Prain and Levy (No 2)

[2011] FamCA 814

FAMILY COURT OF AUSTRALIA

PRAIN & LEVY (NO 2) [2011] FamCA 814

FAMILY LAW – PRACTICE AND PROCEDURE – Stay of order pending appeal

Strahan & Strahan (2011) FLC 93-466
Zschokke & Zschokke (1993) FLC 92-693

APPLICANT: Mr Prain

RESPONDENT: Ms B Levy

FILE NUMBER: MLC 3288 of 2011

DATE DELIVERED: 14 October 2011

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane/Melbourne via telelink

JUDGMENT OF: O’Reilly J

HEARING DATE: 14 October 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Stewart

SOLICITOR FOR THE APPLICANT: Ms Grobtuch
Kennedy Partners

COUNSEL FOR THE RESPONDENT: Mr Richardson SC with him Ms Johns

SOLICITOR FOR THE RESPONDENT: Mr Teasdale
Kenna Teasdale

Orders

UPON THE WRITTEN UNDERTAKING OF THE WIFE FILED 13 OCTOBER 2011 THAT

1. SHE WILL NOT ALLOW HER LOAN ACCOUNT WITH B LEVY INVESTMENTS PTY LTD TO BE DRAWN UPON SO AS TO DIMINISH THE BALANCE TO LESS THAN $250,000 PENDING THE DETERMINATION OF THE APPEAL NO. SOA 70 OF 2011 WITHOUT GIVING 14 DAYS NOTICE OF HER INTENTION TO DO SO IN WRITING TO THE SOLICITORS FOR THE RESPONDENT

2. SHOULD HER APPEAL BE UNSUCCESSFUL OR PARTLY UNSUCCESSFUL SUCH AS TO LEAVE AN UNSATISFIED ORDER IN FAVOUR OF THE HUSBAND, SUBJECT TO ANY FURTHER STAY, SHE WILL APPLY THE FUNDS REFERRED TO IN PARAGRAPH 1 IN SATISFACTION OF THAT OBLIGATION

3. SHE AGREES TO BE BOUND BY THIS UNDERTAKING UNTIL THE DATE NOMINATED BY THE COURT OR OTHERWISE UNTIL EXCUSED BY THE COURT

IT IS ORDERED

1. Order 4 of the orders made 14 September 2011 is stayed pending determination of the wife’s application for leave to appeal, and appeal, initiated by the notice of appeal filed 5 October 2011, on condition that the wife prosecute the appeal diligently, with effect that unless this condition is met the husband may apply to lift the stay for breach of the condition.

2. The costs of both parties be costs in the appeal.

AND IT IS CERTIFIED

1. Pursuant to Rule 19.50 of the Family Law Rules 2004 it was reasonable to brief Senior and Junior Counsel.

IT IS NOTED that publication of this judgment under the pseudonym Prain & Levy (No 2) is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: MLC 3288 of 2011

Mr Prain

Applicant

And

Ms B Levy

Respondent

REASONS FOR JUDGMENT

Application

1. Pending application for leave to appeal, and appeal, the wife seeks a stay of an order I made on 14 September 2011 for litigation funding:

   Litigation funding

   4.     The wife provide litigation funding to the husband of $250,000 to be paid into the husband’s solicitor’s trust account within 21 days, such sum to be used solely for the husband’s litigation costs past and future, including for any forensic report/s and/or valuations he may seek, up to and including the conclusion of a mediation in the matter to be scheduled by the parties in relation to both parenting and property issues, this amount to be characterised at the trial as an addback against the husband.

2. On 5 October 2011 the wife filed an application for leave to appeal that order and a notice of appeal. 

3. Mr Richardson SC, in his written submissions, conceded that to succeed in obtaining leave the wife is faced with the burden of demonstrating an error of principle and/or substantial injustice before leave can be granted, or that the appeal raises an issue of general importance. I make no observations in respect of these matters which are wholly for the Full Court and turn immediately thus to the stay application.

Should there be a stay

1. On conventional principles, a stay must be granted.

Whether the failure to grant a stay may render the appeal nugatory

1. If I do not grant a stay, the wife’s appeal, if successful, would be rendered nugatory.

Whether the appeal is brought bona fide and may seem to have substance

1. There is much in the notice of appeal which, in the context of the hearing I conducted on 12 and 13 September 2011 is close to absurd, if not tantamount to abuse of Court process and a deliberate waste of the Court’s valuable time.  For example, first it is contended that there is confusion as to my use of the expression “litigation funding”; secondly that I did not identify a source of power for the making of the order; and thirdly that there may be some confusion as to whether perhaps the order may have been intended by me as spousal maintenance.

