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October 13, 2016

Barro (interim litigation costs) order

Thornton & Peach

Applications include: restraint on Applicant’s solicitors continuing to act for her; application for general release of funds; application for spousal maintenance; application for Barro/interim litigation costs order – out of time application determined as preliminary issue – threshold issue of geographical location not satisfied for spousal maintenance application – Husband resisting full and frank disclosure.

Applicant Wife’s Submissions:
Proceedings

These are de-facto property proceedings.
The Applicant, Ms Thornton is presently aged 61. The Respondent, Mr Peach is aged 44. For ease of reference, these submissions will refer to the parties as “the wife” and “the husband” respectively.
The parties commenced cohabitation in (omitted) 2002 and separated on a final basis on 12 June 2013. There are no children of this relationship.
The wife commenced these proceedings on by way of an Initiating Application filed 26 February 2016, some 2 years and 8 months after final separation. The Wife therefore seeks leave to bring these proceedings out of time (s 44(6)).
On an interim basis, the Wife seeks orders as set out in her Application in a Case filed 10 August 2016, namely:
1. That the Husband pay her maintenance in the sum of $340 per week;
2. That $30,000 be forthwith released from the controlled money account held by Farrell Lusher Solicitors (being the proceeds of the sale of a property owned by the parties at Property L, on account of legal fees; and
1. That the Husband provide financial disclosure as required by the Rules.
By his Response filed 27 July 2016, the Husband seeks orders that:
1. The wife be refused leave to proceed out of time;
2. That Farrell Lusher Solicitors be restrained from further involvement in this matter; and
1. That $80,000 be released to each of the Husband and Wife from the funds held in the controlled money account.
The Respondent has further filed a Response to an Application in a Case on 22 August 2016 indicating that the orders sought are as per those outlined in the Response filed 27 July 2016 and therefore provides no response to the Wife’s application for spousal maintenance or release of funds to meet legal fees.

Application for leave to bring an application out of time

The Husband opposes leave being granted to the wife to proceed out of time, although his evidence does not address the basis on which such leave is opposed. The position adopted is curious given that the Husband himself seeks orders for final property division.
The reasons for the Wife’s delay in bringing her application for property settlement is as set out at paragraphs 18-19 of her affidavit filed 26 February 2016.
The Wife’s solicitor holds $742,422.22 in a controlled money account, being the net proceeds of sale of a jointly owned property in Property L. This property was purchased in 2005 and the sale was completed on 14 June 2015. Both parties seeks orders on a final basis for how these funds should be distributed, amongst other orders. With respect to those funds, it appears to be conceded that the wife should receive a greater share, the issue in dispute being quantum.
It is submitted that the Court would be satisfied that hardship would be caused to the wife if leave is not granted (s 44(6)(a)) having regard to her current financial circumstances as set out in her Amended Financial Statement.
It is further submitted that the Court would be satisfied that no hardship or prejudice would be caused to the Husband by granting leave to proceed out of time, particularly in circumstances where the Husband himself contends for final property orders.

Restraint on Farrell Lusher Solicitors acting for the Wife

Farrell Lusher Solicitors (“FLS”), although not the solicitors with carriage of the family law matters, acted previously for the parties in relation to conveyancing matters and a dispute with the tenants of the Property L property. The husband seeks to restrain FLS from acting on the basis that he is concerned that confidential information that he has provided may be used to unduly prejudice him in this matter (Aff. Mr Peach, 26/07/2016 at 13(a)). The husband does not particularise the nature of the confidential information held by FLS or how it may be used to prejudice him.
In Billington & Billington (No 2) [2008] FamCA 409 at 43 Coleman J held that the authorities make clear that the jurisdiction to grant such relief “is to be exercised with caution” and that appropriate weight needs to be given to the public interest in a litigant not being deprived of a lawyer of his or her choice.
In Osferatu & Osferatu (2015) FLC 93-666, the Full Court, having considered the authorities, concluded:
41. It follows from the above discussion that the law requires that an applicant seeking to restrain a solicitor from acting must adduce evidence that establishes the confidential information and the risk of the misuse of that information in the circumstances. The weight and persuasiveness of any evidence adduced depends, of course, on the precision of the evidence called, the nature of the confidential information and the nature of the risk of disclosure.
It has not been established by the Husband that FLS holds confidential information, nor that there is a risk of misuse of such information. The fact that FLS acted with respect to the sale of jointly owned real property and an associated lease dispute is not a matter of confidence or controversy. It does not establish a basis for the restraint sought and accordingly, the Husband’s application should be dismissed.

