Strahan & Strahan (No. 7)

[2008] FamCA 905

FAMILY COURT OF AUSTRALIA

STRAHAN & STRAHAN (NO. 8) [2008] FamCA 905

FAMILY LAW – PROPERTY – INTERIM PROPERTY SETTLEMENT – application by wife seeking $5 million interim property settlement for costs and disbursements – whether wife has established compelling circumstances – consideration of history of proceedings and costs incurred by wife – not satisfied are compelling circumstances justifying provision of funds to pursue allegations of non-disclosure or deficiencies in disclosure by husband – wife needs funds to proceed to trial – assessment of required costs – whether sufficient property to meet legitimate expectations of parties – husband to pay interim property settlement to wife of $1 million

FAMILY LAW – COSTS – application for costs by husband – s 117 – where applicant partially successful – where husband has control of majority of assets and ability to access funds to meet his costs – application dismissed

FAMILY LAW – PRACTICE AND PROCEDURE – application of Independent Children’s Lawyer with respect to payment of costs – question of the amount of costs adjourned

Family Law Act 1975 (Cth) s 117

Harris and Harris (1993) FLC 92-378
Zschokke and Zschokke (1996) FLC 92‑693

APPLICANT: Mr Strahan

RESPONDENT: Ms Strahan

INDEPENDENT CHILDREN’S LAWYER: Ann Bills

FILE NUMBER: ADF 228 of 2005

DATE DELIVERED: 24 September 2008

PLACE DELIVERED: Adelaide

JUDGMENT OF: Strickland J

HEARING DATE: 24 September 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Ackman QC with
Ms McMillan and
Mr Berman

SOLICITOR FOR THE APPLICANT: Robinson & Mason

COUNSEL FOR THE RESPONDENT:

Mr Whitington QC with

Mr Holland

SOLICITOR FOR THE RESPONDENT: Pederick Lawyers

COUNSEL FOR THE INDEPENDENT

CHILDREN’S LAWYER:

Mrs West

SOLICITOR FOR THE INDEPENDENT

 CHILDREN’S LAWYER:

Ann Bills & Associates

Orders

1. That within 30 days of the date hereof the husband pay to the wife’s solicitors on behalf of the wife the sum of ONE MILLION DOLLARS [$1,000,000.00] by way of interim property settlement.

2. That the Application in a Case filed by the wife on 18 July 2008 and the Response filed by the husband on 26 August 2008 be dismissed and removed from the active pending cases list.

3. That the oral application of the husband for costs be dismissed.

4. That further consideration of the Application in a Case filed by the Independent Children’s Lawyer on 13 December 2007 be adjourned to 10:00am on 24 October 2008.

5. That further consideration of the issue of property settlement be adjourned to 9:15am on 17 October 2008.

6. Liberty to the parties and their legal representatives to attend the hearing on 17 October 2008 by way of telephone.

IT IS NOTED that publication of this judgment under the pseudonym Strahan and Strahan is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: ADF 228 of 2005

MR STRAHAN

Applicant

And

MS STRAHAN

Respondent

EX TEMPORE REASONS

INTRODUCTION

1. The application before me is the wife's application filed on 18 July 2008.  The primary orders that the wife sought are firstly, that the husband pay to the wife within 21 days the sum of $5 million and that such sum be utilised on account of costs and disbursements of the wife in prosecuting her claim in these proceedings, and secondly, that the trial judge determine at the conclusion of the hearing in what proportions the said sum be allocated towards the amount to be received by the wife by way of adjustment of property rights and/or the amount to be received by the wife in respect of her costs.  The other orders sought are procedural, and I will not repeat those.

2. The husband filed a response on 26 August 2008, wherein he effectively sought dismissal of the application. 

3. There are a number of bases on which the application of the wife can be made, but at the commencement of this hearing her senior counsel indicated that the wife was seeking that she be paid the sum of $5 million by way of interim property settlement.  Thus, if I am with the wife in that regard, there is no need to make the order sought in paragraph 2 of the wife's application.

