Daily & Daily (No. 2)
[2021] FamCA 337
•25 May 2021
FAMILY COURT OF AUSTRALIA
Daily & Daily (No. 2) [2021] FamCA 337
File number(s): ADC 4606 of 2018 Judgment of: BERMAN J Date of judgment: 25 May 2021 Catchwords: FAMILY LAW – PROPERTY – Litigation funding – Where a binding financial agreement was set aside – Where the Full Court allowed the appeal and remitted the matter - Where the applicant seeks a lump sum by way of litigation funding or spousal maintenance – Where the respondent does not oppose the order but queries whether the Court has jurisdiction to make it – Whether the wife has an arguable case for substantive relief – Where the Full Court accepted there is an arguable case – Where impecuniosity to repay is not in and of itself a barrier – Orders. Legislation: Family Law Act 1975 (Cth) ss 72, 79, 117 Cases cited: Rakete v Rakete (2012) 48 Fam LR 325 Number of paragraphs: 23 Date of hearing: 19 May 2021 Place: Adelaide Counsel for the Applicant: Ms Pyke QC Solicitor for the Applicant: Norman Waterhouse Lawyers Counsel for the Respondent: Mr Jordan Solicitor for the Respondent: Jordan & Fowler Family Lawyers ORDERS
ADC 4606 of 2018 BETWEEN: MS DAILY
Applicant
AND: MR DAILY
Respondent
ORDER MADE BY:
BERMAN J
DATE OF ORDER:
25 MAY 2021
THE COURT ORDERS THAT:
1.Pursuant to s 117 of the Family Law Act 1975 (Cth) the husband shall cause the sum of ONE HUNDRED AND TEN THOUSAND DOLLARS ($110,000) to be paid to the trust account of Norman Waterhouse Lawyers for and on behalf of the wife.
2.To give effect to order 1 hereof the husband and wife do all such acts and sign all such documents as may be necessary to withdraw from the parties’ joint Westpac Investment Account number …59 the sum of ONE HUNDRED AND TEN THOUSAND DOLLARS ($110,000).
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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Daily & Daily has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BERMAN J
In contested proceedings between Ms Daily (“the wife”) and Mr Daily (“the husband”), the wife sought a declaration pursuant to s 90G(1)(b) of the Family Law Act 1975 (Cth) (“the Act”) that a financial agreement (“the agreement”) made between the parties on 21 July 2005 is not a binding financial agreement (“BFA”) or that if it is then the agreement be set aside pursuant to the provisions of ss 90K(1)(b), 90K(1)(d) and/or 90K(1)(e) of the Act.
If the agreement is not determined to be a BFA or is set aside then the wife seeks orders for settlement of property pursuant to s 79 of the Act.
Consequent upon judgment being delivered, the following order was made on 17 June 2020:
(1)That pursuant to s 90K(1)(d) of the Family Law Act 1975 (Cth) the financial agreement entered into between the parties dated 21 July 2005 be set aside.
The order made was the subject of an appeal heard on 25 November 2020. On 9 December 2020 the Full Court considered that I had made an error of law and the following orders were made by consent:[1]
(1)The appeal from the order made by the primary judge on 17 June 2020 be allowed.
(2)The proceedings be remitted to the primary judge for rehearing.
[1] See Daily & Daily [2020] FamCAFC 304
The rehearing has been listed for final determination on 6 September 2021.
In anticipation of the proceedings and by Application in a Case filed 16 April 2021, the wife seeks orders that pursuant to s 117 or s 72 of the Act the husband do pay to the wife, by way of either litigation funding or spousal maintenance, the lump sum of $110,000.
The wife seeks a further order that the parties sign all such documents as may be necessary to withdraw the said sum from the parties’ joint Westpac Investment Account number …59 with the sum to be paid to the trust account of Norman Waterhouse Lawyers for her anticipated legal fees.
There is agreement between the parties that subject to the Court having jurisdiction to do so, orders can be made by consent in terms of paragraphs 1 and 3 of the Application in a Case.
LEGAL PRINCIPLES
An application for litigation funding is to be determined by reference to s 117 of the Act. The section provides the power to make an order for litigation costs. It is to be considered in stark distinction to an application under s 79 of the Act by way of an interim property order.
It is not suggested that the wife’s claim under s 117 is in reality an application for interim property under s 79. If it was, I do not consider that I would have the power to make such an order.
The wife’s Application in a Case is supported by her Affidavit filed 15 April 2021. Paragraphs 19 to 30 set out matters relevant to the wife’s costs of legal representation.
The wife estimates that her future legal fees up to and including the conclusion of the trial will approximate $92,600. That sum is to be seen in the context of the wife having paid about $210,000 on her legal fees to date.
The consent of the husband can be considered as tacit acceptance that the sum sought by the wife is likely to be consumed by legal fees save as to the possibility that the parties might be able to settle their differences. The consent of the parties does not create the power to make the order if it does not exist or should not be exercised.
Informed consent of the parties may make the extent and level of any enquiry necessary to determine whether the power exists and if so whether it should be exercised, a more straight forward exercise.
I consider the relevant consideration is whether the wife has an arguable case for substantive relief.
As discussed, the Full Court found that I had made an error of law in applying the test of hardship. The Full Court considered that I had not sufficiently or at all considered the potential outcome for each of the parties if the BFA was set aside and the provisions of ss 79 and 75(2) of the Act were applied.
In addition, the Full Court considered the enforceability of the terms of agreement as follows:
51. As already noted, for her part Queen’s Counsel for the wife alluded to the wife’s intention to raise uncertainty of terms of the agreement at any enforcement stage of the proceedings, if that stage is reached. Given our serious reservations about the enforceability of the terms of the agreement, we raised with the parties during the appeal hearing the desirability of the parties engaging in alternate means of resolving their dispute given what has already been spent by them in the trial proceedings to date, and what potentially remains to be spent on a remitter of these proceedings, with yet a potentially further dispute awaiting at any enforcement stage concerning the validity of the subject agreement.
Initially the Full Court contemplated the utility in remitting the proceedings on the basis that the agreement may not be “capable of clear understanding”.[2] A decision was made to remit on the submission of the husband’s counsel.
[2] Daily & Daily [2020] FamCAFC 304 at [49].
It seems to me that the Full Court has accepted that there is at the very least an arguable case.
I have had regard to whether the order that is proposed would be irreversible if the wife is ultimately unsuccessful. Again, the consent of the parties may render such a consideration as unnecessary but I note the decision of Kent J in Rakete v Rakete (2012) 48 Fam LR 325 that the potential for an interim costs order to never be repaid by reasons of impecuniosity or otherwise is not in and of itself a barrier to such an order being made but rather one of a number of considerations.
The wife argues that even if she is unsuccessful there is still further entitlement by reason of the terms and conditions of the BFA being enforced.
CONCLUSION
I consider that I have power to make the consent order as sought by the parties.
I make orders as appear at the commencement of these reasons.
I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Berman. Associate:
Dated: 25 May 2021
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