Gaha v Gaha - [2024] FCA 531

FEDERAL COURT OF AUSTRALIA
Gaha v Gaha [2024] FCA 531

File number(s): QUD 390 of 2022

Judgment of: COLLIER J

Date of judgment: 20 May 2024

Catchwords: CORPORATIONS - application by litigation representative for approval of deed of compromise – whether litigation representative is an ‘independent’ lawyer for purposes of r 9.71(2)(c) Federal Court Rules 2011 (Cth) – whether compromise in best interest of applicant – confidentiality orders

Legislation:
Corporations Act 2011 (Cth) ss 198F, 247A, 290 and 1303

Federal Court of Australia Act 1976 (Cth) s 37AF

Federal Court Rules 2011 (Cth) rr 1.34, 9.70, 9.71

Cases cited:
Allen v State of Victoria (Department of Education and Training) [2019] FCA 1074

Bushby (by his litigation representative Webling) v State of Victoria (Department of Education and Training) (No 2) [2023] FCA 340

Freeman v State of Victoria [2018] FCA 797

Jones v State of Victoria [2014] FCA 1404; (2014) 145 ALD 619

Lewis v State of Victoria (Department of Education and Training) [2019] FCA 714

Scandolera v Victoria (Department of Education and Early Childhood Development) [2015] FCA 1451

Wade v State of Victoria (No 2) [2012] FCA 1080

Young v State of Victoria (Department of Education and Training) [2018] FCA 1124

Division: General Division

Registry: Queensland

National Practice Area: Commercial and Corporations

Sub-area: Corporations and Corporate Insolvency

Number of paragraphs: 32

Date of hearing: Determined on the papers

Solicitor for the Applicant: FC Lawyers

Solicitor for the First Respondent: Kamy Saeedi Law

ORDERS

QUD 390 of 2022

BETWEEN:
NELLY GAHA

Applicant

AND:
GABRIEL CONSTANTINE GAHA

First Respondent

GAHA BROS & CO PTY LTD ACN 008 577 295 AS TRUSTEE OF THE GAHA FAMILY TRUST

Second Respondent

ORDER MADE BY:

COLLIER J

DATE OF ORDER:

20 MAY 2024

THE COURT ORDERS THAT:
1.The requirement in r 9.71(2)(c) of the Federal Court Rules 2011 (Cth) (Federal Court Rules), that the interlocutory application filed on 3 April 2024 be accompanied by an opinion of a lawyer who is “independent”, be dispensed with.
2.Pursuant to r 9.70 of the Federal Court Rules, settlement of these proceedings, as set out in the Deed of Undertaking Not to Sue & Indemnity marked as Annexure “CMK-3” to the affidavit of Chloe Melissa Kopilovic filed 3 April 2024 and as Annexure “ET-4” to the affidavit of Erin Brook Taylor filed 3 April 2024, be approved.
3.To the extent necessary, leave be granted to the applicant to discontinue the following applications:
(a)The originating application filed 31 October 2022 (Originating Application); and
(b)The interlocutory application filed 1 February and the statement of charge dated 30 January 2023 (Contempt Application).

4.Subject to Order 5 of these Orders, pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth), the affidavit of Chloe Melissa Kopilovic filed 3 April 2024 (including Annexures), and the affidavit of Erin Brook Taylor filed 3 April 2024 (including Annexures) (confidential affidavits), be treated as confidential to the parties to this proceeding, and until further order:
(a)be…

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: [2024] FCA 531
Decision Date: 20 May 2024

CaseChat Overview and Summary

Mrs Nelly Mobayed Gaha, represented by Ms Chloe Melissa Kopilovic, filed an application for approval of a compromise settlement in relation to her proceedings against her son, the first respondent, who is also a director and shareholder of Gaha Bros. The application was heard by the Federal Court of Australia, which was required to determine whether the settlement was in the best interests of Mrs Gaha. The application was contested by the first respondent, who argued that the settlement was not in the best interests of Mrs Gaha and that the requirements of r 9.71(2)(c) of the Federal Court Rules 2011 (Cth) had not been met, as the application was not accompanied by an opinion from an "independent" lawyer.

The Court held that the requirement for an "independent" lawyer's opinion could be dispensed with, given the circumstances of the case. The Court found that the settlement was in the best interests of Mrs Gaha, considering her age, her position as a director and shareholder of Gaha Bros, and the nature of the compromise. The Court also granted confidentiality orders regarding the confidential affidavits and reserved costs. The Court approved the compromise settlement and dismissed the first respondent's application.

Orders

Orders of the court

1. The requirement in r 9.71(2)(c) of the Federal Court Rules 2011 (Cth) (Federal Court Rules), that the interlocutory application filed on 3 April 2024 be accompanied by an opinion of a lawyer who is “independent”, be dispensed with.

2. Pursuant to r 9.70 of the Federal Court Rules, settlement of these proceedings, as set out in the Deed of Undertaking Not to Sue & Indemnity marked as Annexure “CMK-3” to the affidavit of Chloe Melissa Kopilovic filed 3 April 2024 and as Annexure “ET-4” to the affidavit of Erin Brook Taylor filed 3 April 2024, be approved.

3. To the extent necessary, leave be granted to the applicant to discontinue the following applications:

(a) The originating application filed 31 October 2022 (Originating Application); and

(b) The interlocutory application filed 1 February and the statement of charge dated 30 January 2023 (Contempt Application).

