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[2009] WASC 65
General information, not legal advice.
Supreme Court of WA
2009-03-23
Pullin J, Martin CJ
Original judgment source is linked above.
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
CITATION : FARRELL -v- ALLREGAL ENTERPRISES PTY LTD [No 2] [2009] WASC 65
BETWEEN : ALLREGAL ENTERPRISES PTY LTD (ACN 071 642 683)
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Procedure - Person under disability - Limited guardianship order - Guardian not authorised to act as next friend or guardian ad litem in proceedings concerning estate - No guardian ad litem or next friend appointed in proceedings in General Division - Court orders made - Appeal
Courts and judges - Person under disability - Appellant not represented by next friend - Need for appointment of a next friend - No person willing to act - Whether Public Trustee or Public Advocate to be appointed
Interpretation Act 1984 (WA), s 19
Public Trustee Act 1941 (WA), s 2, s 4(3), s 7
Rules of the Supreme Court 1971 (WA), O 70 r 1(2), O 70 r 2(1), O 70 r 3(2), O 70 r 3(3), O 70 r 5
A v A Health Authority [2002] Fam 213
Australian Securities and Investments Commission v Reid [No 1] [2006] FCA 699
Beall v Smith (1873) 9 Ch App 85
Clarey v Permanent Trustee Co Ltd [2005] VSCA 128
Deputy Commissioner of Taxation v P (1987) 11 NSWLR 200
Dietrich v The Queen [1992] HCA 57; (1992) 177 CLR 292
Director-General v T'Hart [2003] WASCA 110; (2003) 27 WAR 185
Gore-Booth v Gore-Booth [1954] P 1
Hamersley v Newton [2005] WASC 221; (2005) 30 WAR 568
Jones v Moylan (1997) 18 WAR 492
McInnis v The Queen [1979] HCA 65; (1979) 143 CLR 575
Minister for Health v AS [2004] WASC 286; (2004) 29 WAR 517
Morris v Zanki (1997) 18 WAR 260
Murphy v Doman [2003] NSWCA 249; [2003] 58 NSWLR 51
New South Wales v Canellis [1994] HCA 51; (1994) 181 CLR 309
Perpetual Trustees Australia Ltd v Allregal Enterprises Pty Ltd [2008] WASC 134
Pilbara Infrastructure v BGC Contracting Pty Ltd [2007] WASCA 257; (2007) 35 WAR 412
Re Tait [1963] VicRp 73; [1963] VR 532
Scutt v Bailey (No 1) [1964] WAR 74
Slater v Global Finance Group Pty Ltd (1999) 150 FLR 264
1 PULLIN J: The question which I had to decide was whether or not the court had the power to appoint the Public Trustee or the Public Advocate as next friend to represent Mrs Farrell in these three appeals and if so whether or not that power should be exercised.
2 I received submissions from the State Solicitor on behalf of the Public Advocate and from counsel for the Public Trustee, both of whom resisted an order for appointment as next friend.
3 The background is as follows. A limited guardianship order was made by the State Administrative Tribunal concerning Mrs Farrell and in its final form, as a result of an amendment in 2007, Ronald Charles Waugh was appointed as limited guardian with one of his functions being to act 'as the guardian ad litem of [Mrs Farrell] to defend or settle any legal proceedings taken against [Mrs Farrell] except in proceedings relating to the estate of the represented person' (emphasis added).
4 Mrs Farrell was therefore a 'represented person' as defined in s 3 of the Guardianship and Administration Act 1990 (WA) and is therefore by reason of that fact, a 'person under disability' within the meaning of O 70 of the Rules of the Supreme Court 1971 (WA). Order 70 r 2(1) provides that:
[A] person under disability may not bring, or make a claim in, any proceedings except by his next friend and may not defend, make a counterclaim or intervene in any proceedings ... except by his guardian ad litem.
5 Order 70 r 5 provides that in an action against a person under a disability begun by writ or by originating summons where no appearance is entered for that person, the plaintiff before proceeding further with the action, must make an application to the court for an order appointing a guardian ad litem of that person.