Spousal maintenance and release of funds

The wife’s weekly income (approximately $330 per week) exceeds her expenses (approximately $670 per week) by $340. Accordingly, the wife seeks a maintenance order in that amount.
The Husband’s Financial Statement filed 27 July 2016 evidences income of $2,757 per week with expenses of $300 and thus a surplus of $2,457 per week. The Husband’s affidavit of 22 August 2016 seeks to convey a contrary position to that set out in his Financial Statement. In circumstances where the Husband has refused to provide financial disclosure, it is submitted that the Court would proceed on the basis of the evidence contained in his Financial Statement. This is particularly so given that the husband now discloses a recent holiday to (country omitted) and the (country omitted) without any detail as to the source of funds for this trip (Aff. Mr Peach, 22/08/2016 at 13). The ability to fund such a trip prima facie appear to be inconsistent with the more parlous financial circumstances the husband seeks to present in his latter affidavit.
The evidence clearly establishes that the wife is unable to support herself adequately, whereas the husband is reasonably able to pay maintenance in the amount sought.
The Husband otherwise seeks the sum of $80,000 be released to each party from the proceeds held in the controlled monies account. He does not particularise how it is proposed that such payments be characterised and proffers no evidence as to his need for the distribution of such funds.
The Husband asserts that $80,000 is “significantly less” than the sum to which he would be entitled (Aff. Mr Peach, 22/08/2016 at 13). This is not conceded. Although the wife’s Initiating Application filed 26 February 2016 proposes, amongst other orders, that the Husband receive the sum of $110,000 this is her preliminary position and may be revised following discovery of the husband’s true financial position. Subsequent to the filing of that application, the wife has become aware of the disposal and acquisition of assets of which she was not aware at the time of filing that application which may in turn impact upon the orders for which she contends on a final basis.
In any event, Strahan & Strahan (Interim Property Orders) [2009] FamCAFC 166; (2009) 42 Fam LR 203 (at 139), the Full Court made clear that in order to establish an appropriate case for an interim property settlement order more is required than the mere fact that upon a final hearing the application would receive the property being sought (or an amount in excess of the funds being sought) from the other party.
The Husband has not established a basis for receiving such funds and is application should therefore fail.

Release of funds for legal fees

The wife seeks the release of $30,000 to meet her legal costs of these proceedings. The basis for the orders sought, together with the quantum is set out at paras 10-15 of the affidavit of Ms Thornton, sworn 9/08/2016.
The wife contends that in the circumstances of this case, the source of power to be exercised is that found in s 117(2).
In Zschokke & Zschokke [1996] FamCA 79; (1996) FLC 92-693 the Full Court held that matters relevant to such an application include the position of relative financial strength on the part of the respondent, a capacity on the part of the respondent to meet his own litigation costs; and an inability on the parent of the applicant to meet his or her costs. It is submitted that a consideration of such factors weighs in favour of an order as sought by the wife being made.
In Zschokke the complexity and the need to investigate the respondent’s financial affairs was identified as further actors which would add considerable weight to the case for an order of the type sought. The husband’s refusal to provide financial disclosure and the inconsistencies between his Financial Statement and affidavit evidence gives rise to a need for the wife to incur costs in investigating the financial affairs, which would further support the order sought by the Wife.

Respondent Husband’s Submissions:

Out of Time Application

The time of separation, June, 2013 is not disputed by the parties.
Section 44(5) of the Family Law Act 1975 (“the Act”) provides a “standard application period” of two (2) years from the date of separation, during which time a party to the relationship may apply for Orders in relation to maintenance and property division.
The “standard application period” concluded, at the latest, on 30 June, 2015.
The Application was made 26 February, 2016 being some eight (8) months outside of the “standard application period” and thirty-two (32) months since the date of separation.
Section 44(6) of the Act provides that leave may be granted by the Court for an “out of time” application in relation to property in the event that the Court was satisfied that hardship would be experienced by a party or a child if leave were not granted.
The principles for “out of time” applications are summarised in cases beginning with The Marriage of Whitford (1979)24 ALR 424 and more recently in the Full Court decisions in Richardson v Richardson [2008]FamCAFC107,Hedley v Hedley [2009]FamCAFC179, and Sharp v Sharp[2011]FamCAFC150.
The authorities discussed in paragraph 6 have determined that the following matters require adequate explanation and consideration:
1. The reason for the delay in bringing the Application;
2. the issue of “hardship”, should leave not be granted;
1. the impact on or prejudice to the Respondent if leave were granted;
1. the reasonableness of the claim; and
2. the proper and separate exercise of discretion even where adequate or reasonable explanation for the delay has been given.
There is no adequate explanation for the Applicant’s failure to file within the “standard application period” as evidenced by the following:
1. The Applicant was legally represented by Farrell Lusher Solicitors (“FLS”) in relation to Family Law matters from 22 January, 2014 being some seventeen (17) months prior to the conclusion of the “standard application period”(Aff. Ms M, 25/08/2016).
2. In the seventeen (17) month period in which FLS were instructed by the Applicant within the “standard application period”, only two (2) attempts were made to communicate with the Respondent via two (2) separate “phantom” email addresses being on 12 February and 24 March, 2015 (Aff. Mr Peach, 26/07/2016).
1. The issues with communications discussed in (ii) arose despite FLS having been in regular telephone communications with the Respondent regarding property matters in which they acted for both the Applicant and Respondent which were also conducted during the “standard application period” (Aff. Mr Peach, 26/07/2016).
1. There were no additional Family Law issues between the parties which might have required priority over an application for property, nor were there any issues facing the Applicant regarding the possible disruption of the status quo or prior arrangements which would have hindered an “in time” application as was in issue in the case of Ordway v Ordway [2012] FMCAfam 624.
2. The sale of the property at Property L was finalised prior to the conclusion of the “standard application period” and in any event should not have been a hindrance to an “in time” application being made.
There are no consequences attending to the loss of the right to commence proceedings which would constitute “hardship” as evidenced by the following:
1. The agreement which the Respondent considered was reached in October, 2015 provided for a split of the proceeds of the sale described in paragraph 8 which are held in Trust by FLS (“the proceeds”), on a 1/3 – 2/3 basis in favour of the Applicant (Aff. Mr Peach, 26/07/2016).
2. Under the above agreement (which is maintained by the Respondent) the Applicant would receive $475,673.00 of the proceeds as well as retaining the significant assets of the relationship in her name or possession following the breakdown of the relationship.
1. Should leave be granted, the costs of maintaining these proceedings are possibly, if not likely, to be greater than any benefit which the Applicant would receive in addition to the distribution discussed in (ii).(Aff. Ms Thornton, 9/08/2016)
Should leave be granted, the Respondent will be impacted by the delay through the inclusion and scrutiny of assets which have been accumulated following the conclusion of the relationship. It is conceded that this consideration may be the subject of submissions in any subsequent proceedings and be “factored into the ultimate deliberation” as seen in Hedley v Hedley [2009]FamCAFC179 at 211 .
The Applicant’s claim in excess of that afforded under the agreement discussed in paragraph 9 is unreasonable and is sustained by an overemphasis on the Applicant’s initial contribution to the relationship without sufficient regard to the transformation of the initial contribution during the relationship and most importantly (as per Williams & Williams [2007] FamCA 313 at para 26) to the weight which should attach to the contributions of the Respondent during the eleven (11) year relationship. (Aff. Mr Peach, 26/07/2016).
The Respondent has only sought Orders be made by the Court to circumvent further delay should the Court grant leave to the Applicant.

