Markell and Markell and Anor (No 2)
[2015] FamCA 856
•13 October 2015
FAMILY COURT OF AUSTRALIA
| MARKELL & MARKELL & ANOR (NO 2) | [2015] FamCA 856 |
| FAMILY LAW – PROPERTY – Interim – Husband’s Application in a Case for litigation funding for the purpose of funding his criminal appeal proceedings – Orders proposed by the husband and wife to be made by consent – Application in a Case by the assignee of the debt said to be owed to the husband’s former barrister in his criminal proceedings to intervene as a creditor – Where the quantum of any debt owing to the proposed creditor is disputed and has not been the subject of determination in any civil court – Where there is no existence of a contract between the former barrister and husband which may be enforced, despite provision in the Legal Profession Act 2004 (NSW) permitting such a contract to be entered and enforced – Where there is no evidence before the Court that the current intervener has assigned any debt to the proposed intervener – Where the wife submits that the husband’s debt to the current intervener and proposed intervener should not be prioritised over her legitimate claim pursuant to s 79 of the Family Law Act 1975 (Cth) – Proposed intervener’s Application in a Case refused – Orders otherwise made as sought by the husband and wife. |
| Family Law Act 1975 (Cth) Legal Profession Act 2004 (NSW) |
| Dimos v Hanos and Egan [2001] VSC 173 In the Marriage of Kowaliw (1981) FLC 91-092 Keesing v Adams [2010] NSWSC 336 Paramount Lawyers Pty Ltd v Maneschi [2012] NSWSC 877 Pentelow v Bell Lawyers Pty Ltd trading as Bell Lawyers [2013] NSWSC 111 |
| APPLICANT: | Ms Markell |
| RESPONDENT: | Mr Markell |
| INTERVENER: | B Lawyers (ACN …) |
| FILE NUMBER: | BRC | 6823 | of | 2012 |
| DATE DELIVERED: | 13 October 2015 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Kent J |
| HEARING DATE: | 13 October 2015 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | Mr Evans, Evans & Company Family Lawyers |
| THE RESPONDENT: | In person (by telephone) |
| THE INTERVENER: | No appearance |
Orders
IT IS ORDERED THAT:
Leave is given to Mr M to file by leave today:
a. Application in a Case to intervene in the proceedings; and
b. an affidavit of Mr M sworn on 12 October 2015.
Mr M’s Application in a Case to intervene in the proceedings filed by leave today is refused and is adjourned to a date to be fixed.
IT IS ORDERED BY CONSENT AS BETWEEN THE HUSBAND AND THE WIFE:
Pursuant to Rule 10.17 of the Family Law Rules 2004, Orders, declarations and notations be made in terms of the document titled “Minutes of Consent” sealed and attached hereto.
IT IS DIRECTED THAT:
The Minutes of Consent remain upon the Court file.
IT IS FURTHER ORDERED THAT:
Each party’s costs of and incidental be reserved.
MINUTES OF CONSENT
That the following Applications filed by the Husband be dismissed:-
a.Contravention Application filed 20th November, 2014;
b.Application in a Case filed 5th June, 2015;
c.Contravention Application filed on 6th July, 2015; and
d.Application in a Case filed 25th August, 2015.
That, conditional upon the making of Order 1 and upon the Undertakings of the Husband and the Solicitor for the Husband in the criminal proceedings, hereby accepted, the parties shall forthwith do all acts and things as are necessary to instruct their mortgagee bank, the Westpac Banking Corporation to pay the following sums:-
a.The sum of $25,000 to the trust account of Richard Cummins, Solicitor of Sydney for the benefit of the Husband for the purposes of the legal costs to maintain the Husband’s appeal to the Court of Criminal Appeal PROVIDED THAT should any portion of the funds remain unused at the conclusion of the Husband’s Court of Criminal hearing, they shall be paid into the mortgage accounts owed by the parties jointly and attaching to their existing real properties, to the Westpac Banking Corporation; and
b.The sum of $25,000 to the trust account of Evans & Company Family Lawyers for the benefit of the Wife; and
c.The following sums/amounts:-
i.$5,900 for payment to N Dentists for orthodontic services required for the child E; and
ii.$7,328 for payment to N Dentists for orthodontic services required for the child F; and
iii.Such sums as are required to meet payment of the following expenses as and when due:-
1.G Town Council Rates and Levies (including water charges) for the two (2) properties at Suburb O and J Street; and
2.Body Corporate Levies for J Street.
iv.Such sum as and when due as shall be required for the child D to study at TAFE College, but limited only to those sums for which a Fee HELP or HECS application cannot successfully be made.
