Rabkin and Edsall

[2017] FamCA 6

FAMILY COURT OF AUSTRALIA

RABKIN & EDSALL [2017] FamCA 6

FAMILY LAW – PROPERTY - Interim – Where the applicant seeks litigation funding – Whether the respondent has access to funds unavailable to the applicant -  Whether the discretion to pay a sum of money in interim proceedings should be exercised – Where there is no legal basis for the exercise of discretion - Where the application is dismissed.

Family Law Act 1975 (Cth) ss 72, 74, 79, 80(1)(h), 114, 117

Kyriakos & Kyriakos & Anor (2013) FLC 93-528
Marchant & Marchant (2012) FLC 93-520
Strahan & Strahan (interim property orders) (2011) FLC 93 466
Zschokke and Zschokke (1996) FLC 92-693

APPLICANT: Mr Rabkin

RESPONDENT: Ms Edsall

FILE NUMBER: BRC 5702 of 2013

DATE DELIVERED: 16 January 2017

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Carew J

HEARING DATE: 12 January 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Self-represented

COUNSEL FOR THE RESPONDENT: Self-represented

Orders

1. Paragraph (1) of the orders sought in the Amended Application in a Case filed by the applicant on 29 August 2016 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 Rabkin & Edsall 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 5702 of 2013

Mr Rabkin

Applicant

And

Ms Edsall

Respondent

REASONS FOR JUDGMENT

1. On 15 November 2016 Senior Registrar Spink made an Order listing two applications before the Court for hearing on 12 January 2017. The first was the further amended Application in a Case filed by Ms Edsall (“the respondent”) and the second was paragraph (1) of the Application in a Case filed by Mr Rabkin (“the applicant”) on 29 August 2016.

2. I disposed of the first application on 12 January and an Order has issued in relation thereto. I reserved my decision in the remaining application to further consider the material relied upon by each party.

3. The applicant seeks an order in the following terms:

   (1)That the sum of $120,224.00 be paid to Mr Rabkin from the I Lawyers trust fund and the balance of the funds held by I Lawyers be transferred to Rosen Lawyers trust fund to be held in trust on behalf of the parties.

4. The dispute between the parties involving both parenting and property matters has been listed for final hearing for five days commencing 6 March 2017.

applicant’s case

1. At the commencement of the hearing I informed the applicant that the Court could only make an order as sought if satisfied that there was evidence to support the exercise of a power under the Family Law Act 1975 (Cth) (“the Act”) such as an interim property order under s 79 and s 80(1)(h) or a maintenance order under s 72 and s 74 or a costs order under s 117. Having briefly perused the applicant’s material I expressed some doubt that the requisite evidence was before me. The applicant submitted that there was sufficient evidence before the Court.

2. The applicant’s submissions were brief. As best I can understand his case he contends:

   a)The respondent has access to the $120,224 contrary to a previous Order of the Court and this gives her an unfair advantage over him in the upcoming trial;

   b)Judge Howard in earlier proceedings observed that neither party should have access to any greater sum than the other;

   c)The respondent could obtain legal representation for the trial and pay them from the $120,224 after the trial and that would be unfair to him as he would not be able to do the same;

   d)I have assumed that his application is for the provision of litigation funding for the upcoming trial.  

the respondent’s case

1. The respondent made no submissions, merely referring to her Response filed 11 October 2016.

2. As best I can understand her case she disputes that she has breached any Order and asserts that the $120,224 is not accessible by her as it is required as security for various loans. It is my understanding that she will also be unrepresented at the upcoming trial.  

relevant legal principles

1. An application for the payment to a party of a sum of money in interim proceedings requires the exercise of a discretionary power pursuant to ss 79 and 80(1)(h), ss 72 and 74, s 117 or possibly s 114 of the Act.[1]

   [1] Zschokke and Zschokke (1996) FLC 92-693; Strahan & Strahan (interim property orders) (2011) FLC 93 466; Kyriakos & Kyriakos & Anor (2013) FLC 93-528; Marchant & Marchant (2012) FLC 93-520

2. In Kyriakos,[2] Finn and Strickland JJ held:

   2. We acknowledge that it has been common practice in the jurisdiction when making an interim litigation funding order to provide that the final categorisation of funds provided pursuant to the order is to be determined at the final trial of the matter for which the funding was provided. However, such a provision does not negate the requirement to identify the source of power which is relied on for the making of the interim order (even though the nature of, or basis for, the interim order may later be changed). This is because, as Brereton J succinctly explained in Paris King Investments, it is “the source of power that determines the necessary preconditions and relevant considerations for making the order”.

   [2]Kyriakos (supra)

3. In exercising the s 79 power I would need to be satisfied of the following matters:

   a)It would be just and equitable to make any order; and

   b)That having regard to such matters as may be relevant in s 79(4) it is appropriate to make an order.

4. An important consideration is whether such a payment could readily be recovered if it were found to exceed the entitlement of the party to whom it is made.

5. In exercising the s 74 power I would need to be satisfied of the following matters:

   a)That the applicant is unable to support himself adequately for a reason as identified in s 72 of the Act;

   b)That the respondent has the capacity to maintain the applicant as claimed; and

   c)That it would be appropriate to make a lump sum order.