Conflict

The principles regarding the manner in which a client’s confidential information should be protected in Family Law proceedings is outlined in the recent Full Court decision in Osferatu and Osferatu (2015) 301 FLR 295 which extensively reviews earlier decisions.
The Applicant first approached FLS in relation to Family Law matters on 22 January, 2014 (Aff. Ms M, 25/08/2016).
In December, 2014 and again in April, 2015 FLS accepted instructions to act for both the Applicant and Respondent in relation to two (2) matters being the sale of an asset of the relationship which is directly relevant to these proceedings and in relation to a dispute regarding a lessor’s refusal to provide vacant possession, the contents and conclusion of which are also directly relevant to these proceedings. (Aff. Ms M, 25/08/2016)
As per Frederico J in Thevenaz v Thevenaz (1986) FLC91-748 at 75,447 “[The Court] will act upon the evidence of the client who swears that he has made a confidential communication”.
FLS are a firm consisting of four (4) solicitors, two of which acted directly for both the Applicant and Respondent during the matters discussed in above.
There have been no special measures taken by FLS to limit the movement of the information discussed in paragraph 15 and accordingly, as seen per Lord Millett in Prince Jefri Bolkias v KPMG (a Firm) [1999]2AC222 at 237-238, the “starting point must be… that information moves within a firm”.
In the circumstances of this matter as discussed in paragraph 15 it can readily be inferred that the solicitors acting for the Applicant are in possession of information which is confidential to the Respondent, the disclosure of which has not been consented to.
It is of overriding importance that for the proper administration of justice a client should be able to have complete confidence that what he tells his lawyer will remain secret and as such Court should act upon the evidence of a client who swears that he has made the confidential communication.
It is also of the utmost importance that justice in matters of a client’s confidence should not only be done but should appear to be done. Accordingly, as per Lord Millett in Prince Jefri at 236 “a solicitor or other person in possession of confidential and privileged information should not act in any way that might appear to put that information at risk of coming into the hands of someone with an adverse interest”.

Maintenance

In the event that leave is granted the Applicant to proceed out of time, Section 90SD(1) of the Act provides that to make an Order for maintenance under Sections 90SE an 90SG of the Act the Court must be satisfied that either or both of the parties to the de facto relationship were “ordinarily resident” in a participating jurisdiction when the application for the Order was made.
The term “ordinary resident” was discussed in the case of Russell & Russel (no 5) [2012] FamCA917 at para 49 where it was accepted as being “residence adopted voluntarily and for settled purpose” and “connotes residence in a place with some degree of continuity”.
At the time of the Initiating Application and the Application in Case the Applicant was ordinarily a resident of (country omitted) (Aff. Ms Thornton 12/02/2016)
At the time of the Initiating Application and the Application in Case the Respondent was ordinarily a resident of (country omitted) and despite regularly working in various locations in this jurisdiction, that time was not with settled purpose and was without continuity (Aff. Mr Peach, 26/07/2016 and 22/08/2016)
In the event that the Court considers one or more parties to this matter is or are “ordinarily residents” of this jurisdiction, the Respondent has sought the Interim Order that $80,000.00 be released to each party without categorisation by way of his Response filed some two (2) weeks prior to the Applicant’s Application in a Case.
The release of $80,000.00 as sought by the Respondent would render moot the considerations which the Court must take into account under Section 90SF(3) of the Act.
The Applicant has significant assets including in excess of $13,000.00 in various shares.
There is no evidence that a debt of $5,000.00 remains outstanding. (FS, Ms Thornton, 17/08/2016 & Aff. Ms Thornton, 9/08/2016)
When averaged over a twelve month period, the Respondent earns approximately $1,200.00 per week (Aff. Mr Peach 22/08/2016).
When working, the respondent is regularly liable to cover the significant costs in relation to accommodation and travel (Aff. Mr Peach 22/08/2016).

Release of Funds for Legal Fees

The Respondent seeks Orders for the release of $80,000.00 to both parties without categorisation which would relieve the matters for consideration pursuant to the decision in Zschokke & Zschokke [1996] FamCA 79; (1996) FLC 92-693.
At the conclusion of the oral arguments, the Court requested further written submissions addressing specific issues:

Applicant Wife’s Further Submissions:

These submissions are submitted in reply to the further submissions of the Respondent of 30 August 2016 limited to the issue of maintenance.
The Respondent claims that the Applicant has failed to satisfy the Court that she meets the “threshold issue” which he asserts to be that the Respondent is required to:
1. Demonstrate to the Court she is not able to support herself; and
2. If she is not able to support herself, why she is not able to support herself.
The Respondent’s submissions invite the Court to impose a test in excess of that which the Act requires. As observed by the majority in the recent High Court decision of Hall v Hall [2016) HCA 23 at 52:
‘The wording of s 72(1), it has been noted, seems to imply that each party should attempt to support himself or herself where that is reasonable having regard to the matters referred to in s 75(2)’.
Section 90SF provides that in exercising jurisdiction under s 90SE the Court must apply the principle that a party to a de facto relationship must maintain the other party to the de facto relationship:
(ii) By reason of age or physical or mental incapacity for appropriate gainful employment; or

(iii) For any other adequate reason.

