Federal Court of Australia

Camarda (by her Litigation Guardian) v Allen (Trustee) [2025] FCA 1162

ORDERS

THE COURT NOTES THAT:

A.    The parties have agreed to a settlement of the proceeding and the disputes connected with it on the terms of a Deed of Settlement and Release dated 14 July 2025 executed by the litigation guardian of the appellant and by the respondent (Settlement).

THE COURT ORDERS THAT:

1.    Pursuant to r 1.34 of the Federal Court Rules 2011 (Cth), for the purposes of the application for approval of the Settlement, compliance with the requirement in r 9.71(2)(c) of the Rules is dispensed with.

2.    Pursuant to r 9.70 of the Federal Court Rules, the Settlement (as set out in the Deed of Settlement and Release appearing at pages 6 to 29 of annexure EMC4 to the affidavit of Elena Maria Collica filed 16 September 2025 is approved.

3.    Subject to paragraph 4 below, pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth), for a period of three years from the date of this order the affidavit of Gabrielle Lindsay filed 15 September 2025 (including annexures) (Confidential Affidavit) is to be treated as confidential to the appellant and until further order:

(a)    will be marked as confidential to the appellant on the Court's electronic court file; and

(b)    will not be available for public inspection, disclosed in open court or disclosed in the open part of any court transcript.

4.    The appellant (by her litigation guardian) may disclose the terms of the Confidential Affidavit to the State Administrative Tribunal of Western Australia, to the extent necessary in any proceeding concerning the administration of the affairs of the appellant pursuant to the Guardianship and Administration Act 1990 (WA).

5.    There is no order as to the costs of and incidental to the application for approval of the Settlement.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

(edited from the transcript)

JACKSON J:

1    This is an application to approve the terms of a settlement of the proceeding on behalf of the appellant, who is under a legal incapacity.

Background

2    The appellant, Francesca Camarda, is 91 years old. Mrs Camarda received a minimal primary school education in Sicily before she emigrated to Australia at the age of 16. She cannot read or write in English. She married her husband, Francesco Camarda, shortly after emigrating.

3    Mrs Camarda is in poor physical health and suffers from dementia. She has lived in her home in Michael Street, Beaconsfield (Property), for over 35 years. During that time Mr Camarda passed away, and in 2022 Mrs Camarda also experienced the sudden death of a son.

4    In October 2016, a sequestration order was made over the estate of one of Mrs Camarda's daughters, Maria Camarda. On 12 October 2022, the Official Receiver issued a notice under s 139ZQ of the Bankruptcy Act 1966 (Cth) seeking payment of $783,200 to the bankrupt estate.

5    The background to the notice, which needs only be sketched broadly, is that in 1999, Mrs Camarda allegedly transferred the Property to Maria Camarda, subject to an estate for life. In October 2015, Maria Camarda allegedly transferred the Property back to Mrs Camarda for no monetary consideration. By the s 139ZQ notice, Maria Camarda's trustee in bankruptcy, the respondent Mr Allen (Trustee), claimed that the 2015 transfer was void as against the Trustee, because it was at an undervalue and for the purpose of defeating Maria Camarda's creditors. There is a dispute about whether either of these transfers was legally ineffective due to fraud, and also a dispute about whether Mrs Camarda understood either transaction.

6    Assuming the s 139ZQ notice was served on Mrs Camarda, its effect would have been to require her to pay the sum claimed, and also to create a charge of the Property in favour of the Trustee, giving him a power of sale: s 139ZQ(8) and s 139ZR. If Mrs Camarda wanted to avoid those consequences, it was incumbent on her to apply to a court under s 139ZS to set the notice aside. There is in fact a dispute about whether the s 139ZQ notice was ever served on her. At any rate, no application to set the notice aside was made.

7    On 1 November 2024, a judge of the Federal Circuit and Family Court of Australia (Division 2) (Circuit Court) heard an application by the Trustee, relying on the s 139ZQ notice, for Mrs Camarda to be required to vacate the Property so that it could be sold. Mrs Camarda had no legal representation and did not appear at the hearing, although there was correspondence before the Court seeking an adjournment of the hearing on the basis of Mrs Camarda's health and difficulties that had been experienced in obtaining legal representation. Also before the Circuit Court was an email from the pro bono clearing house Law Access WA, saying that it could not organise legal assistance for Mrs Camarda because, after speaking to her on the telephone with an interpreter, Law Access could not be sure that Mrs Camarda could understand the service it provided and the legal issue confronting her. Law Access understood that the Circuit Court had invited an application for the appointment of a litigation guardian to represent Mrs Camarda in the Circuit Court proceeding. The Circuit Court was informed that Mrs Camarda's family was in the process of applying to have a guardian appointed for her.

8    Although the matters just mentioned were before the Circuit Court, at the hearing on 1 November 2024 the judge refused to grant an adjournment to permit Mrs Camarda to obtain legal assistance or to permit the appointment of a litigation representative. The judge proceeded to judgment on terms requiring Mrs Camarda to provide vacant possession of the Property to the Trustee within thirty days. A money judgment for $783,200 was also entered against her.

