Lovett and Xavier and Anor

[2014] FamCA 49

FAMILY COURT OF AUSTRALIA

LOVETT & XAVIER AND ANOR [2014] FamCA 49

FAMILY LAW – INTERIM PROPERTY SETTLEMENT – contested interim application by wife for litigation funding – whether it is appropriate to exercise Court’s power on an interim basis – whether source of power ought be categorised under section 117 or 79 – where it is just and equitable to make interim property settlement in favour of the wife – interim property settlement in the sum of $100,000 granted.

Family Law Act 1975 (Cth) ss 75, 79, 79A, 80, 114, 117, 106B.

Bing & Bing [2007] FamCA 418
Bevan and Bevan [2013] FamCAFC 116
Gabel v Yardley (2008) FLC 93-386
Paris King Investments Pty Ltd v Rayhill [2006] NSWSC 578
Poletti and Poletti (unreported, Family Court of Australia, 2 March 1990)
Stanford v Stanford [2012] HCA 52
Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466
Zschokke v Zschokke (1996) FLC 92-693

APPLICANT: Ms Lovett

FIRST RESPONDENT:	Mr I Xavier
SECOND RESPONDENT:	Mr A Xavier

FILE NUMBER: MLC 968 of 2013

DATE DELIVERED: 10 February 2014

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Thornton J

HEARING DATE: 4 December 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Sweeney

SOLICITOR FOR THE APPLICANT: Mills Oakley Lawyers

SOLICITOR/ADVOCATE FOR THE

RESPONDENTS:

Mr Rubera

SOLICITOR FOR THE RESPONDENTS: Sebastian Rubera & Assoc

Orders

1. No later than 17 March 2014 the husband pay the wife the sum of $100,000 by way of interim property settlement.

2. The payment pursuant to paragraph 1 be deemed to be the property of the wife at the final trial or upon the making of final orders, irrespective of how it is applied, or whether it is still in the wife’s possession or control at the date of the trial or the making of final orders and regardless of whether it has increased or decreased in value.

3. That paragraph 5 of the husband’s Response filed 28 March 2013 be otherwise dismissed, save as to costs.

IT IS CERTIFIED THAT

Pursuant to Rule 19.50 of the Family Law Rules 2004 this matter reasonably required the attendance of counsel including senior counsel.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Lovett & Xavier and Anor 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 MELBOURNE

FILE NUMBER: MLC 968 of 2013

Ms Lovett

Applicant

And

Mr I Xavier

First Respondent

Mr A Xavier
Second Respondent

REASONS FOR JUDGMENT

Introduction 

1. The parties are engaged in substantive property settlement proceedings initiated by the wife under Part VIII of the Family Law Act 1975 (“the Act”).[1]

   [1] Initiating Application filed 13 February 2013.

2. The wife joined as second respondent to the proceedings, Mr A Xavier, the husband’s brother, as a person whose rights may be directly affected by an issue in the case and whose participation as a party is necessary for the Court to determine all issues in dispute. 

3. The solicitor for the first and second respondents foreshadowed that the joinder of the second respondent by the wife is contested and will be the subject of an Application in a Case in the future.

4. The wife seeks as a final order, amongst other orders, that insofar as transactions occurred which divested the husband of ownership of assets in favour of the second respondent, such dispositions be reversed pursuant to

   
   

   s 106B of the Act.

5. The wife deposed that she is of the belief that the husband has beneficial entitlements and transactions which he entered into with the second respondent which may be designed to defeat her claim. She has referred to a number of properties in Suburb B which were transferred to the second respondent by the husband when the parties separated for a short time in or about 2009,[2] and which she believes may be valued at approximately $11 million.[3]

   [2] Affidavit of the wife filed 13 February 2013 at paragraph 25.

   [3] Affidavit of the wife filed 13 February 2013 at paragraph 62.

6. The husband and second respondent deny that the husband has made any transaction to defeat the wife’s claim.

7. It is the wife’s case that the husband and the second respondent have been in business together in the C Group and various other companies and businesses which have established trusts and have acquired substantial real estate interests. The wife asserts that the total real estate portfolio of these companies, the trusts, the husband, the husband and wife jointly, and the second respondent, involves no less than 15 real properties. 

8. A key issue between the parties when the trial is conducted will be whether the husband has equitable interests in real property and other assets owned by either the second respondent or various entities controlled by the husband and/or the second respondent.

