Re Settree Estates; Robinson v Settree

[2018] NSWSC 1413

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Re Settree Estates; Robinson v Settree [2018] NSWSC 1413

Hearing dates:

12 September 2018

Decision date:

03 October 2018

Jurisdiction:

Equity - Probate List

Before:

Lindsay J

Decision:

Subject to allowing the parties an opportunity to be heard as to the form of orders to be made, the Court determined that forfeiture application orders should be made under section 11 of the Forfeiture Act 1995 NSW, conditional upon provision being made (in the form of a trust fund established out of the estates of the parties’ deceased parents) for the maintenance, education and advancement in life of a mentally ill son who unlawfully killed both parents, was found not guilty of murder by reason of mental illness, and remains in protective detention as a result of orders made at the conclusion of his criminal trial.

Catchwords:

SUCCESSION – Forfeiture under public policy rule – Testator killed by beneficiary but beneficiary not guilty of murder by reason of mental illness – Application under s 11 of the Forfeiture Act 1995 (NSW) that the forfeiture rule apply – Whether justice requires that the rule be applied – Forfeiture rule applied subject to terms and conditions

 

JUDGMENTS AND ORDERS – Orders on terms or conditions – s 86 Civil Procedure Act 2005 (NSW) – Whether Forfeiture Application orders can be made on terms or conditions – Where statutory language differs between Forfeiture Modification and Forfeiture Application orders – No bar on making Forfeiture Application orders on terms or conditions – Terms and conditions imposed

CRIMINAL LAW – General matters – Criminal Liability and capacity – Verdict of not guilty by reason of mental illness – Effect of verdict on entitlement to inherit from victim’s estate – Forfeiture rule - Application of the Forfeiture Act 1995 (NSW) – Whether accused to be treated as if found guilty of murder

Legislation Cited:

Civil Procedure Act 2005 NSW
Confiscation of Proceeds of Crime Amendment Act 2005 NSW
Evidence Act 1995 NSW
Family Provision Act 1982 NSW
Firearms Act 1996 NSW
Forfeiture Act 1991 ACT
Forfeiture Act 1995 NSW
Interpretation Act 1987 NSW
Mental Health (Forensic Provisions) Act 1990 NSW
NSW Trustee and Guardian Act 2009
Probate and Administration Act 1898 NSW
Protected Estates Act 1983 NSW
Supreme Court Act 1970 NSW
Testators Family Maintenance and Guardianship of Infants Act 1916 NSW.
Uniform Civil Procedure Rules 2005 NSW

Cases Cited:

Ability One Financial Management Pty Ltd and Anor v JB by his tutor AB [2014] NSWSC 245
Amicable Society for a Perpetual Life Assurance Office v Bolland (Lord Fauntleroy’s case) (1830) 4 Bli NS 194; 5 ER 70
Andrew v Andrew (2012) 81 NSWLR 656
Batey v Potts (2004) 61 NSWLR 274
Bosch v Perpetual Trustee Co Ltd [1938] 463
Briginshaw v Briginshaw (1938) 60 CLR 336
CCR v PS (No. 2) (1986) 6 NSWLR 622
Cleaver v Mutual Reserve Fund Life Assurance [1892] 1 QB 147
Clyne v NSW Bar Association (1960) 104 CLR 186
CPT Custodian Pty Limited v Commissioner of State Revenue (Vic (2005) 224 CLR 98
Edwards v State Trustees Limited [2016] VSCA 28
Egan v O’Brien [2006] NSWSC 1398
Estate of Raul Novosadek [2016] NSWSC 554
Farah Constructions Pty Limited v Say-Dee Pty Limited (2007) 230 CLR 89
Fitter v Public Trustee [2007] NSWSC 1487
Gonzales v Claridades (2003) 58 NSWLR 211
Goodman v Windeyer (1980) 144 CLR 490
Guler v NSW Trustee and Guardian [2012] NSWSC 1369

Helton v Allen [(1940) 63 CLR 691
Hill v Hill [2013] NSWSC 524; 11 ASTLR 121
In re Allen [1922] NZLR 218
Jans v Public Trustee [2002] NSWSC 628
Kemperle v Public Trustee (Powell J, 20 November 1985, unreported) BC 8500411
Leneghan-Britton v Taylor [1998] NSWSC 218
O’Sullivan v Farrar (1989) 168 CLR 210
Permanent Trustee Company Ltd v Gillett [2004] NSWSC 278; 145A Crim R220
Pike v Pike [2015] QSC 134
Pilbara Infrastructure Pty Limited v Australian Competition Tribunal (2012) 246 CLR 379
Pontifical Society for the Propagation of the Faith v Scales (1962) 17 CLR 9
Price v Roberts [1992] NSWCA 191.
Public Trustee v Evans (1985) 2 NSWLR 188
Public Trustee v Fitter [2005] NSWSC 1188
Public Trustee v Fraser (1987) 9 NSWLR 433
Public Trustee v Hayles (1993) 33 NSWLR 154
R v R (Hodgson CJ in Equity, unreported, 14 November 1997) BC 9707619
R v Settree (No. 2) [2016] NSWSC 1079
R v Settree [2016] NSWSC 1028
Rasmanis v Jurewitsch (1968) 88 WN (Pt 1) (NSW) 59
Re Jane Tucker, deceased (1920) 21 SR (NSW) 175 38 WN (NSW) 28
Re Keitley [1992] 1 VR 583
Re Plaister; Perpetual Trustee Co v Crawshaw (1934) 34 SR (NSW) 547; 51 WN (NSW) 141
Re Tucker (1920) 21 SR (NSW) 175
Smith v NRMA Insurance Ltd [2016] NSWCA 250
State of Victoria v Davies (2003) 6 VR 245
Strede v Eastwood [2003] NSWSC 280
Troja v Troja (1994) 33 NSWLR 269
Troja v Troja (1994) 35 NSWLR 182
Vain v Morabito (Powell J, 14 August 1992 unreported)
Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492
Woolf v Snipe (1933) 48 CLR 677

Texts Cited:

Hansard, Legislative Assembly, 21 September 2005
Hansard , Legislative Council, 25 October 1995
GE Dal Pont and KF Mackie, Law of Succession (2nd ed, Lexis Nexis Butterworths, Australia, 2017)
JR Lucas, On Justice (Clarendon Press, Oxford, 1980)
Tasmania Law Reform Institute, The Forfeiture Rule (December 2004)
Victorian Law Reform Commission, The Forfeiture Rule (September 2014);

Category:

Principal judgment

Parties:

Plaintiff: Wendy Margaret Robinson
Defendant: Scott Settree by his tutor Elizabeth Jane Grosse

Representation:

Counsel:
Plaintiff: MM Pringle
Defendant: DH Murr SC and J Pentelow

  Solicitors:
Plaintiff: Kenneth Harrison Lawyer
Defendant: Unified Lawyers

File Number(s):

2017/00038811

Judgment

INTRODUCTION

The Nature of the Proceedings : The Forfeiture Rule, the Forfeiture Act and their Field of Operation

1. By a summons filed on 7 February 2017 and amended on 22 March 2017, the plaintiff applies, under section 11 of the Forfeiture Act 1995 NSW, for orders that the “forfeiture rule” apply to her brother, the defendant, in her administration of the deceased estates of their parents, each of whom was shot dead by the defendant, without lawful justification, on 3 December 2014.

2. Section 3 of the Forfeiture Act 1995 defines the “forfeiture rule” as “the unwritten rule of public policy that in certain circumstances precludes a person who has unlawfully killed another person from acquiring a benefit in consequence of the killing”.

3. At common law, the forfeiture rule applies, inter alia, to cases of murder (Cleaver v Mutual Reserve Fund Life Association [1892] 1 QB 147; Re Estate of Crippen [1911] P108) and manslaughter (Re Estate of Hall [1914] P1); but not in the case of a person found not guilty of murder on the ground of mental illness: Re Plaister; Perpetual Trustee Co v Crawshaw (1934) 34 SR (NSW) 547 at 558; 51 WN (NSW) 141; Kemperle v Public Trustee (Powell J, 20 November 1985, unreported) BC 8500411 at 16. The rule applies to intestate estates as well as those governed by a will: Re Jane Tucker, deceased (1920) 21 SR (NSW) 175 at 181-182; 38 WN (NSW) 28 at 31.

4. In the case of an unlawful killing that does not constitute murder (section 4(2)(a)) the Forfeiture Act empowers the Court, if satisfied that that “justice” so requires:

1. to make a “forfeiture modification order” to modify the effect of the forfeiture rule where it otherwise applies (sections 5-6); and

2. to make a “forfeiture application order” where a person who has killed another person has been found not guilty of murder by reason of mental illness (section 11).

5. The defendant was tried for the murder of his parents by Campbell J, sitting without a jury (for reasons explained in R v Settree [2016] NSWSC 1028), giving rise to a determination on 4 August 2016 that the defendant was not guilty of murder by reason of mental illness: R v Settree (No. 2) [2016] NSWSC 1079.

6. More particularly, Campbell J (under section 38 of the Mental Health (Forensic Provisions) Act 1990 NSW) returned a special verdict of not guilty of the charge of murder by reason of mental illness in respect of the deaths of each of the defendant’s parents and (under section 39 of the same Act) ordered that the defendant be detained in a correctional facility or at such other place as determined by the Mental Health Review Tribunal until released by due process of law.

7. In the wake of his finding that the defendant was “criminally insane” at the time he killed his parents ([2016] NSWSC 1079 at [80]), Campbell J accepted that the defendant was fit to plead guilty on a related firearms charge (possession of an unauthorised prohibited firearm contrary to the provisions of section 7(1) of the Firearms Act 1996 NSW) , for which his Honour sentenced the defendant to a term of imprisonment, backdated so as to have expired by the time of imposition of the sentence: [2016] NSWSC 1079 at [3] and [84]-[97]. Despite his finding that the defendant was mentally ill at the time he shot his parents, the judge accepted that the defendant “knowingly” had custody of the “murder weapon” (as His Honour described it), a 12 gauge pump-action shotgun.

8. The defendant continues to be detained pursuant to that order. He is represented in these proceedings by a paternal aunt who, by an order made on 5 June 2017, was appointed his tutor for that purpose.

9. Her appointment as tutor was supported by the facts that: (a) on 11 January 2016 the defendant executed an enduring power of attorney in her favour; and (b) there was no subsisting order (of the Court, the Guardianship Division of the NSW Civil and Administrative Tribunal or the Mental Health Review Tribunal) for the estate of the defendant to be subject to protective management under the NSW Trustee and Guardian Act 2009 NSW.

