Nay v Iskov [2012] NSWSC 598

Supreme Court New South Wales

Medium Neutral Citation: Nay v Iskov [2012] NSWSC 598 Hearing dates: Wednesday 2 May 2012 Decision date: 02 May 2012 Jurisdiction: Equity Division - Duty List Before: Brereton J Decision: Declarations concerning construction of the will and imposing certain trusts on the defendant Catchwords: Wills, Probate and Administration - Forfeiture under public policy rule - Application - Person killing beneficiary under will - Rule applicable Legislation Cited: (NSW) Conveyancing Act 1919, s 66G (NSW) Forfeiture Act 1995 Cases Cited: Troja v Troja (1994) 33 NSWLR 269 Public Trustee v Evans (1985) 2 NSWLR 188 Public Trustee v Fraser (1987) 9 NSWLR 433 Rasmanis v Jurewitsch (1970) 70 SR (NSW) 407 Category: Principal judgment Parties: Pamela Nay (First Plaintiff) Tania Maree Wilkinson (Second Plaintiff) Clayton John Iskov (Defendant) Representation: Mr M Gunning (Plaintiffs) Jon Watts, Avern McIntyre & Co (Plaintiffs) File Number(s): 11/ 245160

Judgment (ex tempore) 1HIS HONOUR: The deceased Kylie Petrina Iskov and the defendant Clayton John Iskov were married in 1997 and together had three children, Hollie, Tia and Dane Iskov. On 13 April 2005, the deceased made a will by which she appointed the plaintiffs Pamela Nay and Tania Mary Wilkinson (her mother and sister, respectively) to be her executors and trustees. By clause 3, she gave certain real property to her trustees upon trust for the three children. 2Clause 5 provided as follows: I give and bequeath to my husband Clayton John Iskov the sum of three hundred and fifty thousand dollars ($350,000.00) which is to be paid from the proceeds of my AMP Flexible Lifetime Super Plan Policy Member 701569XXX should it be in existence at the date of my death and the balance of the proceeds of this Policy I give and bequeath to my Trustees to be held upon trust for such of them my children Hollie Iskov Tia Iskov and Dane Iskov as shall survive me and if more than one in equal shares as tenants in common and this shall also include any other child or children of mine living at the date of my death with such proceeds to be paid to my beneficiaries upon my eldest surviving child attaining the age of thirty years (30) years [sic] provided that should my AMP Flexible Lifetime Super Plan Policy Member 701569XXX no longer be in existence at the time of my death then this bequest shall be of no effect. 3Clause 6 provided as follows: I give and bequeath the proceeds of my AMP Superannuation Policy or any other Superannuation Policy I may have at the date of my death to my trustees to be held upon trust for such of them my children Hollie Iskov Tia Iskov and Dane Iskov as shall survive me and if more than one in equal shares as tenants in common and this shall also include any other child or children of mine living at the date of my death with such proceeds to be paid to my beneficiaries upon my eldest surviving child attaining the age of thirty years (30) years [sic]. 4The inventory of property discloses that, at the time of her death, the deceased held AMP superannuation saving trust policy 701569XXX, which I conclude is the policy referred to in clause 5 of the will, and First State Super policy 3061XXX. Although clause 6 refers to, "my AMP superannuation policy or any other superannuation policy", it seems to me that the specific reference to a specific policy and policy number in clause 5 indicates that, in the events which have happened, it is clause 5 that deals with the policy 701569XXX - or, at least, its proceeds. 5The marriage was a difficult one. In May 2007, the deceased told the defendant she wanted a divorce. On 6 August 2007, after delivering two of the children to childcare and school, respectively, the deceased met the defendant, who entered her car. Prior to doing so, he assaulted and occasioned actual bodily harm to her. He then detained her, drove her for some three and a half hours around and in the vicinity of Lismore and, ultimately, by gross criminal negligence, drove the car into a tree near Mooball, south of Lismore, as a result of which collision the deceased was killed. 6After having initially been charged with the murder of the deceased, the defendant pleaded guilty to three offences of which he was convicted by Barr AJ on 20 September 2010: namely, first, detaining of the deceased without her consent with intent to obtain an advantage and occasioning actual bodily harm; secondly, maliciously inflicting grievous bodily harm upon the deceased with intent to do her grievous bodily harm; and, thirdly, manslaughter by gross criminal negligence. Barr AJ sentenced the defendant to a term of imprisonment which, accumulated, would expire on 23 April 2026, with the first possible date for parole being 23 October 2021. 7Probate of the will was granted to the plaintiffs on 15 April 2008. 8Amongst the assets of the deceased's estate were the AMP superannuation policy to which I have referred, and an interest as joint tenant with the defendant in a property at X Bailey Street West Tweed Heads in the State of New South Wales, being Lot 1 in Deposited Plan 101XXX. By summons filed on 29 July 2011, the executors seek orders to the effect that the forfeiture rule applies in respect of those assets of the estate so as to preclude the defendant from inheriting them, and consequential orders. 