Applicant:MR CAINE Respondent:MS CAINE
[2020] FCCA 225
•6 February 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| CAINE & CAINE | [2020] FCCA 225 |
| Catchwords: FAMILY LAW– The Family Law Act 1975 (Cth) and related legislation – procedure – costs – security for costs. HIGH COURT AND FEDERAL COURT – Federal Circuit Court – Procedure – ending proceedings early – summary disposal or stay. |
| Legislation: Administrative Appeals Tribunal Act 1975 (Cth), ss.44(1), 44AAA(1) |
| Cases cited: Adnunat Pty Ltd v ITW Constructions Systems Australia Pty Ltd [2009] FCA 499 Berry v Commissioner of Taxation [2015] FCA 1244 Birdseye v Australian Securities and Investments Commission (2003) 76 ALD 321 Brown v Repatriation Commission [1985] FCA 236 Child Support Registrar & Crabbe (2014) FLC ¶98–062 Haritos v Commissioner of Taxation (2015) 233 FCR 315 Jamal v Secretary, Department of Social Services [2017] FCA 916 Luadaka & Luadaka [1998] FamCA 1520 Sharma v LGSS Pty Ltd [2018] FCA 167 Weng & Wah [2019] FamCAFC 242 Westrupp v BIS Industries Limited (2015) 238 FCR 354 |
| Applicant: | MR CAINE |
| Respondent: | MS CAINE |
| File Number: | BRC 6733 of 2017 |
| Judgment of: | Judge Jarrett |
| Hearing date: | 18 October 2019 |
| Date of Last Submission: | 18 October 2019 |
| Delivered at: | Brisbane |
| Delivered on: | 6 February 2020 |
REPRESENTATION
| Counsel for the Applicant: | Mr Crofts |
| Solicitors for the Applicant: | McKean Park Lawyers |
| Counsel for the Respondent: | Mr Alexander |
| Solicitors for the Respondent: | Evans Brandon Family Lawyers |
ORDERS
The following matters be struck from the Second Further Amended Application in a Case filed on 3 September, 2019:
(a)Question 2 and paragraphs 3 and 4;
(b)Question 4 and paragraphs 6(a) and 6(b);
Within 21 days of the date of these orders the parties agree upon a Court Book index and within 14 days after such agreement the respondent, Mr Caine prepare, file and serve a copy of the Court Book;
No later than 28 days before the date fixed for hearing of the review application the respondent, Mr Caine, file and serve upon the applicant, Ms Caine, written submissions and a list of authorities in support of the application for review;
No later than 14 days before the date fixed for hearing of the review application the applicant, Ms Caine, file and serve upon the respondent, Mr Caine, written submissions and a list of authorities in support of her opposition to the application for review;
The application for review be listed for hearing at 10:00 am on 28 May, 2020.
IT IS NOTED that publication of this judgment under the pseudonym Caine & Caine is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRC 6733 of 2017
| MR CAINE |
Applicant
And
| MS CAINE |
Respondent
REASONS FOR JUDGMENT
By his second further amended application in a case filed 3 September, 2019 the applicant seeks to have an arbitral award between the parties published on 24 September, 2018 and registered pursuant to s.13H of the Family Law Act 1975 (Cth) set aside. The respondent resists the application.
The present application is one by the respondent to the review (Ms Caine) seeking the summary dismissal of the application for review. Mr Caine resists that application. In the event her application for summary dismissal fails, the Ms Caine seeks an order for security for costs of the application against Mr Caine. In turn, he resists that application.
For the reasons that follow, the application for summary dismissal should be partially successful and the application for security for costs should succeed in part.
Background
These proceedings commenced when the respondent to the present application filed an initiating application seeking property adjustment orders between the parties. The parties subsequently engaged in an unsuccessful mediation.
On 25 January, 2018 a judge of this Court made an order pursuant to s.13E of the Family Law Act 1975 (Cth), referring the whole of the proceedings to arbitration. That arbitration occurred on 21 and 22 June, 2018. Supplementary submissions were made on 25 June, 2018. An arbitral award was published on 24 September, 2018.
On 28 November, 2018 Ms Caine applied to have the award registered pursuant to s.13H of the Act. Mr Caine objected to registration of the award. The registration application was heard on 21 January, 2019 and judgment was reserved.
However, on 15 February, 2019 and before judgment on the registration application was delivered, Mr Caine withdrew his objection to the registration of the award. He nonetheless notified an intention to “appeal” the award. Consequently, the objection to registration of the award was dismissed and on 8 March, 2019 it was registered pursuant to s.13H of the Act.
Mr Caine commenced this application on 18 April, 2019. He has amended his application three times since. I have set out the details of his current application later in these reasons.
