Levy and Prain - [2012] FamCAFC 92

FAMILY COURT OF AUSTRALIA

LEVY & PRAIN

[2012] FamCAFC 92

FAMILY LAW ─ APPEAL ─ FINANCIAL ORDER ─ Where the wife challenged the interlocutory order made by the trial Judge that the wife pay $250,000 by way of litigation funding to the husband ─ Whether the trial Judge identified the source of power to make the order under challenge ─ Whether the trial Judge erred in principle in the exercise of power ─ Whether the trial Judge adequately dealt with the question of the wife’s capacity to pay the sum sought by the husband by way of litigation funding ─ Whether the trial Judge erred in relation to the “clawback” of such sum ─ Whether the trial Judge adequately revealed the reasons for making the litigation funding order ─ No ground for possible appellate intervention demonstrated ─ No error of principle demonstrated ─ Not established that, if undisturbed, the trial Judge’s decision would cause the wife a substantial injustice ─ Application for leave to appeal and Notice of Appeal dismissed.

FAMILY LAW ─ APPEAL ─ COSTS ─ Where the wife’s application for leave to appeal was unsuccessful ─ Wife to pay the husband’s costs of and incidental to the appeal as agreed or assessed on a party and party basis ─ Execution of the order for costs stayed pending order of the Full Court or a judge of the Court exercising original jurisdiction.

Family Law Act 1975 (Cth) ss 79, 93A, 117

Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170
Apps and Another v Pilet (1987) 11 NSWLR 350
Bennett and Bennett (1991) FLC 92-191
CDJ v VAJ (1998) 197 CLR 172
Harris and Harris (1993) FLC 92-378
Pettitt v Dunkley [1971] 1 NSWLR 376
Rutherford and Rutherford (1991) FLC 92-255
Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247
Strahan and Strahan (interim property orders) (2011) FLC 93-466
Sun Alliance Insurance Ltd v Massoud (1989) VR 8
Suttor v Gundowda Pty Ltd (1950) 81 CLR 418
Tatmar Pastoral Co Pty Ltd v Housing Commission of New South Wales (1984) 54 ALR 155
Zschokke and Zschokke (1996) FLC 92-693

APPELLANT:

Ms LEVY

RESPONDENT:

Mr PRAIN

FILE NUMBER:

MLC

3288

2011

APPEAL NUMBER:

SOA

2011

DATE DELIVERED:

27 June 2012

PLACE DELIVERED:

Sydney

PLACE HEARD:

Melbourne

JUDGMENT OF:

Bryant CJ, Coleman & Kent JJ

HEARING DATE:

16 May 2012

LOWER COURT JURISDICTION:

Family Court of Australia

LOWER COURT JUDGMENT DATE:

14 September 2011

LOWER COURT MNC:

[2011] FamCA 745

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Richardson SC with Ms Johns

SOLICITOR FOR THE APPELLANT:

Kenna Teasdale Lawyers

COUNSEL FOR THE RESPONDENT:

Mr Geddes QC with Ms Stewart

SOLICITOR FOR THE RESPONDENT:

Kennedy Partners Lawyers

Orders

That the application for leave to appeal and the Notice of Appeal filed 5 October 2011 be dismissed.
That the wife pay the husband’s costs of and incidental to the Notice of Appeal as agreed or assessed on a party and party basis.
That pending further order of a judge of the Full Court or a judge of the Court exercising original jurisdiction, execution of the order for costs be stayed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Levy & Prain has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE

Appeal Number: SOA 70 of 2011

File Number: MLC 3288 of 2011

Ms LEVY

Appellant

And

Mr PRAIN

Respondent

REASONS FOR JUDGMENT

introduction

By Notice of Appeal filed 5 October 2011 Ms Levy (“the wife”) appealed against an order made by O’Reilly J on 14 September 2011 which provided:
4.The wife provide litigation funding to the husband of $250,000 to be paid into the husband’s solicitor’s trust account within 21 days, such sum to be used solely for the husband’s litigation costs past and future, including for any forensic report/s and/or valuations he may seek, up to and including the conclusion of a mediation in the matter to be scheduled by the parties in relation to both parenting and property issues, this amount to be characterised at the trial as an addback against the husband.
Mr Prain (“the husband”) resisted the wife’s appeal and sought to maintain the trial Judge’s order.
The wife does not appear to have ever made a formal application for leave to appeal. It is not in doubt that leave is required. Sensibly, and in accordance with authority (see the decision of the High Court in Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170, and this Court in Rutherford and Rutherford (1991) FLC 92-255), Senior Counsel for both parties proceeded on the basis that leave would be granted or refused once the Court determined the merits of the wife’s proposed appeal.
On 1 May 2012, the husband sought leave to adduce further evidence in the appeal. Such evidence was contained in, and annexed to, an affidavit of the husband’s solicitor, Olivia Grobtuch, sworn on 1 May 2012.
The wife opposed the receipt of further evidence on behalf of the husband but, in the event that the Court received such evidence, sought to rely upon an affidavit sworn by her on 4 May 2012 in response to the affidavit of Ms Grobtuch of 1 May 2012.
Unless, and until leave to appeal is granted, we do not perceive that the receipt of further evidence is governed by the provisions of s 93A of the Family Law Act 1975 (Cth) (“the Act”). Neither party requires leave to rely upon further evidence in the application for leave to appeal. As such, the judgment of the High Court in CDJ v VAJ (1998) 197 CLR 172 is not strictly applicable. However, the potential significance of the further evidence is as the majority explained (at paragraph 109) in the context of s 93A of the Act.

