Entezam & Devi (No. 3)
[2021] FamCA 549
•28 July 2021
FAMILY COURT OF AUSTRALIA
Entezam & Devi (No. 3) [2021] FamCA 549
File number(s): SYC 2844 of 2018 Judgment of: WILSON J Date of judgment: 28 July 2021 Catchwords: ARBITRATION – application to review arbitral award under s 13J of the Family Law Act.
ARBITRATION – application for an order reversing, varying or setting aside arbitral award under s 13K of the Family Law Act.
BIAS – unparticularised allegation of bias by respondent – allegations not differentiated between actual bias or apprehended bias – no bias by arbitrator demonstrated.
PROCEDURAL FAIRNESS – unparticularised allegation that arbitrator denied respondent procedural fairness – no denial of procedural fairness demonstrated.
QUESTION OF LAW – costs award – arbitrator ordering scale costs yet not identifying the relevant scale and instead ordering a lump sum of costs in excess of $64,000 – no treatment given to the justice of an award being made in that amount – no treatment given to manner in which that sum was made up – error demonstrated – costs to be assessed by a registrar of this court.
Legislation: Evidence Act 1995 (Cth) s 41
Family Law Act 1975 (Cth) ss 13E, 13H, 13J, 13K, 117
Family Law Regulations 1984 (Cth) regs 67H, 67Q
Property (Relationships) Act1984 (NSW)
Cases cited: AK v Western Australia (2008) 232 CLR 438
Australian Timber Workers' Union v Monaro Sawmills Pty Ltd (1980) 42 FLR 369
AYX16 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCAFC 99
Belding & Belding [2020] FamCA 1027
Berowra Holdings Pty Ltd v Gordon (2006) 225 CLR 364
Briginshaw v Briginshaw (1938) 60 CLR 336
Campbelltown City Council v Vegan (2006) 67 NSWLR 372
Cantwell v Beitzel (2014) 87 NSWLR 103
Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337
Entezam & Devi (2021) 62 Fam LR 637
Entezam & Devi (No. 2) [2021] FamCA 122
Goodrich Aerospace Pty Ltd v Arsic (2006) 66 NSWLR 186
Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378
In the Marriage of Hogan (1986) 10 Fam LR 681
Isbester v Knox City Council (2015) 255 CLR 135
Johnson v Johnson (2000) 201 CLR 488
McCarroll v Fitzmaurice [1979] 2 NSWLR 100
Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427
Mifsud v Campbell (1991) 21 NSWLR 725
Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 208 CLR 507
NRMA Insurance Ltd v Tatt (1989) 94 FLR 339
Pettitt v Dunkley [1971] 1 NSWLR 376
Public Service Board of New South Wales v Osmond (1986) 159 CLR 656
R v Immigration Appeal Tribunal; ex parte Khan [1983] QB 790
Re JRL; ex parte CJL (1986) 161 CLR 342
Resi Corporation v Munzer [2016] SASCFC 15
Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (2001) 207 CLR 72
Stead v State Government Insurance Commission (1986) 161 CLR 141
Sun Alliance Insurance Ltd v Massoud [1989] VR 8
Transport Accident Commission v Kamel [2011] VSCA 110
Watson v Anderson (1976) 13 SASR 329
Wei & Wei [2020] Fam CA 98
Wright v Australian Broadcasting Commission [1977] NSWLR 697
Yendall v Smith Mitchell & Co Ltd [1953] VLR 369
Professor Patrick Parkinson, Family Property Arbitration: Exploring the New Potential (Paper presented at ESFLPG Weekend, Katoomba, June 2016) 9
Number of paragraphs: 122 Date of hearing: 13 & 21 July 2021 Place: Melbourne 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
SYC 2844 of 2018 BETWEEN: MR ENTEZAM
Applicant
AND: MS DEVI
Respondent
ORDER MADE BY:
WILSON J
DATE OF ORDER:
28 JULY 2021
THE COURT ORDERS THAT:
1.In relation to the substantive award I dismiss the respondent’s application to review the award under s 13J of the Family Law Act and I dismiss the respondent’s application for an order reversing or varying the substantive award under s 13K of the Family Law Act.
