Pappas & Pappas - [2021] FedCFamC1F 204

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Pappas & Pappas [2021] FedCFamC1F 204

File number(s): SYC 7631 of 2016

Judgment of: ALTOBELLI J

Date of judgment: 18 November 2021

Catchwords: FAMILY LAW – INTERIM PROPERTY – Where each party seeks payment of funds from controlled monies account by way of partial property settlement or interim costs – Issues of disclosure – Partial property order made in favour of the wife only.

Legislation: Family Law Act 1975 (Cth) ss 79, 80, 117

Cases cited:
Markoska v Markoska (Costs) (2011) 46 Fam LR 598; [2011] FamCA 833

Pappas & Pappas [2018] FamCA 297

Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466; [2009] FamCAFC 166

Division: Division 1 First Instance

Number of paragraphs: 21

Date of hearing: 20 August 2021

Place: Sydney (via videoconference)

Counsel for the Applicant: Mr Cummings SC

Solicitor for the Applicant: York Law Family Law Specialists

Solicitor Advocate for the Respondent: Ms Lama

Solicitor for the Respondent: Lama Family Lawyers
ORDERS

SYC 7631 of 2016

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:
MS PAPPAS

Applicant

AND:
MR PAPPAS

Respondent

ORDER MADE BY:

ALTOBELLI J

DATE OF ORDER:

18 NOVEMBER 2021

THE COURT ORDERS THAT:
1.The parties forthwith do all acts and things and sign all documents required to pay from the controlled monies account styled York Law Family Law Specialists CMA Mr Pappas and Ms Pappas BSB …, account number …44 the sum of $200,000 to the Applicant’s solicitors, York Law Family Law Specialists, by way of partial property settlement.
2.The matter is referred to the docket registrar for case management, pending allocation to a judicial docket.
THE COURT NOTES THAT:
A.This matter has been expedited for final hearing by orders made by the Honourable Alstergren CJ on 25 September 2020 but has not yet been allocated to a judicial docket.

Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Pappas & Pappas has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALTOBELLI J:
INTRODUCTION

