Wei and Wei (No 2)
[2020] FamCA 96
•24 February 2020
FAMILY COURT OF AUSTRALIA
| WEI & WEI (NO. 2) | [2020] FamCA 96 |
| FAMILY LAW – PRACTICE AND PROCEDURE – Rule 17.02 and Rule 17.02A – functus officio – doctrine considered – not functus officio. |
| Family Law Act 1975 (Cth), s 79 Family Law Rules 1984 (Cth), o 31 r 6 Family Law Rules 2004 (Cth), rr 17.02, 17.02A Migration Act 1958 (Cth), s 368(2A) |
| Chhor v Minister for Immigration [2017] FCCA 2135 KR Handley, Spencer Bower and Handley: Res Judicata (LexisNexis Butterworths, 4th ed, 2009) |
| APPLICANT: | Ms Wei |
| RESPONDENT: | Mr Wei |
| INTERVENOR: | J Lawyers Pty Ltd |
| FILE NUMBER: | MLC | 530 | of | 2017 |
| DATE DELIVERED: | 24 February 2020 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | The Honourable Justice Wilson |
| HEARING DATE: | 19 February 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Not applicable |
| SOLICITOR FOR THE APPLICANT: | Not applicable |
| COUNSEL FOR THE RESPONDENT: | Dr D Matta |
| SOLICITOR FOR THE RESPONDENT: | Kenna Teasdale Lawyers |
| COUNSEL FOR THE INTERVENOR: | Mr G Holmes |
| SOLICITOR FOR THE INTERVENOR: | J Lawyers Pty Ltd |
Orders
the sum of $261,761.54 being 65% of the amount in the trust accounts is to be paid forthwith to the respondent.
The applicant is entitled to 35% of the sum in trust, namely $140,948.52.
The sum of $140,948.52 referred to in paragraph 2 above is subject to an enforceable equitable charge in favour of J Lawyers Pty Ltd.
The sum of $133,765.39 is to be paid forthwith from the trust accounts to J Lawyers Pty Ltd.
The balance of the sum in trust after payment to the respondent of $261,761.54 and after payment to J Lawyers Pty Ltd of $133,765.39 (the balance being $7,183.13) is to be paid forthwith to the applicant at her last known address.
This proceeding is otherwise dismissed.
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 Wei & Wei 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 MELBOURNE |
FILE NUMBER: MLC 530 of 2017
| Ms Wei |
Applicant
And
| Mr Wei |
Respondent
And
| J Lawyers Pty Ltd |
Intervenor
REASONS FOR JUDGMENT
Introduction
On 31 January 2020 I handed down reasons in this proceeding.
On 13 February 2020 the solicitors for the intervenor emailed my chambers informing me that my reasons were defective for failing to make orders in relation to funds in trust held by BB Lawyers in the sum of $222,689.40. I required the parties to appear on 19 February 2020, which they did.
Mr Gerard Holmes of counsel for the intervenor argued that Rule 17.02 enabled my orders made 31 January 2020 to be corrected. Rule 17.02A enables my reasons handed down on 31 January 2020 to be corrected at any time.
The intervenor advanced several contentions in support of its application. After a searching discussion with Mr Holmes the following is a fair distillation of the matters canvassed –
a)the total of the joint funds held in the two trust accounts (namely that of J Lawyers and BB Lawyers) was $402,710.07;
b)the unpaid fees due to the intervenor were $133,765;
c)the intervenor could only be partially satisfied pursuant to the orders made on 31 January 2020 whereas it could be wholly satisfied in respect of unpaid and owing legal fees if orders were made for funds to be disbursed aggregating $133,765 from both trust accounts;
d)the orders made on 31 January 2020 only addressed recourse to the funds in the trust account of J Lawyers the effect of which was to meet only part of the intervenor’s unpaid fees;
e)the obvious intendment of the court in making orders and in handing down the reasons on 31 January 2020 was to satisfy J Lawyers in full in its unpaid fees; and
f)under Rule 17.02 of the Family Law Rules I had power to vary the orders made on 31 January 2020 because those orders do not reflect the intention of the court and under Rule 17.02A of the Family Law Rules I had power to vary my reasons made on 31 January 2020 where those reasons were issued by mistake.
On behalf of the respondent Dr Matta contended that having handed down reasons on 31 January 2020 I was functus officio and had no power to do as the intervenor urged. He said the relief sought by the intervenor went beyond the correction of clerical errors. That said, Dr Matta said he had no application for orders because he said (perfectly politely I hasten to add) the respondent intends to appeal every aspect of my reasons and orders.