The current application

1. The wife made an interim application in the judicial duty list seeking a payment of $100,000 from the husband by way of an order for litigation funding under s 117 of the Act. The wife requires funding in order to investigate what constitutes property of the marriage.

2. In the alternative, the wife sought the same payment but that it be categorised as a part property settlement under s 79 of the Act. Although there was reference to a third alternative in response to the solicitor for the husband mentioning a “dollar for dollar order”, this was not ultimately pressed by counsel for the wife.

3. The wife’s application was opposed by the husband.  The second respondent did not participate in the hearing.

4. The parties did not seek to cross-examine each other or any other deponent.  The hearing proceeded by way of oral submissions; both parties having previously filed written submissions with the Court which they relied upon.

5. The documents relied upon by the parties are included in this judgement at Annexure 1.

Background

1. The parties were married in January 1998 and finally separated in March/April 2012 after a short separation in 2009.  They have an 11-year-old daughter.  There is a shared care arrangement whereby the child lives between the households of the parties.

2. The wife is 46 and the husband is 51.  Apart from a brief period of employment between July and September 2013, the wife has not been in paid employment since she was retrenched from D Company in 2002.  She has made numerous unsuccessful job applications.  She has received child support payments from the husband through the Child Support Agency from March 2013.  However, she is currently repaying overpayments to Centrelink which are deducted from her monthly child support payments.  The wife is ineligible for Newstart Allowance and Family Tax Benefits A and B because of her joint ownership of the former matrimonial home.

3. Although the question of the interests of the husband in other property is  controversial and will be an issue for determination at trial, there is agreement between the parties that there are at least three real properties of the marriage which are located at:

   ·   G Street, Suburb H;

   ·   E Street, Suburb F; and

   ·   J Street, Suburb K. 

4. The husband resides in the Suburb F property, which is the former matrimonial home registered in the joint names of the parties.  The husband estimates the value of that property at approximately $800,000.  It is unencumbered.

5. The wife resides in the Suburb K property, registered in the name of the husband.  After the parties separated, it was purchased by the husband for $664,000. 

6. The Suburb K property was the subject of consent orders on

   
   

   18 February 2013.  The husband was required to complete the purchase of the Suburb K property and to make available the Suburb H property and the Suburb K property for mortgage security for borrowings necessary to complete the purchase of the Suburb K property.  

7. A mortgage of $538,825 was registered against the Suburb K property and a mortgage of $270,000 was registered over the Suburb H property to complete the purchase.  A total of $700,000, inclusive of legal costs and stamp duty, was paid by the husband for the purchase of the Suburb K property.

8. The consent orders also provided that the wife have the sole and exclusive use and occupation of the Suburb K property.

9. In lieu of spousal maintenance, the consent orders provided that the husband make all payments as they fell due with respect to any borrowings obtained in order to finance the purchase of the Suburb K property and pay all rates, taxes and other apportionable outgoings with respect to that property as and when they fall due and until further hearing in relation to the quantum and obligations of the husband to pay spousal maintenance.

10. The husband and his employees, servants and agents were also restrained from disposing of, transferring, selling or otherwise encumbering or further encumbering the Suburb K property and/or corporate entities in which the husband holds any legal or equitable interest or which are held legally or beneficially in his name.

11. Further orders were made requiring the husband to provide documents to the wife which included income tax returns, group certificates and notice of assessments, bank statements, financial statements including balance sheets, profit and loss statements, depreciation schedules and taxation returns and trustees and any amendments thereto in respect of a number of entities and trusts.

12. The wife deposed that she has been living from her capital, which has been depleted, since she left the former matrimonial home.  She deposed in her updated financial statement and affidavit filed 2 October 2013 that she has $3,000 remaining of a capital amount which she received by way of redundancy in 2002.  She has no other income but receives the payments from the husband pursuant to the consent orders made on 18 February 2013, which account for the mortgage payments, rates and expenses on the property in which she resides. 

13. The wife deposed to a weekly income of $18 and expenses of $1,399.[4]

    [4] The wife’s updated financial statement filed 3 October 2013.

14. The husband deposed that he is the manager of C Group and his current taxable income inclusive of rental income from the Suburb H property is $65,969 per annum.  The husband deposed to a weekly income of $1,468 before tax and weekly expenses of $3,565.[5]

    [5] The husband’s amended financial statement filed 28 November 2013.

