Hogan Orders

Under section 117 of the Family Law Act 1975, the general rule is that parties to family law matters must pay their own legal expenses. However, the court does have some scope to order that one party pays the other costs in certain circumstances. One way this can be done is through a Hogan Order.

There is enough to worry about when a relationship breaks down without having to work out how legal fees are to be paid. Unfortunately, some parties feel they are trapped in relationships and are hesitant to leave because they are concerned that they will not be able to afford the legal representation they need to obtain a fair settlement. They may fear their quality of life will be reduced, and they may also fear they may lose the power to determine how their children will live.

Fortunately, there is an avenue that parties in such positions can take to ensure they get the same access to quality of legal representation as their partner, should they want to proceed with a separation or divorce. The type of order that can be obtained is called a Hogan order. It is named after an order that was made in the case of Hogan [1986] FamCA 34. The purpose of such an order is to ensure there is no power imbalance between parties seeking to settle their affairs after separation or divorce.

A Hogan Order is essentially an order that funds be paid from one party, the one with the greater financial resources, into the other party’s solicitor’s trust account. The payment is essentially a partial advance on the property settlement. At property settlement, the amount advanced is taken out of the sum ordered for the recipient of the funds.

What is required for a Hogan Order to be made?

A Hogan Order is usually applied for as a last resort, and several conditions need to be met for an application to be successful:

• There must be one party that is financially dominant over the other. This must extend to the fact that the party applying for the Hogan Order cannot pay for their legal costs unless they obtain a Hogan Order;
• The financially dominant party must be able to pay their own legal fees;
• The party who is applying for the order must have a case against the respondent that’s prospects of success are reasonable;
• The application must be for an amount that is lesser than the amount a property settlement is likely to award to the applicant;
• The application will also need to include evidence about what legal costs have already been incurred. Evidence will also need to be provided to show that the legal representatives for the applicant are not willing to wait until a settlement has been finalised to be paid.

In some cases, where the respondent’s wealth is held in assets rather than cash, a court may order that certain assets be sold so that the ordered payment can be made.

What options are available other than a Hogan order?

Obtaining a Hogan Order can be a costly exercise, and there is no guarantee that one will be made, so it is worthwhile considering other options. Usually, as a first step, the best approach is to seek consent from the other party to have funds released from the asset pool for legal fees to be paid.

If consent is not received and an application is made for a Hogan Order which is successful, it is possible that a court may make an order that the respondent must pay the legal fees associated with the order being made. This would be in accordance with its discretion to award costs in certain circumstances. This scenario should be explained to the other party when seeking consent. The other party may be more willing to consent to such an order if they consider they may be ordered to pay costs for an application for a Hogan Order if they do not give their consent. It may be necessary to engage lawyers to assist with obtaining the consent of the other party.

What is an example of a Hogan Order that has been made?

In the case of Strahan v Strahan (Interim property orders) [2009]FamCAFC 166 a $5 million payment was ordered by way of a Hogan Order. The total asset pool was more than $80 million. The dispute between this couple lasted for over twelve years and was only finalised in 2017 when they were finally divorced. There were a total of 33 hearings and $35 million in legal fees spent between the couple.

If you require legal advice or representation in any legal matter, please contact Armstrong Legal.