Burt & Merrill

Case [2023] FedCFamC1F 1144

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Burt & Merrill [2023] FedCFamC1F 1144

File number: MLC 9912 of 2013
Judgment of: MCGUIRE J
Date of judgment: 24 February 2023
Catchwords:

FAMILY LAW – PRACTICE AND PROCEDURE – Review of a decision - Applicant seeks review of an order by Senior Judicial Registrar dismissing an application for litigation funding against a third party company – Application granted

FAMILY LAW – PRACTICE AND PROCEDURE – Application that the third party company be joined as a third respondent to the proceedings for litigation funding – Application granted

Legislation: Family Law Act 1975 (Cth) ss 74,79, 117(1), 117(2) and 117(2A)
Cases cited:

Lao & Zeng (2021) FLC 94-053; [2021] FedFamCA1 17

Penfold v Penfold (1980) 144 CLR 311; [1980] HCA 4

Salvage & Fosse (2020) FLC 93-966; [2020] FamCAFC 144

Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466; [2009] FamCAFC 166

Division: Division 1 First Instance
Number of paragraphs: 30
Date of hearing: 23 February 2023
Place: Melbourne
Counsel for the Applicant: Mr Indovino
Solicitor for the Applicant: Vasilaras & Co
Counsel for the Respondents: Mr Eley
Solicitor for the Respondents: McKean Park Lawyers
Solicitor for the Respondents: Serong Legal

ORDERS

MLC 9912 of 2013

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MR BURT

Applicant
AND:

MS MERRILL

First Respondent

MR COUPE AS TRUSTEE OF THE BANKRUPT ESTATE OF MS MERRILL

Second Respondent

C PTY LTD (IN LIQUIDATION)

Third Respondent

ORDER MADE BY:

MCGUIRE J

DATE OF ORDER:

24 FEBRUARY 2023

THE COURT ORDERS THAT:

1.Within seven (7) days of the date of these orders the third respondent pay to the solicitors for the applicant the sum of fifty four thousand one hundred dollars ($54,100) such to be placed in trust and ultimately accounted to the applicant for fees and disbursements properly incurred.

2.The applicant Mr Burt have leave to bring an application for litigation funding pursuant to s 117 of the Family Law Act1975 (Cth) as against the third respondent company in liquidation C Pty Ltd (In Liquidation).

3.Costs of any or all of the parties of and incidental to this application be noted and reserved for determination by the trial judge.

4.By close of business Tuesday 28 February 2023 the applicant make file and serve an amended application to join C Pty Ltd (In Liquidation) as a third respondent to the substantive proceedings.

5.Not later than fourteen (14) days from the date of these orders the applicant and second respondent provide copies of any process including any applications, responses and affidavits filed by that party in these proceedings to the prospective third party liquidator.

NOTATION

6.Leave is given for the prospective third respondent, C Pty Ltd (In Liquidation), to not attend or participate in the s 90SN proceedings currently before this Court commencing final hearing on 28 February 2023 in the Federal Circuit & Family Court of Australia at Melbourne before Justice McGuire.

Note:   The form of the order is subject to the entry…

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AGLC
Burt & Merrill [2023] FedCFamC1F 1144
Case
[2023] FedCFamC1F 1144
Decision Date

CaseChat Overview and Summary

In the matter of Burt and Merrill, the applicant sought review of a decision by the Senior Judicial Registrar that dismissed his application for litigation funding against a third party company, C Pty Ltd (In Liquidation). The applicant also sought to join C Pty Ltd (In Liquidation) as a third respondent to the substantive proceedings. The application was brought under the Family Law Act 1975 (Cth). The court was required to determine whether the application for litigation funding against C Pty Ltd (In Liquidation) should be granted and whether C Pty Ltd (In Liquidation) should be joined as a third respondent to the proceedings.

The court found that the application for litigation funding should be granted as there was a strong likelihood of the applicant succeeding in the substantive proceedings and C Pty Ltd (In Liquidation) had sufficient assets to satisfy any judgment that may be entered against it. The court also found that C Pty Ltd (In Liquidation) should be joined as a third respondent to the proceedings as it had an interest in the property settlement proceedings and its absence would result in a failure of justice. The court noted that the applicant and the second respondent must provide copies of any process, including any applications, responses, and affidavits filed by that party in these proceedings to the prospective third party liquidator.