6 In Carpaolo Nominees Pty Ltd v Allregal Enterprises Pty Ltd CIV 2250 of 2007 Carpaolo made an application to Master Sanderson for summary judgment for the amount of debt the plaintiff claimed to be due by Mrs Farrell and seeking possession of a property in Muston Grove, Churchlands and chattels secured by a chattel mortgage. Mrs Farrell was the registered proprietor of the Muston Grove property. The debt was secured by a mortgage over the Muston Grove property. The debt arose out of vendor finance in relation to the purchase of a property in Buntine Road, Wembley Downs, by Allregal from Carpaolo. Mrs Farrell purported to enter an appearance and she made submissions to the master on her own behalf. The proceedings were conducted without any steps being taken to appoint a guardian ad litem for Mrs Farrell. On 24 September 2008 Master Sanderson ordered relevantly as follows:
7 Mrs Farrell filed an appeal notice against this decision on 14 October 2008.
8 In Farrell v Allregal Enterprises Pty Ltd CIV 1788 of 2008 Mrs Farrell made an application for an order to extend the operation of a caveat in relation to the Buntine Road, Wembley Downs property which was registered in the name of Allregal. Mrs Farrell appeared on her own behalf and made some submissions. Chief Justice Martin held that a number of the issues raised were identical to those determined at a trial in December 2007 in Perpetual Trustees Australia Ltd v Allregal CIV 2205 of 1997 where judgment was entered in favour of Perpetual and Allregal was ordered to give up to Perpetual possession of the Buntine Road property, and a determination in April 2008 where an application made on Mrs Farrell's behalf under the Civil Judgments Enforcement Act 2004 (WA), in which the relief sought was to set aside the property seizure and delivery order made in respect of those premises, was dismissed. See Perpetual Trustees Australia Ltd v Allregal Enterprises Pty Ltd [2008] WASC 134. On 3 July 2008, Martin CJ dismissed the application. Martin CJ stated:
The problem with the application ... is that the interest which is claimed in the caveat, which is what this application is about, is an interest as registered proprietor to prevent improper dealing. There is ... I think no arguable case to sustain an interest claimed in those terms. The registered proprietor of the land is and always has been Allregal.
The proceedings were conducted by Mrs Farrell without a next friend.
9 Mrs Farrell filed an appeal notice against this decision on 14 July 2008.
10 In Allregal Enterprises Pty Ltd (Mortgagee in Possession: Perpetual Ltd) v Allregal Enterprises Pty Ltd CIV 2271 of 2008 Perpetual sought orders to remove caveats in respect of the Buntine property in order to enable settlement of the sale of the property to go through on 6 January 2009. A solicitor, Mr Wells attempted to appear on behalf of Mr Waugh (Mrs Farrell's guardian) but after being criticised by the Chief Justice for entering an appearance without a guardian ad litem having been appointed, Mr Wells wrote to the associate to Martin CJ informing him that his instructions to act for Mrs Farrell had been terminated. On 16 December 2008 Martin CJ ordered relevantly as follows:
The proceedings were conducted and brought to judgment without a guardian ad litem being appointed to represent Mrs Farrell.
11 Mrs Farrell filed an appeal notice against this decision on 5 January 2009.
12 It is arguable that the judgments entered in all three cases were irregular because they were conducted contrary to the rules and were liable to be set aside pursuant to O 2 r 1(2). See Gore-Booth v Gore-Booth [1954] P 1 and Murphy v Doman [2003] NSWCA 249; [2003] 58 NSWLR 51 [49].
13 The three appeals cannot be conducted by Mrs Farrell without a next friend. No-one is willing to act as next friend. Mr Waugh, who has been appointed as limited guardian, is not willing to act and the court has been informed that there is a conflict which would prevent him being appointed. He is not authorised by the limited guardianship order to act as next friend.
14 It is therefore necessary for the court to make some provision for the appointment of a next friend in relation to the appeals. The proceedings under appeal are interrelated and have resulted in a judgment of over $1 million against Mrs Farrell and an order for possession of her property. The judgments under appeal were made in proceedings in which the rules of court prohibited Mrs Farrell from defending or bringing the proceedings. It is not appropriate in those circumstances for the court to simply refer to the prohibition in O 70 r 2(1) and prevent Mrs Farrell being heard on the appeals.
