Farina & Lofts
[2019] FamCA 228
•9 April 2019
FAMILY COURT OF AUSTRALIA
| FARINA & LOFTS AND ORS | [2019] FamCA 228 |
| FAMILY LAW – PRACTICE AND PROCEDURE – Where an application is made to the Court seeking clarification on the proper interpretation of two orders made by consent – Where both orders are final orders - Where the applicant’s former solicitor made an oral application for leave to intervene in the proceedings – Where the application was dismissed as the proceedings are concluded – Where the requirement to pay the applicant’s former solicitor as contained in the later order should be read subject to the earlier order – Where all relevant parties to the proceedings agree with this interpretation. |
| Family Law Act 1975 (Cth) |
| Hughes& Hughes [2013] FamCAFC 146 Langford and Coleman (1993) FLC 92-346 Vitzdamm-Jones v Vitzdamm-Jones (1981) FLC 91-012 |
| APPLICANT: | Mr Farina |
| 1st RESPONDENT: | Ms Lofts |
| 2nd RESPONDENT: | C Pty Ltd |
| 3rd RESPONDENT: | D Pty Ltd |
| 4th RESPONDENT: | Mr B |
| 5th RESPONDENT: | V Pty Ltd |
| FILE NUMBER: | BRC | 10102 | of | 2012 |
| DATE DELIVERED: | 9 April 2019 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Carew J |
| HEARING DATE: | 1 April 2019 |
REPRESENTATION
| FOR THE APPLICANT: | Self-represented |
| FOR THE 1ST RESPONDENT: | Self-represented |
| COUNSEL FOR THE 2ND RESPONDENT: | Mr Looney of Queen's Counsel with Ms FitzGerald of Counsel |
| SOLICITOR FOR THE 2ND RESPONDENT: | Bluewater Lawyers |
| COUNSEL FOR THE 3RD RESPONDENT: | Mr Looney of Queen's Counsel with Ms FitzGerald of Counsel |
| SOLICITOR FOR THE 3RD RESPONDENT: | Bluewater Lawyers |
| COUNSEL FOR THE 4TH RESPONDENT: | Mr Looney of Queen's Counsel with Ms FitzGerald of Counsel |
| SOLICITOR FOR THE 4TH RESPONDENT: | Bluewater Lawyers |
| COUNSEL FOR THE 5TH RESPONDENT: | Mr Looney of Queen's Counsel with Ms FitzGerald of Counsel |
| SOLICITOR FOR THE 5TH RESPONDENT: | Bluewater Lawyers |
ORDER
The oral application made by EE Lawyers for leave to intervene pursuant to s 92 of the Family Law Act 1975 (Cth) is dismissed.
The oral application made by Mr Farina in relation to a payment to U Pty Ltd is dismissed.
By way of clarification of the orders made by consent on 12 November 2018 and 29 January 2019
Bluewater Lawyers is authorised to disburse from the remaining balance of the funds held in the Bluewater Lawyer’s Trust Account as follows:
Any amount required to discharge the liability owed by C Pty Ltd to the National Australia Bank in relation to the motor vehicle …, which as at the date of hearing is the sum of $50,592.48.
NOTATION
It is noted that Bluewater Lawyers and EE Lawyers informed the Court that if the clarification as sought by Bluewater Lawyers was made there was no need to make the order sought by Mr Farina.
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 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 BRISBANE |
FILE NUMBER: BRC 10102 of 2012
| Mr Farina |
Applicant
And
| Ms Lofts |
First Respondent
And
| C Pty Ltd |
Second Respondent
And
| D Pty Ltd |
Third Respondent
And
| Mr B |
Fourth Respondent
And
| V Pty Ltd |
Fifth Respondent
REASONS FOR JUDGMENT
This matter concerns the interpretation of two orders made by the Court on 12 November 2018 (“the November order”) and 29 January 2019 (“the January order”) respectively. As a result of those orders the financial dispute between the parties concluded.
The application is brought by the second, third, fourth and fifth respondents and is supported by the applicant. The first respondent was given leave to withdraw as the matter requiring clarification did not affect her interests.
The applicant’s former lawyers, EE Lawyers, were granted leave, without objection, to make an oral application for leave to intervene pursuant to s 92 of the Family Law Act 1975 (Cth). I reserved the question of leave to intervene but granted them, without objection, leave to make submissions on the issue before the Court in any event.
The issue in contention concerns the balance of a settlement sum held in trust by Bluewater Lawyers (a sum of $51,382.36) and whether a liability of the second respondent, C Pty Ltd, to the National Australia Bank (“NAB”) secured on a motor vehicle in Mr Farina’s possession should be paid or whether the sum should be paid to EE Lawyers. As at the date of hearing the balance owing to NAB was $50,592.48.
