Public Trustee (WA) v Mack - [2017] WASC 325

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: PUBLIC TRUSTEE (WA) -v- MACK [2017] WASC 325

CORAM: MASTER SANDERSON

HEARD: 3 AUGUST 2017

DELIVERED : 30 OCTOBER 2017

PUBLISHED : 14 NOVEMBER 2017

FILE NO/S: CIV 1903 of 2017

MATTER :The Estate of Adrian Ernest Mack of 144 Fairfield Street, Mount Hawthorn, Western Australia (Dec)
Section 45 Administration Act 1903 (WA) & O 58 Rules of the Supreme Court 1971 (WA)

BETWEEN: PUBLIC TRUSTEE (WA) as Administrator of the Estate of ADRIAN ERNEST MACK
Plaintiff
AND
BRENT DONALD MACK
First Defendant
GARY NORMAN MACK
Second Defendant

FILE NO/S :CIV 1899 of 2017

MATTER :The Estate of Ah Bee Mack of 144 Fairfield Street, Mount Hawthorn, Western Australia (Dec)
Section 45 Administration Act 1903 (WA) & O 58 Rules of the Supreme Court 1971 (WA)

BETWEEN :PUBLIC TRUSTEE (WA) as Administrator of the Estate of AH BEE MACK
Plaintiff
AND
PUBLIC TRUSTEE (WA) as Administrator of the Estate of ADRIAN ERNEST MACK
First Defendant
BRENT DONALD MACK
Second Defendant

Catchwords:

Probate - Whether wrongdoer can benefit indirectly as a result of crime

Legislation:

Administration Act 1903 (WA)
Rules of the Supreme Court 1971 (WA)

Result:

Benefit denied

Category: A

Representation:

CIV 1903 of 2017

Counsel:

Plaintiff:     Ms W F Gillan
First Defendant              :     No appearance
Second Defendant         :     Mr M H Solomon

Solicitors:

Plaintiff:     Public Trustee (WA)
First Defendant              :     No appearance
Second Defendant         :     Solomon Hollett Lawyers

CIV 1899 of 2017

Counsel:

Plaintiff:     Mr R J Nash
First Defendant              :     Ms W F Gillan
Second Defendant         :     No appearance

Solicitors:

Plaintiff:     Public Trustee (WA)
First Defendant              :     Public Trustee (WA)
Second Defendant         :     No appearance

Case(s) referred to in judgment(s):

Helton v Allen (1940) 63 CLR 691
In Re Estate of Macaro 182 Misc.2d 625 (1999)
In Re Estate of Vallerius 259 Ill.App.3d 350 (1994)
Matter of Edwards 2012 NY Slip Op 22102

