Guardianship stems from the parens patriae jurisdiction, under which the sovereign has a duty to safeguard those unable to protect themselves. The Guardianship and Administration Act 2019 (Vic) provides a structured framework for exercising this protective role. It defines decision-making capacity as the ability to:
- comprehend the relevant information and the consequences of a decision,
- retain that information,
- apply or weigh the information when making a choice, and
- communicate the decision.
Litigation Guardians
A litigation guardian is appointed to protect the court’s processes and to safeguard the interests of a litigant who lacks capacity, thereby preventing them from being disadvantaged. The litigation guardian steps into the place of the litigant, giving instructions to the lawyer on their behalf. The role exists to safeguard the integrity of proceedings and to protect the rights of individuals who would otherwise be at a disadvantage in the litigation process.
At common law, the guardian has a duty to ensure that all proper and legitimate steps are taken for the person’s representation. As a substitute decision-maker, the guardian must act in what they reasonably believe to be the party’s best interests.
A litigation guardian is bound by the same obligations as a lawyer in conducting proceedings, including the implied undertakings in rule 5 of the UCPR. The Court may remove a litigation guardian if the interests of justice require.
Risks of Acting as Litigation Guardian
At common law, a litigation guardian:
- Is personally liable for the solicitor’s costs engaged on behalf of the adult.
- If acting for a plaintiff, will usually be personally liable for any costs awarded to the defendant.
- If acting for a defendant, the guardian is generally not personally liable for the plaintiff’s costs, unless the guardian has engaged in misconduct.
- Is entitled to seek indemnity from the adult’s estate for costs and expenses properly incurred.
Removal of the litigation guardian
A Court can remove a litigation guardian under r 15.03(4)(a) of the Supreme Court (General Civil Procedure) Rules 2025 (Vic).
The Court will act if continuing the appointment is not in the best interests of the person under a disability.
Check the Rules – Review r 15.03 to understand the appointment and removal process.
Apply to the Court – File a formal application in the Supreme Court of Victoria seeking the removal of the guardian.
Provide Supporting Evidence – Show why removal is appropriate, such as:
- The party has regained capacity and no longer needs a guardian.
- The current guardian is unsuitable or conflicted, and a different guardian is preferable.
- Other circumstances exist that make removal necessary for the person’s welfare.
Court’s Decision – The Court will weigh the evidence and may order the removal or substitution of the guardian.
Key Principles
Guardianship is typically required when a person lacks legal capacity due to age, illness, or cognitive impairment; however, this may change over time.
The best interests of the person under a disability are paramount.
Seek Legal advice to ensure the correct preparation of the guardianship application.
Reid v Reid [2025] VSC 566
Yvonne Lynton Reid (by her litigation guardian Troy Bryan Lowther) (the first defendant) is Lynton Soren Reid’s (the plaintiff) elderly mother; Troy Bryan Lowther (the second defendant) is the plaintiff’s brother-in-law, and the first defendant’s son-in-law appointed in July 2021 as the first defendant’s attorney under an Enduring Power of Attorney (EPOA), covering both personal and financial matters.
Plaintiff’s Claim to the Property
The plaintiff claims an equitable interest in the Hobart property at 156 Brisbane Street, asserting that he signed the contract of sale and paid the deposit when his parents purchased the Brisbane Street Property in July 2001.
The plaintiff claims that he and his parents formed the common intention in July 2001 that:
(a) The plaintiff’s parents would assist him in obtaining the loan for the purchase of the Brisbane Street Property;
(b) Use rental income received from multiple tenancies at the Brisbane Street Property to pay the mortgage instalments.
(c) The plaintiff would be responsible for advertising for, selecting and managing tenants;
(d) The plaintiff would be responsible for all maintenance works at his own expense;
(e) The plaintiff would renovate the Brisbane Street Property at his own expense;
(f) the plaintiff would be entitled to reside at the Brisbane Street Property rent-free; and
(g) The plaintiff would be the full beneficial owner of the Brisbane Street Property as his investment property.
Alternatively, the plaintiff argues that a joint endeavour was entered into with his parents in 2001, supported by their representation that the property would become his investment.
Ownership and Loan Arrangements
In late 2001, the plaintiff’s parents obtained a Westpac loan (secured by both the Brisbane Street property and their family home).
The title was registered in the name of the plaintiff’s parents as joint tenants in November 2001.
The plaintiff only discovered in 2003 that he was not a registered proprietor.
Plaintiff’s Contributions
Between 2001 and 2019, the plaintiff claims to have:
- Managed tenants and maintenance.
- Renovated units 1–4 and started renovating a fifth unit.
The plaintiff alleges that he relied on the arrangement to his detriment, contributing to the joint endeavour and acting on the promise of beneficial ownership.
