GALLANDERS & GALLANDERS - [2019] FCCA 3416

FEDERAL CIRCUIT COURT OF AUSTRALIA

GALLANDERS & GALLANDERS

[2019] FCCA 3416

Catchwords:
FAMILY LAW – Property – final property orders made – application for removal of litigation guardian – application for further property adjustment.

Legislation:

Family Law Act 1975 (Cth), s.79A

Federal Circuit Court Rules 2001 (Cth), rr.11.08, 11.09, 11.10, 11.11, 11.12

Applicant:

MS GALLANDERS

Respondent:

MR GALLANDERS

File Number:

MLC 7132 of 2019

Judgment of:

Judge Stewart

Hearing date:

29 October 2019

Date of Last Submission:

29 October 2019

Delivered at:

Melbourne

Delivered on:

1 November 2019

REPRESENTATION

Solicitors for the Applicant:

Ms Bramham of Flinter & Company Pty. Ltd.

Solicitors for the Respondent:

Ms Bus of Hartleys Lawyers

ORDERS

The Application to remove the State Trustees as Litigation Guardian be and is hereby dismissed.
The Application to remove Mr B as Litigation Guardian be and is hereby dismissed.
The Application in a Case filed by Ms Gallanders on 2 October 2019 be and is hereby dismissed.
The proceedings are removed from the list of pending cases maintained by the Court.

IT IS NOTED that publication of this judgment under the pseudonym Gallanders & Gallanders is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 7132 of 2019

MS GALLANDERS

Applicant

And

MR GALLANDERS

Respondent

REASONS FOR JUDGMENT

(as revised from transcript)