2.In relation to the costs award, I order the review of the costs award and vary the costs award by substituting for the sum ordered by the arbitrator of $64,423.56 such sum, less than $64,423.56, as is assessed by a registrar.
3.The registrar must assess those costs by 4pm on 29 September 2021.
4.The costs assessed by the registrar pursuant to paragraph 2 hereof must be paid by 4pm on 29 October 2021.
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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
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).
REASONS FOR JUDGMENT
WILSON J:
INTRODUCTION
Under s 13E of the Family Law Act, on 20 March 2019 Benjamin J referred the totality of this proceeding to arbitration.
On 28 October 2020 the arbitrator published his award[1] and on 11 February 2021 the arbitrator separately published his award in relation to costs.[2]
[1] The parties described that award as “the substantive award”.
[2] The parties described that award as “the costs award”.
On 12 February 2021 the challenge to the registration of the substantive award was determined and an order was made pursuant to s 13H of the Family Law Act as well as Regulation 67Q(5) of the Family Law Regulations, registering the substantive award.[3] Judgment in relation to the costs of the award registration application was handed down on 12 March 2021.[4] By order made by me on 17 March 2021, the arbitrator’s costs award was registered.
[3] Entezam & Devi (2021) 62 Fam LR 637.
[4] Entezam & Devi (No. 2) [2021] FamCA 122.
Ms Devi, the respondent to this proceeding, has applied for orders –
(a)under s 13K(1) setting aside the substantive award;
(b)under s 13K(1) setting aside the costs award;
(c)under s 13J reviewing the substantive award if an order under s 13K in relation to the substantive award was refused;
(d)under s 13J reviewing the costs award if an order under s 13K in relation to the costs award was refused; and
(e)that the costs award be unenforceable until determination of the application under s 13K or alternatively s 13J.
In opposing the registration of the substantive award, the respondent relied on three issues,[5] namely, her contention that –
(a)the arbitrator was biased;
(b)the arbitrator did not appropriately weigh information; and
(c)the substantive award contained inadequate and inconsistent reasons.
[5] Paragraph 4 of her affidavit made 16 March 2021.
The substantive award was registered on the basis that those contentions did not amount to “any reason” for the purposes of Regulation 67Q(3) of the Family Law Regulations because the “reason” to which that regulation was directed needed to “be one by which a judge can conclude that the arbitral award is void ab initio.”[6] Those include what Professor Parkinson describes as “conditions precedent”, namely –
(a)the objecting party did not consent to the arbitration;
(b)the ‘arbitrator’ is not qualified in accordance with the Regulations; or
(c)the arbitration purported to deal with matters outside of the scope of matters that may legally be arbitrated.[7]
[6] Entezam & Devi (2021) 62 Fam LR 637 (at [29]).
[7] Professor Patrick Parkinson, Family Property Arbitration: Exploring the New Potential (Paper presented at ESFLPG Weekend, Katoomba, June 2016) 9.
The respondent did not oppose the registration of the costs award.
Pursuant to consent orders made by me on 26 March 2021 requiring the respondent to file and serve documents in support of her application, the respondent filed –
(a)an undated statement of facts and contentions;
(b)the affidavit of Mr B made 7 May 2021; and
(c)written submissions dated 18 June 2021.
The substantive award and the costs award were stayed by consent pending the determination of the respondent’s applications herein.
SYNOPSIS
For the reasons that follow, I order as follows –
(a)in relation to the substantive award I dismiss the respondent’s application to review the award under s 13J of the Family Law Act and I dismiss the respondent’s application for an order reversing or varying the substantive award under s 13K of the Family Law Act;
(b)in relation to the costs award, I order the review of the costs award and vary the costs award by substituting for the sum ordered by the arbitrator of $64,423.56 such sum, less than $64,423.56, as is assessed by a registrar;
(c)the registrar must assess those costs by 4pm on 29 September 2021; and
(d)the costs assessed by the registrar pursuant to paragraph 10(b) hereof must be paid by 4pm on 29 October 2021.
