Barre & Barre and Ors - [2020] FamCA 455

FAMILY COURT OF AUSTRALIA

BARRE & BARRE AND ORS

[2020] FamCA 455

FAMILY LAW – PRACTICE AND PROCEDURE – Joinder – where the husband’s previous lawyers applied to be joined to proceedings as judgment creditor of the husband – where the husband’s previous lawyers have obtained default judgment in the Local Court of NSW for unpaid legal fees – where creditor’s petition filed – where application for joinder made after final hearing while judgment is reserved – where at the hearing of their application the husband’s previous lawyers sought merely to be heard as amicus curiae – where the previous lawyers sought to be heard as amicus curiae in support of their own interests – where in the exercise of discretion the Court gave leave to the previous lawyers to make submissions as amicus curiae.

FAMILY LAW – ORDERS – freezing orders – discharge – where the wife seeks enforcement of Binding Financial Agreement pursuant to section 90KA of the Family Law Act 1975 (Cth) – where the husband and a respondent claiming to be de facto of the husband seeks release of funds frozen by court order in a controlled monies account – where there is no dispute the frozen funds are owned by a company controlled by the husband – where there is no dispute the respondent claiming to be a de facto of the husband loaned monies to the husband and husband’s company – where the wife makes no claim on frozen funds to enforce Binding Financial Agreement – freezing order discharged – orders made for release of funds to husband’s company and distribution of funds to respondent claiming to be de facto of the husband.

Bankruptcy Act 1966 (Cth) s 59A
Family Law Act 1975 (Cth) ss 58, 59, 90KA, 92
Family Law Rules (Cth) r 6.02

Barre & Barre; Gilliam & Barre [2019] FamCA 315
Barre & Barre and Ors [2019] FamCA 907
Levy v Victoria (1997) 189 CLR 579

APPLICANT:

Ms Barre

FIRST RESPONDENT:

Mr Barre

SECOND RESPONDENT:

Barre Pty Ltd

THIRD RESPONDENT:

Ms Gilliam

FILE NUMBER:

SYC

6149

2016

DATE DELIVERED:

9 June 2020

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Harper J

HEARING DATE:

4 June 2020

REPRESENTATION

SOLICITOR ADVOCATE FOR

THE APPLICANT:

Mr Parker

THE FIRST RESPONDENT IN PERSON:

Mr Barre

THE SECOND RESPONDENT IN PERSON:	First Respondent as director
THE THIRD RESPONDENT IN PERSON:	Ms Gilliam

Orders

The Application in a Case filed by Q Pty Ltd on 22 May 2020 be dismissed.
All existing orders relating to the funds in the Controlled Monies Account held in the name of Swaab Attorneys at the R Bank, account number …65 be discharged.
Forthwith the balance of the funds held in the Controlled Monies Account in the name of Swaab Attorneys at the R Bank, account number …65 be released to the Second Respondent, Barre Pty Ltd, or be paid at its direction.
That the Second Respondent take all necessary steps to pay forthwith from the funds received pursuant to Order 2 of these orders $35,000 to the Third Respondent, Ms Gilliam.
That the parties give all necessary instructions, execute all necessary documents and take all necessary steps to effect the payments referred to in these orders.
The Application in a Case filed on 19 April 2020 by Barre Pty Ltd otherwise be dismissed.
The Application in a Case filed on 6 April 2020 by the Third Respondent, Ms Gilliam otherwise be dismissed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Barre & Barre & Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 6149 of 2016

