Allregal Enterprises Pty Ltd v Carpaolo Nominees Pty Ltd (No 3)

[2009] WASCA 118

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT :   THE COURT OF APPEAL (WA)

CITATION:   ALLREGAL ENTERPRISES PTY LTD -v- CARPAOLO NOMINEES PTY LTD [No 3] [2009] WASCA 118

CORAM:   PULLIN JA

NEWNES JA

HEARD:   26 JUNE 2009

DELIVERED          :   26 JUNE 2009

PUBLISHED           :  7 JULY 2009

FILE NO/S:   CACV 101 of 2008

BETWEEN:   ALLREGAL ENTERPRISES PTY LTD (ACN 071 642 683)

First Appellant

CAROL ELIZABETH FARRELL
Second Appellant

AND

CARPAOLO NOMINEES PTY LTD (ACN 009 608 093)
Respondent
 

ON APPEAL FROM:

Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA

Coram  :MASTER SANDERSON

File No  :CIV 2250 of 2007

Catchwords:

Practice and procedure - Application to remove next friend - Court's power to do so

Legislation:

Public Trustee Act 1941 (WA), s 7, s 58
Rules of the Supreme Court 1971 (WA), O 70 r 7
Supreme Court (Court of Appeal) Rules 2005 (WA), r 59(2), r 60(2)

Result:

Application dismissed

Category:    B

Representation:

Counsel:

First Appellant  :    No appearance

Second Appellant                 :    Mr B W Ashdown

Respondent:    No appearance

Applicant (Mr R C Waugh)   :    In person

Solicitors:

First Appellant  :    Gavin Wells

Second Appellant                 :    Public Trustee (WA) (as next friend of Ms Farrell)

Respondent:    Solomon Brothers

Applicant (Mr R C Waugh)   :    In person

Case(s) referred to in judgment(s):

Farrell v Allregal Enterprises (No 2) [2009] WASC 65

Re Corsellis; Lawton v Elwes (1884) 50 LT (NS) 703

1. JUDGMENT OF THE COURT: Ronald Charles Waugh sought an order pursuant to O 70 r 7 of the Rules of the Supreme Court 1971 (WA), removing the Public Trustee as the second appellant's (Ms Farrell) next friend. Mr Waugh is a limited guardian for Ms Farrell under a limited guardianship order made by the State Administrative Tribunal in 2007. The limited guardianship order does not authorise Mr Waugh to conduct proceedings relating to the estate of Ms Farrell. After the hearing, the court dismissed the application with reasons to be published later. These are the reasons.

2. The Public Trustee was appointed as next friend by the Supreme Court pursuant to s 7 of the Public Trustee Act 1941 (WA). See Farrell v Allregal Enterprises (No 2) [2009] WASC 65.

3. The power to remove a next friend is a power conferred by the Rules of the Supreme Court (RSC). Order 70 r 7 reads:

   (1)The court may of its own motion or on the application of a party to any proceedings or of any other person remove a next friend or guardian ad litem, and may stay proceedings until a next friend or guardian ad litem in place of the one removed has been appointed.

   (2)An application under this rule shall be by summons which, unless the Court otherwise orders, must be served on the next friend or guardian ad litem whose removal is sought and on the person under disability.

4. A next friend may be removed by order of the court if it appears that the next friend is not properly conducting the litigation.  See Re Corsellis; Lawton v Elwes (1884) 50 LT (NS) 703.

5. Mr Waugh filed an affidavit in support of the application.  The affidavit referred to contact that has taken place between Ms Farrell and officers of the Public Trustee office.  Mr Waugh deposed that, on 25 March 2009, the Public Trustee held a meeting with Ms Farrell.  The affidavit deposed that the meeting was between Ms Browne, a legal officer of the Public Trustee, and Mr Michael Bowyer, the principal legal officer of the Public Trustee and that at the meeting Ms Farrell became 'extremely agitated, distressed and tearful during the meeting especially towards its conclusion'.  The affidavit deposed also that:

   She recalls feeling very unwell and resting her head on the table between her hands.  She recalls becoming too upset to continue and then waiting with Mr Bowyer while she tried to compose herself. 

