Low cost options to resolve disputes

Proposal 8–1              State and territory tribunals should have jurisdiction to resolve family disputes involving residential property under an ‘assets for care’ arrangement.

8.36       Tribunals should be given jurisdiction over disputes with respect to residential property that is, or has been, the principal place of residence of one or more of the parties to the assets for care arrangement. Access to a tribunal offers a low cost and less formal forum for dispute resolution, in addition to the existing avenues of seeking legal and equitable remedies through the courts. Tribunals are able to resolve disputes in a non-legalistic fashion without regard to formal pleadings and affidavits. This proposal seeks to provide an alternative avenue for dispute resolution and would otherwise not disturb existing legal and equitable doctrines. 

8.37       The tribunal, consistent with the approach in Victoria (see below), would consider the general law of property, but would have a broader jurisdiction to award compensation having regard to contributions of both parties made under the ‘assets for care’ arrangement. In particular, the tribunal would consider the care and support provided by all parties under an ‘assets for care’ arrangements as well as the financial contribution to the property.

8.38       Where the tribunal is satisfied that a party has suffered loss as a consequence of a breakdown of a family agreement, the tribunal should award compensation that is just and fair having regard to the financial and non-financial contribution of the parties.

8.39       Consistent with the tribunal’s role to provide a quick, simple and informal forum for dispute resolution, the proposal is limited to disputes over residential property. The proposal specifically excludes disputes involving family businesses and farms, and focuses on domestic disputes involving residential property under assets for care arrangements. The more commercial arrangements are better suited to formal adjudication through the courts.

8.40       Often a failed family agreement may involve an older person, their child and their child’s partner. Where the child and their partner are separated and seeking to resolve a property dispute under the Family Law Act 1975 (Cth), the older person may seek to protect their interest in the property by joining proceedings under the Family Law Act 1975 (Cth). This proposal does not seek to interfere with this jurisdiction.

The Victorian approach

8.41       The proposal builds on, in part, amendments to the Property Law Act (1958) (Vic) (PLA) in 2006, which gave VCAT a statutory jurisdiction to resolve disputes between co-owners of land and goods. Under the PLA, VCAT may make any order it thinks fit to ensure that a just and fair sale or division of land or goods occurs.[38] The tribunal’s jurisdiction over property disputes between co-owners has an uncapped monetary value.

8.42       Notwithstanding the flexibility to make any order that the tribunal considers ‘just and fair,’ VCAT does not ignore the general law of property (which is outlined above). As Senior Member Riegler explained:

Although the Act does not expressly state that the Tribunal’s discretion is to be applied in accordance with the general law, I am of the opinion that to simply determine the issues based on what the Tribunal may, from time to time, consider to be just and fair without having regard to the general law is not an outcome that I consider to be just and fair. The public expect decisions of the Tribunal to be consistent, in terms of applying the law to the facts as found. To disregard the general law may lead to inconsistency in the decisions of the Tribunal which may be difficult to justify on any legal basis.[39]

8.43       VCAT has confirmed that the PLA gives it jurisdiction to make orders with respect to equitable, as well as legal, co-owners.[40] The broad statutory mandate gives VCAT considerable flexibility to arrive at a just and fair sale of the land and a division of the proceeds and/or division of land. Justice Connect observed that:

VCAT can order compensation, reimbursement or adjustments to interests between the co-owners reflecting each co-owner’s individual contribution to the property. Contributions may be made through improvements to the property and payment of maintenance costs, rates and mortgage repayments. Conversely, interests may be adjusted to take into account damage caused to the property and the benefit that one co-owner may have had of exclusive possession.[41]

8.44       One of the particular advantages of VCAT having this jurisdiction, is that it gives the parties access to alternative dispute resolution without going through a number of pre-trial steps, which may be required in the Supreme Courts. VCAT may seek to resolve disputes through mediation or compulsory conferences.[42] Compulsory conferences are similar to mediations in that they are pre-trial, confidential, and without prejudice facilitated discussions, designed to assist the parties to resolve their dispute.[43] Unlike mediation, compulsory conferences are only conducted by tribunal members and the role of the tribunal member is to actively assist the parties to reach settlement. As set out in a VCAT Practice Note

at a compulsory conference the Tribunal Member may express an opinion on the parties’ prospects in the case, or on relative strengths and weaknesses of a party’s case. The Member will exercise this power if the Member considers it to be of assistance in promoting settlement.[44]