The court ordered that C Pty Ltd (In Liquidation) pay to the solicitors for the applicant the sum of $54,100 to be placed in trust and ultimately accounted to the applicant for fees and disbursements properly incurred. The applicant was granted leave to bring an application for litigation funding against C Pty Ltd (In Liquidation). The applicant was also required to file and serve an amended application to join C Pty Ltd (In Liquidation) as a third respondent to the substantive proceedings. The court also granted leave for C Pty Ltd (In Liquidation) to not attend or participate in the s 90SN proceedings currently before the court. Finally, the costs of any or all of the parties of and incidental to this application were noted and reserved for determination by the trial judge.

Orders

Orders of the court

MLC 9912 of 2013

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MR BURT

Applicant

AND:

MS MERRILL

First Respondent

MR COUPE AS TRUSTEE OF THE BANKRUPT ESTATE OF MS MERRILL

Second Respondent

C PTY LTD (IN LIQUIDATION)

Third Respondent

ORDER MADE BY:

MCGUIRE J

DATE OF ORDER:

24 FEBRUARY 2023

THE COURT ORDERS THAT:

1. Within seven (7) days of the date of these orders the third respondent pay to the solicitors for the applicant the sum of fifty four thousand one hundred dollars ($54,100) such to be placed in trust and ultimately accounted to the applicant for fees and disbursements properly incurred.

2. The applicant Mr Burt have leave to bring an application for litigation funding pursuant to s 117 of the Family Law Act 1975 (Cth) as against the third respondent company in liquidation C Pty Ltd (In Liquidation).

3. Costs of any or all of the parties of and incidental to this application be noted and reserved for determination by the trial judge.

4. By close of business Tuesday 28 February 2023 the applicant make file and serve an amended application to join C Pty Ltd (In Liquidation) as a third respondent to the substantive proceedings.

5. Not later than fourteen (14) days from the date of these orders the applicant and second respondent provide copies of any process including any applications, responses and affidavits filed by that party in these proceedings to the prospective third party liquidator.

NOTATION

6. Leave is given for the prospective third respondent, C Pty Ltd (In Liquidation), to not attend or participate in the s 90SN proceedings currently before this Court commencing final hearing on 28 February 2023 in the Federal Circuit & Family Court of Australia at Melbourne before Justice McGuire.

Note: The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

Background

Background to the litigation

It seems that the spousal maintenance element of the application was not prosecuted, and the Senior Judicial Registrar dismissed the Application for Litigation Funding, and hence the Application for Review now before me. Although the Review Application, again, seeks an order for spousal maintenance, this was not prosecuted before me. The Application for Litigation Funding remains live. It is trite to observe that such a Review Application comes before me as a hearing de novo. The background of this application is somewhat convoluted and complicated, and I will try to summarise it for these reasons as succinctly as I can.BACKGROUND The applicant is 71 years of age. He is a retired professional. He currently receives an age pension. The first respondent, Ms Merrill[1], is 54 years of age. She is an undischarged bankrupt, and her trustee in bankruptcy stands in her shoes in this application and in the substantive proceedings, with the first respondent taking no active role as yet. The second respondent is, therefore, noted as Mr Coupe as trustee. There is technically a third respondent but, at this stage, limited, on my understanding, to this discrete interlocutory application. The first respondent is the sole director of a company, C Pty Ltd (In Liquidation).[2] C Pty Ltd has assets consisting primarily of real property which is tenanted.[1] “The first respondent”.[2] “C Pty Ltd” also know as “the Company” or “the third respondent”. The gross value of that real property is estimated at some $4.7 million. It has varying cash accruals from rentals of $17,000 per month, which are its only source of income. Those accruals currently sit at an estimated $75,000. It is common ground that C Pty Ltd was placed into liquidation in respect of a government land tax debt of some $26,000. The Australian Taxation Office is currently owed $246,000 but with taxation returns and assessments outstanding from at least as far back as 2017. Mr PQ, chartered accountant and registered liquidator, is appointed as liquidator for C Pty Ltd. Mr PQ has, I understand, previously made application to the Supreme Court of Victoria seeking assertive orders in respect of his management of C Pty Ltd and, in particular, to be able to sell real property to satisfy creditors, where I understand the applicant has placed caveats on such real property, to secure a claimed interest under the Family Law Act 1975 (Cth). It followed, not surprisingly, that an associate judge of the Supreme Court of Victoria transferred those proceedings to this Court to be consolidated with the extant property proceedings being litigated in this Court. On 14 November 2013, the first respondent commenced proceedings in this Court for a property settlement pursuant to section 90SM of the Family Law Act 1975 (Cth) where the primary parties had lived in a de facto relationship. My colleague Berman J made final property orders on 10 August 2018. On 7 September 2018, the applicant lodged an appeal whereupon Berman J made an order on 27 September 2018 staying the execution of the property orders.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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