These are reasons for judgment explain why the Court has made orders for interim distribution of funds held in trust.
BACKGROUND
The parties before the Court have been involved in litigation since 2016. On 8 May 2018 Stevenson J made a number of orders (some by consent) and published her reasons for judgment in Pappas & Pappas [2018] FamCA 297. Justice Stevenson described the parties as being “locked in litigation concerning financial issues” (at [1]). Little has changed since then. At [1]–[11], her Honour sets out matters of background which are adopted by these reasons for judgment.
In the present round of this litigation, Ms Pappas (“the wife”) by way of an Application in a Case filed 24 June 2021 seeks a further order for partial property settlement in the sum of $200,000, to be paid from monies held in trust for the parties. Mr Pappas (“the husband”) proposes that both parties be paid $75,000 by way of interim order.
A useful chronology is contained in the wife’s case outline document filed 19 August 2021. This chronology is reproduced in Schedule A to these reasons. There were no points of contention raised by the solicitor for the husband in this regard.
When this Application in a Case first came before the Court, consent orders were entered into by the parties on 16 August 2021. The parties agreed that the monies in their controlled monies trust account would be applied towards mortgage arrears and monthly mortgage payments, as well as payment of an outstanding strata levy. In the previous week, on 9 August 2021, the parties also agreed that a firm of accountants, K Accountants, be paid the amount of their outstanding fees from the controlled monies account.
EVIDENCE
In support of her application, the wife relied on the following documents:
(a)The documents contained in her court book, marked as exhibit A1; and
(b)Her case outline filed 19 August 2021, marked as exhibit A2.
In support of his application, the husband relied on the following documents:
(a)His Response to an Application in a Case filed 8 August 2021;
(b)His Affidavit filed 8 August 2021;
(c)His Financial Statement filed 16 August 2021;
(d)A tender bundle, marked as exhibit R1; and
(e)His case outline, marked as exhibit R2.
THE APPLICABLE LAW
Senior counsel for the wife relied on a number of paragraphs from the Full Court’s decision in Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 (“Strahan”) as well as principles relevant to costs orders summarised by Murphy J in Markoska v Markoska (Costs) (2011) 46 Fam LR 598. The applicable law was not put in dispute by the solicitor for the husband.
THE WIFE’S APPLICATION
The wife’s application for $200,000 was framed as a partial property settlement order pursuant to s 79 and s 80 of the Family Law Act 1975 (Cth) (“the Act”). Senior counsel on behalf of the wife submitted, and the Court accepts, that it is appropriate to make the order to fund the wife’s legal costs up until the hearing in circumstances where her entitlement to a final order is not satisfied either by the present payment to the wife, or the past payments. Senior counsel submitted, and the Court accepts, that on the available material before the Court, such an order could easily be reversed or adjusted by a trial judge at a final hearing.
The wife’s application was framed in the alternative as an application for interim costs under s 117 of the Act. Whilst it is unnecessary to make the order on this basis, the Court records that it would have exercised its discretion in the wife’s favour in any event.
The order will be made despite the objection made on behalf of the husband. He submitted that the funds presently held in the controlled monies account are needed to pay capital gains tax on property sales, where the sale proceeds constitute the monies in the controlled monies account. He cavilled with the amount of money sought by way of fees, and suggested that the matter could settle at a mediation. He also pointed out that the wife had already been in receipt of substantial money paid by way of interim distribution. Lastly, on his behalf it was submitted that no payment should be made to the wife in circumstances where her fees could be paid using the proceeds of an inheritance received by the wife after separation.
The capital gains tax liability is put in contention on behalf of the wife though the impression formed is that the wife does not necessarily doubt that there is a capital gains tax liability, but rather contends that it is not in the quantum suggested by the husband and has, in any event, not been established by reliable independent documentation. There is substance to the wife’s concerns.
Firstly, Stevenson J on 23 April 2018 declined to grant the husband’s application that the funds in the controlled monies account be used to pay capital gains tax. Her Honour deals with this at [12]–[14] of her reasons and concludes that it was premature or to make orders before the liability had crystallised. Her Honour was, in any event, seemingly satisfied at the time that there was ample money in the controlled monies account to meet this liability when it crystallised.
Secondly, the only evidence about the existence of this capital gains tax liability consists of correspondence between the husband’s lawyers at the time, and the accountants, K Consultants. The letters are dated 25 October 2018, 26 October 2018 and 14 November 2018. There are no tax assessments verifying the amount of the capital gains tax liability. On one view, however, it is possible to understand how the husband contended that there was a potential capital gains tax liability of $600,000.
The Court finds itself in the same position as the one in which Stevenson J found herself over three years ago. There is still no reliable evidence indicating that the capital gains tax liability has crystallised, or establishing the quantum of this liability. The onus was on the husband to provide satisfactory evidence about this alleged debt, but he has failed to do so. His solicitor explained that part of the reason for this was that the accountants had not been paid, and thus inferentially were exercising a lien over the documents in question. Payment to the accountants was authorised by an order made on 9 August 2021. It is possible that this evidence will come to light in the fullness of time but it does strike the Court as being somewhat implausible that if the husband had been assessed to pay capital gains tax for about $600,000, this would not have come to his notice, even if his accountants had retained a lien in relation to unpaid fees. The existence, therefore, of the potential capital gains tax liability is not a reason to decline to make the order sought by the wife.
From this Court’s perspective, there was nothing unreasonable about the amount sought by the wife on account of her anticipated legal fees. The history of this matter, as is apparent both from the chronology provided, and the Court’s file, creates the strong impression that this is not a matter likely to settle at mediation. Indeed, the chronology creates the strong impression that the husband has been less than diligent in his conduct of the proceedings, and in making the requisite disclosure pursuant to orders of this Court and the applicable rules. It is correct to say that the wife has received the benefit of previous orders for interim distribution, but she has accounted for these funds and has otherwise established the basis for the present order.
In relation to the inheritance, the Court accepts senior counsel’s argument as to why these funds should not be used for present purposes. He submitted that the wife received the funds after separation, she relies on these funds for living expenses, the husband has made no contribution to this fund, and in any event on the most likely scenario these funds will be placed into a separate pool by the trial judge. In these circumstances, he submitted, it would be plainly inequitable and unjust to require the wife to draw on these funds. In circumstances where the wife has otherwise satisfied the Court as to her entitlement to an interim property order consistent with the principles set out in the Full Court’s decision in Strahan, the fact of the inheritance funds is irrelevant for present purposes.
The orders sought by the wife will therefore be made.
THE HUSBAND’S APPLICATION
The basis of the husband’s application was unclear. He sought $75,000 to be paid to his lawyers to cover legal fees owed to his previous lawyers, as well as, inferentially, his current lawyer. His solicitor contended that the application on behalf of the husband was made pursuant to s 117 of the Act, namely the Court’s interim costs power. The Court is not concerned about the amount proposed by him, which will pay an existing debt to past lawyers and provide a relatively modest amount on account of the fees of his current lawyer. The real issue put in contention by the wife is whether the husband has reasonably satisfied the Court about his entitlement to an interim costs order having regard to s 117(2A). It was by no means clear from the submissions made on behalf of the husband how his claim for interim costs was framed.
The Court recognises that the husband’s solicitor faced the formidable difficulty of representing the husband in complex proceedings in circumstances where she had only just come into the matter. No criticism is directed to her. However, on any objective appraisal of the material before the Court and the litigation history of this matter, the husband’s application faced a number of obstacles. The comparative financial circumstances of the parties suggest that the husband is in a much stronger position. His financial circumstances are certainly more flexible. The explicit criticisms of the lack of transparency of his financial disclosure appears borne out by the chronology, which was not put in contention on behalf of the husband. The same chronology raises concerns about the conduct of the husband in this litigation. Whilst the Court accepts the difficulty faced by the husband’s current representation, on even a preliminary assessment of his interim costs application, it is unlikely to succeed. No order can be made in his favour for the time being.
CONCLUSION
The Court makes the orders proposed by the wife, and declines to make the orders proposed by the husband. The Court notes that this matter has been expedited for hearing, but has not yet been allocated to a judicial docket. Pending such an allocation, it is referred back to the listing registrar.

I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Altobelli.
Associate:
Dated:       18 November 2021
SCHEDULE A

DATE

EVENT

HUSBAND’S FAILURE TO COMPLY/FRUSTRATION OF PROCEEDINGS

… 1961

Respondent Husband is born. Now aged 60.

… 1962

Applicant Wife is born. Now aged 58.

May 1987

Parties purchase apartment at L Street for $90,000 in the Husband’s sole name subject to a $60,000 mortgage.

… 1987

Parties marry and commence cohabitation.

Husband manages the Wife’s income to save for wedding reception.

Wife receives a gift of $30,000 from her mother. Husband has nil by way of property.

1987

Husband works at M Company as a professional, and in hospitality on weekends.

