Wednesday, 23 February 2011

Over $350,000 for lawyers, but on the verge of bankruptcy?

In a recent Family Court case, the husband said that he had no money to pay towards the wife's legal fees, that a "bankruptcy position looms", and did not control several companies, but for some reason those companies had paid over $350,000 to his lawyers towards his legal fees.

The wife, in the case of Iphostrou and Iphostrou, owed almost $200,000 to her lawyers, and asked for $500,000 from the husband for her future costs, to help with her anticipated total legal bill of almost $900,000. The wife did not end up getting her $500,000 but got the next best thing: guaranteed payments and restrictions on the husband's spending on his own costs.

Justice Cronin, in considering the wife's position, noted:

One significant dispute between the parties related to whether the various corporate entities owed the husband money. The wife pointed to a document obtained from the computers of the entities showing that he was owed millions of dollars. The same document but formally completed and lodged for corporation purposes, not only showed that he did not have such an asset but that he owed the corporate entities money. No explanation was given as to why that might be so and no doubt it will be the subject of intense scrutiny and ultimate cross-examination.

Ultimately his Honour said that there needed to be a "level playing field" and ordered that every time money was paid to the husband's solicitors , the same amount had to be paid to the wife's solicitors, in a dramatic version of what is known as a dollar for dollar order.

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