Gandega and Fulmali & Ors
[2020] FamCA 74
•13 February 2020
FAMILY COURT OF AUSTRALIA
| GANDEGA & FULMALI AND ORS | [2020] FamCA 74 |
| FAMILY LAW – PRACTICE AND PROCEDURE – SINGLE EXPERT – Where application to expand report by Single Expert – Where such application appropriate in the circumstances where there are associated transactions – Where order made as sought. FAMILY LAW – PRACTICE AND PROCEDURE – INJUNCTION TO RESTRAIN SOLICITORS FROM ACTING – Where application for injunction to restrain solicitors from further acting – Where discussion of applicable principles – Where applicant for injunction does not adduce evidence such as would enliven jurisdiction – Where application dismissed. |
| Dalton & Dalton [2017] FamCAFC 78 Mancini v Mancini [1999] NSWSC 800 Oram & Lambert and Ors (No. 2) [2018] FamCAFC 161 Osferatu & Osferatu [2015] FamCAFC 177; (2015) FLC 93-666 |
| APPLICANT: | Ms Gandega |
| FIRST RESPONDENT: | Mr Fulmali |
| SECOND RESPONDENT: | Mr Akbar |
| INTERVENOR: | As Liquidator for B Pty Ltd ACN … Mr V |
| FILE NUMBER: | PAC | 4811 | of | 2016 |
| DATE DELIVERED: | 13 February 2020 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Foster J |
| HEARING DATE: | 18 December 2019 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | Marsdens Law Group |
| SOLICITOR FOR THE FIRST RESPONDENT: | Crumpton Lawyers |
| COUNSEL FOR THE SECOND RESPONDENT: | Mr Reeves |
| SOLICITOR FOR THE SECOND RESPONDENT: | KPL Lawyers |
| SOLICITOR FOR THE INTERVENOR: | JHK Legal |
Orders
That the application for injunction to restrain Q Lawyers from further acting for the second respondent be dismissed.
That the parties do all things necessary and sign all necessary documents to authorise and direct the Single Expert Mr K of U Company to extend his report to include a valuation of the husband’s interest in D Pty Ltd as at 30 June 2019 and currently.
Liberty to apply as to implementation of the previous order.
That costs of and incidental to the present application be reserved to final trial.
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 Gandega & Fulmali 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 PARRAMATTA |
FILE NUMBER: PAC 4811 of 2016
| Ms Gandega |
Applicant
And
| Mr Fulmali |
First Respondent
And
| Mr Akbar |
Second Respondent
And
| As Liquidator for B Pty Ltd ACN … Mr V |
Intervener
REASONS FOR JUDGMENT
The present discrete applications for determination arise from earlier interim applications between the parties that were in part determined by orders made on 3 July 2019 with reasons for judgment published that day.
The determination of the present discrete applications assumes familiarity with the reasons for judgment of 3 July 2019: Gandega & Fulmali & Anor [2019] FamCA 423.
Inadvertently, two discrete issues were not determined by those reasons for judgment. Those issues arise from the wife’s Response to an Application in a Case filed 21 December 2018 and are as follows:
a)that the second respondent be restrained from further instructing Q Lawyers in these proceedings; and
b)that the single expert be instructed to undertake a valuation of the husband’s interest in D Pty Ltd as at 30 June 2019 and as at today’s date.
The wife’s evidence
The evidence relied upon by the wife in support of orders sought by her as to the discrete issues above is comprised in her affidavit filed 21 December 2018.
It is common ground that the first respondent husband has or had a 40 per cent interest in D Pty Ltd.
The wife asserts that in about June 2015 the husband arranged for a transfer of funds withdrawn from the mortgage account over the then matrimonial home with such funds applied towards part of the deposit for the purchase by the company of a property situated at E Street, Suburb F.
The company entered into a contract for purchase of the subject property for the purposes of development with the purchase price being $6 million. The husband asserts, according to the wife, that he contributed one half of a total cash sum of $960,510 paid by the company towards the proposed purchase.
Subsequent to November 2016 the company was unable to settle on the purchase in respect of which it was represented by the subject solicitors.
It appears common ground that the proposed purchase by the company did not take place and that arrangements were entered into that, in effect, saw the benefit of the contract for purchase assigned to a third-party corporation S Pty Ltd. Pursuant to such arrangement the sum of $600,000 was repaid and was received by D Pty Ltd with that company also receiving, the wife asserts, a refund of stamp duty in the sum of $360,510.
The wife asserts that subsequent to receipt of the above funds, D Pty Ltd controlled by the second respondent disbursed funds as follows:
a)about $161,500 to R Pty Ltd controlled by the second respondent;
b)about $319,000 to B Pty Ltd (that company being the subject of the present single expert valuation);
c)about $92,000 to the second respondent.
It appears that the remainder of the funds received are unaccounted for.
As to the solicitors presently acting for the second respondent, the wife seeks an order restraining those solicitors from continuing to act for the second respondent.