10. The necessity for a tutor arises from the defendant’s detention in a mental health facility pursuant to Campbell J’s orders: Guler v NSW Trustee and Guardian [2012] NSWSC 1369 at [3]. As a “forensic patient” he is a “person under legal incapacity” within the meaning of section 3(1) of the Civil Procedure Act 2005 NSW. That definition feeds into the provisions of Division 4 of Part 7 of the Uniform Civil Procedure Rules 2005 NSW. Rule 7.14 provides that a person under legal incapacity cannot ordinarily carry on proceedings except by a tutor, represented by a solicitor. Rule 7.17(1) provides that the plaintiff in proceedings against a defendant who is a person under legal incapacity can ordinarily take no further step in the proceedings following service of originating process until a tutor has entered an appearance on behalf of the defendant.

11. If satisfied that it is appropriate to do so in the circumstances of a particular case, the Court can dispense with these rules: Civil Procedure Act 2005, section 14. A dispensation order is not uncommonly made in proceedings involving an exercise of protective jurisdiction in which it is in the interests of an incapacitated person for the proceedings to be entertained. However, in proceedings such as the present, where entitlements of an incapable person are liable to forfeiture, the Court ordinarily requires him or her to have the benefit of both a tutor and legal representation.

12. A tutor having been appointed for the defendant, in circumstances in which the tutor had instructed a solicitor, on the same day (5 June 2017):

1. orders were made for the plaintiff to be granted probate in solemn form entitling her to administer the respective estates of the deceased parents;

2. an order was made, under section 12 of the Forfeiture Act, that the plaintiff be granted such leave as may be necessary to make her application for forfeiture application orders outside the time limited by that section;

3. by and with the consent of the parties (without admission of any kind by any party), orders were made authorising, and directing, the plaintiff to pay out of estate property the sum of $20,000 to the defendant’s solicitors on account of professional costs and disbursements incurred by the defendant in the proceedings; and

4. the Court made a formal notation that the defendant proposed, on the hearing of the plaintiff’s application for forfeiture application orders, to take no objection to admission into evidence, of the record of proceedings (including evidence and any agreed statement of facts) in the criminal proceedings that culminated in the judgment of Campbell J in R v Settree (No. 2) [2016] NSWSC 1079.

13. After the defendant’s legal representatives were allowed substantial opportunities to consider whether other evidence should be relied upon in opposition to the plaintiff’s application, both parties invited the Court to proceed on the basis that the factual parameters of the present proceedings are substantially defined by Campbell J’s thorough judgment in the criminal proceedings. Both parties accepted his Honour’s findings of fact as an accurate summary of the facts and circumstances bearing upon decisions to be made in the current proceedings.

14. Section 91 of the Evidence Act 1995 NSW (which provides that evidence of a decision or a finding of fact in proceedings is not admissible to prove the existence of a fact that was in issue in those proceedings) provides no impediment to the Court, in these proceedings, acting on the parties’ joint invitation to adopt, and act upon, undisputed findings of fact made in the criminal proceedings. Although Campbell J had to decide (as the only issue for his determination) whether the mental illness defence was available to the defendant in the criminal proceedings, there was general agreement between the prosecution and defence, and their respective medical experts, that it was, and that the underlying facts were not in dispute: [2016] NSWSC 1079 at [6], [12], [30]-[37].

15. With the acquiescence of the parties, a Forfeiture Act application may be determined by adoption of, or by reference to, findings made in an earlier judgment in criminal proceedings (eg, Jans v Public Trustee [2002] NSWSC 628 at [2]) or by a review of the evidence upon which such findings were made (eg, Hill v Hill [2013] NSWSC 524; 11 ASTLR 121), eschewing a fresh contest which may, in formal terms, be an available option (Public Trustee v Fitter [2005] in NSWSC 1188 at [10]-[11]; Nay v Iskov [2012] NSWSC 598). In the present proceedings, the parties accepted Campbell J’s special verdicts (of not guilty of murder by reason of mental illness) as correct and available to be relied upon.

16. In any event, the evidence before the Court in these proceedings includes (a) the evidence adduced in the criminal trial; and (b) a “certificate of court result” (under section 178 of the Evidence Act 1995) which formally proves (for the purpose of section 11 of the Forfeiture Act) the jurisdictional fact that, on the ground of mental illness, the defendant was found not guilty of the murder of his parents.

17. The hearing of the present summons was conducted without objection to any of the evidence adduced on either side of the record and without cross examination of any witness. The defendant did not personally give evidence on his own behalf.

The Family Setting for Tragic Deaths

18. The plaintiff and the defendant are the only children of the deceased. Sister and brother, both, are adults. The plaintiff was born in about 1962. The defendant was born in 1968.

19. The deceased parents were shot by the defendant at close range following a minor domestic dispute between the defendant and his father. The argument between father and son led, in succession, to a physical assault by the defendant on his father; a demand by his long suffering mother that the defendant leave the family home; and the defendant’s fatal deployment of the shotgun he kept in his bedroom. The mother, Margaret Catherine Settree (“Mrs Settree”), was the first to die. Her death was followed, in quick succession, by that of her husband, the father of the parties, Donald Ian Settree (“Mr Settree”). Mrs Settree was shot once, without warning. Mr Settree was shot twice, in disregard of a plea for mercy.

20. There is no suggestion that Mr and Mrs Settree were otherwise than blameless, loving parents.

21. Mr and Mrs Settree left reciprocal wills dated 23 February 1993 which, given their near simultaneous deaths, essentially provide, in terms, that the whole of each estate passes to their children (the plaintiff and the defendant) in equal shares as tenants in common. In broad terms, the combined value of the two estates (including superannuation and life insurance entitlements) is of the order of $2,000,000. Absent forfeiture application orders under section 11 of the Forfeiture Act, half of that will pass to the defendant.

22. Each will contains an express provision that, if either of the plaintiff or the defendant were to predecease their parents leaving children (that is, grandchildren of the deceased parents), then the grandchildren would, in equal shares, take the share which would have passed to their parent, the plaintiff or the defendant as the case may be.

23. The defendant has two adult sons, respectively born in February 1996 and April 1997. Each of them has affirmed an affidavit in support of the plaintiff’s application.

The Incidental Operation of the Forfeiture Rule : Benefits Forfeited and, incidentally, Acquired

24. At common law, if the forfeiture rule applies, it generally operates to preclude, not only a person who has unlawfully killed another person from taking any benefit that might otherwise flow from the death, but, also, to preclude other persons from claiming a benefit through the offender.

25. The forfeiture rule, as a modern rule of public policy, is sometimes said to have been developed by judges in response to the statutory abolition of older common law rules governing forfeiture of property to the Crown, and loss of civil rights, following upon conviction of a felony: eg, Troja v Troja (1994) 33 NSWLR 269 at 277-278 per Kirby P.

26. The modern forfeiture rule lacks the clarity of focus of an old style forfeiture to the Crown; it focuses attention on a killer’s loss of benefits without certainty as to who, incidentally, acquires forfeited benefits. This is a problem inherent in the operation of the modern rule - determination of how far the rule operates derivatively and who takes the benefit of property the subject of a forfeiture: Public Trustee v Hayles (1993) 33 NSWLR 154; Egan v O’Brien [2006] NSWSC 1398.

27. If, under section 11 of the Forfeiture Act, forfeiture application orders affecting the defendant are to be made, then (subject to the possibility that those orders might be made in terms or on conditions designed to protect the interests of the defendant’s sons) the forfeiture rule will, or may, operate so as to extinguish any interest that the sons might otherwise have in their grandparents’ estates.

28. Against the possibility that they may be found to have an entitlement to the defendant’s share of the estates, each son has (by his affidavit in support of the plaintiff) disclaimed any interest in the estates: GE Dal Pont and KF Mackie, Law of Succession (2nd ed, LexisNexis Butterworths, Australia, 2017), paragraphs [7.42]-[7.46].

29. Accordingly, there is in this case no dispute about what should happen to the defendant’s share of his parents’ estates if an unconditional section 11 order were to be made. The only interests (other than the interests of the defendant) in competition with the interests of the plaintiff under her parents’ wills are the interests of the defendant’s sons, who have disclaimed any interest they might have. If the parents’ estates were to be administered on a partial intestacy then, with the defendant precluded from taking any share in the estates, the only beneficiary would ultimately be the plaintiff: Succession Act, sections 112 and 127.

The Nature of a Forfeiture Application Order : Can an Order be made on Terms and Conditions? : A question to be decided

30. By section 6, the Forfeiture Act expressly provides that a forfeiture modification order (under section 5 of the Act) can be made “in such terms and subject to such conditions as the Court thinks fit”.

31. There is no comparable, express power in the Act that authorises the making of a conditional forfeiture application order under section 11 of the Act.

32. However, section 86 of the Civil Procedure Act 2005 NSW provides, inter alia, that:

“(1)   the power of the Court to make orders in relation to proceedings, whether under the Civil Procedure Act or any other Act or otherwise, includes the power to make orders on terms; and

(2)   the power of the Court to make orders on terms is taken to be a power to make orders on such terms and conditions as the Court thinks fit.”

33. One of the questions for determination in these proceedings is whether, upon the proper construction of the Forfeiture Act and the Civil Procedure Act, the Court is empowered to make, or to decline to make, a forfeiture application order on terms and conditions and, if so, within what parameters.

34. There appear to have been only four reported cases in which section 11 of the Forfeiture Act has been the subject of a determination: Public Trustee v Fitter [2005] NSWSC 1188 (the subject of an unsuccessful application in Fitter v Public Trustee [2007] NSWSC 1487 for orders to be set aside); Guler vNSW Trustee and Guardian [2012] NSWSC 1369; Hill v Hill [2013] NSWSC 524; 11 ASTLR 121; and Estate of Raul Novosadek [2016] NSWSC 554.

35. Although Novosadek alludes to doubts about whether the operation of the forfeiture rule can be “modified” in the context of a section 11 application ([2016] NSWSC 554 at [25] and [57]-[59]), none of these cases otherwise involved discussion of whether a section 11 order can be made on terms and conditions, whether by reference to section 86 or otherwise.

36. In no reported section 11 case has an application for a forfeiture application order been refused. In two cases (Guler and Hill) the “offender”, through a tutor, consented to an order being made. In all cases, a major factor has been revulsion attending a perception of a violent or unnatural death.

37. Young AJ observed in Novosadek [2016] NSWSC 554 at [32]: “In circumstances where the Legislature has chosen to extend the application of the rule to persons found not guilty of murder by reason of mental illness, it would be odd if criminal or moral culpability were the touchstone in determining whether the forfeiture rule should be applied. However, what authority there is seems to take into account the significant actions of the killer and the public revulsion that a person who has committed such actions should reap a financial benefit from them.”

38. From their opposite perspectives, the primary submission of each party to these proceedings is that, upon a proper construction of the legislation, the Court has no power to make, or to withhold, a forfeiture application order on terms or subject to conditions.

