CAMPBELL & CAMPBELL

[2015] FamCA 224

FAMILY COURT OF AUSTRALIA

CAMPBELL & CAMPBELL [2015] FamCA 224

FAMILY LAW – Interim Property – Litigation Funding – Injunction

APPLICANT: Mr Campbell

RESPONDENT: Ms Campbell

FILE NUMBER: BRC 6286 of 2013

DATE DELIVERED: 23 March 2015

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Hogan J

HEARING DATE: 23 March 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Cameron

SOLICITOR FOR THE APPLICANT: Saunders Downing Hely

COUNSEL FOR THE RESPONDENT: Ms McLennan

SOLICITOR FOR THE RESPONDENT: Allan R De Brenni & Company

Orders

IT IS ORDERED BY WAY OF INTERIM ORDER THAT

1. From the funds held in the trust account of Saunders Downing Hely, solicitors for the husband, an amount of $47,489.97 be released to the husband for the purpose of enabling him to meet his costs of and incidental to these proceedings.

2. From the funds held in the trust account of Saunders Downing Hely, solicitors for the husband, an amount of $47,489.97 be released to the wife for the purpose of enabling her to meet her costs of and incidental to these proceedings.

3. The husband is restrained and an injunction issue restraining him from drawing down on the mortgage facility currently secured over real property situated at B Street, Suburb C, Queensland or from further encumbering, charging, dealing or selling this property in any way without written agreement between the parties or further order of the Court.

4. Each party’s costs of the appearance today and the costs of and incidental to the Application in a Case filed 25 February 2015 are reserved.

5. It is certified that it was reasonable to engage Counsel.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Campbell & Campbell 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 6286 of 2013

Mr Campbell

Applicant

And

Ms Campbell

Respondent

Ex Tempore

REASONS FOR JUDGMENT

1. This is an Application in a Case by the husband, who is the respondent in substantive property proceedings, seeking that funds in an amount of $47,489.97 held in a solicitor’s trust account be released to him to be applied by him towards the payment of legal fees. 

2. Whilst not advanced as a primary position or forming part of a response to that Application in a Case, Ms McLennan of Counsel, (who appears for the respondent wife), advances in her written submissions - as an alternative proposition if her primary submissions do not find favour with the Court - that there be also an order authorising the release of funds to her client for the same purpose. 

3. Mr Cameron of Counsel (who appears on behalf of the applicant to this application), advises, on behalf of his client, that there is no issue with the making of such an order and in such an amount if the Court is ultimately persuaded that orders in those terms are just in the circumstances of this case.

Broad Summary

1. The parties married in 1985 and separated in March 2004.  There are three adult children.  It is uncontroversial that for a significant period of time throughout the parties’ relationship, the wife suffered from issues associated with her mental health. 

2. On 24 March 2010, the parties entered into an agreement. The applicant’s case is, it is a binding financial agreement which determined their respective rights in relation to property owned by them or either of them. If that contention is correct, then the consequences which flow from the operation of s 71A of the Family Law Act 1975 (Cth) are obvious.

3. The respondent wife asserts, though, that the agreement is not a binding financial agreement, or, if it is determined to be a binding financial agreement, that it should be set aside.   

4. In the event the wife is successful in having a declaration made to the effect that the agreement is not binding, or, if it is found to be binding, having an order made setting it aside, she will seek to persuade the Court that an order which does justice and equity as between the parties is one by which she receive 70 per cent of the value of the property of the parties.  Additionally, she seeks an order for the payment of lump-sum spousal maintenance. 

5. Counsel for the respondent provided a document entitled “Draft Schedule of Assets and Liabilities” which I have dated with today’s date.  It is accepted for the purpose of the hearing today - and for no other purpose - by Mr Cameron on behalf of the applicant that the Court should accept the property and the values ascribed to it within that document.  For the purpose of considering the interim application and response to it, I do so. 

6. It is apparent from a perusal of that document that the applicant husband owns a property at B Street, in respect of which there is equity in an amount of about $247,000.00.  In addition, the other significant property of the parties are funds held in trust in an amount of $171,140.02 and the husband’s entitlement to a superannuation fund in an amount of $174,180.84. 

