Secure Funding Pty Ltd v AB [No 3]
[2025] WASC 239
•18 JUNE 2025
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: SECURE FUNDING PTY LTD -v- AB [No 3] [2025] WASC 239
CORAM: SOLOMON J
HEARD: 13 JUNE 2025
DELIVERED : 18 JUNE 2025
FILE NO/S: CIV 2326 of 2013
BETWEEN: SECURE FUNDING PTY LTD
Plaintiff
AND
AB
Defendant
Catchwords:
Application for approval of an agreement pursuant to O 70 r 10 of the Rules of the Supreme Court 1971 (WA) - Person under disability - Application to approve proposed compromise of action - Whether the terms of the proposed agreement are for the benefit of the person under a disability
Legislation:
Australian Securities and Investments Commission Act 2001 (Cth), s 12CA, s 12CB
Public Trustee Act 1941 (WA), s 7
Rules of the Supreme Court 1971 (WA), O 67B r 5, O 70 r 3, O 70 r 10
Supreme Court Act 1935 (WA), s 16(1)(d)(ii)
Result:
Application granted
Category: B
Representation:
Counsel:
| Plaintiff | : | Mr J Black |
| Defendant | : | Mr H Reynoldson |
Solicitors:
| Plaintiff | : | Norton Rose Fulbright |
| Defendant | : | Public Trustee |
Case(s) referred to in decision(s):
Duffell v Duffell [2015] ACTSC 123
Re JN Taylor Holdings Limited (In Liq) [2007] SASC 193
Russell v Russell (1976) 134 CLR 495
Scaffidi v Perpetual Trustees Victoria [2011] WASCA 159
Scott v Scott [1913] AC 417
Sosa v Carter [1978] WAR 123
Wood v Public Trustee (WA) (1995) 16 WAR 58
SOLOMON J:
These reasons concern the defendant's application, dated 23 January 2025, for approval of a compromise pursuant to O 70 r 10 of the Rules of the Supreme Court 1971 (WA) (Rules). The plaintiff supported the application for approval.
Background
The background is as follows.
In November 2009, the plaintiff (Secure Funding) advanced funds in the sum of $410,000 to the defendant (AB) pursuant to a written loan agreement. Pursuant to the terms of the loan agreement, AB granted a mortgage to Secure Funding over a property owned by AB in the suburb of Glen Forest, as security for the loan.
In June 2013, Secure Funding served a notice of default on AB and alleged that she had breached the terms of the loan agreement.
By a writ of summons dated 28 August 2013, endorsed with a statement of claim, the plaintiff issued these proceedings against AB. Secure Funding claimed, among other relief, possession of the Glen Forest property and payment of the outstanding loan which as of 16 August 2024, with accrued interest, amounted to $823,763.86. By 12 July 2022, Secure Funding claimed that the amount outstanding was over $1 million.
AB filed a defence and counterclaim. In essence the defence and counterclaim allege that the loan agreement is void as unconscionable.[1] The claim of unconscionability is made under the law of equity and pursuant to s 12CA and s 12CB of the Australian Securities and Investments Commission Act 2001 (Cth).
[1] Substituted Defence and Counterclaim, 31 August 2022, 6.
By orders dated 16 August 2023, pursuant to s 16(1)(d)(ii) of the Supreme Court Act 1935 (WA) (Supreme Court Act) and O 70 r 3(6) of the Rules, this court determined that AB was a person who is incapable of managing her affairs in respect of these proceedings. The court appointed the Public Trustee to act as guardian ad litem of AB pursuant to O 70 r 3 and s 7 of the Public Trustee Act 1941 (WA). By reason of those orders, AB became a person under disability as defined in O 70.
Although AB is represented by a guardian ad litem, I have permitted AB to appear and speak at hearings. The orders for the management of this application, dated 27 February 2025, also included the opportunity for AB to file submissions or make any application. AB did not file submissions or any application within the time frame allowed by the court's orders. When this application was first listed, AB wrote to the court and advised that she was not available on the day it had been listed. The date was then changed to accommodate AB's availability. The matter was also listed for the afternoon to accommodate AB's advice that she was unable to appear in the mornings.
Submissions made by AB
AB did not file any submissions or applications in respect of the hearing. AB appeared at the hearing of the application. As I have on previous occasions, I allowed her to sit at the bar table where she was accompanied by another woman. The court was not advised of the identity of the woman sitting next to AB.