The Applicant is aged 61. At the commencement of the relationship, the Applicant had significant assets comprising of a 450 acre farm at (omitted) (sold in 2005, net proceeds of sale being $1,000,000), an investment property in Adelaide (sold in 2003, net proceeds of sale being approximately $180,000) and a (omitted) motor vehicle. The Respondent had no assets of any significance.
The evidence clearly establishes that the Applicant’s financial circumstances have been parlous post-separation, in contrast to that of the Respondent.
The Applicant’s uncontested evidence is that she is working part-time in (omitted), and had been trying to establish full-time work for a number of months. The Respondent does not proffer any evidence to suggest that the Applicant has any requisite skills, experience or capacity for employment which is not being fully exploited.
To the extent that it is suggested by the Respondent that the Court should draw some conclusion or inference from the fact that the application for spousal maintenance for 3 years post separation, it is submitted that this would be rejected. The evidence clearly establishes that post separation, each party received $52,000 from the sale of a jointly owned property at (omitted). The Respondent himself deposes to having provided the Applicant with $10,000 in early 2015. The means by which the Applicant has supported herself post separation is therefore clearly established, as is the fact that the Applicant has exhausted such resources.
The client’s weekly expenses, as set out in her affidavit are modest. The Applicant is seeking to maintain a standard of living which is in all the circumstances reasonable (s 90SF(3)(g)).
It is submitted on behalf of the Respondent that the application must be dismissed because the Court is unable to make a finding as to the Applicant’s reasonable earning capacity. The Act in fact requires only that the Court be satisfied that the Applicant is unable to support herself adequately and must otherwise take into account (amongst other things) the physical and mental capacity of each of them for appropriate gainful employment (s 90SF(3)(b)). The Applicant does not suggest that she is not capable of working full time. It is her case that despite her best endeavours, she has been unable to secure full time employment.
For the reasons set out in the previous submissions, the Court would not adhere to the Respondent’s request for the release of funds to himself. This is particularly so where the Respondent’s Financial Statement discloses:
1. That his average weekly income far exceeds his outgoings (thus clearly establishing he is reasonably able to meet the order for spousal maintenance sought); and
2. That the Respondent has $81,096 available to him in his bank account;
1. No outgoings or liabilities that the Respondent is unable to meet.

Respondent Husband’s Further Submissions:

The law

A. In Bevan (1995) FLC 92-600, the Full Court stated that an award of spousal maintenance requires:
1. a threshold finding under section 72;
2. a consideration of sections 74 and 75(2);
1. no fettering principle that pre-separation standard of living must automatically be awarded where the respondent’s means permit; and
1. discretion exercised in accordance with the provisions of section 74 with “reasonableness in the circumstances” as the guiding principle.

Submissions

The Respondent concedes that section 90SD(1A) applies and the issue of ‘ordinarily resident’ does not apply.
It is submitted that the Applicant has failed to satisfy the court that she meets the threshold issue which is to demonstrate to the court that she is not able to support herself, and if she is not able to support herself, why she is not able to support herself.
The following criticisms are made of the Applicant’s evidence:
1. the Applicant returned to (country omitted) in 2013 and there is no evidence as to her work history since;
2. it has been 3 years since separation and accordingly it can be inferred that 3 years have passed without the Applicant needing to make an application for spousal maintenance. The inference must be that the Applicant has been able to support herself. There is no evidence of what has happened in the meantime;
1. there is a lack of evidence about the Applicant’s current employment, why it is only part-time, what jobs she has applied for, what the job market is like where she lives in (country omitted), what the Applicant’s qualifications are and what she has otherwise done to obtain full employment. The inference is that because the Applicant is looking for fulltime work that she is capable of working fulltime;
1. evidence as to the rent paid by the Applicant, being her main expense, is very brief and accordingly subject to scrutiny. The Applicant has not provided any details as to where she has lived previously and what her current arrangements are (i.e. is it a shared house, unit, flat or what her needs are);
2. there is no evidence of what other support, or lack of support for that matter, that the Applicant has, whether family or otherwise;
3. it is also noted that the alleged loan referred to in the Applicant’s affidavit does not appear in her Financial Statement.
It is submitted that the Court is accordingly unable to make a finding as to the Applicant’s reasonable earning capacity and her application must be dismissed.
In the alternative, if the Court considers it can make a finding of fact as to the Applicant’s earning capacity, it is submitted that the Court should proceed with caution as to the Applicant’s alleged reasonable living expenses. The figures claimed by the Applicant have all been neatly rounded up and it is submitted therefore the amounts are ‘guestimates’ rather that referenced from actual expenditure. The items claimed therefore require scrutiny. If the Applicant is renting she would have no requirement to pay rates or household supplies or repairs, being the responsibility of the landlord. For the Applicant to make such claims places into question the balance of her claims. Whilst the other amounts claimed may appear reasonable at first blush, the obligation of the Applicant is to live within her means. There is no explanation why the Applicant has committed most of her income to her rent.
There is an overriding discretion in relation to spousal maintenance claims and given the 3 year period since separation and the holes in the Applicant’s evidence as outlined above it is not appropriate for the Court to make an order for spousal maintenance in favour of the Applicant.
The Applicant seeks a Barro/Hogan order. The Respondent seeks an interim property settlement under the principles of Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466. It is submitted that orders sought by the Respondent alleviate both the spousal maintenance claim and Barro order claim.