4. This is not the first such application that the wife has made, and I consider it relevant to briefly refer to the previous orders made.  On 23 January 2007 I ordered that the husband pay to the wife the sum of $3 million by way of interim property settlement.  Since then, but this time by consent, on 27 July 2007 the husband was ordered to pay to the wife the further sum of $1,250,000 by way of interim property settlement and on 25 March 2008 the further sum of $850,000, also by way of interim property settlement.  Separately, but again by consent, on 31 October 2007 the husband was ordered to pay to the wife the sum of $375,000, but how that payment is to be categorised is to be determined by the trial judge.

5. The wife says that she has spent all of these funds and more, primarily on legal costs in relation to these proceedings, that she now has very little available funds and that she needs a further $5 million to meet the current and anticipated future costs of concluding this matter.

6. According to the wife's most recent financial statement filed on 29 July 2008, the wife's cash assets comprise approximately $59,000 in a Commonwealth Bank account and approximately $270,000 in a UBS AG (Zurich) account.  There is also, as I understand it, an amount of approximately $44,000 in her solicitor's trust account, that money being transferred from the trust account of her previous solicitors.

7. On the other side of the coin, the wife tells the court that she owes approximately $252,000 to solicitors in Hong Kong, approximately $184,000 to her current solicitors and a small amount, relatively speaking, of $783 to an accountant.

8. The husband does not necessarily challenge that the wife has primarily spent the money that she has been paid in this regard, in terms of the orders that I have just referred to, on legal costs and disbursements, or that she only has available currently what she deposes to in her financial statement, but he does take issue with the need for the wife to have further funds.  Importantly, the husband also does not suggest that he cannot pay the amount of $5 million sought by the wife if it was ordered.

THE CURRENT STATE OF THE PROCEEDINGS

1. This case involves both child issues and a dispute over property settlement.  The orders that the parties seek in relation to those issues are contained in, firstly, the amended application for final orders filed by the wife on 6 December 2006, the amended response filed by the husband on 27 August 2007 and the reply to that response filed by the wife on 11 December 2007.

2. The child issues are being heard pursuant to Division 12A of the Family Law Act 1975.  The trial commenced on 11 December 2007, and it is currently part heard on the basis that both parties seek that it be heard finally at the same time as the property settlement issues.

3. In relation to the latter, the parties have filed their affidavits of evidence in chief and the affidavits of evidence-in-chief of their witnesses and they have each filed updated statements of financial circumstances.

4. The trial of both issues was listed for final hearing over four weeks in March 2008.  I note, of course, it was originally listed for hearing in September 2007, but I do not propose to say anything about that listing.

5. Referring to the listing in March 2008, by consent that trial date was vacated on 1 February 2008 because the single expert witness Ms E, who had been appointed to provide a valuation of the parties' interests in various entities, including the husband's gambling interests, was not in a position to provide a complete report, in the sense that she was not in a position to provide a report which would be meaningful and which would be able to be used in the trial in the time frame that had been ordered, namely, by 15 February 2008.

6. I then made various orders designed to ensure that the single expert witness could complete that report as soon as possible.  In addition though, the wife indicated that as a result of certain subpoenas having been issued and of other information that had come to hand, she proposed to file applications seeking orders in relation to discovery and production and for leave to join third parties.

7. I might say that, in seeking a vacation of the trial listing, the wife also put in support of that the need, as she saw it, to pursue these other issues.  However, for my part, I did not accept that and, importantly, the only basis on which I adjourned the matter was the need for the single expert witness to complete her report.

8. In relation to those foreshadowed applications by the wife, at the request of the wife's then senior counsel, I made time available in March 2008 to hear them.  However, the wife did not file any such application, and that has remained the case.

9. Since 1 February 2008, the case has been back before me to monitor the progress of Ms E’s report and, in particular, to ensure that she is provided with the information and documents in respect of which she has made various requests of the parties, but particularly the husband, given his control of most of the documents.

10. There were also subpoena issues raised by the wife which I dealt with as well.  However, to repeat, apart from the application that is before me now, there has been no application filed by the wife, either prior to the change of her solicitors in April 2008 or since, seeking orders in relation to any interlocutory matter to do with the issue of property settlement.  In particular, there has been no application seeking further discovery or production or joinder of any third party.

11. Importantly, I also note that when this matter has been back before me to monitor the progress of Ms E’s report, the wife's counsel has not at any point suggested that Ms E should delay the completion of her report because, for example, there were still outstanding issues and/or that there was a need for substantial work to still be undertaken on behalf of the wife in the preparation of her case, or in any investigation of the assets in this case.

