Appeal Steps to be taken by trial judge when exercising discretion to allow an interim property settlement pursuant to s 79 or s 80(1)(h) of the Family Law Act 1975 (Cth) Full Court of the Family Court of Australia before Boland, Thackray and O’Ryan JJ, judgment delivered 14 September 2009
This was an appeal from interim orders of Strickland J. Ms Strahan sought an interim property settlement of $5 million to defray the likely ongoing legal costs of further proceedings before the Court. Strickland J ordered that the wife be paid $1 million as an interim property settlement.
The total pool of property pool was disputed by the parties. The husband asserted that there were total assets of $80 million. The wife asserted total assets which were undisclosed by the husband but were in the magnitude of hundreds of millions of dollars. Strickland J found that the wife had spent approximately $10.5 million in legal fees and other expenses since the proceedings first commenced.
Ms Strahan appealed on the grounds that Strickland J had inappropriately applied a legal test and made findings as to whether there were ‘compelling circumstances’ justifying the making of the order. Ms Strahan claimed that the sum of $5 million could and should have been paid.
The Full Court allowed the appeal. Boland and O’Ryan JJ determined that both s 79 and s 80(1)(h) of the Family Law Act 1975 (Cth) are sources of power to make an interim property order. Boland and O’Ryan JJ stated that it is also possible to make a maintenance order pursuant to s 72 or s 74 of the Family Law Act 1975 (Cth), or a costs order pursuant to s 117.
While determining that there is only one exercise of power pursuant to s 79 of the Family Law Act 1975 (Cth), Boland and O’Ryan JJ determined that there may be a succession of orders made in proceedings until there is no property left which could be subject to orders by way of alteration of interests in property.
Boland and O’Ryan JJ stated that there is a two-step process to determining whether to make an interim property settlement. The first step is for a judicial officer to determine whether to exercise the power before a final hearing.
The second step is for a judicial officer to actually exercise that power. Boland and O’Ryan concluded that there was no requirement to establish that there were compelling circumstances justifying the making of the order. Their Honours considered that all that was required was an assessment of whether it was appropriate in the overall interests of justice to exercise the power pursuant to s 79 or s 80(1)(h) of the Family Law Act 1975 (Cth).
Further, their Honours also considered that it is necessary to consider the fact that the usual order pursuant to s 79 of the Family Law Act 1975 (Cth) is a ‘once and for all’ order made after a final hearing.
Boland and O’Ryan JJ stated that any interim property order must be capable of variation or reversal prior to final orders being made, without a party having to resort to an application pursuant to s 79A of the Family Law Act 1975 (Cth) or an appeal. In a separate judgment, Thackray J allowed the appeal.
Thackray J emphasised that there is no obligation on the Court to make an interim order; rather the Court may do so if it considers that it should in the exercise of its discretion. Thackray J stated that it was necessary for the Court to have regard to the policy consideration that it is generally in the interest of the parties and the Court for there to be only one exercise of the power under s 79 of the Family Law Act 1975 (Cth). Boland and O’Ryan JJ and Thackray J re-exercised the discretion of the trial judge and ordered Mr Strahan to pay $5 million to the wife.