Peters and Giannopoulos and Ors

[2018] FamCA 237

FAMILY COURT OF AUSTRALIA

PETERS & GIANNOPOULOS AND ORS [2018] FamCA 237

FAMILY LAW – PROPERTY – Litigation funding – orders in complex commercial dispute – dollar for dollar order – Whether a dollar for dollar order should “level the playing field” between the parties – Where the source of the monies is not a generous benefactor but another person involved in the proceedings

Family Law Act 1975 (Cth) ss 117, 117(2A)

Atkins & Hunt & Ors [2018] FamCA 14 Forlan & Forlan and Anor [2016] FamCA 469 Hurford & Hurford [2016] FamCA 328 Iphostrou & Iphostrou and Ors [2011] FamCA 20
APPLICANT:	Ms Peters

1st RESPONDENT: Mr Giannopoulos

2nd RESPONDENT: S Pty Ltd - Trustee of the R Trust

3rd RESPONDENT: H Pty Ltd - Trustee of the Giannopoulos Family Trust

FILE NUMBER: ADC 3056 of 2014

DATE DELIVERED: 17 April 2018

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Berman J

HEARING DATE: 23 March 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Culshaw

SOLICITOR FOR THE APPLICANT: Culshaw Miller Lawyers

COUNSEL FOR THE 1ST RESPONDENT: Mr Richards

SOLICITOR FOR THE 1ST RESPONDENT: Lempriere Abbott McLeod

COUNSEL FOR THE 2ND RESPONDENT: Ms Kari

SOLICITOR FOR THE 2ND RESPONDENT: Richards & Evans Commercial Lawyers

COUNSEL FOR THE 3RD RESPONDENT: Ms Kari

SOLICITOR FOR THE 3RD RESPONDENT: Richards & Evans Commercial Lawyers

Orders

1. The husband’s Response filed 10 November 2017 is 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 Peters & Giannopoulos and Ors 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 ADELAIDE

FILE NUMBER: ADC 3056  of 2014

Ms Peters

Applicant

And

Mr Giannopoulos
Respondent

And

S Pty Ltd - Trustee of the R Trust 
2^nd Respondent

And

H Pty Ltd - Trustee of the Giannopoulos Family Trust 

3^rd Respondent

REASONS FOR JUDGMENT

INTRODUCTION  

1. Ms Peters (“the wife”) and Mr Giannopoulos (“the husband”) are engaged in complex litigation in which each seeks orders for settlement of property.

2. On 23 March 2018 orders were made setting down the applications for final orders for trial on 29 October 2018.

3. All parties were legally represented at the hearing. The wife’s previous solicitors filed a Notice of Ceasing to Act on 15 December 2017 on the basis that they were not prepared to represent her without funds for legal and counsel work being placed into trust.

4. The total sum of the wife’s outstanding costs and disbursements at the date of the termination of the retainer is $275,127.96.

5. The outstanding sum is likely to be exacerbated by a further sum of $20,000 representing counsel work recently undertaken. The likely total of her outstanding fees is approximately $300,000.

6. The wife was able to secure legal representation with Culshaw Miller Lawyers.

7. While the basis upon which the wife’s current solicitors continue to act for her is unclear, Mr Culshaw has indicated to the Court that his firm will continue to represent the wife up to and including final determination.

8. A further $38,464.25 has been incurred.

9. The wife’s anticipated costs to the conclusion of the proceedings could fall into the range of a further $123,000 plus GST.

10. The wife’s financial position remains precarious. She has no savings of substance and other than modest remuneration from part-time employment she relies upon an order of spousal maintenance made 22 April 2016 in the weekly sum of $801 and child support pursuant to an assessment in the sum of $507.17 per month.

11. On 22 April 2016, the wife was successful in obtaining an order for litigation funding pursuant to s 117 of the Family Law Act 1975 (Cth) (“the Act”) in the lump sum of $63,717 and by reference to paragraphs 2 to 6 of the orders made, a “dollar for dollar order” that required the husband to direct his solicitors to pay 50 per cent of whatever is received by them on behalf of the husband to the solicitors for the wife.

12. By Response to an Application in a Case filed 10 November 2017, the husband seeks to discharge the order.

THE HUSBAND’S APPLICATION

1. The basis for the husband’s opposition to the continuation of the order is that he considers the wife’s application for property settlement in so far as it now seeks relief from the second and third respondents to be without merit with the consequence that the proceedings have been unnecessarily exacerbated.

2. The husband asserts that he has no ability to pay his own legal costs and while he had been able to pay his legal fees by drawing down on his loan accounts in two trusts that form part of the Giannopoulos Group, that option is no longer available to him.

3. At paragraph 19 of his affidavit filed 10 November 2017 the following explanation is given:-

   My parents have informed me:

   (a)That, in view of the joining by the wife in these proceedings of certain entities under the control of my parents, the entities are incurring substantial costs;

   (b)That they are not prepared to allow the entities to meet my own legal costs on the basis that one half of any amount paid by the entities will be paid to the wife’s solicitors; and

   (c)That while my father is lending certain moneys to me in his personal capacity to assist me with living expenses, I have not received any benefit from the entities, either to pay legal costs or for living expenses, for many months.

4. The husband’s position is that he seeks the discharge of the dollar for dollar order whereupon his father will finance the husband’s legal fees by way of personal borrowings rather than entities of the Giannopoulos Group meeting his legal costs.

