Settled litigation includes vacant possession order and money judgment
Australia’s Federal Court has decided to protect the confidentiality of an affidavit of the appellant’s solicitor, which included an opinion of two lawyers on whether settling the proceedings would serve the legally incapacitated appellant’s best interests.
In Camarda (by her Litigation Guardian) v Allen (Trustee), [2025] FCA 1162, the 91-year-old appellant had dementia and poor physical health. She resided in a property in Michael Street, Beaconsfield, for more than 35 years.
An October 2016 sequestration order covered the estate of one of the appellant's daughters. In October 2022, the receiver issued a notice under s 139ZQ of the Bankruptcy Act 1966 (Cth) and requested the payment of $783,200 to the bankrupt estate.
Based on the s 139ZQ notice, the daughter’s trustee in bankruptcy applied for the appellant to vacate her home so he could sell it.
A judge of the Federal Circuit and Family Court of Australia’s second division (FCFCOA) ordered the appellant to vacate her residence in the trustee’s favour and pay $783,200.
On 25 November 2024, the State Administrative Tribunal (SAT) appointed the appellant’s friend as a limited estate administrator and guardian based on the appellant’s mental disability and inability to reach reasonable decisions on estate matters.
On 27 November 2024, the administrator brought a notice of appeal relating to the FCFCOA’s orders. The parties eventually agreed to resolve the proceeding through a deed of settlement and release.
Last August, the SAT revoked the limited administration order and appointed the friend as plenary administrator of the appellant's estate, with all the powers and duties under the Guardianship and Administration Act 1990 (WA).
The administrator applied to approve the settlement terms under r 9.70 of the Federal Court Rules 2011 (Cth).
An affidavit of the appellant’s solicitor attached a copy of a written opinion of the appellant’s two lawyers. The opinion asserted that the settlement agreement benefited the appellant, served her best interests, and reasonably compromised the issues in the underlying proceeding and appeal.
The administrator sought an order for the court to treat the opinion as confidential and refrain from disclosing it or making it publicly available.
According to the administrator, given that the opinion aimed to help the court exercise its supervisory jurisdiction, making it available to the trustee as the other party to the proceeding would likely defeat that purpose, considering that the court might not approve the settlement.
The Federal Court of Australia approved the settlement in the deed as beneficial to the appellant's best interests and issued a three-year confidentiality order under s 37AF of the Federal Court of Australia Act 1976.
The court noted that the trustee did not oppose the issuance of a confidentiality order. The court determined that ensuring confidentiality would prevent prejudice to the proper administration of justice.
The court ruled that counsel’s detailed opinion comprehensively weighed all possibilities and independently considered what would benefit the appellant. The court afforded the opinion considerable weight when determining that the settlement would serve her best interests.
The court accepted that the appeal might have some merit. However, the court held that rejecting the settlement would likely lead to significant litigation, which might consume the appellant’s remaining years, negatively impact her psychological health, and stress out her family members.
The court added that declining the settlement would enable the trustee to pursue enforcement of the FCFCOA judgment or strive for a similar outcome in other ways. The court said these possibilities were unappealing to anybody, especially someone with the appellant’s circumstances.