The wife’s submissions

1. The wife’s explanation for the amount sought for litigation funding is the necessity to determine the legal and equitable entitlements of the parties’ property which she asserts to be complex.  The reason for the complexity is essentially that the husband has divested himself of property of the marriage in favour of his brother and therefore the husband’s transactions and conduct require extensive forensic accounting investigation.  She claims that the husband is a self-employed wholesaler who operates various businesses with the second respondent, primarily through the business C Group.

2. In support of the argument about the complexity of the investigation to be undertaken by the solicitors and accountant for the wife, counsel for the wife referred to the fact that the solicitor for the husband has filed two affidavits sworn on his own behalf, two affidavits of an accountant and two affidavits of his two clients.  It was also submitted that the affidavit of the husband’s solicitor, which runs to 12 pages, substantiates the assertion of complexity.

3. I accept the submission on behalf of the wife that the documents filed and relied upon by the husband for the purposes of this application are excessive having regard to the nature of the application.

4. It was submitted by counsel for the wife that it will cost the wife a significant amount to litigate the substantive matter.  The wife’s solicitor deposed that the wife has paid $21,000 towards her legal costs but has approximately $10,000 owing and approximately $85,000 by way of work in progress as yet to be billed.[6]  The solicitor estimates that the wife will require another $59,500 to $64,500 to complete the matter.

   [6] Affidavit of Damian Harriss filed 18 October 2013.

5. The husband has also foreshadowed a further interim application by the second respondent which will involve additional legal costs for the wife.

6. Counsel for the wife submitted that if the source of the power is s 117 of the Act, then the Court may make such order as it considers appropriate, if there are circumstances justifying such an order. Relying on the decisions in Zschokke v Zschokke (1996) FLC 92-693 (“Zschokke”) and Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 (“Strahan”), counsel for the wife submitted that whether the payment is categorised as an interim property settlement order under s 80(1)(h) or as an interim costs order under s 117(2) or even a maintenance order, three matters are relevant, namely:

   (1)a position of relative strength on the part of the respondent;

   (2)a capacity on the part of the respondent to meet his own litigation costs; and

   (3)an inability on the part of the applicant to meet her own litigation costs.

7. Counsel for the wife also relied upon the statement of the Full Court in Zschokke in reference to cases where:

   … the complexity of, or need to investigate, the respondent's financial affairs would be a factor or factors, the existence of which would add considerable weight to the case for an order of the type in question.[7]

   [7] Zschokke v Zschokke (1996) FLC 92-693 at 83,218.

8. The Court also stated that this was not necessarily a pre-condition for making an order under any of the possible heads of power.

9. Counsel for the wife also relied upon the decision of Brereton J at paragraph 30 of Paris King Investments Pty Ltd v Rayhill [2006] NSWSC 578 (“Paris King Investments”) where those three propositions were also accepted as being at least three of the requirements for an interim order for litigation expenses to be made as an interim costs order under s 117(2).

10. It was also submitted on behalf of the wife that any order made under s 117 does not have two stages.[8] It was submitted that Boland and O’Ryan JJ concluded that the overarching consideration is the interests of justice.  All that is required is that in the circumstances it is appropriate to exercise the power.[9]

    [8] Strahan at paragraph 119.

    [9] Strahan at paragraph 132.

11. For the proposition that there is a disparity between the parties in terms of their ability to fund the litigation, counsel for the wife emphasised the following:

    ·the affidavit of the solicitor for the husband deposed to tax invoices of $102,128.67 having been issued to the respondents between March and September 2013, which included counsel’s fees and disbursements, and that $91,678.67 has been paid by the respondents;

    ·the husband does not depose to any significant amount owing to his lawyer; and

    ·the fact that the husband has had the capacity to fund the proceedings to this stage.

The husband’s submissions

1. The wife’s application for litigation funding was opposed on behalf of the husband on the basis that:

   ·the wife must have her own funds available because as late as 2012 she had $93,000 in her Columbia Mutual Account and she has claimed to have made renovations totalling $26,150;

   ·it is unnecessary to investigate the financial affairs of the husband because all of the documents sought to be discovered by the wife have been disclosed by the husband;

   ·the costs outlined by the wife’s solicitor in his affidavit are excessive;

   ·the wife does not establish the threshold requirement in Poletti and Poletti (unreported, Family Court of Australia 2 March 1990)[10] because the husband does not in any way exclusively control the bulk of the assets and funds of the parties;

   ·alternatively it was argued by counsel for the husband that any payment ordered to be paid to the wife should be characterised as a part property settlement under s 80(1)(h) and s 79 of the Act; and

   ·relying on Gabel v Yardley (2008) FLC 93-386 at 69 and 72, the interim order must be capable of variation or reversal without resort to section 79A of the Act or appeal.