Consideration and Disposition

A) Out of Time Application

The Wife sought an Order, pursuant to s.44(6) of the Family Law Act 1975 (“the Act”) to proceed with her substantive Application out of time. Her Application was out of time by approximately 8 months. Pursuant to brief oral reasons delivered on 29^th August whilst the Court was sitting in Wagga Wagga that Application was granted. For current purposes, it is sufficient to note the following principles that were identified and applied to the basal facts of the current matter.
The principles to “out of time” applications are well known. They are summarised in cases beginning with Whitford (1979) 24 ALR 424; and are further elaborated in the more recent Full Court decisions in Richardson v Richardson[2008] FamCAFC 107, Hedley v Hedley [2009] FamCAFC 179; (2009) 235 FLR 58, and Sharp v Sharp [2011] FamCAFC 150; (2014) 50 Fam LR 567.
These authorities note, among other things, the need to explain the following matters:
1. the reason or reasons for the delay in bringing the Application,
2. issues of “hardship” in the event that leave was not granted,
3. the impact on or prejudice to the Respondent if leave were to be granted,
4. the reasonableness of the claim (rather than the likelihood of its success), and
5. the proper and separate exercise of discretion even where an adequate or reasonable explanation for the delay has been given.
One further matter noted by Cronin J in Hedley (at [211]) was that in relation to any relevant prejudice to the Respondent as a result of the delay, such a consideration may ultimately be the subject of a submission in the substantive proceedings, and be ameliorated and “factored into the ultimate deliberation.”
As already noted, the out of time Application was granted on 29^th August 2016, essentially (but not only) on the bases of (a) the Court accepting the Applicant’s submissions, including the lack of prejudice to the Respondent and the risk of prejudice to the Applicant, (b) the delay in bringing the Application was not only explained but also because the correspondence with the Respondent over a period of time that was annexed to the Wife’s affidavit, filed 26^thFebruary 2016 (annexures T 1 – 4) highlighted the Husband’s knowledge of the Wife’s intentions (albeit with some contest over precisely the time and to what degree that knowledge was made known), and (c) on the evidence before the Court at this interim stage, the Wife is clearly experiencing financial hardship. Absent any resolution between the parties, or judicial determination, she will (on her evidence) continue to experience hardship given that significant funds continue to remain in her solicitors’ trust account.
I might also add that absent detailed financial disclosure by the Husband, the Court is unable to discern whether he is in any financial hardship. This is against a background of him being rather younger than the Wife and in gainful employment.
Further, the agent for the Husband’s solicitors advised the Court that it was the Husband’s intention to obtain a distribution of funds by way of bringing an Application in “another jurisdiction”, this being understood as the Supreme Court of New South Wales. In circumstances where both parties have filed material in this Court, and where the parties were in a de facto relationship following which they seek property Orders, at the very least, it would seem to be a more cost-effective and efficient course that all maters be heard in this Court rather than starting afresh, with more costs in repeating much if not most of what has already been set out in the documents filed in this Court.

