ALLSOP CJ:
1 This matter commenced in the Insurance List in April 2016 by application of Westpac Life Insurance Services Limited (Westpac Life).
2 The application was made by Westpac Life under s 215 of the Life Insurance Act 1995 (Cth) (the Act) for the declaration to protect itself in respect of a policy of life insurance issued by it over the life of Ms Lainie Coldwell (the primary life insured) for her benefit (as policyowner). The Life Benefit Amount of $150,000 was paid into Court upon filing of the application. The applicant formed the opinion that no sufficient discharge could be obtained otherwise than paying money into the Court.
3 Section 215 of the Act is in the following terms:
215 Power to pay money into Court
(1) A life company may pay into the Court any money payable by the company in respect of a policy for which, in the company's opinion, no sufficient discharge can otherwise be obtained.
(2) Payment of the money into the Court discharges the company from any liability under the policy in relation to the money.
(3) Any money paid into the Court under this section is to be dealt with according to the order of the Court.
(4) This section has effect subject to the Rules of the Court.
4 The brief circumstances that give rise to the application are that the first respondent, who is the former partner of the deceased (Lainie Coldwell), and the estate of Ms Coldwell (the second respondent being the executor of the estate) both claim the proceeds of the life insurance policy on the late Ms Coldwell's life. The third respondent, as represented by her litigation representative, Mr Athol Butler, is the daughter of Ms Coldwell and Mr Mahony.
5 At the time of the application being filed in 2016, Mr Louis Mahony, the first respondent, had been charged with the murder of Ms Coldwell, as well as being charged with offences involving the defrauding and attempted defrauding of insurance companies (including Westpac Life in respect of the subject policy).
6 The history of this matter up to 2 September 2016 is detailed in Westpac Life Insurance Services Limited v Mahony [2016] FCA 1071, [6]-[19]:
6 The facts go back to July 2009 when Westpac Life issued a life insurance policy to Louis Mahony and Lainie Coldwell as joint owners and lives insured. The policy provided for the payment of $150,000 to the other in the event of the death of one. The policy also provided for payment to a loan account owed by them to Westpac Banking Corporation (WBC) being a joint home loan account. As at 31 July 2009, a sum of $123,709.49 was jointly owed by Mr Mahony and Ms Coldwell to WBC in that account.
7 Ms Coldwell died on 25 August 2009 in Charleville, Queensland, from head injuries after she apparently fell from a tree. On 1 September 2009, solicitors acting for Mr Mahony notified Westpac Life of his claim to the policy moneys.
8 Shortly thereafter, a claims administrator of Westpac Life responded to the solicitor's letter requesting various information including a copy of the coroner's report when it was available. The coroner's report, at this point, seemed to be important because, since Ms Coldwell apparently fell from a tree, a claims officer was concerned in October 2009 as to whether the death was accidental or suicide.
9 In November 2009, Westpac Life became aware that Swiss Re had issued policies on the life of Ms Coldwell of over $1.7 million that had been taken out, like the Westpac Life policy, only a matter of weeks before the death of Ms Coldwell. An autopsy was undertaken in August 2009, making clear that the cause of death was a head injury from a fall from a height. This document was given to Westpac Life by the coroner in September 2011.
10 By early 2010, a degree of suspicion in Westpac Life had arisen about Ms Coldwell's death, based on the shortness of time the policy had been taken out prior to her death, and by the knowledge that other policies of significant value had been taken out in the same time frame.
11 Westpac Life made a number of investigations, including of the handwriting on the application for the insurance. An expert handwriting examiner informed Westpac Life in July 2010 that the signature on the insurance application was probably that of the deceased, Ms Coldwell.
12 During 2010, Westpac Life sought certain information as to other policies and superannuation funds from Mr Mahony's solicitors. But it was apparently resolved during 2010 that Westpac Life would await the coroner's report before paying any moneys.
13 In January 2011, Charleville detectives became involved in the investigation of Ms Coldwell's death. A detective sergeant contacted Westpac Life requesting certain assistance as to the details of the policies.
14 By June 2011 (almost two years after the death of Ms Coldwell) the coroner apparently was resolved not to issue a report until the finalisation of police inquiries. By the end of December 2011, Mr Mahony's solicitors informed Westpac Life that Mr Mahony proposed to sell real property that had been mortgaged to secure the joint loan and the letter further stated that he would therefore make a claim personally for the moneys due under the policy. The letter recognised that Westpac Life was awaiting the coroner's report before finalisation of its position. The letter did not contain an unequivocal claim for payment at that time.
15 Thereafter, a significant body of time passed while the coroner awaited the finalisation of the police investigation. By April 2013, the homicide squad in Brisbane had apparently taken over the investigation. In January 2014, Westpac Life was told that the matter was under investigation by three "cold case" detectives from Brisbane. Further requests for assistance were made of Westpac Life by the police in Brisbane for information and documentation.
16 Westpac Life thereafter made regular inquiry of the coroner and police as to progress in the investigation - in April, June, July and November 2014, and January 2015.
17 In May 2015, Mr Mahony's solicitors asked for all documentation and correspondence held by Westpac Life in relation to the policy. This was refused by Westpac Life.
18 Finally, in August 2015, Mr Mahony filed a claim and statement of claim in the Charleville Magistrates Court alleging breach of contract. The body of the statement of claim asserts "loss and damage" from the non-payment. However, the relief claimed is the sum of $150,000 plus interest at the rate of 6 per cent from 14 August 2015 and $1215.10 in costs. No claim for general damages or interest prior to August 2015 is made. Meanwhile, probate of Ms Coldwell's will issued in favour of Patricia and Trevor Coldwell in August 2012. Mr Trevor Coldwell has since died. In December 2015, the remaining executor, Patricia Coldwell, through her solicitors, informed Westpac Life that the estate would make a claim under the policy.