All parties to the orders (save the first respondent as noted above) contend that the NAB debt is required by the orders to be discharged.
EE Lawyers contend that the balance in trust should be paid to them.
The applicant was granted leave, without objection, to seek an order that:
Any funds over and above that owing to the National Australia Bank in relation to the motor vehicle be paid to U Pty Ltd in reduction of the sum owing to them.
background
The substantive proceedings comprised two distinct but intricately connected disputes. In one of the disputes (“the corporate dispute”), C Pty Ltd, D Pty Ltd and Mr B (“the C Pty Ltd respondents”) brought an action pursuant to the Court’s original jurisdiction under the Corporations Act 2001 (Cth) and the Court’s accrued jurisdiction concerning:
a)Oppression by Mr Farina;
b)Breach of director’s duties by Mr Farina in relation to misuse of C Pty Ltd funds; and
c)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.
In the other dispute (“the property dispute”) Mr Farina sought an adjustment of property interests under s 90SM of the Family Law Act 1975 (Cth) against Ms Lofts.
Mr Farina was represented in both the corporate dispute and the property dispute by EE Lawyers.
On 12 November 2018 an order was made by consent, the effect of which was to (inter alia):
a)Resolve the oppression action within the corporate dispute by the C Pty Ltd respondents promising to pay, on or before 90 days after the date of the order (“the settlement date”), the sum of $3,000,000 (“the settlement sum”) into the trust account of Bluewater Lawyers in consideration for:
i)The transfer to the trustee of the Wagner Family Trust or D Pty Ltd of all of Mr Farina’s interest in E Pty Ltd, C Pty Ltd and the C Pty Ltd Investment Trust; and
ii)Mr Farina resigning as director of C Pty Ltd.
b)Maintain other actions in the corporate dispute against Mr Farina and V Pty Ltd by C Pty Ltd or Mr B for alleged breaches by Mr Farina of his common law or statutory breaches as a director of C Pty Ltd.
Relevantly, for present purposes, the November order specifically provided:
8.Prior to the settlement:
8.1 [Mr Farina] will pay any amount required to discharge any remaining debt advanced for the purchase or hire or lease of the motor vehicle currently in his possession into his sole name (or his nominee) at no cost to [C Pty Ltd], and should that payment have not been made by the settlement date this Order acts as an irrevocable written authority from all parties directed to Bluewater Lawyers to disburse an amount from the settlement sum sufficient to discharge any monies owing in respect of that motor vehicle; and
8.2 Upon the payment in Order 8.1 being made, [C Pty Ltd], [Mr B] and [Mr Farina] will immediately do all acts and things and sign all documents to transfer all [C Pty Ltd’s] right, title and interest in the motor vehicle currently in [Mr Farina’s] possession to [Mr Farina] (or his nominee).
The trial of the remaining commercial dispute and property dispute commenced on 21 January 2019 for what was to be a nine day trial. On 29 January 2019 an order was made by consent resolving all outstanding issues. Amendments were made to the November order changing the settlement date to 12 February 2019 and changing the settlement sum to $1,850,000.
Relevantly, for present purposes, the January order specifically provided:
3.That upon the payment of the settlement sum in accordance with Order 1 of this Order, this Order operates as an irrevocable written authority from all parties directed to Bluewater Lawyers to make the following disbursements from the settlement sum from the trust account of Bluewater Lawyers:
3.1 $1,000,000.00 of the settlement sum to [Ms Lofts] as directed in writing to Bluewater Lawyers by [Ms Lofts]; and
3.2$850,000 to be disbursed to the general account of EE Lawyers (being BSB …03, account number …60).
…
14.That [Mr Farina] forthwith retain and or receive as his absolute property, the title and possession of [and] [Ms Lofts] forthwith relinquish and transfer to [Mr Farina] all right, title and claim, if any, to the following:
14.3The Husband’s motor vehicle VIN …;
…
18.That [C Pty Ltd] releases [Mr Farina] from any claim raised in these proceedings and referred to in the Statement of Facts, Issues, and Contentions filed by [C Pty Ltd] on 23 November 2018.
…
20.That unless otherwise specified in this Order, [Mr Farina] retain liability for and indemnify [Ms Lofts] with respect to all other liabilities in his name or which attaches to any item of property he is to retain or receive pursuant to these Orders.
The sum of $1,850,000 was paid into Bluewater Lawyer’s trust account prior to 12 February 2019.
The liability on the motor vehicle had not been discharged and the debt at 12 February 2019 was $51,382.36.
On 12 February 2019 Bluewater Lawyers disbursed:
a)$1,000,000 to Ms Lofts; and
b)$796,617.64 to EE Lawyers.