STATEMENT OF CONTENTION OF FACT AND LAW OF THE WIFE

1. On 19 January 2018 the wife complied with orders requiring her to set out her particulars of claim as it relates to the respondents generally, but in particular the second and third respondents. The wife asserts that at all material times the Giannopoulos Family Trust (“GFT”) holds its interest in the former matrimonial home on express or by constructive trust for the husband or for the husband and wife, that the R Trust (“RT”) holds its assets on constructive trust for the husband and that thereafter should be an order by way of property settlement and spousal maintenance that the husband pay to the wife the sum of $4,000,000.

2. The husband argues that the property available for division as between the parties themselves is modest and the order for property settlement as sought by the wife could only occur if she is successful in her claims against GFT and RT.

3. He argues that any money that would be paid to the wife by reason of the dollar for dollar order would result in the wife receiving funding to pursue her claim against the second and third respondents in which the husband has little involvement.

POSITION OF THE HUSBAND’S SOLICITORS

1. Notwithstanding that the husband seeks the discharge of the order which would presumably result in his father providing sufficient funds to him to pay his legal fees as and when they are incurred, his solicitors are prepared to continue to represent the husband through to the conclusion of the proceedings if no further funds are available.

POSITION OF THE WIFE’S SOLICITORS

1. The wife asserts that it is a factor in the consideration given by her current solicitors as to their continued representation by the wife that the order remains in place. Even if no money is paid to them pursuant to the order, it is nonetheless an important consideration.

2. The husband is unlikely to seek money from his father if the order remains in place. His solicitors will continue to represent him.

3. Even if the order is discharged, the position of the wife’s solicitors is that they will continue to represent her.

SHOULD THE ORDER BE LIFTED?

1. Section 117 of the Act does not refer to a requirement that there be a level playing field between litigants. It is only by reference to matters that the Court considers relevant within s 117(2A) that could be relied upon for the making of a dollar for dollar order.

2. The focus of previous decisions that consider when and in what circumstances a dollar for dollar order should be made are generally based upon the principle that if possible, each party should have the same opportunity for legal representation and perhaps even to the same financial extent.

3. Often dollar for dollar orders are made where there is a financial imbalance between the parties. The basis for the current order was that the husband appeared to have superior recourse to financial resources than the wife. He was able to fund his legal fees by accessing loan account draw down facilities on AGPT and RT whereas the wife did not.

4. The husband’s thoughts of the merits of the wife’s claim against the second and third respondents are an irrelevant consideration.

5. It could not be said at this stage of the proceedings that the wife’s application is devoid of merit or barren of hope.

6. The test for making a dollar for dollar order is not as simple as a requirement in litigation that there needs to be a level playing field.

7. In Iphostrou & Iphostrou and Ors [2011] FamCA 20 Cronin J declined to make an order pursuant to s 80 as there was insufficient evidence of the content of the asset pool.

8. The wife sought relief pursuant to s 106B and if successful the setting aside of a number of transactions would significantly enhance the pool of assets available for distribution.

9. His Honour found at [56]:-

   … For a person who has no control and limited assets, the payments by or on behalf of the husband of these legal fees [of over $350,000] is extraordinary…

10. And concluding at [60]:-

    …cases involving complex commercial family disputes are often not a level playing field. It is important that if possible, an attempt is made to level that field. The best way to do that in this case is to ensure that wherever a payment is made to the husband’s lawyers for the preparation of material, an equal amount is paid to the wife’s practitioners.

    [61]I am satisfied that the wife has no other source of funds other than family and friends and without this sort of assistance, there will not be a level playing field. …

11. In Forlan & Forlan and Anor [2016] FamCA 469 I found that the husband had withdrawn significant funds from “F Group” previously but no longer had the ability to do so, such that his position was, in effect, now similar to that of the wife. I said at [103]:-

    A dollar for dollar order is not a remedy to be applied in all cases where one party is able to pay his or her legal fees but the other is not. The husband may well have a generous benefactor and to that extent it may well be an advantage that is denied to the wife. A dollar for dollar order would not be appropriate in that circumstance.

12. If the husband was to access funds for his litigation from “F Group” then it would have been appropriate for a dollar for dollar order to be made in those circumstances.

13. In  Atkins & Hunt & Ors [2018] FamCA 14 Watts J considered at [46] that the making of a dollar for dollar order was a discretionary order which is made as a last resort. His Honour provided examples of circumstances that may attract the exercise of the discretion including:-

    [46.3] Where a financially advantaged person has relatives or associates who are prepared to fund the litigation against the financially disadvantaged party in circumstances where the financially disadvantaged party does not have the same support from third parties (Hurford & Hurford [2016] FamCA 328).

14. While I consider that it is appropriate to consider carefully the basis upon which family, friends and associates of a party may be prepared to gift or loan money to a party, it does not follow that wherever a party receives financial assistance for the payment of their legal fees a dollar for dollar order should be made in favour of the less fortunate party.

15. The current circumstances of the parties is that they have secured legal representation up to and including a final determination of the proceedings.

16. The husband’s father is involved in the proceedings and it may be argued by the wife that any financial provision he makes in favour of the husband would need to be considered as to whether it was sourced from GFT or RT.

17. The husband’s father is not simply a generous benefactor but has an involvement in the proceedings that may allow a finding that monies provided by him to the husband could be considered as a financial resource not available to the wife until the merits of her claim against the second and third respondents can be determined.

CONCLUSION

1. I dismiss the husband’s Response to an Application in a Case filed 10 November 2017.

2. I make orders as appear at the commencement of these reasons.

I certify that the preceding forty-two (42) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 17 April 2018.

Associate: 

Date:  17 April 2018