The statutory framework
The role of this Court in relation to family law arbitration is provided for in Division 4 of Part IIIB of the Act. The power of this Court to review and set aside awards registered in the Federal Circuit Court is specifically provided for in ss.13J and 13K.
Section 13J of the Act provides that, upon application for review of a s.13E award on questions of law, the Court may determine all questions of law arising in relation to the arbitration and make such decrees as appropriate including a decree affirming, reversing or varying the award.
Section 13K of the Act provides that if a s.13E award is registered in the Federal Circuit Court, then the Federal Circuit Court may make a decree affirming, reversing or varying the award. However, under this section the Court may only affirm, reverse or vary such a decree if the Court is satisfied that:
a)the award was obtained by fraud (including non‑disclosure of a material matter);
b)the award is void, voidable or unenforceable;
c)in the circumstances that have arisen since the award was made it is impracticable for some or all of it to be carried out; or
d)the arbitration was affected by bias, or there was a lack of procedural fairness in the way in which the arbitration process, as agreed between the parties and the arbitrator, was conducted.
The Second Further Amended Application in a Case is a curious document. Although the applicant seeks that the award be reviewed on four specified questions of law, no relief is sought pursuant to s.13J of the Act. However, the applicant seeks relief pursuant to s.13K of the Act, namely that:
a)the award and order registering the award be set aside;
b)the proceeding be remitted for final hearing; and
c)the present respondent pay the husband’s costs of and incidental to the application in a case on an indemnity basis.
None of the grounds specified in s.13K(2) of the Act are seemingly relied upon (none are specified) to found that relief. But as will be seen, arguably there is overlap between the first question of law posed by Mr Caine and the ground provided in s.13K(2)(d) of the Act.
Sections 13J and 13K of the Act
Sections 13J and 13K perform different work. Both sections permit the Court to make a decree affirming, reversing or varying an award. Section 13K permits the Court to make such a decree in relation to an agreement made as a result of an arbitration. However, the circumstances in which the power under each section arises is different.
Section 13J permits the Court to review an award “on questions of law”. That is a broad remit. I have set out later in these reasons what that procedure has come to mean in other statutory contexts.
Section 13K is more confined. It permits the Court to make a decree where it is satisfied that:
(a) the award or agreement was obtained by fraud (including non‑disclosure of a material matter); or
(b) the award or agreement is void, voidable or unenforceable; or
(c) in the circumstances that have arisen since the award or agreement was made it is impracticable for some or all of it to be carried out; or
(d) the arbitration was affected by bias, or there was a lack of procedural fairness in the way in which the arbitration process, as agreed between the parties and the arbitrator, was conducted.
Mr Caine’s argument does not suggest fraud, that the award or agreement is void, voidable or unenforceable or that in the circumstances that have arisen since the award was made it is impracticable for some or all of it to be carried out. Mr Caine’s application is couched in language which engages s.13J of the Act. As I have indicated above, there is some overlap between the first question of law posed by Mr Caine and the ground provided in s.13K(2)(d) of the Act.
The process of review or appeal on a question or questions of law also appears in other Commonwealth statutes and has garnered its own jurisprudence. For example, similar expressions appear in the Administrative Appeals Tribunal Act 1975 (Cth):
44 Appeals to Federal Court of Australia from decisions of the Tribunal
Appeal on question of law
(1) A party to a proceeding before the Tribunal may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal in that proceeding.
and in respect of child support proceedings:
44AAA Appeals to Federal Circuit Court from decisions of the Tribunal in relation to child support first reviews
(1) If the Tribunal as constituted for the purposes of a proceeding that is a child support first review does not consist of or include a presidential member, a party to the proceeding may appeal to the Federal Circuit Court of Australia, on a question of law, from any decision of the Tribunal in that proceeding.
In the context of s.44(1) of the AAT Act, it is the question of law that is the subject matter of the appeal: Haritos v Commissioner of Taxation (2015) 233 FCR 315 at [84] – [90]. Earlier instances of the same statutory formulation took the same approach: e.g., Brown v Repatriation Commission [1985] FCA 236 which was concerned with s.107VZZH(1) of the Repatriation Act 1920 (Cth).
In Haritos v Commissioner of Taxation the Full Court of the Federal Court of Australia (Allsop CJ, Kenny, Besanko, Robertson and Mortimer JJ) said:
62. We now turn to consider the more general questions raised by the appeal in relation to s 44 of the AAT Act. In summary, our conclusions are as follows:
(1) The subject-matter of the Court’s jurisdiction under s 44 of the AAT Act is confined to a question or questions of law. The ambit of the appeal is confined to a question or questions of law.
(2) The statement of the question of law with sufficient precision is a matter of great importance to the efficient and effective hearing and determination of appeals from the Tribunal.
(3) The Court has jurisdiction to decide whether or not an appeal from the Tribunal is on a question of law. It also has power to grant a party leave to amend a notice of appeal from the Tribunal under s 44.
