Maslen & Maslen

Case [2021] FamCA 237

FAMILY COURT OF AUSTRALIA

Maslen & Maslen [2021] FamCA 237

File number(s): ADC 4275 of 2017
Judgment of: MEAD J
Date of judgment: 28 April 2021
Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE –
Application for litigation funding – consideration of order pursuant to s.79 or s.117(2) of the Family Law Act 1975 – husband more financially advantaged – husband controls parties assets – major asset is a retail business – income from the business supports wife and four children as well as husband – no identifiable source of funds to satisfy interim property settlement order or costs order including ‘dollar for dollar’ order – Court not persuaded an interim property settlement order is just and equitable – application dismissed.
Legislation: Family Law Act 1975 (Cth) ss 75(2), 79, 79(4), 117, 117(1), 117(2), 117(2A)
Cases cited:

Atkins & Hunt and Ors [2018] FamCA 14

Paris King Investments Pty Ltd v Rayhill [2006] NSWSC 578

Strahan & Strahan (interim property orders) (2011) FLC 93-466

Zschokke & Zschokke (1996) FLC 92-693
Number of paragraphs: 104
Date of hearing: 1 December 2020
Place: Adelaide
Counsel for the Applicant: Ms Lewis
Solicitor for the Applicant: Jacqui Ion Lawyers Pty Ltd
Counsel for the Respondent: Mr McGinn
Solicitor for the Respondent: Angela Ferdinandy

ORDERS

ADC 4275 of 2017
BETWEEN:

MS MASLEN

Applicant
AND:

MR MASLEN

Respondent

ORDER MADE BY:

MEAD J

DATE OF ORDER:

28 APRIL 2021

THE COURT ORDERS THAT:

1.That paragraphs 3 and 4 of the wife’s response to application in a case filed herein on 19 October 2020 be dismissed.

Note:   The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).

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

REASONS FOR JUDGMENT

INTRODUCTION

  1. On 16 October 2020 the husband filed an application in a case seeking a suite of procedural orders primarily relating to the property settlement aspect of this matter but including an application for an adjournment of the trial, which at that time was listed to commence on 16 November 2020.

  2. On 19 October 2020 a response was filed by the wife opposing the adjournment of the trial and also seeking a suite of procedural orders primarily related to the property settlement aspects of the matter. In addition, in paragraphs 3 and 4 of her response the wife sought orders for litigation funding. It is that aspect of the interim applications with which these reasons and decision are concerned.

  3. The application in a case and the response initially came before the Court on 21 October 2020. On that date the Court determined that…

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AGLC
Maslen & Maslen [2021] FamCA 237
Case
[2021] FamCA 237
Decision Date

CaseChat Overview and Summary

The case of *Maslen & Maslen* involved an application by the wife for litigation funding. The dispute concerned property settlement and parenting issues between the wife and the husband. The matter had commenced in the Federal Circuit Court of Australia and was subsequently transferred to the Family Court of Australia. The wife sought an order for litigation funding to cover her legal costs, while the husband opposed such an order, arguing he had limited resources and had already made significant payments.

The primary legal issue before Mead J was whether to grant the wife's application for litigation funding, considering the husband's financial position and control over the parties' assets, particularly a retail business which generated income for both parties and their four children. The court was required to determine if an order for interim property settlement or costs, including a "dollar for dollar" order, would be just and equitable in the circumstances, and whether the husband had the capacity to satisfy such an order.

Mead J considered the evidence regarding the parties' financial circumstances, including the husband's substantial payments towards spousal maintenance, child support, and legal costs, as well as his ongoing tax debt and limited cash flow from the business. The court noted the husband's assertion that he had no identifiable source of funds to satisfy an interim property settlement or costs order. Crucially, the court was not persuaded that an interim property settlement order would be just and equitable, given the husband's financial constraints and the lack of a clear mechanism for him to meet such an obligation.

Consequently, the court dismissed the wife's application for litigation funding. The formal orders indicate that paragraphs 3 and 4 of the wife's response to the application were dismissed.

Orders

Orders of the court

ADC 4275 of 2017

BETWEEN:

MS MASLEN

Applicant

AND:

MR MASLEN

Respondent

ORDER MADE BY:

MEAD J

DATE OF ORDER:

28 APRIL 2021

THE COURT ORDERS THAT:

1. That paragraphs 3 and 4 of the wife’s response to application in a case filed herein on 19 October 2020 be dismissed.

Note: The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).