39. In essence, three contentions are advanced. First, section 11 of the Forfeiture Act relating to forfeiture application orders is, in terms, unqualified by an express power such as appears in section 6 of the Act as a feature of the power (in section 5) to make a forfeiture modification order. Secondly, the legislative history of section 11 (as manifested in Hansard) is said to indicate a clear intention to implement the forfeiture rule where “justice” requires, unattended by a qualification about orders being made or withheld on terms and conditions. Thirdly, the fact that section 86 of the Civil Procedure Act appears under the heading “Part 6 - Case Management and Interlocutory Orders”, rather than in “Part 7 - Judgments and Orders”, is said to manifest an intention that section 86 be a power confined to interlocutory orders, not one applicable to final judgments or orders.

40. At my invitation, each party made an alternative submission against the possibility that the Court might be minded to make a forfeiture application order on terms or conditions. The plaintiff contended that an order should be made (in terms compatible with an open offer briefly made, but withdrawn by the defendant, during the course of these proceedings) that the defendant’s share of his parents’ estates pass to his sons rather than to him. The defendant submitted that an appropriate term on a forfeiture application order would be that some part of the money that the defendant would otherwise have received from his parents’ estates be held on trust for him to make provision for him while he remains in detention, or if and when he is released, or both.

41. Given the need for the Court, under section 11 of the Forfeiture Act, to make a determination whether justice requires the forfeiture rule to be applied to the defendant, it is necessary for me to form a view about the operation of the common law rule, and the proper construction and operation of the Act.

THE LAW

Introduction

42. The application made by the plaintiff in these proceedings, expressly by reference to section 11 of the Forfeiture Act, is an application for a statutory form of order which, if made, will apply to the defendant, as a person who has unlawfully killed another person, a common law (that is, a non-statutory) rule of public policy.

43. An understanding of the common law is, for that reason, material to an understanding of the proper construction and operation of section 11.

44. The proper construction and operation of Part 3 (centrally, sections 10-13) of the Forfeiture Act, focussing upon “forfeiture application orders”, are informed by an understanding of the proper construction and operation of Part 2 (centrally, sections 5-8) of the Act relating to “forfeiture modification orders”. That is because there is a symmetry between the two types of orders.

45. Each type of order is defined by reference to the common law “forfeiture rule”. The making of each type of order requires the Court to be “satisfied that justice requires” the making of an order, and the consideration of common factors. Those factors are, in the broad: (a) the conduct of an “offender”; (b) the conduct of the person(s) killed by the offender; (c) the effect of the application of the common law forfeiture rule on “the offender and any other person”; and (d) such other matters as appear to the Court to be material.

46. Because the Court must be satisfied as to the “justice” of each case, the jurisdiction conferred by the Forfeiture Act cannot be exercised simply on the basis of an unsanctioned agreement between persons affected, or potentially affected, by the operation of an order made under the Act.

47. In contested proceedings for an order under the Act, there may be (as, in the present proceedings, there is) a need to be informed by a review of the law, generally, in order to address what is required by the “justice” of the case.

The Common Law

48. There is no single, universally correct statement of precise terms in which the common law “forfeiture rule” is to be expressed.

49. Subject to any future, contrary determination by the High Court of Australia, it is settled law in NSW that the forfeiture rule is a rule of public policy of general application. It cannot be characterised simply as an exercise of equitable jurisdiction, although an exercise of equitable jurisdiction might be called in aid of an application of the rule by imposition of a constructive trust: Troja v Troja (1994) 33 NSWLR 269; Edwards v State Trustees Limited [2016] VSCA 28.

50. In Gonzales v Claridades (2003) 58 NSWLR 211 at 220 [42] the Court of Appeal (constituted by Mason P, Beazley JA and Foster AJA) described the forfeiture rule in the following terms: “[It] is one of public policy, being an aspect of the maxim that a person shall not be permitted to profit from his or her own wrong. The rule seeks to deter serious wrongdoing by precluding unjust enrichment of the wrongdoer and those claiming through the wrongdoer.”

51. Variations in expression of the rule can be found even in judgments of judges who, in substance, agree with one another in disposition of a particular case. Those variations are probably best seen as different emphases on the facts of the particular case arising from a consideration of the complex array of ideas which provide a rationale for the rule and which inform its operation.

52. The principal authority in NSW, at an appellate level, on an application of the common law rule is Troja v Troja. In that case, the majority judges (Mahoney and Meagher JJA, Kirby P dissenting) explained the rule in different terms. So too did judges of the Victorian Court of Appeal in Edwards v State Trustees Limited [2016] VSCA 28.

53. Mahoney JA (at 33 NSWLR 294G-295B) articulated the rule in the following terms (with emphasis added):

“There are two things to be considered: the principle itself, and the application of it. It is necessary to distinguish between the two.

There has been some difference as to the nature of the principle and the source of it. The principle involved is, in my opinion, plain. It is that the law will not enforce ‘rights directly resulting to a person asserting them from the crime of that person’. This is the formulation adopted by Dixon, Evatt and McTiernan JJ in Helton v Allen [(1940) 63 CLR 691 at 709]. Their Honours (at 710) referred to ‘the principle that by committing a crime no man could obtain a lawful benefit to himself’. That is the formulation adopted by Lord Atkin in Beresford v Royal Insurance Co, Ltd [1938] AC 586 at 596. Reference was made, both by the High Court and the House of Lords, to the statement of the principle by Fry LJ in Cleaver v Mutual Reserve Fund Life Association [1892] 1 QB 147 at 156: ‘… no system of jurisprudence can with reason include amongst the rights which it enforces rights directly resulting to the person asserting them from the crime of that person.’”.

54. In considering application of the principle to the facts of the case before him, Mahoney JA ( at 33 NSWLR 297 C-D) wrote (with emphasis added):

“The question to be decided in the present case is one of relationship: what is the relationship between the wrong, [manslaughter on the grounds of diminished responsibility] and what it does qua the property claimed [by the offender] which will, or will not, prevent the wrongdoer benefiting from what she has done… It is necessary to show a sufficiently direct relationship between the wrong and ‘profit’ which the wrongdoer seeks to recover from it .… ”.

55. Meagher JA (at 33 NSWLR 299 B-C) explained the forfeiture rule in the following terms (with emphasis added):

“[The] rule 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, he shall not be entitled to take that benefit. It has its origins in the United Kingdom Court of Appeal decision Cleaver v Mutual Reserve Fund Life Association [1892] 1 Qb 147. It was followed by Harvey CJ in Eq in Re Tucker (1920) 21 SR (NSW) 175; 38 WN (NSW) 28. It was followed by the High Court of Australia in Helton v Allen (1940) 63 CLR 691. The New South Wales Court of Appeal has applied the decision in Rasmanis v Jurewitsch (1969) 70 SR (NSW) 40; 90 WN (Pt 2) (NSW) 154. It has been applied many times by the courts of the United Kingdom, a useful catalogue of which decisions may be found in the judgment of Powell J, as he then was, in Kemperle v Public Trustee (Powell J, 20 November 1985, unaccountably, unreported). The basis of the doctrine is public policy, and abhorrence of the notion that one may profit from killing another, and odium occisionis. It is absolute and inflexible.”

56. As Meagher JA recorded, the origins of the rule are generally attributed to Cleaver v Mutual Reserve Fund Life Assurance [1892] 1 QB 147.

57. However, as Mahoney JA demonstrated, earlier origins can be identified. His Honour (at 33 NSWLR 295 C-E) both noted reference to Roman law and the English ecclesiastical courts in Re Tucker (1920) 21 SR (NSW) 175 at 177-178; 38 WN (NSW) 28 at 29 and confined his own historical analysis to a commencement with Amicable Society for a Perpetual Life Assurance Office v Bolland (Lord Fauntleroy’s case) (1830) 4 Bli NS 194; 5 ER 70.

58. The effect of the majority judgments in Troja v Troja was twofold. First, it called a halt to attempts by first instance judges to re-state the forfeiture rule in terms of a flexible general principle, attempts supported by Kirby P in his dissenting judgment in Troja. Secondly, by Meagher JA’s insistence that the common law was absolute and inflexible, the majority judgments moved Parliament to enact the Forfeiture Act.

59. The following extract from Meagher JA’s judgment (at 33 NSWLR 299 F-G) set the scene for legislative law reform (with emphasis added):

“The appellant [‘the offender’] has pointed to various other decisions by Equity judges – of which Public Trustee v Evans ( 1985) 2 NSWLR 188 (a decision of Young J), Public Trusteev Fraser (1987) 9 NSWLR 433 (a decision of Kearney J) and Re Keitley [1992] 1 VR 583 (a decision of Coldrey J) – to the effect that the court has a discretionary power, whether to apply the forfeiture rule or not, and if so, to what extent, and to the further effect that it is not to be applied where to apply it would be unconscionable. This is not the law, as Powell J has pointed out in Kemperle’s Case, and in Vain v Morabito (Powell J, 14 August 1992, unreported). The law laid down in Cleaver’s Case is that all felonious killings are contrary to public policy and hence, one assumes, unconscionable. Indeed, there is something a trifle comic in the spectacle of Equity judges sorting felonious killings into conscionable and unconscionable piles. It follows that I would regard the decisions of Young J, Kearney J and Coldrey J as incorrect.”

The Forfeiture Act 1995 NSW as First Enacted

60. When it came, the legislative response to Meagher JA’s colourful rhetoric favoured the jurisprudential approach of “the equity judges” whose reasoning he rejected.

61. As enacted in 1995, the Forfeiture Act was, in substance, limited to what presently appear as sections 3-8 of the Act as amended in 2005. As first enacted, the Act simply allowed the Court to order that the operation of the forfeiture rule be modified.

62. Under the heading ”Overview of Bill”, the Explanatory Note to the Parliamentary Bill that became the Forfeiture Act 1995 explained the Bill in the following terms (with emphasis added):

“The object of this Bill is to confer a discretion on the Supreme Court to enable it to modify, where justice requires, the operation of the unwritten rule of public policy known as the Forfeiture Rule. The forfeiture rule precludes a person who has unlawfully killed another from acquiring a benefit as a result of the death. In Troja v Troja (1994) NSWLR 269, the New South Wales Court of Appeal held that the application of the rule at common law was not a discretionary matter, but was an inflexible rule of law that the courts had to apply without regard to the particular circumstances of the case.

The provisions of the proposed Act (which are based partly on the provisions contained in the Forfeiture Act 1982 of the United Kingdom and the Forfeiture Act 1991 of the Australian Capital Territory) will operate to confer a statutory discretion on the Supreme Court only where the application of the common law forfeiture rule results in injustice. The conferral of the statutory discretion is not intended to prevent the development of the common law towards a more flexible approach to the application of the forfeiture rule.”

63. In elaboration of what became sections 5 and 6 of the Forfeiture Act, the Explanatory Note provided as follows:

“Clause 5 enables the Supreme Court, on application from any interested person, to order that the forfeiture rule is to have a modified operation in relation to an offender and others affected by the offender’s action if the court considers that the justice of the case requires it.

