Bain and Bain (No. 2)

[2013] FamCA 794

FAMILY COURT OF AUSTRALIA

BAIN & BAIN (NO. 2) [2013] FamCA 794

FAMILY LAW – APPLICATION – Litigation funding – Where there are justifying circumstances – Where the financial matters of the parties are complex – Where the wife is unable to work due to illness – Where an order for litigation funding is made.

Family Law Act 1975 (Cth) s74, s79, s117(2), 117(2A).
Family Law Rules 2004 (Cth) Schedule 3.
Legal Profession Act 2007 (Qld) Schedule 2.

Marchant & Marchant [2012] FamCAFC 181.
Strahan & Strahan (2011) FLC 93-466.

APPLICANT: Ms Bain

RESPONDENT: Mr Bain

FILE NUMBER: BRC 2481 of 2010

DATE DELIVERED: 18 October 2013

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Hogan J

HEARING DATE: 2 July 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Baston

COUNSEL FOR THE RESPONDENT: Mr Dick

SOLICITOR FOR THE RESPONDENT: Mr Bain Lawyers

Orders

1. This Order becomes operative only upon the Wife engaging a solicitor for the purpose of these proceedings and upon that person filing and serving a Notice of Address for Service and confirming such retention in the matter in writing directed to the Husband.

2. Following compliance with the terms of Clause 1 above:

   (a)within seven (7) days after any payment by or on behalf of the Husband of any money in payment of any account for legal advice and representation in these proceedings, howsoever rendered, the Husband pay or cause to be paid the same sum of money into the Trust Account of the solicitor for the Wife; or

   (b)in the event that there is not any payment in a calendar month by or on behalf of the Husband of any money in payment of any account for legal advice and representation in these proceedings, howsoever rendered, the Husband pay or cause to be paid into the Trust Account of the solicitor for the Wife, by 4.00pm on the second day of the following month, the sum of $5,500.00 for each calendar month in which no payment is made by him for legal advice and representation in these proceedings.

3. Within twenty-four (24) hours after the payment by or on behalf of the Husband of any money referred to in Clause 2(a) the Husband cause to be given to the Wife’s solicitor a memorandum stating the amount or amounts so paid.

4. In the event that the Husband engages any solicitor other than one employed within a firm of solicitors in which he has an interest, howsoever defined, to provide to him legal advice and/or representation in these proceedings:

   (a)all money paid by or on behalf of the Husband as referred to in Clause 2(a) is to be held in trust by such solicitor for the Husband and is not to be applied in payment for legal services provided to the Husband until such time as the same amount has been paid by or on behalf of the Husband to the solicitor for the Wife; and

   (b)in the event that such payment to the solicitor for the Wife is not made within seven (7) days, the Husband is to direct his solicitor to pay fifty per cent (50 per cent) of the amount or amounts so held by them in trust to the solicitor for the Wife.

5. The amounts paid by or on behalf of the Husband to the solicitor for the Wife are to be applied by the solicitor for the Wife in payment of the costs and disbursements incurred or to be incurred by the Wife in the conduct of these proceedings including but not limited to the reasonable costs and disbursements:

   (a)       rendered by the solicitor for the Wife; and

   (b)rendered by any accountants engaged by the wife or the solicitor for the Wife to report on the valuation of the interests of the Husband in any business, company or entity.

6. That the question of the categorisation of any payments made pursuant to this order shall be a matter for determination by the trial judge.

7. The costs of this Application are reserved to the trial Judge.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Bain & Bain (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 2481  of 2010

Ms Bain

Applicant

And

Mr Bain

Respondent

REASONS FOR JUDGMENT

1. The Applicant (“the wife”) seeks the provision of litigation funding by way of a ‘dollar for dollar’ order based on the exercise of power pursuant to s 117(2) of the Family Law Act 1975 (Cth) (“the Act”) or s 74 of the Act. The wife does not rely on ss 79 or 80(1)(h) of the Act as the source of power for the making of the order she seeks.

2. The wife seeks orders which would require the Respondent (“the husband”) to pay to her, by way of payment for legal services:

   a)the same amount as he has paid towards his legal costs in the period from 18 December 2012 until the present; and

   b)on the first day of each month, such amount as he has paid to his lawyers for legal services (however provided) in the previous month.