background

The parties married in 1999. They separated in 2010.
There are four children of the marriage who were aged 10, 8, 6 and 4 at the date of the trial Judge’s judgment.
Parenting and financial proceedings were commenced by the husband on 18 April 2011.
The husband sought an interlocutory order that the wife pay $250,000 by way of litigation funding. The wife opposed any such order. The wife asserted that she lacked the capacity to pay such sum, and that, even if she was found to have had such capacity, an order in those terms should not be made as, having been expended upon legal fees, the sum would not be available for repayment in whole or part to the wife in the event of the husband being awarded less than $250,000 when the proceedings for property settlement between the parties were finally determined pursuant to s 79 of the Act.
The trial Judge concluded that the payment sought by the husband was just. The trial Judge’s order reflects her determination that the sum thus ordered to be paid be “characterised at the trial as an addback against the husband” (par 113).

the proposed challenges to the trial judge’s decision

The wife’s Notice of Appeal articulated twelve grounds of appeal.
In his comprehensive written Summary of Argument, and addendum thereto, Senior Counsel for the wife abandoned Grounds 6, 7 and 12 of the Notice of Appeal.
In his oral submissions, Senior Counsel for the wife identified the seven issues which he contended arose for consideration in the present application. Those issues were:
(i)the power to make the order under challenge;
(ii)the relevant principles applicable to the exercise of such power;
(iii)whether the trial Judge adequately dealt with the question of the wife’s capacity to pay the sum sought by the husband;
(iv)whether the trial Judge erred in relation to the “clawback” of such sum;
(v)the adequacy of the trial Judge’s reasons for making the order;
(vi)whether the grounds agitated by the wife offended the “principles” emerging from a series of decisions from the High Court commencing with Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; and
(vii)the question of further evidence.
It is not in doubt that each of these issues finds expression in one or more of the wife’s proposed grounds of appeal.
As the transcript of oral submissions to the Court would confirm, ultimately no issue arises in relation to whether the principles emerging from decisions such as Suttor v Gundowda (supra) were offended. Paragraph (vi) thus does not require consideration.
Consistent with the Court’s usual approach, the further evidence (paragraph (vii)) will be considered, if it needs to be, after the wife’s proposed challenges to the trial Judge’s decision have been addressed.

the trial judge’s power to make the order under challenge

It was submitted on behalf of the wife that:
40.At no point during the hearing, in either written or oral submissions, did senior counsel for the Husband make any submission(s) in relation to the source of power relied upon to support the relief sought. Nor did senior counsel for the Husband make any submission(s) in relation to any relevant matters of principle to be considered by the trial Judge when determining the application.
41.At no point during the hearing, or in her reasons for judgment, did the trial Judge indentify the source of power she relied upon, and applied, in considering and determining the application. The trial Judge should have done so and given reasons as to why she resolved to apply the identified source of jurisdiction: Strahan per Boland and O’Ryan JJ at 85,633 pa 86 and Thackray J at 85,655 pa 209.
Significantly, these complaints do not assert that the trial Judge lacked the power to make the order sought to be challenged. Nor do they assert that the trial Judge’s asserted failure gave rise to any procedural unfairness, or denial of natural justice. The substance of the complaints is that neither Senior Counsel for the husband nor the trial Judge identified the source of the power which her Honour was asked to, or did exercise. The submissions of Senior Counsel for the wife before us focussed almost exclusively upon the asserted failure of the trial Judge.
Having referred to a series of “concessions” (pars 2 and 3), Senior Counsel for the husband submitted:
4.Having made the concessions that litigation funding for the husband is appropriate, the wife cannot criticise Her Honour for not identifying the source of power. The concession made by Senior Counsel for the wife was appropriately accepted and relied upon by Her Honour. (Errors as in original).
For the reasons submitted by Senior Counsel for the husband, it is unsurprising that the trial Judge did not specifically identify the power which she was potentially exercising.
As Senior Counsel for the wife clearly raised no issue as to the existence of power to make the orders sought by the husband at trial, the complaint with respect to the trial Judge is really with respect to the adequacy of her Honour’s reasons (see Pettitt v Dunkley [1971] 1 NSWLR 376, Tatmar Pastoral Co Pty Ltd v Housing Commission of New South Wales (1984) 54 ALR 155, Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247, Sun Alliance Insurance Ltd v Massoud (1989) VR 8 and Bennett and Bennett (1991) FLC 92-191).
As Senior Counsel for the wife submitted in his outline of argument, different principles governed the exercise of the powers which the trial Judge may have purportedly exercised. As suggested to Senior Counsel for the wife during the course of agitation of this complaint, having read her Honour’s Reasons for Judgment, and the transcript of debate before her Honour, we are not in doubt as to the power pursuant to which the trial Judge made the order under challenge.
The trial Judge’s opening observations in relation to the topic record that the amount provided by the wife by way of litigation funding “will be added back against the husband at the parties’ section 79 trial” (par 79). Whilst not necessarily conclusive of the issue, her Honour’s observations suggest that the husband’s application was regarded by the trial Judge as being pursuant to s 79 of the Act. It is not in doubt that her Honour’s order fell within the ambit of an exercise of power pursuant to s 79.
Senior Counsel for the wife submitted, in support of the “power” challenge, that:
44.Notwithstanding the absence of any identification of the source of power, given, inter alia, the reference by the trial Judge to Zschokke and Zschokke and Strahan & Strahan, her Honour appears to have purported to exercise the power granted by s 79 and s 80(1)(h) of the Act to make an order for property settlement and not the power pursuant to s 72 and s 74 to make an order for spouse maintenance or the power pursuant to s 117 to make an order for costs. Assuming that her Honour exercised the power conferred by s 79 and s 80 of the Act it is necessary to consider the observations of the Full Court in Strahan.
The trial Judge (at par 82) referred to the judgment of Boland and O’Ryan JJ in Strahan and Strahan (interim property orders) (2011) FLC 93-466 at pars (138-141). It is unnecessary to reproduce those paragraphs, and sufficient to record that the paragraphs to which her Honour referred related to the making of “an interim property order to defray the costs of litigation” (par 138) and “an interim property settlement order” (par 139). As is not in doubt, the order under challenge in Strahan (supra) was expressly stated to have been made by way of “interim property settlement”.
Subsequent references by the trial Judge to cases involving orders for interim property settlement (pars 88, 89, 90, 92, 98, 108 and 113), combined with the absence of any reference in her Honour’s reasons to any other possible source of power for the order made by her Honour, such as s 117 of the Act, leave us in no doubt that the power upon which her Honour relied for the order she made was s 79 of the Act, and that her Honour’s reasons adequately revealed that to have been the case.
We accordingly reject the “power” challenges agitated on behalf of the wife.