6. In exercising the s 117 power I would need to be satisfied of the following matters:

   a)That there are circumstances that justify the Court making an order as to costs and that such an order would be just; and

   b)In considering what order, if any, the Court must have regard to the matters set out in subsection (2) of s 117 so far as relevant.

7. In exercising the s 114 power I would need to be satisfied of the following matters:

   a)Whether it is just or convenient to grant an injunction; and

   b)The balance of convenience.

discussion

1. So much of the material relied upon by each party was irrelevant to the issue in dispute but having read it I can discern the following:

   a)It appears that an Order was made on 23 June 2014 by consent providing that from the net proceeds of sale of a property at B Street, Suburb C registered in the respondent’s sole name, each party was to receive $25,000 by way of interim property settlement and the balance was to be invested and held in trust for the parties jointly until further order;

   b)The applicant asserts that the entire net proceeds were not placed in trust as required by the Order and, $120,244 was deposited into the respondent’s mortgage account as shown in annexure 2 to his affidavit filed 29 August 2016;

   c)The respondent asserts that the net proceeds were deposited into the trust account of I Lawyers Solicitors as ordered;

   d)The respondent asserts that at the time of the sale of B Street she also had another property at D Street, Suburb C which was mortgaged “at 100%” when it was purchased and “security by the Bank of Queensland was retained in the B Street property and Suburb E [another property] for D Street”. She asserts that:

   4. The Bank of Queensland required security to remain for [D Street] and this security was in the form of $120,244.62 that had been secured in the [B Street] property which the bank required to be transferred as security to one of the other mortgages in my name. That being [Suburb E], my home address due to [D Street] being rented out to tenants.

   …

   6. There have been no drawings of the $120,224.62 that was secured in the mortgage of the [Suburb E] property, account number ... These monies have been secured since the Bank of Queensland required this on the sale of [B Street] in July 2014.

   …

   130. Ultimately the sale of the [B Street] property settled and, at settlement, the net sale proceeds were applied as follows:-

   a. $825 to [J Lawyers];

   b. $378.20 to [F] real estate being the balance of their commission after the use of the deposit by them;

   c. $1,817.08 to the Commissioner of State Revenue;

   d. $28,537.22 to me;

   e. $25,000 to [Mr G];

   f. $309,236.58 to Bank of Queensland; and

   g. $293,861.04 to the Trust Account of [I Lawyers].

   …

   133. As indicated above, at settlement the Bank of Queensland took payment of the sum of $309,236.58 from the net sale proceeds. This was used to pay off the [B Street] home loan as well as the Bank of Queensland Line of Credit #...

   …

   137. The bank (sic) of Queensland made an error at settlement by taking the funds which they required by way of security and applying them to reduce the [D Street] property. …

   138. … The bank (sic) of Queensland rectified this on 15 August by withdrawing the full $120,244.62 and depositing it into the [H Street] home loan (#...). This sum is not available for redraw.

   e)Annexure 2 to the applicant’s affidavit demonstrates that the payment of $120,244.62 reduced the mortgage balance from $427,277.22 to $307,032.60.

   f)The respondent asserts that the withdrawals made subsequent to that date were for the payment of loans (although she does not explain the withdrawal of $13,000);

   g)The respondent asserts that the $120,244.62 has been protected in the joint asset pool;

   h)The respondent asserts that the proceeds of sale of the property in New Zealand in the applicant’s sole name were approximately $163,000 and he has failed to account for those funds;

   i)As at 23 June 2014 the respondent’s estimate of the entire property pool was in the vicinity of $800,000 (although this is before the alleged sale of the applicant’s property in New Zealand) and it was her contention at that time that if the applicant retained a property in his sole name in New Zealand and his car he would not be awarded any further adjustment; and

   j)Although referring to a balance sheet of the current assets and liabilities no such annexure was attached to the respondent’s affidavit.

2. On the evidence before me it is common ground that from the sale proceeds of B Street $120,244.62 was paid into a mortgage account in the respondent’s sole name. Annexure 2 to the applicant’s affidavit corroborates that to be the case. The respondent asserts this was a requirement of the Bank to secure other loans she had to the Bank. What is clear is that it reduced the then mortgage. It is unclear on the evidence before me whether this was a requirement of the bank.

3. I am not satisfied that this sum is a fund available to the respondent or that she has a re-draw facility on this loan account.

4. I am unable to be satisfied that it would be proper to make an interim property order and, in particular, it would be unlikely that the funds would be able to be recovered as the applicant indicated an intention to spend them on legal fees.

5. As I have no evidence before me about the current financial circumstances of the applicant I am not satisfied that he is unable to support himself adequately and even if I were able to be so satisfied I could not be satisfied that he should receive a lump sum payment.  

6. I am not satisfied that it would be just to make a costs order in favour of the applicant.

7. I can see no basis to issue a mandatory injunction requiring the payment of the funds to the applicant.

conclusion

1. I propose to dismiss the application there being no legal basis upon which I am satisfied the payment could be a proper exercise of discretion.

I certify that the preceding twenty-three (23) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carew delivered on 16 January 2017.

Associate: 

Date:  16 January 2017