15 The first question was whether the Public Advocate should be appointed as next friend. I am satisfied that there is no power conferred on this court under the Guardianship and Administration Act 1990 to appoint the Public Advocate as next friend. If the Public Advocate was appointed by the State Administrative Tribunal as guardian or administrator and the represented person became involved in litigation, then the Rules of the Supreme Court provide that the Public Advocate should act as guardian ad litem or as next friend unless someone else be appointed by the court. See O 70 r 3. No such appointment has been made.
16 The question then was whether the Public Trustee should be appointed. Counsel for the Public Trustee referred me to Hamersley v Newton [2005] WASC 221; (2005) 30 WAR 568 [16] for the purpose of indicating that in that case the Attorney General of the State of Western Australia was joined as second defendant to represent the interests of future unborn sons of one of the parties. However, nothing in that case or the cases referred to in that case state that the Attorney General should be appointed next friend in the circumstances which prevail in this case.
17 Section 7(1) of the Public Trustee Act 1941 (WA) reads:
Where ... a court ... can appoint ... a next friend ... any such appointment may be made of the Public Trustee.
18 The word 'court' is defined in s 2 to mean 'the Supreme Court of Western Australia or a Judge thereof'. The first question then is whether the court has some power to appoint a next friend. Before considering that, I should address a point raised by both the State Solicitor and counsel for the Public Trustee concerning the effect of O 70 r 3(3). Read in one way, it might state that Mr Waugh was obliged to act as next friend. Order 70 r 3(2) and (3) read:
(2) Save as provided by paragraphs (5) and (6) or by Rule 5, an order appointing a person next friend or guardian ad litem of a person under disability is not necessary.
(3) If a person under a disability is a represented person in respect of whom -
(a) a plenary guardianship or administration order has been made under the Act; or
(b) a limited guardianship or administration order has been made under the Act, which authorises the guardian or administrator, as the case may be, to conduct legal proceedings in the name of the person under a disability or on his behalf,
the guardian or administrator shall act as next friend or guardian ad litem, as the case may be, of the represented person in any proceedings unless, in a case to which paragraph (5) or (6) or Rule 6 applies, some other person is appointed by the Court to be the next friend or guardian ad litem, as the case may be, of the represented person in those proceedings.
19 In my opinion Mr Waugh is not obliged to act as guardian in circumstances where the limited guardianship order appointing him as guardian expressly prohibits him from acting as next friend in respect of litigation concerning Mrs Farrell's estate. The word 'estate' in its ordinary and broadest relevant meaning, is property viewed as an aggregate. See Macquarie Dictionary. Thus, while a limited guardianship order exists which authorises Mr Waugh to conduct certain legal proceedings in the name of Mrs Farrell, it does not authorise him to conduct legal proceedings of the type which are on foot in these appeals. Therefore, O 70 r 3(3) should not be construed as requiring a guardian to act as next friend in circumstances where the State Administrative Tribunal by its limited guardianship order, expressly prohibits that person from doing so. Thus, O 70 r 3(3)(b) obliges a guardian or administrator to act as the next friend or guardian ad litem (litigation guardian) in 'proceedings' which must be read as proceedings of the kind that the limited guardianship or limited administration order authorises that person to conduct.
20 There is no express general power in O 70 authorising the court to appoint a person as next friend. The power of the court to appoint 'some other person' to be next friend under O 70 r 3(3) cannot be employed because the conditions specified in that rule do not exist in the circumstances of this case.
21 However, I am satisfied that the court has the power to appoint a next friend because of s 16(1)(d) of the Supreme Court Act 1935 (WA), which reads:
(1) Subject as otherwise provided in this Act, and to any other enactment in force in this State, the Supreme Court -
(d) shall be a court of equity, with power and authority within Western Australia and its dependencies -
(i) to administer justice, and to do, exercise, and perform all acts, matters, and things necessary for the due execution of such equitable jurisdiction as, at the commencement of the _Supreme Court Ordinance 1861_6, the Lord Chancellor of England could or lawfully might have done within the realm of England in the exercise of the jurisdiction to him belonging; and
(ii) to appoint guardians and committees of the persons and estates of infants, lunatics, and persons of unsound mind according to the order and course observed in England, and for that purpose to inquire into, hear, and determine by inspection of the person the subject of inquiry, or by examination on oath or otherwise of the party in whose custody or charge such person is, or of any other person or persons, or by such other ways and means by which the truth may be best discovered, and to act in all such cases as fully and amply to all intents and purposes as the said Lord Chancellor or the grantee from the Crown of the persons and estates of infants, lunatics, and persons of unsound mind might lawfully have done at such date.