   [10] Strahan at paragraph 80.

2. In his Response[11], the husband seeks, amongst other orders, a final order that the former matrimonial property be divided between the parties under s 79(4) of the Act in such proportions as the Court deems just and equitable.

   [11] Response filed 28 March 2013.

3. The solicitor for the husband conceded that the wife will ultimately be entitled to “50 to 55 per cent of the net pool, whatever that may be at the end of the day” by way of alteration of the property of the marriage.[12]

   [12] Transcript of proceedings, page 10 at line 25.

4. He conceded that there will be sufficient funds to be distributed between the parties such that the amount of $100,000 sought by the wife would not be an amount in excess of any entitlement she might ultimately receive.  This was based on his preliminary assessment of the net property for distribution between the parties which he outlined in the written submission as being $1,180,081.37.[13]

   [13] Paragraph 5 of the written submissions of the husband filed 2 December 2013.

5. The solicitor for the husband argued that the quantum sought by the wife is excessive and relied upon his own affidavit sworn on 8 November 2013.

6. The solicitor for the husband submitted that there is no ready source of funds available from which to meet the orders sought by the wife.

7. However, he acknowledged the decision of the Full Court in Bing & Bing [2007] FamCA 418 at paragraph 27, which was relied upon by counsel for the wife, where the Full Court referred to assertions in that case that the husband was and remained unable to raise the capital sought by the wife and stated that:

   This is a matter which may become relevant if and when the husband defaults in the order and an enforcement application is brought.  However, the question of enforcement of the order remains a separate question from the propriety of granting the order in the first place.

8. The solicitor for the husband did not take issue with the legal principles outlined by counsel for the wife.

Discussion

1. During the hearing there was some discussion with both counsel about the source of power for the making of a litigation funding order in favour of the wife. Counsel for the wife urged that an order be made under s 117 of the Act but accepted that an order made under s 79 as a part property settlement under

   
   

   s 80(1)(h) was also appropriate.

2. Counsel for the husband conceded that the appropriate source of power to make an order would be under s 79 by way of part property settlement under

   
   

   s 80(1)(h), whilst eschewing the need for such an order. He submitted that it would be entirely inappropriate to make any order under s 117 having regard to the criteria for making an order for costs.

Relevant law for litigation funding as an order for costs

1. The general rule is that each party should bear his or her own costs of proceedings under the Act.[14]

   [14] Section 117(1) Family Law Act 1975 (Cth).

2. Under s 117(2) of the Act, if the Court is of the opinion that there are circumstances that justify it in doing so, the Court may make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the Court considers just.

3. Section 117(2A) of the Act mandates the factors to which the Court should have regard in considering what order (if any) should be made. The factors are:

   (a)the financial circumstances of each of the parties to the proceedings;

   (b)whether any party to the proceedings is in receipt of assistance by          way of legal aid and, if so, the terms of the grant of that assistance to that party;

   (c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;

   (d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;

   (e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;

   (f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and

   (g)such other matters as the court considers relevant.

1. In considering whether there are circumstances which justify an order for costs being made, the weight to be attached to any of the considerations in s 117(2A) is wholly discretionary.

2. Section 117(2A) of the Act must be read having regard to the primary position in s 117(1) of the Act that each party to proceedings under the Act shall bear his or her own costs.

3. If the litigation funding application relies on s 117 of the Act as the source of power, then in considering the amount to award, it probably is necessary for an assessment to be made of the amount that is required.

4. This was referred to in Strahan by Boland and O’Ryan JJ at paragraph 96 and it was also suggested that the Court may consider making an order referred to by Brereton J in Paris King Investments that requires:

   … the funds be administered solely by the applicant’s solicitors and applied only to meet the expenses referred to in the order, with detailed records being maintained to permit review by the Court at the time of the exercise of its discretion in the substantive property proceedings or on the final determination of the issue of costs.

5. These matters are not relevant if the source of the power is s 79 of the Act.[15]

   [15] Strahan at paragraph 153.

Relevant law for litigation funding as a part or interim property settlement

1. Under s 80(1)(h) of the Act, the Court may make an order pending the disposal of proceedings. The test for the exercise of the power in s 80 of the Act to make an interim order is that it be an appropriate case in order to do justice.[16]

   [16] Strahan at paragraph 127.