THE RESPONDENT’S CONTENTIONS CONCERNING THE SUBSTANTIVE AWARD
The respondent advanced a collection of propositions in support of the relief she sought under s 13K and s 13J of the Family Law Act.[8] Relevantly paraphrased she contended that –
(a)the subject matter of the litigation was governed by the Property (Relationships) Act 1984 (NSW) rather than it being governed by the Family Law Act having regard to the duration of the parties’ de facto relationship;
(b)the substantive award should not be registered under s 13K;[9]
(c)the arbitration was affected by bias;
(d)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; and
(e)the arbitration should not be registered under s 13J of the Family Law Act because “the applicant should not be allowed to profit from his own illegal acts in obtaining Centrelink benefits and then being able to come back against the respondent later”.[10]
[8] She relied on an undated document styled “statement of facts and contentions with orders”.
[9] On 12 February 2021 the substantive award was registered under Regulation 67Q(5) of the Family Law Regulations and s 13H of the Family Law Act so that contention, erroneously relying on s 13K of the Family Law Act should have sought affirmation, variation or reversal of the award.
[10] The quoted portion emerged from contention four of the respondent’s facts and contentions document.
STATEMENT OF AGREED FACTS
Counsel for the respondent and counsel for the applicant prepared a document entitled “agreed facts,” comprised of 31 paragraphs. Most of the facts set out in the agreed facts document related to issues the arbitrator was required to determine in order to resolve a threshold issue in the litigation, namely whether a de facto relationship existed between the parties and if so the duration of that relationship including its commencement and conclusion dates. The arbitrator determined that a de facto relationship existed between the parties in the period from 1 July 1991 and 31 August 2016, a little over 25 years. The seven issues styled “disputed facts” and set out in the respondent’s statement of facts and contentions went to the factual matrix in relation to the fact and duration of the de facto relationship between the parties. The statement of agreed facts and of disputed facts was of little utility on the return of these applications having regard to the arbitrator already having made factual findings that underpinned his conclusions about the phenomenon of and duration of the de facto relationship.
SECTION 13K OF THE FAMILY LAW ACT
Once the arbitral award is registered, s 13K of the Family Law Act empowers this court to make a decree affirming, reversing or varying the arbitral award. The power conferred by s 13K(1) is not at large. It is significantly circumscribed by s 13K(2) which provides that an order under s 13K(1) may only be made if the court is satisfied that one of the elements exists as are stipulated in the four alphabetical subsections of s 13K(2). Relevantly paraphrased, the court has power to affirm, vary or reverse an arbitral award only if satisfied that –
(a)the award was obtained by fraud including material non-disclosure;[11] or
(b)the award is void, voidable or unenforceable;[12] or
(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;[13] or
(d)the arbitration was affected by bias or there was a lack of procedural fairness in the way the agreed arbitral process was conducted.[14]
[11] Section 13K(2)(a).
[12] Section 13K(2)(b).
[13] Section 13K(2)(c). See also Belding & Belding [2020] FamCA 1027.
[14] Section 13K(2)(d).
The respondent did not state whether she sought an order varying or reversing the substantive award. Instead, in paragraph 3 of her statement of contentions the respondent asserted that the substantive “award should not be registered under s 13K of the Family Law Act.” The substantive award was already registered. Section 13K makes no provision for registration of the award. The substantive award was registered under s 13H and Regulation 67Q(5) on 12 February 2021.
The respondent was not pressing for the affirmation of the substantive award. She offered no suggested variation of the substantive award. Of the three possible applications of s 13K(1), namely “affirming, reversing or varying the award” the only relevant applications in the circumstances of this case were “reversing” or “varying”. She did not cast her case in that way, however. Nor did she articulate what orders were encompassed by “reversing” or by “varying” the substantive award. Paragraphs 167, 168 and 169 of the substantive award contained the upshot of the arbitrator’s findings, namely –
(a)the parties were in a de facto relationship from July 1991 to August or early September 2016 with a period of separation of a few months in early 1996;[15]
(b)despite separation in 1996 one de facto relationship existed between the parties;[16] and
(c)the duration of the parties’ de facto relationship was 1 July 1991 to 31 August 2016.[17]
[15] Paragraph 167 of the substantive award.
