Willmann & Willmann (No 7)

Case [2023] FedCFamC1F 361

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Willmann & Willmann (No 7) [2023] FedCFamC1F 361

File number: SYC 6037 of 2021
Judgment of: CAMPTON J
Date of judgment: 12 May 2023
Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Application by the husband’s former solicitor to intervene and/or to join themselves and the husband’s current solicitors as parties to the proceedings – Where the husband’s former solicitor asserts a lien over the husband’s file and over the third-party litigation funding facility obtained by the husband, and further asserts that the lien and litigation funding facility are held on trust for the husband’s former solicitor – Where the husband’s former solicitor seeks that they be paid the entire sum of the litigation funding facility – Where the quantum of the outstanding professional fees owed to the husband’s former solicitor is $48,766 – Where the husband asserts he can pay the outstanding debt immediately – Where the husband’s former solicitor has not particularised or explained how an entitlement to the litigation funding facility arises beyond the quantum of the outstanding professional fees – Where the husband’s former solicitor fails to establish that their involvement as a party to the proceedings, or the involvement of the husband’s current solicitors is necessary to determine all issues in dispute in the proceeding – Application dismissed – Costs ordered on a solicitor/client basis.
Legislation:

Family Law Act 1975 (Cth) s 79

Federal Circuit and Family Court of Australia Act 2021 (Cth) s 26

Federal Circuit and Family Court of Australia (Family Law) Rules rr 3.01, 10.10

Cases cited:

B Pty Ltd and Ors & K and Anor (2008) FLC 93-380; [2008] FamCAFC 113

Firth v Centrelink & Anor (2002) 55 NSWLR 451; [2002] NSWSC 564

Hancock Family Memorial Foundation Ltd v Fieldhouse [No 3] [2010] WASC 223

Wayne & Dillon & Anor (2008) 40 Fam LR 543; [2008] FamCAFC 204

Willmann & Willmann (No 3) [2022] FedCFamC1F 827

Willmann & Willmann (No 5) [2023] FedCFamC1F 75

Division: Division 1 First Instance
Number of paragraphs: 65
Date of last submission: 29 March 2023
Date of hearing: 25 January 2023
Place: Sydney
Counsel for the Applicant: Mr Mathews
Solicitor for the Applicant: Barkus Doolan Winnings Family Lawyers
Counsel for the First Respondent: Mr Flick
Solicitor for First Respondent: AB Lawyers
The Second and Third Respondents: Did not participate
The Proposed Intervener: AC Lawyers
The Proposed Fourth Respondent: AB Lawyers

ORDERS

SYC 6037 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MS WILLMANN

Applicant
AND:

MR WILLMANN

First Respondent

MR ANDREWS

Second Respondent

MS ANDREWS

Third Respondent

AC LAWYERS

Proposed Intervener

AB LAWYERS

Proposed Fourth Respondent

ORDER MADE BY:

CAMPTON J

DATE OF ORDER:

12 May 2023

THE COURT ORDERS THAT:

1.The Application in a Proceeding filed on 18 November 2022 and the amendments thereto, including the Application in a Proceeding filed on 22 December 2022 are dismissed.

2.AC Lawyers pay the costs of the wife and the husband on a…

Continue reading Willmann & Willmann (No 7)

Sign in free to access the full text

Details
AGLC
Willmann & Willmann (No 7) [2023] FedCFamC1F 361
Case
[2023] FedCFamC1F 361
Decision Date

CaseChat Overview and Summary

AC Lawyers, a firm of solicitors, applied for joinder in the proceedings between the husband and wife, seeking to join AB Lawyers and the husband as additional parties. AC Lawyers claimed that the husband and AB Lawyers held funds obtained from a litigation funding facility and payments made to AB Lawyers on trust for AC Lawyers. They also sought various injunctive orders regarding the husband's file. The Federal Circuit and Family Court of Australia was required to decide whether AC Lawyers had established an arguable case for the relief sought, and whether joinder was necessary under the relevant rules.

