Crime does not pay: The Forfeiture Rule explained

In Australia, the Forfeiture Rule stops you from keeping the ‘golden egg’ from the goose that you kill. Legally speaking, it is a common law rule that prevents a person who has unlawfully killed another person from inheriting from the victim’s estate or obtaining another financial benefit from the death such as an insurance payment or proceeds from writing a memoir about the crime.¹

It originated in the English Court of Appeal case of Cleaver v Mutual Reserve Fund Life Association [1892] 1 QB 147, where the Court held that a woman who had been convicted of murdering her husband was not entitled to the proceeds of her husband’s life insurance policy. The Court ruled that public policy in these cases should prevent “the person guilty of the death of the insured, or any person claiming through such person, from taking the money“.²

The Australian High Court subsequently endorsed the English authorities and adopted an absolute forfeiture rule in the decision of Helton v Allen (1940) 63 CLR 691. Consequently, today the common law rule applies absolutely regardless of the motivations of the killer, the nature of the killing (eg manslaughter) or any moral justification behind the killing (eg defensive homicide).³

This was further clarified in the NSW Court of Appeal’s decision of Troja v Troja where the majority took a strict approach, stating:

the law as laid down… is that all felonious killings are contrary to public policy and hence, one would assume, unconscionable. Indeed, there is something a trifle comic in the spectacle of Equity judges sorting felonious killings into conscionable and unconscionable piles.⁴

Legislation

There is no uniform legislation in Australia that codifies the Forfeiture Rule. NSW and the Australian Capital Territory (ACT) are the only Australian jurisdictions that have created legislation modifying the rule. All other States and Territories continue to rely upon the common law rule.

New South Wales

In NSW, the Forfeiture Act 1995 (NSW) modified the Forfeiture Rule such that it no longer applies absolutely. The Supreme Court of NSW is given discretion over whether to apply the rule in cases not amounting to murder. In particular, the Court may modify the rule where “it is satisfied that justice requires the effect of the rule to be modified“, having 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
• such other matters as appear to the Court to be material.⁵

However, since its inception, the application of this legislation by Courts has been controversial.⁶ In Lenaghan-Britton v Taylor (1998) 100 A Crim R 565, the plaintiff killed her grandmother and was a beneficiary of her estate. The plaintiff and her husband lied to police, claiming that her grandmother had been killed by an intruder. Several months later it was uncovered that they were responsible for the deceased’s death, and the plaintiff accepted a plea of manslaughter. The plaintiff applied under the Forfeiture Act 1995 (NSW) to exclude the application of the Forfeiture Rule or at least modify it such that she could still receive the benefit due to her under the deceased’s Will. Surprisingly, Hodgson CJ granted a forfeiture modification order, notwithstanding that he acknowledged that this was a “crime of extreme seriousness” and that the attempt by the plaintiff to “cover up the crime was deliberate and serious“.⁷ However, his Honour granted the application for several reasons which included that:

• the killing was not premeditated, and the plaintiff had no intention to profit from the crime;
• the plaintiff was mentally unwell, having been diagnosed with depression and had attempted suicide on numerous occasions;
• the assault on the deceased was one “involving suppressed rage which could erupt against herself as well as others“;
• the plaintiff had a very close relationship with the deceased, having sold her house to help her grandmother and attempted to help her when no other family member would;
• the deceased had bowel cancer, was very ill and was 86 years old at the time of her death. Her death “would not in any event have been long delayed“;
• the plaintiff had been appropriately punished for her crime as she was convicted of manslaughter and sentenced to 11 years imprisonment; and
• modifying the rule in these circumstances would not “provide any incentive to any other person to act similarly, nor would it outrage the community.“⁸

Academics have described this judgment as a “very liberal application” of the Court’s power under the legislation and the factors considered such as her lack of a profit motive and the deceased’s impending death have been viewed as being of “questionable relevance“.⁹

The more recent decision of Edwards v Edwards [2023] NSWSC 1067 applied the Forfeiture Rule one step further to sever the joint tenancy between a wife and her husband who was convicted of her murder, to prevent him from acquiring the property through a right of survivorship.¹⁰ The Court’s broad application of the Forfeiture Rule is consistent with the approach taken by the Court in the WA decision of Public Trustee (WA) v Mack [2017] WASC 325 which we consider below.

Australian Capital Territory

Unlike the NSW legislation, the ACT does not allow for forfeiture application orders, but does allow Courts to make forfeiture modification orders in cases not amounting to murder.¹¹

Victoria

Victoria is a jurisdiction in which the Forfeiture Rule is applied absolutely. In the case Edwards v State Trustees Limited [2016] VSCA 28, the appellant had been a victim of domestic violence from her husband, the deceased, for several years. She killed her husband and pled guilty to defensive homicide and was sentenced to 7 years’ imprisonment.¹² She was not entitled to the deceased’s estate by virtue of the Forfeiture Rule. The Trial Judge held that the Forfeiture Rule was inflexible and applied in all cases of murder, manslaughter or analogous homicides. McMillan J held that the Court did not have any discretion as to whether to apply the rule, and accordingly applied the rule in that case.