Unusually, I am unable to say who is the Applicant in these proceedings. These proceedings came before the Court in a busy duty list. There is an Application in a Case filed on 2 October 2019, purportedly filed on behalf of the Wife seeking as follows:-
1. That if the Court sees fit, then pursuant to Rule 11.11 of the Federal Circuit Rules 2001 (Cth), the Court remove State Trustee Limited [“State Trustees”] as Litigation Guardian for the Applicant [“the Wife”], and instead appoint Mr C [“Mr C”] as Litigation Guardian.
2. That pursuant to Rule 11.11 of the Federal Circuit Court Rules 2001 (Cth), the Court remove Mr B [“Mr B”] as Litigation Guardian for the Respondent [“the Husband”], and if necessary, and [sic] alternative Litigation Guardian be appointed.
3. That Orders 2 to 9 inclusive of the Orders dated 2 September 2019 in matter MLC7132/2019 be struck out and/or amended to state as follows:-
a) That the Applicant (Ms Gallanders) retain the property situated at D Street, Suburb E in the State of Victoria (the property) in her sole name.
b) That the Respondent (Mr Gallanders) and Mr B do all such acts and things and sign all necessary documents to have their names removed from the title of the property.
c) That contemporaneous with Order 2, the Applicant pay to the Respondent and Mr B, 50% of the equity in the property, to be divided equally between them.
4. That order 10 of the orders dated 2 September 2019 in matter MLC7132/2019 remain in full force and effect.
I am not quite sure what order 4 means, but it is going to make little difference to the outcome of the proceedings.
Mr B, as litigation guardian for the Husband, filed a Response to Application in a Case on 28 October 2019 and sought:-
1. That the Application in a Case filed on behalf of the Applicant be dismissed.
2. That the Applicant’s solicitors, Flinter & Company pay the Respondent’s costs on an indemnity basis.
3. Should the matter not be dismissed immediately, the State Trustees Limited lawyers be joined to these proceedings.
There were certainly issues with service of these proceedings and upon whom they were served, though sensibly, none of the parties adopted the more formal approach. Rather, the parties sought to proceed in my busy duty list this week on the basis that they wanted a result. I commend everyone for their pragmatism and practical approach to that.
A representative, Mr F, appeared for State Trustees as Litigation Guardian for the Wife. Mr F also urged that the application be dismissed and filed an affidavit by a Ms G in support of that application.
It seems that Mr Gallanders had not been served with the proceedings personally as a litigant and nor did he appear personally, notwithstanding, that ultimately the Application in a Case filed on behalf of the Wife sought relief against him. He certainly should have been served, in his own right, with the proceedings. In any event, if the proceedings were to continue, Mr Gallanders was aware of the proceedings. I am not quite sure that the relief sought actually impacted significantly on his rights, but more so on his father’s rights. That would be easily rectified if the proceedings were to go any further.
In any event, as a result of the orders that I will make, these issues become a moot point. Ultimately, I will make an order that these proceedings be dismissed.
The Application in a Case filed on behalf of the Applicant Wife, is supported by an affidavit ostensibly sworn by the Wife. The Wife said in that affidavit “I now make this Application in a Case as the Applicant”. A further affidavit was filed in the Wife’s case at 9.29pm on the night before the hearing (29 October 2019). The affidavit was sworn by Mr C, who is the eldest son of the Wife. The Wife now lives with Mr C in Western Australia.
The background in this case becomes relevant to these proceedings. It is necessary to understand the background to understand the context of this application.
Final property orders were made by consent on 2 September 2019. Those orders were consented to by each of the Husband and the Wife by their Litigation Guardians, State Trustees being the Wife’s Litigation Guardian and Mr B being the Husband’s Litigation Guardian.
For the reasons that I will come to, at least on their face, the orders seem unsurprising in terms of the result.
The Husband was born in 1928 and he is aged 91 years. The Wife was born in 1931 and will be 88 years old very shortly. The parties married in 1952 in Country H and separated at the end of 2017. It is alleged by the Husband that the parties were separated against their will. The marriage, therefore, endured for a period of some 65 years.
Their marriage produced three children. Mr C who is 65 years old, another son (Mr J) who is 58 years old, and Mr B who is 52 years old. Their long marriage saw them work hard and emigrate to Australia after the birth of Mr C, with the Husband travelling first and working hard to save the fares to enable his young family to join him; which they did within a matter of months.
The marriage was a traditional one, with the Husband working full time and the Wife being primarily responsible for the care of the three children and the family home. Although, from what I can glean from the material, she did work outside of the home.
The Wife retired from paid employment in 1984 and the Husband in 1991. They purchased property in Australia, starting in Suburb K and ultimately purchasing the former matrimonial home in D Street, Suburb E, which ended up being their home for about 40 years.
It seems that in 2008, the parties were involved in litigation in the Family Court of Australia, as intervenors, in proceedings between Mr C and his wife Ms L, as a result of some investments that they had allegedly secured by mortgage over the D Street, Suburb E property. I have little information about the particulars of those proceeding, but clearly it did not go well for Mr C, or the Husband and the Wife.
Mr C appealed, and Mr C, the Husband and the Wife were ordered to pay just under $260,000 in costs in that proceedings. It appears, and again I don’t have a lot of information, that the three of them were jointly and severally liable for the payment of those costs.
