:
[13] In those circumstances, the defendant is entitled to be registered as proprietor by survivorship of the whole of the property, but holds a half interest in it upon trust for the executors and could be required, in order to give effect to that trust, to transfer a half interest to the executors. Alternatively, the executors would prima facie be entitled to an order under s 66G of the Conveyancing Act 1919 (NSW) for sale of the property.
Having found that the defendant unlawfully killed Mrs Velevski and their children (see paragraph 26 above) and applying the principles to which I have just referred, the forfeiture rule operates in the present case to bring about the result that the defendant holds a half interest in the Property as a tenant in common upon trust for the administrator of her estate. For the sake of completeness it is next necessary to determine the order in which Mrs Velevski and her children died.
In what order did Mrs Velevski and the children die?
The plaintiff has filed no evidence dealing with this question, beyond making the assertion, which I accept, that in the defendant's trial the medical evidence did not enable a determination to be made of the order in which Mrs Velevski and her children died. As at June 1994 the matter was governed by the presumption of survivorship in s 35 of the Conveyancing Act 1919 (NSW) (the "CA"):
In all cases where two or more persons have died under circumstances rendering it uncertain which of them survived, the deaths shall for all purposes affecting the title to any property be presumed to have taken place in order of seniority, and the younger be deemed to have survived the elder.
The application of this presumption means that the victims are taken to have died in the following order: Mrs Velevski, the oldest daughter, the elder twin and then Daniela as the younger twin.
How do the intestate succession provisions apply?
The forfeiture rule applies equally in circumstances of intestacy, such that the disentitled beneficiary is treated as notionally not in existence, so that the other next of kin take the estate: Public Trustee v Fraser (1987) 9 NSWLR 433. This means that in the present case any interest the defendant might otherwise have on intestacy either as the husband of Mrs Velevski or the father of their children is disregarded and the defendant is taken to be notionally not in existence.
Intestate succession in this case is governed by s 61B of the Wills, Probate and Administration Act 1898 (NSW) as it stood in June 1994:
(1) Where a person dies wholly intestate, the real and personal estate of that person shall ... be distributed or held in trust in the manner specified in this section, and the real estate of that person shall be held as if it had been devised to the persons for whom it is held in trust under this section. ...
(4) If the intestate leaves issue but no husband or wife, the estate shall be held in statutory trust for the issue of the intestate. ...
(6) If the intestate leaves no husband or wife, no issue and no parents, the estate shall be held for the following persons living at the death of the intestate and in the following order and manner:-
(a) firstly, in statutory trust for the brothers and sisters of the whole blood of the intestate; but if there are no such brothers or sisters, then ...
(c) thirdly, in trust for the grandparents of the intestate and, if more than one of them survive the intestate, in equal shares; ...
I have already determined that the defendant holds Mrs Velevski's half interest in the Property on trust as an asset of her estate. Given the order of death which I have found by application of the presumption of survivorship, the provisions relating to succession on intestacy which I have quoted above yield the following result.
Mrs Velevski died first. The defendant holds her half interest in the Property on trust for the plaintiff as administrator of her estate. Mrs Velevski's estate would have been held for the benefit of her children in equal shares. With the subsequent deaths of the elder child and elder twin, their respective interests in their mother's estate ultimately passed to Daniela, who by reason of that process in the instant before her death would have become entitled the whole of her mother's estate. Daniela's estate (including all of her mother's estate) then passes upon intestacy to Daniela's grandparents, being the plaintiff, his wife and the defendant's father.
It follows that as a matter of administration, the defendant holds Mrs Velevski's half interest in the Property upon constructive trust for the plaintiff in his capacity as administrator of Mrs Velevski's estate. Upon realising that interest and deducting all appropriate costs and expenses, the plaintiff will notionally have to pass the proceeds to himself in his capacity as administrator of Daniela's estate. He will then distribute those proceeds to himself and the other grandparents as the beneficiaries of Daniela's estate.
