Balancing Victim Compensation and Mortgage Priority: Insights from the Erin Patterson Case
Property Law: 04 August 2025
Author: Bao Ngo - Our People
On Thursday 31st July, Bao Ngo provided on-air insights for a radio station regarding the Erin Patterson case, focusing on the property law aspects. Below is a brief article illustrating how this case highlights the operation of the confiscation laws when other interests in the property such as mortgages are involved.
Following her conviction in July 2025, the Supreme Court of Victoria granted a restraining order over Erin Patterson’s Leongatha home. This move, made under the Confiscation Act 1997 (Vic), is not about punishment — it’s about preserving assets for possible victim compensation.
Why the Court Froze Her Home
Under section 37(1)(b) of the Confiscation Act, a restraining order can be made if there’s likely to be someone entitled to compensation or restitution — such as Ian Wilkinson, the sole survivor of the fatal mushroom lunch.
This process ties in with the Sentencing Act 1991 (Vic), which allows victims to seek compensation for injury (physical, psychological, or financial) directly from the offender. Courts consider:
- Pain and suffering
- Medical/counselling expenses
- Other loss or damage caused by the crime
Importantly, the standard of proof is civil (balance of probabilities), not criminal.
Mortgage and Priority Rights
A registered mortgage was lodged over the property shortly before the restraining order.
Under Victorian law, registered mortgages take priority and survive confiscation, provided they were:
- Entered in good faith
- For market value
- Registered prior to the restraint
Section 50 of the Confiscation Act explicitly allows mortgages registered in good faith and before the restraint to survive any forfeiture.
Section 20 allows for the mortgagee to seek variation or revocation of the restraining order if there interest is unfairly impacted.
Section 54 provides that if the court orders sale of the property, proceeds must first satisfy the mortgagee’s claim before victims receive compensation.
So, if the house is sold, the mortgagee (likely her lawyers or a lender) will be paid before any compensation is distributed to victims.
What Happens Next
- Victims can apply for compensation through the sentencing court.
- If Patterson can’t pay, the DPP may seek a forfeiture order to sell the house.
- Proceeds would go first to the mortgagee, then to victims.
- Victims can also pursue civil claims (e.g. wrongful death, nervous shock) if compensation orders are inadequate.
Notably, the house does not need to be linked to the crime (i.e. “tainted”) for it to be forfeited — only if it's reasonably necessary to satisfy a court-ordered debt to victims.
Legal Safeguards
Patterson and any co-owners can challenge forfeiture on grounds such as financial hardship or proportionality. If the mortgage was fraudulent or created to shield assets, the DPP could seek to invalidate it under anti-avoidance provisions.
Conclusion
The restraining order over Erin Patterson’s home is a legal safeguard, ensuring the property remains available while courts consider victim compensation orders. If she cannot pay, the home may be sold with registered interests protected and remaining funds used to compensate survivors and families of the deceased.