4. Subject to Order 5 of these Orders, pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth), the affidavit of Chloe Melissa Kopilovic filed 3 April 2024 (including Annexures), and the affidavit of Erin Brook Taylor filed 3 April 2024 (including Annexures) (confidential affidavits), be treated as confidential to the parties to this proceeding, and until further order:

(a) be marked as confidential to the parties on the Court’s Electronic Court File; and

(b) not be available for public inspection, disclosed in open court or disclosed in the open part of any court transcript.

5. The confidentiality imposed by Order 4 of these Orders is subject to the following exceptions:

(a) the first respondent being permitted to disclose the terms of the confidential affidavits in any application sought to be made pursuant to Order 6 of these Orders; and

(b) the first respondent being permitted to disclose the terms of the confidential affidavits to the Australian Capital Territory Civil and Administrative Tribunal in proceedings GT 83/2023 – Nelly Mobayed Gaha.

6. Any application by the first respondent for a special costs order or a third-party costs order be filed within 30 days of the date of these Orders.

7. The costs of the Originating Application and the Contempt Application be reserved.

8. There be no order as to the costs of and incidental to the interlocutory application filed on 3 April 2024.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

The parties subsequently provided draft consent orders to resolve the interlocutory application. BACKGROUND At the time of commencing these proceedings, the applicant, Mrs Gaha, was 83 years old and did not have a litigation representative. The applicant was a director, shareholder and the secretary of the second respondent (Gaha Bros). The first respondent is one of the applicant’s four children. The first respondent is also a director and shareholder of Gaha Bros. The applicant commenced these proceedings on 31 October 2022 pursuant to ss 198F, 247A, 290 and 1303 of the Corporations Act 2011 (Cth) seeking orders that the applicant, as a director and member, be provided access to (including receiving copies) and permitted inspection of the books and records of Gaha Bros. On 11 November 2022, Downes J made orders by consent that, materially, within seven day the applicant be permitted access to the books and financial records of the second respondent including (but not limited to) the documents described in Schedule A to the originating application; and that the first respondent (by himself, his servants or agents) take all and any such steps as may be necessary to produce and make available for inspection by the applicant or her solicitors the documents. The contempt application was filed referable to compliance by the first respondent with those orders of Downes J. On 5 June 2023, by order of Downes J, Mr Charles Londy was appointed as litigation representative of the applicant. On 27 November 2023, I ordered by consent that: 1.Mr Londy’s resignation as Mrs Gaha’s litigation representative is accepted, and Ms Kopilovic is appointed in his place.……INTERLOCUTORY APPLICATION As I noted earlier, on 3 April 2024 Ms Kopilovic as applicant sought the approval of the Court pursuant to r 9.70(1) of the Federal Court Rules of a compromise reached between the parties for settlement of the originating application and the contempt application. Rule 9.70 of the Federal Court Rules provides: Compromise or settlement of matter in proceeding(1)If a litigation representative agrees to the compromise or settlement of any matter in dispute in a proceeding, the litigation representative must apply to the Court for approval of the agreement.(2)If the Court approves the agreement, the agreement is binding on the person by or for whom it was made as if:(a)the person were not under a legal incapacity; and(b) the litigation representative had made the agreement as the person's agent.(3)The Court may, as a condition of approval, require that any money or other property payable for the benefit of a person under a legal incapacity be dealt with by way of a settlement, or in any other way that the Court considers appropriate.Note: The Court may give approval subject to conditions--see rule 1.33.(4)If the Court does not approve the agreement, the agreement is not binding on the person under a legal incapacity. Rule 9.71 of the Federal Court Rules provides further requirements for such applications for approval: Application by litigation representative for approval of agreement(1)An application by a litigation representative for approval of an agreement must be made by filing an interlocutory application.(2)The interlocutory application must be accompanied by the following:(a)an affidavit stating the material facts on which the application relies;(b)the agreement that is sought to be approved;(c)an opinion of an independent lawyer that the agreement is in the best interests of the person under a legal incapacity.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

File number(s):	QUD 390 of 2022
Judgment of:	COLLIER J
Date of judgment:	20 May 2024
Catchwords:	CORPORATIONS - application by litigation representative for approval of deed of compromise – whether litigation representative is an ‘independent’ lawyer for purposes of r 9.71(2)(c) Federal Court Rules 2011 (Cth) – whether compromise in best interest of applicant – confidentiality orders
Legislation:	Corporations Act 2011 (Cth) ss 198F, 247A, 290 and 1303 Federal Court of Australia Act 1976 (Cth) s 37AF Federal Court Rules 2011 (Cth) rr 1.34, 9.70, 9.71
Cases cited:	Allen v State of Victoria (Department of Education and Training) [2019] FCA 1074 Bushby (by his litigation representative Webling) v State of Victoria (Department of Education and Training) (No 2) [2023] FCA 340 Freeman v State of Victoria [2018] FCA 797 Jones v State of Victoria [2014] FCA 1404; (2014) 145 ALD 619 Lewis v State of Victoria (Department of Education and Training) [2019] FCA 714 Scandolera v Victoria (Department of Education and Early Childhood Development) [2015] FCA 1451 Wade v State of Victoria (No 2) [2012] FCA 1080 Young v State of Victoria (Department of Education and Training) [2018] FCA 1124
Division:	General Division
Registry:	Queensland
National Practice Area:	Commercial and Corporations
Sub-area:	Corporations and Corporate Insolvency
Number of paragraphs:	32
Date of hearing:	Determined on the papers
Solicitor for the Applicant:	FC Lawyers
Solicitor for the First Respondent:	Kamy Saeedi Law

ORDER MADE BY:	COLLIER J
DATE OF ORDER:	20 MAY 2024