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Supreme Court 13 July 2004

Batey & Anor v Potts & Ors

[2004] NSWSC 606

Also reported as 61 NSWLR 274
Homicide
SUCCESSION EXECUTORS AND ADMINISTRATORS RESIDUARY ESTATE BEQUEATHED TO SON SON CONVICTED OF MANSLAUGHTER WHETHER RULE SHOULD BE MODIFIED

Citation: Batey & Anor v Potts & Ors [2004] NSWSC 606
Court: Supreme Court of New South Wales, Equity Division
Date: 13 July 2004
Judge(s): Gzell J

Background

The plaintiffs were the executors of the estate of a deceased testatrix. Under her will, the testatrix granted her husband a right to reside in the matrimonial home for his lifetime, with the residue of the estate held on trust for their son (the first defendant). If the son's interest failed, the estate would pass to his estranged wife and their children, and to a grandchild of the deceased.

The first defendant was convicted of the manslaughter of his father. This conviction raised the question of whether the common law forfeiture rule (which prevents a person from benefiting from an estate as a result of unlawfully killing another) applied to his interest under his mother's will.

The proceedings were brought by the executors seeking judicial determination of the administration questions. All parties had agreed to consent orders framed in the alternative, depending on the court's findings on the forfeiture rule and any modification of it.

  • Whether a certificate of conviction for manslaughter was admissible in the civil proceedings to prove the son's guilt
  • Whether the forfeiture rule applied to a conviction for manslaughter (as distinct from murder), particularly where the offender suffered from a diagnosed mental illness
  • Whether the son's interest under the will was merely postponed for the period of his father's life expectancy, rather than entirely forfeited
  • Whether the rule in Saunders v Vautier (which allows beneficiaries of full legal capacity to call in a trust early) applied to the son's situation
  • Whether the court should grant leave for a late application under the Forfeiture Act 1995 to modify the forfeiture rule
  • Whether, if leave were granted, the rule should be modified to allow the son to take the residue on his father's death

Decision

Admissibility of the conviction certificate. Gzell J held that the certificate of conviction was admissible. The Evidence Act 1995 s 91(1) generally excludes evidence of findings made in prior proceedings, but s 91(2) preserves an exception for civil proceedings where a party has been convicted of an offence. Section 178(2) permitted proof of that conviction by certificate. The outline of the jury directions and the sentencing remarks, however, were not admissible to prove underlying facts, as the s 91(2) exception extends only to the conviction itself.

Application of the forfeiture rule. The court confirmed that the forfeiture rule applies to manslaughter, not only to murder. The first defendant's diagnosis of chronic schizophrenia did not exempt him from the rule. His Honour distinguished the position of those found not guilty by reason of mental illness (where the rule does not apply) from that of a person, such as the first defendant, who was convicted and sentenced. The psychiatric evidence did not establish that the first defendant lacked the requisite criminal responsibility for the homicide.

Effect of the forfeiture rule on the son's interest. Gzell J concluded that, because the son's entitlement under the will was contingent on his father's prior right of residence coming to an end, the forfeiture rule operated to postpone his enjoyment of the residue for the period of his father's life expectancy. The rule in Saunders v Vautier was held to be inapplicable on the facts.

Modification under the Forfeiture Act 1995. The court granted leave for the son to make a late application under the Forfeiture Act 1995. Having considered all the circumstances, including the son's mental illness and the nature of the offence, Gzell J exercised the discretion to modify the forfeiture rule. The modification allowed the son to take his interests under his mother's will as from the actual date of his father's death, rather than waiting out a notional life expectancy period.

Orders Made

• Refused to make a declaration that the first defendant's involvement in the death of Keith Edward Potts was not such as to invoke the operation of the forfeiture rule
• Granted leave to the first defendant to make a late application for modification of the forfeiture rule pursuant to the Forfeiture Act 1995, s 7(2)
• Modified the forfeiture rule to enable the first defendant to take his interests under the will of the deceased as from the date of death of Keith Edward Potts
• Directed the parties to bring in short minutes of orders reflecting the reasons
• Ordered that costs of all parties and those of Matthew Edwards Potts be paid on an indemnity basis out of the estate

The judgment directed the parties to bring in short minutes of orders reflecting the reasons. Key outcomes recorded in the judgment included:

  • The certificate of conviction declared admissible
  • The forfeiture rule found to apply, operating to postpone (not permanently extinguish) the son's entitlement
  • Leave granted to make a late application under the Forfeiture Act 1995
  • The forfeiture rule modified to allow the son to take the residue from the date of his father's death
  • Costs of all parties, including those of the first and second defendants' son, to be paid on an indemnity basis from the estate

Key Takeaways

  • The forfeiture rule applies to convictions for manslaughter, not only murder, and is not automatically displaced by evidence that an offender suffers from a diagnosed mental illness such as schizophrenia. A conviction resulting in a sentence engages the rule, unlike a verdict of not guilty by reason of mental illness.

  • Under the Evidence Act 1995 s 91(2), a certificate of conviction is admissible in civil proceedings as an exception to the general rule against relying on findings from prior proceedings. However, this exception is confined to proof of the conviction itself; associated material such as jury directions and sentencing remarks do not fall within it.

  • Where the forfeiture rule applies to a beneficiary's interest, its practical effect depends on the structure of the will. On the facts here, the court found the rule postponed the son's enjoyment of the residue for the period of his father's notional life expectancy, rather than effecting a permanent forfeiture.

  • The Forfeiture Act 1995 confers a discretion on the court to modify the rule's effect. Late applications for modification may be granted where the circumstances justify it.

  • Modification of the forfeiture rule does not require the court to frame orders in the alternative. Gzell J declined to adopt that approach, finding it more appropriate to make a definitive finding that the rule applied and then to modify it under the Act.

Legislation and Cases Referenced

Legislation
- Forfeiture Act 1995 (NSW)
- Evidence Act 1995 (NSW), ss 91, 92, 178
- Supreme Court Rules 1970 (NSW), Pt 68 r 2
- Duties Act 1997 (NSW), s 304(2)

Cases
- Permanent Trustee Co Ltd v Gillett [2004] NSWSC 278
- In the Estate of Crippen [1911] P 108
- Hollington v F Hewthorn & Co Ltd [1943] 1 KB 587
- Helton v Allen (1940) 63 CLR 691
- Helsham v Blackwood (1851) 11 CB 111
- Re Jane Tucker (1920) 21 SR (NSW) 175
- In the Estate of Hall, Hall v Knight & Baxter [1914] P 1
- In re Giles, decd [1972] 1 Ch 544
- In re Plaister; Perpetual Trustee Co v Crawshaw (1934) 34 SR (NSW) 547
- Clift v Clift (1964) 82 WN (Pt 1) (NSW) 298
- Cleaver v Mutual Reserve Fund Life Association [1892] 1 QB 147
- Troja v Troja (1994) 33 NSWLR 269
- Public Trustee v Evans (1985) 2 NSWLR 188
- Public Trustee v Fraser (1987) 9 NSWLR 433
- Re Keitley [1992] 1 VR 583
- Permanent Trustee Co Ltd v Freedom From Hunger Campaign (1991) 25 NSWLR 140
- Rasmanis v Jurewitsch (1968) 88 WN (Pt 1) (NSW) 59
- Saunders v Vautier (1841) 4 Beav 115