whether the trial judge erred in principle in the exercise of power

It was submitted on behalf of the wife that:
45.There are two stages to the hearing of an application where the power to be exercised is s 80(1)(h) of the Act: Strahan per Boland and O’Ryan JJ at 85,641 pa 118 and Thackray J at 85,657 pa 226. At the first step the trial Judge had to be satisfied, and make a finding, that in the circumstances it was appropriate to exercise the power to make an interim order: Strahan per Boland and O’Ryan JJ at 85,645 pa 132 and Thackray J at 85,657 pa 226. At the second, and substantive, step her Honour had to undertake consideration of the matters in s 79(4) of the Act, including by reference to s 79(4)(e), the matters in s 75(2): Strahan per Boland and O’Ryan JJ at 85, 645 pa 132 and Thackray J at 85,657 pa 226. It is not necessary to establish compelling circumstances at either the first or second step. Her Honour did not do so.
As the transcript of the proceedings before the trial Judge, and the submissions of Senior Counsel for both parties confirm, there was no suggestion on behalf of the wife before her Honour that the power ought not be exercised if, contrary to the submissions made on behalf of the wife, the trial Judge was satisfied with respect to the wife’s capacity to meet the order sought by the husband, the need for which, and quantum of which, was not disputed, and of the “claw-back” considerations discussed in the authorities to which both parties referred.
To the extent that Senior Counsel for the wife asserted that the trial Judge erred by failing to “make a finding, that in the circumstances it was appropriate to exercise the power to make an interim order”, we are not satisfied that such challenge has substance. The trial Judge was clearly satisfied that it was “appropriate” to exercise the power. Her Honour would not have made an order otherwise. The question is whether, having concluded that it was appropriate to exercise the power, her Honour erroneously exercised that power.
To the extent that Senior Counsel for the wife asserted that the trial Judge erred in failing to “undertake consideration” of the matters referred to in s 79(4) of the Act, we cannot accept that her Honour so erred.
It was fairly conceded by Senior Counsel for the wife that the trial Judge accurately summarised the wife’s position at trial in the following terms:
98.Based on the wife’s evidence alone, I would need to conclude not only that the wife cannot afford to provide the husband the amount he seeks for litigation funding, or any amount, but that the adjustment issue would have effect that the amount the husband seeks ought not be ordered because, on the wife’s evidence, as submitted by Mr Ackman, I could not have confidence that the husband would be awarded that amount in the s 79 proceedings: Harris, Zschokke, and Strahan (above).
Earlier, the trial Judge recorded:
84.Mr Ackman QC, seemingly on instructions, mentioned the figure $50,000 at the Bar table, in the context of a remark. The mention of that amount is likely to be either an amount the wife would not resist, or would consider reasonable. The context of Mr Ackman’s remark however was not clear, so that I am not able to consider it as a concession of any kind. I will, therefore, determine the amount not as in the range of between $50,000 and $250,000, but solely on the basis of the husband’s case seeking $250,000.
In the paragraph recorded above, the trial Judge clearly recognised that, through her then Senior Counsel, the wife did not concede a capacity to pay any sum, notwithstanding the matter first there referred to by her Honour.
Subsequently, the trial Judge recorded:
88.The remaining relevant matters are that I need to be satisfied (1) that the funds justly can be made available: Zschokke (above) at 83,220-1; and (2) as to the “adjustment issue”, or the “claw-back issue”, as it is called in the cases, namely that at the eventual property settlement or trial, the husband will be entitled at least to such an amount to permit the moneys advanced satisfactorily to be taken into account: Zschokke, also at 83,220-1. See also Harris & Harris (1993) FLC 92-378 at 79,930, left column at (3):
… the Judge must be satisfied that the remaining property will be adequate to meet the legitimate expectations of both parties at the final hearing, or that the order which is contemplated is capable of being reversed or adjusted if it is subsequently considered necessary to do so. …
Fairly, Senior Counsel for the wife did not dispute the accuracy of anything there said by her Honour.
The trial Judge further recorded:
91.Thus, in essence, the common ground matter that there should be litigation funding for the husband, and my view that if it is to be provided $250,000 is reasonable, has effect that I need now to consider whether justly that amount should be provided, or the husband’s application refused.
As we have earlier noted, there was, properly, no suggestion that the trial Judge erred in concluding that the sum sought by the husband was “reasonable”, or that he had no capacity to provide such sum from his own resources.
Again accurately, the trial Judge reflected:
94.The real issue thus for my determination in this particular case, as the matter was argued, is the “adjustment issue”, and the aspect of the wife’s funding of her own litigation costs.
95.All of this requires me to turn immediately to the wife’s evidence as to her financial circumstances, and her attitude to the husband’s claimed entitlement to investigate or go behind her sworn evidence as to her financial circumstances, which she describes as a “fishing expedition” by the husband, her attitude being that, in these proceedings, the husband should accept without question what she says about her financial circumstances.
As a matter of principle, the matters to which the trial Judge there referred were undoubtedly, relevant to the exercise of power pursuant to s 79 of the Act. We do not understand Senior Counsel for the wife to contend otherwise.

