Alcroft & Cautrey
[2023] FedCFamC2F 448
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Alcroft & Cautrey [2023] FedCFamC2F 448
File number(s): ADC 5551 of 2022 Judgment of: JUDGE DICKSON Date of judgment: 20 April 2023 Catchwords: FAMILY LAW – LITIGATION GUARDIAN – Property Settlement – interim proceedings – dispute concerning appointment of litigation guardian for the wife – both parties elderly and vulnerable – whether litigation guardian should be appointed by the Attorney-General or be the wife’s daughter – conflict between the husband and the wife’s adult children - order made for the appointment of the wife’s daughter as litigation guardian. Legislation: Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 3.12, 3.14 & 3.15
Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth)
Cases cited: 1 Allregal Enterprises Pty Ltd v Carpaolo Nominees Pty Ltd (No 3) (2009) WASCA 118
2 Grace & Grace (1990) FLC 92-170
3 Logan & Anor& Logan & Anor [2016] FamCA 649
4 Kannis & Kannis (2003) FLC 93-135
5 Nemeck & Nemeck [2019] FCCA 3205
6 Taylor’s Application (1972) 2 QB 369
Division: Division 2 Family Law Number of paragraphs: 44 Date of hearing: 17 April 2023 Place: Adelaide Counsel for the Applicant: Mr Belperio Solicitor for the Applicant: Weldon & Coluccio Lawyers Counsel for the Respondent: Mr Roberts Solicitor for the Respondent: Brian Deegan Lawyers ORDERS
ADC 5551 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR ALCROFT
Applicant
AND: MS CAUTREY
Respondent
order made by:
JUDGE DICKSON
DATE OF ORDER:
20 APRIL 2023
UPON NOTING THAT:
A.The Court is informed that all issues as to valuation and outstanding disclosure will be attended prior to the Conciliation Conference. The parties are hereby advised that costs orders may be made in the event the matter is not able to proceed on the date allocated for this conference in these Orders.
B.Prior to the Conciliation Conference, the lawyer for each represented party must provide to his or her client, and to each other party, a Rule 12.06 Costs Notice indicating whether the party is in receipt of legal aid funding and, if not, providing particulars of:
i.the total costs and disbursements incurred by the party in the proceeding to date;
ii.an estimate of the anticipated costs expected to be incurred in each remaining stage of the proceeding; and
iii.an estimate of the likely duration of the final hearing and the total anticipated costs and disbursements expected to be incurred for the remainder of the proceeding.
C.The Confidential Outline of Case (Dispute Resolution) is a confidential without prejudice document prepared for the purpose of the Conciliation Conference only. It is not to be filed or kept with the Court file after the conclusion of the conference.
THE COURT ORDERS THAT:
1.Pursuant to rule 3.15 (2) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), Ms B be appointed to act as litigation guardian for the wife in these proceedings.
2.As and from the date of this order, the legal costs of the said litigation guardian arising from these proceedings only, be paid from the income or property of the wife with such costs to be at the rate provided for in Schedule 1 of the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth).
3.The said litigation guardian do provide the husband with a copy of all invoices detailing costs incurred pursuant to paragraph 2 herein on a monthly basis.
4.The parties, their legal representatives and the said litigation guardian do attend a Conciliation Conference on 6 July 2023 at 9.00am with Judicial Registrar C.
5.The parties, the litigation guardian and any lawyers on the record shall follow any directions from the Registrar convening the conference in relation to attendance in person, by Microsoft Teams or by telephone.
6.The wife pay the Conciliation Conference fee in accordance with the Family Law (Fees) Regulation 2012 at least twenty-eight (28) days prior to the Conciliation Conference, unless otherwise exempted from payment.
7.The husband reimburse the wife one half of the Conciliation Conference fee at final settlement of property, unless otherwise exempted from payment.