Synopsis
In my judgment and for the reasons that now follow it is appropriate to vary my orders made on 31 January 2020 pursuant to Rule 17.02 and to vary my reasons also dated 31 January 2020 so that the intervenor forthwith appropriates the whole of its unpaid fees of $133,765 from the funds in the J Lawyers Trust account and so much as may remain unpaid, from the funds in the BB Lawyers Trust account with the balance of the funds in the BB Lawyers Trust account being disbursed to the applicant.
Relevant factual setting
In paragraph 17 of the 31 January reasons I recorded the respondent’s contentions about the property in Australia available for division. It is as well to record that entire paragraph –
17.In paragraph 29 of his 28 June 2019 affidavit the husband recorded what he said was the entirety of the property between the applicant and the respondent as at the date of the making of his affidavit. He divided the property there listed into property in Australia on the one hand and property in China on the other. He provided no documentary verification of the property recorded in the table. At all events he stated that in Australia, the property of the parties was made up of the following –
a)$180 020.67 being money held in trust by J Lawyers he said was owned jointly by the husband and wife;
b)$222 689.40 being money held in trust by BB Lawyers he said was owned jointly by the husband and wife; and
c)$177 734 described simply as F Pty Ltd he said was owned solely by the husband.
As appears, that paragraph recorded the respondent’s contentions. It is relevant to observe that nowhere in the transcript of the trial of this proceeding was there mention of funds in the BB Lawyers Trust account. In paragraph 142 of the reasons of 31 January 2020 I narrated matters arising from the respondent’s second affidavit. It is as well to record that paragraph –
142.The respondent made a second affidavit, it being dated 20 September 2019. Some of the more important matters that emerged from that affidavit may be relevantly distilled as follows –
a)Johns J made orders in the nature of partial property settlement orders in June 2017 pursuant to which the applicant received $140 000 and the respondent received $70 000;
b)Z has been in the respondent’s sole care since January 2019;
c) the applicant relocated to China permanently in August 2018;
d)the respondent asserted that more than 60% of the couple’s assets are in China;
e) the sum of $180 020.67 is held on trust by J Lawyers;
f) the sum of $222 689.40 was held in trust by BB Lawyers;
g)the applicant is employed in City DD on a monthly salary, so he said, of AUD $3 086.42;
h)according to a business valuation of F Pty Ltd prepared on 11 March 2019 by Mr QQ of RR Accountants, the total shareholder equity is in the negative amount of $67 316;
i) F Pty Ltd is not providing a stable income;
j)following the ATO’s assessment of capital gains tax on the sale of the Suburb B property, the respondent paid his assessment to the ATO of $93 125 and the applicant should have paid an equivalent sum to the ATO but if she failed to do so and instead transferred that money to China, the respondent will have no way to recover the funds;
k) the applicant failed to disclose important documents; and
l)the respondent deposited $245 050 to F Pty Ltd, as recorded in that company’s books and records.
That was the second mention of BB Lawyers and it came from contentions advanced by the respondent.
Both counsel focused on what each said was a factual finding about the sum of $222,689.40 held by BB Lawyers Trust that emerged in paragraph 152(f) of my 31 January reasons. On behalf of the intervenor, Mr Holmes contended that the express mention in that paragraph of the sum of $222,689.40 in BB Lawyers Trust supported the intervenor’s contention that it was intended by me to address that sum but that the orders made, in addressing only the J Lawyers Trust account, did not correctly reflect the intention of the court. Conversely, Dr Matta submitted that the factual finding in paragraph 152(f) of my reasons represented a finding of fact about which there was no uncertainty, mistake or clerical error yet having made that factual finding I erred in not dealing with the division of that asset being $222,689.40 in the BB Lawyers Trust.
Both counsel agreed that my reasons of 31 January 2020 should have, but failed to, address the money in the BB Lawyers Trust account.
Consideration
No dispute arose that it is erroneous to speak of the “inherent jurisdiction” of the Family Court of Australia because it is a statutory court exercising powers conferred by statute being “powers expressly or by implication conferred by the legislation which governs it”: DJL v The Central Authority.[1] In that case Kirby J spoke of the permissible metes and bounds of powers once the slip rule is enlivened. However, at paragraph 93 of that case Kirby J was addressing order 31 rule 6 of the Family Law Rules 1984 and this case falls to be decided by a consideration of two different rules, namely Rule 17.02 of the Family Law Rules in relation to varying the orders and Rule 17.02A of the Family Law Rules in relation to varying reasons. Each requires separate consideration as each applies to a different aspect of the court’s function (orders on the one hand and reasons on the other).
[1] (2000) 201 CLR 226.