Ms Barre

Applicant

And

Mr Barre

First Respondent

And

Barre Pty Ltd

Second Respondent

And

Ms Gilliam

Third Respondent

REASONS FOR JUDGMENT

Introduction

These proceedings have a long and tortured history. It is not necessary to set it out in any detail for the purposes of this judgment. More detail is given in my earlier judgment in Barre & Barre; Gilliam & Barre [2019] FamCA 315. It is only necessary to recite the following matters.
The substantive proceedings are primarily between Ms Barre (“the wife”) and Mr Barre (“the husband”), in which the wife seeks enforcement of a Binding Financial Agreement (“BFA”) pursuant to s 90KA of the Family Law Act 1975 (Cth) (“the Act”) and lump sum child support. There is no dispute the BFA was binding on both parties.
The second respondent, Barre Pty Ltd is a company of which the husband is the sole director and its two issued shares are held by D Pty Limited, of which the husband is sole director and shareholder.
At [6] of my judgment in Barre & Barre and Ors [2019] FamCA 907, I noted that:
The only shareholder in Barre Pty Ltd is another company named D Pty Limited, of which Mr Barre is the sole director and shareholder. It is clear therefore that Mr Barre can exercise control over the disposition of the funds in the controlled monies account in the absence of the Court’s order prohibiting any such dealings. They are a financial resource for Mr Barre. The funds in the controlled monies account will also clearly form part, at least, of the basis for the value of Mr Barre’s share in D Pty Limited.
During the proceedings Barre Pty Ltd sold a property at G Street, Suburb B. The proceeds of sale were placed into a controlled monies account held in the name of Swaab Attorneys as trustees for the husband and the wife. The funds were made subject to injunctive orders in the nature of freezing orders. It has at all times been common ground that Barre Pty Ltd owns the funds in the controlled monies account.
The third respondent, formerly known as the fourth respondent, (“Ms Gilliam”) was originally joined as creditor of the husband.
At the final hearing, the husband did not dispute that money was owed to Ms Gilliam or challenge Ms Gilliam’s evidence in respect of the alleged loans. For example, in her Affidavit filed 18 January 2019 at [13], Ms Gilliam stated that “Mr Barre either specified exactly how much he needed or what expenses he wanted me to pay. I then either deposited my cash savings into Mr Barre’s personal or business account, or handed cash to him, but always at his direction”. She also gave evidence that the husband specifically agreed to pay her back from the funds then held in the controlled monies account. For his part, the husband confirmed that “It was an agreement of my loan from Ms Gilliam that I would repay her from the sale of the property owned by [Barre Pty Ltd]” (Affidavit filed 19 April 2020, [44]). This evidence was not contested by the wife.
At the final hearing, it was agreed by the husband that he owed Ms Gilliam $228,000. Ms Gilliam accepted this was the correct figure.
Although final judgment is presently reserved, this evidence is sufficient to demonstrate for the purposes of this judgment that some funds at least, lent by Ms Gilliam, were advanced to Barre Pty Ltd. One consequence of this undisputed factual position is that Ms Gilliam should properly be understood as a creditor of both the husband and Barre Pty Ltd.
Ms Gilliam also has commenced her own proceedings SYC 342/2019 (“the de facto proceedings”) against the husband pursuant to part VIIIAB of the Act seeking a declaration that a de facto relationship had existed between them from June 2016 to December 2018. These are listed for final hearing later this year. As I understand it, she contends the monies loaned by her to the husband or Barre Pty Ltd should be treated as a contribution by her during the alleged de facto relationship.
The account is presently held at the R Bank account number …65 (“the controlled monies account”). The funds in the controlled monies account remain the subject of freezing orders. A number of orders have been made during the proceedings releasing funds from time to time to various parties including the wife, the husband, the maternal grandmother and Ms Gilliam, who herself has received $75,000 from the controlled monies account pursuant to Court orders. The maternal grandmother was removed as a party to the proceedings prior to the final hearing. At present the balance in the controlled monies account is $104,868.64 (“remaining funds”) after an order was made for the distribution to Ms Gilliam of $10,000 on 20 May 2020.
The final hearing took place between 3 and 7 February 2020, followed by written submissions and further applications which do not need to be detailed here. Judgment remains reserved, with delivery delayed by, amongst other things, the present applications.
For a period of time, between April and October 2018, Q Pty Ltd T/A Q Lawyers (“Q Pty Ltd”) acted for the husband, ceasing to act thereafter.
Three applications were listed before me on 4 June 2020. Each one targeted the remaining funds held in the controlled monies account.
