Yifrach & Yifrach (No 2)
[2023] FedCFamC1F 916
•23 October 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Yifrach & Yifrach (No 2) [2023] FedCFamC1F 916
File number: SYC 6265 of 2018 Judgment of: CAMPTON J Date of judgment: 23 October 2023 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Application to appoint a litigation guardian for the husband – Where the evidence of concern as to the husband’s capacity emanates primarily from the husband’s prior solicitor – Where the husband’s current solicitor does not raise concerns as to the husband’s capacity – Where the last report of the husband’s treating mental health clinician does not indicate that the husband needs a litigation guardian as provided for in r 3.12 – Where the proposed litigation guardian did not appear – Application dismissed. Legislation: Family Law Act 1975 (Cth) s 79
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) ch 6, rr 3.08, 3.12, 3.15
Cases cited: Yifrach & Yifrach [2023] FedCFamC1F 149 Division: Division 1 First Instance Number of paragraphs: 33 Date of hearing: 23 October 2023 Place: Sydney Counsel for the Applicant: Mr Stapleton Solicitor for the Applicant: Keypoint Law Solicitor for the First Respondent: Equium Lawyers Counsel for the Second Respondent: Mr Raffell Solicitor for the Second Respondent: The Commissioner of Taxation Counsel for the Third Respondent: Mr Loofs SC with Ms Breeze Solicitor for the Third Respondent: Vobis Equity Attorneys ORDERS
SYC 6265 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS YIFRACH
Applicant
AND: MR YIFRACH
First Respondent
THE COMMISSIONER OF TAXATION
Second Respondent
MR C YIFRACH
Third Respondent
ORDER MADE BY:
CAMPTON J
DATE OF ORDER:
23 OCTOBER 2023
THE COURT ORDERS THAT:
1.The Application in a Proceeding of Ms D filed 3 October 2023 seeking that she be appointed as the husband’s litigation guardian be dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Yifrach & Yifrach has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
CAMPTON J:
INTRODUCTION:
By way of an Application for Final Orders filed on 29 September 2018 in what was then the Family Court of Australia, Ms Yifrach (“the wife”), sought orders for final property settlement pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) as between she and Mr Yifrach (“the husband”). By way of his Response to Final Orders filed 21 March 2019, the husband sought different orders adjusting property.
The husband and wife married in 1990 and separated on a final basis in 2016. An order for divorce was made in 2018.
There are three children of the marriage, all of whom are now adults, being:
·Mr E, born 1991, aged 31 years;
·Mr C Yifrach, born 1994, aged 28 years; and
·Mr F, born 1998, aged 25 years.
On 12 April 2022 the Chief Judge transferred the matter to Division 1 of the Federal Circuit and Family Court of Australia, and the matter was subsequently placed on the Major Complex Financial Proceedings list in my docket.
On 15 February 2023 an Order was made for the Commissioner of Taxation (“the Commissioner”) to intervene in the proceedings. The Commissioner is now identified as the second respondent in the proceedings. Absent material controversy, the Commissioner is owed in the range of $4,660,877 by the husband and $7,642,753 by the wife. Each of those liabilities are increasing by way of general interest charges, other penalties and by way of increasing liabilities through subsequent taxation years elapsing. The Commissioner’s intervention in the proceedings is to recover these outstanding liabilities.
The wife contends the gross value of the property of the parties is in the range of $748,904,440 plus some unknowns. A significant issue exists as to the value of the liabilities of the parties. The husband contends that the value of their liabilities approaches the value of their property.
The husband and wife have encountered substantial difficulty in complying with the Court’s directions as to the preparations of the matter for trial. They both contend substantive disclosure failures on the part of the other to comply with obligations of disclosure as codified in ch 6 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”). The habitual failures of the husband and the wife to prepare the matter for trial resulted in self-executing orders coming into effect striking out their respective substantive relief as sought (see Yifrach & Yifrach [2023] FedCFamC1F 149).
Orders were made on 30 June 2023, reinstating both the substantive application of the wife and the response of the husband.
The matter is proceeding for trial over five days to commence 13 May 2024. The husband and the wife have filed their lay affidavits for trial and expert opinion evidence as to the value of the property of the husband and the wife is presently being marshalled.