That the parties do all acts and things as are necessary to direct Westpac Banking Corporation to pay to the Husband, the balance Bank Account Number … in the name of the Husband being approximately $1,000, and thereafter, to close the account.
That the classification of the sums released by paragraph 2 be a matter reserved for determination at Final Hearing.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Markell & Markell & Anor (No 2) 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 6823 of 2012
| Ms Markell |
Applicant
And
| Mr Markell |
Respondent
And
B Lawyers (ACN …)
Intervener
EX TEMPORE REASONS FOR JUDGMENT
On 30 July 2015 I delivered Reasons for Judgment and made orders dismissing the husband’s then application for litigation funding with respect to a claim for litigation funding to fund his criminal appeal. I will not repeat what is set out in detail in those Reasons for Judgment as to the relevant background to this matter and the relevant considerations to a litigation funding application in these circumstances, but I adopt those Reasons as part of these Reasons for Judgment.
As is apparent from those Reasons for Judgment, the concern held by the Court was that the legitimate interests of the wife, and also the then intervener, might be affected by the making of the orders then sought by the husband in terms of the reversibility of the effect of those orders in any final determination of property proceedings.
An important change that has occurred since those orders and Reasons were delivered, is that the wife has been able to agree with the husband upon a form of consent orders which would provide for, inter alia, some litigation funding for the husband so that he might bring his appeal in the criminal proceedings to a conclusion.
The underlying difficulty in the current substantive property proceedings,
vis-a-vis the husband’s criminal appeal, is that unless and until it is finally determined as to the husband’s position, that is, whether he is to remain incarcerated under the current term of his imprisonment or not, is that there cannot be legitimately, it seems to me, a final determination of property proceedings, or at least one that does not risk the prospect of the husband later bringing a s 79A of the Family Law Act 1975 (Cth) (“the Act”) application in the face of changed circumstances.
Thus it is that the present property proceedings that have been on foot now since 2012 in this Court will stall unless and until the husband’s criminal appeal is determined.
Previously, leave was given to a firm B Lawyers (“B Lawyers”) to intervene in the proceedings with respect to a claim for costs by that firm as against the husband with respect to his criminal proceedings. As indicated in my Reasons of 30 July 2015, there was a dispute as between that intervener and the husband as to the proper quantum of those fees.
That dispute has seemingly remained. That is, the husband continues to dispute the amount of the total legal fees owed with respect to his criminal proceedings.
More particularly, from the wife’s perspective, she disputes that that debt or any debt with respect to the husband’s criminal proceedings ought attach in any way in the matrimonial property proceedings. That is, that it is not a debt that could legitimately be said to be a debt of the marriage in the sense in which that term is understood, that is, it is a debt incurred solely by the husband by reason of wanton and reckless or negligent conduct within the meaning expressed in cases such as In the Marriage of Kowaliw (1981) FLC 91-092 for which he should be solely responsible.
On that basis, the wife will contend in the substantive property proceedings that that debt should not form part of the matrimonial property pool to be considered, or at least not form part of that pool for adjustment purposes, that being a debt for which the husband is solely responsible.
In the current circumstances, and as set out in my Reasons for Judgment, there is potentially a difficulty with the parties continuing to service the borrowings with respect to the real properties forming part of the available property. The proposed consent orders about which the husband and wife agree contain inbuilt mechanisms for that to be addressed, that is, for the properties to be preserved at least until there can be a trial of the property proceedings.
On today’s hearing, an application is made by one Mr M to seek to intervene in the proceedings. He forwarded an affidavit to the Court yesterday setting out the basis for the intervention being that he has been the assignee of what is said to be a debt owed by the husband to his former barrister, Ms P, now Judge P of the District Court in New South Wales, by an assignment made by her to him.
However, as was pointed out in exchanges between the bench and bar table today, there is no evidence before me on the current application that Ms P, as her Honour then was, had a contract giving rise to a right to sue as between herself and the husband at any time.