(4) Any requirements of drafting precision concerning the form of the question of law do not go to the existence of the jurisdiction conferred on the Court by s 44(3) to hear and determine appeals instituted in the Court in accordance with s 44(1), but to the exercise of that jurisdiction.
(5) In certain circumstances it may be preferable, as a matter of practice and procedure, to determine whether or not the appeal is on a question of law as part of the hearing of the appeal.
(6) Whether or not the appeal is on a question of law is to be approached as a matter of substance rather than form.
(7) A question of law within s 44 is not confined to jurisdictional error but extends to a non-jurisdictional question of law.
(8) The expression “may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal” in s 44 should not be read as if the words “pure” or “only” qualified “question of law”. Not all so-called “mixed questions of fact and law” stand outside an appeal on a question of law.
(9) In certain circumstances, a new question of law may be raised on appeal to a Full Court. The exercise of the Court’s discretion will be affected not only by Coulton v Holcombe [1986] HCA 33; 162 CLR 1 considerations, but also by considerations specific to the limited nature of the appeal from the Tribunal on a question of law, for example the consideration referred to by Gummow J in Federal Commissioner of Taxation v Raptis [1989] FCA 557; 89 ATC 4994 that there is difficulty in finding an “error of law” in the failure in the Tribunal to make a finding first urged in this Court.
(10) Earlier decisions of this Court to the extent to which they hold contrary to these conclusions, especially to conclusions (3), (4), (6) and (8), should not be followed to that extent and are overruled. Those cases include Birdseye v Australian Securities and Investments Commission [2003] FCA 232; 76 ALD 321, Australian Securities and Investments Commission v Saxby Bridge Financial Planning Pty Ltd [2003] FCAFC 244, 133 FCR 290, Etheridge, HBF Health Funds and Hussain v Minister for Foreign Affairs [2008] FCAFC 128; 169 FCR 241.
…
[94]. In our opinion, the issue must be approached as one of substance. In cases of doubt, the Court should consider the notice of appeal, the alleged question or questions of law, the grounds raised, the statutory context, and the Tribunal’s reasons for its decision, and having considered all those matters, satisfy itself that there is in fact a question of law.
The Federal Court authorities referred to above have been decided in the context of the rules of that court which provide for a particular form to be utilised in such an appeal. Presently that is form 75. It requires the specification of the question or questions of law that are the subject of the appeal. It provides thereafter for specification of the grounds relied on in the application. They are two different matters and their relationship was addressed by Branson and Stone JJ in Birdseye v Australian Securities and Investments Commission (2003) 76 ALD 321 where, speaking of the former Federal Court Rules, they observed at [18] (my emphasis):
In our view, O 53 r 3(2) discloses an intention that a question of law to be raised on an appeal from the Tribunal should be stated with precision as a pure question of law. It is in the specification of the grounds relied upon in support of the orders sought that, in our view, one should expect to find the links between the question of law, the circumstances of the particular case and the orders sought on the appeal.
Although Birdseye was overruled in Haritos (as I have set out above), the ratio in Haritos says nothing about the emphasised sentence in the passage above. It continues to be applied. In Sharma v LGSS Pty Ltd [2018] FCA 167, Gleeson J observed at [30]:
The questions of law are to be stated separately from the grounds relied upon in support of the orders sought in the notice of appeal: P v Child Support Registrar [2013] FCA 1312 at [50] (“P”). In P at [51], Wigney J said:
The specification of the grounds relied upon in support of the orders sought should expose the links between the question of law, the circumstances of the particular case and the orders sought on the appeal: Birdseye [2003] FCAFC 232 at [17]-[18]. It is not legitimate to call in aid the grounds specified in the notice to read down the questions of law stated in the notice to what are truly questions of law. If the order sought is that the decision of the Tribunal be set aside, the grounds in support of that order should assume the resolution of the specified question of law in favour of the applicant and indicate, in a summary way, why that resolution requires the decision of the Tribunal to be set aside: Lambroglou at 524. Grounds drawn up in that way could not elucidate a question of law.
Similarly, in the context of child support appeals, in Child Support Registrar & Crabbe (2014) FLC ¶98–062 the Full Court of the Family Court of Australia (Bryant CJ, Finn and Kent JJ) said:
54. The following principles emerge from these authorities and have relevance to our decision as to whether the Federal Magistrate erred in his review of the SSAT decision in a manner which requires our intervention:
· The question of whether there is evidence to support a finding of fact or an inference drawn from findings of fact is a question of law (Al-Miahi).
· The making of a finding of fact or the drawing of an inference in the absence of evidence is an error of law (Al-Miahi).
· A wrong finding of fact is not an error of law (Al-Miahi).
· A finding of fact based on reasoning that is “demonstrably unsound” or on an “illogical course” or a “faulty process” of reasoning is not an error of law (Al-Miahi).
