M v L

Case [2017] SASC 39

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

M v L & ANOR

[2017] SASC 39

Judgment of The Honourable Justice Hinton

22 March 2017

FAMILY LAW AND CHILD WELFARE - THE FAMILY LAW ACT 1975 (CTH) AND RELATED LEGISLATION - JURISDICTION - EFFECT OF CROSS-VESTING LEGISLATION - PARTICULAR CASES - WHEN TRANSFER GRANTED

FAMILY LAW AND CHILD WELFARE - THE FAMILY LAW ACT 1975 (CTH) AND RELATED LEGISLATION - JURISDICTION - PROCEEDINGS IN RELATION TO CONCURRENT, PENDING OR COMPLETED PROCEEDINGS

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - PARTIES AND REPRESENTATION - PERSONS UNDER LEGAL INCAPACITY OTHER THAN CHILDREN

EQUITY - TRUSTS AND TRUSTEES - APPOINTMENT, REMOVAL AND ESTATE OF TRUSTEES - APPOINTMENT OF NEW TRUSTEES - BY THE COURT - JURISDICTION

M and her former husband L are the sole directors of and sole shareholders in JPH Pty Ltd (the company), a company that is the trustee of the JPH Trust (the Trust). M and L are also the sole beneficiaries of the Trust.

M has instituted proceedings in this Court seeking an order under s 36 of the Trustee Act 1936 (SA) (Trustee Act) appointing a fresh trustee of the Trust in substitution for JPH Pty Ltd. M and L are also embroiled in property proceedings in the Family Court of Australia.

L contends that this Court has no power to entertain M’s application as it falls within the exclusive jurisdiction of the Family Court. In the alternative, he makes an application for the transfer of these proceedings to the Family Court pursuant to s 5(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) (Cross-vesting Act).

L also makes an application that this Court should conduct an inquiry as to whether M is a person under a disability within the meaning of rule 78 of the Supreme Court Civil Rules 2006 (SA).

Held:

1.       The evidence does not support the making of an inquiry as to whether M is a person under disability. The evidence does not raise an apprehension that M is incapable of making rational decisions about taking, defending or settling proceedings (or to communicate decisions to others). Further, it does not raise an apprehension that she is a person who is not capable of managing her own affairs.

2. The application made by M under the Trustee Act is a matrimonial cause within the definition of the Family Law Act 1975 (Cth). The Supreme Court therefore has jurisdiction to hear the proceedings pursuant to the Cross-vesting Act.

4. In the interests of justice the Family Court is the more appropriate forum to hear and determine M’s application under the Trustee Act. L’s application under the Cross-vesting Act is granted and M’s application under the Trustee Act is transferred to the Family Court.

Trustee Act 1936 (SA) s 36; Family Law Act 1975 (Cth) s 4, s 39, s 40, s 78, s 79, s 80; Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) s 4, s 5; Supreme Court Civil Rules 2006 (SA)…

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AGLC
M v L [2017] SASC 39
Case
[2017] SASC 39
Decision Date

CaseChat Overview and Summary

In M v L, the parties were involved in a dispute concerning the jurisdiction of the court to hear an application made by L under the Trustee Act 1936 (SA) to investigate whether M was a person under a disability. This case also involved a request for the transfer of proceedings under the Family Law Act 1975 (Cth) and related legislation. The primary legal issues the court had to address were whether the matters under the Trustee Act were considered a matrimonial cause and if the court had jurisdiction to conduct an inquiry into whether M was a person under a disability. Additionally, the court needed to decide whether the proceedings should be transferred to the Family Court under the Cross-vesting Act.

The court carefully examined the evidence presented, including M's affidavit and medical reports from 2005, which indicated that M had suffered a brain injury resulting in cognitive impairment, speech difficulties, and other lasting effects. L argued that more recent evidence was needed to determine M's current capacity, but the court found that the existing evidence was sufficient to conclude that M's cognitive impairment was still present, albeit with some improvement over the years. The court dismissed L's application for an inquiry into M's disability status, finding that the evidence did not substantiate the need for such an investigation. Instead, the court granted L's application for the transfer of proceedings under the Cross-vesting Act and ordered that M's application under the Trustee Act be transferred to the Family Court.

Ultimately, the court's decision was based on the principle that while M's cognitive impairment was evident, there was no compelling reason to conduct a further inquiry into her disability status at that time. The court ordered the transfer of proceedings to ensure that all related matters would be heard in the appropriate jurisdiction. The final orders included the dismissal of L's application for an inquiry into M's disability and the transfer of M's application under the Trustee Act to the Family Court.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