12. In relation to the report of Ms E, on 19 August 2008 she informed the court that her report would be completed and available by the end of October 2008.  At that time, though, there was one outstanding request by Ms E of the husband to provide certain information, but on the basis of the husband's counsel advising that that request would be responded to by mid‑September, Ms E said that that would not impact on the timing of the completion of her report.

13. At that time it was raised with me by the wife's counsel, that the parties should have the opportunity to comment on the report before it is finalised.  I accepted this submission and made an order that Ms E provide her draft report to the parties on or before 31 October 2008 and then that on or before 4 pm on 14 November 2008 the parties have liberty to raise any issue with Ms E in relation to her report on the basis that that be raised in writing and a copy provided to the other party.

14. I have provided a listing for a directions hearing on 19 November in the event that any issue arises as a result of that exercise.  I have also provided liberty to vacate that listing in the event that there is no issue that needs determination by me.  My order goes on to provide that Ms E file and serve her final report on or before 4:00pm on 1 December 2008.

15. In relation to the child issues, I should mention that on 20 June 2008 the husband filed an application seeking interim orders and the wife filed a response on 18 July 2008.  The hearing of that matter is set for 24 October 2008.

16. In relation to the listing of the case for final hearing, for some time now I have indicated to the parties that that will probably take place in February 2008.  However, I had not formally listed the trial at that time because the result of this application before me today could influence that, as might the report of Ms E and any issue the parties might have about that report.  However, I have set aside four weeks in February for this matter to be heard, on the assumption that there are no issues arising out of the order I make today or Ms E’s report.

THE EVIDENCE

1. For the purposes of this application, the wife has relied on a number of documents namely:

   “A.Materials to be Relied on

   1     Application in a case of the wife filed on the 18^th of July 2008.

   2     Affidavit of the Wife filed on the 18^th of July 2008.

   3     Financial Statement of the Wife filed on the 18^th of July 2008.

   4     Affidavit of the Wife filed on the 16^th September 2008.

   5     Affidavit of Dimitra Pederick filed on the 18^th July 2008.

   6     Affidavit of [Mr AB]filed on the 18^th January 2008.

   7     Wife’s amended Application for Final Orders filed 6/12/06.

   8     Reasons for Judgment of Strickland J delivered 23^rd January 2007.

   B.Materials to be Referred to

   1     Husband’s Financial Statement filed 20^th February 2008.

   2     Husband’s Affidavit filed 31^st January 2008.”

2. In addition, the wife's senior counsel tendered an affidavit of the wife's solicitor sworn on 22 September 2008, which annexed an email sent by the husband and dated 7 June 2007.  Thus, I include that as a document relied on by the wife.

3. For the husband's part, he relied of course on his response, but in terms of affidavits, he only relied on his affidavit filed on 26 August 2008.

THE LAW

1. There appears to be no issue in this case as to the legal principles that apply.  The relevant authority is the Full Court decision in Harris & Harris (1993) FLC 92‑378. There the Full Court said this at pages 79-929 to 79-930:

   “We do not doubt that the Court has power in a proper case in s.79 proceedings to make what may be conveniently described as an interim order, that is an order dealing with some of the property of the parties prior to the final hearing.  We do not consider that it is necessary to draw a distinction in terminology between an “interim” order and a “Partial” order.

   But in the exercise of that power the following matters need to be considered:-

   (1)  The exercise of the power should be confined to cases where the circumstances presented at that time are compelling.  As a generality, the interests of the parties and the Court are better served by there being one final hearing of s.79 proceedings.  However, circumstances may arise before there can be a final hearing which dictate that some part of the property of the parties should be the subject of orders.  A common example is where both parties agree to the disposal of some assets pending the trial.  However, we do not consider that it is confined to cases where the parties consent.  Urgent situations may arise where it is necessary to exercise this power if injustice is to be avoided.  Examples include cases where it is necessary to do so to avoid an asset being eroded or lost in the intervening period, and cases (beyond the maintenance Power) where an order in favour of one party is necessary to preserve or obtain a home for or is otherwise necessary for the welfare of the children.