3. She also seeks that the characterisation of the nature of any payment made be reserved to the trial Judge.

4. I have previously ordered that the husband pay spousal maintenance to the wife. In the course of that determination, I made a number of findings as to the circumstances of the parties which, where relevant, I set out below:

   a)the wife is about 52 years of age and the husband is 56 years of age;

   b)the wife is a retired teacher, having being discharged medically unfit as a consequence of the onset, in 2007 and 2009, of ovarian cancer and associated medical difficulties;

   c)the husband, a self-employed solicitor operating his own firm, has available for his support no less than about $15,000.00 per month via Trust distribution from which he currently draws $2,000.00 per week;

   d)the parties married in 1985 and separated in October 2009,  during which time they had two children, now adults;

   e)following a determination that she was totally and permanently disabled, the wife received, in about July 2009, a lump sum payment in the amount of about $251,775.25 (“the lump sum”) which she asserts has been spent supporting herself and the parties’ adult daughter – an assertion which remains in contention between the parties and which cannot be resolved on an interim basis;

   f)         the parties were divorced on 21 December 2010;

   g)         the husband spent:

   i.          $41,844.00 on travel expenses in December 2012;

   ii.$71,248.00 on holiday accommodation in December 2012/January 2013;

   iii.       $22,885.00 on clothing and shoes in January 2013;

   iv.        $8,794.00 on restaurants in December 2012/January 2013; and

   h)the husband continues to spend $1,799.81 per month by way of  repayments for an British motor vehicle in circumstances where the liability to continue to make such payment was re-negotiated in about February 2013.[1]

   i)the corporate entity through which the husband’s law firm has, until very recently, been operated and in respect of which he is the sole director and majority shareholder, reported a retained profit for the year ended 30 June 2012 in the vicinity of $352,520.00;[2]

   j)it is apparent, from the husband’s Financial Statement[3] that, for the financial year ended 30 June 2013, he spent, on average, the following per week on the items identified:

   i.          $722.83 – entertainment/hobbies;

   ii.         $2,221.03 – holidays;

   iii.       $350.39 – gifts;

   iv.        $298.72 – clothing and shoes,

   which together amounted to an annual expenditure of $186,835.03, or  $3,592.98 per week.

   [1] Wife’s affidavit filed 18 June 2013, Annexure ‘DAB-20’.

   [2] Wife’s affidavit filed 18 June 2013, Annexure ‘DAB-8’.

   [3] Husband’s financial statement filed 28 June 2013.

5. On 26 July 2013, I ordered that the husband pay to the wife, by way of spousal maintenance:

   a)         $1,049.00 per week commencing on 29 July 2013;

   b)        $3,496.00; and

   c)upon the wife vacating the former matrimonial home following its sale, an amount equivalent to the bond payable in respect of alternate residential premises provided that such amount not exceed $4,400.00; and

   d)thereafter, a weekly amount equivalent to the rent payable by the wife on alternate premises up to a maximum of $1,100.00 per week.

6. In addition, upon the wife satisfying certain specified preconditions, the husband was ordered to pay her the sum of $7,000.00 for use in acquiring pharmaceutical treatment, with the potential that he be required to pay, by about the end of the year, a further $7,000.00 to the wife for the same purpose.

7. The consequence for the husband of the July 2013 Order is, therefore, that upon the wife vacating the former matrimonial home, his non-discretionary expenditure will increase by up to $2,149.00 per week, exclusive of the lump sum payments referred to in the previous paragraph.  Even taking this into account, on the basis of the amounts referred to in paragraph 4j above, the husband will still have about $1,443.98 of highly discretionary expenditure from which to meet, by reallocation of priorities, the payment of litigation funding sought by the wife if justifying circumstances are found to exist and it is considered just or proper that he meet the same.

What submissions were made on behalf of each party?

1. The wife asserts, in essence, that the property proceedings between the parties are so complicated as to require her to be put in funds so as to have a “level playing field”. She also relies on the fact that the husband is a legal practitioner although it is accepted that he does not practice in the area of ‘family law’.