Background

Background to the litigation

Both parties’ affidavits dealt with issues unrelated to the dispute regarding litigation funding and in these reasons I will only refer to those parts of the affidavits relevant to that issue.Background Litigation between the parties commenced in this matter on 6 October 2017. Proceedings commenced in the Federal Circuit Court of Australia but were transferred to the Family Court of Australia by order of Judge Brown of 30 July 2019. The parties are in dispute both as to parenting issues and property settlement. The trial with respect to those competing applications is now listed to commence on 19 July 2021. The wife has been represented at all times since the commencement of the proceedings by Jacqui Ion Lawyers. The husband was initially represented by G Solicitors from Suburb H in Victoria but on 20 March 2019 that firm of solicitors filed a notice of withdrawal of lawyer. A notice of address for service was filed on behalf of the husband by Angela Ferdinandy solicitor on 28 May 2019. On 11 July 2019 the husband filed a notice of address for service as a self‑represented litigant. At all hearings between 30 July 2019 and 21 July 2020 the husband appeared on his own behalf. On 23 September 2020 Angela Ferdinandy solicitor filed a notice of address for service for the husband. Ms Ferdinandy remains the solicitor on file and the husband has been represented by counsel at all hearings since and including 7 October 2020. The matter is complex. Allegations of family violence resulted in the Court making a section 102NA(2) order with respect to cross-examination on 30 April 2020 in circumstances where the husband at that time was unrepresented. The complexities of the dispute have been exacerbated by practical problems arising from the impact of COVID-19 on the parties and the inability of the Court to progress the matter in circumstances where the wife and the parties’ four children have resided in South Australia since the latter part of 2017 whilst the husband resides in regional Victoria. On 18 September 2020 the wife filed a further amended initiating application specifying orders sought by way of parenting issues and settlement of property. In paragraph 8 the wife sought that by way of final property settlement she receive 65 per cent of the net non-superannuation assets and 50 per cent of the superannuation assets by way of superannuation split. On 23 November 2020 the husband filed an amended response to the wife’s initiating application specifying orders he sought by way of parenting issues and settlement of property. In paragraphs 1 and 2 of the response under the heading “PROPERTY” the husband proposed a transfer by the wife to him of the majority of the matrimonial assets and that contemporaneously with the transfers he pay to her the sum of $500,000 and indemnify her against any liabilities attaching to those properties and the mortgage over the former matrimonial home. In paragraph 1.3 he proposed an equalisation of the parties’ superannuation entitlements.Wife’s evidence

Evidence

Evidence Before The Court

In the affidavit of the husband filed 23 November 2020 he set out the evidence upon which he relied with respect to the wife’s litigation funding application, in particular in paragraphs 4 to 9 inclusive, 26, 30, 31, 32 and 34. The husband deposed to:·a cost’s advice received by him from his solicitors as at 20 October 2020;·actual costs paid to that date being $23,457.22;·$18,350 remaining in his solicitor’s trust account;·the total future costs of completing the case if no agreement is reached including costs of trial being estimated to be $100,000 to $150,000;·having paid a further sum of $35,000 into his solicitor’s trust account since 20 October 2020 to cover work in progress, expert report fees and valuations;·having acted on his own behalf to try and save legal costs;·having paid to or on behalf of the wife the sum of $432,527.85 by way of spousal maintenance since separation;·having paid a further $27,005 for joint costs associated with the case;·the earlier payment of $100,000 by way of litigation funding to the wife;·those payments having been made from drawings and dividends with tax payable at the rate of 48 cents;·needing to live frugally as a result of the depleted cash flow occasioned by the wife’s expenses;·having incurred a tax debt of $148,621 he is unable to repay out of capital resources which is being repaid to the Australian Taxation Office at the rate of $2,307 per week;·having limited resources available to enable him to pay for his own legal representation;·having spent approximately $117,500 to that date on legal costs including the $35,000 paid into his solicitor’s trust account;·having no capacity to pay for his own anticipated costs of trial including counsel fees out of the business account;·having been informed by his family that they will lend him approximately $50,000 for trial but not if any of those funds were to be paid to the wife;·having to represent himself if a “dollar for dollar order” is made in circumstances where his lawyer has advised she is not prepared to act if her costs and disbursements are not secured;·being willing to sell the van and motor vehicles and pay the net proceeds into the wife’s solicitor’s trust account;·there being no other means to raise cash before trial;·continuing to operate the retail business ;·the business having generated the income for him to have paid substantial amounts of spousal maintenance, child support and expenses including legal expenses to the wife to date;·most of that money being available when he was unrepresented and not liable to pay his own legal fees;·having used the remaining limited resources for his own costs and to it being necessary for him to raise funds from family if he is to continue to be represented;·opposing any further order for litigation funding;·the business being the only source of income for he and the wife;·wishing to retain the business and the property and farm as part of the settlement with the wife;·believing it to be possible for him to secure finance to pay the wife any final judgment sum; and·opposing a “dollar for dollar order” for litigation funding.Wife’s evidence in reply

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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