9On an application such as the present, it is ordinarily necessary for the plaintiffs to re-prove the guilt of the defendant, albeit to the civil and not the criminal standard, although a certificate of conviction is admissible as evidence, but not conclusive evidence [Troja v Troja (1994) 33 NSWLR 269]. However, the present case has proceeded on a consensual basis, with counsel for the plaintiff mentioning the matter for the solicitors for the defendant. The remarks on sentencing of Barr AJ are before the Court. On the basis that the Court has been informed that the outcome reflected in the draft short minutes is consensual, I will treat that as sufficient evidence to satisfy me that the defendant killed the deceased, and did so unlawfully. 10In those circumstances, the majority judgment of the Court of Appeal in Troja establishes that the forfeiture rule applies and that earlier decisions in this Division, such as Public Trustee v Evans (1985) 2 NSWLR 188 (Young J, as His Honour then was) and Public Trustee v Fraser (1987) 9 NSWLR 433 (Kearney J), suggesting that there was some discretion in this respect, are no longer good law. In 1995, Parliament enacted the (NSW) Forfeiture Act 1995, which provided that the Court might, on application, modify the application of the forfeiture rule in a particular case, or might order that it apply in a case to which it otherwise would not apply (in particular, where an accused was found not guilty on grounds of mental illness). The present application is not an application under the Forfeiture Act and involves no exercise of discretion on the part of the Court to apply the rule, or to modify the rule. In those circumstances, the forfeiture rule applies. No order to that effect is necessary. 11As far as the superannuation policy is concerned, there is no evidence that any right, title, or interest in the policy will accrue to the defendant by reason of the deceased's death, or under the will. Clause 5 of the will does not give the defendant an interest in the policy, but a pecuniary legacy, albeit that the legacy is to be paid from the proceeds of the policy. In those circumstances, it seems to me that the consequence of the forfeiture rule is simply that the defendant is not entitled to the legacy under that clause and that, as a result, the children, who are entitled to the balance of the proceeds of the policy, are entitled to the whole of the proceeds. As the children are the residuary beneficiaries under clause 9 of the will and entitled to "my AMP policy, or any other superannuation policy" under clause 6 of the will, as well as to the balance of the proceeds of policy 701569XXX under clause 5 of the will, this is the case whichever way one approaches the issue, and whether one regards the defendant's legacy as lapsing and falling into residue, or as increasing the balance payable to the other beneficiaries named in clause 5. 12So far as the West Tweed Heads property is concerned, the judgment of the Court of Appeal in Rasmanis v Jurewitsch (1970) 70 SR (NSW) 407, established that, in circumstances such as the present, the felonious slaying of one joint tenant by another does not operate to sever the joint tenancy, such that the survivorship rule continues to apply so that the deceased joint tenant's interest accedes to the surviving felon in law, who is therefore entitled to become registered as proprietor, but that equity precludes the felon from taking that interest beneficially and imposes a constructive trust so as to ensure that it be held in the same way as it would have been held had there been, on the slaying, no enlargement of the interest of the felon. 13In those circumstances, the defendant is entitled to be registered as proprietor by survivorship of the whole of the property, but holds a half interest in it upon trust for the executors and could be required, in order to give effect to that trust, to transfer a half interest to the executors. Alternatively, the executors would prima facie be entitled to an order under (NSW) Conveyancing Act 1919 s 66G for sale of the property. 14Accordingly, I propose to make the following orders: 1. Declare that, on or about 6 August 2007, the defendant, Clayton John Iskov, unlawfully killed the late Kylie Petrina Iskov ("the deceased"). 2. Declare that the defendant is precluded from inheriting the legacy referred to in clause 5 of the Will of the deceased, dated 13 April 2005 ("the Will"). 3. Declare that, upon the proper construction of the Will and in the events which have happened, the plaintiffs hold the proceeds of AMP Flexible Lifetime Super Plan Policy Member 7015695XXX upon trust for Hollie Iskov, Tia Iskov and Dane Iskov, in equal shares as tenants in common upon the terms referred to in clause 5 of the Will. 4. Declare that the defendant holds the property situate at and known as X Bailey Street, West Tweed Heads, being the land comprised in Folio Identifier 1/1017105, upon trust as to one half share for himself and as to the other half share for the plaintiffs as executors of the deceased's estate as tenants in common in equal shares. 5. Order that, upon becoming registered as proprietor of the Tweed Heads property, the defendant execute and deliver to the plaintiffs a transfer in registrable form of a one half interest in the Tweed Heads property. 6. Reserve liberty to apply on seven days notice in relation to the implementation of these orders and/or for further orders relating to the disposal of, or dealing with the Tweed Heads property. 7. Order that the plaintiff's costs on the indemnity basis be paid out of the estate. 8. No order as to the defendant's costs, to the intent that the defendant bear his own costs. 9. Direct that the plaintiff serve notice of these orders on the defendant's solicitors by 3 May 2012. 10. Reserve liberty to apply by 16 May 2012 to vary or set aside these orders. 11. Direct that these orders be entered forthwith.