   The affidavit deposed that she collapsed to the floor on the ground level after going down in the lift and was then conveyed to Royal Perth Hospital where she was admitted for several days.  The affidavit stated that the hospital report stated that 'her collapse was secondary to external stress'.  In his affidavit Mr Waugh said:

   As Ms Farrell's SAT appointed guardian I am concerned in this matter only that her court appointed next friend, namely, the Public Trustee, is and will continue to be, detrimental to her health and wellbeing.

   …

   As Ms Farrell's SAT guardian and as a person who has known her throughout her adult life I need no medical qualification to observe the adverse impact that the Public Trustee's inaction is having on Ms Farrell's mental and physical wellbeing.  I am duty bound to protect her in this regard by attempting to rectify the situation.

   Mr Waugh also said that the Public Trustee's legal officer had not met with him. 

6. Annexed to the affidavit of Mr Waugh, was an affidavit of Ms Farrell, sworn 10 June 2009, described as an:

   Affidavit in support of an application in an appeal which seeks orders to declare irregular and to set aside the summary judgment handed down by Master Sanderson in the primary matter CIV 2250 of 2007 heard on 24 September 2008. 

   This affidavit deposes to information which alleges that Master Sanderson was aware that Ms Farrell was the subject of a guardianship order and therefore 'a person under disability' pursuant to O 70 and that the solicitors for Carpaolo also knew that Ms Farrell was a person under disability. The affidavit also provides some information going to the merits of the dispute between the parties to the litigation. Also annexed to Mr Waugh's affidavit is an affidavit by Ms Farrell which was sworn on 11 September 2008 in relation to the application for summary judgment and setting out some background to the litigation.

7. Ms Browne has sworn an affidavit dated 23 June 2009. It is not necessary to recite all that appears in the affidavit. Ms Browne deposed that the Public Trustee has undertaken an investigation into the background to this appeal, the other two appeals, namely CACV 70 of 2008 and CACV 1 of 2009, and other litigation in which Ms Farrell is a party. The Public Trustee has created a position within its legal section to accommodate the investigation into the appeals and has engaged counsel to assist with the investigation and to provide an opinion to the Public Trustee of the merits or otherwise. The Public Trustee has gathered 30 lever arch files of documents in respect of the various transactions involved in the court proceedings, along with two archive boxes of documents comprising materials supplied by Ms Farrell, Mr Waugh and Mr Wells (a solicitor) that are duplicates of the other material gathered by the Public Trustee. Ms Browne deposes that the Public Trustee has now completed investigations to the point where it is possible to commence preparing a brief to counsel for the necessary opinion and advice required, as to the appropriate method by which to progress matters on behalf of Ms Farrell. Ms Browne deposes that it is likely that an application will have to be made to the court, either seeking approval under r 59(2) of the Supreme Court (Court of Appeal) Rules 2005 (WA) to discontinue the appeals, or for approval under r 60(2) of the Supreme Court (Court of Appeal) Rules to compromise the appeals, or for directions or the opinion of the court pursuant to s 58 of the Public Trustee Act or the court's inherent jurisdiction upon questions or issues in connection with the appeals and the underlying merits of the matters generally.  Counsel for the Public Trustee informed the court that no decision had yet been made about what course was to be followed.  The Public Trustee has also obtained an extension of time in which to file the appellant's case in this appeal.

8. One of Mr Waugh's complaints is that the Public Trustee has not applied for a stay.  However, to apply for a stay it may be necessary for the Public Trustee to demonstrate not only the existence of irregularity in process, but also that there is merit in Ms Farrell's case.

9. The evidence before the court does not provide any basis for removing the Public Trustee as next friend.  Although there is a prima facie irregularity in relation to the proceedings in which Ms Farrell was not represented by a litigation guardian, it is of course relevant to examine the merits of the dispute before deciding what course of action to take.  There would be no point in the Public Trustee proceeding with an appeal and seeking to set aside judgments on the basis of irregularity, if it appeared that if judgment were set aside and the case reheard, that the same judgment would be entered.

10. Finally, these reasons should record the hope expressed by the court at the hearing, that the Public Trustee's legal officers take up Mr Waugh's offer to meet with them to provide assistance.  Mr Waugh is articulate and the affidavit he prepared for this application was well drafted and demonstrates an ability to concentrate on relevant issues.