MASTER SANDERSON: In these two actions, each plaintiff sought directions pursuant to s 45 of the Administration Act 1903 (WA) and O 58 of the Rules of the Supreme Court 1971 (WA). Orders were made in both matters on 30 October 2017. The matter in issue in CIV 1899 of 2017 was relatively straightforward. The question posed in CIV 1903 of 2017 was rather more complicated. Before detailing the directions given in both matters, it is necessary to set out the relevant facts.
Between 18 ‑ 29 December 2008 Ah Bee Mack was killed at the hand of one of her two sons Brent Donald Mack (Brent). Brent was tried before this court in November 2012 and was convicted of the murder of his mother. On 10 July 2014 Adrian Ernest Mack (the deceased), the only other child of Ah Bee Mack passed away. He died intestate. On 22 April 2016 a grant of letters of administration to the Public Trustee (WA) of Ah Bee Mack's estate was made. On 27 October 2016 a grant of letters of administration to the Public Trustee of the deceased's intestate estate was made.
The plaintiff as administrator of the deceased's estate (the Estate) seeks the court's direction as to the distribution of that part of the Estate which is made up of Ah Bee Mack's estate. Two persons are entitled to the benefit of the Estate under s 12B and item 8 of the table to sch 14 of the Administration Act. They are Brent who murdered Ah Bee Mack and Gary Norman Mack who is the half brother of the deceased (but was not a child of Ah Bee Mack). The question is does Brent by the murder forfeit any right to any identifiable part of Ah Bee Mack's estate even after the identifiable estate passes to the Estate.
The starting point is what is generally referred to as the rule of forfeiture in Australia. It was set out by the High Court in Helton v Allen (1940) 63 CLR 691, 709 (Dixon, Evatt & McTiernan JJ):
But Helton relies upon his acquittal of the charge of murder in the Criminal court as an answer to the application of the rule excluding a homicide from any benefit under the will or intestacy of the person who died at his hands. The rule is one of recent development. Its earliest appearance in any form may be said to be Fauntleroy's Case, The Amicable Insurance Society v Bolland (1830) 4 Bligh (NS) 194. In the Prince of Wales, etc, Association v Palmer (1858) 25 Beav 605, it appeared that Palmer, the poisoner, had effected insurances upon his victims with the intention of defrauding, and the rule disqualifying a homicide from claiming under the will or intestacy of his victim, or by reason of his death, was scarcely in point. Its first clear formulation was left to Cleaver v Mutual Life Association [1892] 1 QB 147, which arose out of the conviction of Mrs Maybrick. It is placed upon a principle of public policy, and it was said that no system of jurisprudence could with reason include amongst the rights which it enforces rights directly resulting to a person asserting them from the crime of that person - per Fry LJ, [1892] 1 QB 147 at pp 156. In Re Hall [1914] P 1, the doctrine was finally established, and held to include not only murder but manslaughter. There Hamilton LJ, said that the principle could only be expressed in the wide form -
It is that a man should not slay his benefactor and thereby take his bounty; and I cannot understand why the distinction should be drawn between the rule of public policy where the criminality consists in murder and the rule where the criminality consists in manslaughter
- [1914] P 1 at p 7. See further, Re Sigsworth [1935] Ch 89; and Beresford v Royal Insurance Company [1938] AC 586.
That rule has consistently been applied by Australian courts. In fact in relation to Ah Bee Mack's estate (CIV 1899 of 2017) I made orders that by reason of Brent having murdered Mrs Mack he has forfeited his entitlement to take in intestacy from the estate. But the point raised in CIV 1903 of 2017 is somewhat different. Brent's entitlement to a share of the Estate does not arise directly from his crime committed in December 2008. It arises from the fact of the deceased's death in 2014, the fact that he died intestate and the effect of the Administration Act. There is no suggestion that Brent was responsible for the deceased's death. However, the deceased, and subsequently his estate, would not have acquired any interest at all in Ah Bee Mack's estate but for Ah Bee Mack's death. Furthermore, the deceased would not have had an entitlement to the whole of the assets of Ah Bee Mack's estate but for her death at Brent's hand.
There appears to be no Australian authority directly on point. Intuitively it would seem to be a logical extension of the rule of forfeiture to hold that a person in the position of Brent, a convicted murderer, could not benefit directly or indirectly as a consequence of his crime. It is difficult to see that any principle of law is offended by that extension. But, as I have said, there is no Australian case on point. The diligent research of counsel has thrown up three American decisions which support the proposition that a person should not benefit directly or indirectly as a consequence of the crime.