   As to the position in England under the Matrimonial Causes Act 1973 in relation to an interim property order in opposed proceedings and as to the matters to be taken into consideration in the exercise of that discretion including the “overriding grounds of individual or family welfare” – see the discussion in Barry v Barry [1992] 3 All E.R. 405.

   (2)  It is an exercise of the s.79 power.  Consequently it must be performed within those parameters.  Since it is not the final hearing the Judge is unlikely to have the final findings, but the exercise must fall within that general framework and the material available at that time.

   (3)  Of necessity it is likely to be a somewhat imprecise exercise.  Consequently, it must be exercised conservatively and the Judge must be satisfied that the remaining property will be adequate to meet the legitimate expectations of both parties at the final hearing, or that the order which is contemplated is capable of being reversed or adjusted if it is subsequently considered necessary to do so.  It is for this reason that we doubt whether the distinction which Nygh J drew between interim and partial orders is necessary or desirable.”

2. There is also the Full Court decision in Zschokke & Zschokke (1996) FLC 92‑693, where the Full Court identified the following factors as being relevant to the making of an order like the one the wife seeks, whether as an interim property order or an interim costs order:

   §a position of relative financial strength on the part of the respondent

   §the respondent's capacity to meet his or her own litigation costs

   §an inability on the part of the applicant to pay his or her costs.

3. In relation to the principles emanating from Harris, there appears to be no issue as to the exercise of the Section 79 power or that, if the order is made, the remaining property would be sufficient to meet the claims of the parties at the final hearing.  Thus, the issue is whether the wife has established compelling circumstances.

4. With the relevant factors identified in Zschokke, again there is no issue about the first two factors that I have referred to but, with the third and final factor, the husband says that there are alternative ways for the wife's costs to be secured other than by payment by the husband.

5. Finally, I should mention that it is the husband's case that, even if I were to determine that the circumstances are compelling, it is still an exercise of my discretion as to whether the relief sought should be granted.  For example, the wife's senior counsel said that in that regard I need to take into account any alleged injustice to the husband by the making of the order.

DISCUSSION

1. The compelling circumstances promoted by the wife are that her current and anticipated future legal costs and disbursements to the conclusion of this case total in excess of $5 million, but are, say, $5 million, and she has insufficient funds to meet these costs and disbursements.  In these circumstances, without further funding, the wife's solicitor asserts that she will not be able to continue to act for the wife.

2. It is then submitted that it would be unfair to the wife and not in the interests of justice for her to be put in a position where she has to act for herself.  It is also suggested on her behalf that:

   “There remains a considerable amount of work still to be done with regard to identifying the true nature and extent of the parties' assets and the husband's financial affairs.  Therefore, the pursuit of the true facts is essential, (given the husband's control), to enable the wife to obtain just and equitable orders.”

3. This submission appears to be based on the wife's allegations that the husband has failed to make full and frank disclosure of his assets and that he has failed to provide full and complete discovery.

4. It is quite apparent from “(t)he schedule of estimated costs to a trial hearing” annexed to the wife's solicitor's affidavit, which provides a breakdown of the $5 million sought, that the basis of seeking that amount is the alleged need for the wife to undertake this further work for the purpose of achieving justice in this case.  However, I agree with the submission of Mr Ackman, senior counsel for the husband, that that renders the wife's application entirely misconceived.

5. These proceedings commenced early in 2005, and since then the wife has spent approximately $10.5 million in legal costs, not allowing, as I understand it, for the $883,568 that she has now paid her previous solicitors and which is the subject of a dispute before the Supreme Court at the moment, with at least half of that amount of $10.5 million being spent primarily in attempting to establish that the husband has not disclosed all of his assets and that he has not discovered all relevant documents.

1. Over that period - and as is apparent from the court file - the wife has had a total of eight different firms of solicitors acting for her, with almost an equal number of different counsel being briefed.  The last change of solicitors occurred on 9 April 2008, when the firm Donaldson and Walsh ceased to act and Pederick Lawyers took over.

2. In my view, it is inevitable that these changes of solicitors have led to an increase in costs for the wife.  It has been necessary for each new firm of solicitors and counsel to bring themselves up to speed with what is and continues to be, and will remain, a complicated matter, and that has also inevitably led to delays.  That is the case has never been more apparent than with the most recent change of solicitors.  It took approximately two months, I am told, for the new solicitors to obtain the wife's files from the previous solicitors, and Ms Pederick tells the court in her affidavit that she still is not completely on top of this matter and it is going to take a number of months for that to be the case, that statement being as at July 2008.

