RIGBY & KINGSTON - [2020] FamCA 8

FAMILY COURT OF AUSTRALIA

RIGBY & KINGSTON

[2020] FamCA 8

FAMILY LAW – PROPERTY – Interim Orders – Where an order was made for litigation funding in the sum of $135,000 in July 2017, which has since been exhausted – Where the husband seeks further litigation funding in the sum of $418,766 – Where the wife makes an offer for a dollar for dollar order and for a lump sum payment in the sum of $10,000 – Where whether it is just and equitable to make any property settlement order at all is a fundamental issue in the substantive proceedings – Where the wife is unlikely to be able to recover monies paid to the husband if he is unsuccessful in his claim in the substantive proceedings – Where the substantive proceedings involve complex issues such that the husband would be disadvantaged if he was not legally represented – Where the Court considers it appropriate to make a dollar for dollar order and a lump sum payment of $10,000 by the wife to the husband’s solicitor’s trust account.

Family Law Act 1975 (Cth)

Atkins & Hunt and Ors (2018) 57 Fam LR 128
G & T (2004) FLC 93-176
Rakete& Rakete (2012) 48 Fam LR 325
Selena & Montez and Ors [2017] FamCA 583

APPLICANT:

Mr Rigby

RESPONDENT:

Ms Kingston

FILE NUMBER:

BRC

12882

2016

DATE DELIVERED:

14 January 2020

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Brisbane

JUDGMENT OF:

Carew J

HEARING DATE:

13 December 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr G. Richardson SC

SOLICITOR FOR THE APPLICANT:

Hopgood Ganim Lawyers

COUNSEL FOR THE RESPONDENT:

Mr T. Kirk QC

SOLICITOR FOR THE RESPONDENT:

Hartley Healy

Order

Pursuant to s 117 of the Family Law Act 1975 (Cth):

The wife pay to the husband’s solicitors’ trust account ‘dollar for dollar’ all legal accounts relating to the factual issues noted in the order made by this Honourable Court on 13 December 2019 paid by the wife post 13 December 2019 up to the conclusion of the four (4) day hearing on 1 to 4 June 2020 in respect of those factual issues.
Provided, however, that no part of those funds referred to in paragraph 1 are to be used by the husband for any legal work done prior to 14 December 2019.
In addition to the sum/s to be paid pursuant to paragraph 1 the wife pay to the husband’s solicitors’ trust account the sum of $10,000 to be used for the preparation of Points of Claim in the husband’s claim against the third parties.

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 Rigby & Kingston 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 12882 of 2016