Clause 6 enables the court to mould an order modifying the effect of the forfeiture rule (a forfeiture modification order) to suit the circumstances of the case.”

64. The second reading speech of the Attorney General for NSW (JW Shaw MLC QC) in support of the Forfeiture Bill (Hansard , Legislative Council, 25 October 1995, pages 2257-2258) provides an important exposition of the legislation (with emphasis added):

“The object of [the Forfeiture Bill] is to allow the courts to modify the operation of the rule of public policy called the forfeiture rule. The effect of the forfeiture rule is that a person responsible for the unlawful killing of another is deprived of rights to inherit or administer the victim’s estate. A slayer is also deprived of any interest passing by survivorship on the death of the victim. For example, the title to a house in joint names would normally pass to the survivor on the death of one of the parties. The rule prevents the title from passing to the killer. The forfeiture rule is an aspect of the principle that a person should not be permitted to profit from his or her own wrong. The motive of the slayer is irrelevant and the rule applies, prima facie, to every case of unlawful homicide, but may be displaced by the features of the crime.

The application of the rule is determined by the court in its civil jurisdiction, usually when determining the distribution of the estate of the deceased person, following the conclusion of criminal proceedings. While it is clear as a matter of principle that a killer should not profit from his or her crime, the operation of the rule may be unduly harsh in some cases of unlawful killing, because the rule may operate regardless of the killer’s motive or degree of moral guilt. The bill enables the Supreme Court to modify the operation of the rule provided it is satisfied that the justice of the case requires the rule to be modified. The proposed legislation recognises that there are varying degrees of moral culpability in unlawful killings, and legislation is necessary to give judges sufficient discretion to make orders in deserving cases in the interests of justice.

This has been recognised in the United Kingdom and in the Australian Capital Territory, which have enacted legislation in similar terms to that proposed for this State. To illustrate this point it may assist if I set out some examples of cases in which it is envisaged that the proposed legislation might operate to mitigate the effect of the rule. The first example is that of a woman who is found to have killed her partner while suffering from battered woman syndrome. In cases where such women kill their partners, the outcome of criminal proceedings may be acquittal or conviction of manslaughter, although no sentence may be imposed. If the forfeiture rule applied, such a woman would forfeit her interest in her former partner’s estate if the killing was premeditated. Even a person who had been acquitted by the criminal courts could forfeit his or her interest in the estate at present because the civil court determines on the balance of probabilities whether he or she committed an unlawful homicide. This is a lower standard than that applied by the criminal courts.

A further example is the case of a suicide pact, where two people agree that one will assist the suicide of the other. The rule might operate to prevent the estate of the first person from taking any interest in the other’s case. A similar result might follow for a person who assisted suicide. Other cases in which the rule may cause injustice are the application of the rule to involuntary homicide, or causing death by culpable driving. A further objection to the rule is the illogical effect it may have on the interests of persons claiming through the killer. For example, in a case of manslaughter-suicide, the children of the killer might be disentitled although they had no part in the killing of the testator. A person convicted of a unlawful killing, such as a spouse, may have made a significant contribution to the assets of the deceased person’s estate, and in some circumstances provision should be made by the Supreme Court to recognise such a contribution.

The proposed legislation does not abrogate the forfeiture rule. In particular, it does not enable the Court to mitigate the effect of the forfeiture rule for a person who has been convicted of murder. It does not compel the Court to make provision out of the estate of a deceased person to his or her killer. The legislation does not interfere with the rights of the family of the victim to make submissions to the court as to the distribution of the estate. Indeed, in considering whether the rules should apply, the court must consider the conduct of the offender and of the deceased person, the effect of the application of the rule on the offender and any other person, and any other circumstances which appear to the court to be material. The bill empowers the court to mould orders to fit the circumstances of the case; for example, in some circumstances it may be appropriate to permit a former wife acquitted of manslaughter while suffering battered woman syndrome to inherit the family home, but not personal assets of the deceased person.

After an order has been made, the court will be able to revoke or vary it to take account of, for example, the discovery of new information not available at the time of the order or assets not previously thought to be part of the deceased person’s estate. The court will also be able to consider the making of an order for the modification of the rule if a conviction of a person is quashed or the convicted person is pardoned by the Governor. This will ensure that justice is done to persons who are found to have been wrongly convicted of a homicide. The proposals have the support of the Chief Justice, the Law Society, the Public Trustee and the Trustee Corporations Association. The forfeiture rule often affects family members, such as spouses, who may be unable to claim the property of the deceased person even though they may have made a substantial contribution to the estate. The relaxation of the rule will enable family members to inherit such property, provided the court considers it just, and both they and their children will benefit from the reforms. I commend the bill.”

65. This exposition of the legislation is reminiscent of the reasoning of Young J in Public Trustee v Evans (1985) 2 NSWLR 188 at 192E-193E, where (as the Victorian Court of Appeal recognised in Edwards v State Trustees Limited [2016] VSCA 28 at [166]) his Honour conditioned the operation of the forfeiture rule upon an analysis of the justice of the particular case, in its particular factual setting, having regard to contemporary standards of social behaviour and moral judgement.

66. The reasoning in the Public Trustee v Evans was refined by Kearney J in Public Trustee v Fraser (1987) 9 NSWLR 433 at 444B-C by a more explicit invocation of equitable principles governing unconscionability and restitutionary principles relating to unjust enrichment.

67. In his dissenting judgment in Troja v Troja (1994) 33 NSWLR 269 at 282 et seq, Kirby J drew on the reasoning in Public Trustee v Evans and Public Trustee v Fraser, and the English and ACT legislation ultimately relied upon by the NSW Parliament in enacting the Forfeiture Act. His judgment, no less than those of Young and Kearney JJ, was, in substance, endorsed by the Parliament.

68. In the absence of appellate review, the common law forfeiture rule operative in NSW remains “absolute and inflexible” as found by the majority in Troja v Troja. However, its operation has been substantially qualified by the Forfeiture Act.

69. No Australian State or Territory other than NSW and the ACT presently has a Forfeiture Act, although questions about whether to enact one have been the subject of debate in more than one jurisdiction: eg, Tasmania Law Reform Institute, The Forfeiture Rule (December 2004); Victorian Law Reform Commission, The Forfeiture Rule (September 2014); Pike v Pike [2015] QSC 134 at [25].

70. The Forfeiture Act 1991 ACT provides for forfeiture modification orders, but not forfeiture application orders.

The Forfeiture Act 1995 NSW as Amended in 2005

71. The NSW Parliament’s adaptation of the common law forfeiture rule has not been limited to empowerment of the Supreme Court to modify an application of the rule where it applies.

72. An amendment of the Forfeiture Act 1995, to extend the operation of the forfeiture rule to persons found not guilty of murder by reason of mental illness, was effected, somewhat obscurely, by provisions of the Confiscation of Proceeds of Crime Amendment Act 2005 NSW. The amendments to the Forfeiture Act appear, almost as an after thought, in the last schedule (Schedule 4) of the amending Act.

73. The Explanatory Note to the Parliamentary Bill described the object of the Bill to be “to enable the Supreme Court to apply the forfeiture rule (that is, the rule that prevents a person who is found guilty of murder from benefiting from the victim’s estate) to persons found not guilty of murder by reason of mental illness.”

74. In elaboration of this object, the Explanatory Note made the following observations as a preliminary to a fairly literal reproduction of the text of the sections of the Forfeiture Act presently governing the making of a forfeiture application order (with emphasis added):

”The forfeiture rule is a rule at common law that prevents a person who has unlawfully killed another person from acquiring a benefit as a result of the killing. Under the Forfeiture Act 1995 (the principal Act), a person who would otherwise be subject to the forfeiture rule may apply to the Supreme Court to modify the rule to enable the person to acquire a benefit if the court is satisfied that justice requires the effect of the will to be modified. However the principal Act provides that the power to modify the forfeiture rule does not apply to a unlawful killing that constitute murder. Such killings are still subject of the common law. At common law the rule does not apply in the case of a person suffering from mental illness at the time of killing another person, and found not guilty or who would have been found not guilty, because of that illness...”

75. There is in this exposition little fresh insight into the rationale and operation of the common law forfeiture rule as amended or proposed to be adapted by the Forfeiture Act, but it accords with decided cases.

76. The second reading speech of the Confiscation of Proceeds of Crime Amendment Bill was delivered by Graham West MLA (Parliamentary Secretary on behalf of the Attorney General, Bob Debus), as is recorded in Hansard (Legislative Assembly, 21 September 2005).

77. Insofar as it bears directly upon amendment of the Forfeiture Act, it is in the following terms (with emphasis added):

”This bill contains important amendments to the Confiscation of Proceeds of Crime Act 1989, the Civil Liability Act 2002, the Crimes Act 1900 and the Forfeiture Act 1995. These amendments will improve the processes involved in confiscating criminal assets, broaden the scope of existing laws, make prosecutions easier, create new offences of money laundering, prevent mentally ill offenders from misusing civil damages paid to them, and prevent mentally ill murderers from profiting from their crime by applying the forfeiture rule…

The common law forfeiture rule operates to prevent killers from benefiting financially from their victim’s estate. The Forfeiture Act 1995 leaves the common law rule intact but allows the court to modify the effect of the rule if justice demands it. The forfeiture rule currently cannot be applied to people found not guilty of a killing by reason of mental illness. The bill amends the Forfeiture Act 1995 to enable the forfeiture rule to be applied to people found not guilty of murder by reason of mental illness where it would not be just for them to inherit from their victim’s estate.

Section 11 provides that where an offender has been found not guilty of murder by reason of mental illness, any interested person may apply to the Supreme Court for a forfeiture application order to enable the forfeiture rule to apply as if the offender had been found guilty of murder. The court may make an order applying the forfeiture rule if it is satisfied that justice requires a rule to be applied. In determining whether justice requires the rule to be applied, the court is to have regard to: the conduct of the offender; the conduct of the deceased person; the effect of the application of the rule on the offender or any other person; and any other matter the court considers relevant. Section 12 provides that a forfeiture application order must be sought within six months after the day on which it is determined that the offender was not guilty of murder, although the court may grant leave for a late application.

Section 13 makes provision for the court to accept applications for the revocation of a forfeiture application order that has already been made. The Confiscation of Proceeds of Crime Amendment Bill contains important reforms. The reforms will strengthen criminal asset confiscation and money laundering laws in New South Wales and, as such, has the support of the key New South Wales law enforcement and prosecuting authorities. The bill also contains important reforms relating to mentally ill people who commit serious offences. I commend the bill to the House.”

78. Lest it be thought that this speech deployed loose language in speaking of “mentally ill murderers” and “mentally ill people who commit serious offences”, notice should be taken of direct incorporation of the second reading speech in subsequent debate in the Legislative Council: Hansard, Legislative Council, 18 October 2005.