Bearing in mind the foundational principle to which Bell J refers in Goddard Elliott and the caution to be exercised before an individual’s personal autonomy is interfered with, I agree with Nicholson J’s approach and adopt the same here. That said, I do not disregard Kyrou J’s approach in Slaveski nor, for that matter, Edmonds J’s and Boreham J’s in Owners of Strata Plan No 23007 and White v Fell respectively. The factors that each identified, relevant as they are to the ultimate question, are also relevant to the antecedent question of whether there arises real apprehension that the plaintiff may be a “person under a disability”.b. The medical evidence concerning M’s mental health In her first affidavit, sworn 1 August 2016 and filed in support of her application under the Trustee Act, M deposed as follows:29. In January 2005 there was an incident which caused me to suffer stroke-like symptoms and which left me with cerebral damage.30. I was hospitalised from January 2005 until March 2005 or thereabouts.31. Based on medical notes and photographs I have seen, I was covered with cuts and bruises. I was found by [L] … on my bed at home in an unconscious or semi-conscious state. I was taken to hospital the next day.…33. I have undertaken rehabilitation since my hospitalisation for the incident, and my medical condition has improved in many respects.34. Nonetheless, it was appropriate (because of the enduring effects of the incident on my health and mental condition) for me to appoint [JI] as my Power of Attorney in September 2015.35. The most significant enduring impact of the injury has been the impact on my speech and some of my motor skills.36. After my medical incident, and because of my condition, [L] took over the control of my finances and he put in place various corporate structures with trusts. He took control of my bank accounts and financial affairs.37. I am unaware of what has happened to the very substantial assets I once owned. L did not adduce any additional evidence in support of his application that this Court investigate whether M is a person under a disability within the meaning of SCR 4 and 78.[22] Rather he elected to rely upon the content of M’s affidavit as quoted above in addition to the medical reports she exhibited to her affidavit. [22] The affidavit of Andrew Jordan sworn 4 August 2016 filed by L exhibits the same material. The medical reports exhibited by M were all prepared in 2005. Tracking through the content of each is of no utility. It is enough to observe that M was admitted to the Royal Adelaide Hospital on 24 January 2005 and discharged on 10 February 2005. Upon admission M was found to suffer from dysarthria and ataxia. She was diagnosed as having suffered an hypoxic brain injury. Upon discharge it was recorded that:M was cognitively impaired and her calculation, abstraction, executive function was poor. She had impulsivity, poor planning and organization and some short term memory loss. She was significantly dysarthic. She had in coordination more on the right side, past pointing, dysmetria etc. [M] was ataxic and was ambulating with a frame. She was assessed by the rehabilitation team including neuropsychology and neuropsychiatry assessment. [M] did not have any major medical issues during her stay in rehabilitation. She regained much of her ability through multidisciplinary rehabilitation. Although [M] made gains in her language and speech function, there were still some residual problems. A referral was made to Brain Injury Rehabilitation Community and Home for ongoing therapy (sic).

Decision

Reasons for decision

HINTON J
Lastly, if I am wrong and the matters under the Trustee Act are not considered a matrimonial cause, for the reasons given above, I would nonetheless order the transfer of the proceedings pursuant to s 5 of the Cross-Vesting Act and s 5 of the Jurisdiction of Courts (Cross-vesting) Act 1987 (SA). Conclusion For the reasons given above, on 29 September 2016 I dismissed L’s application for an order that I conduct an inquiry into the question of whether M is a person under a disability. I would grant L’s application under the Cross-vesting Act and order that M’s application under the Trustee Act be transferred to the Family Court, to be heard with the proceedings ADC 465 of 2008. I will hear the parties further as to the question of costs and as to whether the orders I made on 10 October 2016 should continue.

Ratio Decidendi

Legal Principle Established

Established by: HINTON J

On 12 September 2005 Dr Peter Anastassiadis from the Brain Injury Rehabilitation Unit reviewed M. This is the most recent report provided to the Court. Dr Anastassiadis noted that M had persisting dysarthria for which she attended upon a speech pathologist once a week. She had some difficulty with movement in her right upper limb and shoulder. She was undertaking driver training and was looking after her children. She was not taking any medication. He reported:On examination she has slurred speech with right upper and lower limb hypokinesis as previously. She appears to be more confident and capable with her general activities and abilities. Her right shoulder had reduced range of motion at 75% of normal for abduction, flexion and rotation.He planned to review her in four months’ time.c. Consideration The evidence before me establishes that as a consequence of the 2005 incident M continues to suffer a degree of cognitive impairment manifest in a persisting speech impediment and impetuosity in decision-making particularly when she is tired. There is some possibility, but it cannot be put any higher, of M’s cognitive impairment including poor calculation, abstraction and executive functioning. That conclusion, some possibility, is drawn from medical reports that are now over 10 years old. L contended that the proper course would be to set the terms of reference for an inquiry into whether M was a person under a disability by commissioning more up to date medical or psychiatric reports. He referred to M’s affidavit filed in the Family Court proceedings ADC 465 of 2008 and in this Court which contains the same information as quoted above at [32]. L also referred to the first affidavit of JI, sworn 22 July 2016, where, in particular, he deposed:Since my appointment as Power of Attorney (“my appointment”) I have spent many hours conferring with [M] about her financial circumstances. I have been told that [M] suffered a brain injury in 2005 which (I am told by [M] and her solicitor David Starke) still occasions a level of disability. The disability manifests itself, on my observation, in some occasional speech impediment and on occasions in impetuosity in [M]’s decision-making, especially when she is tired. L placed some reliance on the fact that as recently as 2015, and despite the progress she had made since 2005, on account of the enduring effects of the 2005 medical incident on her health and medical condition, M considered it appropriate to appoint JI as her power of attorney. His point was that her own actions suggested that M was under a disability. Despite JI’s appointment, M brought the proceedings under the Trustee Act in her own name. There was no explanation as to why JI did not do so. Of course, merely vesting power of attorney in a person does not mean that the person in relation to whom the power of attorney may be exercised loses the right, whilst they have capacity, to make decisions and exercise such rights as they have for themselves. Nonetheless, L contended it should be inferred that on M’s own assessment the proceedings ought to have been brought in her attorney’s name.