· Judicial review is not to be over-zealous in seeking to find inadequacy of reasoning by an administrative decision maker; the review of the reasons of an administrative decision maker must not be turned into a reconsideration of the merits of the decision (Wu Shan Liang).
Given the similarity between the text of the subsection conferring jurisdiction on the Court to review arbitral awards and that conferred by ss.44(1) and 44AAA(1) of the AAT Act, it is appropriate in my view to apply the principles that emerge from the cases I have referred to above when determining an application pursuant to s.13J(1) of the Family Law Act. That is to say, the subject matter of the review is the question or questions of law identified by the applicant for review and which emerge from the arbitration process and award. The review is confined to the questions of law so identified. The question or questions identified in the review application need not be “pure” questions of law, but might be seen as mixed questions of law and fact. But a question of law must be involved. The statement of the questions of law is important, but a failure to so state the questions in the application for review is not fatal. It is the substance of the application which is important. Although the form prescribed by the Federal Circuit Court Rules 2001 does not require the separate specification of the question or questions of law raised in the review, from the grounds relied upon in the review, having regard to the Federal Court authorities discussed above, best practice would dictate such an approach in applications under s.13J of the Act.
A question of law is not synonymous with an error of law. In Haritos (above), the Full Court said, at [92]:
We agree with Ryan J in [Australian Telecommunications Corporation v Lambroglou (1990) 12 AAR 515] that merely to assert that the Tribunal erred in law in making a particular finding is not to state a question of law. We also agree with the later statement by Ryan J, at 527, that: “[I]t simply begs the question of law to commence it with the words ‘whether the Tribunal erred in law’. If the question, properly analysed, is not a question of law no amount of formulary like ‘erred in law’ or ‘was open as a matter of law’ can make it into a question of law.” (Emphasis added.) But this is not to say that it is impermissible to commence a question of law for the purposes of s 44 with the expression ‘whether the Tribunal erred in law’ if that is given sufficiently precise content by what follows.
See also Jamal v Secretary, Department of Social Services [2017] FCA 916 at [15]; Westrupp v BIS Industries Limited (2015) 238 FCR 354 at [15] and Berry v Commissioner of Taxation [2015] FCA 1244 at [25].
Consideration of the proposed questions of law
I turn then to the questions of law contended for by the applicant as set out in the Second Further Amended Application in a Case.
The first question of law for which the applicant contends is in the following terms (footnotes omitted):
Question One - Can the Arbitrator reach a conclusion outside the range advocated for by the parties and further can he do so without giving the parties an opportunity to be heard?
1 Whether it was open to the Arbitrator as matter of law and/or failed to afford the Respondent natural justice, for the Arbitrator to:
(a) Arrive at a “view”“ that “it is appropriate to assess the contributions of the parties as to 65% to the Applicant (Wife) and 35% to the Respondent (Husband)” in circumstances where:
(i) The Wife had conceded in written submissions made by direction after the conclusion of the arbitral hearing that “a contributions” based assessment would be 60% to the Wife and 40% to the Husband”;
(ii) The Husband had sought in written submissions made by direction after the conclusion of the arbitral hearing that he “retain 55 - 60% of the pool based on contribution”.
(b) Not-with-standing the Arbitrator’s view being outside the position sought by either party, he failed to give the husband an opportunity to be heard on the Arbitrator’s “view”.
2 Whether it was open to the Arbitrator as matter of law to order that “the property of the parties be apportioned 55% to the Wife and 45% to the Husband” in circumstances where:
(a) the Wife had conceded in written submissions made after the conclusion of the arbitral hearing that:
(i) “a contributions” based assessment would be 60% to the Wife and 40% to the Husband”; and
(ii) There should be “an adjustment to the Husband of no more than 10% by reason of the disparity in earning capacity, financial resources, health and age of the parties”.
(b) The Husband had sought in written submissions made after the conclusion of the arbitral hearing that:
(i) He “retain 55 - 60% of the pool based on contribution”; and
(ii) That he sought “a 10 - 15% adjustment for future needs noting that on the wife’s current salary 10% amounts to little more than one year’s income for her”.
(c) The Arbitrator expressed the “view” that:
(i) “it is appropriate to assess the contributions of the parties as to 65% to the Applicant (Wife) and 35% to the Respondent (Husband)”;
(ii) “I consider that an adjustment is required in favour of the respondent to take account of s 75(2) factors. In all of the circumstances of the case, a 10% adjustment is appropriate”;
(iii) The husband was “entitled to 45% of the pool”.
(d) The Arbitrator utilised an apparent, and impermissible, presumption against adjustment - as evidenced by the statement “Despite the Respondent’s age”.
