Strahan & Strahan - [2021] FamCA 97

FAMILY COURT OF AUSTRALIA
Strahan & Strahan [2021] FamCA 97

File number(s): ADF 228 of 2005

Judgment of: MEAD J

Date of judgment: 5 March 2021

Catchwords:
FAMILY LAW – COSTS – Claims by two of the wife’s previous solicitors for liens over ‘fruits of the litigation’ – ‘fruits of the litigation’ comprised of $2 million fund standing to credit of the wife in the Family Court of Australia Litigants Fund – fund came into existence as part of final property settlement order between husband and wife – litigation between husband and wife extended over nearly 13 years prior to final order on 27 November 2017 – final hearing conducted on undefended basis in absence of wife – one firm of solicitors ceased acting for the wife in December 2010 – the other firm acted between either October 2015 or April 2016 to September 2016 – Court not satisfied as to ‘causal link’ between the efforts of the solicitors and the existence of the fund – claims dismissed.

FAMILY LAW – COSTS – Husband sought payment of outstanding costs orders prior to the wife becoming entitled to any part of the fund – order for payment of husband’s costs as sought – wife entitled to the balance of the fund.

Legislation: Family Law Act 1975 (Cth) ss 75(2), 79, 79(2)

Cases cited:
Carew Counsel Pty Ltd v French (2002) 4 VR 172

Doyles Construction Lawyers v Harsands Pty Ltd (Unreported, Supreme Court of New South Wales, McLelland CJ, 24 December 1996

Ex parte: Patience; Makinson v The Minister (1940) 40 SR (NSW) 96

Firth v Centrelink & Anor (2002) 55 NSWLR 451

Roam Australia Pty Ltd v Telstra Corporation Ltd t/as Telecom Australia & Ors [1997] FCA 980

c and Ors [2020] FamCA 27

Worrell v Power & Power (1993) 46 FCR 214

Dal Pont, Gino Evan, Law of Costs (Lexis Nexis Butterworths, 4^th edition, 2018

Number of paragraphs: 124

Date of hearing: 11 May 2020

Place: Adelaide

Counsel for the Applicant: Mr Williams QC

Solicitor for the Applicant: McInnes Wilson Lawyers

Counsel for the Respondent: Mr Wilson of Counsel

Solicitor for the Respondent: Kennedy Partners

Counsel for the First Intervener: Mr Cox QC

Solicitor for the First Intervener: Mr PP, Solicitor

Counsel for the Second Intervener: Mr NF

Solicitor for the Second Intervener: NF Lawyers
ORDERS

ADF 228 of 2005

BETWEEN:
MS STRAHAN

Applicant

AND:
MR STRAHAN
Respondent

PP LAWYERS PTY LTD AND MS PP

First Intervener

NF PTY LTD
Second Intervener

ORDER MADE BY:

MEAD J

DATE OF ORDER:

5 MARCH 2021

THE COURT ORDERS THAT:
1.That the application in a case filed herein by NF Pty Ltd on 30 October 2018 be dismissed.
2.That any claim of the first and/or second interveners to entitlement to payment of any outstanding fees and/or costs and disbursements from funds standing to the credit of the applicant in the Family Court of Australia Litigants Fund pursuant to their respective asserted liens over ‘fruits of the litigation’, be dismissed.
3.That the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Strahan & Strahan

Details

AGLC: Strahan & Strahan [2021] FamCA 97
Case: [2021] FamCA 97
Decision Date: 5 March 2021

CaseChat Overview and Summary

In the Family Court of Australia, Mead J considered claims by two firms of solicitors, PP Lawyers Pty Ltd and NF Pty Ltd, who sought to enforce liens over a $2 million fund held in the Family Court of Australia Litigants Fund. This fund was established as part of the final property settlement orders between Ms Strahan (the wife) and Mr Strahan (the husband), concluding nearly 13 years of litigation. The wife's solicitors had ceased acting for her at various points between December 2010 and September 2016.

