Entezam and Devi (No 2)

[2021] FamCA 122

FAMILY COURT OF AUSTRALIA

ENTEZAM & DEVI (NO. 2) [2021] FamCA 122

FAMILY LAW – NATIONAL ARBITRATION LIST – costs – novel point argued – no earlier authority on point in this court – not unsound for respondent to have argued the point she did having regard to FCCA authority – s 117(1) order made.

Family Law Act 1975 (Cth) ss 13J, 13K, 117(1), 117(2A)
Family Law Regulations 1984 (Cth) reg 67Q(3)

Entezam & Devi [2021] FamCA 25
Fitzgerald v Fish (2005) 33 Fam LR 123
Penfold v Penfold (1980) 144 CLR 311

APPLICANT: Mr Entezam

RESPONDENT: Ms Devi

FILE NUMBER: SYC 2844 of 2018

DATE DELIVERED: 16 March 2021

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Wilson J

HEARING DATE: On the papers

DATE OF FINAL SUBMISSIONS: 12 March 2021

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr A. Singh

SOLICITOR FOR THE APPLICANT: Opal Legal

COUNSEL FOR THE RESPONDENT: Mr A. Strik

SOLICITOR FOR THE RESPONDENT: Jack Rigg Solicitors

Orders

1. Pursuant to s 117(1) each party bears his and her own costs of and incidental to the application to register the award the subject of my determination in [2021] FamCA 25.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Entezam & Devi has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: SYC 2844 of 2018

Mr Entezam

Applicant

And

Ms Devi

Respondent

REASONS FOR JUDGMENT

Introduction

1. On 12 February 2021 I delivered reasons for judgment on the hearing of the contested application to register the arbitral award, concluding that Regulation 67Q(3) of the Family Law Regulations had not been validly invoked.[1]  In consequence I ordered the registration of the award.

   [1]Entezam & Devi [2021] FamCA 25.

2. The applicant in the proceeding in whose favour the award was registered has applied for an order under s 117(2A) of the Family Law Act requiring the respondent to the proceeding to pay costs in the sum of $8,111.40.

3. The applicant relies on several grounds[2] under s 117(2A). He contended that the respondent was wholly unsuccessful in resisting the application to register the arbitral award. He also submitted that the applicant had obtained a better outcome than was offered pursuant to an offer of compromise made by the respondent.

   [2] He relied on four but his counsel pressed two.

Synopsis

1. For the reasons that follow, in my view an order should be made under s 117(1) of the Family Law Act requiring each party to bear his and her own costs.

Consideration

1. The issue that fell for my determination in Entezam & Devi[3] was novel, raising an important point concerning the interaction between the Family Law Act and the Family Law Regulations in respect of the bases for challenging registration of an arbitral award.  I held that no earlier authority in this court existed on point, concluding that the “reason” to which Regulation 67Q(3) was directed was a reason connected to the validity of the process, the consensus of the parties or the integrity of the arbitral process.  On the facts of this case none of the 15 reasons urged by the respondent as representing reasons for not registering the arbitral award was a reason connected to the validity of the arbitral process, or the consensus of the parties or the integrity of the arbitral process for the purposes of Regulation 67Q(3).

   [3] [2021] FamCA 25.

2. To the date of my decision in Entezam & Devi, in several decisions of the Federal Circuit Court of Australia it had been held that the “reason” in Regulation 67Q(3) was the same as the reasons set out in s 13J and s 13K of the Family Law Act.  In Entezam & Devi I took a different view.  The decisions in those Federal Circuit Court authorities provided a rational jurisprudential basis for the respondent endeavouring to challenge the registration of the arbitral award in this case.  That challenge failed.  But that did not mean the arguments were untenable.  To the contrary – they accorded with authority that then prevailed.  It could not be said that the respondent ought not to have endeavoured to invoke the reasoning in them.

3. The costs of the arbitration have been met by the parties equally from funds in a controlled moneys account.  This costs application related only to the costs of and incidental to the unsuccessful opposition to the application to register the arbitral award.

4. In support of the application for his costs to be paid by the respondent the applicant relied on four subsections of s 117(2A) of the Family Law Act, namely s 117(2A)(a), s 117(2A)(c), s 117(2A)(e) and s 117(2A)(f). In Fitzgerald v Fish[4] it was held that one only of the subsections of s 117(2A) may be relied on for an order for costs to be made that deviates from an order under s 117(1).