19 On 10 December 2015, Mr Mahony was arrested in connection with the death of Ms Coldwell. He is in custody and has had bail refused. A committal hearing was to take place in July 2016. The charges against Mr Mahony are for the murder of Ms Coldwell and dishonestly inducing or attempting to induce insurance proceeds from Swiss Re Life, Health Australia Limited, Westpac Life and Sunsuper Pty Ltd. The committal hearing was set down in July 2016.
7 In that judgment on 2 September 2016 I made a declaration under s 215 and made orders permitting Westpac Life to have its costs paid from the moneys paid into Court: Westpac Life Insurance Services Limited v Mahony [2016] FCA 1071. On 21 March 2017, I made orders and delivered reasons permitting the second and third respondents to have their costs paid from the moneys paid into Court: Westpac Life Insurance Services Limited v Mahony (No 2) [2017] FCA 277.
8 On 13 November 2017, Mr Mahony was convicted of the murder of Ms Coldwell. His appeal was refused on 28 June 2019: R v Mahony [2019] QCA 131. He is presently incarcerated in Wolston Correctional Centre.
9 Douglas J made the following sentencing remarks:
You've been found guilty of the murder of your partner of many years and the mother of your daughter. You have just heard of the results of your crime on her family. Your conduct has no doubt affected your own family tragically also. The wickedness of your crime and the apparent motives that caused you to commit it will effect deep shame on you. You are also someone who had been privileged to be a police officer who should have known better than most of the reasons why crime is punished and especially crime of this nature. The only sentence the law imposes for such a crime is life imprisonment and I sentence you to life imprisonment.
10 Mr Mahony's involvement in Ms Coldwell's death raises consideration of what is sometimes referred to as the "forfeiture rule".
11 As discussed in Swiss Re Life & Health Australia Ltd v Public Trustee of Queensland (No 3) [2018] FCA 1918 at [19]-[24], the forfeiture rule is a rule of public policy which "provides for the forfeiture of property if the vesting of the property is materially contributed to by the death of someone for whose deaths the person taking is criminally responsible". If a person murders another, he or she would be precluded from receiving a financial benefit from that death, including in the form of life insurance proceeds. In the context of murder, the rule has been described as "absolute and inflexible", resting on "an abhorrence of the notion that one may profit from killing another": Troja v Troja and the Public Trustee (1994) 33 NSWLR 269 at 299 per Meagher JA.
12 On 9 December 2019, following the refusal of Mr Mahony's appeal and the filing of a notice of ceasing to act by Mr Mahony's legal representatives, the Court wrote to the parties to give Mr Mahony directly an opportunity to identify why the forfeiture rule ought not to be applied in this case. Mr Mahony was given until 7 February 2020 to provide any such submissions to the Court. The Court has not received any response from Mr Mahony.
13 In these circumstances, the criminal culpability for the violent death of Ms Coldwell must attract the operation of the forfeiture rule. Under this rule, Mr Mahony is not entitled to any of the proceeds from Ms Coldwell's death, including the payment from the life insurance policy with the applicant. As a result, the insurance proceeds fall into the estate of Ms Coldwell, the policyholder.
14 On 4 December 2019, the second and third respondents informed the Court that they have reached an agreement as to the division of the proceeds of the life insurance policy. (With the moneys in the Court and relevant costs determined in Westpac Life Insurance Services Limited v Mahony (No 2) [2017] FCA 277, the applicant is no longer actively involved in the proceedings.) Despite requests for further information by my chambers on my behalf, the Court has not been apprised of the detail of the agreement. In these circumstances, it will be for the executor of Ms Coldwell's estate to give effect to this agreement once the funds have been paid to the estate.
15 I propose to direct that the balance of the funds held in Court from the moneys paid into Court by Westpac Life in respect of policy ZM051547, of which the late Lainie Coldwell was the policyowner and life insured, be paid to the estate of Ms Coldwell.
16 On 4 March 2020, my chambers received an informal application, without evidence and without submissions, that the solicitors of the second and third respondents be awarded $5,500 each for legal costs. There has been no justification for these additional costs by submissions or fee notes. As stated above, I made orders and delivered reasons permitting the second and third respondents to have their costs of $2750 and $2000 respectively paid from the moneys paid into Court on 21 March 2017. I am prepared to accept that the continuation of the matter has led to some costs for the second and third respondents and I am prepared to make an order that, before the money has been paid to the estate, the solicitors for the estate and the solicitors for the litigation representative are entitled to $1500 each from the funds paid into Court. There is cost and delay in taking any other course.
17 The informal application also requested, again without evidence and without submissions, and without any apparent service on Mr Mahony, that Mr Mahony reimburse the estate for the costs of and incidental to these proceedings. This application would require Mr Mahony to be represented and receive legal advice and possibly pro bono representation. I am not prepared to make this order. Enough costs have been spent on this matter and the matter needs to be finalised. Also, as a matter of principle, Mr Mahony is being punished for his grave crime pursuant to the sentence of the Supreme Court. He has forfeited the benefit of the insurance policy. He should not be mulcted in costs by way of further punishment. Apart from murdering his wife, Mr Mahony played no part in the commencement or conduct of these proceedings and, in these circumstances, ordering that he pay the costs of the proceedings would be unfounded and unjustifiable.
I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Allsop.