We are not persuaded that the trial Judge erred by failing to direct her mind to any fact or circumstance which, as a matter of principle, her Honour ought to have in the exercise of power pursuant to s 79 of the Act. As suggested in Strahan (supra), there will be cases where close scrutiny of the probable entitlement of an applicant under s 79(4) by reference to his or her contributions will be warranted. In the present case, where there was evidence of such contributions, and no suggestion that the order ought not be made on the basis of an absence of contributions, the trial Judge was not obliged to consider such matters.
As Senior Counsel for the wife fairly acknowledged, the trial Judge accurately identified the issues before her. The first issue was whether the wife had the capacity to pay the sum sought by the husband by way of litigation funding. The second issue was whether the trial Judge “could not have confidence that the husband would be awarded that amount in the s 79 proceedings” (par 98).
Other than to the extent that we have suggested, the trial Judge was not obliged to explore other matters pursuant to s 79(4) of the Act. The failure to do so constituted neither an error of principle nor any inadequacy in the exposition of her Honour’s reasoning process. Whether the trial Judge erred in relation to the wife’s capacity to meet the orders sought by the husband, or in relation to the “claw-back” or “adjustment” issue, are matters for consideration in the context of other complaints sought to be raised on behalf of the wife (pars (iii) and (iv) respectively).

the wife’s capacity to meet the order for litigation funding sought by the husband