Accordingly, the Husband and the Wife were required to satisfy that order. Their younger son, Mr B, negotiated the debt down to about $150,000 and paid that sum to Ms L’s solicitors. Due to that payment, Mr B took a one quarter interest in the former matrimonial home at D Street, Suburb E, which interest was transferred to him. The remainder was then transferred to the Wife in 2015.
The transfer to the Wife appears to be because the Husband was concerned about further litigation. Mr B’s payment enabled the Husband and the Wife to remain in their home, which had been so fundamentally important to their day to day life for so many years.
Although the Wife had been diagnosed with dementia at that stage, the Husband for some time previously held her Power of Attorney. During this period the property was validly transferred. It also seems that Mr C did not contribute to fulfilling the costs payment against him, which meant that the money clearly came from the Husband and the Wife.
I preface the next part of these reasons by saying that I have derived some of this information from an affidavit filed by Mr B on 27 June 2019 in the substantive property proceedings.
Annexed to that affidavit is what is described as a draft affidavit of the Husband, but which is probably more accurately a proof of evidence. The document is said to have been prepared by his previous solicitors from instructions provided by the Husband before it became apparent that the Husband required a Litigation Guardian to assist him.
On that basis, I will be fairly circumspect about the history and recite it with a degree of caution because I am aware that many of these things are disputed by Mr C. In Mr C’s affidavit filed on 28 October 2019, he joins issue and disputes a number of the facts.
I am also very careful because the document was not signed by the Husband in any way. There is no indication at what stage that proof of evidence or draft affidavit was prepared.
Nevertheless, it provides some source of information and I form the view that what I can derive from it is that there is a great deal of angst in the proceedings. There are family issues with respect to the brothers. There are issues with respect to the brother, or at least Mr C and Mr B, pertaining to how their respective parents have been treated by the children. These are disputed facts.
All of those things lead me, ultimately, to the conclusion that even if these proceedings got to the stage where there could be a consideration of discharge of the Litigation Guardian, on a prima facie basis, it would seem to me that there would be very significant dispute about Mr C being appointed as Litigation Guardian for the Wife. Also, at least on a prima facie basis, there appears to be some reasons as to why that would not be appropriate.
It seems that following the family law proceedings in the Family Court of Australia in 2008 between Mr C and Ms L, Mr C was imprisoned for about two years between 2014 and 2016 because of family violence issues between he and Ms L. Upon his release, Mr C lived with the Husband and the Wife in the former matrimonial home in D Street, Suburb E.
It is suggested in the proof of evidence that Mr C engaged in financial abuse of his parents when he moved in at that time. From recollection, that was denied by Mr C in the affidavit that he recently filed.
It is suggested in the proof of evidence that Mr C tried to gain financial advantage from his parents. It is alleged that Mr C requested that parts of the former matrimonial home be rented out by trying to convince the Husband and Wife to move with him to Perth, and attempting to convince his parents to change their wills to leave him a larger share of their estate than his brothers. Again, that latter part was denied by Mr C.
The proof of evidence document suggests that the Husband was subjected to verbal abuse and aggressive harassment from Mr C, and was occasionally hit by him. The document suggests that the Wife transferred $25,000 into a bank account in her sole name in October 2017 after she had been deemed incapable of doing so and a time when she was incapable of caring for herself.
It is alleged in the proof of evidence that the Wife and Mr C had the Husband removed as the Wife’s carer with Centrelink. It is in this context that it was said by the Husband, in that document, that he and the Wife’s separation was involuntary. The proof of evidence sets out the circumstances of separation in 2017 where it was alleged that Mr C tried again to convince the Husband to rent out part of the former matrimonial home, which was again refused. The Husband in the proof of evidence said “This time when I rejected He became angry, pushed me to the ground and held his knee to my chest.”
The document then goes on to reveal that three days following this event the Wife made an application for an Intervention Order with the assistance of Mr C. The particulars of the Intervention Order allege that verbal and physical abuse perpetrated by the Husband against the Wife and that Mr C had to intervene to prevent incidents of abuse occurring. That accords, in general terms, with the evidence of Mr C in his most recent affidavit where he suggests that it was the Husband that was the aggressor and the perpetrator of family violence against the Wife.
The orders in the Intervention Order sought an order that the Husband not go to or remain within 200 metres of the former matrimonial home. However, it would seem that the Husband was not excluded from the home at that time and was removed by the police on 15 December 2017, which is the suggested date of separation. On 15 December 2017 there was a dispute between the Husband, the Wife and Mr C, where it is alleged in the proof of evidence that Mr C and the Wife were trying to force the Husband to sign a lease agreement. The police were called when the Husband complained by telephone to his son Mr J, who is the parties’ middle son. The police attended at the property and removed the Husband from the property following Mr C’s complaint that it was the Husband that was abusive to the Wife. That is how the Husband says that the separation between he and the Wife was involuntary.
