Paul and Paul and Anor

[2015] FamCA 274

FAMILY COURT OF AUSTRALIA

PAUL & PAUL AND ANOR [2015] FamCA 274

FAMILY LAW – LITIGATION FUNDING – payment pending mediation scheduled for July 2015

Strahan v Strahan

APPLICANT: Ms Paul

1^st RESPONDENT: Mr Paul

2^nd RESPONDENT: Ms B

FILE NUMBER: BRC 4278 of 2013

DATE DELIVERED: 25 March 2015

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Hogan J

HEARING DATE: 24 March 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Looney QC

SOLICITOR FOR THE APPLICANT: Bourke Legal

COUNSEL FOR THE 1^ST RESPONDENT: Ms Carew QC

SOLICITOR FOR THE 1^ST RESPONDENT: Michael Lynch Family Lawyers

COUNSEL FOR THE 2^ND RESPONDENT: Mr Galloway

SOLICITOR FOR THE 2^ND RESPONDENT: Quinn & Scattini

Orders

IT IS ORDERED UNTIL FURTHER ORDER THAT

1. The Applicant and First Respondent do all things to cause C Pty Ltd to pay:

   (a)by way of partial property settlement the sum of $100,000.00 to the Applicant via cheque made payable to Bourke Legal Trust Account;  and

   (b)by way of partial property settlement the sum of $100,000.00 to the First Respondent via cheque made payable to Michael Lynch Family Lawyers Trust Account;  and

   (c)by way of partial property settlement the sum of $100,000.00 to the Second Respondent via cheque made payable to Quinn and Scattini Lawyers Trust Account.

2. The Applicant and First Respondent do all things to cause C Pty Ltd to pay:

   (a)the sum of $13,951.66 to the First Respondent by way of reimbursement for valuation costs paid by him to date;  and

   (b)the sum of $13,951.66 to the Second Respondent by way of reimbursement for valuation costs paid by her to date.

3. The Applicant and First Respondent do all thing to cause C Pty Ltd:

   (a)to pay each Court expert appointed pursuant to Order 5 of Orders made on 8 July 2014 in the first instance;  and

   (b)to pay the mediator referred to in Notation 1 of Orders made on 8 July 2014 in the first instance;  and

   (c)       to pay the costs of the mediation venue in first instance.

4. Each party has liberty to seek orders in relation to that parties’ contribution to the costs of the Court experts, mediator and costs of the mediation venue at any final hearing of this matter. 

5. Paragraph 1 of the Amended Application in a Case filed 20 March 2015, as further amended orally on behalf of the Applicant, by which the Applicant seeks the payment of $450,000.00 by way of interim order is adjourned to the Judicial Duty List at 10.00 am on Monday, 24 August 2015.

6. The costs of and incidental to today are reserved.

7. In the event that any party files an Application for costs in relation to the Application in a Case filed 3 March 2015 and/or the Amended Application in a Case filed 20 March 2015, such Application is to be listed for hearing to the Judicial Duty List at 10.00 am on Monday, 24 August 2015.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Paul & Paul 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 4278 of 2013

Ms Paul

Applicant

And

Mr Paul

Respondent

Ex Tempore

REASONS FOR JUDGMENT

1. In this matter, I made orders yesterday disposing of the Interim Applications before the Court.  Because of the Court’s commitments to another matter, I told the parties I would deliver reasons for the orders made this morning.  These are those reasons. 

2. The parties are agreed that they will engage in a mediation in the matter in July 2015. 

3. There is no dispute that funds sought, pursuant to the Application in a Case filed by the wife, are well within her likely entitlement in those proceedings. 

4. In order to set the context of that statement, regard can helpfully be made to the summary of the facts as contained within the Ex Tempore Reasons for Judgment delivered by Kent J on 8 September 2014.  To the extent necessary, by way of outlining the factual circumstances within which the Application is determined, I adopt the assertions contained within paragraphs 1, 2, 3, 4 and 5 of his Honour’s Reasons for Judgment and, in the cause of brevity, incorporate them into these Reasons for Judgment. 