2. Counsel for the wife submitted that, whilst to date she had been able to obtain legal assistance by way of direct engagement, she does not have the capacity to fund the provision of legal assistance on an ongoing basis. Without an order that the husband contribute to her costs of litigation, she has no funds from which to pay the legal expenses associated with the proceeding.

3. In contrast, it was submitted, the husband had engaged competent legal representation notwithstanding that he is a legal practitioner.

4. Counsel for the wife submitted that she sought to utilise and have payments made into the ‘G Trust Account’: that Mr G is a solicitor and a friend of hers who has agreed to provide his Trust Account for such purpose. There was no evidence from Mr G in support of this assertion made from the Bar Table nor was it suggested that he had been retained by the wife or would be retained by her if her application for litigation funding was successful.

5. Counsel for the wife submitted that the husband has the capacity to meet a ‘dollar for dollar’ order given his past considerable discretionary expenditure. It was submitted that it was ‘entirely appropriate’ that the wife receive the benefit of a dollar for dollar order.

6. Counsel for the husband opposed the making of an order, submitting that:

   a)the wife should have provisioned from the lump sum so as to be able to meet her own legal expenses;

   b)the husband has employed a solicitor within his firm to act on his behalf so as to minimise the quantum of his legal costs;

   c)the wife has not provided sufficient, or any, evidence of her attempts to obtain funding from other sources such as by way of an application for legal aid funding and/or litigation funding from an external credit provider;

   d)the wife’s evidence does not establish those matters required by an application of the principles espoused in Strahan and Strahan[4];

   [4] (2011) FLC 93-466.

   e)it was ‘curious’ that the nature of the wife’s legal representation seemed to have changed in that:

   i.in her February affidavit[5] she referred to her engagement of Counsel as ‘pro bono’; but

   ii.when the matter was before the Court in June 2013, her Counsel announced that he appeared on a ‘pro bono direct brief’ basis but also said that, if a litigation funding order was made, that might be different,

   with the consequence that it was difficult for both the husband and the Court to know the basis on which the wife’s legal representation had been engaged;

   f)whilst details about the wife’s solicitor friend had been provided from the Bar Table, there were no details about his engagement in the matter and there was no evidence at all as to the terms of his retainer (if any) and the basis and terms upon which he was prepared to put his Trust Account at the wife’s disposal;

   g)the Court was not in a position to make an order for litigation funding because, other than the submission from the Bar Table referred to above, there is no evidence before the Court to support the basis upon which the wife’s legal representation had been engaged or would be engaged in the future;

   h)the wife is seeking to receive, by way of the payment of legal fees, an  amount greater than that which she will receive in the proceedings because the liabilities of the parties exceed the value of the property of the parties the subject of the proceedings; and

   i)the husband does not have the capacity to pay the wife’s legal expenses.

   [5] at paragraphs 53 and 54.

7. It was further submitted, on behalf of the husband, that the Court should not be persuaded by the wife’s evidence that she has fully expended the lump sum and that, given the wife’s evidence that she held significant amounts of the lump sum in cash and spent it on her self- support, there is no way such assertion can be verified.

8. There is, at this stage, some difference in the expenditure the wife accounts for and the calculations undertaken in respect of the same on the husband’s behalf. Despite this, a number of matters seem to me to be non-contentious:

   a)the wife has not been in paid employment since prior to separation; and

   b)since separation in October 2009 (nearly four years ago), whilst having the benefit of continued residence in the former matrimonial home, she has supported herself using the lump sum and savings she had at separation: even using the husband’s figure of the total monies available to the wife at separation, which I understand to be about $370,643.68, my calculations suggest that the wife may have spent about $1,400.00 per week to meet her own needs. Given that an order was made for spousal maintenance in the amount of $1,049.00 per week and the fact that the wife admits to spending money on the only overseas trip she has ever taken in her life, I am not, at this point, persuaded that, if there is any money unaccounted for, it is likely to be of such an amount as to make any order that the husband meet the wife’s litigation costs ‘unjust’ or ‘improper’.