On 30 November 2017, Mr C applied for a guardianship and an administration order in his favour with respect to the Wife. Mr C also sought a revocation of the Husband as the Wife’s attorney. There were objections by the Husband and the remaining two sons and State Trustees were ultimately appointed to manage the affairs of the Wife, both in terms of her personal affairs and also her financial affairs.
I note for the sake of completeness, State Trustees appointment with respect to dealing with the personal affairs of the Wife expired in about April of this year. But their appointment, with respect to dealing with her financial affairs, endures until about 2021.
The Husband is the affected family member in a final Intervention Order where Mr C is the respondent. The Intervention Order remains in place until March 2021.
The Wife is the affected family member in a final Intervention Order against the Husband.
The Wife has been diagnosed with dementia and it seems was diagnosed in about 2012. Ultimately, in 2016 she was deemed incapable by her General Practitioner.
In the previous proceedings a letter from Dr M (“Dr M”) of N Medical Centre was exhibited with respect to the Husband’s health, this resulted in Mr B being appointed as the Husband’s Litigation Guardian. The letter from Dr M dated 31 May 2019 says as follows:-
Mr Gallanders has presented to the practise after a long time for assessment his mental state and dementia. He has significantly cognitive impaired (MMSE score 8). He has severely deteriorated over the last 18 months mentally, physically and cognitively and also he has deteriorated.
At his current state of mind, he is incapable of making any appropriate decision for himself.
In these previous substantive property proceedings between the Husband and the Wife, it was determined that both the Husband and the Wife were persons who required a Litigation Guardian.
Rule 11.08 of the Federal Circuit Court Rules 2001 (“the Rules”) states:-
(1) For these Rules, a person needs a litigation guardian in relation to a proceeding if the person does not understand the nature and possible consequences of the proceeding or is not capable of adequately conducting, or giving adequate instruction for the conduct of, the proceeding.
(2) Unless the Court otherwise orders, a minor in a proceeding is taken to need a litigation guardian in relation to the proceeding.
Rule 11.09 of the Rules states:-
(1) A person who needs a litigation guardian may start, continue, respond to or seek to be included as a party to a proceeding only by his or her litigation guardian.
(2) The litigation guardian of a party to a proceeding:
(a) must do anything required by these Rules to be done by the party; and
(b) may do anything permitted by these Rules to be done by the party.
Rule 11.10 of the Rules states:-
A person may be a litigation guardian in a proceeding if he or she is an adult and has no interest in the proceeding adverse to the interest of the person needing the litigation guardian.
Importantly, rule 11.11 of the Rules states:-
(1) The Court may, at the request of a party or of its own motion, appoint or remove a litigation guardian or substitute another person as litigation guardian in a proceeding in the interests of a person who needs a litigation guardian.
(2) A person becomes a litigation guardian if he or she consents to the appointment by filing an affidavit of consent in the proceeding.
(3) The Court may remove a litigation guardian at the request of the litigation guardian.
Finally rule 11.12 of the Rules, sets out when the manager of the affairs of a party might be entitled to be a Litigation Guardian. This is relevant in so far as State Trustees are concerned having been appointed pursuant to orders that I made.
There was an application initiating proceedings filed on the Husband’s behalf on 27 June 2019, supported by an affidavit of Mr B at that stage.
The proceedings came before the Court on 2 September 2019. On that date there was an order of the Court that Mr B be appointed as Litigation Guardian for the Husband and State Trustees be appointed as Litigation Guardian for the Wife. On that same date final consent orders were entered into by the parties. Those orders, unsurprisingly, effected a fifty-fifty division of the parties’ assets and liabilities. The parties’ assets and liabilities included their remaining 75 per cent interest in the former matrimonial home in D Street, Suburb E. The asset pool, as one might imagine people who are in the later stages of their lives, was relatively simple. They owned 75 per cent of a property that was said to be worth about $1,000,000. They had no superannuation entitlements. There were some issues with respect to monies that had gone in an and out of bank accounts and that was around the sum of about $25,000 or so, which was sought to be adjusted to effect the fifty-fifty settlement between the Husband and Wife in the final property orders that were made on 2 September 2019.
There nothing unusual about the property orders that were made. Not only were they likely to be the property orders made, they were made at the very earliest stage, which is a prudent and practical way to expend the parties’ funds in terms of effecting a financial separation between them. A fifty-fifty division of a marriage which has endured for 65 years, with the sort of history that these parties had, is almost irresistible.
In Mr C’s affidavit filed the night before this hearing, he sought to argue that the Husband had gone off on a frolic of his own in the 2008 proceedings without reference to the Wife, and that because the Husband and the Wife were subjected to that indemnity costs order which was made (which ultimately resulted in 25 per cent of the former matrimonial home going into Mr Gallanders’ name), that it should be the Husband that was held entirely responsible for the costs expenditure. Therefore, in what seems to me to be fairly sophisticated logic, his claim was that the Wife should receive 50 per cent of the entire matrimonial asset pool (including Mr Gallanders’ 25 per cent of the property), the Husband should get 25 per cent of the entire value of the property, and Mr B should keep his remaining 25 per cent.