5. The Application in the Case, as originally filed, sought the payment of $750,000.00 by way of interim order to assist the Applicant in meeting legal costs to and including a final hearing.  That Application was opposed by both the First Respondent and Second Respondent. 

6. The First Respondent proposed that each party receive a payment of $100,000.00 and that steps be taken to cause C Pty Ltd to meet the costs of valuations necessary in this matter and the costs associated with the mediation (being the costs of the mediator himself and the costs of any room hire).  The Second Respondent joined significantly in that proposal. 

7. During the course of hearing, the Applicant amended the Application in a Case to seek the payment of a sum of $300,000.00 and that the balance of the Application, as it were, that referred to the remaining $450,000.00 be adjourned to a date after the mediation:  in that way it would be able to be considered if the parties were unable to reach resolution at a mediation.

8. I should also say that the Second Respondent sought orders that C Pty Ltd repay (in a sense) to both the First Respondent and Second Respondent monies already paid by them in relation to valuations - in essence, to bring matters into line so that all valuation costs could be consolidated and seen as having been paid by C Pty Ltd.  Ultimately, there was no objection by either the Applicant or the First Respondent to such a course which was an approach, that seemed very sensible to me. 

9. The power to make orders sought by the Application in a Case is clear and the principles are well known.  Regard need only be had to Strahan v Strahan and the authorities which follow it.  There is, as I say, no contest between the parties that the Applicant and, additionally, the other parties would clearly receive on any assessment of the matter an amount well in excess of – in the Applicant’s case - the $300,000.00 sought and - in the cases of each of the respondents – the $100,000.00 proposed by the First Respondent. 

10. The real issue in contest, which became apparent, was whether there was a source at present available from which funds in the amount sought by the Applicant could be met or whether the funds – as currently available – were in an amount which the consideration of the overarching justice of the matter means that each party should receive some funds and in an equal amount.  In essence, the issue became whether there existed a source from which the payment could be caused to be made and whether the overarching justice of the case required that funds be provided in an amount of $300,000.00 to the Applicant and/or be provided to all the parties in equal amounts. 

11. The Application falls to be considered also in the context where the Applicant and First Respondent have already taken action to have made available to each of them a sum of $170,000.00 to defray legal expenses associated with this litigation.  The Second Respondent has also had made available to her the sum of $120,000.00 to defray the costs of this litigation. 

12. The Applicant’s evidence is that the funds previously made available to her have been expended - her current position is that there are outstanding legal costs of a little over $180,000.00 with an estimated cost to mediation of between a further $80,000.00 and $107,500.00. 

13. It is perhaps trite to note that, if the assumptions contained within the premises are made out - namely, that those funds are in fact expended on legal expenses - the Applicant alone, by the conclusion of the mediation, will have spent about $450,000.00 of her own money on legal expenses:  such is the cost, it seems, of litigation. 

14. In relation to the source of the funds, it was submitted by Queen’s Counsel for the First Respondent that the evidence established that there is – or soon will be – an amount of $450,000.00 available to the Paul Group. 

15. The sum of $3 million currently held in a bank term deposit is, on the First Respondent’s case, unavailable at the present time because, according to Exhibit 1, the bank has taken a lien over that money, said to be essential to the provision by it of funds sourced by the husband in the exercise of the operation of the corporate Group. 

16. Ms Carew QC submitted that the First Respondent’s proposal that C Pty Ltd pay, at first instance, all costs of valuation and mediation means that there is likely to be a further significant impost upon those cash resources, given the reality of the operation of the Paul Group as a property developer.

17. There is clear evidence before the Court that the Group has to pay, in March or April of this year, some $804,600.00 to meet assessed taxation liabilities - that, of course, is another draw upon the funds available.  Additionally, it is clear (and not, as I understood it, in contest between the parties) that the nature of the business operated – or at least, the nature of the substantial business operated – within the Paul Group (namely, the purchase and development and then on sale of real property) has the result that the Group is required to meet expenses such as land tax, rates, insurances, which also need to be met from funds. 

18. At paragraph 50 of his affidavit, the First Respondent makes clear that the sum of $450,000.00 will be made available to meet orders that he proposes:  namely, that each party receive a payment of $100,000.00 and that the balance be applied to C Pty Ltd’ proposed obligation to meet the costs of valuations – which are likely to be significant in this case – and the costs of the mediation, with any remainder to be utilised by way of working capital. 