Wife works at various businesses in administration until first child is born and then part-time after the second child is born.

… 1990

First child Ms G is born. Now aged 30.

19 Jan 1991

Parties sell L Street property for $176,500.

1991

Parties purchase N Street, Suburb O for $245,000 funded through the L Street sale proceeds and a mortgage.

… 1993

Second child Ms H is born. Now aged 27.

1999

Parties separate and the Husband vacates the family           home.             Until     2014,   the             parties

represented that they were still a married couple and family unit by attending family events, business functions and holidays as a married couple and family.
The parties continue to coalesce finances.

Husband is now self-employed.

1999-2002

The Wife and children reside in rental accommodation in Suburb P financially supported by the Husband.

Feb 2001

The parties purchase a property at Q Street, Suburb J for $236,000 as tenants in common in equal shares subject to a mortgage.

2002-2006

The Wife and children reside in rental accommodation in Suburb R financially supported by the Husband, who also resided at accommodation on occasion.

2002

The parties purchase a property at B Street, Suburb C for $955,000 as tenants in common with 99% to the Husband and 1% to the Wife.

From time of purchase until 2016, the Suburb C property is leased and the husband receives the rental income.

2004

Husband purchases property at S Street, Suburb E for $445,000.

2005

Wife recommences full-time work.

Feb 2006

The Suburb J apartment is sold for $770,000 with net proceeds applied to discharging the mortgage and the balance of approximately

$370,000 deposited into a joint account.

2006

The parties purchase a property in joint names located at F Street, Suburb D subject to a Commonwealth bank mortgage. The Husband meets the mortgage repayments and outgoings until separation but does not live there.

Wife resides at Suburb D property.

Feb 2007

Wife commences work 3 days per week.

2010

Suburb O property is sold for $725,000. Wife is uncertain of how the sale proceeds are applied apart from discharging the Suburb O mortgage.

2011

Wife is served with paperwork in relation to Suburb C default in property mortgage. Husband assures her that he will take care of it.

2012

Mortgage secured over Suburb D is refinanced.

1 Aug 2013

Husband obtains interest in a lease in relation to a property at Location T with a third party namely Mr U as tenant in common in equal shares.

Nov 2013

Husband purchases property at V Street, Suburb J for $55,000. Wife uncertain of how it is funded as there is no mortgage registered on the property’s purchase.

Feb 2014

Parties separate on a final basis by informing the children and their respective families of the separation.

Feb 2016

The Suburb J property is sold and the net proceeds of $370,000 are deposited into a joint account.

Sep 2016

Wife becomes aware that Husband failed to meet mortgage repayments in relation to mortgage secured over Suburb D property. Husband makes a complaint against Commonwealth Bank with the Financial Ombudsman Service. As a result CBA agree to a plan to reduce payments of interest for a period of six (6) months until December 2015 and agreed that until March 2017 payments be made for a period of three (3) months of principal and interest and in March 2017 if the repayment plan is adhered to the bank will consider capitalising the arrears back into the loan.

28 Sep 2016

$14,301.05 withdrawn from parties’ joint National Australia Bank #...45 and deposited into the parties NAB account that met mortgage repayments each month in relation to Suburb D property. National Australia Bank advised that funds were withdrawn from parties’ joint account to fulfil obligations given the direct debit facility that was set up. Thereafter the direct debit was cancelled.

Oct 2016

The Commonwealth Bank commence enforcement proceedings on the Suburb D property upon mortgage arrears of $46,846.01.

26 Oct 2016

$58,500 withdrawn from parties’ joint NAB account to meet mortgage arrears on Suburb D property, pay strata management levies arrears and ancillary expenses.

18 Nov 2016

The Wife commences urgent proceedings after becoming aware of:

-     The Commonwealth Bank’s enforcement proceedings on the Suburb D property; and

-     The Suburb C property being sold by way of mortgagee sale for $3,006,000.

5 Dec 2016

Orders are made by consent for the Suburb D arrears to be repaid from funds from a joint account, for disclosure, injunctions on the husband, and for the sale proceeds of the Suburb C property to be deposited into a Controlled Monies Account.

The Wife’s Application for interim costs and partial property settlement is adjourned to 10 March 2017.

The Wife provides to the Husband monthly authority for him to enable the monthly mortgage repayments for the Suburb D property to be paid.

23 Jan 2017

Directions are made for the matter to be listed for a Case Assessment Conference and for the Husband to file his Response and Financial Statement within 14 days.

6 Feb 2017

The Husband fails to serve his Response and Financial Statement per Orders made 23 Jan 2017. (Wife Affidavit filed 24 June 2021 Para 22)

6 Mar 2017

Husband files Response approximately a month late.

(Wife Affidavit filed 24 June 2021 Para 22)

7 Mar 2017

Directions are made a Case Assessment Conference for the parties to attend Conciliation.

10 Mar 2017

The Wife’s Application for costs and partial property settlement is heard and Orders are made for each party to receive $165,000 from the Suburb C property sale proceeds which were held in the Controlled Monies Account.

20 Mar 2017

Pursuant to orders on 5 December 2016, $1,516,590.68 is deposited into the Controlled Monies Account, being the sale proceeds of the Suburb C property.

To date, the balance of the Controlled Monies account is $720,299.65 inclusive of accrued interest.

20 Apr 2017

Conciliation is vacated by consent and adjourned to June as the Wife’s Mother had passed away.

13 Jun 2017

Matter listed for Conciliation Conference but is aborted due to non-filing.