Dealings by the Attorney
Following the death of the first defendant’s husband in October 2011, the second defendant conducted various transactions related to the Brisbane Street Property on behalf of the first defendant, acting as her attorney under the POA.
(a) In May 2022, refinanced the loan that Westpac provided initially for the Brisbane Street Property and obtained an additional loan from the Bendigo & Adelaide Bank.
(b) In October 2022:
(i) registered the first defendant as the sole owner of the Brisbane Street Property through survivorship;
(ii) paid off the mortgage held by Westpac on the family home;
(iii) paid off the mortgage secured to Westpac on the Brisbane Street Property; and
(iv) established a new mortgage on the Brisbane Street Property in favour of Bendigo & Adelaide Bank, related to the refinanced Westpac loan and to secure the new amount borrowed.
(c) On 2 February 2024, executed a contract to sell the Brisbane Street Property to a third party for the amount of $1,112,000.
The sale of the Brisbane Street Property closed on 19 April 2024. The plaintiff asserts that either the first defendant or the second defendant, in his role as her attorney, is holding the proceeds of the sale or their recoverable proceeds in trust for the plaintiff, which constitutes a common intention constructive trust, a Baumgartner trust, and/or a constructive trust arising from proprietary estoppel.
Additionally, the plaintiff makes a separate claim against the second defendant, stating that as the first defendant’s attorney, he knowingly facilitated the first defendant’s breaches of trust and is therefore ‘accessorially’ liable as a constructive trustee, as well as liable for equitable compensation.
The second defendant sought summary judgment against the plaintiff, arguing the plaintiff’s accessory liability claim (knowing procurement of breach of trust) had no real prospect of success.
Although filed later, the second defendant’s application was dealt with first because, if successful, it would have made the plaintiff’s summons unnecessary.
The second defendant contended that liability must fall within the two limbs of Barnes v Addy (1874) LR 9 Ch App 244, requiring proof of dishonest assistance.
Goulden AsJ disagreed, noting Farah Constructions v Say-Dee(2007) 230 CLR 89 and later authority (including Pittmore Pty Ltd v Chan; Chan v Tan [2020] NSWCA 344) confirm that liability is not limited to Barnes v Addy (1874) LR 9 Ch App 244; a distinct ground exists where a third party knowingly induces or procures a breach of trust or fiduciary duty.
Baden v Société Générale pour Favoriser le Développement du Commerce et de l’Industrie en France [1983] BCLC 325 is a leading English trusts law case dealing with breach of trust and the knowing receipt of trust property. The case is most notable for establishing the so-called “Baden scale” of knowledge, formulated by Peter Gibson J, which sets out five levels of knowledge or notice:
- Actual knowledge.
- Deliberately shutting one’s eyes to the obvious (also called Nelsonian knowledge).
- Recklessly failing to inquire where an honest and reasonable person would have done so.
- Awareness of circumstances that would indicate the relevant facts to an honest and reasonable person.
- Awareness of circumstances requiring inquiry, i.e. traditional constructive notice.
Proof of dishonesty is not required —knowledge within the first four Baden categories suffices.
The plaintiff’s pleadings and evidence met the two elements of this form of liability:
- intentional conduct by the second defendant that caused the alleged breach; and
- knowledge that his conduct was bringing about that breach.
There were clear factual disputes—particularly as to the second defendant’s knowledge—which could only be resolved at trial, not summarily.
Applications Before the Court
Plaintiff’s Summons (6 March 2025):
Sought the removal of the second defendant as litigation guardian for the first defendant and appointment of a replacement. Requested orders for:
- Reimbursement of the first defendant if the second defendant had claimed indemnity from her for his legal costs while acting as litigation guardian/attorney.
- Costs of the application if successful.
Second Defendant’s Summons (11 April 2025):
Sought summary judgment dismissing the plaintiff’s claim against him, or that the claim be struck out, with costs.
Also sought dismissal for alleged non-compliance with discovery orders, but the plaintiff did not pursue this ground at the hearing.
Goulden AsJ held [at 26] that the plaintiff’s case had a real prospect of success.
“I see no reason in principle for treating a third party who acts with knowledge of facts giving rise to a constructive trust differently to one who acts with knowledge of an express trust.”
Given the complexity and contested facts, it was inappropriate to determine liability on a summary basis. The Court:
- Dismissed the second defendant’s application for summary judgment.
- Removed the second defendant as litigation guardian for the first defendant under r 15.03(4)(a) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic).
- Appointed Mr Lachlan Vallance, solicitor, as the replacement litigation guardian under r 15.03(4)(b) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic).
- Reserved the question of costs and the additional matters raised in the plaintiff’s summons for later determination after hearing further from the parties.