Principles to be applied in determining an Application for the provision of funds for litigation

1. In Strahan v Strahan, (2011) FLC 93-466 Boland and O’Ryan JJ said, at [79]:

   The need for a party to proceedings under the Act to seek an order for the provision of funds to enable the payment of his or her legal costs of participating in the proceedings has been recognised for many years. It is a reflection of an important matter that distinguishes litigation under the Act from civil litigation between parties who are not parties to a marriage, namely that “very often the wealth of the parties is controlled by one rather than both of them”: Blueseas Investments Pty Ltd v Mitchell (1999) FLC 92-856 at 86,128 per Full Court (Nicholson CJ, Lindenmayer and O’Ryan JJ). 

2. Where the source of power relied on is s 117(2) of the Act, the Court may make such order it considers just provided there are justifying circumstances[6] and where the source of power relied on is s 74 of the Act, the Court may make such order as is proper.[7]

   [6] Strahan & Strahan (2011) FLC 93-466, [86].

   [7] Strahan & Strahan (2011) FLC 93-466, [86].

3. The source of power relied upon for the making of the order sought determines those necessary preconditions and relevant considerations to which regard must be had in determining whether or not to exercise the discretion to make the orders sought.[8] Many of these necessary preconditions and relevant considerations are common to the sources of power relied upon by the wife.

Is there a position of relative financial strength on the part of the husband, does he have the capacity to meet his own litigation costs and does the wife have an inability to meet her own litigation costs?

[8] Strahan & Strahan (2011) FLC 93-466, where at [84] and [86] Boland and O’Ryan JJ agreed with Brereton J in Paris King Investments Pty Ltd v Rayhill [2006] NSWSC 578 regarding what Zschokke & Zschokke (1996) FLC 92-693 had established.

1. The wife is not a director, or shareholder of any of the corporate entities in which the husband has an interest or is involved.

2. The wife asserts that the husband told her that, as at June 2013, he had paid $122,111.23[9] by way of legal fees relating to this matter. I understand her to rely on this as the basis for a submission that his financial circumstances are such that he has been able to make such payments in addition to undertaking the significant discretionary spending referred to above. I did not understand the husband to contradict this assertion.

   [9] Wife’s affidavit filed 21 June 2013, paragraph 23.

3. Whilst the wife said that she has paid legal bills of around $100,000.00,[10] she later said that she has spent $66,399.35 on legal representation. I do not understand the basis for this difference nor is any explanation to be found within the wife’s material.

   [10] Wife’s affidavit filed 24 February 2013, paragraph 25.

4. In any event, the wife says that she can no longer afford legal representation and that has been self-represented since sometime in 2012.

5. The wife said, at paragraphs 53 and 54 of her affidavit filed on 24 February 2013:

   I am unable to afford further legal representation. I have been fortunate to secure the services of Mr Peter Baston of Counsel by direct brief. He is acting for me on a pro bono basis.

   Mr Baston has advised me that he will only continue acting for me on the basis that an application for a dollar for dollar Hogan Order is made. To date, he estimates that he has provided $5,000.00 – $6,000.00 of representation.

6. Further, the wife said, at paragraph 79 of her affidavit filed on 18 June 2013:

   Fortunately I have had Peter Baston of Counsel appearing on my behalf on a direct brief pro-bono basis since December 2012.

7. The husband notes that the wife has not filed any material evidencing her attempts to obtain finance for the purpose of the litigation from a source other than him. He says that there is no evidence that she has applied to Legal Aid or attempted to obtain funding from litigation lenders. I accept this but consider that, given the husband’s evidence that the property pool has a negative value and the indisputable evidence that the wife has suffered from ovarian cancer since 2007 and has received a lump sum payout as a consequence of being determined to be permanently and totally incapacitated for work, it is highly unlikely that any litigation funder or commercial lender would advance funds to her for the purpose of conducting this litigation or that she would be successful in obtaining legal aid funding.

8. I accept for the purpose of this Application that the wife has an inability to meet her own litigation costs.

9. The evidence establishes that, since April 2013, the husband has conducted “these proceedings” within his own firm by employing another lawyer, at a rate of $80.00 per hour (inclusive of GST) to work on the matter. That lawyer also undertakes work on other files.