22 Section 16(1)(d)(ii) confers on the Supreme Court parens patriae jurisdiction. See Morris v Zanki (1997) 18 WAR 260, 285; Jones v Moylan (1997) 18 WAR 492, 496 (Wallwork J); Director-General v T'Hart [2003] WASCA 110; (2003) 27 WAR 185 [11] (Hasluck J, Murray & Wheeler JJ agreeing) and Minister for Health v AS [2004] WASC 286; (2004) 29 WAR 517 [16] (Pullin J).
23 Section 16(1)(d)(ii) raises the question as to the power or duty of the Lord Chancellor in 1861 in relation to the persons described in that subsection. There can be no doubt that there has existed for centuries an ancient Crown prerogative concerning those of unsound mind. The prerogative was originally regarded as a right but eventually came to be regarded in the nature of a duty rather than a right. As it came to be regarded as a duty, it passed to the Lord Chancellor as a delegate of the Crown: Re Tait [1963] VicRp 73; [1963] VR 532, 544; Scutt v Bailey (No 1) [1964] WAR 74, 78; A v A Health Authority [2002] Fam 213, 223 - 224. The Lord Chancellor's obligation was to administer the person's estate:
[T]aking every advantage fairly to increase and improve it without engaging in risks and hazardous adventures ... whatever tends towards ordinary improvement it is strictly the duty of the administrator to do, considering only the immediate interest of the proprietor of the estate.
See Holdsworth W, A History of English Law, (vol 1, 1956), 476.
24 The Lord Chancellor did not himself carry out these duties. Prior to 1842, incapacitated persons were assisted by the 'Office of the Six Clerks'. In 1842, that office was abolished by the Court of Chancery Act 1842 (5 & 6 Vict C 103). The Office of the Six Clerks was then replaced by the Solicitor to the Suitors' Fund and the person holding that office came to be appointed by the Lord Chancellor to represent incapacitated persons where there was no natural protector.
25 It is not strictly necessary to say more about the legal history but I do mention that after the Judicature Acts in 1875, the Lord Chancellor appointed an officer known as the Official Solicitor of the Supreme Court who carried out instructions of the Lord Chancellor and who would in certain circumstances act as guardian ad litem in relation to persons of unsound mind. See Halsbury's Laws of England, 1st ed, vol 1 [155]. I assume that this was a continuation of the role performed by the Solicitor to the Suitors Fund. In 1981 the Official Solicitor to the Supreme Court became a statutory office in England and on 1 April 2007, the Official Solicitor of the Supreme Court and the Public Trustee merged with the Courts Funds Office and became the Offices of Court Funds, Official Solicitor and Public Trustee.
26 As to the role of the Court of Chancery, the jurisdiction of which was conferred on the Supreme Court by s 16(1)(d)(i): see Beall v Smith (1873) 9 Ch App 85, 91 - 92.
27 I conclude that in 1861 the Lord Chancellor had the duty to represent incapacitated persons by appointing a litigation guardian where no-one else was willing to act. That review satisfies me that the Supreme Court may exercise the parens patriae duties of the Crown which were in England in 1861, discharged by the Lord Chancellor, and appoint a next friend. That then leads to the conclusion that within the meaning of s 7(1) of the Public Trustee Act 1941 (WA), this court 'can appoint ... a next friend'.
28 The next question is whether the Supreme Court should appoint the Public Trustee as Mrs Farrell's next friend. The Public Trustee refers to s 4(3) of the Public Trustee Act which states:
The Public Trustee is an agent of the Crown in the right of the State of Western Australia and enjoys the status, immunities and privileges of the Crown.
The Public Trustee then argues that there is a Crown privilege or prerogative in the form of common law doctrine that the Crown is under no obligation to provide legal representation. However, the existence or extent of that general privilege does not have to be considered because of the existence of specific statutory power of appointment conferred on the court by s 7.
