When Is It Appropriate to Seek an Interim ‘Lump Sum Order’ for Property Settlement?

In family law proceedings, a party may apply for an interim order for litigation funding (commonly referred to as a Barro order), a partial property settlement, or spousal maintenance. These interim orders are designed to address immediate financial needs while the final property settlement is pending.

Situations Requiring Interim Orders

There are several circumstances where a party may seek an interim order, such as:

1. Litigation Funding:

   • To cover legal fees, accountant’s fees, and valuation costs. These are essential, especially in financially complex cases, to ensure the matter is properly prepared and the outcome is fair and equitable.
   • Example: A party might need funds to investigate asset values, financial disclosure, or hire legal representation to advance their case.

2. Urgent Financial Support:

   • A party may require immediate funds to re-establish themselves, secure housing, or cover basic living expenses. This is particularly relevant for individuals who lack access to the parties’ shared assets or income.

3. Interim Maintenance:

   • In situations where one party is unable to meet their reasonable living expenses, an application for urgent interim spousal maintenance may be necessary to address immediate financial hardship.

Relevant Provisions of the Family Law Act 1975 (Cth)

The Family Law Act 1975 provides several legislative pathways for seeking interim lump sum orders:

1. Section 72 & Section 74 (Spousal Maintenance):

   • Section 72 establishes the entitlement to spousal maintenance if one party is unable to support themselves adequately.
   • Section 74 empowers the court to make orders it deems proper for maintenance, including lump sum payments.

2. Section 79 (Property Settlement):

   • Section 79 allows the court to alter property interests between parties.
   • The enabling provision in Section 80(1)(h) permits the court to order a lump sum payment as part of interim property proceedings.

3. Section 117 (Costs):

   • This section allows the court to award costs in proceedings. Interim costs orders can provide necessary funding for legal representation and related expenses.

Process for Seeking an Interim Lump Sum Order

To apply for an interim lump sum order, a party must:

1. Prepare the Application:

   • Provide detailed financial disclosure, including evidence of current assets, liabilities, and income.
   • Clearly outline the basis for the request, linking it to the relevant sections of the Family Law Act.

2. Justify the Need:

   • Demonstrate the necessity of the funds, such as legal fees, re-establishment costs, or maintenance requirements.
   • Show that the application is fair and does not disproportionately deplete the shared asset pool.

3. Present Supporting Evidence:

   • Provide evidence such as affidavits detailing financial hardship or inability to proceed with litigation without funds.
   • Include expert reports (e.g., valuations or accountancy advice) where applicable.

4. Attend Court Hearing:

   • Both parties will present arguments. The court will consider whether the request is reasonable, necessary, and consistent with achieving a just and equitable outcome.

Reasons for Granting an Interim Lump Sum Order

The court may grant an interim lump sum order for several reasons, including:

• To ensure procedural fairness by enabling a financially disadvantaged party to access the necessary resources to participate in proceedings.
• To prevent undue financial hardship where one party lacks access to shared funds.
• To maintain equity in litigation, ensuring that one party does not gain an unfair advantage due to control over the assets.
• To address urgent financial needs, such as securing accommodation or covering living expenses during the proceedings.

Key Considerations for Success

Courts assess interim applications carefully to avoid prematurely depleting the asset pool or creating inequities. A well-prepared application should:

• Clearly demonstrate the necessity of the funds.
• Ensure the amount sought is proportionate and justified.
• Show how the order aligns with the principles of fairness under the Family Law Act.

Final Thoughts

Interim lump sum orders play a vital role in family law by addressing immediate financial needs and ensuring equity during proceedings. By leveraging the provisions of the Family Law Act 1975 and presenting a well-supported application, parties can seek relief while working towards a just and equitable property settlement.