This question poses two questions of law as one compendious question, namely:
a)can an arbitrator conducting an arbitration for the purposes of s.13E of the Family Law Act reach a conclusion outside the range advocated for by the parties? and
b)if so, can the arbitrator do so without giving the parties an opportunity to be heard about the conclusion that the arbitrator proposes to reach?
Paragraphs 1 and 2 provide the grounds of the review in much the same way that the grounds relied upon operate in a s.44(1) appeal from the Administrative Appeals Tribunal to the Federal Court. There is some overlap, repetition and lack of precision, but the intent is clear:
a)assuming that an arbitrator conducting an arbitration for the purposes of s.13E of the Family Law Act cannot reach a conclusion outside the range advocated for by the parties without first giving the parties an opportunity to be heard about the conclusion that the arbitrator proposes to reach (a matter about which I make no determination); then
b)it was not open to the arbitrator to make an award:
i)based upon a finding that contributions of the parties were “65% to the Applicant (Wife) and 35% to the Respondent (Husband)” because:
(1)Ms Caine had conceded in written submissions made by direction after the conclusion of the arbitral hearing that “a contributions” based assessment would be 60% to her and 40% to Mr Caine; and
(2)The arbitrator did not hear further from the parties about his intention to depart from that concession;
ii)that “the property of the parties be apportioned 55% to the Wife and 45% to the Husband” because:
(1)Ms Caine had conceded an adjustment to the parties’ contribution based entitlement in Mr Caine’s favour “of no more than 10% by reason of the disparity in earning capacity, financial resources, health and age of the parties”;
(2)Mr Caine had sought in written submissions made after the conclusion of the arbitral hearing that he “retain 55 - 60% of the pool based on contribution” and “a 10 - 15% adjustment for future needs noting that on the wife’s current salary 10% amounts to little more than one year’s income for her”.
Despite some conflict of views, in the context of appeals under s.44(1) of the AAT Act it has now been authoritatively held that whether a person was denied procedural fairness by the AAT raises a question of law: Haritos (above) at [202]. Although that case was decided in the context of administrative decision making under the scheme established by the AAT Act, arguably the principle applies in the context of the present case. That will, no doubt, be a matter for argument at the hearing of the present review. For present purposes, however, I am satisfied that question 1 proposed by Mr Caine does raise a question of law.
The next question is stated as follows:
Question Two - Did the Arbitrator misapprehend the facts or make an entirely erroneous assessment of the issues?
3. Whether it was open to the Arbitrator as a matter of law to:
(a) Be “satisfied’ that “the payment to the Applicant of $741,473.19 will result in an adjustment that is just and equitable” in circumstances where the Arbitrator:
(i) was “conscious that from this sum the [Husband] will have to meet his legal fees”;
(ii) subsequently determined that the Husband pay the legal costs of the Wife fixed in the sum of $31,995.10;
(iii) also made the findings detailed at paragraph 3(b) below.
(b) “Conclude” that the Husband “will receive a generous payment of cash that will enable him to maintain a standard of living that is appropriate” in light of the Arbitrator’s findings that:
(i) the Husband was 59 years of age; and
(ii) the Husband’s state of health when compared to the Wife and especially the Arbitrator’s own findings that the Husband:
(A) has a serious physical disability and has not worked outside the parties’ business for many years;
(B) has a knee injury and back pain and suffers from an acute stress disorder and an adjustment disorder;
(C) has limited employment opportunities and may require a total knee replacement;
(D) was issued with a Serious Injury Certificate following the workplace accident in 2008 and has not worked in the open labour market since that time; and
(iii) the Husband’s capacity to obtain appropriate gainful employment when compared to the Wife and especially the Arbitrator’s own findings that;
(A) the Husband has limited education and may have dyslexia;
(B) As to the Husband’s health detailed at paragraph 3(b)(ii) above;
(C) The Husband is unemployed and in receipt of new start allowance;
(D) The Wife will remain employed as a professional with a current salary of $208,481.63 per annum and “will retain a much higher income earning capacity than the Respondent”; and
(iv) the commitments necessary to enable the Husband to support himself when compared to the Wife and especially the Arbitrator’s own findings that:
(A) the Wife would retain:
(I) her Perth apartment which had an agreed value of $622,000;
(II) her shares, and a modest sum of cash but would “continue to earn a lucrative income”; and
(B) In respect of the Husband the matters set out at paragraphs 3(a) and 3(b)(i) to (iii) above when the Husband otherwise retained only $119,456 after allowance for spousal maintenance during the period of separation.
(c) The Arbitrator had regard, or inappropriate regard, to the Wife’s speculation that at 38 years of age, and with no evidence that she was in any relationship, wished to have children and concluded “which will necessitate some time out of the workforce and then when she returns .... will lead to a likely reduction of income”.
