This article was published in the Law Institute of Victoria Journal, LIJ October 2012.
The witness-beneficiary rule, introduced in the 18th century but abolished in Victoria in 1997, is being reconsidered as part of a review of succession laws by the Victorian Law Reform Commission (VLRC).
The witness-beneficiary rule was that a witness to a will could not receive a benefit from it. A gift to a beneficiary who witnessed the will was null and void, although later amendments to the rule introduced significant exceptions.
Under the terms of reference of the current inquiry the VLRC will consider ‘whether the current requirements for witnessing wills should be revised to better protect older and vulnerable will-makers from undue influence by potential beneficiaries and others’.
In examining this issue, the VLRC is considering why the witness-beneficiary rule—also known as the interested witness rule—has been abolished in Victoria, although it has been retained in some other jurisdictions and is included in model legislation for national uniform succession laws.
The witness-beneficiary rule arose in the 18th century in response to rules of evidence. At that time, the common law rule of evidence was that an interested witness was not a credible witness. A beneficiary who witnessed a will was disqualified from testifying as to its execution in probate proceedings unless they disclaimed their interest. This could prevent the will from being proved and the estate being distributed in accordance with the will-maker’s wishes.
The solution provided by Lord Hardwicke’s Wills Act of 1752 was to allow a witness to give evidence in probate proceedings. The will could thus be proved, and the estate distributed, but any provisions in the will that attempted to confer a benefit on a witness were ‘null and void’. The rule was extended to the spouses of beneficiaries by the Wills Act 1853 (UK), which applied in the colonies.
The Victorian Parliamentary Law Reform Committee recommended abolishing the rule in May 1994, in a report on a draft bill to replace the Wills Act 1958 (Vic). The rule was abolished in Victoria under Section 11 of the Wills Act 1997 (Vic). It had already been abolished in South Australia (1972), and the Australian Capital Territory (1991). It has since been abolished in Western Australia.
There were several reasons for the Law Reform Committee’s recommendation.
Firstly, the rule’s original purpose-—to ensure the credibility of witnesses in probate proceedings—no longer existed. Retaining the rule could be justified only by the protection it gave a vulnerable will-maker.
Secondly, the Law Reform Committee considered the rule draconian because it did not distinguish between innocent and fraudulent witnesses. The rule assumed that every witness-beneficiary was fraudulent, usually to the disadvantage of honest witnesses who were unaware of the law. A person perpetrating a fraud against the will-maker was more likely to disguise their involvement in the will-making process, including by not witnessing the will.
Thirdly, the rule had become increasingly complicated as the judiciary and legislatures in all jurisdictions attempted to overcome the injustices it caused. In Victoria, the rule was amended in 1977 to let witness-beneficiaries and their spouses receive an amount under the will and any partial intestacy of up to the value of any share in the estate to which they would have been entitled if the will-maker had died wholly intestate. They could also seek relief where they satisfied the Court that the benefit was not included as the result of any undue influence by any person.
Finally, abolishing the rule in South Australia and the Australian Capital Territory had not created any problems.
It was recognised that the majority of witness-beneficiaries were innocent; but how to insure against the small number of fraudulent ones? The Law Reform Committee reasoned that, in the absence of the rule, there were other avenues available to third parties objecting to a benefit conferred on a witness. They could claim that the witness had exerted undue influence over the will-maker, or they could raise the fact that the will was witnessed by a beneficiary as a ‘suspicious circumstance’.
So, why is the rule now being revisited?
The National Committee for Uniform Succession Laws reached a different conclusion about the witness-beneficiary rule in 1997. The Committee was established in 1995 to guide a project to harmonise succession law and practice across Australia. In December 1997, it produced a report on wills that contained draft model legislation similar to the Wills Act 1997 (Vic).
The National Committee concluded that the witness-beneficiary rule should be retained but should not absolutely disqualify a witness from taking a benefit. Drawing from section 13(2) of the Wills, Probate and Administration Act 1989 (NSW), it proposed that a beneficial gift to a witness should not fail where:
• at least two of the people who attested the execution of the will are not interested witnesses, or
• all the persons who would benefit directly from the avoidance of the gift consent in writing to the gift according to the will (if those persons have the capacity to give that consent) or
• the Court is satisfied that the will-maker knew and approved of the gift and it was given or made freely and voluntarily by the will-maker.
The VLRC needs to consider whether Victoria should adopt the model provisions. Would re-introduction of the rule help to protect will-makers from undue influence? At the same time, it is necessary to consider the effect of the rule on innocent witness-beneficiaries; and whether there are better ways of protecting vulnerable will-makers from undue influence.
The VLRC will be releasing a consultation paper covering all of the succession laws terms of reference by the end of this year. More details regarding this project, including the terms of reference, are available on the Commission’s website, www.lawreform.vic.gov.au.