So as between the Husband and the Wife, the Wife would receive $500,000 whereas the Husband would receive $250,000. Even if we got to that stage of analysing it, I do not accept that would be the result even if the Husband was seen to have been primarily active and totally responsible for those costs orders that resulted, but the case does not even get to that point. Even though I have a wide discretion as to whether to remove a Litigation Guardian, on one view I am functus officio in this case. On another view, the proceedings have completely concluded and the only way to set aside the orders would be to plead a ground pursuant to section 79A of the Family Law Act 1975 (“the Act”) to set aside property orders.
The only thing that even approximates an assertion in that regard is the assertion by Mr C that the Wife was not advised of the proceedings. However, that would not be a sufficient ground to set aside the orders and I am certainly not prepared to contemplate it without it being pleaded correctly. The other aspect of an application pursuant to section 79A of the Act, is that even if someone can establish a ground pursuant to section 79A, setting aside property orders is discretionary. There is no prima facie case that the orders are unjust on their face or there would be a different result in the event that the orders were varied or set aside pursuant to that section of the Act. To the contrary, the result is almost unremarkable.
The other aspect of the case which causes me, ultimately, to form the view that the Application in a Case must be dismissed is that there is really nothing pleaded with respect to the State Trustees which would result in any fact that would give rise to the Court to exercise their discretion to remove them as Litigation Guardian for the Wife. State Trustees have acted professionally and competently. It is true that they are reimbursed for their endeavours but that is not uncommon. They have acted in the Wife’s interests and have achieved an appropriate result. They act at arm’s length to the Wife and have no other interest in the proceedings, save as in their professional capacity, contrasted with Mr C. State Trustees have discharged their duties in a professional way and in a way which has sought to preserve costs.
The other aspect that impacts on my consideration of the exercise of the discretion is that, if the Litigation Guardian is not Mr C, and as I have said, I think there is a strong prima facie basis to think that he would not be appointed a litigation guardian in these proceedings, who else would it be except for a professional body? There does not seem to be anybody else who would or could be appointed as the Wife’s Litigation Guardian. It could not be Mr B as he is involved on the other side of the litigation. I have no information about the parties’ son Mr J, so on that basis it seems to me that a professional organisation such as State Trustees is the appropriate body to be the Wife’s litigation guardian in any event.
I turn now to the application to remove Mr B as Litigation Guardian for the Husband. The application was not pressed and when I tried to work my way through what really is quite a confusing set of facts, there was really no evidence except an assertion by Mr C that Mr B had a conflict of interest in the proceedings. I fail to see how that is and it is not pleaded with any particularity. On that basis the application to remove Mr B as Litigation Guardian for the Husband will also be dismissed.
Cases involving elderly people are sometimes very difficult. Quite clearly, people who are involved in the care of elderly people have particular views and, at times, those particular views do not accord within the family.
I am troubled in this case that it appears to be Mr C who has provided the instructions to the Applicant’s solicitor, although there is no real direct evidence about that. Certainly, I accept what the solicitor for the Applicant (whoever that might be) said in Court that it was Mr C providing the instructions. Practitioners need to be exceptionally careful about how they take instructions in proceedings such as this and how they frame applications in proceedings such as this.
I note that in these proceedings it was suggested that Mr C was to make an application to essentially become the financial administrator for the Wife, but that has not occurred at this stage and it is not the Court’s role to make any comment about that.
The property proceedings are concluded and the application is multifaceted in that it involves both issues with respect to litigation guardians, but also setting aside final property orders. Those issues for any practitioner that brings a case before the Court need to be considered very carefully. Practitioners need to consider very carefully how they might act at first instance, ostensibly on behalf of somebody who has a Litigation Guardian appointed for them, on proper grounds, who has been involved in Victorian Civil and Administrative Tribunal (VCAT) proceedings and has had persons appointed to act. Further, bringing an application without any medical evidence, but asserting in Court that the Wife has capacity is not an appropriate way to deal with these sorts of issues.

I certify that the preceding fifty-four (54) paragraphs are a true copy of the reasons for judgment of Judge Stewart

Associate:

Date: 6 December 2019