Conciliation does not proceed and directions are made for the parties to appear in Court on 21 August for a file review, compliance check and further directions.

21 Aug 2017

Neither the Husband nor his solicitor appear at Court as directed. The matter is adjourned until 4 September and a costs order is made against the Husband. Directions are made for the Husband and his solicitor to personally attend next hearing date.

(Wife Affidavit filed 24 June 2021 Para 27)

4 Sep 2017

Directions made for single experts to be appointed to undertake valuations of real property held by the parties and other items.

Directions made for husband to provide outstanding disclosure.

The Husband does not appear at Court as directed on 21 August. Directions are made for the Husband’s legal representative to file and serve an affidavit as to when he informed that he would be absent from Court. The matter is adjourned to 9 October 2017.

(Wife Affidavit filed 24 June 2021 Para 28)

9 Oct 2017

Directions are made for each party to provide any outstanding disclosure and leave is granted to approach with respect to any valuation or disclosure issues to be considered for file review on 27 November.

24 Nov 2017

For file review on 27 November, the Wife provides a proposed Minute of Order regarding the Husband’s outstanding financial disclosure. The matter is then listed for a further directions hearing.

Dec 2017

The Husband ceases enabling the Suburb D property monthly mortgage repayments and ignores all requests by the Wife to enable the payments.

(Wife Affidavit filed 24 June 2021 Para 14)

Feb 2018

The Suburb D property mortgage again falls into arrears in the sum of $14,399.25 after the husband ceased providing authority for the repayments.

The Wife files an urgent Application seeking that inter alia the balance in the controlled monies account be applied towards repayment of the Suburb D property mortgage.

9 Feb 2018

Wife files urgent Application in a Case seeking Orders in relation to the Suburb D mortgage, interim costs and partial property settlement.

12 Feb 2018

Directions are made which provide for, inter alia, the Husband to file and serve an undertaking as to disclosure within 14 days and disclose certain documents.

The Husband does not comply with the Orders of 12 February 2018.

(Wife Affidavit filed 24 June 2021 Para 31)

7 Mar 2018

The Wife files an Amended Application in a Case to include orders in relation to the Husband’s outstanding disclosure.

8 May 2018

The Suburb D property mortgage arrears are repaid following the establishment of the offset account connected to the Suburb D property made pursuant to Orders.

Orders are made for the Husband’s compliance with Orders made on 12 February 2018 to be extended by 14 days.

22 May 2018

The husband files an undertaking as to disclosure but does not comply with the balance of Orders made on 8 May 2018.

To date, the Husband has still not made disclosure per orders made 12 February 2018 regarding artworks and taxation matters.

(Wife Affidavit filed 24 June 2021

Para 33)

3 Mar 2020

Matter listed in Summer Callover Campaign.

Neither the Husband nor his legal representative appears at Court for the matter’s listing. Directions are made for the Husband to provide updating disclosure by 20 March, and the Wife to seek leave for an undefended hearing if the Husband fails to comply or does not attend the next court event.

(Wife Affidavit filed 24 June 2021

Para 34)

10 Mar 2020

Wife receives correspondence from K Accountants advising that the Pappas SMSF owed the accountant $7,384.19.

31 Mar 2020

The Husband discloses some documents 11 days late and does not discharge obligation of disclosure per previous Orders.

(Wife Affidavit filed 24 June 2021

Para 35)

1 Apr 2020

With the Husband’s legal representative appearing on his behalf, directions are made for inter alia the parties to attend mediation on 19 June 2020 and provide all outstanding disclosure by 29 April 2020.

The Husband fails to provide all outstanding disclosure by 29 April 2020.

(Wife Affidavit filed 24 June 2021

Para 36 and 37)

15 Apr 2020

Wife provides to Husband’s solicitor requests for disclosure.

Husband does not provide documents in answer to requests for disclosure.

12 Jun 2020

The Husband discloses select documents nearly two weeks late but does not discharge his disclosure obligations. The mediation on 19 June 2020 is therefore terminated before the afternoon.

(Wife Affidavit filed 24 June 2021

Para 38)

22 Jun 2020

The Husband’s legal representative informs the Court that he had not made disclosure regarding parcels of land he holds in Country W and that the Pappas SMSF was a noncompliant fund.

Orders are made for inter alia the parcels of land in Country W be valued and updated disclosure be provided.

The Husband does not provide the address of the properties in Country W for an expert to be appointed, does not nominate valuers in relation to all other valuations, and does not provide updated disclosure.

(Wife Affidavit filed 24 June 2021

Para 39 and 40)

Aug 2020

The Strata Managers of the Suburb D property issue a special levy for building works required to be undertaken in the sum of $82,097.20 due in December 2020

8 Sep 2020

The Wife writes to the Husband via solicitors requesting consent for the special levy to be met from funds held in the controlled money account.

16 Sep 2020

Orders are made for the Husband to comply with the Orders made 22 June 2020 by 23

September 2020, and for the Husband to provide a minute of orders sought, an outline why the matter should not proceed undefended, and an affidavit explaining his non-compliance and why he should not pay costs.

23 Sep 2020

The Husband provides some disclosure documents but does not discharge all his obligations of Orders made on 16 September 2020

(Wife Affidavit filed 24 June 2021

Para 42)

25 Sep 2020

Matter is listed.

Directions are made for the matter to be listed before a Registrar of the Family Court.

Moments before the matter is mentioned, the Husband’s lawyers provide an unfiled affidavit which asserted compliance of Orders made on 16 September 2020. The husband submits he requires 4

weeks to get the balance of disclosure.