   [4] (2005) 33 Fam LR 123.

5. The applicant relied on s 117(2A)(a), asserting that the conduct of the respondent supported the making of the costs order the applicant sought against her. The applicant contended that the respondent had pursued every ground available to her to challenge the award. He said the respondent had –

   a)objected to registration of the award;

   b)sought to review the award; and

   c)sought to set aside the award.

6. The applicant submitted that only on the hearing on 29 January 2021 when it was pointed out to the respondent that any application to review or set aside the award was predicated upon the award being first registered did the respondent confine her objection to the registration of the award.  The applicant submitted that until that day, the applicant was put to the expense of meeting the respondent’s case on each of the three grounds argued including those that went beyond the opposition to registration.

7. The applicant submitted that the respondent pressed all 15 grounds when contending, on any of those three abovementioned bases, that the award should be set aside, reviewed or simply not registered.

8. I do not accept that the applicant was required to devote considerable resources to responding to each ground of challenge. The respondent relied on 15 grounds in advancing all her challenges. In other words, there was no separate differentiation between grounds when the respondent urged her 15 bases for setting aside, reviewing or not registering the award. To my mind it is most unlikely that any different or variable expenses were incurred by the applicant when he resisted each of the 15 grounds, irrespective of those 15 grounds being cast as a basis for not registering the award, for setting it aside or for reviewing it. The respondent urged each of the 15 grounds as a basis for resisting the registration of the award. She failed on each. For reasons already mentioned, this application raised a novel point in this court. I declined to follow certain authorities from the Federal Circuit Court on the interpretation of Regulation 67Q(3). For reasons already mentioned, it was appropriate for the respondent to have relied on those authorities. Having regard to those authorities, it was also appropriate for the respondent to have cast her opposition to the registration of the award on the basis that she was also relying on s 13K(2) of the Family Law Act. As the state of the learning stood prior to my 12 February 2021 decision, the decisions of the Federal Circuit Court led to the construction of Regulation 67Q(3) as being synonymous with the grounds of s 13K(2) of the Family Law Act.  That uncertainty called for clarification which I gave in my reasons in Entezam & Devi.  That did not render the point unarguable, even if ultimately unsuccessful.

9. The applicant relied on the High Court’s decision in Penfold v Penfold[5] to the effect that the respondent adduced incorrect and misleading evidence justifying a costs order.  The arbitrator dealt with any allegedly erroneous or misleading evidence.  On this application I was concerned only with Regulation 67Q(3) and whether any of the 15 so-called reasons urged by the respondent amounted to “any reason” within the contemplation of that regulation.  In view of my conclusion that none did, it was not necessary to make any determination about whether the arbitrator was correct in relation to allegedly erroneous or misleading evidence from the respondent.

   [5] (1980) 144 CLR 311.

10. In my view there was no merit in the submissions made under s 117(2A)(c).

11. So far as s 117(2A)(e) was concerned, the applicant submitted the respondent was wholly unsuccessful in the proceeding with the consequence that she should pay his costs.  I do not agree.  She failed in her opposition to the registration of the award.  However, she pursued, albeit unsuccessfully, a basis of opposition which was sanctioned by the learning to that point in time.  In my view, especially in view of there being no authority in this court binding on me, she was entitled to take the points she did and is not to be fastened with a costs order for doing so.

12. Next the applicant argued that s 117(2A)(f) was enlivened because an offer of compromise had been made.  The respondent argued that the sole issue for arbitration was the existence and duration of a de facto relationship.  Conversely the applicant submitted that the arbitrator’s finding about the existence and duration of the de facto relationship was generous with the consequence that if the matter hereafter needs to be determined the applicant will inevitably receive an amount greater than the offer.  The applicant submitted that his offer was reasonable and so by not accepting it the respondent has caused the applicant to continue to incur legal expenses thereby further diminishing the pool of assets available for distribution.  That debate must await another day.

13. Having regard to the fact that the application determined by my decision dated 12 February 2021 related only to the registration of the arbitral award, I am unable to see how issues in relation to offers of compromise were relevant.

Disposition

1. In my view the appropriate order to be made is one under s 117(1). I make an order in those terms.

I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson delivered on 16 March 2021.

Associate: 

Date:  16 March 2021