PALLAS & PALLAS

[2014] FamCA 83

FAMILY COURT OF AUSTRALIA

PALLAS & PALLAS [2014] FamCA 83

FAMILY LAW -  INTERIM PROCEEDINGS – Interim property settlement – Where two categories of payments are sought – Where the parties agree that a small interim distribution should be made to each of the parties – Where there is controversy in relation to two debts said to have been sourced in improvements or renovations to a property – Where the wife challenges whether the debts are payable – Where the wife has not received documentation supporting the debts owing – Where the court has the power to make an interim order, interim orders should not be  orders that cannot be undone at the final settlement – Where the Trial Judge refuses to make an order for payment of the debts – Where the Trial Judge orders each of the parties be paid $5,000 by way of interim property settlement.

Family Law Act 1975 (Cth) ss 79 & 117

Harris v Harris (1993) FLC 92 – 378
Strahan & Strahan (Interim Property Orders) [2009] FamCAFC 166

APPLICANT: Mr Pallas

RESPONDENT: Ms Pallas

FILE NUMBER: SYC 1157 of 2013

DATE DELIVERED: 10 February 2014

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Loughnan J

HEARING DATE: 10 February 2014

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Paltos Briggs Family Lawyers

COUNSEL FOR THE RESPONDENT: Ms Bridger

SOLICITOR FOR THE RESPONDENT: Jo-Anna F S Moy

Orders

1. Paltos Briggs Family Lawyers are authorised as the trustee of the Controlled Monies Account (CMA) to pay forthwith to the husband and the wife, or as they shall each direct, and by way of interim property the sum of $5,000 each from the monies held in the CMA.

1. Leave is granted to the parties to restore the proceedings to the list on giving 48 hours’ notice to the court and to each other.

1. The costs of the parties of and incidental to the proceedings today are reserved.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Pallas & Pallas has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

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FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 1157 of 2013

Mr Pallas

Applicant

And

Ms Pallas

Respondent

REASONS FOR JUDGMENT

1. These are proceedings for an interim distribution from funds held in a controlled moneys account to await the outcome of property settlement proceedings.  Two categories of payments are sought.  There is an agreement about a small distribution to each of the parties.  There is a controversy in relation to the discharge of two debts said to have arisen because of improvements or renovations to a property.

2. The husband says that $22,000 odd is owing to Business B, and $17,000 odd to Business C.  As to one and perhaps both debts, the wife challenges whether the debts are payable.  I gather that she also has a more general argument that the husband might have had access to funds previously from which those payments could and perhaps should, have been made.

3. In the short term, she says she has only seen an invoice in relation to the debts, and has not seen any of the source documents including properly executed variations to contracts and the documents behind the invoice going to payments for subcontractors and payments for supplies and so on.  I am told there is a letter dated 6 February which attaches a bundle of documents, some of which might address some of the wife’s concerns in relation to those things.  There seems to be a concession that the bundle of documents has yet to reach the wife. 

4. The law in relation to this is almost “why not”, provided the court is not asked to make an order that cannot be undone on the final settlement.  There is a decision of Strahan & Strahan (Interim Property Orders) [2009] FamCAFC 166 “Strahan”, whereby the court swept aside much of the law in relation to interim distributions. It is an application of statutory power; usually either section 79 or 117. If the claim is under s 79 the approach of identifying the pool, assessing contributions and dealing with the other elements of s 79(4), applies. It is asserted by counsel for the wife that her case might mean the husband does not receive a further $39,000. She will argue that the husband has already received half the pool, in circumstances where her claim is for more than half the pool. I cannot gainsay that proposition today. The principle of not doing something on an interim basis that cannot be undone on a final basis comes from a decision of Harris v Harris (1993) FLC 92 – 378 and a line of authorities left undisturbed after Strahan. 

5. There will be a simple answer to this problem, and it might be that it is just bloody-mindedness or a tactical approach by one of the parties, or, in some cases, there is a combination of stupidity from both parties, that causes the dispute.  If there is a genuine debt, and if any costs are incurred in meeting it, and if there is nothing in the claim of the wife that the husband has already had the wherewithal to meet these costs, then it is likely, as I have said on a number of occasions today, that the wife will be responsible for any additional costs caused by those suppliers or tradesmen or whatever chasing their claim.

6. I accept that that would not address all of the potential mischief.

7. Mr Paltos quite rightly points out that there will be some damage just in the fact of the husband being associated with incurring a debt for work and that debt not being satisfied.  I cannot fix everything.  I really rely on the advocates to make their cases and to support them.  Ms Bridger’s argument relates to the controversy described in a draft joint balance sheet which has been prepared for these proceedings.

8. I refuse to make the order today.  I give leave to the parties to restore the matter.  I should say that it might be when the bundle of documents is received by the wife and her advisors, she might decide that the safer course is to agree to the payments.

9. The other aspect is in the settlement of a property itself.  There might be some wriggle room in terms of who retains responsibility for what liabilities and who retains what assets.  In that way something more than the literal proportions of the settlement could be reflected in orders.  In that way it might not matter that his entitlement is no more than the amount that he has already received. 

I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 10 February 2014.

Associate:

Date:  19 February 2014