On 25 August 2023 the second son of the husband and the wife, Mr C Yifrach, filed an Application in a Proceeding seeking leave to intervene. On 15 September 2023 orders were made granting Mr C Yifrach that leave to intervene in the proceedings. He is now the third respondent in the proceedings.
Mr C Yifrach has annexed a points of claim document to his Initiating Application filed 11 October 2023. It is his case that in 2012 the husband declared that he intended to purchase a unit at Suburb G beneficially for him, that the husband would pay the mortgage in respect of the unit, and that the husband to transfer to him legal title in the unit once the mortgage has been paid.
In 2014 the husband acquired a unit at H Street, Suburb G NSW (“the Suburb G property”). Mr C Yifrach identifies this as the unit referred to by the husband in 2012.
The urgency confronting this proceeding, insofar as it relates to the third respondent, Mr C Yifrach, and the husband, is that in mid-2023 the husband exchanged a contract for sale of the Suburb G property to a Mr J at a sale price of $1 million. The contract provided for the sale to complete the following month. That completion was prevented by way of a caveat lodged on the title by Mr C Yifrach. Mr C Yifrach questions if the sale was to a bona fide arm’s-length third party and contends that it was likely sold undervalue.
By way of Orders made in this forum on 15 September 2023:
(a)Mr C Yifrach was directed to file an Initiating Application setting out with particularity the final orders he sought, attaching his points of claim by way of pleading. After some difficulties with the filing counter that Initiating Application was eventually filed on 11 October 2023.
(b)Each of the husband, the wife and the Commissioner were to file and serve on or before 3 October 2023 any points of defence and/or crossclaim to the points of claim.
The wife has not filed any points of defence and/or crossclaim. The Commissioner filed points of defence on 3 October 2023.
Further directions were made on 15 September 2023 listing for hearing today the interlocutory relief as sought by Mr C Yifrach as articulated in paragraphs 9 and 10 of his further Amended Application in a Proceeding filed 15 September 2023, being:
9. That pending further order the parties shall not sell, lease, transfer, gift and/or assign any right, title and interest in the [Suburb G] Property without the prior consent in writing from the [Mr C Yifrach].
10. That in the alternative to Order 9 above, any sale proceeds from the sale of the [Suburb G] Property shall be held on trust in a solicitors trust account until further Order of the Court.
Mr C Yifrach pleads cascading claims for relief in the alternative by way of his points of claim.
Agitation was initiated in respect of Mr C Yifrach’s caveat by way of proceedings in the Supreme Court of New South Wales. In late 2023 consent orders were made in that forum for that caveat to be withdrawn and for an alternate caveat, claiming a different interest, to be lodged by Mr C Yifrach on, and to remain on the title of, the [Suburb G] unit property pending further order.
It is against that background that on 3 October 2023 the husband’s sister, Ms D (“the husband’s sister”), filed an Application in a Proceedings seeking that she be appointed as his litigation guardian, and further seeking that the time for the husband to comply with the Orders made 15 September 2023 be extended. These reasons determine that application.
The above has been further complicated in that:
(a)The husband has, as of today, instructed different solicitors in this proceeding, namely, Ms Judy Swan, who has filed a notice of address for service on his behalf;
(b)The husband’s sister has not appeared in the hearing today; and
(c)Ms Swan, the husband’s current solicitor, does not consent to nor opposes the application to appoint a litigation guardian.
The Documents relied upon to appoint a litigation guardian for the husband
·The Application in a Proceeding filed 3 October 2023;
·Affidavit of Ms D, the husband’s sister, filed 3 October 2023; and
·Affidavit of Mr K, the husband’s prior solicitor, filed 12 October 2023.
The wife opposes the application. Mr C Yifrach, the third respondent, questions whether the husband’s sister is, in the circumstances of this case, an appropriate or proper person to be appointed as the husband’s litigation guardian.
Consideration
In determining the application in a proceeding of the husband’s sister to be appointed as litigation guardian for the husband it is important to consider the evidence contained in the affidavit of his prior solicitor, Mr K. That evidence includes as follows:
(a)That Mr K has known the husband in a personal capacity for in excess of 30 years and has acted for him in a professional capacity in this litigation for the past two and a half years;
(b)His experience of the husband was that of an intelligent and articulate litigant who was well-versed in property, business and financially related matters;
(c)That over the past six-month period he has, from time to time, observed the husband’s behaviour to be unusual and “on occasion concerning.” This generated Mr K, as the husband’s solicitor, to have the husband assessed by a forensic psychologist, Mr L, who has been a treating clinician of the husband since 2018. The solicitor received a report from Mr L on 13 April 2023 annexed to his affidavit.