3. In addition, the wife is engaged in Supreme Court proceedings against her previous solicitors as to her costs.  She was obliged to pay the amount that they say she owes them in order to obtain her files, but not only does the wife dispute that she owes that amount to them but her position is that she has significant issues as to the value of the work that those previous solicitors have undertaken on her behalf.

4. Clearly, she is in a difficult position but, regardless of that, it is not open to her at this stage in effect to say to this court that, because she has changed solicitors, she needs funds to investigate the alleged nondisclosure of assets by the husband and the alleged deficiencies in his discovery.  She has had ample time and ample funds to pursue those matters, and I consider that she has in fact done so.

5. To repeat, the parties have reached the position in relation to the property settlement matter where all affidavits of evidence-in-chief have been filed, there is no application before the court in relation to any interlocutory matter - be it in relation to subpoenas, discovery, production or disclosure generally - and all but one valuation report has been completed, and the only outstanding issue is that one valuation report, namely the report of Ms E, the single expert.

6. Further, there is nothing necessarily new in the allegations made by the wife or by her solicitors as to nondisclosure by the husband or as to deficiencies in his discovery.  They have been raised before and, in my view, dealt with by the husband in one way or another.  That may not satisfy the wife, and clearly it does not, and there will probably be ample scope for cross examination of the husband at trial as to his responses to those allegations, but there is no basis - and particularly just because the wife has new solicitors and they may need to get on top of the matter and are raising issues as to what they see, with their limited involvement to date in this matter, as being the work that needs to be completed - for the wife to be provided with funding to again pursue these matters.

7. That is borne out if one looks closely at the affidavit of the wife's solicitor and how she expresses the need for further work to be undertaken.  To give three examples of many, she says at paragraph 4.4 of her affidavit:

   “It will be necessary to consider whether or not further subpoenas for documents need to be issued to entities both here and overseas.”

   Then in paragraph 4.3 she says this:

   “Also it may be in the wife's interests for further documentation and information to be forwarded to Ms [E], and advice will be required about that.”

   And finally in paragraph 4.6 she says this:

   “There will need to be consideration of what, if any, further investigation should be made with regard to the matrimonial assets and the husband's interests and, if so, the appropriate method of doing so.”

8. I accept the submission of Mr Ackman that the wife's solicitor simply does not know what is needed and, thus, the wife's case is, in reality, "give me $5 million and we can work out what we need."  However, to repeat, in terms of the allegations that the wife makes, which presumably are the catalyst for the wide ranging comments by the wife's solicitor as to the further work that might be needed, in my view there is nothing necessarily new there.  They have been raised before.  They have been dealt with.  Whether they have been dealt with satisfactorily or not is a matter now for the trial.  It is not open to, in effect go back to square one with those issues.

9. I also agree with Mr Ackman that an appropriate opportunity for the wife to raise any issue like those that she is raising is once the report of Ms E is provided but, I hastily add, not on the basis of looking to commence a new case not found in the wife's evidence currently before the court.

10. Of course, it remains to be seen whether any such issue, or any issues at all, needs to be addressed once the report of Ms E is to hand, but the process that Ms E has undertaken has entailed obtaining information from a number of sources, including the husband as to his business and gambling interests, and it may be that her report will lead to the need for further investigation.  But again, to adopt the submission of Mr Ackman, it is premature to assume that there will be the need for that arising from or flowing from the report of Ms E until we have her report.

11. Thus, I am not satisfied that at the present time there is any compelling circumstance that requires the wife to be provided with funds to pursue allegations of nondisclosure and allegations of deficiency in discovery on the part of the husband.

12. I make that finding without even addressing the reasonableness or otherwise of the wife's claim for $5 million in that regard.  I say, though, that there are categories of further work and costs alleged to be required which are completely unjustified.  For example:

    “4.Conferring with and preparation of witnesses' affidavits, some of whom are overseas and interstate.  At this stage in excess of 50 possible witnesses have been identified, $500,000.

    5.Air fares and expenses to see overseas and interstate witnesses.  Say, 10 trips (Hong Kong, London, Switzerland, USA - business class fares and accommodation), and time of solicitors and counsel, $550,000.”