On 14 February 2019 EE Lawyers ceased to act for Mr Farina.
Should EE LAWYERS be granted leave to intervene?
EE Lawyers sought leave to intervene pursuant to s 92 of the Family Law Act 1975 (Cth) (“the Act”) which relevantly provides:
(1)In proceedings … any person may apply for leave to intervene in the proceedings, and the court may make an order entitling that person to intervene in the proceedings.
(1A) …
(2)An order under this section may be made upon such conditions as the court considers appropriate.
(3)Where a person intervenes in any proceedings by leave of the court the person shall, unless the court otherwise orders, be deemed to be a party to the proceedings with all the rights, duties and liabilities of a party.
The word ‘proceedings’ is defined in s 4(1) of the Act as follows:
“proceedings” means a proceeding in a court, whether between parties or not, and includes cross-proceedings or an incidental proceeding in the course of or in connexion with a proceeding.
The proceedings between the applicant and the respondents (other than the first respondent) were not proceedings within the definition of ‘de facto financial cause’ in s 4 of the Act in which there is a specific provision including ‘any other proceedings … in relation to … concluded proceedings of a kind referred to in any of the preceding paragraphs’.
As noted, all proceedings have concluded so the question arises as to whether EE Lawyers can intervene in such circumstances. The High Court of Australia in Vitzdamm-Jones v Vitzdamm-Jones[1] considered, inter alia, whether a stranger could intervene in proceedings that had abated upon the death of one of the parties to the litigation. The court decided in the negative. Gibbs J stated:
It is not possible to intervene in proceedings that have concluded and are no longer on foot; the decision to the contrary in Waters and Waters and Townsend (1978) FLC 90-428 … is based on the erroneous assumption that the definition of “proceedings” in sec. 4 of the Act includes completed proceedings … and should be overruled.[2]
[1] (1981) FLC 91-012.
[2]Ibid at 76,161.
Accordingly, the oral application for leave to intervene will be dismissed. Nothing turns on this decision however, given that EE Lawyers were nevertheless permitted to make submissions, without objection.
Discussion – Interpretation of Order
The legal principles relevant to the interpretation of an order are not in dispute. An order should be considered in its entirety on its plain meaning without regard to the subjective intentions of the parties and having regard to extrinsic material only to the extent of resolving ambiguity.[3]
[3]Langford and Coleman (1993) FLC 92-346; Hughes& Hughes [2013] FamCAFC 146.
The respondents and the applicant, Mr Farina, submit that the November and January orders are each final orders as they each finalise different claims made in the commercial dispute and should be read together. It is only to the extent that the January order amends the November order that it should be interpreted as superseding the earlier order. In particular, the irrevocable authority to disburse the settlement sum in the manner described in paragraph 3 of the January order must be read subject to the irrevocable authority contained in paragraph 8 of the November order to disburse an amount from the settlement sum sufficient to discharge any monies owing in respect of the motor vehicle in the event Mr Farina does not discharge the debt.
Counsel for EE Lawyers submits that the November order was an interim order superseded by the January order and that Mr Farina was released from any responsibility in relation to the motor vehicle because of the general release contained in paragraph 18 of the January order set out above. Further, it is submitted:
The surest guide to the objective intention of the parties is the language of the orders, which provide for specific, unqualified amounts to be paid to the parties.[4]
[4] See paragraph 34 of Dowd & Co written submissions. It is common ground that the payment of $850,000 was for the benefit of the applicant, Mr Farina.
I do not agree that the November order can properly be described as an interim order in relation to that part of the commercial dispute which was finalised by it.
If the January order is interpreted as suggested by EE Lawyers, there would be no obligation on C Pty Ltd to transfer ownership of the motor vehicle to Mr Farina, yet it is clear from both orders that Mr Farina retain it.
The January order did not amend or discharge the terms of paragraph 8 of the November order.
The orders should be read together.
However, as there appear to be two competing irrevocable authorities contained in two ‘final’ orders I consider it appropriate to have regard to the communications between Bluewater Lawyers and EE Lawyers to assist in resolving this apparent ambiguity.
By email dated 1 February 2019 Bluewater Lawyers informed EE Lawyers inter alia:
The paperwork for the transfer of the motor vehicle has been prepared but [Mr Farina] is to otherwise be responsible for paying out any finance as per paragraph 8.1 and 8.2 of the Orders dated 12 November 2018.
An email response from EE Lawyers dated 1 February 2019 said inter alia:
What is the payout figure for the motor vehicle? Can you provide a pay-out letter from the financier?