79. Although the legislative history of the 2005 amendments to the Forfeiture Act provides little elaboration of policy reasons for extension of the operation of the forfeiture rule to persons found not guilty of murder on the ground of mental illness, the terms of the amendments to the Forfeiture Act and the tone of the second reading speech in support of them suggest a reluctance to differentiate between conviction of an offence less than murder and a finding of not guilty on a charge of murder on the ground of mental illness. To quote a passage of the second reading speech not here extracted, the reforms embodied in the amendment bill (including amendments to the Forfeiture Act) were presented as reforms designed to “benefit victims of crime”… for this purpose, accepting that “mentally ill people [may] commit serious offences”.

80. Evidence given before Lloyd AJ, summarised in his judgment styled Public Trustee v Fitter [2005] NSWSC 1188 at [52](l)-(m) and [53], suggests that the 2005 amendments were the product of political representations made to the then NSW Attorney General (Bob Debus) on behalf of Homicide Victim Support Groups.

81. In his second reading speech on the Forfeiture Bill 1995, the Attorney-General, correctly, said of the common law forfeiture rule that “the motive of the slayer is irrelevant”… but the interests of justice required that the Court be given a statutory discretion to take into account all the circumstances of a case, including motive.

82. It is not altogether surprising that, in the fullness of time, questions of justice approached a similar point from opposite directions. It is not altogether surprising that “victims of homicide” should call for the justice of a case to be more closely examined notwithstanding that a death was caused by a person found wanting in capacity for the “guilty mind” required to constitute a crime. Although minds might differ about particular forms of order, there is a symmetry between the types of cases dealt with by sections 5 and 11 of the Forfeiture Act. That symmetry depends ultimately upon the Court being able to assess what “justice requires” by reference to particular facts.

83. In a Report styled The Forfeiture Rule published in September 2014, the Victorian Law Reform Commission made a recommendation (not yet the subject of legislation) in favour of a codified form of the common law forfeiture rule, retaining the existing exception to the common law rule for persons found not guilty by reason of mental impairment. In criticising legislation such as Part 3 of the NSW Forfeiture Act, the Commission (in paragraph 3.99) wrote the following (with footnote omitted):

“While the Commission recognises the views and concerns of victims, the purpose of the forfeiture rule is not to provide a de facto form of compensation to victims of crime or another avenue to punish an offender when they have been found not to be responsible for an act. Tthe Commission agrees with the views of Victoria Legal Aid that the competing interests of other parties in claiming a benefit from an estate should not form a basis for removing existing protections from a special category of persons that the civil and criminal law treat differently in other ways in recognition of their vulnerability.”

84. The Commission (in paragraph 3.101) embraced an underlying public policy objective “that seeks to achieve a therapeutic aim by promoting an increased understanding and tolerance of mental illness that can give rise to a mental impairment”, and observed that “[exempting] persons found not guilty of an unlawful killing by reason of their mental impairment from the forfeiture rule is consistent with this policy aim.”

85. In discussion of options for development of the law leading to its recommendation against legislation such as Part 3 of the NSW Forfeiture Act, the Commission (in paragraphs 3.91-3.93) gave voice, in the following terms, to criticism of the three NSW judgments on section 11 of the Act then available (omitting footnotes, but with editorial adaptation and emphasis added):

[3.91]   The forfeiture rule has been applied against a person who has been found not guilty by mental illness on three occasions in New South Wales: Re Fitter [2005] NSWSC 1188; Guler vNSW Trustee and Guardian [2012] NSWSC 1369; and Hill v Hill [2013] NSWSC 524. Consultations undertaken with judges of the NSW Supreme Court, the Elder Law and Succession Committee of the New South Wales Law Society and other New South Wales-based legal professionals suggests that there have been no major issues resulting from the change in the law and that the application of the forfeiture rule in these cases was appropriate.

[3.92]   However, the rationale for applying the rule to a person who is not morally culpable for the offence was not well articulated in Parliament and has not been made clear in the cases. Factors that have been considered relevant in determining whether to apply the forfeiture rule to a person found not guilty by reason of mental illness in New South Wales have included the offender’s prior history of violent behaviour and lack of remorse: Re Fitter and Guler. Such behaviour could be a manifestation of the mental impairment itself. Any outcome in which the forfeiture rule would be applied to a person who has been found not guilty because of a mental impairment on the basis of the symptoms of that mental impairment would be inappropriate.

[3.93]   The impact of the death of the deceased person on third parties has also been taken into account. In Hill v Hill, where a man was found not guilty of killing his de facto spouse because of mental illness, the Court considered the effect that the application of the forfeiture rule would have on their children. The Commission considers this to be an extension of the rule beyond its purpose in Victoria, which is to prevent an offender from benefiting from their crime rather than to distribute assets to the most deserving beneficiary. Family provision legislation is available to innocent beneficiaries who wish to increase their share of the deceased estate.”

86. The Commission’s criticism of NSW caselaw is a welcome contribution to development of jurisprudence governing the making of court orders vis a vis the operation of the forfeiture rule. It is, however, predicated on a policy preference for mentally ill “offenders” not to be subject to the forfeiture rule at all. In light of the NSW Parliament’s adoption of a contrary policy position, in Part 3 of the Forfeiture Act, the Commission’s criticism is deprived of force it might otherwise have in a NSW context. Contrary to the Commission’s preferred state of the law, Part 3 is predicated upon an assumption that an absence of criminal responsibility for an unlawful death does not necessarily, upon consideration of what justice requires in a particular case, carry with it an absence of adverse civil law consequences for the “offender”. In determining what justice requires the Court is bound by the legislation to consult interests beyond those of the “offender”, as well as those of the “offender”.

Extracts from the Forfeiture Act 1995 NSW as currently in force

87. As in force on 3 December 2014 (when the parties’ parents were killed by the defendant) and as presently in force, the operative provisions of the Forfeiture Act (namely, sections 3-8 and 10-13) are in the following terms (with emphasis added):

“PART 1 – PRELIMINARY

1. …

2. …

3 Definitions

In this Act:

"benefit" includes any interest in property and any entitlement under Chapter 3 of the Succession Act 2006 .

"deceased person" means a person who is unlawfully killed.

"forfeiture application order" means an order made under section 11.

"forfeiture modification order" means an order made under section 5.

"forfeiture rule" means the unwritten rule of public policy that in certain circumstances precludes a person who has unlawfully killed another person from acquiring a benefit in consequence of the killing.

"interested person" means any of the following persons:

(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.

"offender" means a person who has unlawfully killed another person.

"unlawful killing" means:

(a) any homicide committed in the State that is an offence, and

(b) any homicide that would be an offence if committed within the State,

and includes aiding, abetting, counselling or procuring such a homicide and unlawfully aiding, abetting, counselling or procuring a suicide.

4 Application of Act

(1) This Act applies to the following:

(a) an unlawful killing whether occurring within or outside the State,

(b) property:

(i) located within the State, or

(ii) located outside the State, but only to the extent to which courts of the State have jurisdiction to make orders concerning the property.

(2) This Act does not apply to the following:

(a) an unlawful killing committed in the State that constitutes murder,

(b) an unlawful killing that would constitute murder if committed in the State.

PART 2 – FORFEITURE MODIFICATION ORDERS

5 Power of Supreme Court to modify effect of forfeiture rule

(1) If a person has unlawfully killed another person and is thereby precluded by the forfeiture rule from obtaining a benefit, any interested person may make an application to the Supreme Court for an order modifying the effect of the rule.

(2) On any such application, the Court may make an order modifying the effect of the forfeiture rule if it is satisfied that justice requires the effect of the rule to be modified.

(3) In determining whether justice requires the effect of the rule to be modified, the Court is to have regard to the following matters:

(a) the conduct of the offender,

(b) the conduct of the deceased person,

(c) the effect of the application of the rule on the offender or any other person,

(d) such other matters as appear to the Court to be material.

6 Forfeiture modification orders may be moulded to suit circumstances

(1) The Supreme Court may make a forfeiture modification order in such terms and subject to such conditions as the Court thinks fit.

(2) For example, the Court may modify the effect of the forfeiture rule in relation to property:

(a) in the case of more than one interest in the same property (for instance, a joint tenancy) affected by the rule--by excluding the operation of the rule in relation to any or all of the interests, and

(b) in the case of an offender who has an interest in real property (such as a family home) and personal property affected by the rule--by excluding the application of the rule in relation to all the property or some of the property.

(3) If the Court makes a forfeiture modification order, the forfeiture rule is to have effect for all purposes (including purposes relating to anything done before the order was made) subject to modifications made by the order.

7 Time for applications for forfeiture modification orders

(1) Unless the Supreme Court gives leave for a late application to be made under subsection (2), an application for a forfeiture modification order must be made:

(a) if the forfeiture rule operates immediately on the death of a deceased person to prevent the offender from obtaining the benefit concerned--within 12 months from the date of the death of the deceased person, or

(b) if the forfeiture rule subsequently prevents the offender from obtaining the benefit--within 12 months from the date on which the forfeiture rule operates to preclude the offender from obtaining the benefit.

(2) The Court may give leave for a late application if:

(a) the offender concerned is pardoned by the Governor after the expiration of the relevant period, or

(b) the offender's conviction is quashed or set aside by a court after the expiration of the relevant period and there are no further avenues of appeal available in respect of the decision to quash or set aside the conviction, or

(c) the fact that the offender committed the unlawful killing is discovered after the expiration of the relevant period, or

(d) the Court considers it just in all the circumstances to give leave.

8 Revocation and variation of forfeiture modification orders

(1) If the Supreme Court has made a forfeiture modification order, an interested person may make an application to the Court for the revocation or variation of the order if:

(a) the offender concerned is pardoned by the Governor after the making of the order, or

(b) the offender's conviction is quashed or set aside by a court after the making of the order and there are no further avenues of appeal available in respect of the decision to quash or set aside the conviction, or

(c) in all other cases--if the Court considers it just in all the circumstances to give leave for such an application to be made.

(2) On any such application, the Court may revoke or vary the forfeiture modification order concerned.

(3) The provisions of sections 5 (2) and (3) and 6 (1) and (2) apply to the determination of any such application in the same way as they apply to the making of a forfeiture modification order. In determining whether to revoke or vary the forfeiture modification order, the Court is also to have regard to the effect on the offender and other persons of any such revocation or variation.

(4) If a forfeiture modification order is revoked or varied, the forfeiture rule is to have effect for all purposes (including purposes relating to anything done before the order was revoked or varied):

(a) in the case of a revocation--subject to the terms on which the Court revokes the order, and

(b) in the case of a variation--subject to modifications made by the varied order.

9. …

PART 3 – FORFEITURE APPLICATION ORDERS

10 Definitions

In this Part:

"interested person" does not include an offender or a person claiming through an offender.

"offender" means a person who has killed another person and been found not guilty of murder by reason of mental illness.