I invited AB to speak. AB advanced a number of prepositions. I was not able to follow them all, but her central contention was that the court did not have jurisdiction under the Supreme Court Act. AB then said she intended to call expert evidence from a teacher. Immediately, the woman sitting next to AB rose and started speaking. She did not identify herself by name. It became apparent very quickly that she was the expert teacher referred to by AB. The teacher then embarked on a series of extravagant allegations about the government, government agencies and the Public Trustee in particular. Among many other things, she alleged that the government and its agencies had been conducting themselves like Hitler and the Nazis, and were killing 10,000 Western Australians each year. The teacher said she had written a book, entitled Political Persecution of Women & Children (World), and that chapter 5 of this book explained these matters. At the end of the teacher's remarks, AB sought to tender the book, a fax to the Registrar of 13 June 2025 and a document dated October 2024 entitled Notice of Liability. I marked those items for identification.
I am satisfied that the court has jurisdiction. None of the other matters raised by AB, or the teacher on her behalf, or in the documents marked for identification were germane to the matters before the court in respect of the application.
Approval of proposed compromise
In October 2024, the Public Trustee as guardian ad litem entered into a compromise of Secure Funding's claim and a settlement of these proceedings, subject to the court's approval under O 70 r 10. It now seeks that approval.
In support of its application, the defendant filed an affidavit of Shaun William Conlin, the Director of Trustee Services for the Public Trustee. The affidavit, dated 22 January 2025, attached the deed of settlement executed in counterpart by Secure Funding and the Public Trustee.
The Public Trustee also filed a confidential opinion from independent senior counsel, Mr Leigh Warnick SC, dated 19 December 2024, as to whether the terms of the settlement are beneficial to AB. Mr Warnick SC also appeared before the court in person on the day this application was heard. The Public Trustee seeks to maintain confidentiality over the opinion.
The affidavit of Mr Conlin states that, on the basis of advice from the Public Trustee's solicitor, he believes that the independent counsel's opinion is based on facts that are correct and complete so far as can be ascertained. Having considered the advice he received, Mr Conlin stated in his affidavit that he believes the compromise is beneficial to AB.
Order 70 r 10 provides:
10.Settlement etc. of action by person under disability
(1)No settlement or compromise, and no acceptance of money paid into court, whenever entered into or made, in any cause or matter (other than an appeal to the Court of Appeal) in which there is a claim by or on behalf of or against a person under disability, shall be valid unless it is approved by the Court.
(2)An application for approval under paragraph (1) -
a.if made before the hearing of a cause or matter, shall be by summons in chambers;
b.if made during the trial of an action or issue, shall be to the trial Judge on motion,
and shall be supported by affidavit and by the opinion of an independent counsel; but the Court or Judge may dispense with the necessity of obtaining counsel's opinion.
(3)In this Rule settlement includes an acceptance of an offer to consent to judgment.[2]
[2] Rules of the Supreme Court 1971 (WA), O 70 r 10 (Rules).
Practice Direction 4.2.2 provides:
Where counsel's opinion is not dispensed with, it must be obtained, filed and identified, and the court will normally be required to be satisfied:
a.that the next friend, (or guardian appointed by a court to be the representative in a particular lawsuit as the case may be) has perused counsel's opinion, has discussed it with the solicitor and approved of or consents to the proposed compromise;
b.that the facts on which counsel's opinion is based are correct and complete so far as can be ascertained;
c.that sufficient facts are identified to enable the court to form an opinion in respect of the matter to be approved, and that grounds for any apportionment of liability are stated; and
d.that in the opinion of both counsel and solicitor, the proposed compromise would be beneficial to the person under disability.[3]
[3] Consolidated Practice Direction 4.2.2.
The court has inherent power to approve an agreement to compromise an action brought on behalf of the person under a disability if it is satisfied that it is for the benefit of the person to do so. Order 70 r 10 merely provides a framework to enable the court to exercise its power.[4]
[4] Wood v Public Trustee (WA) (1995) 16 WAR 58 [62]; Scaffidi v Perpetual Trustees Victoria [2011] WASCA 159 [50].
In Sosa v Carter[1978] WAR 123 at [124], Burt CJ explained:
Expressed in general terms this court ought not and indeed cannot approve the proposed settlement unless it be of the opinion that it will be for the benefit of the infant plaintiff. But that cannot, I think, mean that the court is in effect to hear the application as if it were itself the appeal and then to give or to withhold its approval by comparing the offer with the judgment which it would have given on appeal. In my view what the court is called upon to do is to satisfy itself that all the facts relevant to the plaintiff's claim have been brought together and considered by her legal advisers and, unless the requirement be dispensed with, that the settlement is supported by the opinion of independent counsel. It should itself consider the opinion given and the reasons for it. If having done that it appears that all aspects of the case have received proper consideration it should be slow to disagree with the opinion particularly upon such a matter as the assessment of damages for personal injuries. The court should be aware of the risks of litigation in an area in which reasonable men can reasonably reach different conclusions and hence slow to force the infant to take a risk which the court is unable to underwrite. It should, too, satisfy itself that the opinion of counsel has been considered and understood by the infant's guardian and it should give proper weight to the fact that the guardian, as is necessarily the case, wishes to accept the settlement. See generally the remarks of Megarry J in Re Barbour's Settlement [1974] 1 All ER 1188 at 1191.