7. If the respondent’s position was ultimately accepted by the Court a finding that she receive 70 per cent of the value of the property and entitlement to superannuation as set out in the draft schedule would see her receive property having a value of $497,160.00.  From this would, necessarily, be deducted the amount of $35,000.00 leaving a total of $462,160.00 in round terms.  I say necessarily because the total of $70,000.00 – the total of each parties’ receipt of $35,000.00, being funds already disbursed to them – has been included as part of the draft schedule figure. 

8. It is immediately apparent that, even if the current application is granted, there will remain sufficient property - being funds held in trust, funds available, albeit held as equity in real property and “funds” held within an entitlement to superannuation - from which the respondent’s entitlements could be met if a Court were ultimately persuaded that an ultimate decision of 70 per cent division in her favour is one which is just and equitable in the circumstances. 

9. As would be apparent from a consideration of the discourse between myself and Counsel, I consider that the appropriate source of power in a circumstance such as the present where there is a dispute as to the nature of the financial agreement entered into by the parties - is to have regard to the terms of s 117 of the Act. 

10. It is clear, from a perusal of the terms of that section, that the Court may make an order if satisfied that the circumstances justify the making of an order as to costs:  an order, if made, should be one that is just in the particular circumstances of the case. 

11. I have determined that I am persuaded that the circumstances of the case justify the making of an order as to costs.  I am satisfied that the circumstances justify an order as to costs in terms that will see each party receive payment out of moneys held in trust - namely, their property held in a trust account - in equal amounts:  the amount sought by the applicant of $47,489.97. 

12. I have arrived at this conclusion taking into account the clearly established fact that the applicant’s financial circumstances are significantly superior to those of the respondent’s.  He is in paid employment, albeit that his financial statement asserts a deficiency on a weekly basis of income vis-à-vis expenditure.  It is clear that the respondent - who is supported by receipt of a disability pension - is in financial circumstances which are inferior to those of the applicant. 

13. However, the other significant factor that persuades me that there are justifying circumstances for the making of an order as to costs is that there exists within the property of the parties sufficient equity in the B Street property and the husband’s entitlement to superannuation and those funds which will remain in trust to ensure that the wife will be in a position to receive her entitlements in an amount as sought by her if that is ultimately made out at trial. 

14. It will also be apparent from regard to discussions with Mr Cameron of Counsel on behalf of the applicant that a significant part of my reasoning in arriving at this conclusion rests upon the assumption that the Court can put into effect orders which will protect “the equity” held in the B Street property, which, on the figures set out in the draft schedule, currently stands in an amount of about $247,000.00. 

15. As a result of a request, Mr Cameron proffers, on behalf of the applicant, an undertaking that his client will not encumber or deal with that property without leave of the Court.  That is an entirely appropriate proffering of an undertaking, designed to ensure that the Court is persuaded there remains available property from which any determination as to the respondent’s entitlement can be met. 

16. Whilst accepting the undertaking in the terms offered, it is also my intention to restrain the husband from drawing down the mortgage currently secured over that property or from further encumbering in any way or doing anything to decrease the current equity represented by the asserted value and the existing mortgage without either written agreement of the parties or further order of the Court.  I do so to ensure the position remains. 

17. The justifying circumstances arise here because permitting access to funds currently held in cash in trust means the parties jointly are likely protected from having to deal, at some future time, with an argument that the applicant be able to access funds by drawing on “the equity” in the B Street property – an action which would have the consequence of incurring repayments to a commercial lender. 

18. Additionally, as I have said, there is sufficient property, however it is held, to ensure that the respondent’s entitlements can be satisfied once the other matters in dispute between the parties are resolved, either by agreement or final hearing. 

19. Orders that see each party receive funds in the same amount will ensure that both parties are able to continue to be assisted by legal representation. 

20. I am persuaded that there is the capacity to take into account a sum advanced, and, in this circumstance, the parties are both drawing upon funds which represent part of the balance of the net sale proceeds from real property previously sold by agreement. 

I certify that the preceding twenty-three (23) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hogan delivered on 23 March 2015.

Associate:                 KV

Date:    23 March 2015