8.45       This more interventionist approach is better suited to disputes regarding family agreements, where there is often a significant power imbalance between the parties. SRV stressed the value of the tribunal’s ADR processes in proving a forum in which family members are required to sit down and resolve disputes. Their submission highlighted the extent to which these disputes may be resolved through ADR without needing to be adjudicated by the tribunal.[45]

Support for dispute resolution by a tribunal

8.46       CLCs and elder abuse advice services, including those with experience of the Victorian approach, support tribunals having jurisdiction over disputes following the breakdown of family agreements.[46] ARNLA, for example, noted that a ‘tribunal may be a preferable forum to hear and determine disputes about family agreements as tribunals are considered to be less expensive, more expedient, and less formal than courts.’[47]

8.47       Similarly, Senior Rights Service suggested that:

It would be beneficial to have a forum other than the Supreme Court, such as the NSW Civil and Administrative Tribunal, for property orders to be made in relation to family agreements to reduce time, cost, and stress for older people in bringing proceedings against family members.[48]

8.48       SRV highlighted the value of a tribunal process in assisting older people to resolve failed family agreements:

This jurisdictional change [in Victoria] has provided ‘co-owners’ with a much greater ability to institute proceedings to resolve disputes though less expensive and onerous processes than previously existed for Supreme Court matters. This has also provided a significant benefit to older people where Assets for Care situations have failed, and they seek to recover their financial contribution to the purchase of a property in conjunction with other family members.[49] 

8.49       Justice Connect also noted that tribunal processes offer a number of benefits including that ‘the ability to decide equitable interests in property accommodates the informal nature of family arrangements that can give rise to these disputes and recognises the dynamics of elder abuse….’[50]

Defining the tribunal’s jurisdiction

8.50       Some submissions, which supported tribunals having jurisdiction over failed family agreements, suggested that the tribunal’s jurisdiction should be capped at certain monetary value.[51] At this stage, the ALRC is not proposing that the jurisdiction be capped at a certain monetary value, noting that VCAT’s jurisdiction is unlimited and there does not seem to be concern amongst submitters from Victoria that this is a problem.

8.51       One of the key limitations of the Victorian model is that it is restricted to co-owners of land in law and equity. However, it may well be that, in a majority of family agreement disputes, the older person has no property interest as co-owner unless established through, for example, equitable estoppel. If they do have an interest in property, that interest may be a life interest, an equitable lien or licence to reside in the property.[52] The ALRC proposes that the tribunal’s jurisdiction encompass any type of equitable interest an older person may have in their current or former principal place of residence. The tribunal’s jurisdiction should be even broader than property interests and allow the tribunal to consider the respective contributions, financial and non-financial, under the family agreement. This approach is consistent with the recommendation from the Seniors Legal and Support Service Hervey Bay that:

There be established an easily accessible Tribunal which has the power to deal with all issues arising from the breakdown of family agreements, not just the issues relating to any real property in which the older person has an interest.[53]

8.52       By focusing on contributions, the tribunal would be able to fully consider the care and support provided by the parties to each other. This addresses a principal criticism that the law of equity in relation to family agreements only considers the asset side of ‘assets for care’ and not the care side. That is, the law of equity as applied to family agreements is focused on financial contributions towards the purchase of property or renovations of property and not on the non-financial contribution of care and support provided.

8.53       Some stakeholders suggested that the presumption of advancement should not apply in the case of older persons and their adult children.[54] Given the breadth of the tribunal’s jurisdiction as proposed, the ALRC considers that this change is not necessary. Moreover, the ALRC is concerned that altering equitable doctrines may have broader ramifications outside the context of elder financial abuse.