[16] Paragraph 168 of the substantive award.
[17] Paragraph 169 of the substantive award.
The arbitrator made declarations accordingly.
Precisely what was to be reversed or varied in any of those three findings was not stated by the respondent.
In the respondent’s document styled “statement of facts and contentions” the respondent incorporated a segment headed “disputed facts” in which she stated that the arbitrator’s findings of fact between paragraphs 76 to 127 of the substantive award were disputed. Several paragraphs within that range of paragraphs allegedly disputed by the respondent record the respondent’s own concessions about certain facts. Precisely how she can now challenge those conceded matters was not said. In any event, it was impossible to tell what the respondent sought by “reversing” or “varying” the substantive award as she seemed to seek by her s 13K application. It could have been any one or more of the following –
(a)a declaration that the parties were not in a de facto relationship at all;
(b)a declaration that the parties were in a de facto relationship but over a different yet unspecified period;
(c)a declaration that no separation took place in early 1996; or
(d)a declaration that the separation that took place brought to an end any de facto relationship.
Being concerned that the parties had not turned their minds to the operation of s 13K, I invited further submissions on 21 July 2021. In response the respondent submitted as follows –
MR STRIK: The step that we’re at now, as I see it, is the review or setting aside the registered award under 13K or 13J. The review is under 13J and for setting aside it’s under 13K.
In paragraph 3 of her statement of facts and contentions, the respondent contended that 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 respondent was thereby invoking s 13K(2)(d) of the Family Law Act.
Section 13K(2)(d) melds into one subsection two quite distinct legal doctrines. The first is bias and the second is procedural fairness. So far as bias is concerned, s 13K(2)(d) does not distinguish between actual bias or apprehended bias. The respondent advanced a contention of bias when she objected to the registration of the substantive award. As to that submission I said the following in my reasons[18] for registering the substantive award –
76.In order to make out this reason, a detailed debate would need to unfold concerning High Court authorities such as Re JRL; Ex parte CJL,[19] Johnson v Johnson,[20] Ebner v Official Trustee in Bankruptcy,[21] Michael Wilson & Partners Ltd v Nicholls[22] and Isbester v Knox City Council.[23]
[18] Entezam & Devi (2021) 62 Fam LR 637 (at [76]).
[19] (1986) 161 CLR 342
[20] (2000) 201 CLR 488.
[21] (2000) 205 CLR 337.
[22] (2011) 244 CLR 427.
[23] (2015) 255 CLR 135.
The respondent declined to engage in any, let alone a detailed debate, about any of those authorities. Instead, the respondent made the following submissions about bias –
14. The arbitrator clearly formed bias against the respondent.
From the comments in the Award, he has clearly formed a certain view of the respondent. This is against his duties as an arbitrator. Whenever this view was formed, the arbitrator did not disclose anything to the parties in writing about any bias he may have experienced at any time. This is a requirement of his arbitrator duties under regulation s 67I.
No precision was exhibited in the respondent’s submission that “from the comments in the award, he (to interpolate, the arbitrator) has clearly formed a certain view of the respondent.” Specific passages of the award said to reveal the arbitrator’s view of the respondent were not essayed. Instead, the respondent’s submissions invited reference to certain exchanges in the evidence with commentary such as –
(a)“this is the start of (the arbitrator) losing control of the proceeding”;[24]
(b)“it’s strange to define this at page 18 of the award without showing bias”;[25] and
(c)“at no stage in the evidence was there a mention of the FIRB or similar things. This is just supposition used by the arbitrator against the respondent. Again, showing bias and lack of procedural fairness to the respondent.”[26]
[24] Respondent’s submissions page 6.
[25] Respondent’s submissions page 10.
[26] Respondent’s submissions page 11.
The respondent made no attempt to identify how and in which respect the arbitrator exhibited bias. Nor did the respondent differentiate whether the bias that she said existed was actual or apprehended.
