Hawkins and Hawkins (No. 3)

[2015] FamCA 760

FAMILY COURT OF AUSTRALIA

HAWKINS & HAWKINS (NO. 3) [2015] FamCA 760

FAMILY LAW – PRACTICE AND PROCEDURE – Interim – Wife’s application for litigation funding – Wife seeks $30,000.00 and the husband seeks $25,000.00 for the purpose of funding legal representation at forthcoming trial– Where the wife opposes any such funds being drawn from superannuation – Where superannuation is the only source of funds presently available – Orders made pursuant to power in s 117 of the Family Law Act 1975 (Cth) with categorisation reserved to be determined at forthcoming trial – Orders made regarding sale proceeds of former matrimonial home – Payment for repairs.

Family Law Act 1975 (Cth)

APPLICANT: Mr Hawkins

RESPONDENT: Ms Hawkins

FILE NUMBER: BRC 6561 of 2007

DATE DELIVERED: 14 September 2015

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Kent J

HEARING DATE: 14 September 2015

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Mr Wright, Wrightway Legal

FOR THE RESPONDENT: In Person

Orders

IT IS ORDERED THAT:

1. UNTIL FURTHER ORDER The net proceeds of the sale of the former matrimonial property situated at B Street, Suburb C, in the State of Queensland, being the sum remaining after payment of the amount or amounts due to the Commonwealth Bank of Australia (“CBA”) to secure the discharge of the CBA mortgage, and payment of costs of sale including conveyancing costs, be retained in Wrightway Legal’s Trust Account to be invested in an interest bearing trust account in the joint names of the parties.

2. The Husband forthwith, upon the Wife nominating in writing the identity of the firm or lawyer retained by her to represent her in these proceedings, cause to be paid from superannuation funds the amount of $30,000.00 to the trust account of that firm or lawyer to be used solely for the purpose of meeting the Wife’s legal costs referable to her legal representation at the forthcoming trial of these proceedings.

3. The Husband be permitted to draw down from superannuation funds the sum of $25,000.00 to be paid to the trust account of the solicitor for the Husband and to be used solely for the purpose of meeting the Husband’s legal costs referable to his legal representation at the forthcoming trial of these proceedings.

4. The funds referred to in paragraphs 2 and 3 hereof are to be used solely for legal expenses and are to be accounted for on that basis by each party, with the categorisation of such funds, whether as costs, partial property settlement or otherwise to be reserved to and determined at the trial of these proceedings.

5. The Husband be authorised to draw down from superannuation funds any remaining sum necessary to complete payment for the repairs undertaken to the former matrimonial home to facilitate its sale.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Hawkins & Hawkins (No. 3) 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 6561 of 2007

Mr Hawkins

Applicant

And

Ms Hawkins

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. The trial of these substantive property proceedings is set down to take place on three days commencing 6 October 2015, a matter of some three weeks away. The applications before me today relate to each party seeking to fund this litigation that is, seeking orders pursuant to the costs power in s 117 of the Family Law Act 1975 (Cth) (“the Act”) to provide funding to fund the litigation expenses of each of the parties at the trial.

2. This matter has a lengthy history, in circumstances where the proceedings were initially instituted in 2007.  I have over the period commencing 2 December 2014 delivered a series of interim judgments dealing with interim issues as they arose.  Such Reasons for Judgment were delivered on 2 December 2014, 9 December 2014, 20 April 2015 and more recently 8 September 2015.  I incorporate these respectively in these Reasons without unnecessary repetition.

3. The Reasons for Judgment I delivered on 2 December 2014 detail the relevant background to the substantive property issues that are to be determined at the trial.  At that stage the interim relief that was being sought was a variety of injunctions in relation to the proceeds being received from the F Trust interest referred to in those Reasons; issues of interim spousal maintenance; interim injunctions; restoration of superannuation funds by the husband and other matters.  It would be unnecessarily repetitive for me to now, again, set out the relevant background of the matter, but I repeat and rely upon the Reasons for Judgment delivered on 2 December 2014 in particular as setting out the relevant background to these proceedings. 

4. Commencing at [163] of those Reasons, I set out the costs power as a potential source of power for interim litigation funding.  Again I will not repeat what is set out in those Reasons commencing at [163] and following concerning that particular source of power. 