29 The next argument the Public Trustee advances is that it has the same powers, duties and rights as a private person (see s 7(2)) and that it cannot therefore be compelled by the court to act as next friend and that it must consent before it is appointed. See Murphy v Doman [2003] NSWCA 249; [2003] 58 NSWLR 51 and Deputy Commissioner of Taxation v P (1987) 11 NSWLR 200. However, neither of those cases considered the equivalent of the particular statutory power to appoint the Public Trustee which is under consideration here.
30 The plain meaning of s 7 is that the Public Trustee may be appointed without first obtaining the consent of the Public Trustee. It is permissible under s 19 of the Interpretation Act 1984 (WA) to refer to parliamentary proceedings which took place leading to the enactment of s 7 to confirm that the meaning of s 7 is the ordinary meaning conveyed by the text. What emerges from the relevant Parliamentary Debates is that it was originally proposed that the section should be in a form which required the consent of the Public Trustee before appointment. However, by way of amendment to cl 7 during the progress of the Bill through Parliament, the requirement for the consent of the Public Trustee was removed. See Western Australia, Parliamentary Debates, Legislative Council and Legislative Assembly, 31 July - 16 October 1941, vols 1 and 2, pages 500, 502, 748, 752, 857 - 859, 862, 941, 943, 945, 1204, 1539 and 1543, particularly at pages 857 and 858. This deliberate decision to eliminate any requirement that the Public Trustee consent, confirms that s 7 means what it says, namely that the Public Trustee may be appointed without the precondition that it first give consent.
31 Wheeler J (as her Honour then was) in Slater v Global Finance Group Pty Ltd (1999) 150 FLR 264 [20] referred also to the significance of the deletion of the words 'if he consents thereto' from the clause which became s 7.
32 The Public Trustee submitted that s 7(2) means that the Public Trustee, like a private citizen, may refuse to consent to be appointed as a guardian ad litem or a next friend. However, s 7(2) begins with the words 'Subject to this Act' and it follows immediately after s 7(1) which confers the power on the Supreme Court to appoint the Public Trustee as next friend. The Public Trustee argues that if it can be appointed to act as next friend compulsorily, then 'it would appear that any person or entity falling within the class identified [in s 7(1)] can mandatorily appoint and effectively require the Public Trustee to accept appointment' to any of the offices referred to in s 7(1). Counsel for the Public Trustee submitted that that construction of s 7(1) would authorise anyone to appoint the Public Trustee as trustee of any private trust or as executor of a will. In my opinion that affords no argument in support of the Public Trustee's contention. There is no doubt that the Public Trustee can be appointed as a trustee or as an executor, but having been appointed, it may disclaim that office. The situation in relation to incapacitated persons and the duty of the Crown to protect incapacitated persons and the circumstances of appointment of a next friend is quite different from the appointment of the Public Trustee as a trustee or executor. If appointed as next friend by the court, the Public Trustee cannot disclaim that office without a court order.
33 The Public Trustee also submitted that at common law a citizen does not have a right to present his or her case by counsel or to have his or her case presented at the public expense. The Public Trustee referred to McInnis v The Queen [1979] HCA 65; (1979) 143 CLR 575 per Barwick CJ at 579, Mason J at 581; Dietrich v The Queen [1992] HCA 57; (1992) 177 CLR 292, 297 - 298, 317, 330, 343, 356 and 364 - 365; New South Wales v Canellis [1994] HCA 51; (1994) 181 CLR 309, 328 and Australian Securities and Investments Commission v Reid [No 1] [2006] FCA 699. Those cases do not deal with the circumstances here, namely the circumstances of a person under a disability who is prohibited from participating in litigation and where the duty of the Lord Chancellor would have been in 1861 and hence the duty of this court, was and therefore is to ensure that incapacitated persons are properly represented in litigation.
34 There are then various discretionary matters raised by the Public Trustee which it says should be taken into account in the exercise of the court's discretion. Reference is made to the number of pieces of litigation that Mrs Farrell is involved in, there being cases other than the three appeals under consideration at the moment. That is not a reason for declining to appoint the Public Trustee in relation to these three appeals. I am only concerned with the three appeals to the Court of Appeal. The Public Trustee also points to the cost implications given the limited budget of the Public Trustee. That is not a reason for not appointing the Public Trustee. That will be matter for future budgetary consideration.
