Dunn & Dunn (No 4)

Case [2022] FedCFamC1F 264

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Dunn & Dunn (No 4) [2022] FedCFamC1F 264

File number(s): ADC 5380 of 2020
Judgment of: BERMAN J
Date of judgment: 26 April 2022
Catchwords:

FAMILY LAW – PROPERTY – Litigation funding – Where the applicant seeks litigation funding and the respondent opposes the application – Where the proceedings have been bifurcated with final hearing of the parenting matters to be heard first – Where an interim consent order was previously made for a payment to the applicant lawyer’s trust account– Where payment has been made or will soon be made – Consideration of the applicant’s costs – Where the applicant asserts the respondent has the financial resource of his legal practice – Where the monies paid pursuant to the interim consent order are to be quarantined for the purpose of mediation and the final hearing with respect to parenting matters - Orders.

FAMILY LAW – PRACTICE AND PROCEDURE – Discovery – Where the applicant seeks discovery of documents in relation to the respondent’s legal practice – Where the documents sought arise from a valuation of the practice obtained in the proceedings - Where the respondent opposes the application on the basis of legal professional privilege and confidentiality – Where cost of compliance due to the number of files would be substantial - Consideration of the principles to be applied – Relevance of documents – Where it is unclear how the documents would assist the Court or the valuer – Orders made for the parties to instruct the valuer with respect to discrete issues.

Legislation:

Family Law Act 1975 (Cth) ss 80(1)(h), 117, 117(2),

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) ch 6

Federal Court Rules 2011 (Cth) Pt 20

Cases cited:

Alanco Australia Pty Ltd v Higgins (No 2) [2011] FCA 1063

Commonwealth v Milledge (1953) 90 CLR 157

Dennis v ChambersInvestment Planners Pty Ltd [2012] FCA 63

Hatton & Attorney-General of the Commonwealth of Australia (2000) FLC 93-038

Klearchos & Klearchos [2015] FamCAFC 217

Lenehan & Lenehan (1987) FLC 91-814

Little & Little (1990) FLC 92-147

Lucas Industries Ltd v Hewitt (1978) 18 ALR 555

Martin & Martin (No 2) [2014] FamCA 232

Smith & Smith (1991) FLC 92-261

Strahan & Strahan(Interim Property Orders ) (2011) FLC 93-466

Woley & Humboldt (No 3) [2009] FamCA 546

Division: Division 1 First Instance
Number of paragraphs: 90
Date of hearing: 16 and 22 March 2022
Place: Heard in Adelaide, delivered in Melbourne
Counsel for the Applicant: Mr Anderson
Solicitor for the Applicant: Clelands Lawyers Adelaide Pty Ltd
Counsel for the Respondent: Mr Belperio
Solicitor for the Respondent: Jordan & Fowler Family Lawyers

ORDERS

ADC 5380 of 2020

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

MS DUNN

Applicant
AND:

MR DUNN

Respondent

ORDER MADE BY:

BERMAN J

DATE OF ORDER:

26 APRIL 2022

THE COURT ORDERS:

1.That the applicant be restrained and an injunction granted restraining her from instructing her solicitors to…

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AGLC
Dunn & Dunn (No 4) [2022] FedCFamC1F 264
Case
[2022] FedCFamC1F 264
Decision Date

CaseChat Overview and Summary

In Dunn & Dunn (No 4), the Federal Circuit and Family Court of Australia considered issues of litigation funding and discovery of documents in the context of a family law dispute. The applicant sought litigation funding or partial settlement of property, asserting the respondent had the financial resources of his legal practice. The applicant also sought discovery of documents related to the respondent’s legal practice, arguing they were necessary to determine the value of the practice and to support her application for litigation funding. The respondent opposed both applications, citing legal professional privilege, confidentiality, and the substantial cost of complying with the discovery order.

The court was required to decide whether the applicant was entitled to litigation funding and whether the discovery of documents sought by the applicant should be ordered. In addressing these issues, the court considered the principles governing interim costs, the relevance of the documents to the case, and the potential for legal professional privilege to protect the documents. The court also weighed the applicant's need for representation against the respondent's privilege and confidentiality concerns. Ultimately, the court concluded that the applicant's request for litigation funding should be denied and that the discovery of documents should be limited to specific issues relevant to the valuation of the respondent’s legal practice.