2. Section 79 of the Act provides for the alteration of property interests between the parties to a marriage. It is preferable that there be one final hearing of
   

   [17] Strahan at paragraph 136

   s 79 proceedings at which all relevant evidence and factors are taken into account. The interim order must be capable of variation or reversal without resort to s 79A of the Act or appeal. It must be capable of alteration at any time prior to, or part of, the final exercise of s 79 power.[17] In this case, the wife seeks an order which, if made, would require the Court to exercise its power under s 79 on an interim basis pursuant to s 80(1)(h) of the Act.

3. In Strahan, Boland and O’Ryan JJ (with whom Thackray J agreed) described a two-step approach.  Firstly, the Court must identify circumstances that make it appropriate to give consideration to exercising its power to make an interim order.[18] Once the Court has determined that the interests of justice require it to exercise the power, the conditions on which the power is to be exercised are governed only by the obligation to make an order that is “appropriate” and to ensure that the proposed order is “just and equitable” by reference to the matters set out in s 79(4) of the Act.

   [18] This requires the Court to have regard to the policy consideration that it is generally in the interest of parties and the Court for there to be only one exercise of the s 79 power.

4. The first step, described as the adjectival or procedural step[19], is a determination of whether it is just and equitable to make a property order at an interim stage.  At paragraph 132 of Strahan, their Honours stated:

   In relation to the first stage, in our view, when considering whether to exercise the power under s 79 and s 80(1)(h) of the Act to make an interim property order the “overarching consideration” is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.

   [19] See paragraphs 115-118 of the decision in Strahan.

5. The second step, which is described as the substantive step, requires the court to take into account the factors under s 79, 75(2) and s 80(1)(h) of the Act. At paragraph 135 of Strahan, their Honours observed:

   In relation to the second matter, as the jurisdiction under s 79 of the Act is being exercised the provisions of that section must be considered and applied but with limitations given that it is not the final hearing. There is also no requirement of compelling circumstances in relation to the substantive step.

6. At paragraph 137 of Strahan, Boland and O’Ryan JJ held that in the substantive phase, the Court must consider s 79(4) of the Act, including by reference to s 79(4)(e), the matters in s 75(2) so far as they are relevant. The consideration may be brief and if it is established that the applicant is likely to receive by way of property settlement a sum sufficient to cover the advance that would seem to be enough for an order to be made. The Court pointed out that in such circumstances the applicant would only be receiving what he or she was entitled to receive when the power under
   s 79 of the Act was exhausted.

7. In Bevan and Bevan [2013] FamCAFC 116 at paragraph 73, the Full Court of the Family Court referred to the three “fundamental propositions” laid down by the High Court in Stanford v Stanford [2012] HCA 52 (“Stanford”) which should guide trial judges in approaching the task under s 79. They were summarised as follows:

   i)Determination of a just and equitable outcome of an application for property settlement begins with the identification of existing property interests (as determined by common law and equity);

   ii)The discretion conferred by the statute must be exercised in accordance with legal principles and must not proceed on an assumption that the parties interests in the property are or should be different from those determined by common law and equity;

   iii)A determination that a party has a right to a division of property fixed by reference only to the matters in s 79(4), and without separate consideration of s 79(2), would erroneously conflate what are distinct statutory requirements.

8. I apply the above principles to the determination of the wife’s application for litigation funding by way of an interim property settlement.

Application of the law

1. It can be assumed for the purposes of this application that the parties agree, ultimately for the final property settlement, that it is just and equitable to make an order under s 79 of the Act altering the interests of the parties to the marriage.[20] Section 79(4) factors must then be considered.

   [20] Section 79(2) of the Act; Stanford at paragraph 42.

2. It is implicit from the submissions of the parties that they regard an interim distribution of property to the wife as within power.  The proposition that the wife will receive at least a further sum of $100,000 by way of final property orders is conceded.

3. Having considered the written and oral submissions of both counsel and the discussion in Court, I have concluded that it is appropriate and in the interests of justice to exercise the power under s 79 of the Act to order the payment of funds to the wife by way of a partial/interim property settlement, notwithstanding that the usual order under s 79 is a once and for all order made after a final hearing.

4. I do not accept the submission by the solicitor for the husband that the costs outlined by the solicitor for the wife in his affidavit are unreasonable having regard to the complexity of the financial affairs of the husband.  The plethora of affidavit material filed by the solicitor for the husband for this application is testament to the need for those costs.  It is understandable that the wife will incur significant expenses in investigating the financial arrangements of the husband.