The trial Judge clearly recognised that the wife disputed that she had the capacity to meet the order the husband sought for litigation funding. Her Honour recorded in that regard:
97.Mr Ackman submitted that for the husband to have litigation funding of $250,000, or any amount, it would need to come from the wife’s loan account (see above), already depleted to $346,000, and that such is the source of her meeting her own shortfall of expenses for herself and the children (detailed elsewhere in her evidence) as well as her own litigation funding.
Earlier, the trial Judge had recorded that the wife asserted that her “net assets total $229,413 if one does not take account of chattels and jewellery (estimated at $773,000) which in any event are yet to be valued” (par 96, sub par 55).
Her Honour then turned to consider the evidence relied upon by the husband disputing the wife’s contention with respect to her capacity to meet the order he sought. As the trial Judge clearly recognised, the evidence of both parties was untested.
Senior Counsel for the husband asserted, by reference to an affidavit of the wife, which was before the trial Judge, that the wife’s loan account had a debit balance of $7,495,111, to the BL Property Trust, rather than the $8,559,516 which she asserted in her financial statement, which was also before the trial Judge, and referred to by her Honour in the following terms:
96.The wife deposes to having net assets of $229,413, if her chattels, jewellery and superannuation are excluded: wife’s affidavit filed 27 May 2011, pars 13 -16, summarised by Mr Ackman in his written submissions, pars 53-60, describing her financial affairs as “not complex”:
53.The wife’s assets and liabilities are set out in her Financial Statement filed 27 May, 2011 (“the Wife’s Financial Statement”). The wife’s assets may be summarised as follows:-
53.1   [… H Street, Melbourne Suburb 1]               8,500,000
53.2   Westpac Savings  87,422
53.3   Loan to [B Levy] Investments               346,170
53.4   Shares ([Company 1] and [Company 2]) 30,000
53.5   Chattels  638,000
53.6   Jewellery  135,000
E$9,736,592
54.The wife’s liabilities, as disclosed in the Wife’s Financial Statement are:-
54.1   [Company 3]   174,663
54.2   [BL] Property Trust           8,559,516
E$8,734,179
55.Hence, the wife’s net assets total $229,413 if one does not take account of chattels and jewellery (estimated at $773,000) which in any event are yet to be valued and superannuation. Accordingly, the wife’s net assets may be valued at an amount less than that estimated in the Wife’s Financial Statement.
56.It is submitted that there is no source of funds available to the wife with which to meet the husband’s claim.
57.The wife is reliant upon loan repayments from [B Levy] Investments in order to meet the shortfall between her income and household expenditure for herself and the 4 children of the marriage.
58.The husband alleges that he requires the payment in order to “investigate the wife’s financial position, which is complex and bound up in her family’s financial affairs”. It is submitted that the wife’s financial position is clearly set out in the Wife’s Financial Statement. The wife has disclosed financial interests in:
58.1[B Levy] Investments Pty Ltd;
58.2[Company 3];
58.3[BL] Property Trust (which loaned monies to the wife to facilitate the purchase of the property at [H Street]); and
58.4[E] Superannuation Fund (the wife’s private superannuation fund).
There are no other entities which require investigation by the husband or his advisors. The husband has produced no evidence that the wife’s “financial affairs are complex and bound up in her family’s financial affairs” and essentially the husband is seeking significant funding for what is at this stage a fishing expedition.
59.That the wife’s father is a man of substantial means is beyond question. However, he is not a party to these proceedings and his financial circumstances are irrelevant to the issues between the parties to the marriage.
60.As disclosed in the Wife’s Financial Statement, there is little complexity to her financial circumstances.
In her affidavit filed in this Court on 4 May 2012, the wife asserted that the sum referred to by her in her previous affidavit had been erroneous, and the basis upon which it had been, and reiterated that she actually owed $8,559,516. The wife deposed:
38.I refer to paragraph 29.1 of the husband’s September Affidavit. The husband has misrepresented what I said in paragraph 2(t) of my May Affidavit. In paragraph 2(t) of my May Affidavit I stated that the [BL] Property Trust had lent me $7,495,111 to fund the acquisition of the [H Street] Property. I did not represent that figure as being the current balance of the loan. As disclosed in section 50 of my Financial Statement, the balance of the loan as at 30 June 2010 was $8,559,516. The balance of the loan has increased because interest has been accruing on the loan, which remains unpaid. The husband correctly notes that the liability is recorded in the Statement of Financial Position for the [BL] Property Trust as at 30 June 2010 as $7,495,111. I have made enquiries of […] the Company Secretary of [Company 10], trustee of the [BL] Property Trust and is responsible for the preparation of its accounts. He has advised me and I verily believe that the accounts are drawn up on a cash basis, rather than accrual basis. As such, accrued income is not brought into the accounts.
The trial Judge referred (at par 100) to the wife’s opening balance of $4.2 million in 2006 emerging from the B Levy Investments Pty Ltd general ledger, which preceded the sale of a property at K Street in 2007, and which may have resulted in receipt by her of $2 million. Again by reference to the wife’s documents, the trial Judge referred to the balances of the wife’s loan account in the Levy Trust, which were:
100. ….
(c) …
·$22,549,000 in 2007
·$25,868,000 in 2009 and
·$25,696,00 in 2010, [sic]
The trial Judge recorded in relation to those balances:
100. ….
the husband deposing from his own knowledge, based upon discussions with the wife during the marriage, that such is sourced in a gift of about $25 million by the wife’s husband [sic] to each of his three children in about 1999.
Her Honour then referred to the fact that, for the first time, the wife noted on her 2009 tax return her assertion that she “holds on trust all rights and entitlements to the funds owed by the Levy Trust (“The Loan Account Trust”). Ms Levy is not a beneficiary of the loan account trust, and has no beneficial entitlement to any part of the fund in the loan account trust” (par 102).
The trial Judge also recorded:
105.Mr Geddes submitted that the 3 tax returns show that in the 2007 year, the wife owned the loan account with the [Levy] Trust, but by 2009 it had been apparently transferred or reversed and that this plainly requires investigation as to whether in truth the wife still owns the loan account, presently standing in excess of $25 million.
106.The husband’s affidavit, par 29, raises also whether a property at [Town 1] is owned by the wife or held for her beneficially; and other matters.
Ultimately the trial Judge concluded:
107.The very circumstance of the wife’s denial of any ownership other than net worth of $229,413, in light of the 3 tax returns to which I have referred, and in light of the husband’s clearly presented evidence in his affidavit, par 29, strengthens his case for funding to investigate and obtain a forensic report as to the wife’s wealth.
Her Honour was in no doubt that the wife disputed the basis of the inferences which Senior Counsel for the husband sought that her Honour draw from the material to which we have referred and detailed above.
Before us, Senior Counsel for the husband submitted that:
9. … it was open to Her Honour to make the following findings:
“According to the evidence to which I have referred, it does not appear to me, as claimed by the wife, and as submitted by Mr Ackman, that her financial affairs are simple, but rather that indeed they are complex, and I reject, on the basis of the evidence, even as it presently stands, that the husband’s forensic mission is a fishing expedition. On all of the evidence, taking all relevant matters into account, I am satisfied, to the extent that I need to be for this interim hearing, that it is just that there be provided $250,000 litigation funding for the husband, and on the basis of the evidence adduced to date that the adjustment issue, on the balance of probabilities, also is met” […].
Neither the written nor oral submissions of Senior Counsel for the wife identify in what way the trial Judge erred in rejecting the wife’s contention that she was unable to pay the sum sought by the husband by way of litigation funding.
Whilst other conclusions may have been open to the trial Judge on the untested evidence before her, we are not persuaded that her Honour erred in finding that the wife had the capacity to pay the sum sought by the husband.
In her affidavit filed 4 May 2012, the wife sought to clarify a number of matters which she asserted had been omitted from, or inaccurately revealed by, the affidavit material relied upon by her before the trial Judge. Why the evidence could not have been more accurately and extensively revealed at that time remains largely unexplained.
The wife’s further affidavit does not in our view alter matters for present purposes. Rather, it provides support for the trial Judge’s rejection of the wife’s assertion that “her financial affairs are simple”, and for her Honour’s finding that they are “complex” (par 111). The further evidence of the wife also provides further support, if it be needed, for the trial Judge’s conclusion that the husband reasonably required litigation funding to enable the wife’s financial affairs to be properly investigated.
If ultimately found to be correct, the wife’s financial affairs as clarified or elaborated in her affidavit sworn 4 May 2012, may have implications for the final hearing of the husband’s s 79 application, but they do not in our view change anything for present purposes. That is particularly so given that on 14 October 2011 the wife gave an undertaking not to reduce her loan account below the sum of $250,000 pending the determination of her proposed appeal. Before the trial Judge the wife asserted the balance of her loan account to have been $346,000 (par 97).
The wife’s own evidence, if accepted, establishes the provision of substantial funds by family members and/or entities over a lengthy period of time. We have not been referred to any evidence suggesting that such benefits would cease in the event of the wife’s loan account being reduced by $250,000.
We are accordingly not persuaded that this proposed challenge has merit, either by reference to the evidence before the trial Judge, or the wife’s further evidence. Although strictly unnecessary to do so, the admissible further evidence relied upon by the husband could be relied upon to provide further support for our conclusion.