B) The Restraint Sought against the Wife’s Solicitors

Relevant principle in relation to applications of this kind may be summarised as follows.
The recent Full Court decision in Osferatu v Osferatu outlines relevant principle. It is sufficient to record the following from that decision.^[1]
First, at [20], the Full Court (Finn, Ainslie-Wallace & Aldridge JJ) said (emphasis added):^[2]
1. There are three established categories on the basis of which solicitors may be restrained from acting against their client or former client. They are: breach of confidence, breach of fiduciary duty and the inherent jurisdiction of a court over its officers and to control its process. Each category has its own principles which guide its operation. The third category may be involved in conjunction with either of the first two so there is clearly an overlap; nonetheless, the basis for the exercise of the jurisdiction in each is different (Kallinicos v Hunt [2005] NSWSC 1181).
Secondly, at [22] and [23], the Full Court further observed, in the light of earlier authorities (emphasis added):
1. [22] The manner in which a client’s confidential information is to be protected in family law proceedings was clearly explained by the Full Court in McMillan and McMillan [2000] FamCA 1046; (2000) FLC 93-048 where the Full Court extensively reviewed existing authorities in the Family Court and in many other courts. The following statement of Frederico J in Thevenaz v Thevenaz (1986) FLC 91-748 at 75,447 was expressly adopted by the court:
  1. Thus “a practitioner who wishes to cease acting for one party and to continue to act for the other party will be restrained from doing so by the court if there is any evidence that confidential communications have been made to him by the party for whom he is ceasing to act. In such a case the court will not weigh conflicting evidence as to confidence. It will act upon the evidence of the client who swears that he has made the confidential communication”. (Reference omitted).
2. [23] The following passage from Thevenaz was also expressly adopted by the Full Court in McMillan:
  1. It is my view that in this case [the lawyer] should not continue to act on behalf of [the wife]. It may well be that the risks were he to do so are more theoretical than practical. However, it is asserted and not contradicted that material in the files does relate to confidences exchanged in the course of the former firm previously acting on behalf of both parties and would embarrass the husband. It is of the utmost importance that justice should not only be done but should appear to be done. In the circumstances of the present case, there is a risk which may well be merely theoretical but still exists, that justice might not appear to be done.
Thirdly, at [28] and [29], the Court set out the detailed comments of Coleman J in Billington & Billington at [43], and from the leading decision of the House of Lords in Prince Jefri Bolkiah v KPMG (a firm):^[3]
1. [28] … In Billington & Billington (No 2) [2008] FamCA 409 Coleman J said at [43]:
  1. As the authorities make clear, the jurisdiction to grant relief of this kind “is to be exercised with caution.” The court understands caution to be exercisable in relation to the totality of the evidence, and the matters relevant to the exercise of the jurisdiction, and not to be referrable only to the interests of the party seeking the relief. Relevant in that context is the need to give appropriate weight to the public interest in a litigant not being deprived of the lawyer of his or her choice without due cause. Also relevant in this context is the cost and inconvenience of requiring the wife to retain new lawyers. Quite apart from the work required to be undertaken by solicitors familiar with the case to adequately represent the wife’s interests before the Full Court, realistically, were new solicitors now to be instructed, a far greater level of reading and preparation would be required, and at greatly increased expense to the wife.
2. [29] These are serious and weighty considerations which must, of course, be balanced against the competing interests of the client which were described by Lord Millett in Prince Jefri Bolkiah v KPMG (A Firm) [1998] UKHL 52; [1999] 2 AC 222 at 236 as follows:
  1. …It is of overriding importance for the proper administration of justice that a client should be able to have complete confidence that what he tells his lawyer will remain secret. This is a matter of perception as well as substance. It is of the highest importance to the administration of justice that a solicitor or other person in possession of confidential and privileged information should not act in any way that might appear to put that information at risk of coming into the hands of someone with an adverse interest.
Finally, at [32] and [33], the Full Court said, again by reference to the House of Lords decision in Prince Jefri (emphasis added):
1. [32] The next step involves a consideration of the risk that the relevant confidential information will be disclosed. The risk of disclosure “must be a real one, and not merely fanciful or theoretical. But it need not be substantial”: Prince Jefri at 237.
2. [33] How is this to be determined? It is by the consideration of the risk and of any protective measures taken or proposed by the solicitor or his or her new firm. The evidentiary burden on this issue falls squarely on the lawyer or the firm to which he or she has moved. As Lord Millett said in Prince Jefri at 237-238:
  1. Once the former client has established that the defendant firm is in possession of information which was imparted in confidence and that the firm is proposing to act for another party with an interest adverse to his in a matter to which the information is or may be relevant, the evidential burden shifts to the defendant firm to show that even so there is no risk that the information will come into the possession of those now acting for the other party. There is no rule of law that Chinese walls or other arrangements of a similar kind are insufficient to eliminate the risk. But the starting point must be that, unless special measures are taken, information moves within a firm. In MacDonald Estate v. Martin, 77 D.L.R. (4th) 249, 269 Sopinka J. said that the court should restrain the firm from acting for the second client “unless satisfied on the basis of clear and convincing evidence that all reasonable measures have been taken to ensure that no disclosure will occur.” With the substitution of the word “effective” for the words “all reasonable” I would respectfully adopt that formulation.
Finally, at [41], the Full Court said (emphasis added):
1. It follows from the above discussion that the law requires that an applicant seeking to restrain a solicitor from acting must adduce evidence that establishes the confidential information and the risk of the misuse of that information in the circumstances. The weight and persuasiveness of any evidence adduced depends, of course, on the precision of the evidence called, the nature of the confidential information and the nature of the risk of disclosure.
In the light of this outline of principle, I note two matters in particular in relation to the facts in the current proceeding. The so-called “facts” are taken from the affidavit of the Respondent Husband, filed 27^th July 2016, and of the Wife’s solicitor, Ms M, filed 26^th August 2016.
At par.13 of the Husband’s affidavit, he deposed to the Wife’s [current] solicitors acting for the parties (obviously when they were together) in relation to a conveyancing matter and a further contested lease matter in 2015. In par.13(c), the Husband stated:
1. Especially as Farrell Lusher was acting for Ms Thornton and I in relation to property matters whilst they were acting for Ms Thornton in relation to this matter, I am concerned that confidential information that I have provided to Farrell Lusher as my solicitors in the past may be used to unduly prejudice me in this matter.
It is clear from Osferatu that there must be evidence (as opposed to general assertion) from the client who contends that he has made confidential disclosures or provided such information to the solicitors who are now sought to be restrained from acting.
Unfortunately, there are no “specifics” or details generally about what kind of “confidential information” the Husband actually passed to Farrell Lusher. In my view, absent some basic information that would enable the Court to determine if the alleged risk of prejudice is a “real and not a fanciful one”, the Husband’s claim, on his own evidence, cannot be made out. But that is not the end of it.
On the Husband’s own account to which I have referred, he confirmed that whilst engaged in the current property contest with the Wife, he and the Wife [together] engaged Farrell Lusher to act for them in relation to the conveyance and lease matters. That being so, and notwithstanding that it is not argued or addressed by either party, in my view, the Husband has waived or at least acquiesced in Farrell Lusher acting for the Wife. On his evidence, he raised no objection about that firm acting for both parties in the disputes noted. And this was at a time when the current property dispute between the parties was manifest. In those circumstances, the Husband cannot now complain about Farrell Lusher continuing to act for the Wife.
In addition to the above, I note also the following from the Affidavit of Ms M. First, she confirmed (and it was not disputed at the hearing) that she was not involved in either the conveyancing or lease matters involving the parties.
Secondly, she confirmed that she had inspected the files relevant to the matters involving the parties. The implication here was that there was nothing untoward, from her perspective, which could give rise to a possible breach of any confidential information adverse to the Husband.
Thirdly, she confirmed that on 10^th August 2016, she wrote to the Husband’s solicitors inviting them to inspect the files in question, obviously with a view to satisfying themselves if there was anything untoward or of a confidential nature in them. Thus far, she deposed, there was (or has been) no request by the Husband’s solicitors to take up the offer or invitation to inspect the said files.
Further, Ms M has deposed that there is nothing in the files of her firm that discloses any confidential information by the Husband. This sworn evidence has not been challenged. And again, I note that no details of what the alleged confidential information have been provided.
In the light of the authorities to which I have referred, in my view, (a) the Husband has not provided any evidence to establish that there is a risk of prejudice from the possession of confidential information and that such risk is “a real one and not merely fanciful or theoretical”; and or (b) the Husband’s conduct in not objecting to Farrell Lusher acting for both parties during the conveyancing and lease matters is indicative of a person having no relevant concern that would warrant the Court to prevent that firm from continuing to act for the Wife. Further, simply by way of observation, it is difficult to conceive what possible confidential information in the course of conveyancing and lease matters could have been passed to Farrell Lusher such as to warrant the Court granting the restraining Order sought by the Husband.
In addition to what I have said, to the degree necessary, I also accept the Wife’s submissions.
In the light of the above discussion, the Application to restrain the Wife’s solicitors from acting for her must be dismissed with costs, either as agreed or taxed.

