Mullins & Ors and Mullins & Ors (No 2)

[2017] FamCA 941

FAMILY COURT OF AUSTRALIA

MULLINS AND ORS & MULLINS AND ORS (NO. 2) [2017] FamCA 941

FAMILY LAW – PROPERTY – INTERIM – Variation of a dollar for dollar litigation funding order.

Family Law Act 1975 (Cth)

FIRST APPLICANT: Mr A Mullins

SECOND APPLICANT: B1 Pty Ltd

THIRD APPLICANT: B2 Pty Ltd ATF B Trust

FIRST RESPONDENT: Ms Mullins

SECOND RESPONDENT: Mr C Mullins

THIRD RESPONDENT: Mr D Mullins

FOURTH RESPONDENT: B3 Pty Ltd

FIFTH RESPONDENT: E Pty Ltd

FILE NUMBER: BRC 1999 of 2017

DATE DELIVERED: 22 November 2017

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Forrest J

HEARING DATE: 22 November 2017

REPRESENTATION

COUNSEL FOR THE FIRST AND THIRD APPLICANTS: Mr Alexander

SOLICITOR FOR THE FIRST AND THIRD APPLICANTS: Moloney MacCallum Lawyers

COUNSEL FOR THE RESPONDENTS: Mr Jennings

SOLICITOR FOR THE RESPONDENTS: Nyst Legal

Orders

1. That paragraph 6 of the Orders of Justice Forrest made 4 October 2017 be varied so as to now read:

   That whilst Nyst Legal continues to represent the Respondents in these proceedings, each time Nyst Legal is paid with money sourced from funds that were, or are earned, or held by the family business …, through whatever corporate entity was, or is used for that purpose, including the Second Applicant and the Fourth and Fifth Respondents, in respect of any of the accounts rendered to any of the Respondents for legal fees or disbursements for work done in the proceedings in this Court, then the Respondents, jointly or severally, shall cause the exact same amount to be paid to Moloney MacCallum Lawyers, solicitors for the husband, such money to be held in trust by them for the husband and only applied to the payment of legal costs and outlays incurred by the husband in conducting his case in the proceedings in this Court.

2. That all applications for costs of and incidental to this Application in a Case filed 14 November 2017, are dismissed.

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

IT IS NOTED that publication of this judgment by this Court under the pseudonym Mullins and Ors & Mullins and Ors (No 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

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 r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 1999 of 2017

Mr Mullins

First Applicant

And

B1 Pty Ltd

Second Applicant

And

B2 Pty Ltd
ATF B Trust

Third Applicant

And

Ms Mullins

First Respondent

And

Mr C Mullins

Second Respondent

And

Mr D Mullins

Third Respondent

And

B3 Pty Ltd 

Fourth Respondent

And

E Pty Ltd 

Fifth Respondent

REASONS FOR JUDGMENT

1. On 4 October 2017, I made interim orders in these proceedings, including an interim litigation costs funding order applied for by the husband that is readily described as a “dollar for dollar” costs order.

2. Today, I am asked by the wife, her two adult sons and two companies that the adult sons own and control (“the Applicants”) to vary that order as they submit that, as made, it did not reflect the intention of the Court. That application is opposed by the husband.

The Order as made

1. Paragraph 6 of my Orders of 4 October 2017 reads:

   That whilst Nyst Legal continues to represent the respondents in these proceedings, each time Nyst Legal is paid in respect of any of the accounts rendered to any of the Respondents then the Respondents, jointly or severally, shall cause the exact same amount to be paid to Moloney MacCallum Lawyers, solicitors for the husband, such money to be held in trust by them for the husband and only applied to the payment of legal costs and outlays incurred by the husband in conducting his case in the proceedings in this Court.

2. For the Applicants in this Application in a Case, it is submitted that in my written reasons for judgment I found:

   (i)The second and third respondents, the adult sons of the husband and the wife, with the acquiescence and support of the wife, continue to operate the family business…;

   (ii)That the family business was generating an income for all four members of the family until the dispute that is the subject of this and other proceedings;

   (iii)That the husband no longer receives an income from the business;

   (iv)That the circumstances justified an order “matching dollar for dollar any legal fees paid for the wife, [the adult sons and the fourth and fifth respondent companies] sourced from funds earned or held by either [the fourth or fifth respondent companies]”.