4 Whether it was open to the Arbitrator and did not amount to an error of law in being the wholly erroneous assessment of the relevant issues and evidence to:
(a) Arrive at a “view’’ that “it is appropriate to assess the contributions of the parties as to 65% to the Applicant (Wife) and 35% to the Respondent (Husband)”, in the light of:
(i) s. 79(4)(a) to (c) of the Act - in that the Arbitrator failed to consider and apply, alternatively properly consider and apply, the contributions made by the Husband and particularly;
(A) the duration of the marriage and the period prior to marriage in which they cohabitated (from 2007) and shared an intimate relationship (from 2002);
(B) the Husband’s contribution to the income, earning capacity, property and financial resources of the Wife during the marriage and their earlier period of cohabitation;
(ii) the matters at paragraph 1 hereof;
(iii) the justice of the case generally.
(b) To order that “the property of the parties be apportioned 55% to the Wife and 45% to the Husband’ in the light of:
(i) s. 79(4)(a) to (c) of the Act - in that the Arbitrator failed to consider and apply, alternatively properly consider and apply, the contributions made by the Husband and particularly;
(A) the duration of the marriage and the period prior to marriage in which they cohabitated (from 2007) and shared an intimate relationship (from 2002);
(B) the Husband’s financial and non- financial contributions to the income, earning capacity, property and financial resources of the Wife during the marriage and their earlier period of cohabitation;
(ii) s. 79(4)(d) to (e) of the Act - in that the Arbitrator failed to consider and apply, alternatively properly consider and apply, the effect of the proposed award on the parties earning capacities or the provisions of s. 75(2) of the Act in so far as they were relevant and particularly:
(A) the matters set out at paragraphs 3(a) (i) to (ii) above; and
(B) The matters set out at paragraphs 3(b) and 3(c) above;
(iii) the justice of the case generally.
Purported question 2 does not raise a question of law. Neither do the numbered paragraphs. They are complaints about the merits of the decision and the weight attributed to various matters by the arbitrator in arriving at his decision. The use of the phrase “Whether it was open to the Arbitrator as a matter of law” does not convert the complaints about the merits of the decision into a question of law. At best, it might be said that what is being suggested is that the arbitrator did not take into account relevant mandatory considerations, but a perusal of the arbitrator’s reasons reveals that each of the matters referred to by the applicant in this ground was considered by the arbitrator, just not in the way in which the applicant would have preferred – hence the formulation used in the grounds “in that the Arbitrator failed to consider and apply, alternatively properly consider and apply….”.
To the extent that this question asserts that the arbitrator “made an entirely erroneous assessment of the issues”, the question (and the following paragraphs) does not identify the issues identified by the arbitrator (erroneously or at all). Nor does it suggest what the correctly identified issues should have been.
This purported question does not raise a question of law. Nor can it be seen as engaging any of the grounds set out in s.13K(2) of the Act.
The third question of law is stated in the following terms:
Question Three - Whether the arbitrator provided adequate reasons?
5 Whether it was open to the Arbitrator as a matter of law to fail, as he did, to adequately expose the reasoning process by which he arrived at:
(a) His “view’’ that “it is appropriate to assess the contributions of the parties as to 65% to the Applicant (Wife) and 35% to the Respondent (Husband)” in light of the matters at paragraph 1;
(b) His “view” that only a “10% adjustment . . . [for S75(2) factors] .. . is appropriate” having regard to the provisions of s. 79(4)(a) to (c) and s. 75(2) of the Act and especially the specific matters detailed in paragraph 2 and 3 above;
(c) His findings that:
(i) “the payment to the Applicant of $741,473.19 will result in an adjustment that is just and equitable”;
(ii) the Husband “will receive a generous payment of cash that will enable him to maintain a standard of living that is appropriate”.
having regard to the matters detailed at paragraph 3 above.
This question is best restated as “Must an arbitrator conducting an arbitration pursuant to s.13E of the Family Law Act provide to the parties adequate reasons for any award made in the arbitration?”. Paragraph 5 then goes on to add the grounds of the review and assert (at least by implication) that the arbitrator did not provide adequate reasons for his award in this case. The significance of that inquiry depends upon the answer to the question of law posed, which in turn, must be considered in the statutory context in which the arbitration was conducted.
This question raises a question of law. The paragraphs which support it can remain and retain meaning notwithstanding that paragraph 3 will be struck out as I have indicated above.
The fourth question of law is stated in the following terms:
Question 4 - whether the Arbitrator acted on a wrong principle?
6 Whether it was open to the Arbitrator as a matter of law to determine not to accept or rely upon the evidence of the Husband unless it was accepted by the Wife or corroborated by a contemporaneous document in circumstances where:
(a) The Arbitrator did not find that the Husband was being deceitful or deliberately ignorant in his answers so as to gain some forensic advantage; and
(b) The Arbitrator acknowledged that it was and is inappropriate to rely on conclusions based simply on the demeanour of the witness; and
(c) The Arbitrator failed to, or failed adequately to, expose the reasoning process by which he was lawfully permitted to reject the whole of the husband’s evidence in matters of disputed fact between the parties unless corroborated by a contemporaneous document.