2. I will deal with each of these in turn as examples only of matters in the notice of appeal in the category I have mentioned. 

3. First, as made clear in the catchwords prefacing my reasons for judgment 14 September 2011, order 4 is a Hogan order, well understood in this jurisdiction as an order for the provision of a cash sum by one party to the other party, to be used solely by that party for legal fees, with an imperative, as included in my order, that at the section 79 trial the amount be an "add back" against that party, in this case the husband. If there is criticism of my use of the expression “litigation funding”, this, in the context of the hearing I conducted, is a nonsense and a feigned pretence, because at the hearing of the husband’s application for what was and is a Hogan order, all present in the courtroom plainly understood the expression to be a short form convenient expression for “a cash sum for the husband, to be used by him solely for his legal fees, to be an add back at the trial”. 

4. There can be no suggestion, in the circumstances which obtained, of confusion with third party litigation funding, for example, by persons or organisations who engage in litigation funding as a business. 

5. Secondly, in the matter which I was required to determine, there was no need to identify a source of power because it was common ground, as stated by Mr Ackman QC for the wife, that there should be litigation funding for the husband in the sense described and that such amount would be added back against the husband at the parties’ section 79 trial so that the only issue was the amount of funding:  reasons for judgment [79]; see also transcript 13 September 2011 5/10-15; 9/33; 10/10-35; 79/1-5; 79/30-45.

6. Further, as I made plain in my reasons, that circumstance had the effect that many of the factors in Zschokke’s case I did not need to consider and, therefore, on that basis, did not consider: reasons for judgment [80], [81], [82]. In particular, as I stated at [82], the common ground position was not whether there be litigation funding for the husband, but only its amount: 

   82. I need not thus in this particular case proceed to consider or balance the other criteria in Zschokke referred to in Strahan & Strahan (2011) FLC 93‑466 at [138]-[141], because of the stated common ground position, such that what I am to determine is not whether there be litigation funding but only its amount. (original italics)

7. Plainly, the source of power which I invoked was the statutory power referred to and discussed in those authorities which was not in issue at the first instance hearing and thus cannot conceivably be an issue on appeal. 

8. Thirdly, it is disingenuous to suggest as a basis for appeal or leave to appeal that there can have been any confusion as to whether the amount in order 4 could possibly be or relate to the husband’s application for spousal maintenance.  Indeed, expressly, I stood over the husband’s discrete application for spousal maintenance to be determined by a Registrar: order 5.

9. The wife has offered an undertaking filed 13 October 2011: 

   (1) That I will not allow my loan account with [B Levy] Investments Pty Ltd to be drawn upon so as to diminish the balance to less than $250,000 pending the determination of the Appeal No SOA70 of 2011 without giving 14 days notice of my intention to do so in writing to the solicitors for the Respondent. 

   (2)Should my Appeal be unsuccessful or partly unsuccessful such as to leave an unsatisfied Order in favour of the husband, subject to any further stay, I will apply the funds referred to in paragraph 1 in satisfaction of that obligation. 

   (3)I agree to be bound by this undertaking until the date nominated by this Honourable Court or otherwise until excused by the Court.

10. There is, I think, an air of unreality in the wife, on the one hand saying, as is her case, that she needs that money to support herself and her children and pay her own legal fees, but nonetheless will hold it intact pending outcome of the appeal.  However, I will leave that interesting question for the Full Court.

11. Despite these observations, it may be that there is some substance in the appeal as to quantum.  I will reiterate that it was common ground, as stated by Mr Ackman QC, that the husband should have an amount for litigation funding provided to him by the wife.  The only issue before me was its quantum.  If the wife wishes to take this matter to the Full Court, that is, the issue of quantum, then that is a matter for her and her legal advisers. 

Prejudice

1. The wife has offered the undertaking which I have set out. This will not assist the husband to be legally represented in the appeal, unless his lawyers are prepared to carry him for that purpose. I note that today Ms Stewart of Counsel appears for the husband. The fate of the proposed legal representation for the husband at the trial plainly will depend upon the outcome of the application for leave to appeal and the appeal. The desirability of funding for the husband was addressed below: reasons for judgment [81].

Balance of convenience

1. The balance of convenience favours the grant of a stay primarily because any success on appeal would be rendered nugatory if a stay is not granted. 

ORDERS MADE

I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of the Honourable Justice O’Reilly delivered on 14 October 2011.

Associate:     

Date:              25 October 2011