C) Interim Litigation Costs Order

The principles that apply to an Application of this kind (known as a “Barro Order”) are set out extensively in Full Court decisions such as Zschokke, Strahan (Interim Property Orders) and Kyriakos.^[4] For current purposes, it is sufficient to note the following summary of principle taken from the head-note in relation to the dissertation-like discussion in the joint judgment of Boland and O’Ryan JJ in Strahan.
At [84], their Honours said (Thackray J agreeing at [229] – [232]):
1. It is important, when contemplating an order for interim provision for litigation expenses, to identify the relevant source of power because it is the source of power that determines the necessary preconditions and relevant considerations for making the order.
Then at [84] – [86], the plurality said:
1. More than one order may be made in the course of s 79 proceedings to fund the litigation expenses of a party, and it is not essential that a second order necessarily be made under the same head of power. In other words, for example, a first order may be made under s 117 of the Family Law Act 1975 (Cth) (the Act) and a subsequent order may be made by way of an interim property order under s 80(1)(h) provided the power is identified, and the principles applicable to the exercise of that power are observed.
At [113], their Honours said:
1. There is only one exercise of the power under s 79 of the Act. However this power may be exercised by a succession of orders until the power is exhausted, and the power is exhausted when there remains no property with respect to which orders by way of alteration of property could be or have been made. Further, an earlier order whether made under ss 79(6) or 80(1)(h) is capable of alteration at any time prior to, or as part of, the final exercise of the s 79 power.
Further, at [118] and [132], Boland and O’Ryan JJ said (emphasis added):
1. [The Wife’s] submission that there are two stages to the hearing of an application for an interim property settlement order where the power is to be exercised pursuant to s 80(1)(h) of the Act is to be accepted. This is recognised by the fact that although the power under s 79 should ordinarily be exercised on a once only basis, circumstances may arise before there can be a final hearing where the power is exercised. Thus the first step is to resolve whether to exercise the power before a final hearing and if it is resolved to do so then the second step involves the exercise of that power.
2. In relation to the first stage, when considering whether to exercise the power under ss 79 and 80(1)(h) of the Act to make an interim property order the overarching consideration is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.
Finally, in relation to the Court’s exercise of power under s.79, at [135] – [137], the Court said:
1. Turning to the substantive step, as the jurisdiction under s 79 of the Act is being exercised the provisions of that section must be considered and applied but with limitations given that it is not the final hearing. There is also no requirement of compelling circumstances in relation to the substantive step. The discretion conferred by the power in s 79 is to make such order as the court considers appropriate [after consideration of the matters in s 79(4)]provided it is just and equitable to make the order in circumstances where the power will not be exhausted by the interim order.
The Wife’s Application for a litigation funding orders is stated to be sought pursuant to s.117(2). The Husband simply asserts that both parties should receive $80,000 in relation to legal fees with the categorisation of those funds at a later point in the litigation. He relied upon, without discussion, the decision in Zschokke.
In relation to the s.117(2) Application, the Wife relied (summarily stated) on the fact that (a) she earns approximately $330 per week, (b) her expenses amount to approximately $670 per week (a shortfall of some $340 per week).^[5]Otherwise, she says that she is unable to support herself. The Wife is aged 61 years; the Husband is aged 44. These facts of course are also relevant to the spousal maintenance Application.
A relevant consideration, in my view, regarding the current Application for such funds relates, to some degree at least, to the ongoing contest about the disclosure, or the alleged lack of it by the Husband.
Having regard to the principles in the cases to which I have referred, and the summary of facts outlined in more detail in the Wife’s material, in my view, an Order should be made for the release of funds pertaining to the cost of the litigation. At this stage, in my view that sum should be fixed at $25,000. The Wife should have leave to approach the Court for further funds as required, particularly if the issue of disclosure (or the lack of it) remains in contest, not least in relation to the lack of detail concerning the Husband’s recent (country omitted) vacation.
Again, otherwise, I should be taken to accept the written submissions of the Wife.