The wife properly asserts that the solicitors had never acted for her and they do not hold confidential information that may have been conveyed to them by the wife.
The wife asserts that the firm has acted for D Pty Ltd in respect to the property transactions referred to above and that the firm acted in relation to certain share transfers that are the subject of issue in these proceedings. Otherwise, the wife asserts that the solicitors acted for both the husband and the second respondent historically in relation to their business affairs.
It is common ground that the husband does not support the application of the wife, him being silent on the issue.
The second respondent’s evidence
The second respondent relied upon his affidavit filed 12 November 2018 and, subsequent to the filing of the wife’s affidavit evidence, the affidavit of his solicitor Ms T filed 5 March 2019.
As to the issue of the valuation of D Pty Ltd it is conceded by the second respondent that the various monetary transactions set out above, in fact, occurred. Clearly, such a concession raises the issue as to how funds advanced to the company were treated in the company accounts and how funds and on what basis such funds were later disbursed by the second respondent or, otherwise, retained by him.
In such a circumstance it is of forensic importance that the single expert valuation be expanded to an analysis and valuation of the present value of the said company including what would clearly be various loan account transactions and balances that would impact upon that valuation. Accordingly, the single expert valuation will be extended to include the valuation sought of D Pty Ltd.
As to the issue of the restraint sought against the solicitors, evidence is proffered on behalf of the second respondent by Ms T setting out the nature and extent of the engagement of the solicitors in relation to the failed property purchase referred to above. Otherwise, evidence is given as to the nature and extent of the various commercial transactions in respect to which the solicitors acted on behalf of the first and second respondents and the company B Pty Ltd.
In circumstances where the husband is separately represented and does not seek to be heard in relation to the wife’s injunctive application, it is incumbent upon the wife to adduce evidence that would enliven this Court’s power to make the injunction sought by her.
As set out by the Full Court again in Oram & Lambert and Ors (No. 2) [2018] FamCAFC 161 the basis for seeking orders restraining solicitors from acting was set out by the Full Court in Osferatu & Osferatu [2015] FamCAFC 177; (2015) FLC 93-666 at [20] as follows:
There are three established categories on the basis of which solicitors may be restrained from acting against their client or former client. They are: breach of confidence, breach of fiduciary duty and the inherent jurisdiction of a court over its officers and to control its process. Each category has its own principles which guide its operation. The third category may be involved in conjunction with either of the first two so there is clearly an overlap; nonetheless, the basis for the exercise of the jurisdiction in each is different (Kallinicos v Hunt [2005] NSWSC 1181).
The Full Court quoted with approval Bryson J in Mancini v Mancini [1999] NSWSC 800 at [7]:
It is of importance to observe that information generally is not protected; the protection available relates to confidential information, and is available to the person entitled to the confidence. No circumstances were put forward in which Mrs Mancini herself is entitled to the protection of the law against the use of any particular information by Mr Mancini or by the lawyers whom he has chosen to retain. It is not possible to address in any clear way and to come to a decision on protection of any alleged confidential information without identifying what the confidential information is in a sufficiently specific way to enable it to be identified. Without doing that it is not possible to come to a conclusion on whether the information truly is confidential, to consider and appraise the circumstances in which it came into existence and was communicated, to come to any conclusion about whether protection is appropriate, or to make any enforceable order. A case about confidential information cannot be nebulous. Confidential information which once existed may no longer be confidential; it may no longer be available although it was communicated in the past; it may not be material to any use which might now be proposed to be made of information. Without specificity a claim to protection cannot be defended or decided on any fair procedural basis, and a general allegation of the kind put forward here to the effect that from the nature of the past legal business confidential information must have been communicated should not in my opinion be upheld.
The relevant principles were identified in the following passages of Osferatu (and see later Dalton & Dalton [2017] FamCAFC 78):
34.We agree with Goldberg J in PhotoCure ASA v Queen’s University at Kingston [2002] FCA 905 where he said at [50] and [51]:
50.It is apparent from Lord Millett's judgment that there are three stages which need to be considered:
- whether the firm is in possession of information which is confidential to the former client;
- whether that information is, or may be, relevant to a matter in which the firm is proposing to act for another party with an interest adverse to the former client;
- whether there is any risk that the information will come into the possession of those persons in the firm working for the other party.
51.The burden of establishing the first two propositions is upon the former client but the burden of establishing the third proposition moves to the firm proposing to act once the first two propositions are satisfied ...
35.A balancing of the nature of the information against a consideration of the person to whom the information was given, when the information was given, the relevance of that information to the current proceedings, the risk of disclosure and any proposed protective measures is required before any determination can be made as to whether any relief is required and, if so, what is the appropriate relief.
The wife fails to demonstrate that her complaint falls within the matters that would enliven this Court’s injunctive jurisdiction. Her application for such restraint will be dismissed.
Orders will be made as set out at the forefront of these reasons.
I certify that the preceding twenty five (25) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 13 February 2020.
Associate:
Date: 13 February 2020
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