10. The husband asserts that he does not have the ability to pay the wife’s legal fees because, whilst self-employed in his own practice, the majority of work performed by his firm is mining law or relates to mining activities, the demand for which has decreased during the most recent financial year. He relies on a comparison of the gross fees, before wages, other office expenses and tax, received from work performed by all staff being:

    a)         $1,719,106.00 for the year ended 30 June 2012; but

    b)        $1,475,098.75 for the year up to 11 June 2013.

1. The husband deposes to his intention to merge his practice, effective 1 July 2013. He says that, whilst the Mr Bain Lawyers Discretionary Trust No. 1 (“the Trust”) will continue the current practice of drawing approximately $15,000.00 per month before tax from the practice, and he will continue his current practice of drawing $2,000.00 per week from the Trust, he will no longer receive the benefit of the practice meeting his credit card payments and the costs associated with his use of his motor vehicle.

2. Despite these matters and the actuality of being involved in these proceedings, the husband decided to spend funds available to him in the manner outlined in paragraphs 4(g), (h) and (j) above.

3. The husband says that, the wife seeks orders that would cause him financial hardship. Given the significant discretionary expenditure undertaken relatively recently, I am confident that the husband is in a position of relative financial strength vis-à-vis the wife and that he possesses the capacity to meet both his legal expenses and the wife’s legal expenses, albeit that this may require some diminution in the level of his spending on discretionary items.

4. The husband also says that he is paying $5,000.00 per month as a consequence of litigation conducted in the Supreme Court of New South Wales and that, as a consequence of the December 2012 Order, he is the party who will be responsible for the payment of the costs of the Trustee for sale of the former matrimonial home. The wife does not take issue with these submissions and I take these matters into account.

Is there complexity in the financial affairs of the parties and a need for expert investigation?

1. I consider that there is sufficient complexity in the husband’s financial circumstances that it is understandable that the wife seeks to investigate the same. Her desire to do so is, no doubt, heightened by her appreciation of the husband’s position that there is no net property available for the purpose of s 79 of the Act. I take into consideration that the husband is responsible, at first instance, for the costs of valuing various entities, companies, trusts and assets which will result in him having to meet costs of approximately $20,000.00. Repeating his assertion that it is unlikely that there will be any value in the property pool because the liabilities exceed the assets, he says it is highly unlikely that he will be compensated from “the pool” for these costs and he will be left to bear them alone and without contribution from the wife. Such assertion is not capable of determination on an interim proceeding but it is clear from his decision to undertake discretionary spending in the manner referred to above that he was confident of his ability to meet these costs.

Does the wife have at least an arguable case for substantive relief which deserves to be heard?

1. The parties were married for 24 years and had two children. Both worked for remuneration during the relationship and, in the absence of any submission to the contrary, contributed the incomes they earned for the joint advancement and benefit of the family unit as it was then constituted. They parented two children who are now adults.

2. It seems uncontroversial that, since separation, the husband has, through his efforts in self-employment, been in a superior financial position to the wife, at least in terms of the availability of income. He has been able to engage in significant discretionary expenditure in recent times.

3. Whatever the ultimate position in terms of the value of the property amendable to the operation of s 79 of the Act, I am satisfied that the wife, who seeks both property orders and ongoing spousal maintenance, has an arguable case for substantive relief which deserves to be heard.

What are the wife’s likely costs of the litigation?

1. There is no sworn evidence as to the wife’s likely costs of the litigation. Whilst authority suggests that, in considering the amount to award by way of litigation funding order it is probably necessary for an assessment to be made of the amount that is required,[11] I consider that this ‘necessity’ does not arise in circumstances where the Court is being asked to make a dollar-for-dollar order rather than a payment by way of specified lump sum.

   [11] Strahan & Strahan (2011) FLC 93-466, [153].

Will it be possible to ‘take into account’ in the proceedings any sum paid to the wife?