Resolution and orders
For these reasons the plaintiff is entitled to the relief he seeks in the summons, including orders for sale of the Property under s 66G of the CA. The plaintiff's entitlement to an order for statutory sale is in his capacity as executor of Mrs Velevski's estate rather than as a beneficiary in the unadministered estate of Daniela (see Kelly v Kelly [2007] NSWSC 1076).
There are two slight differences between the orders I propose to make and those sought in the summons in relation to which I should record my reasons. I will also make directions for the defendant to be notified of the outcome.
First, the plaintiff seeks both an order that the defendant execute and deliver to the plaintiff a transfer in registrable form of a one half interest in the Property and an order for sale under s 66G of the CA. However, as Brereton J noted in Nay v Iskov (see paragraph 32 above) these are in practice alternative forms of relief. Given the defendant's lack of co-operation I think the most efficient course is to make an order under s 66G of the CA.
If for some reason it becomes necessary for Mrs Velevski's half share to be transferred to the plaintiff, the matter can be relisted. Any order for the defendant to execute a transfer of an interest in the Property should include a further order under s 94 of the Civil Procedure Act 2005 (NSW) for such a transfer to be executed by the Registrar in default of compliance by the defendant.
Second, the plaintiff's solicitor wrote to the defendant before commencing these proceedings inviting the defendant to consent to the outcome which the plaintiff has now had to achieve by approaching the Court. In those circumstances, and given the defendant's attitude to the proceedings as recorded in paragraph 5 above, it is appropriate that the defendant pay the plaintiff's costs of and incidental to the summons.
Furthermore, given that the plaintiff sues the defendant in effect as a beneficiary suing his trustee to recover his interest in trust property and that the principle underlying the application of the forfeiture rule is that the defendant should be in no way permitted to benefit from his wrong, the defendant should pay the plaintiff's costs of the summons on the indemnity basis.
Those same considerations also warrant two variations to what would otherwise be the usual orders in a s 66G application. I will order that the costs of these proceedings, as agreed or assessed, be payable to the plaintiff by the defendant in the first instance from that share of the proceeds of the sale of the Property to which the defendant is otherwise entitled. The costs and expenses of the sale itself should also be borne by the defendant alone out of his share of the proceeds of sale.
The Court's orders are:
1. Declare that on or about 20 June 1994 the defendant unlawfully killed his wife namely, Snezana Velevski (the "Deceased"), and three children namely, Zaklina Velevska, Dijana Velevska and Daniela Valevska.
2. Declare that the defendant is precluded from having the Deceased's interest in the land comprised in Folio Identifier XXXXX at Berkley, Wollongong (the "Property") pass to him under the right of survivorship or by inheriting any part of her estate.
3. Declare that the defendant holds the Property on trust as to one half share for himself and as to the other half share for the plaintiff as administrator of the Deceased's estate as tenants in common in equal shares.
4. Order pursuant to s 66G of the Conveyancing Act 1919 (NSW) (the "Act") that the plaintiff be appointed as trustee for sale of the Property.
5. Order that the Property be vested in the plaintiff as such trustee subject to incumbrances affecting the entirety of the Property, but free from incumbrances affecting any undivided share or shares therein, to be held by the said trustee upon statutory trust for sale under Division 6 of Part 4 of the Act.
6. Reserve liberty to any party to apply on seven days' notice in relation to the implementation of these orders including further orders relating to the disposal of, or dealing with, the Property.
7. Order that the defendant pay the plaintiff's costs of and incidental to the summons on the indemnity basis and that those costs and the costs and expenses of the sale of the Property be paid, in the first instance, out of what would otherwise be the defendant's share of the proceeds of sale of the Property.
8. Direct that the plaintiff give notice of these orders to the defendant by 30 August 2013 by delivering them with a copy of the reasons herein to the defendant c/- The Officer in Charge, Reception, Goulburn Correctional Centre, Maud Street, Goulburn.
9. Direct that these orders be entered forthwith.
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Decision last updated: 14 August 2013
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