D) Spousal Maintenance

In relation to the Wife’s spousal maintenance Application, in addition to the brief factual outline, I note the following, especially in the light of the Full Court’s detailed discussion in Strahan (Interim Property Orders) to which I have already referred.
First, by way of observation only, the Husband’s material and submissions leave a number of evidentiary and jurisprudential gaps. For example, as noted by the Wife, it is unclear how the Husband paid for his (country omitted) holiday. Further, a simple assertion that the Husband would be entitled to an amount at any final hearing greater than $80,000 is not, of itself and without more evidence and or articulation of legal principle, sufficient to establish that the Court should advance funds to him from those held in the trust account.
That said, in his submissions, the Husband seems to contend (on the basis of the heading under which the submission is made) that the release of funds to him would be for the payment of legal fees. This should have been more directly set out if this be the actual basis for the claim.
Secondly, the power and matters to be considered for an order for spousal maintenance in relation to de facto couples is set out in s.90SE. It replicates, in large measure, the considerations found in s.74.
In my view, to speak generally, the Wife has established the thresh-hold requirement that she is unable to support herself adequately. What constitutes “adequately” is set out in many cases, including Brown & Brown.^[6]
However, there is a significant difficulty that stands in the way of the Wife’s Application for spousal maintenance, which was noted in the Husband’s submissions but not addressed in the Wife’s submissions.
Section 90SD requires that the Court may make an Order under s.90SE (or s.90SG) in relation to a de facto relationship “only if the Court is satisfied” that “either or both of the parties to the de facto relationship were ordinarily resident in a participating jurisdiction when the application for the Order was made” or (s.90SD(1A)) “that the parties to the de facto relationship were ordinarily resident in a participating jurisdiction when the relationship broke down.” “Participating jurisdiction” is defined in s.90RA(1).
Fortunately, and very properly, in his supplementary submissions, filed in Court on 30^th August 2016, the Husband’s solicitor’s agent, conceded that the alternative jurisdictional ground in s.90SD(1A) applied.
A difficulty for the Court (and the parties) at the moment is the conflicting evidence of the Husband and his lack of disclosure. This is also to say that even though the Wife has established prima facie her entitlement to an Order for maintenance, the Court cannot, at this stage, be confident about the capacity of the Husband to pay – acknowledging and accepting at their highest the Wife’s written submissions in this respect. Those submissions highlight that the Husband has $81000 (or thereabouts) in a bank account, and that he has a weekly income of approximately $2757, with outgoings of only about $300 per week.

E) Husband’s Application for Interim Property Distribution

The Husband seeks a distribution to each party of $80,000. He seeks this course on the basis, among others, that at a final hearing he would more likely than not receive a sum significantly greater than $80,000.
In circumstances, which do not seem to be overly disputed, where the Wife brought into the relationship essentially all assets of significant worth and the Husband contributed a utility van and funds of approximately $6000, it is difficult not to agree with the Wife’s submissions to the effect that, at a final hearing, there is no guarantee that the Husband would receive the sum now sought on an interim basis.
The Husband’s evidence is that he recently took a holiday to (country omitted) (the specific funds for which area not disclosed) and according to his Financial Statement (dated 27^th July 2016) and affidavit he earns anywhere between $1200 – $2581 per week (subject to variables regarding his employment: see pars. 4 and 5 of his affidavit filed 22^nd August 2016). These matters do not suggest any relevant financial hardship. He seems to seek an interim property distribution from funds held on trust on the grounds of financial hardship.
On the Wife’s evidence, she contributed significantly at the commencement of the relationship and is currently experiencing financial hardship, working in a part-time position and cannot financially make ends meet. The Husband contends that these have been the Wife’s circumstances for the last three years and as such there is no need or basis to make a spousal maintenance Order now.
Accepting the difficulty in making any finding on an interim basis, nonetheless it seems to me that it may be inferred that the acknowledgement that the Wife has been supporting herself for the last three years out of a very modest income such reserves as she has had (excepting the funds held in trust) will have been depleted. In such circumstances the Court is reasonably satisfied that the Wife has demonstrated financial hardship. However, where (on the Husband’s evidence) he has (a) significant weekly income (subject to some variation), (b) taken a holiday to (country omitted), (c) failed to provide full disclosure to the Wife, and (d) [allegedly] recently purchased a (omitted) aircraft (valued at between $100,000 and $200,000), the Court is not satisfied that an interim property distribution to the Husband in the sum sought of $80,000, is appropriate and should be made. The Court, however, accedes to the provision of the sum of $15,000 to the Husband from the funds held in trust.

Conclusion

In my view, the appropriate course is to make the following interim Orders (in addition to the Order refusing the Husband’s disqualification Application and a costs Order in the Wife’s favour in relation to it):

(b) Release the sum of $15,000 to the Husband from those held in trust. The categorisation of those funds is to be determined later;

(c) On an interim basis, refuse the Wife’s Application for spousal maintenance but grant leave to the Wife to renew her Application for spousal maintenance on 21 days’ notice;

(d) The Husband is to provide full and frank disclosure, as prescribed by the Rules of this Court, within 28 days. Failure to so provide it will entitle the Wife to bring the matter back to Court to deal with this issue;

(e) Subject to notification from both parties that there has been proper disclosure, the parties are to attend private mediation on a date and time to be determined by them;

(f) Otherwise, the matter will come back before the Court for further mention or direction on 14th December 2016 in the telephone list commencing at 12 noon, with both parties able to attend by telephone.

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Barro (interim litigation costs) order