    I note, of course, that not one of those possible witnesses has been named in any affidavit filed on behalf of the wife.  They are but two examples of what I would consider to be unjustifiable expenditure on the part of the wife at this stage of the case and given the funds she has already had.

13. Given that finding - namely, that I am not satisfied as to there being any compelling circumstance to require funds to be provided as the wife seeks - I do not need to consider such matters as a comparison of the amounts that each party has spent on legal costs to date or, in my view, the exercise of my discretion and the taking into account of any alleged injustice to the husband of making the orders sought.

14. However, it is nonetheless apparent that the wife needs funds to take this case to trial, outside of any question of further investigation as to the husband's assets and/or his discovery.  The wife simply does not have the funds to meet the legal costs necessary for her to be adequately represented at the hearing tentatively set for four weeks in February 2009. 

15. In addition, although the property case is ready, apart from the provision of the report of Ms E - and, as I say, always allowing for issues that might flow from her report - there is still the need to prepare and file the evidence in relation to the child issues.  The identification of the witnesses to be called and the preparation and filing of their affidavits, as well as the involvement of experts, has not yet been completed.  On current indications, I indicate that that will be attended to in early December 2008.

16. The wife's solicitor has not addressed in her affidavit specifically the extent of the costs and disbursements required for these exercises, but the husband's senior counsel suggests that, on the figures set out in the wife's solicitor's affidavit, an amount of $1 million might be necessary for this purpose.  I should hasten to add, though, that the husband's senior counsel does not concede that the wife's apparent need for funds to take this matter to trial is a sufficiently compelling circumstance to require the husband to make a payment to the wife by way of interim property settlement.

17. Mr Ackman attempted to revisit an argument in that regard that he put to me in January 2007 and which I rejected at the time and which I still reject.  Apart from that, Mr Ackman submitted that there are alternative ways for the wife's costs to be secured.  For example, given the closeness of the trial and that the wife's entitlement to property settlement will exceed the wife's costs, it would not be unreasonable for the wife's solicitor to take a charge over the wife's assets such that the costs would be paid upon conclusion of the proceedings.

18. However, in the circumstances that the husband's solicitors are paid promptly by the husband and there is no arrangement in place requiring them to wait for their costs until the conclusion of the proceedings, there is no basis, in my view, for requiring the wife to make such an arrangement with her solicitors.

19. It also must not be forgotten that the order sought is by way of interim property settlement, not by way of interim costs, and, once paid, the wife can use that money how she sees fit, without complaint by the husband or concern, at least prima facie, by this court.  Finally, there is still no guarantee as to when the trial will conclude and when judgment would be delivered, and this creates an element of uncertainty as to when the wife's costs would be paid if I adopted the submission of Mr Ackman.

20. There is also, of course, the argument put by Mr Ackman that, had the wife used the funds she has had to date appropriately, she would not now need to be asking for further funds.  The plain fact of the matter is that the wife has received almost twice as much as I found that she needed to take this matter to trial in January 2007.

21. As much as that argument may have some attraction, and particularly given my comments made in my reasons for judgment delivered on 23 January 2007, I am in no position to make such a finding.  Certainly, there still does not appear to be much to show for the work undertaken by the wife's previous solicitors, even in comparison with the amount that they appear to have charged the wife, but I do not have sufficient evidence before me to pursue that, even if it was appropriate for me to do so, and I am not suggesting it is.

22. Thus, I proceed on the basis that the wife has very little money left to meet her ongoing legal costs and she needs funds to take this case to trial.  The question then is:  is there sufficient evidence before me to fix an amount that would cover the wife's legal costs and disbursements to trial?

23. The wife's senior counsel, without conceding that this should be done, submitted that, like I did in January 2007, I could take a broadaxe to the wife's claim for $5 million and fix a lesser figure for these purposes, but he refrained from proffering a figure which might be appropriate.  As I said, Mr Ackman had no concerns about putting a figure, and he suggested that a figure of $1 million might be appropriate if that course was taken by me, which again I hasten to add was not a course promoted by the husband.  Mr Ackman put that figure on the basis, he says, of using the figures set out in the wife's solicitor's affidavit.