The first in time is the decision In Re Estate of Vallerius 259 Ill.App.3d 350 (1994). The headnote to that case (or what I understand to be the American equivalent of the headnote) summarised the Court of Appeal decision in this way:
Petition was filed to intervene and consolidate estates of grandmother and her daughter and objection to distribution was filed in estate of grandmother wherein plaintiffs alleged that two grandsons, having intentionally and unjustifiably caused grandmother's death, could not lawfully receive any property, benefit or other interest by reason of her death, through grandmother's estate or daughter's estate. One grandson petitioned to intervene. The three cases were consolidated and the Circuit Court, Madison County, Michael J. Meehan, J., held that grandsons could not inherit. Appeal was taken. The Appellate Court, William A. Lewis, P.J., held that grandsons who intentionally and unjustifiably participated in grandmother's murder could not indirectly inherit grandmother's estate through their mother who died after grandmother was murdered.
The second case is In Re Estate of Macaro 182 Misc.2d 625 (1999). This is a first instance judgment. Once again I will quote the headnote:
Administratrix of estate of decedent, who died intestate and was survived only by his eight nieces and nephews, moved to disqualify one of nephews as distributee, based on nephew's convictions for intentional homicides of his father, who was decedent's brother, and another of decedent's siblings. After nephew filed objections, and administratrix moved for summary judgment dismissing objections, the Surrogate's Court, Westchester County, Albert J. Emanuelli, S., held as a matter of first impression that nephew's convictions disqualified him as an intestate distributee.
It is not always easy to reconcile American procedure with the procedure in this court. However, as I understand the case the plaintiff sought summary judgment in the same way a plaintiff would seek summary judgment in this court. Rather than holding there was no serious question to be tried - the test for summary judgment in this court - the New York court held 'as a matter of first impression' the respondent had no answer to the claim. It would appear the two tests are roughly similar. In the course of judgment Albert J Emanuelli S put the position this way:
In Riggs v. Palmer, 115 N.Y. 506, 22 N.E. 188, supra, by will executed in 1880, Francis B. Palmer, a widower ['testator'], gave small legacies to his two daughters, and his entire residuary estate to his grandson, Elmer Palmer, with a gift over to the daughters if Elmer were to die before reaching the age of majority, unmarried and without issue. The testator's estate consisted primarily of a farm and considerable personal property.
According to Judge Earl of the Court of Appeals, 'that [Elmer] might prevent [the testator] from revoking such provisions, which [the testator] had manifested some intention to do, and to obtain the speedy enjoyment and immediate possession of his property, [Elmer] willfully murdered [the testator] by poisoning him' (Riggs v. Palmer, supra, at 508-509, 22 N.E. 188).
In finding that, notwithstanding the applicable provisions of the will and foregoing statutes in effect at that time, Elmer had forfeited his right to inherit the property in question, Judge Earl wrote (Riggs v. Palmer, 115 N.Y. 506 supra, at 511-514, 22 N.E. 188) [emphasis supplied]:
'[A]ll laws as well as all contracts may be controlled in their operation and effect by general, fundamental maxims of the common law. No one shall be permitted to profit by his own fraud, or to take advantage of his own wrong, or to found any claim upon his own iniquity, or to acquire property by his own crime. These maxims are dictated by public policy, have their foundation in universal law administered in all civilized countries, and have nowhere been superseded by statutes ***
Under the civil law evolved from the general principles of natural law and justice by many generations of jurisconsults, philosophers and statesmen, one cannot take property by inheritance or will from an ancestor or benefactor whom he has murdered [citations omitted]. Our revisers and lawmakers were familiar with the civil law, and they did not deem it important to incorporate into our statutes its provisions upon this subject. This is not a casus omissus. It was evidently supposed that the maxims of the common law were sufficient to regulate such a case and that a specific enactment for that purpose was not needed.
For the same reasons, [Elmer] Palmer cannot take any of this property as an heir. Just before the murder he was not an heir, and it was not certain that he ever would be ***. He made himself an heir by the murder, and he seeks to take property as the fruit of his crime. What has before been said as to him as legatee applies to him with equal force as an heir. He cannot vest himself with title by crime ***.'