Mr Rigby

Applicant

And

Ms Kingston

Respondent

REASONS FOR JUDGMENT

Mr Rigby and Ms Kingston separated in 2015 after a marriage that lasted 24 years. They have not been able to resolve their property settlement dispute. A significant fundamental issue is whether or not it is just and equitable to make any property settlement order at all. Mr Rigby (whom I shall refer to as “the husband”) is a man of very modest means when compared with Ms Kingston (whom I shall refer to as “the wife”) who is a woman of significant wealth.
When this matter was before me in 2017 I made an order for the wife to advance a sum of $135,000 to the husband on account of his legal fees. It was anticipated that the parties would attend a mediation. They have not. The sum advanced to the husband has been expended and the husband seeks a further advance of funds ($418,766.15)[1] to meet his legal costs (including outstanding legal costs of $123,505).
[1] See husband’s written submissions filed 17 December 2019 page 6 last paragraph.
The wife opposes an order for a lump sum payment (with one exception) but makes an open ‘dollar for dollar’ offer in order to ‘level the playing field’[2] and a lump sum of $10,000 to meet the costs of preparing a pleading relevant to a claim by the husband against third parties. It seems common ground that a ‘dollar for dollar’ order would require the wife to match any sum paid by her for her own legal fees in relation to the current dispute between the husband and the wife by paying an exact amount to the husband for his legal fees.
[2] See outline of argument filed by wife on 17 December 2019 at [3] and exhibit 4.
The relevant background to this matter is set out in my judgment delivered on 11 July 2017 [3] – [15].
While parties to litigation under the Family Law Act 1975 (Cth) (“the Act”) are generally required to bear their own costs, s 117 of the Act empowers the Court to make a costs order in appropriate circumstances. In summary, if “the court is of the opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A) … make such order as to costs … whether by way of interlocutory order or otherwise, as the court considers just.” In my view, the power granted by s 117(2) is sufficiently broad to support the making of what is generally referred to as a ‘dollar for dollar’ order and no submission was made to the contrary.[3]
[3] See G & T (2004) FLC 93-176; Atkins & Hunt and Ors (2018) 57 Fam LR 128; cfSelena & Montez and Ors [2017] FamCA 583.
Particular matters to which the Court should have regard in this case are:
a)The respective financial positions of the parties;
b)The open offer made by the wife;
c)The substantial difference in the estimated legal costs for each party - $220,318 for the husband (not including costs relating to third party claims or outstanding legal costs) compared with $146,000 for the wife;
d)The fact that each party has a prima facie case for the substantive relief claimed against the other (see my reasons for judgment delivered on 11 July 2017 [51] – [53]); and
e)One party or the other will be prejudiced depending upon what, if any, litigation funding order is made.
(see ss 117(2A)(a), (f) and (g) of the Act)
Since the matter was last before me in 2017, the wife has revised the estimated worth of her personal assets to $7.3 million and the husband has obtained employment with a taxable income for the 2019 financial year of $113,144.
Two particular matters that weigh heavily in the exercise of my discretion in this case are firstly, the consequence for the husband if no order for legal costs is made in his favour and secondly, the consequence for the wife if the husband is ultimately unsuccessful in his claim for substantive relief.
It seems likely that without a costs order in his favour the husband will be unable to retain legal representation (certainly his current legal representation) and he would be at a distinct disadvantage in representing himself against the wife who most certainly will be represented. Of course, it is not unusual in this day and age for a party to be self-represented. There are likely to be particular complexities in this case however, which would make the husband’s position as a self-represented litigant more difficult than many cases where a person is unrepresented.
On the other hand, if the husband is ultimately unsuccessful in his claim for substantive relief the wife will have little prospect of recovering any sum paid to the husband by way of legal costs. Since separation the wife has paid to the husband $285,000 (at least $215,000 of which has been expended on legal costs).
The sum now sought by the husband is significant and on current estimates will only advance the matter to the first series of dates for trial. The initial trial dates have been allocated for the hearing of evidence relevant to the question of ten issues identified with the assistance of the husband and wife and will not involve the third parties. It is anticipated that the ability to cross-examine each party and any witnesses relied upon will enhance the prospect of the matter being able to proceed to resolution, but of course that cannot be guaranteed.
Included in the sum claimed by the husband by way of litigation funding is a sum of $123,505 outstanding to the husband’s solicitors and incurred it seems from about late 2017/early 2018 and thereafter. Additionally, two further sums are claimed: $32,431 for the preparation of Points of Claim in the husband’s claim against third parties and another $37,512 for the husband’s anticipated response to a possible application by the third parties.
In my view, as the husband’s solicitors have continued to represent the husband for well over a year despite knowing that he was unable to meet their fees, the claim for the payment of outstanding fees is significantly weakened. Mr Kirk QC also highlights that the affidavit by the husband’s solicitor does not specifically state that the firm will cease to act if the outstanding fees are not paid but rather only that the firm “will not carry the fees for [the husband] in relation to the work outlined above” and the outstanding fees are not included in that work.
As for fees associated with the husband’s claim against third parties: the sum claimed for drafting Points of Claim ($32,431) seems an extraordinarily high estimate and in relation to the drafting of a response to a ‘possible’ application by third parties, it is entirely speculative. In any event, I am not at this stage persuaded that the circumstances justify an order for the wife to pay the husband’s costs of pursuing a claim against third parties, particularly where the basis for that claim is yet to be particularised. That said, I note the wife’s concession to advance a sum of $10,000 to the husband in order for his claim against the third parties to be particularised in Points of Claim. That seems to be a very reasonable concession and one I will adopt.
It is true that the provision of litigation funding is a means by which a ‘level playing field’ can be maintained for the husband and wife, but in circumstances where each party has established a prima facie case for their claims in the substantive proceedings, the prejudice to each of them if an order for litigation funding is or is not made is finely balanced. As noted in my earlier judgment, the decision “devolves into a balance between those two centrally competing considerations”.[4]
[4] See Rakete& Rakete (2012) 48 Fam LR 325 at [47].
A ‘dollar for dollar’ order, as proposed by the wife, will ensure that any sums paid to her own lawyers will be matched by the same amount being paid to the husband’s lawyers. In my view, such a proposal is the best means of addressing the competing considerations in this case and I propose to adopt the order proposed by the wife in exhibit 4, with some minor redrafting which I intend will create a positive liability upon the wife to make the payments. I note that no submissions were made by the husband as to the form of the dollar for dollar order. As already noted, I will also order the wife to advance the sum of $10,000 to the husband for the sole purpose of drafting Points of Claim against the third parties.

I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carew delivered on 14 January 2020.

Associate:

Date: 14.01.2020