The wrong principle said to have been acted upon by the arbitrator is not identified. In my view, this purported question does not raise a question of law. As paragraph 6 makes clear, it attacks the fact finding undertaken by the arbitrator and his determination to treat Mr Caine’s evidence in a particular way. The matter raised in paragraph 6(c) is covered by the third question of law set out above relating to adequate reasons, but the other matters (paragraph 6(a) and 6(b)) reveal this purported question not to be a question of law at all, but a complaint about the factual determination concerning the reliability of Mr Caine’s evidence made by the arbitrator.
Save for paragraph 6(c), this question does not raise a question of law. Again, save for paragraph 6(c) which can be conveniently considered in the context of s.13J, the matters raised in this proposed question cannot be seen as engaging any of the grounds set out in s.13K(2) of the Act.
Summary dismissal
Ms Caine bears the onus of persuading the Court that Mr Caine has no reasonable prospect of successfully prosecuting his application or a claim within those proceedings. If she does so, then pursuant to r.13.10 of the Federal Circuit Court Rules 2001 and s.17A of the Federal Circuit Court of Australia Act 1999, the Court might summarily dismiss Mr Caine’s proceedings or claim within the proceeding. To do so is discretionary and the Court must exercise the discretion with caution. What is required is a critical examination of the available materials to determine whether there is a real question that should be decided having regard to the particular circumstances of the case: Adnunat Pty Ltd v ITW Constructions Systems Australia Pty Ltd [2009] FCA 499.
Given that it is the question or questions of law that are the subject matter of the application to review under s.13J of the Act, only those parts of the application that specify a question of law should be permitted to proceed. The others should be summarily dismissed because those complaints will not engage the Court’s power under s.13J of the Act.
As I have set out above, purported questions 1 and 3 raise arguable questions of law. Purported questions 2 and 4 do not (save for that in paragraph 6(c) which can be accommodated underground 3). Accordingly, I decline to summarily dismiss questions 1 and 3. I find, however, that Mr Caine has no reasonable prospect of successfully prosecuting questions 2 and 4. Those questions should be summarily dismissed.
I have contemplated summarily dismissing all questions because no relief has been sought pursuant to s.13J of the Act. The relief sought is sought pursuant to s.13K of the Act. On the face of the application, ss.13K(2)(a)(b) and (c) are not engaged, nor intended to be engaged. Subsection 13K(2)(d) overlaps with the first question of law identified above insofar as it relied upon a lack of procedural fairness on the part of the arbitrator. Thus the claim for relief pursuant to s.13K(1) is not inappropriate. The failure to seek relief pursuant to s.13J can be cured by a simple amendment.
Security for Costs
In the event that her application to summarily dismiss Mr Caine’s claim is unsuccessful, the applicant seeks security for her costs of the application. The parties agreed that the principles to be applied on the application are those that fell from the Full Court of the Family Court of Australia in Luadaka & Luadaka [1998] FamCA 1520 at [61 to 62], recently summarised by Kent J in Weng & Wah [2019] FamCAFC 242 as follows:
13. The power to make an order for security for costs is found in s 117 of the Family Law Act 1975 (Cth) (“the Act”). Each of the wife and the son have the onus in their respective applications of establishing circumstances that justify an order as to costs, pursuant to s 117(2) of the Act, by reference to the relevant matters referred to in s 117(2A) of the Act and the relevant discretionary considerations for security for costs orders.
Whilst described in different ways and with varying emphasis, the authorities establish that the following (non-exhaustive) list of factors, additional to or in the context of the five specific matters identified in s 117(2A) of the Act, may be relevant to the exercise of discretion to order security for costs in respect of an appeal:
a) Whether the claim for security is made bona fide;
b) The financial circumstances of the parties to the proceedings: impecuniosity of the appellant is not alone sufficient to justify an order for costs but nor does it prevent an order being made if there are other grounds which justify an order. As regards the respondent, an order is not confined to cases where the respondent (the applicant for security) does not have the means to meet his or her costs – in appropriate circumstances an order may be made even if the applicant for security has the means to meet his or her costs;
c) The prospects of success of the appeal – ordinarily the Court will not undertake a detailed assessment of the likelihood of the appellant’s success unless it can be demonstrated that there is a high probability of success or failure;
d) Whether the appeal is bona fide, whether it is genuine and not trivial, vexatious or a sham;
e) Whether an order for costs would be oppressive or stifle the litigation: that prospect does not require a refusal of the application but is often a significant matter;
f) Whether or not the litigation involves a matter of public importance (if so, this will militate against the making of an order);
g) Whether or not there has been delay in bringing the application for security and consequent prejudice to the respondent (appellant);
h) Other relevant matters may include any difficulties of enforcing an order for costs and the amount of costs to be incurred.