24. However, I am tempted to not undertake that task and simply dismiss the wife's application on the basis that there is no compelling circumstance established to require the order that she now seeks to be made, particularly in the circumstances where her own counsel was not able to, or prepared to, suggest a lesser figure that might be the subject of a finding of compelling circumstances.

25. The wife could then, if so advised, file a further application, with a supporting affidavit setting out the amount that she says would be necessary to meet the costs of taking this case to trial.  The wife could even delay filing such an application until the report of Ms E is received and, if justified by that report, she could include in that application any costs that may be necessary to pursue any issue arising from that report.  Indeed, in that regard Mr Ackman suggested that the wife's application before me now could simply be adjourned for that purpose.

26. However, the wife's senior counsel did not make such an application and, indeed, spoke against it on the basis that, if the provision of funds to the wife was delayed until then, that would lead to further delays in the wife being able to pursue preparation for the trial at the earliest possible time.  Frankly, I consider that to be a legitimate submission and, indeed, that has swayed me not to simply dismiss the wife's application but to try and make some assessment of the costs that the wife will need to take this matter to trial.

27. Turning to that assessment and using the figures from the wife's solicitor's affidavit as the benchmark:

    64.1There should be an allowance made for the costs of this hearing, the hearing in relation to the child issues set for 24 October, a possible directions hearing consequent upon the delivery of the report by Ms E and a further hearing in the part‑heard trial in relation to the child issues to prepare the child matter for trial - say $80,000.

    64.2A contribution by the wife to the costs of the Independent Children's Lawyer - say $75,000.

    64.3Attending to the preparation and filing of affidavits for the completion of the trial of the child issues and conferring with experts - say $100,000.

    64.4Counsel fees for a four‑week trial, including preparation time - say $500,000.

    64.5Preparation of briefs - say $7000.

    64.6Contingencies - say $250,000, to include further work arising from Ms E’s report and maybe disbursements associated with the involvement of experts and miscellaneous ongoing costs.”

28. In making this assessment, I proceed on the basis that the husband is meeting in the first instance the costs of Ms E and the costs of Dr C, the single expert witness instructed by the Independent Children's Lawyer.

29. Coincidentally, that exercise that I have now undertaken arrives at a total of approximately $1 million, and that is the amount that I propose to order the husband to pay, on the basis that there are compelling circumstances requiring that payment by way of interim property settlement.

30. Before doing so, though, adopting this approach still requires me to exercise my discretion in favour of the wife to that extent, and that obliges me to consider the factors relevant to the exercise of that discretion, and for example, factors raised by Mr Ackman in this submissions.

31. The two issues to consider in this regard, after having rejected the alleged need of the wife to pursue allegations of nondisclosure and deficiencies in the discovery of the husband, are the circumstance that as at January 2007 the wife required $5 million to take the matter to trial, and she has had $5.475 million, and the alleged injustice to the husband as elaborated on by Mr Ackman.

32. With the former, I have dealt with that already and I do not propose to take that any further.  With the latter, the argument is that, if I required a payment to the wife by the husband by way of interim property settlement and I was satisfied that that payment still allowed sufficient leeway for the parties' expectations at the final trial to be met, the trial judge - namely, me - might be met with an argument by the wife that, "Well, that's all very well, but I've spent several million dollars of my entitlement on legal costs.  I no longer have that money.  I need money to live and to take care of my future.  Thus, provide me with a further adjustment on account of the relevant section 75(2) factors."  

33. However, I do not accept that submission.  It is nothing more than speculation as to the outcome of the trial, particularly given that it is based on the husband's position solely.  What I have to look at is whether, if the order is made, there will be sufficient property left to meet the legitimate expectations of both parties at the hearing and, on the current evidence before me, I am so satisfied.

34. Thus, I consider that I should exercise my discretion in favour of the wife in making the order that I have proposed.

35. Mr Ackman has submitted that the order I make should, in effect, require the wife to use the moneys to meet the costs of her solicitors and any counsel briefed in accordance with how I have calculated the amount required.  That is not an unreasonable submission to make given the history of this matter, and obviously I have calculated the amount by looking at the costs that I have assessed that the wife needs to take this matter to trial, but this is an order being made by way of interim property settlement, and what that entails is that the wife can spend the money how she likes.  I note though that I made a comment about that at the conclusion of my reasons for judgment in January 2007.  I am prepared to make a similar comment, but it does not take anything away from the fact that the order is by way of interim property settlement, it is in relation to the wife’s entitlement by way of property settlement, and it is not an order by way of interim costs.