11 Power of Supreme Court to apply forfeiture rule

(1) If a person who has killed another person is not subject to the forfeiture rule because the person has been found not guilty of murder by reason of mental illness, any interested person may make an application to the Supreme Court for an order that the rule apply as if the offender had been found guilty of murder.

(2) On any such application, the Court may make an order applying the forfeiture rule to the offender if it is satisfied that justice requires the rule to be applied as if the offender had been found guilty of murder.

(3) In determining whether justice requires the rule to be applied, the Court is to have regard to the following matters:

(a) the conduct of the offender,

(b) the conduct of the deceased person,

(c) the effect of the application of the rule on the offender or any other person,

(d) such other matters as to the Court appear material.

(4) If a forfeiture application order is made, the forfeiture rule is to apply in respect of the offender for all purposes (including purposes relating to anything done before the order was made) as if the offender had been found guilty of murder.

12 Time for applications for forfeiture application orders

(1) Unless the Supreme Court gives leave for a late application to be made, an application for a forfeiture application order must be made within 6 months after the day on which it is determined that the offender was not guilty of murder.

(2) The Court may give leave for a late application if the Court considers it just in all the circumstances to give leave.

13 Revocation of forfeiture application orders

(1) If the Supreme Court has made a forfeiture application order, an interested person may make an application to the Court for the revocation of the order if the Court considers it just in all the circumstances to give leave for such an application to be made.

(2) On any such application, the Court may revoke the forfeiture application order concerned.

(3) Section 11 (2) and (3) apply to the determination of any such application in the same way as they apply to the making of a forfeiture application order. In determining whether to revoke the forfeiture application order, the Court is also to have regard to the effect on the offender and other persons of any such revocation.

(4) If a forfeiture application order is revoked, the forfeiture rule has, and is taken to have had, no effect in relation to the offender for all purposes (including purposes relating to anything done before the order was revoked), subject to the terms on which the Court revokes the order.”

Interconnection with Family Provision Jurisdiction

88. Introduction. Via the definition of “forfeiture rule” in section 3 of the Forfeiture Act, sections 5 and 11 of the Act incorporate a definition of “benefit” that includes “any [family provision] entitlement under chapter 3 of the Succession Act 2006”.

89. The reference to the Succession Act in this definition of “benefit” was inserted upon commencement of the Succession Act in 2008, in substitution for a comparable reference to the Succession Act’s predecessor, the Family Provision Act 1982 NSW.

90. Forfeiture Application Cases. None of the reported cases on section 11 of the Forfeiture Act has addressed the implications of a reference to family provision “entitlements” in the statutory definition of “benefit”. Their focus has been elsewhere. In the handful of section 11 cases thus far decided, judges have cast an eye over factors (such as voluntary, intentional conduct preceding a death and the absence of remorse) which may bear upon an offender’s moral responsibility for his or her actions, taking into account social conditions and personal relationships generally.

91. Forfeiture Modification Cases. Some, but little guidance is available in judgments concerning the making of a forfeiture modification order under section 5 of the Forfeiture Act. More often implicitly than explicitly, the Court appears to have looked for: (a) an explanation for antisocial behaviour of an offender in a finding of diminished criminal responsibility associated with mental illness or abnormal social conditions; (b) an offender’s ongoing moral claim on the bounty of the deceased; and (c) an offender’s need for material assistance that can be met by restoration of benefits that, but for the forfeiture rule, he or she would enjoy.

92. This mode of reasoning differs from that characteristic of family provision jurisprudence because: first, it does not give primacy to a weighing up of competing needs of beneficiaries or others who have a moral claim on the deceased’s bounty; and, secondly, it is channelled through the prism of “justice” of the particular case in the context of consideration of the forfeiture rule, rather than a consideration of adequacy of provision for proper maintenance, education and advancement in life, a touchstone of the family provision jurisdiction.

93. In making a forfeiture modification order in Leneghan-Britton v Taylor [1998] NSWSC 218 Hodgson CJ in Eq analysed the justice of the case (involving manslaughter of a grandmother, with diminished responsibility associated with mental illness) by reference to a range of factors expressed in terms consistent with family provision jurisprudence. His Honour made an order so that the offender could receive a benefit provided for her in her grandmother’s will. He took into account the nature of the crime; a lack of premeditation on the part of the offender; an absence of intention on the part of the offender to profit from the crime; the existence of a strong moral claim on the bounty of the deceased, but for the crime; an assessment that the offender had been sufficiently punished by the criminal law; a finding that modification of the forfeiture rule would not provide any incentive to any other person to act as the offender had; and a finding that the making of a forfeiture modification order would not outrage the community. The order was made on the basis that the offender was seeking an indulgence from the Court. A factor implicit in the making of the order, and explicit in the making of costs orders, was that the Court’s orders could be made without other beneficiaries being disadvantaged by the relief granted to the offender.

94. Six months earlier, in R v R (Hodgson CJ in Eq, unreported, 14 November 1997) BC 9707619 his Honour made a forfeiture modification order in favour of a teenager who had killed his mother and his sister, pleading guilty to manslaughter. By the Court’s order the forfeiture rule was modified so that the young man was not deprived of his interest in his mother’s estate. The judge was satisfied that the teenager had been sufficiently punished by the criminal law; that the killings were substantially affected by his mental abnormality and diminished responsibility; that the offender’s domestic circumstances contributed to his commission of manslaughter; and that the application for a forfeiture modification order was supported by family members.

95. The idea that, in considering whether to make a forfeiture modification order (and, if so, upon what terms) punishment of an offender can be left to the criminal law – twice embraced by Hodgson CJ in Eq – also finds expression in Gzell J’s judgment in Batey v Potts (2004) 61 NSWLR 274 at [43].

96. In Permanent Trustee Company Ltd v Gillett [2004] NSWSC 278; 145 A Crim R 220 Austin J demonstrated a preparedness to make a forfeiture modification order, in combination with a grant of relief under the Family Provision Act 1982 NSW, designed to give effect to an agreement making provision for a family member (arguably responsible for the death of his father) who, by reason of an order made by the Mental Health Review Tribunal pursuant to the Protected Estates Act 1983 NSW, was the subject of a protected estate management regime.

97. In Strede v Eastwood [2003] NSWSC 280 Palmer J made a forfeiture modification order in circumstances in which he held that (unlike an exercise of family provision jurisdiction) needs of other beneficiaries could not be a sole and independent ground for refusing to make a forfeiture modification order. His Honour held that, on an application under the Forfeiture Act, competing needs of beneficiaries are only one of possibly many factors relevant to the question whether any (and, if so, what) modification order should be made: [44].

98. A Common Law Precedent. These judgments, under section 5 of the Forfeiture Act, might be supplemented by reference to a common law case pre-dating the legislation.

99. In Kemperle v Public Trustee (unreported, 20 November 1985) BC 8500411. Powell J, having found that the forfeiture rule did not apply to a person found not guilty of murder on the ground of mental illness (the deceased’s husband), granted to interests in competition with the “offender” family provision relief under the Testators Family Maintenance and Guardianship of Infants Act 1916 NSW.

100. In ordering that provision be made for various family members, his Honour moulded orders to ensure that provision was nevertheless made for “the offender”. That provision took the form of a lump sum entitlement (upon an intestacy) to a share of the deceased’s estate, the rationale for which was explained in the following terms: “So much of the Deceased’s husband’s future is suspect, that I feel that there should be provided to him some modest amount of capital to assist him, either, by enabling him to acquire such modest luxuries as can be obtained by those in custody, or, to provide for him, when he is released on license, a fund to which he may resort to meet any untoward emergencies to which he may be subject . ...”.

101. This measure of the need of a mentally ill person detained for an unlawful killing finds resonance in the current proceedings, although the facts of each case must be independently assessed.

102. General Observations. In considering what “justice requires” in the context of an application under the Forfeiture Act, the Court might draw upon learning acquired in the exercise of family provision jurisdiction. However, to the extent that that may be done in the absence of an application for family provision relief, it is reasoning by analogy only. Attention must remain focused on the nature, scope and purpose of the Forfeiture Act.

103. The statutory definition of “benefit”, in the context of the Forfeiture Act as a whole, is directed towards three ends.

104. First, it provides a means to address concerns (expressed before the legislation was enacted) about the availability of family provision relief in a case to which the common law forfeiture rule applies: Troja v Troja (1994) 35 NSWLR 182 (per Master McLaughlan). Those concerns highlight, not only the operation of the forfeiture rule, but also the jurisprudence persistently spoken of in terms of “conduct disentitling”: Cf, Price v Roberts [1992] NSWCA 191.

105. Secondly, it brings regulation of a right to apply for family provision relief within the ambit of the jurisdiction to make a forfeiture application order.

106. Thirdly, in combination with the requirement (in section 5(3)(c) and section 11(3)(c)) to have regard to “the effect” of the application of the forfeiture rule “on the offender or any other person”, it requires the Court, in the making of a discretionary decision under the Forfeiture Act, to consider any interplay between the Court’s family provision jurisdiction (discretionary in character) and the forfeiture rule (at common law, absolute in nature).

107. In this territory, a section 11 application has a potentially unique field of operation, with layers of complexity. That is because it relates to a person who has been found not guilty by reason of mental illness; a person who has killed without lawful justification but, equally, without criminal responsibility.

108. A lack of criminal responsibility, for a death might be accompanied by a lack of: (a) any form of moral culpability; (b) conduct capable of characterisation as “disentitling”; or (c) any estrangement in personal relationships with the deceased. It might also be accompanied by a perception that, however unjustified the killing may have been, a wise and just testator in the position of the deceased might recognise an ongoing obligation to make provision for the education, maintenance and advancement in life of the killer when all surrounding circumstances are taken into account. Another layer of complexity may be found in questions about whether, in the public interest, some part of the ongoing burden of maintenance of a mentally ill family member should be borne by resources of the family rather than the State.

109. These are not easy questions to untangle or resolve. They must be approached through an evaluative judgement about what “justice requires” in all the circumstances of the particular case.

The power to make a forfeiture application order on terms and conditions

110. The absence from the Forfeiture Act of an express power to make a forfeiture application order on terms and conditions, and the contrast with the existence of such a power (in sections 6 (1) of the Act) vis a vis a forfeiture modification power, does not of itself compel a conclusion that a forfeiture application order cannot be made on terms and conditions. Nor is such a conclusion compelled merely by the absence of discussion of orders made on terms and conditions in extrinsic materials evidencing the legislative history of the jurisdiction to make a forfeiture application order.

111. The ordinary meaning of section 86 of the Civil Procedure Act and section 11 of the Forfeiture Act, read together, supports the existence of a jurisdiction to make a forfeiture application order on terms and conditions.