The court is mindful of respondent's argument that the tenets established in Riggs v. Palmer and its progeny have generally been applied only where the killer was seeking a share either as a legatee or distributee of his victim's estate, and there appears to be no published New York precedent applying said tenets where, as here, the estate from which the killer seeks to inherit is not the estate of his victim.
Nevertheless, in light of all relevant circumstances herein, and in order to uphold the principal maxim derived from Riggs v. Palmer - No one shall be permitted to acquire property by his own crime - this court hereby extends the foregoing principles to the limited circumstances at issue herein.
Indeed, to hold otherwise would subvert the longstanding public policy of the courts in New York, as articulated by Judge Earl (Riggs v. Palmer, supra, at 514, 22 N.E. 188): 'simply *** that he shall not acquire property by his crime, and thus be rewarded for its commission'.
Curiously enough the decision is footnoted with material which in this jurisdiction would undoubtedly form part of the judgment. Footnote 3 is in the following terms:
Indeed, the foregoing principles set forth in Riggs v. Palmer both with respect to testate and intestate estates have withstood scrutiny for over a century, and have guided the development of related precedents, to wit: one who has been convicted of an intentional homicide forfeits, without the right to any further hearing: (i) the right to receive the proceeds of insurance policy on the life of the victim (see, e.g., Matter of Barrett, 224 A.D.2d 415, 637 N.Y.S.2d 751); (ii) sole title to property held jointly with right of survivorship with the victim (see, Matter of Pikul, 192 A.D.2d 259, 601 N.Y.S.2d 113); and (iii) in essence, the right to receive any property from the victim, regardless of whether the property would have otherwise passed to the killer by will, intestacy, or operation of law (see generally, Estate of Murphy, NYLJ, June 23, 1999, at 31, col. 5 [Kings County]; Estate of Mickens, NYLJ, Aug. 8, 1996, at 25, col. 1 [Bronx County] ).
Notably, such forfeiture does not occur where the killing was accidental, in self-defense (see, Matter of Barrett, supra, or where the killer acted under a disability sufficient to negate a culpable mental state, such as insanity (see, Matter of Wirth, 59 Misc.2d 300, 298 N.Y.S.2d 565).
The final case is Matter of Edwards 2012 NY Slip Op 22102, decided on 28 March 2012. John M Czygier J set out the relevant facts as follows:
Dianne Edwards died on December 17, 2008 as a result of what was described in her death certificate as 'neck compress.' Her son-in-law, Brandon Palladino, was charged with Murder in the Second Degree, as well as lesser included offenses, in connection with this death. On October 12, 2010 he entered a plea of guilty to Manslaughter in the First Degree in satisfaction of the charges against him and was subsequently sentenced to twenty-five (25) years in prison. As part of the plea negotiation, he waived his right to appeal. Brandon Palladino's wife, Deanna Palladino, was the sole beneficiary of her mother's estate. Dianne Edwards' will was admitted to probate in this court on October 5, 2009 and letters testamentary with limitations (a wrongful death action was referenced in the probate petition) issued to Dennis Gleason (an ex‑spouse), who has since been substituted by order of the court (August 29, 2011) by successor fiduciary Gail O'Connell. The sole asset of the estate was decedent's house in Melville, New York. On February 9, 2010, Deanna Palladino died intestate as a result of an accidental drug overdose, according to the parties. Her sole distributee was her husband, Brandon Palladino. He designated his mother, Donna DiRusso, to receive letters of administration for Deanna Palladino's estate.
The accounting before the court reflects the sale of the decedent's Melville property and a principal balance on hand of approximately $262,000. Instead of a proposed distribution schedule, the accounting fiduciary asks the court for direction on whether to pay funds on hand to the estate of decedent's post-deceased beneficiary (her daughter Deanna, whose sole distributee is Brandon Palladino) or to the decedent's sister Donna Larsen.
Donna Larsen (Larsen) filed objections to the account, alleging that she is the decedent's only sibling and that Brandon Palladino has forfeited his right to inherit through the estate of his wife, assets attributable to his mother-in-law's estate, as a matter of public policy, since he caused the death of the person whose funds would inure to his benefit through his post-deceased spouse's state.
Judge Czygier then set out the issue to be determined in the case. He said:
