Farina and Lofts (No. 2)

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FAMILY COURT OF AUSTRALIA

Farina & Lofts (No. 2) [2021] FamCA 75

File number(s): BRC 10102 of 2012
Judgment of: CAREW J
Date of judgment: 22 February 2021
Catchwords: FAMILY LAW – PROPERTY – Dispute over payment of an expert report – Where in the substantive proceedings, a single expert was initially engaged by two parties to provide a valuation and additional parties were subsequently joined to proceedings – Where a dispute arose as to which party was liable for satisfying the outstanding invoice – Where it is found that the first respondent is liable for the payment of the invoice as between the parties to the substantive proceedings.
Legislation: Family Law Act 1975 (Cth)
Cases cited: Farina & Lofts and Ors (No. 2) [2019] FamCA 228
Number of paragraphs: 37
Date of hearing: 22 December 2020
Place: Brisbane
Counsel for the First Applicant: Ms FitzGerald
Solicitor for the First Applicant: Bluewater Lawyers
Solicitor for the First Respondent: Self-represented
Counsel for the Second Respondent: Ms FitzGerald
Solicitor for the Second Respondent: Bluewater Lawyers
Counsel for the Third Respondent: Ms FitzGerald
Solicitor for the Third Respondent: Bluewater Lawyers
Solicitor for the Fourth Respondent: Mr Goldsworthy
For the Fifth Applicant: Self-represented

ORDERS

BRC10102/2012
BETWEEN:

MR WAGNER
Applicant
AND:

MR FARINA
First Respondent

C PTY LTD
Second Respondent

D PTY LTD

Third Respondent

U PTY LTD
Fourth Respondent

MS LOFTS
Fifth Respondent

ORDER MADE BY:

CAREW J

DATE OF ORDER:

22 FEBRUARY 2021

THE COURT ORDERS THAT:

1.By way of clarification of previous orders of this Honourable Court, and as between the parties to the substantive litigation, i.e. all parties other than U Pty Ltd, Mr Farina is liable for the payment of invoice number … to U Pty Ltd.

2.Mr F shall pay the sum of $43,156 to U Pty Ltd within 14 days.

3.The Amended Application in a Case filed by the applicant on 21 April 2020 (paragraphs 1, 4, 5 and 6) and the Response filed by the first respondent on 17 July 2020 and the Response filed by fourth respondent on 30 June 2020 and the Amended Response filed by the fifth respondent on 2 October 2020 are otherwise dismissed (save as to costs).

4.In the event that a party requires a determination of a costs application and the parties are unable to reach agreement in relation to costs within 21 days the following shall apply:

(a)The person/entity applying for costs shall file and serve one affidavit (if necessary) and written submissions within 14 days from the date of this Order;

(b)The person/entity against whom costs are sought shall file and serve one affidavit (if necessary) and written submissions within a further 14 days; and

(c)The person/entity applying for costs shall file and serve one affidavit strictly in reply (if any) and written submissions strictly in reply (if any) within a further 14 days.

5.The costs application (if any) will be heard in chambers without the need for further appearance.

NOTATION

A.The applicant filed a Notice of Discontinuance on…

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Details
Case
[2021] FamCA 75
Decision Date

CaseChat Overview and Summary

This matter concerned a dispute between Mr Farina and Ms Lofts regarding the outstanding invoice for an expert report. A single expert, Mr I of U Pty Ltd, was initially engaged by Mr Farina and Ms Lofts for a business valuation in property proceedings. Subsequently, additional parties, including Mr Wagner, C Pty Ltd, and D Pty Ltd, were joined to the proceedings. A disagreement arose as to which party bore responsibility for the outstanding invoice from U Pty Ltd.

The court was required to determine which party was liable for the payment of the outstanding invoice issued by U Pty Ltd. This involved interpreting the terms of an Engagement Letter and Standard Terms and Conditions entered into between U Pty Ltd and the parties to the substantive litigation, particularly in light of the joinder of additional parties and the initial consent orders regarding payment responsibilities.

Carew J found that, as between the parties to the substantive litigation (excluding U Pty Ltd), Mr Farina was liable for the payment of the invoice. This conclusion was based on the terms of the Engagement Letter and the acknowledgements signed by the parties. The court noted that while U Pty Ltd had indicated an intention to pursue contractual rights elsewhere, it had been provided an opportunity to make submissions regarding the court's jurisdiction to determine the contractual dispute, which it did not pursue. The court ultimately determined it did not have jurisdiction to determine the dispute between U Pty Ltd and the parties.

The court ordered that Mr Farina is liable for the payment of the invoice to U Pty Ltd and must pay the sum of $43,156 within 14 days. Certain applications filed by the applicant and respondents were dismissed, save as to costs. Provisions were also made for the determination of any costs applications if parties could not reach agreement within 21 days, with such applications to be heard in chambers. The order clarified that it did not preclude U Pty Ltd from pursuing any contractual rights they may have against any party.

Orders

Orders of the court

THE COURT ORDERS THAT:

1. By way of clarification of previous orders of this Honourable Court, and as between the parties to the substantive litigation, i.e. all parties other than U Pty Ltd, Mr Farina is liable for the payment of invoice number … to U Pty Ltd.

2. Mr F shall pay the sum of $43,156 to U Pty Ltd within 14 days.

3. The Amended Application in a Case filed by the applicant on 21 April 2020 (paragraphs 1, 4, 5 and 6) and the Response filed by the first respondent on 17 July 2020 and the Response filed by fourth respondent on 30 June 2020 and the Amended Response filed by the fifth respondent on 2 October 2020 are otherwise dismissed (save as to costs).