(Wife Affidavit filed 24 June 2021

Para 43)

23 Oct 2020

Wife writes to Husband’s solicitors again requesting consent for special levy to be met from funds held in controlled monies account.

(Wife Affidavit filed 24 June 2021

Para 49)

4 Dec 2020

The Husband’s solicitors write to the Wife’s requesting details of the special levy raised by the Strata despite the correspondence of 8

September and 23 October providing the relevant details.

(Wife Affidavit filed 24 June 2021

Para 50)

8 Dec 2020

Matter is listed before Registrar McGrath for a settlement conference but does not proceed due to husband’s non-disclosure and non-compliance.

Further directions are made for appointment of single experts and disclosure.

The Husband does not comply with directions for the preparation of conference by only providing his Financial Questionnaire on the morning of the conference,

proposal for settlement the day before the conference and still had not nominated expert valuers.

(Wife Affidavit filed 24 June 2021

Para 44)

8 Dec 2020

The Wife’s solicitors write to the Husband’s requesting disclosure of all tax invoices evidencing monies owed to an accountant after the Wife is advised that Pappas SMSF

owes an accountant $7,384.19.

To date, the Husband has not responded to this request.

(Wife Affidavit filed 24 June 2021

Para 71)

11 Dec 2020

X Valuers is appointed as a single expert to undertake a valuation of the Suburb J property, Suburb D property, S Street, Suburb E, and Y Street, Suburb Z.

20 Jan 2021

The single expert advises that upcoming/proposed levies to complete remedial works for internal/external defects of the Suburb D property require the parties to advise him how they wish to proceed with valuation as the works has had a negative impact on the value of a comparable sale.

Despite multiple requests, the Husband has not cooperated with the Wife in providing a proposed joint letter to the single expert.

(Wife Affidavit filed 24 June 2021

Para 57 to 62 )

25 Jan 2021

The Husband’s solicitor’s write to the Wife’s asserting that the outstanding levies are not referrable to the special levy.

29 Jan 2021

The Wife again writes to the Husband requesting disclosure of tax invoices for monies owed to an accountant by Pappas SMSF.

No response is received.

(Wife Affidavit filed 24 June 2021

Para 72)

2 Feb 2021

The Wife’s solicitors write to the Husband’s enclosing a draft joint letter to the single expert and a copy of Notice of Levies due 1

March 2021 and again requests consent for the special levy to be met from funds in the controlled monies account.

To date, the Husband has not met the Wife’s requests and the special levy has accrued interest payable.

(Wife Affidavit filed 24 June 2021

Para 52)

3 Feb 2021

Husband's solicitor writes to Wife's solicitor requesting wife advise what the internal defects to the Suburb D property are and why she has not maintained them.

Wife responds attaching copies of the internal defects in the Suburb D property and advised that the same will be rectified as part of the repair work for which the special levies have been issued. The wife advises that she is otherwise not aware of any other internal defects.

9 Feb 2021

The Single expert writes to parties requesting response to their request regarding the Suburb D property.

The Husband’s solicitor writes to the single expert on 16 Feb advising a response would be provided that evening. No response is provided.

(Wife Affidavit filed 24 June 2021

Para 61)

17 Feb 2021

Wife’s solicitor writes to Husband’s requesting that the husband advise if he agrees with the draft joint letter to be provided to the expert.

No response is provided by the Husband.

(Wife Affidavit filed 24 June 2021

Para 61 and 62)

3 May 2021

Following enquiries with Commonwealth Bank, the Wife’s solicitors send a letter to the Husband’s enclosing a Wealth Application Form that requires the Husband’s completion in order to reduce the interest rate secured over the Suburb D property from 4.55% to 1.94%.

To date, the Husband, has not responded to this correspondence.

(Wife Affidavit filed 24 June 2021

Para 76)

25 May 2021

The weekly repayments of $1,001 for the Suburb D property mortgage begin to be unpaid upon the depletion of funds held in the offset account pursuant to orders made on 8 May 2018.

24 Jun 2021

To date, the Husband has not provided any financial statements in relation to the Pappas Superannuation Fund for the financial years ended 30 June 2016

to date, nor the AA Family Trust from its date of establishment to present.

(Wife Affidavit filed 24 June 2021

Para 64)

12 Jul 2021

The Wife files an Application in a Case seeking inter alia:

-     The required funds held in the controlled monies account to be paid towards the Suburb D property mortgage;

-     $83,019.60 to be paid from the controlled monies account for the special strata levies for the Suburb D property; and - $200,000 by way of interim costs.

16 Aug 2021

Matter is listed for Interim Hearing.

File number(s):	SYC 7631 of 2016
Judgment of:	ALTOBELLI J
Date of judgment:	18 November 2021
Catchwords:	FAMILY LAW – INTERIM PROPERTY – Where each party seeks payment of funds from controlled monies account by way of partial property settlement or interim costs – Issues of disclosure – Partial property order made in favour of the wife only.
Legislation:	Family Law Act 1975 (Cth) ss 79, 80, 117
Cases cited:	Markoska v Markoska (Costs) (2011) 46 Fam LR 598; [2011] FamCA 833 Pappas & Pappas [2018] FamCA 297 Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466; [2009] FamCAFC 166
Division:	Division 1 First Instance
Number of paragraphs:	21
Date of hearing:	20 August 2021
Place:	Sydney (via videoconference)
Counsel for the Applicant:	Mr Cummings SC
Solicitor for the Applicant:	York Law Family Law Specialists
Solicitor Advocate for the Respondent:	Ms Lama
Solicitor for the Respondent:	Lama Family Lawyers