The gravamen of the motion to dismiss the objections to the accounting is that Larsen lacks standing to object thereto. It is DiRusso's contention that Larsen could only seek to disqualify Brandon within the context of the accounting to be brought by the administrator of Deanna's estate, which is not before the court. The unconditional bequest in decedent's will vested in Deanna upon the decedent's death. DiRusso posits that, since Brandon had no involvement in Deanna's death, he cannot be disqualified as a distributee of Deanna's estate; therefore, attempting to seek his disqualification in the decedent's estate is merely Larsen's attempt to establish a closer nexus between this decedent's death and the disqualification/forfeiture issue. To do so would also prejudice the rights of any creditors of Deanna's estate.
After considering the arguments put by the parties his Honour said:
While this court has also struggled with the fact that Deanna Palladino apparently supported her husband until her death, it is also cognizant of the fact that she died approximately eight months before Brandon Palladino pled guilty to the crime. Whether this would have changed Deanna Palladino's mind set is, of course, unknown; and to arrive at a conclusion one way or the other would be pure speculation. Here, no speculation is required to see the causal connection between the wrongdoing and the benefit. To ignore Brandon Palladino's admission concerning captioned decedent's death and reward his actions with an inheritance he would not have otherwise acquired, albeit through the estate of his spouse, disturbs the conscience of the court, which as previously noted herein is a court of equity.
...
Admittedly, a consistent application of the approach adopted herein could prove to be problematic were there a greater temporal proximity between the wrongful act and the wrongdoer's succession to the funds received by the original heir(s) of the victim. The court is well aware that the tracing of such funds may well prove to be impossible in certain cases due to their conversion, expenditure, depletion, or any other number of reasons. However, to say that potential hurdles to the enforcement of the forfeiture in certain instances should prevent the application in a case such as this, where the precise tracing of the funds produced by the wrong is possible, would make the court a facilitator of the wrongdoer, by shirking its equitable responsibilities under the common law and the long-standing public policy that a wrongdoer should not profit from his or her intentionally committed wrongful acts.
It would appear then that the principle that a wrongdoer cannot benefit even indirectly as a consequence of his misdeeds is well established in the United States. It does appear as though there may be some doubt whether if a long period of time has passed between the commission of the offence and the passing of an asset to the wrongdoer whether the principle would hold good. But that is not this case. The estate of Ah Bee Mack was quite discrete on her death and with the disqualification of Brent from participating in a distribution of her estate the property passed to the deceased. There is nothing in the evidence to suggest there was any significant modification to the deceased's estate either by the flux of time or otherwise which made identification of the asset held by the deceased consequent upon the death of Ah Bee Mack difficult. Accordingly, directions should be made so as to ensure Brent does not benefit by his criminal conduct.

In response to the questions posed by the originating summons I made the following directions in CIV 1903 of 2017:
1.On final distribution of the Estate the plaintiff should not pay to the first defendant who would otherwise be entitled in intestacy any part of the Estate of the late Adrian Ernest Mack which derives from the estate of the late Ah Bee Mack.
2.The plaintiff is justified in paying the whole of that part of the Estate which derives from the estate of the late Ah Bee Mack to the second defendant.
3.The plaintiff can accept a written discharge of the second defendant for any payment made to him of any part of the Estate of the late Adrian Ernest Mack.
4.The costs of this application should be paid on an indemnity basis from the assets of the Estate.
In CIV 1899 of 2017, orders were made in terms of the minute:
1.Pursuant to s 45 Administration Act (WA) 1903 and Order 58 of the Rules of the Supreme Court, the Court directs the plaintiff, on the final distribution of the intestate estate of the late Ah Bee Mack, to distribute the whole of the estate, after payment of all estate debts, duties, taxes, funeral, testamentary and administration expenses, to the administrator of the estate of the late Adrian Ernest Mack, namely the first defendant.
2.The plaintiff's and first defendant's costs of this application be paid out of the estate of the late Ah Bee Mack.