(d)The solicitor gives evidence as to observing further changes in the husband’s presentation as to confusion and an absence of capacity to, on occasions, express himself in an organised way;
(e)The solicitor quite properly sought an update opinion from Mr L. That update opinion was dated 1 June 2023. It is also annexed to the solicitor’s affidavit. Importantly, that opinion, being the last opinion of an expert nature before the Court expresses the following:
Opinion
[The husband] was able to demonstrate to the author that he was aware of the contents and the nature of the documents. Further, that he was able to make an informed decision in respect to whether or not it was in his interests to sign said documents.
In summary, [the husband] was able to demonstrate that he has, or at least at the time of receiving legal advice and signing the documents, capacity.
(f)Mr K gives evidence as to his observations in his interactions with him of the husband being increasingly variable from about mid-September 2023, including on occasions being functional and lucid and on other occasions being overwhelmed, consumed and erratic. He gives further evidence as to attempting to obtain instructions from the husband in response to Mr C Yifrach’s points of claim and experiencing an incapacity to obtain what are described as consistent, meaningful or relevant instructions. The solicitor has set out clearly that the husband has refused to submit to any further specialist assessment and says that in his opinion the husband no longer has “continuous legal capacity, such as would be necessary to conduct these proceedings.”
(g)He has indicated that the husband may have in recent times indicated some softening to undertake an updated medical assessment by a treating mental health specialist.
Ms Swan has obtained limited instructions from the husband for the purposes of appearing today. It is not express nor implicit from her submissions today that she has any difficulties in obtaining instructions from the husband.
Insofar as the affidavit of the husband’s sister gives observations as to her experience of the husband and her opinion as to the husband’s capacity, in the circumstances of all of the prior evaluated evidence I give the sisters evidence very limited weight.
Rule 3.12 of the Rules provides that:
A person needs a litigation guardian in relation to a proceeding if the person:
(a)does not understand the nature and possible consequences of the proceeding; or
(b)is not capable of adequately conducting, or giving adequate instruction for the conduct of, the proceedings.
As is self-evident from these reasons, the evidence as to the husband’s deficiencies in capacity primarily emanates from that of his prior solicitor. It is implicit from the submissions made today that the observations and experience of the husband’s current solicitor, Ms Swan, are not consistent with those not made by his current solicitor.
I give significant weight to the last expert opinion of the husband’s treating mental health clinician, Mr L, being that the husband “was aware of the contents and the nature of the documents… that he was able to make an informed decision in respect to whether or not it was in his interests to sign said documents”, and that he “was able to demonstrate that he has, or at least at the time of receiving legal advice and signing the documents, capacity.”
Further, I am mindful in the circumstances of this case of the rights of litigants to be heard and for them to be represented in the proceedings as codified in r 3.08 of the Rules.
In all of the circumstances, especially where there is no appearance by or on behalf of the husband’s sister directly for the purposes of prosecuting this application today, and having regard to the whole of the evidence, I am not satisfied that it is established that the husband requires a litigation guardian for the purposes of understanding the nature and possible consequences of the proceedings or that he is incapable of adequately conducing or giving instructions for the conduct of the proceedings to Ms Swan.
I accept that the April opinion of Mr L has specified that the husband ought to be subject to periodic reviews in relation to the various possible diagnoses presenting by way of abnormalities of judgment and disorganised thinking cast against a history of epileptic seizures and neurological disease. In the event the husband undertakes further clinical testing, and that testing establishes some restriction as to his cognitive function, it is always possible for the appropriate application to be made for a litigation guardian when that further expert evidence is available.
It ought be remembered that a litigation guardian cannot provide instructions as to factual matters outside the knowledge of that litigation guardian and that often the appointment of a litigation guardian, while assisting in one part of the conduct of a proceeding on behalf of the party, can make the conduct of the proceeding on the part of that party more difficult especially when factual matters are in contest.
Putting it simply, if further expert evidence exists as to the deterioration in the husband’s capacity, an application can be made at that time, as considered appropriate, so as to protect and promote the husband’s interests.
The Application of the husband’s sister that she be appointed his litigation guardian will be dismissed.
I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 26 October 2023
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