A former policeman currently serving life in prison for murdering his wife has no right to claim the payout from a life insurance policy they had jointly taken out weeks before her death, the Federal Court of Australia has ruled.

Chief Justice James Allsop says he has to apply what is known as the “forfeiture rule” in light of Louis Mahony’s “criminal culpability for the violent death” of Lainie Coldwell.

“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,” he says in his judgment on Tuesday.

“As a result the insurance proceeds fall into the estate of Ms Coldwell, the policyholder.”

The fate of the $150,000 life policy the couple took out in July 2009 with Westpac Life came before the court after the insurer received competing claims to the proceeds from Mr Mahony and the executor of the deceased’s estate, Patricia Coldwell, who is also the victim’s mother.

Ms Coldwell died on August 25 2009 in a Brisbane hospital after being taken off life support on the advice of doctors. Mr Mahony had told police that his wife sustained injuries from falling off a gum tree three days previously while trying to remove some lights.

On September 1, Mr Mahony made a claim on the life policy through his solicitors. Westpac Life followed up with its own investigation and in November 2009, the insurer became aware that a Swiss Re-issued life policy of more than $1.7 million was also taken out to insure Ms Coldwell weeks before her death.

“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,” the judgment says.

In 2011, the police opened an investigation into her death and Westpac was asked to provide details of the life policy.

The circumstances of her death were pursued further by three “cold case” Brisbane detectives in January 2014, which led to the arrest of Mr Mahony in December 2015.

In November 2017, a jury convicted him of the murder of Ms Coldwell. He lost his appeal against the conviction last year and is currently incarcerated in Wolston Correctional Centre.

Click here for the ruling.