112. To deny the existence of such a jurisdiction, one needs: (a) to elevate beyond the text of the two pieces of legislation an absence of an express power in Part 3 of the Forfeiture Act; (b) to read down section 86 (particularly its reference to “any other Act or otherwise”) as confined to “interlocutory orders” upon an assumption that a forfeiture application order is properly characterised, for all purposes, as a “final” order; (c) to ignore Parliament’s declared purpose in enacting the Forfeiture Act in the first place, to give the Court sufficient discretion to make orders in deserving cases, in the interests of justice, bearing in mind that there are varying degrees of moral culpability in unlawful killings; (d) possibly, to embrace a view that an unlawful killing by a criminally insane person is more heinous than an unlawful killing by a person to whom the criminal justice system attributes culpability falling short of a conviction for murder; and (e) to ignore a discretionary element in both Parts 2 and 3 of the Forfeiture Act inherent in the Act’s definition of “benefit” as including family provision entitlements.

113. In my opinion, a forfeiture application order can be made on terms and conditions. That is because:

1. The operation of the forfeiture rule in the circumstances contemplated by the Part 3 of the Forfeiture Act depends on the making of a court order (a forfeiture application order), unlike the context in which Part 2 of the Act operates. Where the forfeiture rule applies at common law it applies unless a forfeiture modification order is made.

2. A forfeiture application order and a forfeiture modification order are to this extent different. Because the common law forfeiture rule applies without the need of a court order in the case of criminal conduct (such as manslaughter) to which the rule applies, it was necessary for Parliament to explain what it meant by a “modification” order. This it did in section 6(2) of the Forfeiture Act, a necessary foundation for which was express articulation in section 6(1) of the power to make orders on terms and conditions.

That same necessity did not attend the making of a forfeiture application order. The Court can make any order on terms and conditions if the nature of the case so requires. And, given the symmetry between the two types of order for which the Forfeiture Act (in sections 5 and 11) provides, nothing more was required as a matter of legislative drafting than the examples for which section 6(2) provides.

162. However, by its enactment of Part 3 of the Forfeiture Act, Parliament has determined that a lack of criminal responsibility may not be enough, in a particular case, to exempt an “offender” from civil consequences of his or her conduct. A finding of not guilty of murder by reason of mental illness is the jurisdictional foundation for a section 11 application. It is not, of itself, an exculpatory fact.

163. The Court needs to consult the interests of persons affected by the conduct of an “offender” (including, but not limited to, the “offender”) and the public interest.

164. This must be done bearing in mind the public policy character of the forfeiture rule, its reflection of the maxim that a person should not be permitted to profit from his or her own wrong, the deterrent object of the rule, and the associated object of precluding unjust enrichment.

165. The Court should be slow to impose civil consequences upon a person found not to have been criminally responsible for unlawful killings recognising, however, that the interests of justice are broader than the criminal law.

166. As required by section 11(3) of the Forfeiture Act, I have regard specifically to the following matters, all of which are set in the context of this judgement, read as a whole:

1. The conduct of the “offender”. On his own admission, the defendant intended to kill his parents, although, for the purposes of the criminal law, he has been found to have killed them in circumstances in which his judgement was impaired by mental illness.

Impaired though his judgement was, there was an element of premeditation and design in what he did: he knowingly kept a shotgun close at hand; he harboured unjustified resentments against his parents; and he contemplated their deaths in terms of benefit to himself.

In shooting them without mercy and, allowing them no opportunity to defend themselves, he exhibited callous disregard for his parents, causing them undeserved, violent deaths shocking to the conscience of a right-thinking person.

Apart from owning up to what he did, he has demonstrated no real remorse for what he did.

A history of domestic violence, drug taking and heavy drinking (in part, at least, a product of undiagnosed, untreated mental illness) must be weighed in the balance as an explanation for the defendant’s conduct, but not as a justification for tolerance without consequences.

2. The conduct of the deceased parents. No blame can be fairly attributed to the defendant’s parents in analysis of the cause, manner or timing of their deaths. A minor domestic argument with the defendant’s father, giving rise to an assault of the father, the mother’s direction that the defendant leave the home, and the defendant’s fatal resort to his shotgun cannot be seen as an occasion for attribution of blame to the parents. Their deaths were neither provoked nor justified. Despite the defendant’s delusionary thoughts to the contrary, they were consistently loving, supportive and patient parents to him.

3. The effect of an application of the forfeiture rule on the defendant. An application of the forfeiture rule to the defendant will deprive him of the half share of each parent’s estate which he would otherwise have under their wills. This will leave him almost totally dependent upon the State for all his material needs.

4. The effect of an application of the forfeiture rule on other persons. The practical effect of an unconditional forfeiture application order, in combination with the defendant’s sons’ disclaimer of any interest in the estates of their grandparents, is that the whole of both estates will pass to the plaintiff as her parents’ sole beneficiary. If and to the extent that a forfeiture application order is made upon terms or conditions for the purpose of making provision for the maintenance, education and advancement in life of the defendant, such provision as may be made for him will be made, in practical terms, at the expense of the plaintiff. Even then, however, she will acquire a substantial portion of what, but for the operation of the forfeiture rule, would have been the defendant’s inheritance.

5. Other material matters. With full acknowledgement of the defendant’s mental illness, the Court is bound to recognise public revulsion in the defendant’s callous, violent, unprovoked, unjustified killing of his loving, supportive and patient parents.

Recognising support given to the defendant by the paternal aunt who has served as his tutor in these proceedings, an eloquent statement of family attitudes to the defendant’s conduct is found in his sons’ repudiation of him. The opinions of family members (especially those with a financial interest in the making, or otherwise, of an order under the Forfeiture Act) can be highly material (at least if made against interest), as it is in this case: R v R (Hodgson CJ in Equity, unreported, 14 November 1997) BC 9707619; Jans v Public Trustee [2002] NSWSC 628 at [8].

The compassionate support of the defendant by his aunt (his tutor) has manifested itself in emphasis on his incapacity despite the nature of his conduct. It is perhaps a demonstration of that same pity, in the form of resigned forbearance, that may explain the patient endurance of the defendant’s aberrant conduct by his long suffering parents over the several years they allowed him to live at home after the breakdown of his marriage.

Isolated though he appears to be from most members of his family, he appears, in detention under State care, to have no unmet, basic material needs. This is an assessment reinforced by, possibly: (i) the absence of any claim for family provision relief from the deceased parents’ estates; (ii) the defendant’s opposition to a forfeiture application order being made, or withheld, on terms and conditions; and (iii) his passing offer to allow his inheritance to pass to his sons rather than himself. Nevertheless, he cannot fairly be said to be without material needs. He lacks access to consumables which, for most people, add enjoyment, if not meaning, to ordinary life. He lacks a fund to protect him against the ordinary contingencies of life.

CONCLUSION

Application of the Forfeiture Rule

170. Taking these various matters into account, in all the circumstances of the case, I am satisfied that justice requires that the forfeiture rule, in some form, be applied to the defendant as if he had been found guilty of murder attending the deaths of his parents. Allowing for the defendant’s experience of mental illness, and the absence of criminal responsibility for the deaths of his parents, a primary factor telling in favour of an order of any type being made is the pre-meditated, violent and merciless character of the killings, reinforced by a lack of remorse. To adapt Young AJ’s observations in Novosadek (as quoted in paragraph 37 above), a factor to be taken into account is public revulsion that a person who has engaged in such conduct should reap a substantial benefit from it.

The form of the Court’s Forfeiture Application Order

171. Drawing support from the analogous example of Kemperle v Public Trustee (explained in paragraphs 99-101 above), I nevertheless conclude that an allowance of some provision in favour of the defendant, within parameters such as those described by Powell J, is consistent with contemporary community standards of justice focussed on dealing with mental illness in a family context.

172. The form of forfeiture application orders that justice requires is one conditioned upon modest provision being made in favour of the defendant (administered via a trust or managed via protected estate orders), with terms requiring provision to be made, for his maintenance, education and advancement in life taking into account all the circumstances of the case, as now known.

173. Particular factors which, in my opinion, tell in favour of conditional forfeiture application orders are those listed in paragraphs 120-122 above. At the time he killed his parents the defendant suffered from an undiagnosed form of mental illness which he, in common with his parents, had endeavoured to have identified and treated. There is evidence that his resort to alcohol and drugs in the several years before his parents’ death may have been a product, rather than a cause, of his mental illness. The parents themselves, particularly his mother, supported the defendant through thick and thin as he struggled to come to terms with his illness. Members of the family, generally, were aware of his propensity for violence and threats against his parents but, in common with the parents (or, at least, the mother), they never imagined that he was capable of doing what he did. Members of the family, including the plaintiff and the defendant’s tutor, have from time to time expressed the view that the defendant’s parents, subjectively, would not have wanted the defendant left without provision from their estates, even in light of his role in their deaths. There is a public interest element in looking to family assets for a contribution towards the defendant’s ongoing maintenance, education and advancement in life.

174. If, as I propose, forfeiture application orders are to be made predicated upon provision being made for the defendant’s maintenance, education and advancement in life, then, subject to any further order of the Court, that provision should be administered, or managed, by the NSW Trustee or another professional trustee/manager able to stand apart from members of the defendant’s family. The family should be able to conduct their lives (including any contact they may voluntarily have with the defendant) uncomplicated by ongoing monetary ties.

175. The amount of provision made for the defendant should, in these circumstances, include an allowance for fees which, in the ordinary course of business, might reasonably be chargeable by the NSW Trustee or another professional trustee/manager.

176. If, as I propose, the form of provision made for the defendant is to be administered through a trust, the defendant’s beneficial entitlement to trust property should be subject to a condition that he not terminate the trust without the leave of the Court, and ancillary terms. This is necessary to cater for the possibility that the defendant might, at some future time, contend that he is entitled, under that “the rule in Saunders v Vautier” (authoritatively stated in CPT Custodian Pty Limited v Commissioner of State Revenue (Vic (2005) 224 CLR 98 at 119[47]), to terminate the trust because no longer incapacitated by mental illness.

177. The object of the proposed condition, and ancillary terms, is not to keep the defendant out of property to which he may be entitled, but to provide a mechanism to enable any entitlement to terminate the trust, or to deal with trust property, to be dealt with in an orderly fashion. But for a need to provide a regulatory mechanism, the defendant’s entitlement to the provision to be made for him should be regarded as absolute. Any unconsumed balance of property still held on trust at the time of the defendant’s death should pass to those persons who may be entitled to his deceased estate.

178. The absence of any application by the defendant for a family provision order under chapter 3 of the Succession Act should not be held against him in moulding an analogous form of relief as a condition imposed on the making of forfeiture application orders. But for the making of discretionary decisions under section 11 of the Forfeiture Act, the defendant stands to inherit property valued at about $1 million – an inheritance unlikely to be supplemented by a grant of family provision relief. The absence of an application for family provision relief is sufficiently explained by that practical reality. Within the context of an exercise of jurisdiction under the Forfeiture Act, relief granted against the unconditional operation of forfeiture application orders is a function of the Court’s determination to make such orders upon the exercise of a discretionary Forfeiture Act jurisdiction rather than a function of an exercise of family provision jurisdiction. Relief allowed to the defendant in the form of conditions imposed on the making of forfeiture application orders affects no interests in the estates of the parties’ deceased parents beyond those which, but for the making of the Court’s orders, would have been the defendant’s entitlement to inherit.