9    On 25 November 2024 the State Administrative Tribunal (SAT) appointed Elena Collica, a friend of Mrs Camarda, as limited administrator of her estate and a limited guardian. The appointment was made on the basis that Mrs Camarda was unable, by reason of a mental disability, to make reasonable judgements in respect of matters relating to a part of her estate. Among the functions Ms Collica was authorised to perform as limited administrator were to bring legal proceedings in relation to the Circuit Court proceeding and, if appropriate, to settle such proceedings.

10    On 27 November 2024 Ms Collica, pursuant to that appointment, lodged a notice of appeal from the Circuit Court's orders on Mrs Camarda's behalf. The Trustee has given successive undertakings with the effect that he has not sought to enforce the orders so as to remove Mrs Camarda from her home. This Court subsequently made an order pursuant to r 9.63(1) of the Federal Court Rules 2011 (Cth) appointing Ms Collica as Mrs Camarda's litigation representative, with effect from the date of commencement of the appeal.

11    The Court also issued a pro bono referral certificate under r 4.12. This was taken up by Nunzio Lucarelli KC and, ultimately, also by James Paterson as junior counsel and Blackwall Legal LLP as instructing solicitors. The Court is grateful to these practitioners for the assistance they have provided.

12    An amended notice of appeal was filed on 4 April 2025. The matter was referred to a mediation conducted by a Registrar of the Court. After the mediation conference on 6 June 2025, and further discussions and negotiations, the parties agreed to settle the proceeding on terms set out in a Deed of Settlement and Release. The Deed was executed by Ms Collica on Mrs Camarda's behalf and by the Trustee on 14 July 2025.

13    On 22 August 2025, the SAT revoked the limited administration order and replaced it with the appointment of Ms Collica as the plenary administrator of Mrs Camarda's estate, with all the powers and duties conferred by the Guardianship and Administration Act 1990 (WA).

14    Under r 9.70 of the Federal Court Rules, Ms Collica now applies for approval of the agreement made in the Deed.

The terms of settlement

15    The Deed provides for the matter to settle on the following terms.

16    Mrs Camarda agrees to pay the Trustee up to $525,000 in full and final settlement of the dispute, which is defined to include the Circuit Court proceeding, this appeal, the s 139ZQ notice and the judgment of the Circuit Court. The money will be paid from the net proceeds of the sale of the Property. Mrs Camarda (or those assisting her) will be required to put the Property on the market for sale by a registered real estate agent. The Property is to be sold for a specified minimum price and on certain other terms as to settlement of the sale and payment of a deposit. But if an unconditional offer to sell for at least the minimum price has not been received by a specified date, Mrs Camarda may sell the Property for the next highest unconditional offer received (the Trustee's consent is necessary for this, which the Trustee cannot unreasonably withhold).

17    If a contract for the sale of the Property on these terms is not achieved by the specified end date, Mrs Camarda will be required to vacate the property within 14 days of receipt of a notice from the Trustee that he intends to take vacant possession and sell the Property. In that event, the Trustee is under an obligation to use best endeavours to maximise the price obtained for the Property.

18    The proceeds of sale are to be distributed firstly in payment of the expenses of the sale, secondly in payment of outstanding rates, taxes and charges in respect of the Property, thirdly in satisfaction of a debt that is secured by a mortgage of the Property to a bank, fourthly in payment of the settlement sum due to the Trustee, and fifthly by payment of any surplus to Mrs Camarda.

19    If the proceeds of the sale of the Property are insufficient to pay the full settlement sum of $525,000, the Trustee must accept the lesser sum in full and final settlement.

20    Once the settlement sum is paid, the parties will lodge consent orders setting aside the judgment of the Circuit Court and dismissing this appeal, both with no orders as to costs. At the same time there will be a mutual release and discharge from all claims connected with the dispute.

Approval of a settlement

21    Where the approval of a settlement by the Court is required under r 9.70 of the Federal Court Rules, the application must be accompanied by an affidavit stating the material facts on which the application relies and annexing the agreement that is sought to be approved and the opinion of an independent lawyer that the agreement is in the best interests of the person under the legal incapacity: r 9.71.

22    The requirement is for a genuinely independent legal opinion as to whether the compromise is reasonable and in the best interests of the person under disability. If counsel providing that opinion has acted for the party in the proceeding, the requirement for independence can be satisfied if the opinion can be seen to be informed by counsel's obligations to assist the Court, and not in furtherance of their duties to the party: see Wade v State of Victoria (No 2) [2012] FCA 1080 at [9] (Bromberg J); Lewis v The State of Victoria (Department of Education and Training) [2019] FCA 714 at [13]-[14] (Kenny J).

23    In any event it is open to the Court under r 1.34 of the Federal Court Rules to dispense with the requirement for the lawyer to be independent. That can be done where, for example, the opinion is clear and well-reasoned and it would be a product of unnecessary and disproportionate expense to require another lawyer to cover the same ground: Modra v State of Victoria (Department of Human Services Victoria & Department of Education and Early Childhood Development) [2013] FCA 1041 at [9] (Tracey J); see also West (by his litigation representative Toms) v State of Victoria (Department of Education and Training) [2024] FCA 871 at [22] (Anderson J).