The applicant, Mr Entezam, argued that the respondent bore the burden of establishing a claim that apprehended bias existed. Counsel for the applicant relied on Ebner v Official Trustee in Bankruptcy,[27] Isbester v Knox City Council[28] and Minister for Immigration and Multicultural Affairs v Jia Legeng.[29] In Isbester, Gageler J held that a three stage process existed for ascertaining the existence of bias, namely –
(a)identifying the factor that is hypothetically said to cause the question to be resolved otherwise than as a result of a neutral evaluation of the merits;
(b)articulating how the identified factor might cause that deviation from a neutral evaluation of the merits; and
(c)considering the reasonableness of the apprehension of that deviation being caused by that factor in that way.
[27] (2000) 205 CLR 337.
[28] (2015) 255 CLR 135.
[29] (2001) 208 CLR 507.
In my view, the respondent failed to pinpoint precisely what specific factor or factors fell from the arbitrator by which it could be said that the arbitrator revealed that he might deviate from a neutral evaluation of the merits of this case. The respondent’s articulation of so-called bias was vague, imprecise and ephemeral. To my mind none amounted to the existence of apprehended bias. No basis for alleging actual bias existed either.
In my view the respondent’s contentions that the arbitrator was biased were not made out.
It must be recalled that s 13K(2)(d) incorporated relief if “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.”
So far as the agreed arbitration process was concerned, the substantive award mentioned several aspects of the agreed process. In particular –
(a)the arbitration agreement set out various rules on how the arbitration would be conducted;[30]
(b)the parties consented to an order being made on 5 November 2018 that the proceeding was to be conducted under Division 12A;[31]
(c)directions were made at a preliminary conference in the arbitration held on 1 July 2020;[32]
(d)the parties agreed to a trial plan;[33] and
(e)the parties agreed to the arbitral hearing being recorded with parties being at liberty to transcribe the recording.[34]
[30] Substantive award paragraph 8.
[31] Substantive award paragraph 9.
[32] Substantive award paragraph 11.
[33] Substantive award paragraph 13.
[34] Substantive award paragraph 14.
None of the documents recording the agreements reached as set out in the immediately preceding paragraph were put into evidence before me. Accordingly, for the purposes of the phrase in s 13K(2)(d) “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 respondent’s evidence on this application did not disclose –
(a)what was the arbitral process as agreed between the parties and the arbitrator; and
(b)the manner in which the respondent alleged that a lack of procedural fairness existed in the way in which the agreed arbitral process was conducted.
Conversely, the respondent exhibited three lever arch folders worth of transcript of the arbitral hearing.
In her statement of facts and contentions, the respondent advanced several reasons why, so she argued, the arbitrator denied the respondent procedural fairness. She catalogued her contentions in that regard in a number of ways. For ease of reference I have considered them below using headings adopted by the respondent.
Allowing allegedly improper questions
First, the respondent contended that the arbitrator allowed for improper questioning by the applicant’s counsel over extended periods and allowed immaterial matters to be raised such as the respondent’s son’s incarceration. The respondent cited[35] an exchange that occurred on the second day of the hearing during which Mr Singh, the applicant’s counsel, was questioning a witness.[36] Counsel before me, Mr Strik for the respondent, wrote in written submissions that the applicant’s counsel “was attacking the witness in a rude fashion”[37] in the following exchange –
Counsel: No, no. Please reinterpret listen again and reinterpret.[38]
[35] Respondent’s written submissions page 6.
[36] Exhibit B to the affidavit of Mr B made 7 May 2021.
[37] Respondent’s written submissions page 6.
[38] Day 2 T88.
There was nothing wrong, rude or attacking in that exchange.
On that day of the arbitral hearing, Mr Nathan, the respondent’s solicitor was appearing as the respondent’s advocate. Mr Nathan asked a question to which Mr Singh objected. Mr Nathan said he would not press the question. The transcript then revealed an exchange between the interpreter and the witness described as being in a foreign language. Mr Singh then told the interpreter (or witness) to stop. The exchange was as follows –
Counsel: No, no stop.