Having considered the matter carefully, including the careful and fulsome opinion of independent senior counsel, I am satisfied of each of the matters required by O 70 r 10 and Practice Direction 4.2.2. I am satisfied that the facts relevant to AB's claim have been brought together and considered by her legal advisers and that the settlement is supported by the opinion of independent counsel. In particular, I am satisfied that in the circumstances, the deed of settlement represents a compromise that is beneficial to AB.
The reasons set out above are sufficient for the court to explain its approval of the compromise. It is neither necessary nor appropriate for the court to set out in detail its reasons for approval of the compromise.[5]
[5] See Duffell v Duffell[2015] ACTSC 123 at [48] ‑ [50].
Orders were also sought by the Public Trustee for the management of any funds received for AB under the terms of settlement. The orders were not opposed. The orders are sensible and appropriate and will be made in the terms sought by the Public Trustee.
Access to documents
The final matter concerns orders sought by the Public Trustee restricting access to the opinion of independent counsel, filed 23 January 2025.
Order 67B r 5(3) and r 5(4) provides:
(3)The Court may make an order that restricts access to information or a record or other thing if it considers -
(a)that the information, record or thing is the subject of a pending claim that it is privileged or confidential; or
(b)that the information, record or thing is privileged or confidential; or
(c)that in the interests of justice, access to the information, record or thing should be restricted.
(4)An order made under subrule (3) must include the reasons for it and sufficient information to identify clearly -
(a)the information, record or thing to which the order applies; and
(b)the person, or class of persons, whose access to the information, record or thing is restricted by the order; and
(c)any conditions that will apply if access to the information, record or thing were to be given by the Court; and
(d)the period during which the order applies.[6]
[6] Rules, O 67B r 5(3), r 5(4).
The Public Trustee contended that it is in the interest of justice for confidentiality to be maintained over the opinion. The opinion was required to be provided, by the processes of the court, in order to satisfy the court of the fairness and the benefit to AB of the settlement.[7] It is possible that the compromise may at some later stage fail, and it would be unfair to AB in those circumstances if the confidential advice was disclosed to Secure Funding.
[7] Rules, O 70 r 10(2).
Secure Funding contended that to restrict access to the opinion of counsel would be contrary to the cardinal principle of open justice. Initially, Secure Funding opposed any orders for confidentiality in respect of counsel's opinion. At the hearing, Secure Funding modified its position. It was prepared to consent to orders for confidentiality but on the basis that the orders did not apply to it such that it would have access to counsel's opinion.
The principle of open justice is indeed important. In Russell v Russell(1976) 134 CLR 495, Gibbs J explained at 520:
It is the ordinary rule of the Supreme Court, as of the other courts of the nation, that their proceedings shall be conducted 'publicly and in open view' (Scott v Scott). This rule has the virtue that the proceedings of every court are fully exposed to public and professional scrutiny and criticism, without which abuses may flourish undetected. Further, the public administration of justice tends to maintain confidence in the integrity and independence of the courts. The fact that courts of law are held openly and not in secret is an essential aspect of their character. It distinguishes their activities from those of administrative officials, for 'publicity is the authentic hall-mark of judicial as distinct from administrative procedure' (McPherson v McPherson). To require a court invariably to sit in closed court is to alter the nature of the court. Of course there are established exceptions to the general rule that judicial proceedings shall be conducted in public. (Citations omitted).
It is important to emphasise that legal principles are not free-standing beacons of righteousness in their own right. Notwithstanding its primacy, the principle of open justice, like all other legal principles, serves a more fundamental purpose - the interests of justice. Where the court exercises its protective jurisdiction, the principle of open justice may yield to the just protection of the person under a disability whose interests the court is concerned to protect.[8]
[8] See Re JN Taylor Holdings Limited (In Liq)[2007] SASC 193 and the cases cited there.
Viscount Haldane LC said of the court's protective jurisdiction:
Its jurisdiction is in this respect parental and administrative, and the disposal of controverted questions is an incident only in the jurisdiction.[9]
[9] Scott v Scott [1913] AC 417, 437.
The opinion of counsel contains matters that are strictly confidential to AB and those representing her. In my view, it is not in the interests of justice for the opinion to be made available to others, including Secure Funding. In the circumstances, that consideration prevails over the principle of open justice.
Conclusion
Accordingly, I shall make orders as sought by the Public Trustee under O 67B r 5 for the confidentiality of the opinion of Mr Leigh Warnick SC dated 19 December 2024.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
GP
Associate to the Hon Justice Solomon
18 JUNE 2025
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