36. The comment that I make is that, although the wife can spend this money how she likes, I expect and trust that she will use it to meet the legal costs that have brought her to this court on this application and in respect of which I have calculated the appropriate amount.  I add - whether it is necessary - as I did last time, that, on the assumption that she does spend it on legal costs, I would hope that she spends it wisely.

37. I now have before me an application for costs by the husband. The husband seeks an order for costs in the sum of $60,000, with payment of that sum to be delayed until the conclusion of the property settlement trial. That application is opposed. As with any application for costs, what I do is governed by section 117 of the Family Law Act 1975.

38. It seems that the circumstance justifying an order for costs upon which Mr Ackman relies is that the wife has in the past received moneys to meet her legal costs, it seems to be the case that there is not much to show for the costs that have been spent, the wife now comes to this court seeking further costs, she has not received an order to the extent that she was seeking, and in some way it needs to be brought home to the wife that she cannot simply keep coming back to this court spending money that is intended to be for legal costs and pursuing an application and raising issues which have been considered and dealt with in the past.

39. It is unusual, as Mr Holland has said, and Mr Ackman has conceded, for an application for costs to be made by the respondent where the applicant is at least partially successful and the respondent has been unsuccessful.  By that I mean that the husband's position was he opposed any money being paid to the wife but given the order he has been wholly unsuccessful in that regard.

40. Those circumstances would usually lead to there being no order for costs, but this is an unusual case and I do not necessarily dismiss the application out of hand.  It has caused me to think about what I should do about this issue because, frankly, Mr Ackman makes some good points consequent upon my findings and the orders that I have made.  Indeed I have said similar things, if you like, in my reasons for judgment and I have been concerned about how this case has progressed.  We seem to have reached the stage where the wife has spent money that was intended to be used for legal costs.  She seems to be still looking to pursue matters that have been dealt with, at least as far as preparation for trial is concerned, and the like.

1. However, at the end of the day I propose to dismiss the application, for this reason.  The wife, in relation to her legal costs and her conduct, has been under scrutiny in this case and in previous applications that she has made for interim property settlement, whereas the husband's circumstances have not been under scrutiny.  It may be - and this is pure speculation - that the husband has spent some costs unnecessarily or pursued matters in respect of which there has been no outcome or no value.  However, the difference between the two parties is that the husband has control of the majority of the assets and he is able to access money to meet his costs at whatever level he deems appropriate.  The wife is not in that position.  She has to come to this court to seek orders like the one that she has now been successful on.  Although that does not take away my concern about the wife's conduct in this case in terms of the basis for this most recent application - namely, looking to investigate nondisclosure and deficiencies in discovery - I do not consider that there is any circumstance justifying an order for costs, and I dismiss the application.

2. The Independent Children’s Lawyer has now revisited the application in a case filed by her on 13 December 2007.  That application had been put aside on the basis that there was money in the Legal Services Commission's trust account - some $69,000 approximately - and it was appropriate to draw first upon that money to meet the costs of the Independent Children's Lawyer.  However, the point has been reached where that money has almost gone, and the Independent Children's Lawyer seeks an order that each party contribute $75,000 to the Independent Children's Lawyer's costs.

3. That is an order which is consented to by the husband.  However, the wife's position is that she opposes the order.  I have indicated that I intend to make an order that the wife contribute an amount of costs to the costs of the Independent Children’s Lawyer.  However, Mr Holland has asked that the matter be adjourned specifically in relation to the amount of those costs, and Ms Bills does not oppose that.

4. Finally, in relation to the property settlement issues, I want to be certain as to the current position with any required valuation outside of the valuation being undertaken by Ms E.  As I have indicated to counsel, my notes indicate that as at the commencement of this year there were no outstanding issues in relation to the valuation of real estate or personalty, or anything else for that matter.  However, I want to give the parties the opportunity to consider their position and, obviously, given the time frames in this case, there may need to be an updating of a valuation or valuations.  Thus I propose to list that issue for a directions hearing in the near future.

I certify that the preceding 81 paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered 24 September 2008.

Associate