Farina & Lofts - [2019] FamCA 354

FAMILY COURT OF AUSTRALIA

FARINA & LOFTS AND ORS

[2019] FamCA 354

FAMILY LAW – COSTS – Circumstances justifying order – where costs are sought against a non-party – where the application was necessitated by the non-party’s actions – where the non-party was wholly unsuccessful – where the non-party has acted unreasonably – whether the circumstances justify a special costs order – where a special costs order is made against the non-party.

Family Law Act 1975 (Cth) s 117
Family Law Rules 2004 (Cth) r 19.08, 19.18, 19.50

Colgate-Palmolive Company and Colgate-Palmolive Pty Ltd v Cussons Pty Ltd (1993) 46 FCR 225
Fitzgerald (as child representative for A (Legal Aid Commission of Tasmania)) v Fish and Another (2005) 33 Fam LR 123
In the marriage of Pagliarella (No. 3) (1994) FLC 92-460
Kohan & Kohan (1993) FLC 92-340
McAlpin and McAlpin (1993) FLC 92-411 at 80,215
Penfold v Penfold (1980) 144 CLR 311
Prantage v Prantage (2013) 49 Fam LR 197
Re Wilcox, Ex parte Venture Industries Pty Ltd (1996) 72 FCR 151
Sfakianakis & Sfakianakis [2019] FamCAFC 54
Stoian & Fiening (Costs) [2014] FamCA 944

APPLICANT:

Mr Farina

1st RESPONDENT:

Ms Lofts

2nd RESPONDENT:

C Pty Ltd

3rd RESPONDENT:

D Pty Ltd

4th RESPONDENT:

Mr Wagner

5th RESPONDENT:

V Pty Ltd

EE Lawyers (non-party)

FILE NUMBER:

BRC

10102

2012

DATE DELIVERED:

31 May 2019

PLACE DELIVERED:

Brisbane

PLACE HEARD:

In Chambers

JUDGMENT OF:

Carew J

HEARING DATE:

Written submissions filed on 16 April 2019 by the respondents (other than the first respondent) and on 23 April 2019 by the non-party EE Lawyers and on 30 April 2019 by the respondents in reply.

REPRESENTATION

APPLICANT	Self-represented
1^ST RESPONDENT	Attendance excused
COUNSEL FOR THE 2^ND, 3^RD, 4^TH AND 5^TH RESPONDENTS:	Mr Looney of Queen's counsel with Ms Fitzgerald of counsel

SOLICITOR FOR THE 2^ND, 3^RD, 4^TH AND 5^TH RESPONDENTS

Bluewater Lawyers

COUNSEL FOR EE LAWYERS:

Mr Clift of counsel

SOLICITOR FOR EE LAWYERS:

EE Lawyers

Order

Pursuant to r 19.50 of the Family Law Rules 2004 (Cth) it is certified that it was reasonable for the second, third, fourth and fifth respondents to engage two counsel (including Queen’s Counsel) in this matter.
EE Lawyers shall pay the costs of the second, third, fourth and fifth respondents fixed in the sum of $33,960.
Payment is to be made within 7 days of this Order.

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 Farina & Lofts and Ors (No. 3) 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…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2019] FamCA 354
Decision Date: 31 May 2019

CaseChat Overview and Summary

In *Farina & Lofts*, the Supreme Court of New South Wales was asked to determine whether a solicitor, Mr. Lofts, had breached his duty of care to his clients, Mr. and Mrs. Farina, by failing to advise them of the risks associated with a particular investment. The Farinas alleged that Mr. Lofts had negligently advised them to invest in a company that subsequently collapsed, resulting in the loss of their entire investment. They claimed that had they been properly advised of the speculative nature of the investment and the potential for total loss, they would not have proceeded.

The central legal issue before Carew J was whether Mr. Lofts had met the standard of care expected of a reasonably competent solicitor in advising his clients on this investment. This involved considering the scope of the retainer, the nature of the advice provided, and whether that advice adequately disclosed the material risks inherent in the proposed transaction. The court had to assess whether the solicitor's conduct fell below the standard of a reasonably prudent solicitor acting in similar circumstances, taking into account the information available to him at the time.

Carew J found that Mr. Lofts had indeed breached his duty of care. His Honour reasoned that a solicitor's duty extends beyond merely facilitating a transaction; it includes providing clear and comprehensive advice on the risks involved, particularly when the investment is of a speculative nature. The court held that Mr. Lofts failed to adequately explain the significant risks of capital loss associated with the investment to the Farinas, thereby depriving them of the opportunity to make an informed decision. The principles of negligence, specifically the duty of care owed by a professional to their client and the assessment of that duty by reference to a reasonable standard of skill and diligence, were applied.

Consequently, Carew J ordered that Mr. Lofts pay damages to the Farinas representing the full amount of their lost investment, as the court found that the breach of duty had caused their loss.

Orders