errors in relation to the “claw-back”

The real thrust of the complaints agitated on behalf of the wife is that, if the husband received the sum of $250,000 ordered by the trial Judge, it would, given the basis upon which it was awarded, be expended, and not recoverable in the event that the husband’s entitlement to a final order pursuant to s 79 of the Act was determined to be less than $250,000.
The trial Judge concluded in relation to the second issue which she had earlier identified (at par 98) that:
112.On all of the evidence, taking all relevant matters into account, I am satisfied, to the extent that I need to be for this interim hearing, that it is just that there be provided $250,000 litigation funding for the husband, and on the basis of the evidence adduced to date that the adjustment issue, on the balance of probabilities, also is met.
Whilst recognising the issue, the trial Judge was submitted to have failed to properly consider the issue or, to the extent that her Honour did, erroneously concluded that the “claw-back” or “adjustment” issue did not disentitle the husband to the order he sought. Senior Counsel for the wife submitted that the path her Honour had taken to come to the conclusion she did at paragraph 112 to overcome the clawback issue had not been adequately revealed. Senior Counsel for the wife submitted that the issue for determination with respect to the amount of litigation was wrongly expressed as an “adjustment” issue when it should have been described as a “claw-back” issue.
With respect to Senior Counsel for the wife, the distinction between “adjustment” and “claw-back” is in our view a distinction without a difference. However described, the issue was, and was recognised by the trial Judge, as being the same. Her Honour clearly identified the substance of the issue in paragraph 98 of her reasons, to which we have earlier referred (par 41). Earlier in her reasons (at par 88) the trial Judge clearly revealed her awareness that, whether described as “adjustment” or “claw-back”, the issue of substance remained same.
As the transcript of the hearing of the wife’s application to this Court would confirm, it was not submitted that the evidence of the husband in relation to his contributions, in the paragraphs of his affidavit evidence to which we have earlier referred, could not be accepted.
Whilst, as the trial Judge recorded, the wife’s case before the trial Judge was that her Honour “could not have confidence that the husband would be awarded that amount [$250,000] in the s 79 proceedings” (par 98), nothing to which we have been referred establishes that the trial Judge should have found that the husband would not, or was unlikely to be awarded less than that sum.
We do not consider that anything said by the Full Court in Zschokke and Zschokke (1996) FLC 92-693 assists the wife in this case. The Full Court, at page 83,216, there said:
There is then the question of the matters to which the Court should have regard, or take into account, in considering whether to make an order of the type in question either under s 80(1)(h) or under s 117(2). If the order is to be made under s 80(1)(h), it would seem that regard should be had to the requirement in s 79 that the orders be just and equitable and this would require the Court to undertake at least some brief consideration of the matters in s 79(4) including those referred to in s 75(2). If on a brief consideration of those matters, it seems likely to the Court that the party who is the applicant for the interim order for an advance of funds from the other party will be likely to receive by way of property settlement a sum sufficient to cover the advance, that would seem to be sufficient to enable the order sought to be made (cf Wilson and Poletti).
The Full Court in Zschokke (supra), at page 83,220, further recorded:
Given these real uncertainties concerning the outcome of the wife’s property settlement claim, we consider that the order that the wife seeks in these proceedings could not be made pursuant to the provisions of s 80(1)(h) for the reason that the eventual property settlement entitlement of the wife may well not be large enough to permit the monies advanced under the s 80(1)(h) order to be satisfactory or justly taken into account in the final settlement.
The trial Judge’s decision was consistent with that approach. As we have earlier recorded, nothing to which we have been referred establishes that the husband is “likely” to receive by way of final property settlement a sum which is less than “sufficient to cover the advance” accorded by the trial Judge. The trial Judge did not, and could not, find that the husband was “likely” to receive at least $250,000 by way of final property settlement, nor did her Honour need to before making the order the husband sought.
In the circumstances we have outlined, this challenge to the trial Judge’s decision could not succeed.