(See Luadaka v Luadaka (1998) FLR 92-830; Jones and Jones (2001) FLC 93-080; Adult Guardian and Mother’s Parents and B and Child’s Representative (2002) FLC 93-116; Sawer & Sawer [2007] FamCA 140; Palma & Caleffi and Anor (Security for Costs) [2011] FamCAFC 174; Malcher & Malcher (Security for Costs) (2017) FLC 93-803; Atkins & Hunt (Security for Costs) (2015) FLC 93-646 and Frazier & Valdez (2016 FLC 93-729)).
Ms Caine submits that when regard is had to the questions of law raised by the husband and the grounds relied upon to support them, the Court should quickly conclude that Mr Caine has little prospect of success. The grounds relied upon, it is said, are complaints about findings of fact and at times, the weight ascribed to various matters by the arbitrator. In the absence of a question of law those matters are of no importance to the current application and are an impermissible attempt to review the merits of the award.
Mr Caine received nett property pursuant to the award of $638,301. Of that, over $55,000 is represented by motor cycles, car and watercraft received under the award. As best as I can tell, the balance was in cash that was then his solicitor’s trust account and the trust account of the wife’s solicitors. That was agreed by the parties to be $600,000 in his solicitor’s trust account (see replacement ex.1 before the arbitrator) and $108,718.15 held in the wife’s solicitor’s trust account. He has since sold one boat. He has purchased a caravan, he says, because he cannot afford a suitable home given the cash component of his property settlement and his inability to work. He does not say how much of the cash is left or what has become of it. There is no evidence before me as to what, if any, funds he retains. Mr Caine deposes that he is unemployed, but nonetheless according to Ms Caine’s evidence seems to travel outside the Commonwealth of Australia frequently. He lives in rented accommodation and has done so since March, 2018. Mr Caine does depose to the capacity to meet an order for security should one be made. To the extent that he submits that an order for security would stifle the litigation his own evidence is against that proposition.
Mr Caine argues that given the chattels he retained under the award, there are assets against which Ms Caine could levy any judgment for costs in her favour. However those assets are capable of easy disposal. He offers no undertaking to retain them until agreement between the parties or order of the Court. He offers Ms Caine no security over them.
It is difficult to conclude that Mr Caine’s application enjoys a high probability of failure. The subject matter of the application is the questions of law identified above, not a reconsideration of the merits of the findings and assessments made by the arbitrator. I have identified that the application in its present form does raise questions of law. The prospects of the resolution of those questions leading to favourable relief for Mr Caine cannot be ascertained without argument. I have made no detailed assessment of them. Mr Caine’s case as revealed by those questions identified above is not unarguable and it cannot in my view be said to be highly likely to fail.
Mr Caine submits that the litigation involves a matter of public importance. He submits that “with the Court’s emphasis on ADR including arbitration, precedent decisions on the extent to which procedural fairness applied to an arbitrators (sic) decision are such a matter”. I do not accept that submission.
I am not satisfied that there are special circumstances here that warrant the making of an order for costs pursuant to s.117(2) of the Family Law Act and specifically an order for security for costs of the present application. Notwithstanding the liquid nature of the husband’s assets, the lack of information about his current financial circumstances, the lack of any matter of public importance involved in the application and his concession that an order for security will not stifle the litigation, it is for the applicant for security to persuade the Court that an order is appropriate. I am not so persuaded and in my view, an order for security for costs is not appropriate. That application will be dismissed.
Conclusions
The form of the application filed by Mr Caine highlights two issues. First, it is imperative that on such an application the source of the power the Court is being asked to exercise is clearly identified. There is a significant difference between the nature of a review based upon s.13J of the Act and a review based upon s.13K. The application should make clear the nature of the review being pursued. Second, if the review is pursued pursuant to s.13J of the Act, the application must make clear the question or questions of law which are said to form the subject matter of the review. They should be posed with precision. For each question so identified, the application should include grounds of review in support of the orders sought which expose the links between the question of law, the circumstances of the particular case and the orders sought on the review.
It is appropriate to order that proposed questions of law 2 and 4 be struck out of the second further amended application in a case filed on 3 September, 2019. Ground 6(c) of question 4 can be taken up as part of question 3 and the argument concerning adequacy of the arbitrator’s reasons.
I have set out some directions for the preparation of the application for hearing in the orders at the commencement of these reasons.
The application for security for costs should be dismissed.
I certify that the preceding fifty-four (54) paragraphs are a true copy of the reasons for judgment of Judge Jarrett delivered on 6 February 2020
Associate:
Date: 6 February 2020
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