4. In the event that a party requires a determination of a costs application and the parties are unable to reach agreement in relation to costs within 21 days the following shall apply:

(a) The person/entity applying for costs shall file and serve one affidavit (if necessary) and written submissions within 14 days from the date of this Order;

(b) The person/entity against whom costs are sought shall file and serve one affidavit (if necessary) and written submissions within a further 14 days; and

(c) The person/entity applying for costs shall file and serve one affidavit strictly in reply (if any) and written submissions strictly in reply (if any) within a further 14 days.

5. The costs application (if any) will be heard in chambers without the need for further appearance.

NOTATION

A. The applicant filed a Notice of Discontinuance on 22 April 2020 in relation to paragraphs 2, 3, 7 and 10 of his Application in a Case filed 21 April 2020 and did not press paragraphs 8 and 9 thereof.

B. The parties all agreed that should costs be sought by any party, the application should be heard in chambers upon the receipt of written submissions.

C. The above order does not preclude U Pty Ltd from pursuing any contractual rights they may have against any party.

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

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 17.02 Family Law Rules 2004 (Cth).

Background

Background to the litigation

The dispute that causes the parties to return to Court relates to fees still owing to U Pty Ltd. BACKGROUND When proceedings originally commenced in 2012, Mr Farina was the applicant and he sought a property adjustment order against Ms Lofts pursuant to s 90SM of the Family Law Act 1975 (Cth) arising out of their de facto relationship (“the property proceedings”). In September 2013, Mr Farina and Ms Lofts retained Mr I of U Pty Ltd to provide a valuation of various business assets relevant to the property proceedings. On 18 July 2014, Mr Wagner, C Pty Ltd and D Pty Ltd were joined to the property proceedings. On 25 August 2014, an interim order (“the 2014 order”) was made by consent which relevantly included the following provision:2.[Mr Farina] is responsible to pay any further fees of Mr I of U Pty Ltd in relation to the preparation of the single expert business valuation report as due by Mr I.3.[Ms Lofts] reimburse a half share of the costs at the conclusion of the proceedings from settlement funds. On 28 September 2015, U Pty Ltd required Mr Wagner to sign an Engagement Letter updating the terms of engagement to reflect the addition of the further parties to the proceedings. Relevantly, the Engagement Letter included the following:…All parties are responsible for our fees with Mr Farina responsible for payment in the first instance. …Unless otherwise advised, we will provide a copy of our invoice to all Parties care of your solicitor with payment to be made by Mr Farina in the first instance. A written acknowledgement to be bound by the terms of the Engagement Letter and U Pty Ltd’s Standard Terms and Conditions was signed on 29 October 2015 by Mr Wagner in his personal capacity and on behalf of D Pty Ltd and by Mr Farina in his personal capacity and on behalf of C Pty Ltd. The copy of the document that forms part of exhibit 3 before me does not include Ms Lofts’s signature. Relevantly, the acknowledgement contains the following provision:…We are jointly responsible for your fees with Mr Farina responsible for payment in the first instance. We also note that your fees are payable within 14 days of accounts being rendered. Any account unpaid within that time will accrue an administration fee from the date of rendering the account.… The Standard Terms and Conditions relevantly contains the following provisions:4.1 You agree to pay for the services we provide in accordance with the payment terms set out in the Engagement Letter and in these Standard Terms and Conditions.…7.4 Our invoice is payable within 14 days of the date of issue unless stated otherwise in the Engagement Letter. 7.5 If you do not pay our invoice in full, we may:…Charge interest on any unpaid amount. …Instigate legal proceedings without further notice…… Any costs, fees or disbursements that we incur in the recovery of the outstanding amounts, together with any interest, will be added to the amount due from you. The substantive proceedings involving Mr Farina, Ms Lofts, Mr Wagner, C Pty Ltd, D Pty Ltd and V Pty Ltd comprised two distinct but intricately connected disputes. The first dispute has already been referred to, namely, the property proceedings between Mr Farina and Ms Lofts, and the second dispute (“the commercial dispute”) involved an action brought by C Pty Ltd, D Pty Ltd and Mr Wagner (“the C Pty Ltd respondents”) pursuant to the Court’s original jurisdiction under the Corporations Act 2001 (Cth) and the Court’s jurisdiction to determine the whole of a matter when determining a matter otherwise within the Court’s federal jurisdiction, concerning:(a)Alleged oppression by Mr Farina;(b)Alleged breach of director’s duties by Mr Farina in relation to misuse of C Pty Ltd funds; and(c)Alleged breach of director’s duties by Mr Farina and injunctive relief in relation to a lost business opportunity against Mr Farina and V Pty Ltd (a fifth respondent in the substantive proceedings).

Evidence

Evidence Before The Court

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Decision

Reasons for decision

As to the quantum of the current debt, I note that Mr Farina accepted that the debt was owed and did not take issue with the quantum. In any event, having considered the terms of the Engagement Letter and Standard Terms and Conditions the basis for the increase in the debt appears to be entirely reasonable. CONCLUSION As between the parties to the substantive litigation i.e. other than U Pty Ltd, Mr Farina is liable for the payment of the U Pty Ltd invoice number … in the sum of $43,156. Payment should be made within 14 days.MISCELLANEOUS Mr Goldsworthy, the lawyer representing U Pty Ltd initially expressed dismay at his clients being joined to the application by Mr Wagner and indicated that it was his client’s intention to pursue their contractual rights elsewhere. Nevertheless, Mr Goldsworthy submitted that the Court had jurisdiction to determine the contractual dispute between the parties arising from the terms of their Engagement Letter signed by the parties. Mr Goldsworthy was provided an opportunity to file further written submissions as to the Court’s power to determine such a dispute in the absence of proceedings in which the Court is otherwise exercising federal jurisdiction. No further submissions were filed. In my view, the Court does not have jurisdiction to determine that dispute.

Ratio Decidendi

Legal Principle Established

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