The primary legal issues before the court were whether the solicitors' claims for liens over the $2 million fund were valid, and if so, to what extent. Specifically, the court had to determine if there was a sufficient causal link between the exertions of the solicitors and the creation of the $2 million fund, which constituted the "fruits of the litigation" in this context. The court also considered the husband's application for payment of outstanding costs orders prior to the wife receiving any portion of the fund.

Mead J dismissed the solicitors' claims, finding that they had not established the necessary "causal link" between their efforts and the existence of the $2 million fund. The court noted that while the litigation had been extensive and involved significant sums, the final order directing the $2 million payment to the wife was made in her absence and on an undefended basis. The court applied the principle that a solicitor's equitable lien over the fruits of litigation arises only where the moneys have been recovered, at least in part, by the solicitor's exertions, and that a sufficient causal connection must be demonstrated.

The court ordered that the wife pay the husband the sum of $167,347 in satisfaction of various costs orders made in the Family Court and the High Court. This payment was to be made directly from the $2 million fund held in the Litigants Fund. The remaining balance of the $2 million fund was ordered to be paid to the wife. Consequently, the applications by the solicitors for entitlement to payment from the fund were dismissed.

Orders

Orders of the court

ADF 228 of 2005

BETWEEN:

MS STRAHAN

Applicant

AND:

MR STRAHAN

Respondent

PP LAWYERS PTY LTD AND MS PP

First Intervener

NF PTY LTD

Second Intervener

ORDER MADE BY:

MEAD J

DATE OF ORDER:

5 MARCH 2021

THE COURT ORDERS THAT:

1. That the application in a case filed herein by NF Pty Ltd on 30 October 2018 be dismissed.

2. That any claim of the first and/or second interveners to entitlement to payment of any outstanding fees and/or costs and disbursements from funds standing to the credit of the applicant in the Family Court of Australia Litigants Fund pursuant to their respective asserted liens over ‘fruits of the litigation’, be dismissed.

3. That the wife do pay to the husband the sum of $167,347 in satisfaction of orders for costs made in the Family Court of Australia on each of 29 November 2018, 21 February 2019 and 10 June 2019 and in the High Court of Australia on 16 October 2019.

4. That such costs be paid to the husband directly from the funds standing to the credit of the wife in the Family Court of Australia Litigants Fund by electronic funds transfer to the account nominated to the Court by the husband.

5. That the balance of the funds standing to the credit of the wife in the Family Court of Australia Litigants Fund be paid to the wife by electronic funds transfer to the account nominated to the Court by the wife.

6. That all extant applications be otherwise dismissed.

Note: The form of the order is subject to the entry in the Court’s records.

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 17.02 Family Law Rules 2004 (Cth).

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

CRONIN J

In Carew Counsel Pty Ltd v French (2002) 4 VR 172 (‘Carew Counsel’) Winneke P said, at [33]:As a matter of general principle, a solicitor has an equitable lien over the fruits of litigation, whether obtained by way of judgment or compromise, where those ‘fruits’ have been gained, at least in part by the solicitor’s exertions on behalf of the client: Roam Australia Pty Ltd v Telstra Corporation Ltd [1997] FCA 980 at [3]-[4] per Lehane J……The essence of the solicitor’s ‘particular’ or ‘non-possessory’ costs lien is that the solicitor has been instrumental in recovering the judgment sum (whether by way of compromise or otherwise) or, put another way, that the moneys have been recovered as a result of his exertions. Thus the fund in respect of which the lien arises is the fund represented by the fruits of the labours exercised by the solicitor in recovering it: Phillipa Power & Associates v Primrose Couper Cronin Rudkin [1997] 2 Qd R 266 at 270-271 per Macrossan CJ and White J. The charge on the fund represented by the ‘particular’ lien arises immediately upon the recovery of the moneys through the exertions of the solicitor (Ex parte Patience; Makinson v The Minister (1940) 40 SR (NSW) 96 at 100) and should be distinguished from rights which might arise through a solicitor’s exertions in respect of other matters. However, for the right to arise, it must be shown that there is a sufficient causal link between the solicitor’s exertions and the recovery of the fund: Roam Australia Pty Ltd v Telstra Corporation Ltd (at [4]) per Lehane J. In each case, that is a question of fact. The costs which are protected by the lien will not only include the costs incurred in recovering the judgment, but also those ‘immediately incidental thereto’: Re Meter Cabs Ltd [1911] 2 Ch 557 at 559 per Swinfen Eady J.(emphasis added) In [35(e)] of the judgment of Campbell J in Firth His Honour considered the decision of Lehane J in Roam Australia and that of the Full Court of the Victorian Supreme Court of Appeal in Carew Counsel when stating that:For the right to arise it must be shown that there is a sufficient causal link between solicitor’s exertions and the recovery of the fund of money.(citations omitted) The facts of this case are unusual. I have already referred to litigation between the husband and the wife commencing in 2005 and encompassing parenting issues, interim property settlement, spousal maintenance and final property settlement orders. The litigation extended over a period of almost 13 years. Many millions of dollars were expended by each party in pursing their various claims. It was submitted on behalf of PP Lawyers that during the period of the proceedings the wife was paid $1.5 million in spousal maintenance and $12 million in interim property settlements as well as a final property settlement order in the sum of $11.8 million. The only monetary sum ordered to be paid to the wife by the husband by way of the final order of Cronin J on 23 November 2017 was the $2 million to which I have already referred.