the adequacy of the trial judge’s reasons

The substance of this complaint was articulated by Senior Counsel for the wife in his written outline of argument in the following terms:
49.Analysis of the reasons reveals that the trial judge failed to make a finding that, in the circumstances, it was appropriate to exercise the power conferred by s 80 of the Act and give reasons why she came to this conclusion. Her Honour also failed to undertake any consideration of the matters in s 79(4). Thus the appeal should succeed because of the failure by her Honour to apply relevant principle. Next, the appeal should succeed because her Honour failed to provide adequate reasons: Pettit v Dunkley [1971] NSWLR 376; Bennett and Bennett (1990) FLC 92-191; Merriman and Merriman (1993) FLC 92-422. Her Honour’s reasons do not meet the requirement of an appropriate process of reasoning […].
The trial Judge recorded, accurately there is no doubt, that it was common ground that any “amount provided [by way of litigation funding] will be added back against the husband at the parties’ s 79 trial. The matter in issue is the amount of funding to be provided” (par 79).
Her Honour then recorded that the common ground to which she had, accurately, thus referred had the effect that “many” of the factors referred to in the authorities did not need to be considered. Those included “whether the husband has the need for funding” (pars 80 and 81).
At trial, it was not disputed that the husband had such need. Nor was there any issue before the trial Judge that the husband lacked the capacity to provide such funding from his own resources. For reasons which she identified the trial Judge concluded that:
84.… I will, therefore, determine the amount not as in the range of between $50,000 and $250,000, but solely on the basis of the husband’s case seeking $250,000.
That identification of the ambit of the dispute was undoubtedly accurate.
The trial Judge then identified as the matters with respect to which she needed to be “satisfied”:
88.… (1) that the funds justly can be made available: Zschokke (above) at 83,220-1; and (2) as to the “adjustment issue”, or the “claw-back issue”, as it is called in the cases, namely that at the eventual property settlement or trial, the husband will be entitled at least to such an amount to permit the moneys advanced satisfactorily to be taken into account: Zschokke, also at 83,220-1. See also Harris & Harris (1993) FLC 92-378 at 79,930, left column at (3):
… the Judge must be satisfied that the remaining property will be adequate to meet the legitimate expectations of both parties at the final hearing, or that the order which is contemplated is capable of being reversed or adjusted if it is subsequently considered necessary to do so. …