5. There is evidence in the form of the affidavit of the wife’s solicitor as to the purposes for which the wife proposes to apply the funds from any order made.  I am satisfied that the wife’s application for an interim order has a legitimate basis and is bona fide.

6. Having decided that it is appropriate to exercise the power, the substantive phase to be considered is whether the interim property settlement proposed by the wife is just and equitable within the meaning of s 79(2) of the Act after consideration of the matters in s 79(4) including, by reference to s 79(4)(e), the matters in s 75(2) so far as they are relevant.

7. This was a relatively long marriage and it is common ground that the parties have interests in property in the order of at least $1,180,081.37 on the husband’s case.  It is the wife’s case that it is substantially more.  The solicitor for the husband conceded that the wife will ultimately be entitled to “50 to 55% of the net pool” of the property of the marriage.

8. I am satisfied that the interim property settlement of $100,000 sought by the wife is capable of being adjusted and taken into account on a final alteration of property interests under s 79 of the Act and without resort to s 79A of the Act or appeal.

9. I am satisfied that there is sufficient property of the marriage and that the wife is ultimately likely to receive a sum sufficient to cover this advance of $100,000 in the final property settlement proceeding.

10. I also take into account the financial circumstances of the parties when assessing whether it is just and equitable to make the order sought by the wife.

11. I am satisfied that the wife does not have the ability to pay the costs required for the investigation of the husband’s financial affairs in order to prepare her substantive case.  The husband has met his legal costs and has control of the assets.  An injustice may result if the funds are not provided to the wife.

12. Having taken into account all of the submissions as to how any order to fund the litigation of the wife might be characterised, I have come to the conclusion that it is appropriate to make an order in favour of the wife for litigation funding under the source of power in s 79 by way of part property settlement rather than by way of a costs order under s 117 of the Act.

13. The reason for the application by the wife for litigation funding is her uncertainty about the value of the property of the marriage. I accept the submissions on behalf of the husband in respect of the issues he raised surrounding s 117 of the Act. This is largely because one of the issues in the substantive proceedings will be whether the husband has divested himself of property in favour of his brother and if so, whether any transactions should be reversed under s 106B of the Act by way of a final order. It will not be possible until the conclusion of the substantive hearing to make any findings about the conduct of the parties which might have implications as to costs under s 117. I cannot identify matters in isolation or cumulatively which would justify an order for costs against the husband. It would be inappropriate for this reason to characterise any payment to the wife at this stage of the proceedings as a payment for costs under s 117.

Conclusion

1. I am satisfied that the applicant wife has at least an arguable case for substantive relief which deserves to be heard, that there is evidence of the likely costs of the litigation in the affidavit of the wife’s solicitor which is reasonable and that there is a need for funds to defray litigation costs and expenses on behalf the wife, which she cannot afford.  I am satisfied that the husband has already funded his litigation and has the capacity to continue to fund his case.

2. Accordingly I propose to grant the interim application by the wife that the husband pay her $100,000 for the costs of litigation funding by way of a part property settlement under s 79 and s 80(1)(h) of the Act.

I certify that the preceding seventy-nine (79) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Thornton delivered on 10 February 2014.

Associate: 

Date:  10 February 2014

ANNEXURE 1: DOCUMENTS RELIED UPON

Documents relied upon by the wife:

·Affidavit of the wife filed 13 February 2013;

·Affidavit of the wife filed 2 October 2013;

·Updated financial statement of the wife filed 2 October 2013;

·Affidavit of Damian Harriss filed 2 October 2013; and

·Written submissions on behalf of the wife filed 15 November 2013.

Documents relied upon by the husband:

·Affidavit of the husband filed 28 March 2013;

·Financial statement of the husband filed 28 March 2013;

·Affidavit of the second respondent, Mr A Xavier, filed 6 September 2013;

·Affidavit of Mr L filed 14 June 2013;

·Affidavit of Mr L filed 11 September 2013;

·Affidavit of the husband filed 8 November 2013;

·Financial statement of the husband filed 8 November 2013;

·Affidavit of Sebastian Rubera filed 8 November 2013;

·Affidavit of the second respondent, Mr A Xavier, filed 12 November 2013;

·Affidavit of the husband filed 28 November 2013;

·Amended financial statement of the husband filed 28 November 2013; and

·Written submissions on behalf of the husband filed 2 December 2013.