In a further email from EE Lawyers dated 1 February 2019 they said inter alia:
Below is a list of residual issues for the parties and we ask for your response:
…
Item
Description
Proposed outcome
Vehicle transfer
Signed vehicle transfer registration form … (the motor vehicle) to Mr Farina
C Pty Ltd to provide signed registration papers
Finance transfer
Transfer of lease repayments on the motor vehicle to Mr Farina
C Pty Ltd to provide pay out letter from outgoing financier and Mr Farina to advise incoming financier
…
Please advise when we can collect the:
…
The (sic) Payout letter for the 2016 [motor vehicle]
On 11 February 2019 EE Lawyers were advised by Bluewater Lawyers inter alia:
… in the absence of your client providing evidence that the motor vehicle has been paid out, we will hold back the sum of $51,382.36 from tomorrow’s settlement payment as per paragraph 8.1 of the orders dated 12 November 2018. This sum is calculated based upon the payout letter forwarded to you on 4 February 2019.
On 11 February 2019 EE Lawyers responded stating inter alia:
No such deduction is to occur. If the vehicle is not paid out, it will be retained by [C Pty Ltd]. I am content for you to hold the transfer documents until my client provides proof that the vehicle has been paid out.
The irrevocable authority will be enforced in accordance with the terms of the Orders as they stand as exactly that, an irrevocable authority. There is no scope for deductions or alterations to those Orders.
Accordingly, I await your confirmation of the deposit of the sum of $850,000 to my general account in accordance with the Orders.
…
On 11 February 2019 Bluewater Lawyers responded inter alia:
What is proposed is not a ‘deduction’. Your client is taking ownership of the motor vehicle as per paragraph 14.3 of the Orders dated 29 January 2019 and our client is entitled pursuant to paragraph 8.1 of the Orders dated 12 November 2018 to disburse an amount sufficient to pay out the vehicle. Plainly, that does not mean to your general account but to the relevant financier.
Paying it to your general account whilst the vehicle otherwise remains at large and at risk is unacceptable to our client.
…
As an alternative arrangement, we will accept delivery of the vehicle at our office …
Later on that same day EE Lawyers responded inter alia:
… the prior Orders relating to a payment to the financier of the vehicle were overridden by the current Orders – as much is obvious from the terms of the current Orders. I will arrange for proof of payout of the vehicle to be provided to you or for the vehicle to be surrendered to your client.
On 12 February 2019 EE Lawyers informed Bluewater Lawyers inter alia:
… I have been advised that the vehicle will be paid out today or tomorrow …
Later that same day EE Lawyers responded to Bluewater Lawyers inter alia:
Your firm is in breach of an irrevocable authority given to it by the Court and consented to by all parties to the proceeding. As managing partner of EE Lawyers I require your firm to immediately draw a cheque in favour of my firm in the sum of $51,382.36 in discharge of the irrevocable authority directed to your firm …
As noted above, EE Lawyers ceased to act for Mr Farina on 14 February 2019.
In a direct written communication from Farina to Bluewater Lawyers on 14 February 2019 he said inter alia:
Can you please outline any matters that still remain outstanding from the orders of 12 November 2018 and orders of 29 January 2019, so that I can address them promptly.
On 15 February 2019 Mr Farina emailed Bluewater Lawyers and stated inter alia:
Yes I do have the motor vehicle. As per 12 November 2018 orders, I intend that the final payment be made from the “Settlement Sum”.
In light of the communications from EE Lawyers to Bluewater Lawyers in which it is repeatedly accepted that Mr Farina is responsible for the debt to NAB, I find it somewhat disingenuous (to say the least) for a submission now to be made that the January order absolved Mr Farina from any responsibility for it.[5]
[5] See paragraph 31 of written submissions of Dowd & Co.
No one other than EE Lawyers interprets the January order in that way. Importantly, their former client, Mr Farina, rejects such an interpretation. If any further confirmation be needed I note that paragraph 20 of the January order provides that Mr Farina is to retain liability for “any item of property he is to retain”.
Accordingly, the requirement to pay $850,000 to EE Lawyers should be read subject to the November order.
If I am incorrect about the interpretation of the orders I would nevertheless vary the January order, as requested by the parties to it, pursuant to r 17.02(f) of the Family Law Rules 2004 (Cth) which provides that an order may be varied at any time if the party in whose favour it was made consents. Mr Farina is the party in whose favour paragraph 3.2 was made and he consents.
MR FARINA’S Oral Application
Mr Farina was granted leave to seek an order that any balance after payment of the liability on the motor vehicle be paid to U Pty Ltd.
The respondents and EE Lawyers submitted that if the orders are to be read together it was not necessary to make an order as sought by Mr Farina.
I will therefore dismiss Mr Farina’s application.
I certify that the preceding forty-eight (48) paragraphs are a true copy of the reasons of the Honourable Justice Carew delivered on 9 April 2019.
Associate: .
Date: 9 April 2019
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