Reference was made by me in the course of the hearing to the decisions in New South Wales concerning the relevant statutory provisions, including the decision of Keesing v Adams [2010] NSWSC 336 per Brereton J,
Pentelow v Bell Lawyers Pty Ltd trading as Bell Lawyers [2013] NSWSC 111 per Schmidt J and Paramount Lawyers Pty Ltd v Maneschi [2012] NSWSC 877 and Dimos v Hanos and Egan, a Victorian case reported at [2001] VSC 173.It seemed to be accepted, in the end, on behalf of Mr M that the relevant statutory provisions in New South Wales afford the capacity for a barrister in New South Wales to enter into a costs agreement with a client which constitutes a contract enforceable at law by way of suing the client for a debt, but that did not seem to be the position adopted by Ms P in the costs agreement mechanism she entered into with the firm B Lawyers, as was pointed out in the course of argument by reference to Ms P’s letter to B Lawyers dated 17 December 2013 Ms P offered to enter into a costs agreement with the firm B Lawyers pursuant to s 322(1)(c) of the Legal Profession Act2004 (NSW). However, Ms P expressly confirmed that acceptance of that offer would not create a contract for the provision of legal services and, “[m]y rights and obligations under the NSW Bar Rules and my advocate’s immunity from suit are preserved and will not be affected in any way by the costs agreement.”
As the cases to which I have earlier referred make plain, whilst the New South Wales legislation creates a mechanism for a barrister to enter into a costs agreement including a right to sue, it is a matter of the law of contract as to whether that is done.
There is also an election available to a barrister to rely upon the extra-curial processes, that is, the disciplinary processes to seek to enforce payment of fees. As it seems to me on the evidence as it stands before me that is what Ms P sought to do, by reference to the letter I have referred to.
Mr Krochmalik of counsel for Mr M suggests that given an opportunity by way of an adjournment, Mr M could put forward evidence before the Court to show that he is now the assignee from B Lawyers of a relevant debt, that is, the debt in respect of fees. Mr Krochmalik points out that in that respect, assuming that to be so, Mr M can be said to be a person whose interests would be affected by the making of the order within the meaning of s 79(10)(b) of the Act.
A couple of points need to be made about that. First, it is the position that a disputed debt as between the husband and B Lawyers has been in existence for a significant period of time now. Nothing seems to have been done by B Lawyers previously to bring about a determination of that dispute in any civil court in New South Wales. The claimed debt arises in circumstances of fees completely rendered by early 2014 and it remains the position even today that the husband continues to dispute the quantum of the fees.
Thus it is that in terms of assessing the interests of Mr M, even on the assumed basis that he will receive some valid assignment or has received some assignment from the current intervener, it is not possible to know what the true quantum of the debt underlying the claim advanced is, whether it be the reduced quantum claimed by the husband or the amount claimed now on behalf of Mr M.
However, even allowing for the prospect that Mr M could ultimately demonstrate the claim is as he says it is, it seems to me that the discretionary considerations that bear upon this question in terms of providing some interim orders by way of relief heavily favour the wife’s position in circumstances where she is now prepared to incur further debt to bring about a conclusion to these proceedings. That is, the wife is prepared to incur the liability involved in providing limited funding in an amount of $25,000 to the husband in order for him to advance determination of his criminal appeal, and thus advance these proceedings.
As it seems to me, in circumstances where the wife is now prepared to accommodate that, obviously also in her interests in bringing about a conclusion to these proceedings, there is merit in the approach in terms of discretionary considerations and the just and equitable considerations involved in allowing for the amounts provided for by interim property orders.
Whilst Mr Krochmalik on behalf of Mr M suggested that one mechanism of advancing the matter would be to have the parties proceed to a mediation, Mr Evans on behalf of the wife pointed out the limited prospects of a mediation being successful in circumstances where the dispute as between the husband regarding the fees and the amount claimed is substantial.
But moreover, in circumstances where the wife will ultimately and legitimately contend in the substantive proceedings that whatever debt, or whatever quantum might exist of such a debt, is entirely the responsibility of the husband, there ought not be any prioritisation of that creditor over and above her legitimate claims pursuant to s 79 of the Act in the circumstances of this marriage.
For these reasons, I am satisfied that the orders expressed as consent orders as agreed upon between the husband and wife ought be made and I make those orders.
I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kent delivered on 13 October 2015.
Associate:
Date: 14 October 2015
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