Arbitrator: Stop. Stop. Stop. Stop, stop. Okay. Mr. Nathan has withdrawn the question. Just new question, please, don't worry about the last one Mr. Interpreter.[39]
[39] Day 2 T80.
It was said that the exchange set out immediately above revealed attacking the witness and interpreter in a rude fashion. I do not agree. Mr Singh was endeavouring to control the exchange between the witness and the interpreter. The arbitrator intervened. But that was to do no more than ensure the proceeding went forward in a calm and controlled manner. The arbitrator reminded all present that Mr Nathan had withdrawn his question and requested Mr Nathan to ask another question. In my view that accorded with proper procedure.
Next, the respondent contended that a different exchange between Mr Singh and the interpreter amounted to an attack on the witness or on the interpreter. The exchange was as follows –
Counsel: Can I just interrupt here for one minute? I'd ask the interpreter to interpret one sentence at a time. What is happening is a number of words are being missed because when they are two or three sentences, words are being missed. I request that you interpret one sentence at a time.[40]
[40] Day 2 T81.
To my mind, Mr Singh did no more than point out the importance of accurate translation by requesting the interpreter to deal with one sentence at a time. There was nothing rude or attacking in such a request. The request was made politely. I reject the assertion that any impropriety arose from that exchange.
Next, the respondent complained about the following –
Counsel: Listen, interpreter, listen to his answer and interpret.[41]
[41] Day 2 T99.
That prompt by Mr Singh seemed tolerably polite albeit direct. But being direct is not the same as attacking a witness or the interpreter in a rude fashion. In my view there was no impropriety in Mr Singh’s request to the interpreter set out immediately above.
When the interpreter encountered difficulty with evidence given in Language D the interpreter said he was unable to understand and was therefore unable to interpret. The transcript revealed that words were spoken in a language the interpreter was unable to understand so the interpreter did not say anything. Then followed this exchange –
Counsel: Interpreter you need to say the words he said, the words, you don't understand say that word (sic).
Interpreter: I don’t understand sir. How can I interpret, sir?
Arbitrator: Just try again one sentence.
Interpreter: Some parts is like Language D how can I understand it? [42]
[42] Day 2 T89.
Not only was that exchange unexceptional but Mr Singh behaved properly as did the arbitrator. I reject the criticism the respondent placed on the exchange narrated immediately above.
It is true that the arbitrator did not correct Mr Singh in relation to the following question –
Counsel: No, no, no. Interpret the question properly. I'll ask it again. Was it you agreed that you moved to Suburb E in 2012?[43]
[43] Day 2 T103.
Mr Singh’s instruction for the interpreter to interpret properly was to remind the interpreter of no more than his oath or affirmation when performing his interpreting function. There was nothing odious in the statement by Mr Singh. I do not attach any nefarious complexion to it.
The final criticism raised by the respondent about the applicant’s questions related to a question put by Mr Singh. It was as follows –
Counsel: I'll ask. I'll ask the question again, please listen to the question. I'm asking you a specific question about a specific thing and time and place, please interpret.[44]
[44] Day 2 T107.
Mr Singh’s request for the witness to listen to the question was unexceptional. No criticism could be raised from that. Mr Singh said “I’m asking you a specific question about a specific thing and time and place.” Again, there was no basis for criticism of that. He was there addressing his comments to the witness, hence “I’m asking you…”. Then Mr Singh requested the interpreter to interpret. That was far from objectionable.
Mr Strik of counsel for the respondent submitted in writing that Mr Singh engaged in aggressive questioning. He argued that s 41 of the Evidence Act required the disallowance of questions put to a witness in cross-examination or to inform the witness that the question is misleading or confusing or if the question is unduly annoying, harassing, intimidating, offensive, oppressive, humiliating or repetitive. It is important to point out that no objection was taken at the time to any of the impugned questions now called in issue.
In my view s 41 of the Evidence Act was not contravened in respect of any of the questions set out above as put by Mr Singh.
Under paragraph 3(a) of the respondent’s statement of contentions, the respondent asserted that the arbitrator allowed improper questioning by Mr Singh over extensive periods and the arbitrator allowed immaterial matters to be raised, such as the son’s incarceration.