The court found that AC Lawyers had not established an arguable case for the relief sought. The court was not satisfied that there was any foundation for a declaration that the husband and AB Lawyers held the litigation funding and legal costs on trust for AC Lawyers. The court also found that the injunctive orders sought would have little utility given the lack of merit in the substantive claims. The court held that joinder is unlikely to be necessary if there are alternative means to obtain the necessary information. The court concluded that AC Lawyers had alternative means to pursue their claim for unpaid professional fees of $48,766, and that their claim was not necessary for the determination of the substantive matters in dispute.

The court dismissed the application for joinder, holding that AC Lawyers had not met the threshold for establishing an arguable case or the necessity of joinder under the relevant rules. The court found that the proposed claims lacked foundation and merit, and that AC Lawyers had other means available to pursue their claim for unpaid professional fees. The court did not see any reason why AC Lawyers would not release the husband's file upon receipt of payment of their outstanding fees. The court held that joinder was not necessary given the alternative means available to AC Lawyers.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

AB Lawyers did not file or seek to rely on any documents, such that their position and material relied upon was consolidated with the husband.BACKGROUND TO THE APPLICATION IN A PROCEEDING The relevant background to these proceedings was set out in the reasons for judgment delivered on 27 October 2022 at [10]–[22] (see Willmann & Willmann (No 3) [2022] FedCFamC1F 827), and in those delivered on 17 February 2023 at [12]–[26] (see Willmann & Willmann (No 5) [2023] FedCFamC1F 75). These reasons assume familiarity with each of those decisions. Relevantly for this determination, the matter came before me on 21 October 2022 for trial management and an interim hearing as to whether the husband’s relief sought against the wife’s parents and their application for security for costs should be listed for a separate trial pursuant to r 10.10 of the Rules. Mr Macauley of counsel appeared on that date for the husband, instructed by AB Lawyers. Prior to this time Mr Macauley had been briefed by AC Lawyers for the husband. Mr AD attended the listing as an “interested party” on behalf of AC Lawyers. On 18 November 2022, AC Lawyers filed an Application in a Proceeding seeking the following orders:1. That this application in a proceeding in urgently listed.2. It is declared that [AB Lawyers] and/or [the husband] hold the sum and/or loan and/or account received in litigation funding on constructive trust for [AC Lawyers] with such sum to be applied to [the husband’s] costs and disbursements in respect of the proceedings Willmann & Willmann SYC6037/2021 in the event that [the husband] - of his own will and volition - instructs [AC Lawyers] to continue acting in the said proceedings.3. That, in the alternative to Order 1, in the event that [the husband] - of his own will and volition - wishes [AB Lawyers] to continue acting in the proceedings Willmann & Willmann SYC6037/2021 then [AB Lawyers] shall within seven (7) days of the date of these Orders file in these proceedings SYC6037/2021 an undertaking that within 28 days of that date upon which final orders are made in these proceedings, whether by way of Orders made by consent or by final hearing, it shall pay a sum equivalent to half of the litigation funding and/or costs reasonably billed by it in and/or in respect of these proceedings.4. That until such time as [AB Lawyers] have discharged their obligations pursuant to these Orders a lien exists over any and all files electronic or otherwise in the possession, constructive or otherwise, of [the husband] and/or [AB Lawyers] and/or any counsel briefed in respect of and/or in relation to SYC6037/2021.5. That [the husband] is to deliver to [AB Lawyers] any and all such documents as referred to in Order 3 herein by no later than 4.00 pm 19 November 2022, and, whether those files are - without limitation - in electronic and/or hard copy and whether provided to this firm by [the husband] and/or received from this firm by [the husband] in relation to the said proceeding(s) howsoever provided and/or received.6. That in the event that [the husband] does not wish - of his own volition and choice - for [AB Lawyers] to act in these proceedings [AB Lawyers] shall be provided reasonable access to any and all documents identified and referred to in the Orders as well as the file held subject to the lien of [AC Lawyers] by [AB Lawyers].7. That in the event [the husband] does not wish - of his own volition and choice - for [AC Lawyers] to act in the proceedings SYC6037 /2021 [AC Lawyers] is hereby permitted a right of appearance in the proceeding SYC6037/2021 and access to the Commonwealth Court Portal file.8. That in the event that [the husband] - of his own volition and choice - continues to instruct [AB Lawyers] then within 14 days of the completion of the proceedings by Orders made by consent or by final hearing, [AB Lawyers] shall deliver up to [AC Lawyers] any and all documents identified and referred to in these Orders.9. That in the event that [the husband] - of his own will and volition - continues to instruct [AB Lawyers] then until Order seven (7) is discharged [AB Lawyers] shall provide reasonable access to [AC Lawyers] to any and all documents identified and referred to in these Orders.10. That [the husband] is hereby restrained from using any and all documents identified and referred to in these Orders in any way except for the purposes of these proceedings SYC6037/2021.11. That for the purposes of this application:10.1 [Mr AD] of [AC Lawyers] is to file an Affidavit in respect of this Application by no later than 4.00 pm on 24 November 2022;10.2 That [AB Lawyers] and [the husband] file and serve any affidavit on which they may wish to rely by no later than 4.00 on I December 2022 should they choose to do so;11.3 That [AC Lawyers] is to file written submissions by no later than 4.00 pm on 8 December 2022;11.4 That [AB Lawyers] file written submissions in response by no later than 4.00 pm on 15 December 2022;11.5 That [AC Lawyers] file written submissions in reply by no later than 4.00 pm on 22 December 2022. 12. That in the event that [the husband] - of his own will and volition - continues to instruct [AB Lawyers] in these proceedings SYC6037/2021, and this application in a proceeding is successful, then if [AB Lawyers] does not comply with any Order referred to herein then [AB Lawyers] shall pay to [AC Lawyers] the costs of enforcing these Orders on an indemnity basis.13. That an injunction issue whereby [the husband] and [AB Lawyers] are not permitted to use, in any way, any and all documents identified and referred to in these Orders for the purposes of contesting and/or resisting this application nor in respect of the proceedings SYC6037/2021 unless as required and/or permitted by these Orders and only so as to give effect to these Orders.Notation A. Order 13 naturally follows from the fact that to do so may and/or otherwise does offend the lien and/or rights of [AC Lawyers]. (As per the original)

