New inquiries for Victorian Law Reform Commission

Attorney-General Robert Clark today announced two new references to the Victorian Law Reform Commission (VLRC).

The VLRC has been asked to examine:
•the common law rule of forfeiture; and
•remedies for the beneficiaries of trading trusts.

“These reviews will examine whether the current laws offer sufficient protections for Victorians and whether improvements can be made,” Mr Clark said.

“While each of these laws apply in limited circumstances, they can have significant consequences for the lives of those affected.”

The forfeiture rule prevents a person from inheriting from the estate of a person they have killed or from benefiting through survivorship. The VLRC has been asked to review the rule and its exceptions, such as where a person is found not guilty due to mental impairment, to determine whether the circumstances covered by the rule are appropriate.

“The Commission has been asked to make recommendations on whether there is a need for legislative or other reform to clarify when and/or how the forfeiture rule should be applied, or to replace the common law,” Mr Clark said.

Trading trusts are often used by family businesses and other small businesses as the legal entity to operate the business.

“While Commonwealth laws protect shareholders in the case of oppressive conduct by a company’s directors, similar protections do not exist for beneficiaries in the case of oppressive conduct by the trustees of a trading trust,” Mr Clark said.

In examining protections for the beneficiaries of trading trusts, the VLRC has been asked to consider the sufficiency of existing remedies for oppressive conduct by trustees. The VLRC has also been asked to have regard to whether or not adequate remedies are currently available, the interaction between State and Commonwealth laws, and the interests of other parties such as creditors, trustees, directors and employees.

The VLRC is required to report on the review of forfeiture rules by 15 September 2014 and on the review of trading trust remedies by 3 February 2015.