Ratio Decidendi

Legal Principle Established

Established by: CRONIN J

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File number(s):	ADF 228 of 2005
Judgment of:	MEAD J
Date of judgment:	5 March 2021
Catchwords:	FAMILY LAW – COSTS – Claims by two of the wife’s previous solicitors for liens over ‘fruits of the litigation’ – ‘fruits of the litigation’ comprised of $2 million fund standing to credit of the wife in the Family Court of Australia Litigants Fund – fund came into existence as part of final property settlement order between husband and wife – litigation between husband and wife extended over nearly 13 years prior to final order on 27 November 2017 – final hearing conducted on undefended basis in absence of wife – one firm of solicitors ceased acting for the wife in December 2010 – the other firm acted between either October 2015 or April 2016 to September 2016 – Court not satisfied as to ‘causal link’ between the efforts of the solicitors and the existence of the fund – claims dismissed. FAMILY LAW – COSTS – Husband sought payment of outstanding costs orders prior to the wife becoming entitled to any part of the fund – order for payment of husband’s costs as sought – wife entitled to the balance of the fund.
Legislation:	Family Law Act 1975 (Cth) ss 75(2), 79, 79(2)
Cases cited:	Carew Counsel Pty Ltd v French (2002) 4 VR 172 Doyles Construction Lawyers v Harsands Pty Ltd (Unreported, Supreme Court of New South Wales, McLelland CJ, 24 December 1996 Ex parte: Patience; Makinson v The Minister (1940) 40 SR (NSW) 96 Firth v Centrelink & Anor (2002) 55 NSWLR 451 Roam Australia Pty Ltd v Telstra Corporation Ltd t/as Telecom Australia & Ors [1997] FCA 980 c and Ors [2020] FamCA 27 Worrell v Power & Power (1993) 46 FCR 214 Dal Pont, Gino Evan, Law of Costs (Lexis Nexis Butterworths, 4^th edition, 2018
Number of paragraphs:	124
Date of hearing:	11 May 2020
Place:	Adelaide
Counsel for the Applicant:	Mr Williams QC
Solicitor for the Applicant:	McInnes Wilson Lawyers
Counsel for the Respondent:	Mr Wilson of Counsel
Solicitor for the Respondent:	Kennedy Partners
Counsel for the First Intervener:	Mr Cox QC
Solicitor for the First Intervener:	Mr PP, Solicitor
Counsel for the Second Intervener:	Mr NF
Solicitor for the Second Intervener:	NF Lawyers

ADF 228 of 2005
BETWEEN:	MS STRAHAN Applicant
AND:	MR STRAHAN Respondent
PP LAWYERS PTY LTD AND MS PP First Intervener NF PTY LTD Second Intervener

ORDER MADE BY:	MEAD J
DATE OF ORDER:	5 MARCH 2021