Rigby & Kingston 2020 FamCA 958

The case of Rigby and Kingston [2020] FamCA 958 is an interesting case for many reasons.

There are an array of third party respondents.

In this particular application, the husband had sought litigation funding be further extended.  The wife had already paid at least $412,000 towards the husband’s legal costs since the commencement of the proceedings.

The court determined that it was not just to make a further litigation funding order in a context where, if the wife was successful in the substantive proceedings, the sums already paid by her to the husband would be unable to be taken into account or repaid.

The case also dealt with a spouse maintenance application.  The husband sought interim spouse maintenance and the order was made to provide the husband with “a reasonable time” within which to find new employment.

The case is also interesting because of the case management that has been applied to it.

The context is this:

“…after a long marriage which produced two children, the husband retains very few assets and is currently an unemployed finance professional living in a share house while the wife estimates her wealth to be in the vicinity of $7,000,000, including superannuation, and her average weekly income is $3,749. The husband and wife separated in 2015.”

The factual context further includes that the wife’s wealth was largely derived from her father, the parties kept their finances entirely separate, the wife assumed a greater responsibility for joint expenses with some minimal intermingling of financial arrangements, the parties maintained ledgers of their respective expenditure and although he had greater availability, the husband’s contribution as homemaker and parent did not exceed that of the wife.

In the substantive proceedings, the wife argues it is not just and equitable to make any property order.

Paragraph 14 of this case provides:

“A major source of dispute in this matter relates to the nature of the wife’s interests in the Kingston Group. The wife concedes that she has a right to due consideration as an eligible beneficiary of certain trusts within the Kingston Group and a right to due administration, but argues that as she does not control the Kingston Group, her interests represent, on a practical level, at best, a financial resource. The husband argues that the wife’s interests represent ownership of one third of the value of the Kingston Group. As such, he seeks, among other things, to bring forward the vesting date of various trusts within the Kingston Group, including the Kingston Testamentary Trust and a distribution to the wife of one third of the value thereof.”

The husband had commenced the third party litigation as early as 2016 and in May 2020, Her Honour removed 21 of the 30 respondents the husband had joined on the basis “that the husband had joined them for an improper purpose”.  The obligations of those remaining nine respondents have been stayed until the husband properly particularises his claim against them.

In July 2017, an interim spouse maintenance application by the husband was dismissed as he had failed to establish he was unable to support himself adequately.

The relevance of this case for practitioners is that Her Honour then works through the relevant principles applicable to litigation funding and adds to findings she has already made.

Order 3 of the husband’s application was drafted in these terms:

“That the characterisation of the payment in paragraphs 1 and 2 of these interim orders be adjourned to be determined by the trial judge in these proceedings or in the alternative that the said payments (or part of such payments as determined by this Honourable Court) is determined to be litigation funding.”

Her Honour began by pointing to the fact that when considering “an application for litigation funding, it is necessary to identify the source of power relied upon to make such order” (Kryiakos & Kryiakos (2013) FLC 93-528 at 86,937).  The court then went on to consider the discretion to make such order as to costs as the court considers just.

The husband commenced his proceedings in 2017.  He has frequently complained that the wife has failed to comply with her disclosure obligations.  He has failed to establish that the wife has been derelict in her disclosure obligations.  He does not appear to have taken any formal steps since 2017 to obtain them despite the wife having paid over $400,000 towards his legal costs to date.  The husband came to the court on this application in breach of an order made on 13 December to properly particularise his claim against the other respondents.

In Rakete & Rakete (2012) 48 Fam LR 325, the trial judge, Kent J, when considering an application for litigation funding based on the costs power said:

“The question of justifying circumstances necessarily involves consideration of the potential outcomes of the claims advanced, and comparison of the competing considerations so far as the effect of that upon the parties.”

The court said at paragraph 34:

“In the current case, the husband’s approach to the substantive proceedings seems to assume that just because he and the wife were married for a long time he is entitled to receive a property settlement.”

Because of the way this particular case has been case managed, Her Honour was then able to set out 10 findings that have already been made.

At paragraph:

“These findings are likely to make the husband’s claim in the substantive property proceedings against the wife more difficult.”

The wife’s solicitor’s estimate provided as to the wife’s costs if the matter proceeds to a conclusion would be between $758,000 to $820,000. The wife has already paid legal costs of $951,175 (including the husband’s legal costs).  There is no suggestion before the court that this funding will bring the matter to a conclusion. The husband’s estimate of his costs to attend a mediation is over $32,000.  Her Honour decided to conclude:

“…it would not be just to make an order for further litigation funding pursuant to s 177 of the Act.”

The husband also sought to have legal costs incurred by him for the case assessment hearing held on 9 September to form part of the dollar for dollar litigation funding order made on 14 January 2020.

The application to have $9,850 for the appearance on 9 September purportedly in reliance of an order made on 14 January 2020 was also dismissed.

The court considered litigation funding under section 79, the interim property power.

Her Honour said:

“…there remains a real possibility that no s 79 order will be made. As already noted, the prospect of recovery of sums paid by the wife will be non-existent if the husband’s substantive claim fails or substantially fails.”

The court determined that his application pursuant to s 79 must also fail. The court then considered s 74, the maintenance power.

Her Honour considered herself bound by the Full Court in Wilson & Wilson (1989) FLC 92-033 at 77,448 which rejected that s 74 could be a source of power for such an order.

The court then turned to the spouse maintenance application.

The court accepted that the husband bore the onus of establishing that he is unable to support himself adequately for an adequate reason.

“The husband provides no explanation as to why he has not applied for any of the literally hundreds of jobs the wife particularises in her material for which it would appear he would be eminently qualified.”

The court ordered the wife to pay spouse maintenance until the middle of April 2021.

The court then looked at its case management.

Her Honour then determined:

“I have come to the conclusion that the most appropriate next step involves a determination of the following issues:”

She set out four issues.

This is an interesting case because of the style of case management  that has been adopted; where the court appears to have tried to narrow the issues sufficiently to enable the parties to settle the matter.

The most important sentence, from a practical perspective for family lawyers on a day-to-day basis is:

“the husband’s approach to the substantive proceedings seems to assume that just because he and the wife were married for a long time he is entitled to receive a property settlement”.

Practitioners have to look beyond the duration of the relationship.