Rule 17.02 is concerned with varying orders. In this case that is a reference to orders 1 to 5 that I made on 31 January 2020. Rule 17.02(1)(e) provides that an order may be varied or set aside if, relevantly, the order does not reflect the intention of the court. The rule expressly provides that the court may vary or set aside an order at any time so long as one of the eight factors recorded in the subparagraphs to Rule 17.02(1) is enlivened.
Here, it was my intention to make orders under s 79 of the Family Law Act in relation to the totality of money in trust. That was in reality the entirety of the property that fell for division. The total sum in trust exceeded $400,000. I intended to divide that entire sum as to 65% to the respondent and as to 35% to the applicant. In arithmetical terms, 65% of $402,710.07 was $261,761.54 and 35% of $402,710.07 was $140,948.52. I intended to order the whole of the money in trust to be disbursed in those arithmetical amounts. Rather than including the total balances in both trust accounts, I made orders only in relation to the amount in the J Lawyers Trust account. The orders I made on 31 January 2020 do not reflect my intention, therefore. The amount in the BB Lawyers Trust account should have been disbursed as well.
At once it will be apparent that the intervenor’s outstanding fees would have been met in full by the division of the totality of the trust funds ($402,710.07) to the respondent as to 65% ($261,761.54) and as to the applicant as to 35% ($140,948.52) recognising that the intervenor’s equitable charge enabled the intervenor to take the sum divisible to the applicant. However, had I done that, a small amount would have been left over between the amount claimed by the intervenor and the 35% ordered to be disbursed. That small sum had to be paid to the applicant. That was my intention for the purposes of Rule 17.02(1)(e) of the Family Law Rules.
The orders made on 31 January 2020 do not reflect that intention. They must. Power exists to rectify that situation. I am persuaded that those orders require variation or setting aside and orders to be pronounced to reflect the intendment of my reasoning.
It was said that I was functus officio and therefore could not make the correct orders. I do not agree for at least two reasons. First, both Rule 17.02 and Rule 17.02A are expressed to have the temporal limitation “at any time”. The orders were pronounced on 31 January 2020, less than three weeks ago. Dr Matta told me his client had not yet filed any appeal process. No timing constraint exists on varying or setting aside the orders pronounced on 31 January.
The second reason why I am not functus officio emerges from a consideration of the learning on the doctrine which I examined in Chhor v Minister for Immigration.[2] It is useful to restate what I there held –
[2] [2017] FCCA 2135.
25.The doctrine of functus officio (those Latin words translating to “having discharged his duty”)[3] is of very great antiquity with its heritage deeply connected to the doctrine of res judicata, as was pointed out in his signature work, Spencer Bower and Handley: Res Judicata[4] by the Honourable Mr Justice Handley. His Honour traced the doctrine of res judicata to civil law origins through the former ecclesiastical courts and the High Court of Admiralty that applied canon and civil law. His Honour said that the doctrine originated from principles of Roman law and that when applied, it rendered a dispute incontrovertible on the merits on the basis that it was in the interests of the community to be protected against the multiplication of suits and the scandal of conflicting decisions.[5]
[3] Osborne, A Concise Law Dictionary (Sweet & Maxwell, 5th ed, 1964).
[4] (LexisNexis Butterworths, 4th ed, 2009).
[5] The Honourable Mr Justice Handley, Spencer Bower and Handley: Res Judicata (LexisNexis Butterworths, 4th ed, 2009) paragraphs 27.01 – 27.04.
26.The overlay between the two doctrines of res judicata and functus officio was explained in the 1952 article by Thomas Penberthy Fry, ‘The Finality of Judicial Decisions’.[6] There, the learned author wrote the following –
[6] (1956) 2 University of Queensland Law Journal 9, 13.
There is a rule that, if a final and conclusive judgment or decree given by a judicial tribunal as to the merits of a case exhausts, in the absence of an order to the contrary by a superior tribunal, its powers and jurisdiction in respect of that case, it is functus officio. This rule as to functus officio is of importance mainly if an attempt is made to induce the tribunal to vary or rescind in whole or in part, at its own discretion and on its own initiative, any final and conclusive judgment which it may have given as to the merits of a case.[7]
27.In a later passage of the same article, the learned author wrote the following –
For a judicial tribunal to become functus officio it must have delivered a valid judgment or decree of a final and conclusive nature. A res judicata must have come into existence.[8]
28.In its more modern emanation, the doctrine has been said to be preferable to the description or consequence of the performance of a function having regard to the statutory power or obligation to perform that function. So much was said by the High Court of Australia in R v Moodie; Ex parte Mithen[9] (Stephen, Murphy and Aicken JJ). The Federal Court held to like effect in Comptroller-General of Customs v Kawasaki Motors Pty Ltd (No.1).[10] The concept underlying the doctrine of functus officio has been described in terms equating to the statutory function as having been spent and that the issue is in reality a matter of statutory construction of the statute that confers the power in issue. That was the view of Gummow J in Minister for Immigration, Local Government and Ethnic Affairs v Kurtovic.[11]
[7] Ibid.
