Funds sought to maintain legal representation

Newson & Gaffy

SUMMARY – Husband’s application that the Wife provide him with a “fighting fund” to pay his legal fees in pursuing his case against her refused where the Court is not satisfied he has any right or interest in the funds held by the Wife from which such “fighting fund” would be provided nor has he any resources to pay them back.

CONCLUSION IN RELATION TO THE APPLICATION FOR INTERIM RELIEF

41. The difficulty with the orders sought by the husband is that he is seeking that the Court make an order on an interim basis that the husband has an interest in the property by virtue of the operation of s.79 of the Act. That involves a determination of whether the husband has an entitlement to any of the monies which are held in the fund. Clearly, it is not axiomatic that because the parties were married there will be an adjustment of property interests.^[3]
42. If an order was made that the wife pay an amount of by way of a partial settlement of the husband ’s property claim The Senior Master would then be required to determine whether to make an order in the pursuant to an application under r.15.9 of the Supreme Court Rules (VIC). Given that the husband has no apparent capacity to repay those monies back in the event that the Court was to find at a final hearing that he had no entitlement to an adjustment in his favour from those funds the Senior Master would no doubt be concerned that the fund may be depleted. The question of whether the monies are paid out of the fund in favour of the husband whether or not by order of this Court, or the Family Court, are a matter within the discretion of the Senior Master. The difficulty of enforcing orders made by the Court in Holmes & Holmes was noted in that decision.^[4]
43. At final hearing I will have to consider the matters set out under s.79(4) and s.75(2) of the Act. No doubt the argument will be put on behalf of the wife that the husband has made little or no contribution to the monies held in Supreme Court fund. I will have to consider the proper characterisation of the monies held in the fund and the purpose of the award of damages made in favour of the wife. I appreciate that the reference in s.79 is not limited to “matrimonial property” and the fact that the husband has made little contribution to the fund does not mean that it should not be considered as property of the parties of the marriage in this application. While not directly analogous, I note that lottery winnings after separation and divorce and inheritances have also been considered as property to parties of the marriage.^[5]
44. At present, the husband has no right to the monies in the fund and whether or not any final order is made in his favour is a matter that will be determined at final hearing. In order for me to make an order for an interim property settlement I would be required to find that the husband has an entitlement to part of the fund. I have regard to Harris & Harris^[6] in relation to the matters to be considered in exercising the power to make an interim order. In summary those matters are:
    (i) the exercise of the power should be confined to where the circumstances are compelling and generally the parties are better served by there being on final hearing;

(ii) it is an exercise of the s.79 power and therefore must be exercised within those parameters having regard to the material available at the time; and (iii) it is likely to be an imprecise exercise and must be exercised conservatively. The Court must be satisfied that there will be adequate property remaining after the order is made to meet the legitimate expectations of both parties or that the order made is capable of being reversed or adjusted if it subsequently considered necessary to do so.

45. In this case there is a real concern that the interim orders sought may affect the wife’s legitimate expectations to have the benefit of the fund for the rest of her life to maintain her, due to her disability. There is also a concern that the order could not be reversed or adjusted.
46. Likewise, in respect of the claim for spousal maintenance, at present the evidence does not support a finding that the wife has any capacity to pay spousal maintenance, whether in the sum sought or otherwise, without recourse to the funds held in the Supreme Court. An order that the wife pay spousal maintenance would necessitate an application to the Supreme Court. Similar issues would arise as to whether it was appropriate for that Court to approve the payments pending any final determination by this Court in relation to the husband’s entitlement to money held in the fund.
47. I decline to make an interim order for the payment of a sum in respect of costs pursuant to s. 117(2) of the Act for the same reasons.
48. In relation to the quantum of costs sought by the husband, although the quantum of the sum sought was not challenged by the wife or the Intervener, I would require a detailed breakdown of the costs claimed if I was to make an order in respect of them. The claimed costs of initiating proceedings; preparing a reasonably brief affidavit; and appearing at a first return of the matter (with Counsel briefed) was $22,709.78.^[7]This appears to be about three times the applicable scale fee.
49. This matter is listed for final hearing on 16 March 2016 and in those circumstances it is inappropriate for the Court to make interim orders of the kind sought for the reasons outlined above.
50. The determination of what, if any, orders may be made that may be made in favour of the husband, taking into account the matters under (in particular) s.75(2)(d) and ss.79(2) and (4) of the Act await final hearing.