1. Consistent with his primary case that there is no net property amendable to s 79 of the Act, Counsel for the husband submitted that it will not be possible for the Court to take into account any amount the husband is ordered to pay to the wife for litigation funding purposes at the final hearing of the matter and that, consequently, the wife will receive more than might legitimately be expected in the circumstances. Such submission would, I think, have greater weight if the source of power relied upon for the making of the order sought by the wife was s 79 of the Act rather than ss 117(2) or 74 of the Act.

2. Further, whilst it may be necessary for the Court, in determining whether to make an order, to consider whether it will be possible to ‘take into account’ in the property proceedings any sum payable under an order, a conclusion about the uncertainty of the wife’s eventual property settlement award, as is the case here, is not necessarily fatal to her application but is just one of the matters to be balanced in the exercise of discretion.[12]

   [12]Strahan & Strahan (2011) FLC 93-466, [95] referring to Zschokke & Zschokke (1996) FLC 92-693, 83,217 & 83,221.

Will the wife’s legal representatives continue to act for her in the absence of funds?

1. Understandably, there was no challenge to the wife’s evidence that she has been advised by Counsel that he is unwilling to continue to represent her on a pro bono basis. Consequently, should the wife fail in her application for litigation funding, she will have to represent herself or try to engage new legal representatives in circumstances where she is unemployed, and has been for a not insignificant period, has a chronic and debilitating illness and is dependent for her financial support on the spousal maintenance payments the husband has been ordered to make.

Additional matters relevant to the consideration of the wife’s Application pursuant to s 117(2) of the Act

1. In addition to the matters outlined above, it is also necessary to consider those matters contained in s 117(2A) of the Act where they are relevant.

2. The financial circumstances of each party have been summarised above and I do not intend to repeat them. Neither party is legally aided.

3. Whilst each party alleges that the other has failed or delayed in providing disclosure and that this conduct has either slowed the progress of the proceeding or in some way contributed to the legal costs so far incurred, it is impossible to determine the competing assertions at an interim hearing.

4. The husband asserts that the manner in which the wife has engaged in her conduct of the litigation between them has resulted in higher legal costs than would otherwise be the case. He asserts that she interrogates him by email on an almost daily basis and has requested significant disclosure of documents and then told him that they were of little interest to her. Such matters are also incapable of determination on an interim proceeding.

Are there justifying circumstances which make it just, or is it proper that the husband pay to the wife the same amount as he has paid for his legal costs in the period from 18 December 2012 until the present?

1. Since December 2012, the wife has had the benefit of legal representation provided on a pro bono basis. The term ‘pro bono’ is defined for the purpose of the Legal Profession Act2007 (Qld) as meaning:

   a)done for the public good; and

   b)without charge or at a reduced cost.[13]

   [13] Schedule 2.

2. Whilst an order can be made in respect of costs already incurred as well as for future costs,[14] there is no evidence before the Court to establish whether, in fact, the wife has, at this stage, incurred an indebtedness to Counsel for the services so far provided by him on a pro bono basis.  There is no evidence of the retainer between Counsel and the wife and there is no evidence, save for that referred to in paragraph 23, to establish that fees have been or will be charged in respect of the previous representation provided on a pro bono basis. There is no evidence to establish whether the representation provided thus far pro bono has been provided without charge or at a reduced cost – if the latter, there is no evidence as to the basis relied upon for the quantification of whatever costs are said to be associated with the provision of such services.

   [14] Strahan & Strahan (2011) FLC 93-466, [96].

3. Given the above, I am not persuaded that that there are justifying circumstances or that it is just or proper that an order be made which would require the husband to meet legal expenses for services rendered to the wife on a pro bono basis in the period from December 2012 until the present.

Are there justifying circumstances which make it just or is it proper that the husband pay the wife, on a monthly basis, the same amount he has paid his solicitors in the previous month?

1. I consider that there are circumstances which justify the making of an order for the provision of litigation funding and that it is just that such order be made[15] in terms which will see the husband meet such costs by way of a dollar for dollar order. It is proper that such an order be made. The wife is unable to meet her own litigation costs without such an order. In contrast, the husband is in a relatively stronger financial position and has demonstrated a capacity to meet his own legal costs and make arrangements to minimise these. Without such an order the wife, who has an arguable case for substantive relief, will be left to act on her own behalf in circumstances where she also has to deal with the effects of her ongoing illness. The husband has the capacity to meet such an order by varying the amount of his discretionary expenditure.

