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…
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CaseChat Overview and Summary
In the matter of Pappas & Pappas, the Court addressed an interim distribution of funds held in trust between the parties, Ms Pappas and Mr Pappas. The dispute arose from ongoing litigation between the parties since 2016, with specific focus on financial issues. The wife sought an interim distribution of $200,000 from the trust account to cover her legal costs, while the husband proposed a payment of $75,000 to each party. The legal issues before the Court included the appropriate allocation of the trust funds and the necessity of the wife's requested amount for her legal costs. The Court had to determine whether the wife's application for $200,000 was justified and whether the husband's objections were valid. The Court considered the financial circumstances of both parties and the history of the litigation.
The Court examined the evidence and submissions from both parties and applied relevant principles from Strahan & Strahan and Markoska v Markoska. The wife argued for her requested amount as a partial property settlement and as interim costs, while the husband objected on grounds of financial necessity and the wife's prior payments. The Court found that the wife's request for $200,000 was reasonable, given her ongoing need for legal representation and the husband's stronger financial position. The Court dismissed the husband's objections, noting his lack of transparency and the likelihood that his interim costs application would not succeed.
The Court decided to grant the wife's application for $200,000 for her legal costs and rejected the husband's proposal for a smaller interim distribution. The Court concluded that the wife's request was justified and the husband's objections were not well-founded. The matter was referred back to the listing registrar pending allocation to a judicial docket. The Court emphasised that the decision was based on the current evidence and could be adjusted at a final hearing if necessary.
The Court examined the evidence and submissions from both parties and applied relevant principles from Strahan & Strahan and Markoska v Markoska. The wife argued for her requested amount as a partial property settlement and as interim costs, while the husband objected on grounds of financial necessity and the wife's prior payments. The Court found that the wife's request for $200,000 was reasonable, given her ongoing need for legal representation and the husband's stronger financial position. The Court dismissed the husband's objections, noting his lack of transparency and the likelihood that his interim costs application would not succeed.
The Court decided to grant the wife's application for $200,000 for her legal costs and rejected the husband's proposal for a smaller interim distribution. The Court concluded that the wife's request was justified and the husband's objections were not well-founded. The matter was referred back to the listing registrar pending allocation to a judicial docket. The Court emphasised that the decision was based on the current evidence and could be adjusted at a final hearing if necessary.
Orders
Orders of the court
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Background
Background to the litigation
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.
Evidence
Evidence Before The Court
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.
Decision
Reasons for decision
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.
Ratio Decidendi
Legal Principle Established
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