8.Not later than 30 June 2023, each party must:
(a)ensure that all documents required to be exchanged between parties pursuant to Chapter 6 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) have been exchanged;
(b)obtain joint single expert valuations of any asset the value of which is in dispute and ensure that any such valuation relevant to the proceedings has been filed;
(c)provide to the Court (by email to …@fcfcoa.gov.au) and to the other party a single collated bundle of documents comprising:
(i)a Confidential Outline of Case (Dispute Resolution)
(ii)a detailed minute of Orders Sought;
(iii)details of any previous or current family violence orders;
(iv)a copy of any document exchanged between the parties which is directly relevant to an issue remaining in dispute (with relevant passages highlighted);
(v)particulars of any financial resource;
(vi)a valuation or market appraisal of any real estate or other asset the value of which is in dispute;
(vii)statements for, and where applicable, valuations of any superannuation interest;
(viii)written confirmation that the trustee of any fund that may be the subject of a splitting order has been afforded procedural fairness.
9.The wife file and serve an Amended Response to Final Orders setting out with particularity the final orders sought for property settlement within fourteen (14) days of the date hereof.
10.The costs of the single expert valuations shall be paid for in the first instance by the wife and with the husband’s half share to be paid by the husband at final settlement of property.
11.That paragraph 1 of the husband’s interim orders sought in the Initiating Application filed 6 December 2022 and paragraphs 1 and 2 of the wife’s interim orders sought in the Response filed 16 March 2023, be dismissed.
12.All extant interim applications and directions be adjourned to 9:30am on 9 August 2023, such hearing to take place in open Court on a face-to-face basis in accordance with Court protocols.
13.That costs be reserved.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Alcroft & Cautrey has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE DICKSON:
INTRODUCTION
These interim proceedings concern competing applications for the appointment of a litigation guardian for the wife.
For the reasons set out herein the court proposes to order that the wife’s daughter Ms B be appointed as litigation guardian.
These are the Court’s oral reasons following argument on 17 April 2023.
DOCUMENTS RELIED UPON
The husband relies upon the following documents:
(1)Initiating Application for Final Orders filed 6 December 2022;
(2)Affidavits filed 6 December 2022 (‘the first affidavit’) and 4 April 2023 (‘the second affidavit’);
(3)Financial Statement filed 6 December 2022; and
(4)Financial Questionnaire filed 6 December 2022.
The wife relies upon the following documents:
(1)Response to Initiating Application for Final Orders filed 16 March 2023;
(2)Affidavit of Ms B filed 16 March 2023; and
(3)Financial Statement filed 16 March 2023;
Each of the parties filed a ‘List of Authorities’ for the hearing.
BACKGROUND
The husband was born in 1930 and is aged 92 years. The wife was born in 1939 and is aged 84 years.
There are no children of the relationship. The wife has three adult children of a previous relationship who are financially independent.
The parties commenced cohabitation in or around 2016.
On 14 December 2017, the wife executed an Enduring Power of Attorney. The wife’s son, Mr D, is the primary Power of Attorney.
On 1 December 2020, the wife executed a new Will. The wife’s estate is to be divided between four nominated beneficiaries. Three of the beneficiaries are the wife’s children. The husband is not nominated as a beneficiary and the Will has been drafted in contemplation of marriage.
The parties were married in 2021. The circumstances surrounding the parties’ marriage are contentious.
On 26 May 2021,the wife’s family discovered that the sum of $221,252.62 had been transferred from a bank account in the wife’s sole name into a newly established bank account in the joint names of the husband and the wife on 15 January 2021.
On 28 May 2021, Mr D, transferred the sum of $229,000 back out of the joint account and into a new account in the wife’s sole name. The husband’s authority to sign on the wife’s sole accounts was also removed.
The events of early 2021 and their sequela have resulted in the relationship between the husband and the wife’s adult children becoming fraught. The parties mistrust each other and view each other’s actions with suspicion.
The husband subsequently issued proceedings in the South Australian Civil and Administration Tribunal (SACAT) seeking to replace the wife’s adult children as her financial attorneys. Those proceedings remain on foot.
On 6 December 2022, the husband filed an Initiating Application seeking by way of final order a sum representing 25 per centum of the net asset pool. The asset pool available for distribution is now agreed and is set out in ‘Exhibit W1’, noting that those assets are to be the subject of valuation by a joint expert.
The parties agree that the wife does not have capacity to provide instructions to her solicitor, or to understand the nature and consequences of this litigation.
