Filby & Northcott

[2021] FamCA 323

FAMILY COURT OF AUSTRALIA

Filby & Northcott [2021] FamCA 323

File number(s):

TVC 909 of 2016

Judgment of:

BAUMANN J

Date of judgment:

26 March 2021

Catchwords:

FAMILY LAW – PROPERTY – Application by the wife for litigation funding – Where his Honour was not minded to exercise his discretion in favour of the wife’s Application – Application dismissed

Legislation:

Family Law Act 1975 (Cth) ss 79, 83

Cases cited:

Chorn & Hopkins (2004) FLC 93-204

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

Number of paragraphs:

21

Date of hearing:

26 March 2021

Place:

Brisbane

Counsel for the Applicant:

Mr M Fellows

Solicitor for the Applicant:

J Hamilton & Associates

Counsel for the Respondent:

Mr R Galloway

Solicitor for the Respondent:

Campbell & Co

ORDERS

TVC 909 of 2016

BETWEEN:

MR FILBY

Applicant

AND:

MS NORTHCOTT

Respondent

ORDER MADE BY:	BAUMANN J
DATE OF ORDER:	26 MARCH 2021

THE COURT ORDERS:

1.That the father has leave to file and serve a further affidavit of himself and any other witness in respect of the issue raised today in respect of Mr B, no later than 23 April 2021.

2.That the mother shall file and serve any affidavit in reply no later than 30 April 2021.

3.That the wife’s Application in a Case filed by leave on 25 March 2021 be dismissed.

4.That for the purpose of Mr C, the wife’s forensic accountant, and Mr D, the husband’s accountant, preparing a further updated joint report, the husband do all things necessary to direct E Accountants to provide financials as at 31 December 2020 to Mr C of F Accountants for all entities in the Filby Group, including but not limited to the entities listed below, by no later than 16 April 2021:

(a)G Pty Ltd;

(b)G Unit Trust;

(c)H Pty Ltd;

(d)J Partnership;

(e)J Family Trust;

(f)K Trust;

(g)L Pty Ltd;

(h)P Trust;

(i)M Trust;

(j)N Trust;

(k)O Family Trust;

(l)Q Trust;

(m)R Trust;

(n)S Trust;

(o)T Trust;

(p)U Trust;

(q)V Pty Ltd;

(r)W Pty Ltd;

(s)Filby Family Company;

(t)Z Family Trust & T Trust Partnership.

5.That for the purpose of the parties’ preparing an updated Conclave Report, the wife do all things necessary to provide financials as at 31 December 2020 to Mr C of F Accountants and Mr D by no later than 16 April 2021.

6.That the husband do all things necessary to provide to Mr C of F Accountants all login details and full access to all general ledgers for all entities in the Filby Group by no later than 16 April 2021.

7.That the parties do all things necessary to direct E Accountants and F Accountants to conclave and prepare a joint report by no later than 5 May 2021.

8.That the parties shall cause the joint report to be filed on the Commonwealth Courts Portal by no later than 5 May 2021.

9.That the parties shall file and serve an Affidavit annexing an updated report by their respective accountants on the other party by no later than 5 May 2021.

10.That the Final Hearing of these proceedings be adjourned part-heard for a further two (2) days commencing at 10.00am on 12 May 2021 in the Family Court of Australia at Brisbane, with those persons not based in Brisbane to appear by video via MS Teams.

11.That by 12.00pm (noon) on 6 May 2021, the parties shall inform the chambers of the Honourable Justice Baumann whether they require cross-examination of any other witness other than the expert witnesses.

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 Filby & Northcott has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

EX TEMPORE REASONS FOR JUDGMENT

BAUMANN J:

1. This trial commenced late, but finally commenced on Tuesday.  It is a property and parenting case.  It has a long and very tragic history. 

2. The parties, as the exhibits reveal, have spent significant sums of money on legal costs.  The wife’s legal costs have, it would seem, been mostly met through a litigation funder and, most likely, some indulgence given by the firm retained by the wife and/or experts retained by the firm on the wife’s behalf.

3. There is no evidence that the husband has had to incur the obligations of a litigation funder to fund the litigation.

4. There have been Orders made previously in this long matter, for example, for the wife to receive $850 per week in a form of spouse maintenance.  However, it seems that the Judge making the Order rather than, as one might expect, identifying exactly the nature of the payment, indicated that the characterisation of that payment should be left to the trial Judge who, of course, at the time the Order was made, was to be herself.

5. For reasons we do not need to restate consistently, and after seven days of hearing in another Court, no Judgment was delivered.  It has caused enormous difficulties and extra costs for these parties.  Both have, it seems to me, been affected, although the wife would say by her lack of access to funds she has been more financially affected than the husband.