   [15] Ibid at [91] referring to Zschokke at p 83,218.

2. The wife seeks a dollar for dollar order to provide her with the same level of legal representation as the husband has had, currently has and will continue to have until the matter is finalised. The wife says that, at present the husband has employed a solicitor, for $80.00 per hour, to work on his case. It is submitted that, if that solicitor is paid for seven hours a day, five days a week, such expenditure amounts to $2,800.00 per week. Whilst the mathematics is correct, I am not persuaded that it is just or proper to make an order simply on such terms. Rather, I consider an order which requires the husband to pay or cause to be paid to the wife’s solicitor the same amount he spends in a month on legal services associated with these proceedings for property settlement and spousal maintenance – whatever that amount is – is that which is both just and proper in all the circumstances.

3. In order to deal with the possibility that, in a particular month, the husband does not pay any money for legal services associated with the proceedings, I consider that, in order to ensure that the matter does not stall in its progression toward resolution or readiness for trial because the wife does not receive a payment during such period, it is both just and proper that an order be made requiring him to make some payment toward the wife’s litigation expenses each month irrespective of whether he has made a payment for his own legal services in that month.

4. In order to arrive at the amount which is to be payable by the husband in the circumstance where he does not make a payment for his own legal services in any month, I take into account that:

   a)in the period from 15 April 2013 to 26 June 2013, he paid, on average, an amount of $3,371.00 per week in legal costs which, using the hourly rate he provides, amounts to the receipt by him of an average of about 42 hours of legal services per week;

   b)legal costs are not generally incurred on a steady basis each week, there being times when more work is needed to be done on a matter and times when less work is required such that the amount referred to above may not accurately represent the ongoing legal expenses incurred by the husband;  and

   c)Item 108 of Schedule 3 of the Family Law Rules 2004 prescribes an hourly rate of $218.60 for a lawyer, and Item 201 of Schedule 3 of the Family Law Rules 2004 prescribes an hourly rate of between $251.00 - $357.96 for Junior Counsel.

5. Doing the best that I can to cater for the alternate position where the husband does not pay anything for his legal expenses in a month – and taking into account that, unlike the husband, the wife does not have the option to obtain legal services from an “employee”[16] – I consider it just and proper that, in such an eventuality, he pay or cause to be paid to the wife’s solicitor’s trust account the sum of $5,500.00 per month. Such amount takes into account the provision, on average, of about five hours per week of legal services at a cost of $250.00 per hour.[17]

   [16] The term being used in a general sense to encompass the husband’s engagement of Mr Springer.

   [17] About 5 hours per week at $250.00 per hour – $1,250 per week for 52 weeks divided by 12 to arrive at an average monthly figure then rounded up.

6. I also consider that, in order to protect both parties from any risk of injustice arising from the manner in which the sum is expended, it is just and proper that the order be made in terms which require the funds paid by the husband to be administered solely by a solicitor engaged by the wife, applied only to meet expenses referred to in the order and that, consistent with the proper operation of a solicitor’s practice, detailed records be maintained about the matters on which sums are expended so as to permit review by the Court at the time it determines the substantive property and spousal maintenance proceedings or on the final determination of the issue of costs.[18]

   [18] Strahan & Strahan (2011) FLC 93-466, [95] referring, with approval, to Brereton J. in Paris King Investments Pty Ltd v Rayhill at [30] & [31]; Strahan & Strahan (2011) FLC 93-466, [153].

7. Further, given that it does not follow from the need to identify the source of power exercised in making an interim order of the type sought by the wife that the Court is required to characterise such money on an interim basis[19] an order shall be made reserving the question of the characterisation of the payments made by the husband pursuant to the order to the trial Judge.

   [19] Marchant & Marchant [2012] FamCAFC 181, [40]-[42] per May, Ainslie-Wallace and Kent JJ.

I certify that the preceding (fifty-four) (54) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hogan delivered on 18 October 2013.

Associate:

Date:              18 October 2013