In developing this contention in his written submissions, Mr Strik argued that such cross-examination was irrelevant except for its significance in the respondent moving closer to a jail where her son was then held in custody. Mr Strik argued that by reason of not controlling Mr Singh, the manner in which the rest of the arbitration occurred was curtailed and the respondent did not have the opportunity to make oral submissions.[45]
[45] Respondent’s submissions dated 18 June 2021 page 9.
On behalf of the applicant, Mr Singh disputed the assertion that the respondent’s cross-examination was irrelevant or that the arbitrator allowed that cross-examination to continue over extensive periods. He relied on a large number of factors in advancing that contention, including –
(a)the subject matter of the respondent’s questioning covered 28 years in which “the respondent disputed the vast majority of the facts asserted by the applicant”;[46]
[46] Applicant’s submissions dated 18 June 2021 paragraph 20.
(b)each topic on which the respondent was cross-examined related to the duration of the de facto relationship between the parties or it related to the respondent’s credibility;[47]
(c)the respondent’s cross-examination also included questions directed to how her home loan increased from $300,000 in 2016 to $1,850,000 in 2018, the fate of her F Super Fund, the fate of her employee termination from G Company and other discrepancies;[48]
(d)the respondent was cross-examined over two days during which her legal representative objected to certain questions and each was ruled on by the arbitrator after debate from both advocates;[49]
(e)the respondent’s legal representative made such objections as he considered appropriate each of which was ruled on by the arbitrator;[50]
(f)the cross-examination about the respondent’s son’s incarceration was relevant on the question of the occupant of which room during the relationship;[51]
(g)the applicant and the respondent each adduced evidence about the respondent’s son’s incarceration and the issue was the subject of documentary tenders;[52]
(h)the respondent’s legal representative re-examined on the issue of the respondent’s son’s incarceration;[53]
(i)the arbitrator asked questions of the respondent on the issue without objection by the respondent’s legal representative;[54]
(j)the respondent incorporated a submission on the issue of her son’s incarceration in her final address;[55] and
(k)the arbitrator addressed the issue at paragraphs 115(c)(i)(4), 119 and 121-126 of the substantive award.[56]
[47] Applicant’s submissions dated 18 June 2021 paragraph 21.
[48] Applicant’s submissions dated 18 June 2021 paragraph 22.
[49] Applicant’s submissions dated 18 June 2021 paragraph 23.
[50] Applicant’s submissions dated 18 June 2021 paragraph 24.
[51] Applicant’s submissions dated 18 June 2021 paragraph 27.
[52] Applicant’s submissions dated 18 June 2021 paragraphs 28, 29 & 30.
[53] Applicant’s submissions dated 18 June 2021 paragraph 32.
[54] Applicant’s submissions dated 18 June 2021 paragraph 33.
[55] Applicant’s submissions dated 18 June 2021 paragraph 35.
[56] Applicant’s submissions dated 18 June 2021 paragraph 36.
At no time during the arbitration did the respondent’s legal representative complain to the arbitrator that he or the respondent was concerned about actual or apprehended bias. Mr Singh in his written submissions contended that the respondent’s legal representative was bound to raise his concerns about actual or apprehended bias with the arbitrator and to make a recusal application.
In my view the respondent’s contentions in paragraph 3(a) are without merit. So far as the issue of the respondent’s son’s incarceration was concerned, the arbitrator regarded it as plainly relevant. The issue appeared in the applicant’s affidavit evidence, in the respondent’s affidavit evidence, in documents tendered in evidence, in cross-examination, in re-examination, it was the subject of the arbitrator’s own questions and it was the subject of addresses. The arbitrator was required to address that matter, it being an issue in the award having regard to the importance it occupied in the arbitration itself.[57]
[57] Yendall v Smith Mitchell & Co Ltd [1953] VLR 369, 379, Watson v Anderson (1976) 13 SASR 329, Wright v Australian Broadcasting Commission [1977] NSWLR 697, McCarroll v Fitzmaurice [1979] 2 NSWLR 100, Australian Timber Workers' Union v Monaro Sawmills Pty Ltd (1980) 42 FLR 369, 374, 380, R v Immigration Appeal Tribunal; ex parte Khan [1983] QB 790, 794, Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378, 385, NRMA Insurance Ltd v Tatt (1989) 94 FLR 339, Sun Alliance Insurance Ltd v Massoud [1989] VR 8, 17 and Mifsud v Campbell (1991) 21 NSWLR 725, 728.