6. When the matter came to this Court, the effort of the Court was to get the matter finished; in fact, to start again and finish.  Kent J kindly elected to assist with the case management in the hope that he may be able to hear the case this week.  He was not able to do so.  I was.

7. I have heard as much of the case this week as has been, I think, on any assessment, humanly possible to hear.  There have been many developments during the course of this week.  However, what is clear is that, when this case started, the parties may have had the expectation the matter would start and finish this week.  It has not.

8. For the reasons which both parties know, and to which no blame is being attributed by the Court, at this stage, to either party or expert, we are going to have to return for at least one more day on 12 May 2021. 

9. Mr Galloway, on express instructions, has identified a need for further, it seems to me, on his submissions, litigation funding for his client.  As a result, he, without any other evidence that would normally accompany a litigation costs application, namely; why these additional funds in respect of fees may be incurred but not paid; rates of pay; costs agreement; etcetera all those things which Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 identify, asserts an ambit claim for $500,000, filed and accepted through me yesterday.

10. I indicated I would deal with it before the trial finished.  Of course the Court has power, at any time, to consider whether or not a partial property order power or a maintenance power or a cost power ought be exercised.  That is the nature of the power.  I will deal with each of those sequentially.

11. If the Order of 2017 made by Judge Demack was not a maintenance order, then of course s 83 has no relevance. It only has relevance to vary a maintenance order. I am not in a position today to characterise it, nor do I even attempt to do so. If it was an Order for partial property settlement on instalments, then with great respect to her Honour, it was a very open-ended Order and an unusual Order in my view.

12. Nonetheless, it was made and has not been the subject of any further variation, notwithstanding the trial in March 2018 and the later statements by Kent J.  I refer to the statements of Kent J because it is again clear that when this matter was before him, and after there was a discussion of which I could not possibly be aware because I was not there (and there are no Reasons before me in which to understand it) with the parties’ consent, the husband agreed to pay to the wife $150,000 to be characterised by way of partial property settlement.

13. So, it seems to me, if I am right, that the Order made by Judge Demack for $850 per week, not characterised as spouse maintenance, again, in a sense, came up for discussion before Kent J and he made an Order.  So that from the time the Order was made by Kent J (and there is an Order not for the benefit of the lawyers but for the benefit of the wife) the wife knew, at that stage, she had to look to those monies to, on the face of it, support herself; meet debts which may have included those to her lawyer; and to use the funds in a way that she chose, because, if it is partial property settlement, it would be brought into account.

14. Although there is no evidence, Mr Galloway, doing the best he can on limited material, says to me that the wife used $130,000 of it for her lawyer.  I have no way of knowing why she made that decision.  However, by so doing, it seems to me, that she can hardly come to this Court now, having been paid $150,000, and argue she needs funds now to live on.  She made a choice as to how she would use that $150,000.  She is, in my view, stuck with her choice.

15. In terms of costs power, of course, even if the husband has drawn on what he would say are his assets to retain a lawyer of his choice, these are all matters which would no doubt be the subject of further submissions and be taken into account in accordance with principle (see Chorn & Hopkins (2004) FLC 93-204).

16. I am being asked to exercise a discretion. In my view, the only power really available would be partial property power. Although it has been said many times that the power under s 79 should only be exercised once, it is a very common part of our jurisprudence now that these sorts of orders, or seeking costs or litigation funding, are regularly made.

17. In my view, though, the appropriate power to consider, for the reasons I have given, is the partial property power.  It means, therefore, that the Court needs to consider whether the order is just and equitable.  One of the aspects of that is not only is it fair to the wife but is it fair to the husband.

18. I have not concluded this property matter through no fault of this Court.  I do take on board, as Mr Galloway indicates, that the husband’s offer, if that is what it is, contained in his case outline, is that he pay the wife $1 million.  The evidence at this stage, subject to further submissions, is that he does not have $1 million but that he may be able to get it from Westpac at City EE.

19. There seems to be a broad willingness of the bank to support him increasing his borrowings by that level.  I do not know to what extent any consent or otherwise of the co-owner of the property at Location JJ is required, if that is what is going to be used as security.  There is many things I do not know about that loan, except there is no evidence that it is available today.

20. It would not be just and equitable to make an order against the husband unless I was satisfied that he had the capacity to pay it today.  I am not.  In the exercise of my discretion, I sadly take the view, perhaps from the wife’s perspective, that this is not a claim for her support.  This is a claim to meet costs that she has incurred; that she ought to know she will incur; that she knew when she made a decision to pay $130,000 towards legal expenses she would incur, and that perhaps any balance owed to her lawyer after litigation funding seems to be expended might be on a contingent or conditional basis and be taken from her ultimate verdict.

21. I do not propose to exercise my discretion in favour of the Application made by the wife.  I will dismiss that Application.

I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Justice Baumann.

Associate:  

Dated:       24 May 2021