Annexed to the husband’s first affidavit being ‘Annexure -1’ is a report from Dr E, Geriatrician, dated 20 August 2021, which confirms that:
(1)The wife has severe memory impairment and difficulty verbalising. On a mini mental score, the wife recorded an outcome of ‘5/30’; and
(2)The assessment confirms that the wife is in the advanced stages of dementia. Dr E states that “Ms Cautrey does not have the capacity to make financial decisions or medical decisions.”
On or about February 2022, the wife was placed into permanent aged care. The husband remains living in the Suburb F property.
The husband asserts that the parties remain in a committed relationship.
The question of who is to be the wife’s litigation guardian must be determined before the proceedings can move forward through the case management pathway.
ISSUES IN CONTENTION
The husband seeks an order that a litigation guardian be appointed for the wife and that the Attorney General’s Department be requested by the Court to appoint a person to be the manager of the affairs of the wife. The husband further proposes that the costs of the litigation guardian be paid from the income or property of the wife.
The wife’s daughter, Ms B, applies to act as the litigation guardian for the wife and seeks an order that the costs of the litigation guardian be paid from the income or property of the wife.
THE HUSBAND’S POSITION
The husband contends that a non-family member litigation guardian should be appointed for the wife for the following reasons:
(1)The relationship between the husband and at least two of the wife’s three children could be described as one of “high conflict”;
(2)There have been disputes about what assets should be included in the marital pool for consideration by the Court with Mr D allegedly asserting an equitable claim over the Town G Shack;
(3)There is the potential for conflict between the wife and Ms B and there could be “very significant consequences” on the distribution of the wife’s estate dependent on how assets are divided in these proceedings;
(4)The position taken by Ms B as a beneficiary of the wife’s Will may not be what is in the best interests of the wife;
(5)If Ms B is appointed as litigation guardian it will increase the animosity between the parties given that Ms B has been highly critical of the husband in her affidavit; and
(6)The preliminary arguments raised by the proposed litigation guardian (i.e. summary dismissal and validity or otherwise of the parties’ marriage) will increase costs and unduly prolong the litigation.
In those circumstances, it is contended that it is not in the interests of justice for Ms B to be appointed litigation guardian for the wife.
THE PROPOSED LITIGATION GUARDIAN’S POSITION
The proposed litigation guardian, Ms B, contends that she should be appointed litigation guardian for the wife for the following reasons:
(1)Ms B “fits the criteria” of a person who should be considered as litigation guardian;
(2)Ms B is appraised of the financial circumstances of her mother and her interests are aligned with the wife rather than being in conflict;
(3)That it was the Attorney, Mr D, who withdrew the funds from the parties’ joint account, not Ms B;
(4)That an appointment should be made expeditiously given that the parties are in advanced years and the wife, at least, has compromised health;
(5)That as Ms B is familiar with her mother’s financial affairs, costs could be kept to a minimum;
(6)That whilst Ms B had made “no secret” of her opinion of the husband, this alone was not a reason for her not to be appointed as litigation guardian; and
(7)As this is an interim hearing, the Court is unable to make any findings of fact in relation to contested issues between the parties of which there are many.
LEGAL PRINCIPLES
Part 3.5 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (‘the Rules’) mandates the appointment of litigation guardians.
For the sake of clarity, the Court is satisfied that the wife meets the criteria set out in rule 3.12(1) of the Rules as being a person needing a litigation guardian in relation to these proceedings.
Pursuant to rule 3.14, a person may be a litigation guardian in a proceeding if the person:
(a)Is an adult; and
(b)Has no interest in the proceeding adverse to the interests of the person needing the litigation guardian; and
(c)Can fairly and competently conduct the proceeding for the person needing the litigation guardian.
The husband opposes the appointment of Ms B arguing that she has an interest adverse to the interest of the wife and that Ms B will not fairly and competently conduct the proceedings on behalf of the wife for the Reasons set out above.