SYC 7631 of 2016
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:	MS PAPPAS Applicant
AND:	MR PAPPAS Respondent

ORDER MADE BY:	ALTOBELLI J
DATE OF ORDER:	18 NOVEMBER 2021

DATE	EVENT	HUSBAND’S FAILURE TO COMPLY/FRUSTRATION OF PROCEEDINGS
… 1961	Respondent Husband is born. Now aged 60.
… 1962	Applicant Wife is born. Now aged 58.
May 1987	Parties purchase apartment at L Street for $90,000 in the Husband’s sole name subject to a $60,000 mortgage.
… 1987	Parties marry and commence cohabitation. Husband manages the Wife’s income to save for wedding reception. Wife receives a gift of $30,000 from her mother. Husband has nil by way of property.
1987	Husband works at M Company as a professional, and in hospitality on weekends. Wife works at various businesses in administration until first child is born and then part-time after the second child is born.
… 1990	First child Ms G is born. Now aged 30.
19 Jan 1991	Parties sell L Street property for $176,500.
1991	Parties purchase N Street, Suburb O for $245,000 funded through the L Street sale proceeds and a mortgage.
… 1993	Second child Ms H is born. Now aged 27.
1999	Parties separate and the Husband vacates the family home. Until 2014, the parties represented that they were still a married couple and family unit by attending family events, business functions and holidays as a married couple and family. The parties continue to coalesce finances. Husband is now self-employed.
1999-2002	The Wife and children reside in rental accommodation in Suburb P financially supported by the Husband.
Feb 2001	The parties purchase a property at Q Street, Suburb J for $236,000 as tenants in common in equal shares subject to a mortgage.
2002-2006	The Wife and children reside in rental accommodation in Suburb R financially supported by the Husband, who also resided at accommodation on occasion.
2002	The parties purchase a property at B Street, Suburb C for $955,000 as tenants in common with 99% to the Husband and 1% to the Wife. From time of purchase until 2016, the Suburb C property is leased and the husband receives the rental income.
2004	Husband purchases property at S Street, Suburb E for $445,000.
2005	Wife recommences full-time work.
Feb 2006	The Suburb J apartment is sold for $770,000 with net proceeds applied to discharging the mortgage and the balance of approximately $370,000 deposited into a joint account.
2006	The parties purchase a property in joint names located at F Street, Suburb D subject to a Commonwealth bank mortgage. The Husband meets the mortgage repayments and outgoings until separation but does not live there. Wife resides at Suburb D property.
Feb 2007	Wife commences work 3 days per week.
2010	Suburb O property is sold for $725,000. Wife is uncertain of how the sale proceeds are applied apart from discharging the Suburb O mortgage.
2011	Wife is served with paperwork in relation to Suburb C default in property mortgage. Husband assures her that he will take care of it.
2012	Mortgage secured over Suburb D is refinanced.
1 Aug 2013	Husband obtains interest in a lease in relation to a property at Location T with a third party namely Mr U as tenant in common in equal shares.
Nov 2013	Husband purchases property at V Street, Suburb J for $55,000. Wife uncertain of how it is funded as there is no mortgage registered on the property’s purchase.
Feb 2014	Parties separate on a final basis by informing the children and their respective families of the separation.
Feb 2016	The Suburb J property is sold and the net proceeds of $370,000 are deposited into a joint account.
Sep 2016	Wife becomes aware that Husband failed to meet mortgage repayments in relation to mortgage secured over Suburb D property. Husband makes a complaint against Commonwealth Bank with the Financial Ombudsman Service. As a result CBA agree to a plan to reduce payments of interest for a period of six (6) months until December 2015 and agreed that until March 2017 payments be made for a period of three (3) months of principal and interest and in March 2017 if the repayment plan is adhered to the bank will consider capitalising the arrears back into the loan.
28 Sep 2016	$14,301.05 withdrawn from parties’ joint National Australia Bank #...45 and deposited into the parties NAB account that met mortgage repayments each month in relation to Suburb D property. National Australia Bank advised that funds were withdrawn from parties’ joint account to fulfil obligations given the direct debit facility that was set up. Thereafter the direct debit was cancelled.
Oct 2016	The Commonwealth Bank commence enforcement proceedings on the Suburb D property upon mortgage arrears of $46,846.01.
26 Oct 2016	$58,500 withdrawn from parties’ joint NAB account to meet mortgage arrears on Suburb D property, pay strata management levies arrears and ancillary expenses.
18 Nov 2016	The Wife commences urgent proceedings after becoming aware of: - The Commonwealth Bank’s enforcement proceedings on the Suburb D property; and - The Suburb C property being sold by way of mortgagee sale for $3,006,000.
5 Dec 2016	Orders are made by consent for the Suburb D arrears to be repaid from funds from a joint account, for disclosure, injunctions on the husband, and for the sale proceeds of the Suburb C property to be deposited into a Controlled Monies Account. The Wife’s Application for interim costs and partial property settlement is adjourned to 10 March 2017. The Wife provides to the Husband monthly authority for him to enable the monthly mortgage repayments for the Suburb D property to be paid.
23 Jan 2017	Directions are made for the matter to be listed for a Case Assessment Conference and for the Husband to file his Response and Financial Statement within 14 days.
6 Feb 2017	The Husband fails to serve his Response and Financial Statement per Orders made 23 Jan 2017. (Wife Affidavit filed 24 June 2021 Para 22)
6 Mar 2017	Husband files Response approximately a month late. (Wife Affidavit filed 24 June 2021 Para 22)