[8] (1956) 2 University of Queensland Law Journal 9, 15.
[9] (1977) 51 ALJR 850.
[10] (1991) 32 FCR 219.
[11] (1990) 21 FCR 193, 211.
When analysed in terms of the statutory function of the judge having been spent by the handing down of reasons, in my view the entitlement conferred by Rules 17.02 and 17.02A of the court at any time to vary or set aside those orders reveals that the statutory function is not spent and that, as a matter of statutory construction, power exists to do as the intervenor seeks.
In short, I am not functus officio.
The orders made on 31 January 2020 should be varied or set aside and new orders substituted for them.
As to Rule 17.02A, my reasons can be varied or set aside at any time where they were issued by mistake. My reasons contained the mistake that I did not address the funds in the BB Lawyers Trust account whereas I should have done so having identified those funds as property in paragraph 152(f) of my reasons. Specifically, the following paragraphs of my reasons require correction by reason of the mistake I made about the totality of the trust funds in this case. The specific variations are as follows –
a)paragraph 4 second sentence under the heading “synopsis” presently states an amount of “$61,344.70”. That amount should be “$140,948.52”;
b)paragraph 152(y) the words “Suburb B property money in J Lawyers Trust account” should read “Suburb B property money in BB Lawyers Trust account”;
c)paragraph 155 presently reads “In real terms, that resulted in the only asset in Australia being the proceeds in the J Lawyers Trust account.” That sentence should read “In real terms, that resulted in the only assets in Australia being the proceeds in the BB Lawyers Trust account and the J Lawyers Trust account.”;
d)paragraph 215 second sentence the words “J Lawyers Pty Ltd” should read “BB Lawyers”;
e)paragraph 231 third sentence presently reads “Applying the arithmetic previously calculated, 35% of the sum held in trust is $61 344.70”. That sentence should read “Applying the arithmetic previously calculated, 35% of the total sum held in the two trust accounts ($402,710.07) is $140,948.52”;
f)paragraph 231 sixth sentence presently reads “However, the sum in trust will not satisfy the entirety of the sum adjudged payable in favour of the respondent as well as the full sum claimed by the applicant”. That sentence should be deleted.
g)paragraph 231 seventh sentence presently reads “As to the latter, the intervenor’s claim I sand always has been derivative in nature”. That sentence should read “As to the latter, the intervenor’s claim always has been derivative.”;
h)paragraph 231 eighth sentence presently reads “The intervenor obtains a claim in debt in persuasion over the whole amount the applicant owes it”. That sentence should read “The intervenor obtains a claim in debt in priority over the whole amount the applicant owes it.”;
i)paragraph 231 tenth sentence, after the comma, “in the trust account” should read “in the trust accounts” and the words “in that trust account” should read “in those trust accounts”;
j)paragraph 231 eleventh sentence the words “in the trust account” should read “in the trust accounts”;
k)paragraph 231 twelfth sentence, the words “of the trust account” should read “of the trust accounts”;
l)paragraph 235(a) should be replaced with the following –
“the sum of $261,761.54 being 65% of the amount in the trust accounts is to be paid forthwith to the respondent”;
m)paragraph 235(b) should be replaced with the following –
“I declare that the applicant is entitled to 35% of the sum in trust, namely $140,948.52”;
n)paragraph 235(c) should be replaced with the following –
“I declare that the sum of $140,948.52 referred to in the preceding alphabetical subparagraph is subject to an enforceable equitable charge in favour of J Lawyers Pty Ltd”;
o)paragraph 235(d) should be replaced with the following –
“I order the sum of $133,765.39 be paid forthwith from the trust accounts to J Lawyers Pty Ltd”; and
p)paragraph 235(e) should remain as –
“I otherwise dismiss this proceeding”.
In addition, the following paragraph should be added to reflect the distribution of the balance in the trust accounts to the applicant after payment has been made to J Lawyers Pty Ltd from the applicant’s share of the trust funds –
“The balance of the sum in trust after payment to the respondent of $261,761.54 and after payment to J Lawyers Pty Ltd of $133,765.39 (the balance being $7,183.13) is to be paid forthwith to the applicant at her last known address.”
The amendments above have been incorporated into the reasons in this case, in a fresh document called Wei & Wei (No 3).[12]
[12] [2020] FamCA 98.
I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson delivered on 24 February 2020.
Associate:
Date: 24 February 2020
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