5. The application today by the wife was listed urgently by me, in circumstances where she again raised the issue of litigation funding at the recent hearing on 8 September 2015.  She seeks an order for interim litigation funding of $30,000.00, to be paid to a solicitor’s trust account of solicitors she proposes to nominate so that she can have representation at the forthcoming trial in three weeks time.  In response to her application for such funding, the husband filed a response proposing that each party be provided with $25,000.00 to fund their litigation expenses for the forthcoming trial. 

6. Part of the issues raised by the wife, including at this hearing, is the source from which any such funding should come.  The wife was concerned that any superannuation fund not be used as the source of such funding.  She suggested that the husband use a MasterCard account for that purpose, but as has been pointed out by Mr Wright, it would seem that this is a credit card account or debt facility rather than an account holding a positive balance, and obviously the use of that facility would simply incur interest and debt. 

7. Whether that is so or not, I have attempted to explain again to the wife today during the hearing that because there is to be a trial of property proceedings in only three weeks time, issues about financial conduct on either side can be properly revisited at a trial.  By referring to, again, explaining to the wife, the relevant considerations are set out in detail in my earlier Reasons for Judgment delivered on 2 December 2014 that I have referred to.  I have explained to the wife that at the trial, where parties can be cross-examined and there can be records or relevant records tendered in evidence, the Court is in a far better position to make any relevant assessments that need to be made so far as relevant financial conduct is concerned and consider adjustments of property interests as a result.

8. In this case it is clear that the remaining assets of any substance are the F Trust interest referred to, which has been the subject of expert accounting evidence, and also the superannuation interests.  I have explained to the wife that in terms of final property orders the Court has power to redistribute superannuation as part of a splitting order for any superannuation by way of property orders.  I have thus attempted to explain to the wife that, in the end result, so far as net terms in assessing the parties’ property interests, there will be no significant difference between the use of superannuation funds for the current purpose as opposed to any other source of that funding. 

9. In the course of argument the husband was prepared to concede to the amount he initially proposed of $25,000.00 for the wife’s litigation funding being increased to the amount sought by the wife of $30,000.00, provided he continued to receive the amount of $25,000.00 for his litigation funding.  As is pointed out in the evidence filed on behalf of the husband, whilst the husband has had the benefit of legal representation and will continue to do so for the trial, it would seem that his solicitor has been, as it is termed, “carrying him” in respect of costs. 

10. In my judgment, it is just within the meaning of s 117 of the Act that there be fairness as between both parties concerning litigation funding, albeit with the amount being provided to the wife being $30,000.00 and the amount being provided to the husband being $25,000.00, with the characterisation of those sums to be revisited at the forthcoming trial of the proceedings. Relying upon the principles I set out in [163] and the following paragraphs of my earlier Reasons for Judgment referred to, I am satisfied that it is appropriate to use s 117 of the Act as the source of power for the orders now made in terms of providing the litigation funding referred to, to each of the parties, to ensure their legal representation at trial.

11. In the course of argument a question arose in submissions as to the forthcoming settlement of the sale of the former matrimonial home, a matter addressed recently on 8 September 2015.  It seems there is some prospect of there being a settlement of the sale of that property this week potentially or at least soon.  The contract of sale was entered into at a price of $850,000.00, and on the evidence available at least recently when the matter was heard, it seems that the combined amounts owing to the Commonwealth Bank of Australia on the wife’s accounts, including the mortgage account, total about $790,000.00.  Mr Wright confirmed at this hearing that as yet he has been unable to confirm with the Commonwealth Bank of Australia the precise settlement amount that the Commonwealth Bank of Australia will require upon settlement of the sale of the property to release the mortgage.  However, it may be that, in gross terms, there is some $60,000.00 available, subject to the question of expenditure on repairs to the property. 

12. In the course of argument, Mr Wright on behalf of the husband expressed agreement with the proposition that, given that the trial is in three weeks time, any net proceeds of sale of the former matrimonial home that are available should be preserved in an interest bearing account invested in the names of both parties pending further order of the Court, and that is the order I consider to be appropriate. 

13. There also should be, though, the ability for the necessary repairs to the property to be funded by the husband so that the settlement of the sale is not delayed and contractors are paid and the like, and of course that too may well be an issue that the wife has indicated she wishes to revisit at the forthcoming trial of the proceedings.  That is, the merits of the husband having incurred such expenditure with respect to the sale of the former matrimonial home may be a topic that she wishes to revisit, albeit now, hopefully, with the benefit of legal advice available to her for the purposes of the trial. 

14. For these Reasons I make the orders set out earlier and stated in open Court.

I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kent delivered on 14 September 2015.

Associate:  JT

Date:  15 September 2015