The court restrained the applicant from using the funds from the sale of motor vehicles and livestock for any purpose other than the mediation and payment of legal fees for the parenting proceedings. The court also ordered the parties to instruct the valuer to address specific issues related to the valuation of the respondent’s legal practice and the applicant’s proposed orders. The court's decision balanced the need for fair representation in the proceedings with the protection of legal professional privilege and the respondent's confidentiality.

Orders

Orders of the court

ADC 5380 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS DUNN

Applicant

AND:

MR DUNN

Respondent

ORDER MADE BY:

BERMAN J

DATE OF ORDER:

26 APRIL 2022

THE COURT ORDERS:

1. That the applicant be restrained and an injunction granted restraining her from instructing her solicitors to disburse any money received following the sale of motor vehicles and livestock pursuant to order 3 of orders made 14 February 2022 for any other purpose than the mediation that occurred on 29 March 2022 or on such other date as it may have been heard and for the payment of the applicant’s legal fees in respect of the parenting proceedings listed for hearing on 16 May 2022.

2. That the parties at their joint expense, payable by the respondent at first instance, instruct Mr V to provide an opinion as to the following:

(a) The method and manner by which he would be prepared to give an opinion as to the extent that impaired and unrecoverable WIP and debtors of M Pty Ltd should be brought to account;

(b) The extent to which the orders sought by the applicant as to paragraph 2.1 and 2.2 of her Application in a Proceeding filed 23 February 2022 are of any utility in determining the extent to which impaired and unrecoverable WIP and debtors of M Pty Ltd should be brought to account.

3. That time is extended to 4.00 pm 30 April 2022 to comply with Order 1 of orders made 14 February 2022.

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

In Strahan & Strahan(Interim Property Orders ) (2011) FLC 93-466 at 85,631, Boland and O’Ryan JJ analysed the relevant authorities in respect of an application for interim costs and stated:80.In Poletti & Poletti (unreported, Family Court of Australia, 2 March 1990) Nygh J, when describing an application for “interim costs”, referred to the reasons of the Full Court in Wilson and Wilson (1989) FLC 92-033 (“Wilson”) and said it is a “situation where one party to the marriage controls almost exclusively what might be described as the patrimony of the parties and has control of the bulk of the assets and funds of the parties, where an order may be made to ensure the other party, who does not have the fortune of controlling those funds, at least has an equal or near equal opportunity to present his or her case”: see also In the marriage ofPoletti (1990) 15 Fam LR 794 (“Poletti”) at 796 per the Full Court (Ellis, Strauss and Butler JJ). The Full Court in Zschokke at 83,220 made a number of relevant remarks about the “desirability of legal representation for both parties in family law”.BACKGROUND The applicant has in part met her legal fees and disbursements as follows:(a)By the payment of $23,663.25 from the total sum of $49,000 paid in accordance with Order 3 of orders made 16 June 2021;(b)The sum of $15,000 in accordance with Order 1 of orders made 1 October 2021;(c)Borrowings from the applicant’s parents in the sum of $44,523; and(d)When the applicant was employed and able to do so, she paid the sum of $700 per week pursuant to an agreement with her solicitors to ensure their continuing representation. By Amended Reply filed 28 January 2022, the applicant sought partial settlement of property or litigation funding in the sum of $100,000 which sum was to be satisfied from the sale of motor vehicles and equipment in the possession and control of the respondent, together with the livestock. If the application for litigation funding was unsuccessful then the applicant sought an order pursuant to s 102NA(1)(c)(i) of the Act such that she would have representation for the purpose of any cross-examination of the respondent. It is conceded by the respondent that a mandatory ban in respect of cross-examination of the respondent would apply and there was no opposition to such an order being made. The Amended Reply was supported by an affidavit of the applicant setting out her current and future legal costs and disbursements as at 28 January 2022. As at that date, the applicant was responsible for the following outstanding legal fees:(a)Clelands Lawyers in the sum of $32,660 plus GST together with disbursements of $204;(b)BB Lawyers in the sum of $28,038.80;(c)CC Lawyers in the sum of $4,837.64; and(d)Mr EE in the sum of $440. As at 28 January 2022, the sum of $23,447.25 remained in the Clelands Lawyers’ trust account. As at that date, the applicant received an estimate of future disbursements up to and including the trial to commence on 16 May 2022 as follows:(a)The applicant’s share of the valuation of M Pty Ltd conducted by Mr V in the sum of $2,970;(b)The applicant’s share of the valuation of motor vehicles by Mr DD in the sum of $500 to $1,000; and(c)The applicant’s share of the costs of the preparation of the updated/addendum family report by Ms E in the sum of $1,250.

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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