In summary, Ms Gilliam sought an order for a distribution to her of the balance of $45,000, being the sum of $35,000 after taking account of the $10,000 received on 20 May 2020. The husband agreed with this distribution and sought an order for the balance of the remaining funds to be distributed to him. In their application as filed, Q Pty Ltd sought orders for their joinder to the proceedings, and consequential orders for the remaining funds to be paid to them, with an order restraining any dealing with those funds until they were paid to Q Pty Ltd.
Q Pty Ltd are presently a judgment creditor of the husband. They have obtained a default judgment in the Local Court of NSW against him, for unpaid legal fees. On the basis of the judgment they issued a bankruptcy notice to the husband, then a creditor’s petition, based on the husband’s failure to comply with the bankruptcy notice. It appears the husband has committed an act of bankruptcy. Q Pty Ltd claim a debt of $102,616.88 (plus interest accruing and costs). The bankruptcy proceedings are being conducted in the Federal Circuit Court of Australia and have been adjourned several times. However, I was told the creditor’s petition is listed for hearing on 12 June 2020. An application by the husband in the Local Court to set aside the default judgment was dismissed by a registrar on 28 May 2020 but this decision has been taken on review.
When the matter was listed for hearing on 4 June 2020 counsel for Q Pty Ltd sought much less ambitious relief than that claimed by his clients in their application. He made clear that his clients sought to make submissions only as amicus curiae. They no longer sought to intervene or be joined as a party. It is therefore unnecessary to consider s 92 of the Act or rule 6.02 Family Law Rules 2004 (Cth) (“the Rules”).
The hearing of an amicus curiae is entirely in the Court's discretion. The discretion is exercised on the footing that a person is willing to offer the Court a submission on law or relevant fact which will assist the Court in a way in which the Court would not otherwise have been assisted and the Court is of the opinion that it will be significantly assisted thereby; the Court should be cautious not to let the efficient operation of the Court be prejudiced: Levy v Victoria [1997] HCA 31; (1997) 189 CLR 579; (1997) 146 ALR 248; (1997) 71 ALJR 837.
An application to be heard as amicus curiae, at an interim hearing, is unusual and more unusual after a final hearing has been concluded. However in my view it is not precluded on principle, and Q Pty Ltd made such an application limited to making submissions about the manner in which the remaining funds should be dealt with. They submitted that since no finding has been made that the husband is entitled to the remaining funds, and Ms Gilliam has no direct claim to the funds, all three applications should be dismissed. However, so the argument went, if the Court agrees to make a finding that the husband is entitled to the monies, orders should be made so that the monies are first applied to discharge the amount owing to Q Pty Ltd, since as a judgment creditor they are entitled to garnish any monies to which the husband was entitled.
I am dubious that these submissions assist the Court in a way in which the Court would not otherwise have been assisted or are made in support of a party unable or unwilling adequately to protect his or her own interests. Rather, Q Pty Ltd seek to be heard as amicus curiae in support of their own interests, to support relief which would preserve a fund from which they believe they could be paid. However, both the husband and Ms Gilliam were self-represented. Understandably, they have a limited knowledge of the relevant law. The proposed submissions of Q Pty Ltd were helpful in that they were succinct and focussed attention on the question of entitlement to the remaining funds. I take account of the terms of s 90KA(a) of the Act which specifies the Court has the same powers, and may grant the same remedies, and “must have the same regard to the rights of third parties as the High Court” when enforcing a BFA. I accept Q Pty Ltd are such a third party. In the exercise of discretion I permitted Q Pty Ltd to make submissions as amicus curiae.
It is important to note here that, putting the remaining funds to one side, there are a range of assets which fall to be apportioned between the husband and wife according to the terms of the BFA. It is not necessary to canvass these in detail here. What is important to note is that in her comprehensive proposed final orders, the wife in effect disavows any claim on the remaining funds in the controlled monies account to satisfy her claims under the BFA. Instead, at final hearing she has proposed an order that the remaining funds be distributed, in summary, as to $84,125.13 to Q Pty Ltd, which was apparently the judgment debt earlier in 2020, with the balance to be paid to the husband or Barre Pty Ltd or be subject to orders in the de facto proceedings. I also note that in her Response filed for the interim hearing she neither consented to nor opposed the orders sought by Q Pty Ltd. I should add that the wife also submits that it is open to the Court, in the exercise of discretion, to make orders favouring her, for example, regarding lump sum child support, which could be directed to the remaining funds. However, she seeks no such order herself.
