Guardian for Michael Kelly v Kelly

[2023] ACTSC 398

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

Director General, Community Services Directorate as Guardian for Michael Kelly v Kelly

Citation: 

[2023] ACTSC 398

Hearing Date: 

15 December 2023

Decision Date: 

15 December 2023

Before:

Curtin AJ

Decision: 

(1)    Application in proceeding dated 4 December 2023 is refused.

(2)    Parties’ costs of the application are to be to be the parties’ costs in the cause.

Catchwords: 

SUCCESSION – FAMILY PROVISION – Application for extension of time to make application for family provision –application to approve settlement agreement reached at mediation – where applicant is an infant – where defendant’s understanding of settlement agreement different to plaintiff’s understanding – whether superannuation proceeds be given to relative of infant or Public Trustee and Guardian for the Australian Capital Territory – settlement agreement not approved

Legislation Cited: 

Family Provision Act 1969 (ACT) s 8

Parties: 

Director General, Community Services Directorate as Guardian for Michael Kelly ( Plaintiff)

Kathleen Kelly ( Defendant)

Representation: 

Counsel

B Campbell ( Plaintiff)

Self-represented ( Defendant)

Solicitors

Campbell & Co Lawyers ( Plaintiff)

Self-represented ( Defendant)

File Number:

SC 341 of 2023

CURTIN AJ:  

EX TEMPORE (REVISED)

1․Before me today in these proceedings is an application to make orders in accordance with a written settlement agreement reached and signed at a mediation.

2․The proceedings arise out of the will of the late Monica Kelly, whose Will concerned two major assets. One asset was a one third interest in Section 58, Block 3, Deposited Plan 372 situated in O’Connor, and the other was some funds held by a superannuation fund.

3․The son of the deceased, Michael Kelly, has been under the care of the Director General of the ACT Community Services Directorate for some years. Michael is presently 12 years’ old.

4․The short point is that the deceased’s Will did not provide for Michael.

5․The Director-General commenced proceedings on his behalf against the executor of the Will, a sister of the deceased, for provision, pursuant to s 8 of the Family Provision Act 1969 (ACT).

6․The parties attended a mediation of the proceedings on 13 November 2023. The mediator was a highly experienced counsel in this area, being Mr John Armfield of counsel. The Director-General was represented by its solicitor and counsel. The executor, who is not legally trained nor legally experienced, was not legally represented at that mediation.

7․At the mediation, the parties thought that they had come to an agreement about the two substantial assets. The agreement was reduced to writing and signed by the defendant and the plaintiff’s representative (the Signed Settlement Agreement).

8․There is no dispute before me that the real estate or the interest in the O’Connor property owned by the deceased would be held on trust by the defendant for the benefit of Michael until 4 February 2032 (when Michael would reach 21 years of age), whereupon the defendant would sign all documents and do all things necessary to transfer that real estate to Michael.

9․There is, however, a dispute about the superannuation proceeds.

10․The defendant tells me today that her understanding of the Signed Settlement Agreement (signed by her and by Mr Alexander Thomas N. Tandy on behalf of the plaintiff) was that the superannuation proceeds formed part of the estate of the deceased, and so would be held on trust by her for the benefit of Michael.

11․The plaintiff has a different understanding of the Signed Settlement Agreement.

12․The plaintiff informed me that the superannuation funds were paid by the superannuation trustee, pursuant to the terms of the trust deed, to the Public Trustee and Guardian for the Australian Capital Territory some time ago, and do not form part of the estate.

13․The defendant contends that those funds do form part of the estate.

14․The short point is that the defendant who appears before me today without the benefit of legal representation, in effect, communicated to me that, at least as concerns the superannuation proceeds, her understanding of what she signed at the mediation is different to that of the defendant.

15․I am sure that, at the mediation, all practitioners did what they could to assist the defendant. The mediator is a highly experienced counsel in this area. Notwithstanding all their best efforts and intentions, the end result remains that Ms Kelly tells me her understanding of the Signed Settlement Agreement is different to the understanding of the plaintiff, insofar as concerns the superannuation proceeds.

16․I have tried to explain to the defendant on multiple occasions today that even if the Signed Settlement Agreement did mean that the parties had agreed that the superannuation proceeds would be held by her on trust for Michael, the Court would not approve such a settlement.

17․It is in only the rarest of circumstances that a court will approve a settlement where cash sums are given to a relative of an infant or disabled person to be held on trust for the benefit of that infant or disabled person.

18․I have tried to explain to the defendant the reasons behind that approach by the courts, whose only interest in approving settlements is the interest of the infant or disabled person, and the protection of any cash funds which are to be held for the benefit of that person.

19․I endeavoured to solve the practical problem presented to me in that, at the end of the day, both parties agreed that the superannuation proceeds should be held on trust by someone for the benefit of the plaintiff. The disagreement is as to whether it is held by the defendant, or by the Public Trustee.

20․As I’ve said, I endeavoured to explain to the defendant that it is only in the rarest of circumstances that a court would approve someone in her position holding those funds on trust for someone like Michael. I would not have done so in this case (if the parties had asked), which left the only viable alternative being the Public Trustee.

21․That is no reflection on the defendant at all, but simply a recognition by the Court that despite all best intentions, the better course is that a person independent of the plaintiff and the plaintiff’s family should be the trustee of such funds.

22․Notwithstanding my best attempts to explain these matters to the defendant, I was not able to reach a position where the defendant agreed that the superannuation funds should remain with the Public Trustee. Even had the defendant indicated her consent to that position, I would still have had some hesitation in making any orders to that effect (if such orders were necessary) given the defendant is not legally trained, experienced, nor legally represented, and I had some doubts whether any consent achieved in Court would be a genuine, fully informed consent granted by someone who understood the issues. In any event, that situation did not arise.

23․In those circumstances, all I can do is refuse to approve the settlement and the matter will have to proceed in the ordinary course to hearing, unless and until some further agreement is reached.

Orders

24․I make the following orders:

(1)Application in proceeding dated 4 December 2023 is refused.

(2)Parties’ costs of the application are to be to be the parties’ costs in the cause.

I certify that the preceding twenty-four [24] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Acting Justice Curtin.

Associate:

Date: