Supreme Court action CIV 1788 of 2008 was commenced by Mrs Farrell seeking to extend caveat K500974.

Hearing of Supreme Court action CIV 1788 of 2008 before Martin CJ where the application to extend caveat K500974 was dismissed.

Caveat K500974 lapsed pursuant to s 138B of the Transfer of Land Act.

Caveat K647788 lodged by Allregal against the Buntine Road property claiming an estate or interest as registered proprietor to prevent improper dealings.

Court of Appeal action CACV 70 of 2008 commenced by Mrs Farrell against decision of the Chief Justice dated 3 July 2008 in Supreme Court action CIV 1788 of 2008.

Supreme Court action CIV 2271 of 2008 commenced by Perpetual seeking removal of caveats K644203 and K647788 lodged by Mrs Farrell and Allregal against the Buntine Road property.

Application by Allregal to restrain mortgagee sale of the Buntine Road property by Perpetual. Application dismissed by Templeman J in CIV 2205 of 1997. This decision was not appealed against.

Martin CJ in CIV 2271 of 2008 ordered removal of caveats K644203 and K647788 and granted liberty to Mrs Farrell and Allregal to apply to rehear the application.

Application filed by Mrs Farrell and Allregal to rehear pursuant to liberty to apply in action CIV 2271 of 2008.

Perpetual as mortgagee in possession entered into contract of sale to sell the Buntine Road property to a third party. The sale price was $2,150,000 which was in accordance with a valuation obtained from a valuer. The proceeds were insufficient to discharge the total amount due to Perpetual. Carpaolo was paid nothing under the third mortgage.

Application by Mrs Farrell and Allregal dated 29 December 2008 in action CIV 2271 of 2008 dismissed by Martin CJ.

Mrs Farrell commenced appeal CACV 1 of 2009 against the decisions of the Chief Justice of 16 December 2008 and 2 January 2009.

Transfer of title of the Buntine Road property by Perpetual to a bona fide purchaser for value without notice.

Mr Waugh discharged from bankruptcy by operation of law.

6 Below is the chronology of events in relation to the Muston Grove property:

Mrs Farrell became registered proprietor of the Muston Grove property.

Mortgage F554514 granted to Adelaide Bank registered over the Muston Grove property.

Mrs Farrell granted a mortgage to Carpaolo over the Muston Grove property (G278979).

Carpaolo commenced Supreme Court action CIV 2250 of 2007 against Allregal and Mrs Farrell for debt recovery and possession of the Buntine Road property and the Muston Grove property.

Mrs Farrell lodged caveat K502779 claiming an estate or interest as registered proprietor to prevent improper dealings.

Master Sanderson granted judgment in favour of Carpaolo in Supreme Court action CIV 2250 of 2007 for $1,027,967.72 together with an order for possession of the Muston Grove property.

Mrs Farrell commenced appeal CACV 101 of 2008 against judgment of Master Sanderson.

Contract for sale of the Muston Grove property by Carpaolo as mortgagee in the sum of $1,025,000.

Mrs Farrell commenced action CIV 1726 of 2009 seeking orders to extend the operation of caveat K502779.

Mrs Farrell lodged caveat K917552 over land as a registered proprietor to prevent improper dealings.

Mrs Farrell commenced action CIV 2094 of 2009 seeking orders to extend the operation of caveat K917552.

Carpaolo transferred title to the Muston Grove property to third party purchaser.

After payment out to Adelaide Bank to obtain the discharge of its mortgage, Carpaolo received a net realisation of $659,693.62. This left a shortfall of $438,000 owing to Carpaolo.

There were sustainable grounds of appeal in each appeal

7 Order 70 r 2(1) RSC provides that a person under a disability cannot bring or make a claim in any proceedings except by a next friend and cannot defend or intervene in any proceedings or appear in any proceedings except by guardian ad litem. The prohibition in that rule cannot be dispensed with without a provision in the rules giving the court the power to do so: Doyle v The Commonwealth of Australia [1985] HCA 46; (1985) 156 CLR 510, 518. A court cannot ignore the prohibition against the continuation of a proceeding in the absence of a next friend or guardian ad litem. If the proceedings by or against a person under a disability is conducted without such a litigation guardian, then the person under a disability is in effect not heard: Murphy v Doman [2003] NSWCA 249; (2003) 58 NSWLR 51 [14], [43], [52].

8 Mr Ashdown in his opinion, concluded that the fact that the proceedings conducted in the proceedings under review were without the appointment of a litigation guardian meant that there was a miscarriage of justice and that prima facie Mrs Farrell had a right to have the judgment set aside to permit a rehearing on the merits: Murphy v Doman [48]. On that basis there were sustainable grounds of appeal in each of the three appeals.

However the appeals would have been dismissed

9 However, Mr Ashdown correctly noted in his opinion that the court on appeal would refuse relief if it was satisfied that a rehearing could not lead to a different result: Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141, 147; Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172 [28], [48] - [50]; Murphy v Doman [51].

10 In the underlying proceedings CIV 1788 of 2008, Mrs Farrell commenced proceedings while she was a person under a disability without the appointment of a next friend. The proceedings were therefore irregular. Mrs Farrell sought an order extending her caveat no K500974 in relation to the Buntine Road property. The proceedings were to extend the operation of the caveat. On 4 July 2008 the caveat lapsed pursuant to s 138B(2) of the Transfer of Land Act. The lapse occurred by reason of the statutory effect of the provisions and allowing an appeal could not give rise to a further hearing which could preserve or reinstate the caveat particularly where the property had been sold by Perpetual as mortgagee to a purchaser for value who now has indefeasible title under the Transfer of Land Act. That and other reasons expressed by counsel led him to the conclusion that there were no prospects of success in the appeal and that the appeal ought to be dismissed. Counsel expressed the opinion that the proposed settlement by way of dismissal of the appeal with no order as to costs inter partes is for the benefit of Mrs Farrell.

11 The originating summons issued by Perpetual was against Mrs Farrell being a person under a disability. The application related to caveats over the Buntine Road property. The Supreme Court ought to have declined to proceed further until such time as the appointment of a guardian ad litem for Mrs Farrell had been made. The decision and judgment entered was therefore prima facie irregular and liable to be set aside on the basis of miscarriage of justice. However, counsel considered that no materially different result would follow if the appeal were allowed and the underlying proceedings sent to trial or a final hearing. Even if the appeal continued, this court could not make an order restoring the caveats because the title to the Buntine Road property is now registered in the name of a purchaser who has indefeasible title. Counsel expressed the opinion that it is for the benefit of Mrs Farrell that the appeal be dismissed with no order as to costs inter partes.

12 The underlying proceedings in this case related to the Muston Grove property and were commenced by Carpaolo against Mrs Farrell who was a person under a disability. Carpaolo sought summary judgment for the debt owing to it and an order for possession. Summary judgment was granted by Master Sanderson for the debt and an order was made that possession of the Muston Grove property be given to Carpaolo. The action ought not to have proceeded until a guardian ad litem had been appointed. Prima facie there was a miscarriage of justice and the judgment would be set aside unless no materially different result would follow. Counsel having reviewed the material available to him, concluded that no different result would follow and that, in addition, any right to require an account from the mortgagee or payment of any surplus proceeds after discharge of the first and second registered mortgages, would be vested solely in the Trustee in Bankruptcy. The order for possession could not be reversed because the title to the property is now in the name of a purchaser and the title is indefeasible. Mrs Farrell's guardian also submitted that the part of the Carpaolo debt which Carpaolo has not recovered from the two property sales will hang like a 'sword' over Mrs Farrell's head (ts 93). That is not so. Mrs Farrell has been discharged from bankruptcy and is thereby freed from any claim for a debt which was unsecured. Counsel's opinion is that it is for the benefit of Mrs Farrell that the appeal be dismissed with no order as to costs inter partes.

13 Before expressing a conclusion about the application, I must mention that Mrs Farrell's ex-husband, Mr Waugh, who has been appointed by SAT as Mrs Farrell's guardian under the Guardianship and Administration Act 1990 (WA), asked the court if he could make submissions in relation to the application. Mr Waugh is not a lawyer and he was involved in the financial arrangements which form the background to these appeals. However, the guardianship order made by SAT authorised Mr Waugh to liaise with the Public Trustee on Mrs Farrell's behalf about the litigation. Mr Waugh was provided a copy of Mr Ashdown's opinion and was informed that he would be permitted to make comments upon it. Strictly speaking, Mr Waugh had no right to make submissions but giving him the opportunity to do so on Mrs Farrell's behalf was an indulgence which caused no injustice and gave me the opportunity to explain to Mrs Farrell and Mr Waugh why Mr Ashdown was of the view that the appeals should be settled.

14 Mr Waugh sent the court a 98 page response to Mr Ashdown's opinion. This in turn referenced a great many documents. The response has been considered by Mr Ashdown. The comments do not lead Mr Ashdown to alter the opinion he has expressed about the proposed settlement of the appeals (ts 86).

15 Many parts of Mr Waugh's response must be disregarded. He descends into expressions of opinion and comments which in many areas do not bear at all upon the decision about whether the appeals should be settled. For example, he expresses a view about the decision of Bongiorno J in the case of Farrell v CSL Ltd [2004] VSC 308. That case and the outcome was mentioned by Mr Ashdown for limited purposes, one being the adverse comments made by Bongiorno J about Mrs Farrell's credibility. Mr Waugh has dedicated many pages to the reasons for judgment of Bongiorno J. Mr Waugh asserts that Bongiorno J was 'wrong' or 'failed to understand' aspects of Mrs Farrell's case (see pages 48, 49 and 50) or made 'misinformed comments' (page 78). Mr Waugh refers to various paragraphs in the reasons and asserted that he 'totally rejected' them (page 79). Mr Waugh's comments in this regard must be entirely disregarded.

16 In his response, Mr Waugh also claims that in relation to his dealings with Perpetual (the mortgagee in possession and a respondent in CACV 1 of 2009) that persons attempted to 'sabotage my good reputation' (page 63). These comments are irrelevant and argumentative and must be disregarded.

17 There is one point however, that Mr Waugh raises which must be addressed. Rule 60 of the Court of Appeal (Supreme Court) Rules states that the application for approval of a settlement or compromise must be filed with an opinion of an 'independent' lawyer. Mr Waugh contends that Mr Ashdown is not an 'independent' lawyer because he has been retained by the Public Trustee. That fact alone does not mean he is not independent. Whenever a lawyer is retained to provide an opinion in support of a compromise, he or she will be retained by the party making the application.

18 The word 'independent' has its ordinary meaning. It means 'not influenced by others in manners of opinion, conduct, etc; thinking or acting for one's self ... not subject to another's authority or jurisdiction; autonomous; free ... not influenced by the thought or action of others' The Macquarie Dictionary.

19 There may be cases where a court perceives that a lawyer providing an opinion has some relationship with the litigation guardian which leads to the conclusion that the lawyer is not independent. This would be of concern in circumstances where there may be a suspicion that the litigation guardian may not have the interests of the person represented at heart. This is not such a case. The Public Trustee is a statutory body. Mr Ashdown is a member of the independent bar and he has prepared an opinion which has closely examined the merits of the three appeals. Mr Waugh contends that Mr Ashdown is not independent because he appeared on behalf of the Public Trustee at hearings in early 2009 where there was a question whether the Supreme Court would appoint the Public Trustee or the Public Advocate as the litigation guardian to represent Mrs Farrell's interests and whether the Public Trustee could be appointed by the court in circumstances where it did not consent to the appointment. Mr Ashdown did appear when those matters were considered. They were matters involving the power of this court to appoint the Public Trustee. Once those matters were resolved, Mr Ashdown was retained to advise on the merits of the appeals and whether they should be compromised. My conclusion is that Mr Ashdown's opinion is that of an 'independent' lawyer. Even if I had reached a conclusion that on a proper construction of r 60 Mr Ashdown was not independent, I would have been prepared to act on Mr Ashdown's opinion and make an order under r 60 dispensing with the need for an opinion of an independent lawyer. This is because of the correctness of the opinions he has expressed about the fact that no different orders would be made if the appeals proceeded to a hearing.

20 Mr Waugh also refers to an affidavit filed by Mr Skinner, in March 2009 (page 8). Mr Skinner is employed by the Public Trustee. Mr Skinner was there addressing the concerns of the Public Trustee about its appointment as litigation guardian. The affidavit stated that the Public Trustee did not have the capacity to take on the affairs of Mrs Farrell 'on ... short notice' and that the conduct of the actions in his view would divert resources of the legal section of the Public Trustee from 'more deserving cases'.

21 Mr Waugh submitted that the latter remark was 'disturbing'. Mr Skinner's reference to 'more deserving cases' was clearly to cases more deserving of immediate attention. The Public Trustee was not able to deal with the present appeals immediately but, given time (which was given), the Public Trustee was able to thoroughly examine the history of the litigation. I am satisfied that the Public Trustee has properly taken on the task of gathering and assembling the information necessary to brief Mr Ashdown, and properly considered and acted upon his opinion.

22 I am satisfied that counsel in his opinion, has taken into account all relevant considerations. The next friend wishes to settle. The proposed settlement involving a dismissal of all appeals by Mrs Farrell on the basis that there be no inter partes costs order is for the benefit of Mrs Farrell because if the appeals proceeded to a hearing then it is likely they would be dismissed with an order for costs against Mrs Farrell. I approve the settlement of Mrs Farrell's three appeals on the terms that:

(b) there be no order as to costs of the appeal inter partes;

(c) the Public Trustee have liberty to apply to a single judge of the Court of Appeal with respect to any order for costs against a non-party to the appeal.