3. I accept the correctness of that submission.

4. For the applicants, it is submitted that the order as made prejudices them in two ways not intended by me when I made it. First, they submit that it is not limited in terms of the source of the funds used to pay accounts rendered by their solicitors to any of them, such that, for example, payment of an account from funds not derived from the business but sourced from a third party or personal savings is caught by the order. Second, they submit that it is not limited in terms of the work carried out by their solicitors that is the subject of any such account rendered, such that if accounts are rendered to one of them by their solicitors for work done in respect of other, non-Family Court proceedings, the wording of the order catches that and requires a dollar for dollar payment to the husband for use by him in paying for his legal representation in these proceedings.

5. For the husband in response, it was first submitted that it is implicitly clear that the existing order does not catch payment of an account from funds sourced from a third party, and also that it only operates in terms of the legal fees concerning the proceedings in this Court, such that it need not be more clearly expressed for the Court’s intention to be understood.

6. When I indicated, in exchange from the bench with counsel for the husband, that I did not necessarily agree that those things were so clear (and the mere fact that the parties were back before me on this further application fortifies me in my view that those things were not as clear as was being asserted) it was submitted for the husband that, in any event, the evidence that was before me when I made the existing order should satisfy me that there is good reason for leaving the order as it is without any variation. It was submitted that the adult sons have, prima facie, already shifted cash out of the businesses that they would now, if given the opportunity, unashamedly assert was not “sourced from funds earned or held by either of the [fourth or fifth respondents]”. This it was submitted would allow them to subvert the “dollar for dollar’ interim costs funding order if the variation sought was now made.

7. After I made the point that the order could be varied not just in the manner sought by the applicants in this interim application but also further so as to clearly give effect to the intention to catch the Applicants use of any funds sourced from the “family business”, counsel for the applicants did not argue against that, whilst counsel for the husband still submitted that no variation to the original order was necessary.

My decision

1. Upon consideration of the written and oral submissions made for the parties, I am persuaded that the form of the existing order does not clearly preclude and save the applicants from the two aspects of potential prejudice raised by them on the application.

2. I propose to vary the existing ‘dollar for dollar” interim costs funding order so that it expressly deals with the two matters raised, accepting that it was not my intention to create those potential difficulties for the Applicants. However, I also intend to further vary the order, other than just as applied for by the Applicants, so as to make clear that my order is meant to catch any funds paid to the Applicants’ solicitors for work done in these Family Court proceedings that are sourced from funds not just earned or held by either the fourth or fifth respondent companies but from funds that were, or are earned, or held by the family business through whatever corporate entity was, or is used for that purpose, including the second applicant company, B1 Pty Ltd and the fourth and fifth respondents. In doing so, I am particularly conscious of the evidence that I refer to in paragraphs [30] – [33] of my reasons for judgment of 4 October 2017, that has, to date, not been contradicted or explained by any of the Applicants. On that evidence, the wife and the adult sons could very well already hold funds earned by the family business through the second applicant company in the period before the more recent changes to the entities through which the business is being run. Any such funds should also be caught by the dollar for dollar order, in my judgment.

3. I will make the order set out at the commencement of these reasons.

Costs

1. At the conclusion of the hearing, I invited submissions from the parties as to the costs orders that should be made having regard to the potential outcomes.

2. Counsel for the Applicants submitted that if I make the amendments sought by the Applicants I should make an order that the husband pay their costs of and incidental to this application. He referred to written correspondence from the solicitors for the husband in which the Applicants were told, quite clearly, that the order was clear, was consistent with my intention and did not require variation. He effectively submitted that findings contrary to those and the making of an order to vary the existing order would justify departure from the general principle that each party bears their own costs, and the making of a costs order in favour of the Applicants.

3. Counsel for the applicants properly conceded that the strength of that submission was reduced if the Court varied the order further than was sought by the Applicants alone.

4. Counsel for the husband submitted that if there was no variation to the order that the husband’s costs of and incidental to responding to the application should be paid by the Applicants. He went on to submit that if the order was varied that it would be appropriate to reserve all parties’ costs of and incidental to this application.

5. I am not persuaded, given that I have determined to vary the existing order in terms different to those sought by the Applicants so as to make it quite clear what I am seeking to achieve in terms of providing some assistance to the husband in respect of his litigation costs funding, that the circumstances justify making a costs order or reserving the issue of costs. I will dismiss all applications for costs.

I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 22 November 2017.

Associate:

Date:  22 November 2017