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Property – litigation funding order against third party – irreversibility not fatal to application

In Lao & Zeng [2021] FedCFamC1A 17 (23 September 2021), the Full Court (Ainslie-Wallace, Ryan & Austin JJ) considered a litigation funding order that required the wife’s mother to pay $350,000 towards the husband’s legal fees.

The wife’s legal fees were funded by her mother, the husband seeking that the mother also pay his fees.

As to the reversibility of the litigation funding order, Ryan J, with whom Ainslie-Wallace J agreed, said (from [48]):

“(…) Reversibility and the ability to take the payment into account in the final hearing are considerations of fluctuating relevance having regard to the source of power under which the payment is sought. …

[49] It is … significant that in Zschokke [1996] FamCA 79 … the Full Court said that there must be a question about whether it is possible to make a litigation funding order under s117(2), even though the order could not be taken into account in a final hearing – for example, in parenting proceedings or where no right of action exists under s79. If their Honours considered that reversibility and the ability to take the amount into account in a final property hearing was an essential element to the exercise of power under s117(2), it follows that in the examples given such an order could not be made. …

[50] … [T]here will be cases where even though the amount paid may not be able to be … taken into account in the final hearing, the interests of justice may nevertheless justify an order under s117(2) for interim funding or security for costs. (…)”

The majority dismissed the appeal with costs.

Craig Nicol and Keleigh Robinson are co-editors of The Family Law Book. Both are accredited specialists in family law (Queensland and Victoria, respectively). The Family Law Book is a one-volume loose-leaf and online family law service (thefamilylawbook.com.au).

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