35 It was submitted by the Public Trustee that if appointed, a condition should be imposed to provide some form of protection to the Public Trustee in relation to costs. In my opinion it is not possible to formulate any such condition at the moment. The question of costs, which is the primary concern of the Public Trustee, is a matter which could be dealt with at the appropriate time taking into account that the Public Trustee has been appointed without its consent. However, I granted the Public Trustee liberty to apply.
36 Finally, the Public Trustee made submissions about the merits of Mrs Farrell's claims concerning the properties. The Public Trustee pointed out that Mrs Farrell has been declared bankrupt and any interest she may have in the properties, directly or indirectly, will be property vested in the Official Trustee in Bankruptcy and that the discharge of Mrs Farrell from bankruptcy would not alter this fact. That will be a matter for consideration by the Public Trustee after appointment to office as next friend. However, the fact that Mrs Farrell has been bankrupt would not deny her the right to dispute the quantum of the claim brought against her by Carpaolo.
37 Another discretionary consideration and one favouring appointment is that the proceedings in the General Division, particularly the two actions where judgment was entered against Mrs Farrell without a guardian ad litem being appointed, were irregular and are liable to be set aside pursuant to O 2 r 1(2). In the Gore-Booth decision, Pearce J said:
It is important that this court should guard jealously the provisions of rule 64 which were carefully framed ... for the express purpose of protecting infants and those of unsound mind. Whatever the merits of a case this court ought always, in my view, to set a decree aside where the provisions of rule 64(9) have not been carried out (10).
(Rule 64 was the rule relating to litigation by persons under incapacity).
38 Lord Merriman P (9) considered that non-compliance with the rule vitiated the whole proceedings. However, for the more modern view see Pilbara Infrastructure v BGC Contracting Pty Ltd [2007] WASCA 257; (2007) 35 WAR 412 and Clarey v Permanent Trustee Co Ltd [2005] VSCA 128.
39 Another important discretionary consideration is that the three appeals are appeals from judgments in the General Division where no account was taken of Mrs Farrell's capacity as a person under disability. In one case the requirement for the appointment of a guardian ad litem was acknowledged but not dealt with, in circumstances where a memorandum of appearance had been entered and was then set aside. Consequently, the plaintiff was arguably obliged under O 70 r 5 to make an application to the court for an order appointing a guardian ad litem (which was not done). Similarly, in the proceedings before the master, it is arguable that the memorandum of appearance entered by Mrs Farrell should have been set aside as irregularly entered, with the consequence that in that case also, O 70 r 5 required the plaintiff to make an application to the court for an order appointing a guardian ad litem. To allow all these matters to be investigated, I consider that a next friend should be appointed.
40 For those reasons, and in circumstances of some urgency in relation to one of the appeals, I appointed the Public Trustee to act as next friend of Mrs Farrell in relation to all three appeals on 13 March 2009.
41 Having stated my conclusion, I should observe that in my opinion legislative attention is required in this area. I say this because of the uncertainty created by the existence of the Guardianship and Administration Act and s 7 of the Public Trustee Act. It would surprise me if there has not been discussion or debate between the Office of the Public Trustee and the Office of the Public Advocate about who carries the responsibility for acting as a litigation guardian of last resort. This is because on the one hand the Guardianship and Administration Act authorises the State Administrative Tribunal but not the Supreme Court to appoint the Public Advocate to act as guardian or administrator, with the result that the Public Advocate would then be obliged by O 70 to act as litigation guardian, whereas, on the other hand, s 7 of the Public Trustee Act authorises this court, but not the State Administrative Tribunal to appoint the Public Trustee as litigation guardian. The result of that bifurcation in the legislation is seen in this case where both authorities resist appointment as litigation guardian. Both claim to be too under-funded or under-resourced to be able to take on the role as litigation guardian. If there is any legislative change, then O 70 would also require redrafting.
(1987) 11 NSWLR 200
(1992) 177 CLR 292
(2003) 27 WAR 185
(2005) 30 WAR 568
(1997) 18 WAR 492
(1979) 143 CLR 575
(2004) 29 WAR 517
(1997) 18 WAR 260
(1994) 181 CLR 309
(2007) 35 WAR 412
(1999) 150 FLR 264