By Craig Nicol and Keleigh Robinson
Property – Litigation funding orders are to be founded in evidence that establishes the reasonableness of the sum sought – Such applications should not be routinely filed as they are only for the benefit of financially precarious litigants, not lawyers
In Mihova [2026] FedCFamC1A 79 (7 May 2026) the Full Court (Aldridge, Austin & Christie JJ) heard a husband’s appeal from orders of Schonell J.
The orders required the husband to pay $2.1 million to the wife’s solicitors for her legal fees and dismissed his application for a release of funds to pay his living expenses and legal fees. The husband argued that the $2.1 million amount for the wife’s legal fees was erroneously excessive, notwithstanding that he also sought the same amount be released to pay his legal fees ([11]).
The Full Court said (from [14]):
“Litigation funding orders need to be founded in evidence which establishes the reasonableness of the sum sought, even if that does not require the production of itemised accounts … (Salvage & Fosse [2020] FamCAFC 144 … ). … [I]t necessarily involves an imprecise and somewhat general quantification of the amount to be paid. … [I]t should be emphasised that applications for litigation funding orders should not be routinely filed as they are only for the benefit of litigants in precarious financial positions, not for the benefit of lawyers…
[15] … [B]ecause the husband had challenged the amount sought by the wife as being unreasonable, it was necessary for his Honour to address the issue. He did not. …
( … )
[19] It must be remembered that although the orders are expressed as costs orders, any inequality in the amount can be taken into account at the hearing under s 79(5) of the Act.
[20] The husband submitted that the orders proposed by the wife would see her getting more for litigation funding than he was and that this was contrary to the point of such funding which is to ‘level the playing field. Levelling the field is not the same as equality of payments. …”
The appeal was allowed and orders made permitting the husband to make payment to his solicitors, provided that the amount paid for legal fees did not exceed $2,281,448.40. An order was made for the husband to pay $1,952,378 to the wife for her legal costs in the proceedings.