7 Mar 2017	Directions are made a Case Assessment Conference for the parties to attend Conciliation.
10 Mar 2017	The Wife’s Application for costs and partial property settlement is heard and Orders are made for each party to receive $165,000 from the Suburb C property sale proceeds which were held in the Controlled Monies Account.
20 Mar 2017	Pursuant to orders on 5 December 2016, $1,516,590.68 is deposited into the Controlled Monies Account, being the sale proceeds of the Suburb C property. To date, the balance of the Controlled Monies account is $720,299.65 inclusive of accrued interest.
20 Apr 2017	Conciliation is vacated by consent and adjourned to June as the Wife’s Mother had passed away.
13 Jun 2017	Matter listed for Conciliation Conference but is aborted due to non-filing. Conciliation does not proceed and directions are made for the parties to appear in Court on 21 August for a file review, compliance check and further directions.
21 Aug 2017	Neither the Husband nor his solicitor appear at Court as directed. The matter is adjourned until 4 September and a costs order is made against the Husband. Directions are made for the Husband and his solicitor to personally attend next hearing date. (Wife Affidavit filed 24 June 2021 Para 27)
4 Sep 2017	Directions made for single experts to be appointed to undertake valuations of real property held by the parties and other items. Directions made for husband to provide outstanding disclosure.	The Husband does not appear at Court as directed on 21 August. Directions are made for the Husband’s legal representative to file and serve an affidavit as to when he informed that he would be absent from Court. The matter is adjourned to 9 October 2017. (Wife Affidavit filed 24 June 2021 Para 28)
9 Oct 2017	Directions are made for each party to provide any outstanding disclosure and leave is granted to approach with respect to any valuation or disclosure issues to be considered for file review on 27 November.
24 Nov 2017	For file review on 27 November, the Wife provides a proposed Minute of Order regarding the Husband’s outstanding financial disclosure. The matter is then listed for a further directions hearing.
Dec 2017	The Husband ceases enabling the Suburb D property monthly mortgage repayments and ignores all requests by the Wife to enable the payments. (Wife Affidavit filed 24 June 2021 Para 14)
Feb 2018	The Suburb D property mortgage again falls into arrears in the sum of $14,399.25 after the husband ceased providing authority for the repayments. The Wife files an urgent Application seeking that inter alia the balance in the controlled monies account be applied towards repayment of the Suburb D property mortgage.
9 Feb 2018	Wife files urgent Application in a Case seeking Orders in relation to the Suburb D mortgage, interim costs and partial property settlement.
12 Feb 2018	Directions are made which provide for, inter alia, the Husband to file and serve an undertaking as to disclosure within 14 days and disclose certain documents.	The Husband does not comply with the Orders of 12 February 2018. (Wife Affidavit filed 24 June 2021 Para 31)
7 Mar 2018	The Wife files an Amended Application in a Case to include orders in relation to the Husband’s outstanding disclosure.
8 May 2018	The Suburb D property mortgage arrears are repaid following the establishment of the offset account connected to the Suburb D property made pursuant to Orders. Orders are made for the Husband’s compliance with Orders made on 12 February 2018 to be extended by 14 days.
22 May 2018	The husband files an undertaking as to disclosure but does not comply with the balance of Orders made on 8 May 2018. To date, the Husband has still not made disclosure per orders made 12 February 2018 regarding artworks and taxation matters. (Wife Affidavit filed 24 June 2021 Para 33)
3 Mar 2020	Matter listed in Summer Callover Campaign.	Neither the Husband nor his legal representative appears at Court for the matter’s listing. Directions are made for the Husband to provide updating disclosure by 20 March, and the Wife to seek leave for an undefended hearing if the Husband fails to comply or does not attend the next court event. (Wife Affidavit filed 24 June 2021 Para 34)
10 Mar 2020	Wife receives correspondence from K Accountants advising that the Pappas SMSF owed the accountant $7,384.19.
31 Mar 2020	The Husband discloses some documents 11 days late and does not discharge obligation of disclosure per previous Orders. (Wife Affidavit filed 24 June 2021 Para 35)
1 Apr 2020	With the Husband’s legal representative appearing on his behalf, directions are made for inter alia the parties to attend mediation on 19 June 2020 and provide all outstanding disclosure by 29 April 2020.	The Husband fails to provide all outstanding disclosure by 29 April 2020. (Wife Affidavit filed 24 June 2021 Para 36 and 37)
15 Apr 2020	Wife provides to Husband’s solicitor requests for disclosure.	Husband does not provide documents in answer to requests for disclosure.
12 Jun 2020	The Husband discloses select documents nearly two weeks late but does not discharge his disclosure obligations. The mediation on 19 June 2020 is therefore terminated before the afternoon. (Wife Affidavit filed 24 June 2021 Para 38)
22 Jun 2020	The Husband’s legal representative informs the Court that he had not made disclosure regarding parcels of land he holds in Country W and that the Pappas SMSF was a noncompliant fund. Orders are made for inter alia the parcels of land in Country W be valued and updated disclosure be provided.	The Husband does not provide the address of the properties in Country W for an expert to be appointed, does not nominate valuers in relation to all other valuations, and does not provide updated disclosure. (Wife Affidavit filed 24 June 2021 Para 39 and 40)
Aug 2020	The Strata Managers of the Suburb D property issue a special levy for building works required to be undertaken in the sum of $82,097.20 due in December 2020