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Fundamental to this application for joinder are three facts, being:(a)the quantum of the claim of AC Lawyers for outstanding professional fees is $48,766; and(b)the husband says that debt can be paid without delay, such that payment would not await the s 79 determination being made later this year; and(c)implicitly, neither the husband nor AB Lawyers require the prior “file” held by AC Lawyers for the s 79 trial later this year. CONCLUSION Insofar as AC Lawyers’ relief sought against the husband and AB Lawyers is for a declaration that the husband and AB Lawyers hold the total sum of the litigation funding facility obtained by the husband, and “any and all costs” paid by the husband to AB Lawyers “on trust” for AC Lawyers, I am not satisfied that AC Lawyers has established it has an arguable case for that relief. Putting it another way, it is difficult to discern any other relevant dispute or any foundation as to why equity would facilitate AC Lawyers to receive the benefit of the “third‑party litigation finance entity”, when its outstanding professional fees are $48,766. As a corollary, I am not satisfied that AC Lawyers has established any basis upon which it could seek to have those monies identified paid to it. Those prayers for relief as articulated, on the material identified thus far, is misconceived both as to foundation and as to value. Insofar as the relief sought is for the raft of injunctive orders in relation to the husband’s file identified at [29(d)] above, those orders would seem to have little utility having regard to the substantive relief as presently articulated being without merit. The application to join AB Lawyers therefore fails to achieve the second threshold in r 3.01 and will be dismissed. If the relief sought by AC Lawyers is restricted to the recovery of the amount which is properly owing to them by the husband (as identified at [46] above), then they may potentially have rights that may be, as opposed to will be, affected by the proceedings. While accepting that anything is possible, there is no reason not to accept the husband’s evidence that the outstanding professional fees due to AC Lawyers can be forthwith paid and the debt satisfied in a way that is unaffected by the determinations to be made in this litigation. Why AC Lawyers will not tender the husband’s file on receipt of payment for their outstanding fees as claimed remains obscure and cryptic. Any claim as to priority by way of the lien is yet to crystallise. No current party to the proceeding is presently seeking priority as against the claim of AC Lawyers in the sum of $48,766. That claim of AC Lawyers for payment of its outstanding professional fees is not directly relevant to the determination of the matters reserved by Tree J or to the s 79 proceeding listed later this year. Putting it another way, the determination of the claim for unpaid professional fees as sought by AC Lawyers is not necessary for the Court to completely and finally determine all the matters currently in dispute in the substantive litigation. Alternate means are available to AC Lawyers other than joinder to the substantive proceeding to pursue their final invoice of $48,766 in professional costs due.