On the material available, I am not satisfied there is evidence to suggest Ms B has an interest adverse to that of the wife. There is nothing before me to suggest that Ms B would want her mother to receive less than her proper entitlements. In this sense, and as has been observed in other decisions of this Court, their interests align and “it would seem axiomatic that both would want to retain as much as possible of the matrimonial property”.[1]
[1] Nemeck & Nemeck [2019] FCCA 3205, [74] (Brown J).
The proposed applications in the wife’s Initiating Application, which were said to “ potentially complicate and unduly delay “ this litigation have now been dismissed by consent on Ms B’s own oral application. The proposed litigation guardian for the wife no longer pursues an application for summary dismissal or a declaration as to the validity of the marriage. Those applications have been dismissed by consent.
It is anticipated by both parties that the matter will now proceed in the ordinary way to a Conciliation Conference with a registrar of this court to try and resolve the matter in its entirety. Any arguments about assets not being included in the asset pool available for distribution have been withdrawn due to the matters set out in the joint Balance Sheet being ‘Exhibit W1.’The assets and liabilities available for discussion at the Conciliation Conference are clearly recorded as :
(1)The former matrimonial home at Suburb F;
(2)The Town G Shack;
(3)Furniture & effects;
(4)The husband’s motor vehicle;
(5)The husband’s bank accounts;
(6)The wife’s bank accounts; and
(7)The liabilities are the parties’ mutual debts to Centrelink.
There is also now an agreement that the two real properties and the parties’ furniture and effects are to be valued and paid for at first instance by the litigation guardian and with the husband’s half share to be paid at settlement.
The dismissal of applications for declaration and summary dismissal as originally sought by the proposed litigation guardian, provide some comfort to the Court that the matter will now proceed in an orderly way.
The appointment of Ms B as litigation guardian is not without some hesitation given the history of the relationship and events which have occurred up to this point. If the Court has been misguided in placing confidence in Ms B to discharge her duties fairly and competently on behalf of the wife then the Court has, at its disposal, mechanisms to control and regulate the proceedings. The appointment of a litigation guardian is not irrevocable. [2]
[2] Allregal Enterprises Pty Ltd v Carpaolo Nominees Pty Ltd (No 3) (2009) WASCA 118; Taylor’s Application (1972) 2 QB 369.
Rule 3.15(1) provides that a person may apply for the replacement or removal of a person as the litigation guardian of a party. The Court may also remove or substitute a person as a litigation guardian of its own motion and has the power to make awards of costs if the conduct of a party to the proceedings is seen as warranting such an order being made.
However, as was recognised in the decision of Logan & Anor,[3] the position of a case guardian (as the language then provided for) “does not need to be neutral or impartial.” A case guardian:
...can be highly protective of the protected person and even strongly opposed to the opposing party. Providing he acts honestly and is seen to do so thereby protecting the interests of the protected person, there can be no challenge to his retention.[4]
[3] [2016] FamCA 649.
[4] Ibid at [30] (Berman J).
Further, as was also recognised in the decision of Logan & Anor,[5] a litigation guardian will not necessarily have his or her position terminated and the appointment discharged simply because he or she may stand to gain by the outcome of the litigation; see Kannis & Kannis (2003) FLC 93-135. Appointing a litigation guardian who bears “no malice or ill-will towards the other party” [6] may be unachievable in a family law context and needs to subservient to the priority of an appointment within a timely manner.
[5] Ibid.
[6] Grace & Grace (1990) FLC 92-170.
There is no evidence before the Court as to the timeframe which may be involved if orders are made as sought by the husband for the Attorney General to appoint a manager of the affairs of the wife. The Court is reluctant to embark on a process which could result in further delay and potential complication if the Attorney General is not able to find a manager to conduct the affairs of the wife in a short time frame or at all.
It is agreed the costs of the litigation guardian should be paid by the wife. No Retainer Agreement has been filed by Ms B and no submissions made as to the likely quantum. Therefore, costs should be paid as per Schedule 1 of the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth).
CONCLUSION
On balance, the interests of justice in this case will be met by the appointment of Ms B as the litigation guardian, subject to the overarching management by the Court in moving this matter through the case management pathway as expeditiously as possible.
For all of the above Reasons, the Court makes orders as set out at the commencement of these Reasons.
I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Dickson. Associate:
Dated: 20 April 2023
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