24    The central consideration for the Court is whether the proposed settlement best serves the interests of the person under legal incapacity. The Court has a responsibility to determine this for itself. The Court is concerned only with the benefit of that person: Lewis at [14]-[16]; Scandolera v State of Victoria [2015] FCA 1451 at [26]-[27] (Mortimer J); Young v State of Victoria (Department of Education and Training) [2018] FCA 1124 at [11] (Bromberg J).

25    In considering whether the settlement is beneficial, the Court may take into account:

(a)    likely outcomes if the matter proceeds to trial;

(b)    risks, costs, and burdens inherent in litigation, including emotional and psychological strain; and

(c)    the adequacy and advantages of the compromise, both tangible and intangible, including certainty, finality and the avoidance of distress and personal or familial pressures upon the applicant, as well as the avoidance of further expense.

See Young at [12]; Scandolera at [29], [32].

26    The Court benefits from the lawyer's opinion, which is expected to be based on full access to relevant facts and evidence. But it is not obliged to agree with the opinion, and may still reject a settlement, even when the opinion supports it: see Scandolera at [28]. In the ordinary case, however, it is appropriate for the Court to give considerable weight to the assessment of the applicant's legal advisers, provided the opinion is seen to be independent and objective: Wade at [6]; Modra at [12]; Young at [12].

Consideration

27    The evidence filed on behalf of Mrs Camarda includes an affidavit of Ms Collica setting out the material facts and an affidavit of Mrs Camarda's solicitor attaching the Deed. The summary of the terms of settlement set out above is taken from the Deed.

28    The solicitor's affidavit also attaches a copy of a written opinion of Mr Lucarelli and Mr Paterson dated 12 September 2025, to the effect that the settlement recorded in the Deed is for the benefit of Mrs Camarda, is in her best interests, and represents a reasonable compromise of the issues in the primary proceeding and this appeal.

29    Ms Collica seeks an order that the opinion be treated as confidential to her and is not to be disclosed or publicly available. This is on the basis that it is provided in order to assist the Court in exercising its supervisory jurisdiction but, since it is possible that the settlement is not approved, that purpose is likely to be defeated if the opinion could become available to the Trustee as the other party to the litigation.

30    The Trustee does not oppose this order. I am satisfied on the basis just outlined that it is necessary to prevent prejudice to the proper administration of justice to protect the confidentiality of the opinion in the manner proposed: see e.g. James v WorkPower Inc [2019] FCA 1239 at [18] (Mortimer J). Orders to that effect will be made under s 37AF of the Federal Court of Australia Act 1976 (Cth), on the ground specified in s 37AG(1)(a). The duration of the order needs to be specified in it: s 37AJ. Three years is appropriate.

31    The opinion of Mr Lucarelli and Mr Paterson is comprehensive, detailed and closely reasoned. My assessment is that it approaches the question from the perspective of an independent consideration of what is in Mrs Camarda's best interests. In the context of a matter of this kind, including the sum of money at stake, it is appropriate to dispense with the requirement of r 9.71(2)(c) of the Federal Court Rules.

32    In view of the confidentiality order, it is appropriate not to disclose very much about the contents of the opinion. Suffice to say that I give it considerable weight in reaching the view that the settlement recorded in the Deed is indeed in Mrs Camarda's best interests.

33    The circumstances set out at the beginning of this judgment provide important context for considering whether the settlement is in Mrs Camarda's best interests. While there may be some merit in the appeal, the reality is that without the settlement, it will still be open to the Trustee, in performance of his duties, to pursue enforcement of the judgment of the Circuit Court or, if that were to be set aside, to pursue the same outcome through other means. That would likely to produce significant ongoing litigation.

34    These possibilities are all comprehensively considered in the opinion. They present an unattractive prospect for any individual to face, but for a person in Mrs Camarda's circumstances they would be lamentable indeed. There would be every prospect that her remaining years will be taken up by litigation. While she may not be capable of understanding that litigation, it is likely that the stress and difficulties it would cause to the family members around her would detrimentally affect her psychological wellbeing.

35    I have taken into account that the settlement means that Mrs Camarda will sell the Property, her home of over 35 years, or it will be sold by the Trustee. But the settlement means that there are good prospects of the sale taking place on terms that are of the choosing of Mrs Camarda's administrator and Mrs Camarda's family. While there is no detailed valuation evidence, evidence as to a range of possible values of the Property is before the Court, giving reason to think that a surplus will be available after the sale to permit Mrs Camarda to be moved into aged care. It also provides a measure of certainty that the terms of the settlement effectively cap Mrs Camarda's liability to the Trustee at the net proceeds of the sale of the Property (up to $525,000).

36    For those reasons, I will make orders as sought approving the settlement.

Associate:

Dated:    22 September 2025