Ratio Decidendi

Legal Principle Established

The word “necessary” for the purposes of a predecessor of the r 3.01 was described by Warnick J in Wayne & Dillon & Anor (2008) 40 Fam LR 543, as meaning: 18.... something more than “useful” or “expeditious”. In my view, if there are available alternative means to joinder to the substantive proceedings, of obtaining from a third person or someone already a party what is needed to allow an applicant for joinder to establish an identified “case”, joinder is unlikely to be “necessary”. Consideration and Determination The Full Court in B Pty Ltd and Ors & K and Anor (2008) FLC 93-380 held as follows:52.We do not accept that it is proper to allow joinder of third parties merely upon the formulation of a paragraph in, or to be added to, an application, on the basis that at trial facts to support the application may be asserted and proved. Sufficient facts must be asserted to demonstrate that, if proved, the law arguably provides the relief sought. This is consistent with the approach taken in other jurisdictions to joinder of third parties, as was usefully summarised by Le Miere J in Hancock Family Memorial Foundation Ltd v Fieldhouse [No 3] [2010] WASC 223, who explained why it is necessary for a party seeking to join a third party to litigation to establish an arguable case, in the following terms: 27.The applicant on a joinder application must show that there is an arguable case sufficient to resist the entry of summary judgment by the parties sought to be joined. It would be futile to order that a person be joined as a defendant if the material before the court disclosed that if the person, having been joined as a defendant, applied for summary judgment the application would succeed.(Citations omitted) An examination of the nature of AC Lawyers’ proposed claim against the current parties to the proceedings and AB Lawyers, and its foundation is necessary to determine the necessity of their joinder.AC Lawyers’ substantive relief The fundamental prayers for relief sought are difficult to distil. Doing the best I can on the material identified, they appear to be:(a)a declaration that the husband and AB Lawyers hold the total sum of the litigation funding facility obtained by the husband “on trust” for AC Lawyers;(b)a declaration that AB Lawyers hold “any and all costs” paid to it by the husband in these proceedings on “constructive trust” for AC Lawyers;(c)a claim that the funds obtained by the husband from the litigation funding facility, in addition to the funds paid by the husband to AB Lawyers (regardless of the source of those monies) for their legal services, be paid to AC Lawyers within fourteen days of the making of final orders; (d)various claims in relation to what might be described as the husband’s “file”, comprising documents in relation to these proceedings albeit that the documents were not particularised, including:(i)that the file, insofar as it is currently in possession of either the husband or AB Lawyers, be delivered to AC Lawyers; (ii)that until the file is delivered to AC Lawyers, the husband and AB Lawyers be restrained from “using any and all documents” comprising the file; and (iii)that after the file is delivered to AC Lawyers, should the husband wish to transfer the file to any other legal representative, that legal representative file an “undertaking” and return to AC Lawyers the file after the completion of the proceedings; and(iv)that the husband and AB Lawyers be restrained from otherwise using the file for purposes outside of these proceedings.