In the circumstances outlined, where the wife seeks satisfaction of her claims from other assets, and the remaining funds are owned by Barre Pty Ltd, it is unnecessary to determine whether the husband is entitled to the remaining funds in disposing of the present applications. As already pointed out, there is no dispute that Barre Pty Ltd has an entitlement to the remaining funds. In my view, in light of the final orders sought by the wife, there no longer exists any reason to subject them to a freezing order to preserve either the integrity of the Court’s processes or as a fund from which to satisfy any ultimately successful claims of the wife.
While s 90KA(a) of the Act specifies the Court “must have the same regard to the rights of third parties as the High Court” when enforcing a binding financial agreement, there is no statutory criteria indicating how this is to be done. It is at large. But in my view, while I am required to have regard to the interests of third parties, this is amply satisfied in this case by permitting such a third party to make submissions. It does not extend to making or continuing injunctive relief to favour a third party, such as Q Pty Ltd, who are not a party to the proceedings and, in the exercise of the Court’s discretion, appear only to make submissions as amicus curiae, largely in their own interest.
Q Pty Ltd further submitted that any distribution from the remaining funds without first discharging their judgment debt risked preferring Ms Gilliam as a creditor of Mr Barre. I am unable to accept that submission. If the remaining funds are released to their owner, Barre Pty Ltd, on the evidence before me, I am unable to see how any preference is created.
I propose to make an order that the remaining funds be released to Barre Pty Ltd.
I have earlier found that Ms Gilliam is in parlous financial circumstances. She relied on affidavit evidence which persuades me this is so. Ms Gilliam sought payment to her of $45,000. As noted above Ms Gilliam received $10,000 on 20 May 2020. I am satisfied it is appropriate in the circumstances to order Barre Pty Ltd to pay to Ms Gilliam the further amount of $35,000. The husband supports this order, and the wife does not directly oppose it. I am unable to form a view that this proposed order would create any preference in favour of Ms Gilliam, as submitted by Q Pty Ltd. As already pointed out, Ms Gilliam claims that monies lent by her to or for the husband were contributions made during a de facto relationship. While I have formed no views about Ms Gilliam’s claims in the de facto proceedings, I note, for example, that s 59A of the Bankruptcy Act1966 (Cth) provides that ss 58 and 59 of that Act have effect subject to an order under Part VIII or VIIIAB of the Act.
It is necessary to deal with some further matters. The directions for preparation for the hearing on 4 June 2020 required each applicant to file and serve a minute of prosed orders to be sought at the hearing on 4 June 2020. Both the husband and Ms Gilliam took the opportunity to propose a minute of orders which travelled far outside the narrow question of what should happen to the remaining funds. The husband’s prosed minute of orders became Exhibit “1”. Ms Gilliam’s proposed minute of orders became Exhibit “A”. I made clear to both of them that if they pressed for the range of orders sought, if unsuccessful, they may be exposed to an order for costs against them. The husband ultimately only pressed for orders 1 and 3 in Exhibit “1”. Order 1 was for the release of funds from the controlled monies account which I propose to do. Order 3 related to the issue of further subpoenas. In support of his order to issue further subpoenas the husband made a range of allegations, repeated several times that there had been irregularities in the management of the controlled monies account by the solicitors for the wife, which required investigation.
The solicitor for the wife, Mr Parker, denied the allegations and submitted the husband was attempting to re-litigate aspects of the final hearing which are covered in the evidence already before the Court, in particular, the bank statements sought by the husband. Furthermore, all withdrawals made from the controlled monies account had been pursuant to Court orders, made since freezing orders had first been imposed early in the proceedings. I accept those submissions. I decline to permit the issuing of the subpoenas sought by the husband.
For her part, Ms Gilliam pressed for orders 1, 2, 8 and 9 in Exhibit “A”. She pressed order 7 if Q Pty Ltd were joined as parties. It is unnecessary to consider this further. Q Pty Ltd resiled from any application to become a party. Orders 1 and 8 will be reflected in the orders I propose to make. Order 9 sought the issuing of further subpoenas, suffers the same vices as the order for subpoenas sought by the husband. I decline to make it. Order 2 sought $10,000 as costs or damages. It was pointed out to Ms Gilliam that self-represented litigants usually are not entitled to costs orders in their favour, and no argument was pressed for a payment of damages. I decline to make Order 2.

I certify that the preceding twenty-nine (29) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Harper delivered on 9 June 2020

Associate:

Date: 9 June 2020