19. It was submitted on behalf of the Applicant that an overarching consideration of the justice of the matter required that the Court should be persuaded to make orders which would see the Applicant receive the sum of $300,000.00 in order to assist her to meet the costs associated with engaging in, and being prepared properly to engage in, the mediation which is to occur in July of this year. 

20. It is clear that the Court has power to make an appropriate order if satisfied that it is just and equitable to make such an order. 

21. I am not persuaded that I can conclude at this interim hearing other than what is established by the contents of Exhibit 1. I am not prepared to infer that the husband has done anything other than run the Paul Group in a way that is appropriate - I note, of course, that I was not urged to do so by Mr Looney QC on behalf of the Applicant.  I do not accept the submission that, absent clear evidence, I should conclude that the $3 million held in a term deposit is available to meet any order of the Court.  In any event, I consider that Exhibit 1 establishes, to the extent that is necessary at this point in time, that there may well be some issues associated with any requirement that those funds be utilised to meet any order of the Court. 

22. I am fortified in that conclusion, where, in any event, there is available to the Paul Group the sum of $450,000.00 referred to in the First Respondent’s affidavit, as providing a source from which funds can be provided.  Arguments in relation to the availability of funds currently held in the term deposit can, I consider, be revisited if necessary at the adjourned hearing of the Application in a Case. 

23. The question is, as I say, then whether, really, the overarching justice of the dispute between the parties in the proceedings in which they are involved would persuade the Court as to the terms of the order sought by the Applicant. 

24. I am satisfied that it is just and equitable that an order be made on an interim basis.  I am satisfied that the appropriate order is one which would provide to all parties access to funds sufficient to enable them to participate in a mediation.  I am further satisfied that the appropriate order is in terms which would see each party receive the sum of $100,000.00, that C Pty Ltd bear the costs of the valuations of real property and the parties’ interests in, and the value of, the Paul Group and the costs associated with the mediation. 

25. I arrive at that conclusion in the context of the comments I have already made in relation to the source of funds and the following: 

    a)the payment of such a sum to all of the parties provides all of them with funds to enable them properly and meaningfully to participate in the proposed and upcoming mediation;  and

    b)whilst the costs are not in the amount sought by the Applicant the arrangement outlined in her solicitor’s account clearly provides for fees to be outstanding for 90 days.  The document makes that clear.

26. That suggests to me that it is more likely than not that she will continue to be represented by those solicitors as 90 days is not far from the time that will elapse between now and the proposed mediation date. 

27. I take into account also that, as a consequence of orders that will see C Pty Ltd bear the costs of the valuation and mediation, no party will be required to draw upon their own resources to meet the same at first instance. 

28. I am not persuaded that the prospect of a sale of property owned within the Paul Group to enable funds to be made available is one which is likely to accord early satisfaction to the Applicant, especially given the evidence contained within the First Respondent’s affidavit to the effect that sales of real property have slowed.  I take into account that the business (or a substantial part of the business) operated by the Paul Group is as a property developer engaged in acquiring, adding value to and then selling real property for profit. 

29. Additionally, I take into account the submission that, if a sale of property was to be the source from which funds could be made available, then appropriate orders are those which would permit 60 days to elapse before requiring the payment of funds to the Applicant – this seems to me to provide support for a conclusion that it is unlikely that work on the Applicant’s behalf will grind to a halt if monies are not paid within that timeframe. 

30. I consider that all of the parties, in this case supported by funds sourced in the Paul Group, are, in a sense, in the same position and thus justice and equity as between them requires that each be provided with funds.

31. I am also persuaded that it is appropriate to allow a buffer to C Pty Ltd in an amount of the difference between $300,000.00 and $450,000.00 – noting, as I have, that it is the entity which is going to be required to meet the costs of the valuations and mediation and pay other costs like rates and insurances that may be required to be paid. 

32. For these very short reasons, then, I was persuaded to make the orders that were made yesterday.

I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hogan delivered on 25 March 2015.

Associate: 

Date:              25 March 2015