The Victorian Court of Appeal upheld the judgment. It stated that the Forfeiture Rule applies where the person is guilty of “deliberate, intentional and unlawful violence, or threats of violence … in circumstances in which there is no legal justification for the killing“.¹³ The only exception to the rule is in cases of insanity or where rational judgment has been precluded.¹⁴

Queensland

In Queensland, the common law Forfeiture Rule differs from Victoria, in that the intention to kill or cause grievous bodily harm is not necessary to trigger the rule.¹⁵ It at least covers all cases of murder and manslaughter.¹⁶ It also extends to assisted suicide cases.

In Public Trustee of Queensland v Public Trustee of Queensland [2015] 1 Qd R 601, the deceased died as a result of a drug overdose. His executor and the sole beneficiary of his estate was convicted of having assisted the deceased in committing suicide. de Jersey CJ viewed the Forfeiture Rule as being “inflexible and absolute; absent statutory change” and that once “one identifies the causal relationship between the crime and the death, and that is established essentially by the conviction, then any entitlement under the deceased estate is, without more, forfeited.“¹⁷ His Honour applied the Forfeiture Rule and ruled that the beneficiary was not entitled to the deceased’s estate.

Tasmania and Northern Territory

The authors have not been able to identify any published cases in Tasmania or the Northern Territory making judicial rulings on the common law Forfeiture Rule. However, the Tasmania Law Reform Institute in their report on the Forfeiture Rule, believe that courts would be persuaded by the decision in Troja v Troja, as discussed above.¹⁸ Therefore, the rule would probably operate in those jurisdictions absolutely, regardless of the nature and circumstances of the killing.

South Australia

Like the other States, the Forfeiture Rule applies absolutely in South Australia.¹⁹ In Rivers v Rivers, the South Australian Supreme Court formulated the rule as preventing a person from “exercising a right to property which could have been exercised if it had not been for the fact that the death of the owner of the property had been the result of the unlawful act of the claimant.“²⁰

Western Australia

There is limited case law in regard to the operation of the Forfeiture Rule in Western Australia. However, in Public Trustee (WA) v Mack [2017] WASC 325, Master Sanderson applied the Forfeiture Rule in unusual circumstances. The deceased was killed by her son, who was convicted of the murder. The deceased’s estate was to be split between her 2 sons, the other one of whom passed away shortly after his mother’s death. Master Sanderson ordered that the son’s share be forfeited by operation of the Forfeiture Rule. The issue that arose in this case was how to distribute the deceased son’s share of the mother’s estate and specifically whether the other son was entitled to it. The Court held that the son was not entitled to his deceased brother’s share of the mother’s estate, as this would be an indirect benefit of his crime of murder, and that more broadly, the Forfeiture Rule extended to prevent a person benefitting indirectly as a consequence of their crime.

Until uniform law is passed so as to codify the Forfeiture Rule across all Australian States and Territories, we remain heavily reliant on the common law. Even in NSW and ACT, where legislation has been passed, judges have been left with a discretion that has made it difficult to predict a consistent application of the rule.

HWL Ebsworth Lawyers’ estate disputes team have experienced professionals who can assist you to manage a dispute or prosecute a claim in relation to a contested Will or deceased estate.

This article was written by Simon Crawford, Partner, Angela Liaskos, Senior Associate, and James Xue, Law Graduate.

¹See for example Edwards v State Trustees Limited [2016] VSCA 28.
²Cleaver v Mutual Reserve Fund Life Association [1892] 1 QB 147, 155.
³Helton v Allen (1940) 63 CLR 691, 709-10.
⁴Troja v Troja (1994) 33 NSWLR 269, 299.
⁵Forfeiture Act 1995 (NSW) s5.
⁶See for example, Straede v Eastwood [2008] NSWSC 280; Nicola Peart, ‘Reforming the Forfeiture Rule: Comparing New Zealand, England and Australia’ (2002) 31(1) Common Law World Review 1; Andrew Hemming, ‘Killing the Goose and Keeping the Golden Nest Egg’ (2008) 8(2) Queensland University of Technology Law and Justice Journal 342.
⁷Lenaghan-Britton v Taylor (1998) 100 A Crim R 565, 571.
⁸Ibid.
⁹See Nicola Peart, ‘Reforming the Forfeiture Rule: Comparing New Zealand, England and Australia’ (2002) 31(1) Common Law World Review 1, 27; Andrew Hemming, ‘Killing the Goose and Keeping the Golden Nest Egg’ (2008) 8(2) Queensland University of Technology Law and Justice Journal 342, 356.
¹⁰Edwards v Edwards [2023] NSWSC 1067.
¹¹Forfeiture Act 1991 (ACT) ss3-5.
¹²Edwards v State Trustees Limited [2016] VSCA 28.
¹³Ibid [191].
¹⁴Ibid.
¹⁵See Pike v Pike [2015] QSC 134, [22].
¹⁶Ibid.
¹⁷Public Trustee of Queensland v Public Trustee of Queensland [2015] 1 Qd R 601, [16].
¹⁸Tasmania Law Reform Institute, The Forfeiture Rule (Report No 6, December 2004); Troja v Troja (1994) 33 NSWLR 269.
¹⁹See for example, Rivers v Rivers [2002] SASC 437; Re: Luxton [2006] SASC 371.
²⁰Rivers v Rivers [2002] SASC 437, [32].