Court ordered one party to pay money to the other to enable the other to fund Family Court Proceedings

19/08/2015

Not every person has the same capacity to fund legal proceedings for property division in cases which are usually commenced in the Family Court or the Federal Circuit Court of Australia.  This can cause problems when one party to a marriage or a relationship is in a weaker financial position than the other party.  This may arise by reason of one party having more assets or control of joint assets or by reason of their superior earning capacity.  In circumstances where separation occurs and the need for a property division arises, it is often the case that one party is unable to afford the costs of legal representation. 

The Family Law Act and the Courts have dealt with this problem. There is a procedure available to the party to Family Law disputes to make application to the Court for funding usually by way of an interim partial property settlement.  Watson & Watson have acted for one or other party on numerous occasions when the need arises. 

The Courts generally try to divide matrimonial property or relationship property on a final basis however the Courts have recognised the necessity for litigants to be able to fund a claim where one of the parties controls the assets and funds available to the parties to the marriage or relationship and the person with the control of the assets can fund the costs of the other party, who has inadequate access to the funds of the parties to fund his or her case.   Once the order is made each party to the dispute can adequately litigate his or her claim with legal representation as well as being able to meet other costs for example of valuers and accountants.   

If one party is struggling to meet their legal costs or for instance, the costs of forensic accounting, an application can be made for the other party who has sufficient funds to pay money to the party with inadequate funds.  The Court has the power to make Orders for one party to fund the other party’s costs.

The Courts power to make such Orders relating to:

1. The maintenance power.
2. Injunctive power.
3. Costs power.
4. General power to make interim Orders.

The Court can, if it has proper evidence before it, make an Order for interim partial property settlement. 

There are a number of factors which the Court will look at in determining whether or not such an interim Order should be made.  Those factors include:

• Disparity of financial position.
• Capacity or incapacity of one or the other party to fund their legal expenses.
• The availability of a fund of money or assets that can be used for payments and funding.

The Court will need to ensure (based on the evidence) that a claim is genuine and that in granting the Order, the effect of the Order does not interfere or prohibit a trial Judge making an effective final Order before making a funding order at the commencement of the case.

Please do not hesitate to contact Richard Watson or Dennis Grant who are experienced with these applications and are happy to discuss your concerns if you are faced with the situation of having “insufficient funds” and a partner with more than adequate funds to support legal intervention to resolve the matter.