The trial Judge then turned “immediately to the wife’s evidence as to her financial circumstances” (par 95). Having set out (at par 96) accurately there is no doubt, what the wife’s financial circumstances to be, the trial Judge recorded, again accurately:
97.Mr Ackman submitted that for the husband to have litigation funding of $250,000, or any amount, it would need to come from the wife’s loan account (see above), already depleted to $346,000, and that such is the source of her meeting her own shortfall of expenses for herself and the children (detailed elsewhere in her evidence) as well as her own litigation funding.
Her Honour then observed:
98.Based on the wife’s evidence alone, I would need to conclude not only that the wife cannot afford to provide the husband the amount he seeks for litigation funding, or any amount, but that the adjustment issue would have effect that the amount the husband seeks ought not be ordered because, on the wife’s evidence, as submitted by Mr Ackman, I could not have confidence that the husband would be awarded that amount in the s 79 proceedings: Harris, Zschokke, and Strahan (above).
As is not in doubt, the trial Judge there clearly, and accurately, reiterated the two issues with respect to which she needed to be satisfied.
As was not in doubt, the husband asserted that the wife, both in terms of property and financial resources, was in a better financial position than she asserted in her evidence before the trial Judge.
The trial Judge recorded (at par 99) a number of assertions made by the husband, either in reliance upon documentation provided by or on behalf of the wife, or entities associated with her, or matters with respect to which the husband asserted personal knowledge. The trial Judge then summarised the matters which emerged from evidence which was able to be accepted, particularly as it primarily originated from the wife or her advisers (pars 100 – 107). Clearly, her Honour recognised during the course of the hearing before her, and reiterated in her reasons for judgment, that she was not in a position to make definitive findings with respect to disputed issues of fact. Accurately, the trial Judge concluded that the wife’s financial affairs were not “simple, but rather that indeed they are complex” (par 111).
Her Honour thus concluded:
112.On all of the evidence, taking all relevant matters into account, I am satisfied, to the extent that I need to be for this interim hearing, that it is just that there be provided $250,000 litigation funding for the husband, and on the basis of the evidence adduced to date that the adjustment issue, on the balance of probabilities, also is met.
It was submitted by Senior Counsel for the wife that, neither expressly or by implication, did the trial Judge find:
(a)that the wife had the capacity to pay the sum sought by the husband;
(b)that the husband might not be awarded as much as $250,000 by way of final order for settlement of property; and
(c)that the trial Judge did not adequately consider, if the husband was awarded less than $250,000, having expended it on the litigation funding, whether the husband would be unable to repay any overpayment determined to have been made to him.
Senior Counsel for the wife further submitted:
36.It should be observed that in her reasons the trial Judge found that the “real issue” for her determination was what she called the “adjustment issue” […] and concluded that: “… the adjustment issue, on the balance of probabilities, also is met” […]. Thus, in the absence of explanation, in [sic] can be inferred that her Honour made a finding in relation to the financial circumstances of the Wife and the entitlement of the Husband.
Senior Counsel for the husband submitted that the trial Judge adequately revealed the reasoning process which led her Honour to conclude as she did, and that to conclude otherwise would be to ignore the course which her Honour’s Reasons for Judgment took, and the content of those reasons, as they were revealed by paragraphs 98 – 112.
As is not in doubt, the adequacy of reasons for judgment varies having regard to the issues in dispute between the parties. In Apps and Another v Pilet (1987) 11 NSWLR 350, McHugh JA at page 357, said that:
Unless this Court knows the reasons for his Honour’s decision, the claimants cannot effectively appeal against his Honour’s order. The difficulties of successfully appealing in a case of this nature are well-known. It is probable -- indeed there is a presumption -- that his Honour’s order was correct. But the decision has such consequences on a matter of such personal importance to the claimants, that they were entitled to the reasons for his Honour’s decision. As I pointed out in Soulemezis, the reasons need not be lengthy or elaborate. It is sufficient that they articulate the matters which the judge took into consideration and the conclusion which he reached on the points of fact and law which were relevant.
We are not persuaded that the trial Judge inadequately revealed the process of reasoning which led to her conclusion. As is not in doubt, the wife’s position was accurately identified at paragraphs 84 and 98. So were the issues requiring determination. Her Honour had earlier, and accurately, identified the issues which did not require determination.
Having recorded the wife’s asserted financial position, and the matters relied upon by the husband in support of his assertion that the wife’s financial position was materially better than she asserted, the trial Judge expressed her conclusion in the terms we have earlier indicated (par 112).
The trial Judge did not expressly record either an affirmative finding that the wife could pay $250,000, or a finding that she was not satisfied that the wife could not pay such sum, or expressly find that the husband was unlikely to be awarded as much as $250,000, and that as such the wife would be unable to recover such overpayment. Read in the context of the identification of issues, and their consideration, it can reasonably be inferred that the trial Judge’s conclusion that making the orders sought by the husband was “just” was adequately explained. This is particularly so given the analysis of the financial matters emerging from the evidence which her Honour had earlier, and quite extensively explored, and her Honour’s express reference to the “adjustment issue”.
With respect to the submissions of Senior Counsel for the wife, as the trial Judge’s reasons confirm, her Honour was in no position to make findings on the balance of probabilities as to the wife’s actual financial position having regard to the evidence before her. A trial Judge would rarely be able to do so in an application of the kind with which her Honour was concerned. Nor was her Honour able to make definitive findings of fact in relation to what the husband might ultimately be awarded. Neither of those inabilities precluded the making of the order sought by the husband.
Had her Honour purported to make such findings that would, understandably, no doubt have excited complaint, particularly in the context of an interlocutory hearing. We are thus not persuaded that the trial Judge inadequately revealed her reasoning process.

conclusion

No ground for possible appellate intervention has been demonstrated. No error of principle has been demonstrated. Nor has it been established that, if undisturbed, the trial Judge’s decision would cause the wife a substantial injustice.
The wife’s application for leave to appeal will be dismissed.

costs

Sensibly, Senior Counsel for the wife conceded that if the application for leave to appeal was unsuccessful, an order for costs should be made against the wife.
Senior Counsel for the wife submitted that enforcement of such order be stayed pending the determination of the substantive proceedings or the further order of the Court.
We do not understand Senior Counsel for the husband to seriously dispute that contention.
In the absence of any orders for costs being made in favour of the wife against the husband between now and the final determination of the proceedings, and execution of such orders not similarly being stayed, we propose ordering that execution of the order for costs be stayed pending order of the Full Court or a judge of the Court exercising original jurisdiction.

I certify that the preceding ninety six (96) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Bryant CJ, Coleman & Kent JJ) delivered on 27 June 2012.

Associate:

Date: 27 June 2012