The rationale of the Forfeiture Rule, and the Forfeiture Act, kept in view

179. In determining that justice requires conditional forfeiture application orders as here described, I have kept in mind: (a) the rationale of the forfeiture rule found in the description of the rule in Gonzales v Claridades, extracted in paragraph 50 above; and (b) the nature, scope and purpose of the Forfeiture Act, predicated upon adaptation of the forfeiture rule to accommodate what justice requires on the facts of the particular case.

180. The fact that the defendant was found not guilty of murder on the ground of mental illness (and, so, relieved of criminal responsibility) is not inconsistent with characterisation of the deaths of his parents as unlawful or, in the interests of justice, denying him civil benefits flowing from conduct which was plainly wrong.

181. A refusal to make a forfeiture application order would be an unjust determination of these proceedings insofar as a consequence would be that the defendant would obtain a benefit (of the order of $1 million) from conduct which, although not viewed as a crime, would generally be regarded by fair-minded members of the community as profoundly wrong.

182. The Court cannot assume that the making of a forfeiture application order in respect of a mentally ill person will have no deterrent effect on others similarly ill, lacking insight. It may well do, and that possibility presents itself as an element of what “justice requires” in the making of an order.

183. In any event, the making of a forfeiture application order may have a more broadly based deterrent effect. A reasoned application of the forfeiture rule in the case of a person found not guilty on the ground of mental illness may serve as a deterrent in the general community – involving, as it does, reinforcement of the law’s abhorrence of an unlawful killing, and affirmation of the truth that conduct has consequences even if not criminal in character. A mental illness defence to a charge of murder is no sure means of avoiding the operation of the forfeiture rule, in the interests of justice.

184. The making of a forfeiture application order is not a vehicle for punishment of a person found not guilty of murder on the ground of mental illness, or for compensation of his or her victim: Rasmanis v Jurewitsch (1968) 88 WN (Pt 1) (NSW) 59 at 63-64, affirmed on appeal (1969) 70 SR (NSW) 407. Nor is it (as the report of the Victorian Law Reform Commission apprehended) a vehicle for denigration of such a verdict. It is a means by which, in the interests of justice, in civil proceedings, a person may be denied benefits flowing from his or her wrongful conduct.

185. Community support for the mentally ill (in the criminal justice system, in therapeutic treatment and in everyday life) need not extend to tolerance of wrongful conduct without civil consequences. The fact that a mentally ill “offender” lacks insight to recognise a wrong does not oblige the community to be blind to the wrong, or to acquiesce in the “offender” receiving consequential benefits.

186. The legislative history of the Forfeiture Act, as enacted in 1995, manifests a determination on the part of the Parliament to bring to the law a regard for justice responsive to the facts of the particular case. The amendments to the Act effected in 2005 are, in true perspective, an extension of that same determination.

COSTS

187. At the time this judgment was reserved for consideration, the parties made submissions about orders for the costs of the proceedings.

188. Prima facie (by reference to section 98 of the Civil Procedure Act, 2005 NSW and rule 42.1 of the Uniform Civil Procedure Rules 2005 NSW), the costs of the proceedings should follow the event.

189. However, the parties agreed that, whatever the outcome of the proceedings, the costs of the plaintiff (as her parents’ executrix) should be paid out of the estates on the indemnity basis.

190. The plaintiff also recognised, early in the proceedings, that a reasonable allowance should be made out of estate assets for the defendant (as an incapacitated person, necessarily to be represented by a tutor) to have the benefit of legal advice and legal representation: Guler v NSW Trustee and Guardian [2012] NSWLR 1369 at [3]; Smith v NRMA Insurance Ltd [2016] NSWCA 250.

191. In making an order for the defendant’s costs to be paid out of his parents estates, I am conscious that he was a necessary contradictor to the plaintiff’s application for forfeiture application orders; that, because he is an incapacitated person, it was necessary for the proceedings to be conducted on his behalf by a tutor; and that, by analogy with protective proceedings, the Court should have regard to what is a proper order for costs (CCR v PS (No. 2) (1986) 6 NSWLR 622 at 640E), not merely the rule that the costs of adversarial proceedings ordinarily follow the event.

192. I acknowledge that at least some part of the legal work undertaken on behalf of the defendant was undertaken (to paraphrase Clyne v NSW Bar Association (1960) 104 CLR 186 at 203-205) on a “speculative” basis; but that fact does not bear upon my decision-making in the absence of any suggestion of a fee uplift contingent upon success.

193. In my assessment, the defendant (and his tutor) should have the benefit of an order for the payment of costs out of the estates of the deceased parents, assessed on the ordinary basis, not the indemnity basis. This accords with the practice of the Court in family provision cases, in which an executor is ordinarily allowed his, her or its costs out of an estate on the indemnity basis, and an applicant for family provision relief is ordinarily allowed costs out of the estate on the ordinary basis.

194. In ordering that the defendant’s costs be paid out of the deceased parents’ estates, I am not to be taken as having approved the rates of fees charged by the defendant’s lawyers to his tutor or particular items of work undertaken by them pursuant to their retainer by the tutor. During interlocutory processes leading to the final hearing of the proceedings, and during the final hearing itself, I expressed concerns about the course of the proceedings on the defendant’s side of the record before, late in the piece, senior counsel was retained to appear for the defendant. Senior counsel’s involvement in the proceedings brought to the defendant’s case a discipline not earlier apparent.

195. Having determined that the defendant should have the benefit of a costs order (charged, effectively, against what would have been his share of his parents’ estates had it not been for the operation of the forfeiture rule), in the absence of any agreement between the parties as to what costs should be allowed the interests of justice are best served by my leaving to a costs assessor questions about the reasonableness, or otherwise, of work done, fees charged and costs recoverable.

196. I do not order that costs of the defendant payable out of estate assets be capped (Civil Procedure Act 2005, section 98; Uniform Civil Procedure Rules 2005, rule 42.4), lest an injustice is inadvertently done to the defendant’s tutor. Nobody has invoked the Court’s general jurisdiction to regulate the quantum of professional charges (Woolf v Snipe (1933) 48 CLR 677 at 678-679) or to make a personal costs order against a practitioner (Civil Procedure Act, section 99).

PROPOSED ORDERS

197. Subject to allowing the parties to be heard as to the form of the orders to be made, and securing the consent of the NSW Trustee or another suitable person to act as trustee of a fund established as a vehicle for provision being made for the defendant, I propose to make orders to the following effect:

1. On condition that: (a) the defendant be allowed (on the terms set forth in order 5 of these orders) provision for his maintenance, education and advancement in life in the sum of $50,000 (together with any interest accruing thereon pursuant to these orders) out of the estate of the deceased; and (b) no person be at liberty, during the lifetime of the defendant, to terminate the trust for which order 5 provides without the leave of the Court, ORDER, pursuant to section 11 of the Forfeiture Act 1995 NSW, that the forfeiture rule apply to the defendant as if he had been found guilty of the murder of Margaret Catherine Settree.

2. On condition that: (a) the defendant be allowed (on the terms set forth in order 5 of these orders) provision for his maintenance, education and advancement in life in the sum of $50,000 (together with any interest accruing thereon pursuant to these orders) out of the estate of the deceased; and (b) no person be at liberty, during the lifetime of the defendant, to terminate the trust for which order 5 provides without the leave of the Court, ORDER, pursuant to section 11 of the Forfeiture Act 1995, that the forfeiture rule apply to the defendant as if he had been guilty of the murder of Donald Ian Settree.

3. ORDER that the sums of $50,000 referred to in orders 1 and 2 of these orders be paid by the plaintiff (as the legal personal representative of the deceased), out of the deceased estates of Margaret Katherine Settree and Donald Ian Settree respectively, within three months of the date of these orders or such other time as the Court might allow.

4. DECLARE that, by reason of the operation of the forfeiture rule, the defendant has no right, title or interest in or in respect of the respective deceased estates of Margaret Catherine Settree and Donald Ian Settree other than the provision for him referred to in orders 1 and 2 of these orders.

5. ORDER that, as the legal personal representative of the late Margaret Catherine Settree and the late Donald Ian Settree, the plaintiff would be justified in administration of each estate upon the footing that, upon allowing for the provision made for the defendant in orders 1 and 2 of these orders, she (the plaintiff) is the only person beneficially entitled to the estate.

6. ORDER that the provision to be made for the defendant (totalling $100,000) set forth in orders 1 and 2 of these orders, be paid to the NSW Trustee, and be held by the NSW Trustee, on trust for the defendant with power to make payments (out of capital and interest) for the maintenance, education and advancement in life of the defendant.

7. ORDER that the defendant by himself, his servants and agents be restrained from terminating the trust (or assigning, charging or otherwise dealing with his interest in the trust) without the leave of the Court.

8. ORDER that no interest accrue on the sums of $50,000 referred to in orders 1 and 2 of these orders if those sums are paid to the NSW Trustee (pursuant to order 5 of these orders) within 28 days of the making of these orders, with the intent that interest (calculated in accordance with section 84A of the Probate and Administration Act 1898 NSW) is to accrue thereafter upon any amount unpaid.

9. ORDER that the plaintiff’s costs of the proceedings be paid out of the estates of Margaret Catherine Settree and Donald Ian Settree on the indemnity basis.

10. ORDER that the defendant’s costs of the proceedings, assessed on the ordinary basis, be paid out of the estates of Margaret Catherine Settree and Donald Ian Settree.

11. RESERVE to the parties liberty to apply in the working out of these orders.

198. If the NSW Trustee does not consent to act as trustee of the proposed trust fund, I will consider the making of (partial) protected estate management orders under sections 40-41 of the NSW Trustee and Guardian Act 2009, committing management of the defendant’s beneficial interest in the fund to the NSW Trustee.

199. The practice of the Court, and the NSW Trustee, is that the NSW Trustee’s consent is not required as a condition of management of a protected estate being committed to the NSW Trustee: Ability One Financial ManagementPty Ltd and Anor v JB by his tutor AB [2014] NSWSC 245 at [155] and [181].

200. If the NSW Trustee recommends protected estate management orders as better suited to the facts of the case than establishment of a trust I will, in consultation with the parties, consider that recommendation before making orders in disposition of the proceedings.

Amendments

03 October 2018 - Paragraph 85 - Reference to "Part 2" amended to refer to "Part 3".

Paragraph 179 - The word "paraphrased" replaced by "extracted".

26 July 2019 - Paragraph 52 - Deletion of the remainder of the sentence after the reference to Edwards v State Trustees Limited [2016] VSCA 28.

Decision last updated: 26 July 2019