8 Sep 2020	The Wife writes to the Husband via solicitors requesting consent for the special levy to be met from funds held in the controlled money account.
16 Sep 2020	Orders are made for the Husband to comply with the Orders made 22 June 2020 by 23 September 2020, and for the Husband to provide a minute of orders sought, an outline why the matter should not proceed undefended, and an affidavit explaining his non-compliance and why he should not pay costs.
23 Sep 2020	The Husband provides some disclosure documents but does not discharge all his obligations of Orders made on 16 September 2020 (Wife Affidavit filed 24 June 2021 Para 42)
25 Sep 2020	Matter is listed. Directions are made for the matter to be listed before a Registrar of the Family Court.	Moments before the matter is mentioned, the Husband’s lawyers provide an unfiled affidavit which asserted compliance of Orders made on 16 September 2020. The husband submits he requires 4 weeks to get the balance of disclosure. (Wife Affidavit filed 24 June 2021 Para 43)
23 Oct 2020	Wife writes to Husband’s solicitors again requesting consent for special levy to be met from funds held in controlled monies account. (Wife Affidavit filed 24 June 2021 Para 49)
4 Dec 2020	The Husband’s solicitors write to the Wife’s requesting details of the special levy raised by the Strata despite the correspondence of 8 September and 23 October providing the relevant details. (Wife Affidavit filed 24 June 2021 Para 50)
8 Dec 2020	Matter is listed before Registrar McGrath for a settlement conference but does not proceed due to husband’s non-disclosure and non-compliance. Further directions are made for appointment of single experts and disclosure.	The Husband does not comply with directions for the preparation of conference by only providing his Financial Questionnaire on the morning of the conference, proposal for settlement the day before the conference and still had not nominated expert valuers. (Wife Affidavit filed 24 June 2021 Para 44)
8 Dec 2020	The Wife’s solicitors write to the Husband’s requesting disclosure of all tax invoices evidencing monies owed to an accountant after the Wife is advised that Pappas SMSF owes an accountant $7,384.19.	To date, the Husband has not responded to this request. (Wife Affidavit filed 24 June 2021 Para 71)
11 Dec 2020	X Valuers is appointed as a single expert to undertake a valuation of the Suburb J property, Suburb D property, S Street, Suburb E, and Y Street, Suburb Z.
20 Jan 2021	The single expert advises that upcoming/proposed levies to complete remedial works for internal/external defects of the Suburb D property require the parties to advise him how they wish to proceed with valuation as the works has had a negative impact on the value of a comparable sale.	Despite multiple requests, the Husband has not cooperated with the Wife in providing a proposed joint letter to the single expert. (Wife Affidavit filed 24 June 2021 Para 57 to 62 )
25 Jan 2021	The Husband’s solicitor’s write to the Wife’s asserting that the outstanding levies are not referrable to the special levy.
29 Jan 2021	The Wife again writes to the Husband requesting disclosure of tax invoices for monies owed to an accountant by Pappas SMSF.	No response is received. (Wife Affidavit filed 24 June 2021 Para 72)
2 Feb 2021	The Wife’s solicitors write to the Husband’s enclosing a draft joint letter to the single expert and a copy of Notice of Levies due 1 March 2021 and again requests consent for the special levy to be met from funds in the controlled monies account.	To date, the Husband has not met the Wife’s requests and the special levy has accrued interest payable. (Wife Affidavit filed 24 June 2021 Para 52)
3 Feb 2021	Husband's solicitor writes to Wife's solicitor requesting wife advise what the internal defects to the Suburb D property are and why she has not maintained them. Wife responds attaching copies of the internal defects in the Suburb D property and advised that the same will be rectified as part of the repair work for which the special levies have been issued. The wife advises that she is otherwise not aware of any other internal defects.
9 Feb 2021	The Single expert writes to parties requesting response to their request regarding the Suburb D property.	The Husband’s solicitor writes to the single expert on 16 Feb advising a response would be provided that evening. No response is provided. (Wife Affidavit filed 24 June 2021 Para 61)
17 Feb 2021	Wife’s solicitor writes to Husband’s requesting that the husband advise if he agrees with the draft joint letter to be provided to the expert.	No response is provided by the Husband. (Wife Affidavit filed 24 June 2021 Para 61 and 62)
3 May 2021	Following enquiries with Commonwealth Bank, the Wife’s solicitors send a letter to the Husband’s enclosing a Wealth Application Form that requires the Husband’s completion in order to reduce the interest rate secured over the Suburb D property from 4.55% to 1.94%.	To date, the Husband, has not responded to this correspondence. (Wife Affidavit filed 24 June 2021 Para 76)
25 May 2021	The weekly repayments of $1,001 for the Suburb D property mortgage begin to be unpaid upon the depletion of funds held in the offset account pursuant to orders made on 8 May 2018.
24 Jun 2021	To date, the Husband has not provided any financial statements in relation to the Pappas Superannuation Fund for the financial years ended 30 June 2016 to date, nor the AA Family Trust from its date of establishment to present. (Wife Affidavit filed 24 June 2021 Para 64)
12 Jul 2021	The Wife files an Application in a Case seeking inter alia: - The required funds held in the controlled monies account to be paid towards the Suburb D property mortgage; - $83,019.60 to be paid from the controlled monies account for the special strata levies for the Suburb D property; and - $200,000 by way of interim costs.
16 Aug 2021	Matter is listed for Interim Hearing.