I do not accept the respondent’s assertions that questions about the respondent’s son’s incarceration were improper or irrelevant. To the contrary – the issue seemed to have assumed a very significant role in this case. So far as the assertion that the arbitrator was biased was concerned, I reject it. At no stage did the respondent’s legal representative raise with the arbitrator concerns in the nature of bias. No recusal application was brought. No doubt that was for the sensible reason that grounds did not exist to support a recusal application. So far as Mr Strik’s submission that the arbitrator failed to control the arbitration, I reject that argument. The parties were each legally represented throughout. Each had the capacity to make submissions to best advance the case each client made in the arbitration. It was not for the arbitrator to assume control of the case each litigant advanced. That was the role of the parties’ legal representatives.
Allegedly inappropriately weighing information
In paragraph 3(b) of the respondent’s statement of contentions the respondent asserted that the arbitration was affected by bias or there was a lack of procedural fairness because the arbitrator did not appropriately weigh “the information” (as the respondent’s counsel described it, without saying what “the information” was). In other words this alleged failure to weigh information was put by the respondent as evidence of bias or lack of procedural fairness. The information on which the respondent relied which she said was not properly weighed related to a Centrelink application. To that I now turn.
The respondent asserted that during her evidence in the arbitration the applicant stated he became aware of a Centrelink application four to five weeks prior to the arbitral hearing on 28 September 2020.[58] The respondent’s counsel asserted that the respondent annexed the relevant Centrelink form to her affidavit made 18 July 2018.[59] Counsel for the respondent asserted that the arbitrator did not raise or deal with that inconsistency.
[58] Five weeks equated to mid-August 2020 or thereabouts.
[59] While not expressly stated, the respondent inferred that the applicant had the respondent’s affidavit for over two years rendering his statement that he only saw the application five weeks prior to the hearing inconsistent.
In his written submissions dated 18 June 2021 Mr Strik for the respondent did not focus on the so-called inconsistency raised in paragraph 3(b) of the respondent’s notice of contentions. Instead, Mr Strik cited paragraph 166 of the substantive award in which the arbitrator stated as follows –
166.Whilst the applicant signed the application any illegality was perpetrated by both of them or with respect to the respondent she at least aided in the illegal conduct.
Mr Strik submitted that the finding that any illegality was perpetrated by both the applicant and the respondent and the finding that the respondent at least aided in the illegality were findings in the nature of criminal activity. He submitted that before such findings were made the arbitrator needed to be satisfied to the standard set out in Briginshaw v Briginshaw[60] that the findings were established to the requisite degree. Further, Mr Strik submitted that according to principles of procedural fairness, the arbitrator was required to have alerted the respondent to the possibility that the arbitrator may find that the respondent had aided or actively engaged in illegal conduct.
[60] (1938) 60 CLR 336.
In his written submissions, Mr Singh of counsel for the applicant submitted that no lack of procedural fairness or bias was exhibited in the assertions concerning the Centrelink form or the characterisation of the conduct amounting to illegal activity. Specifically, he submitted that –
(a)the respondent was cross-examined on her involvement in relation to the Centrelink form;
(b)the arbitrator identified relevant authorities on point and invited submissions from the parties;
(c)submissions were made by both parties on the issue;
(d)the arbitrator then made findings on the issue following a consideration of the submissions and relevant authorities; and
(e)this process did not amount to a denial of procedural fairness to the respondent.
Mr Singh argued that the arbitrator comprehensively addressed the evidence on this issue. The arbitrator’s analysis was given at paragraph 116(d) of the reasons in the substantive award in which the arbitrator narrated the evidence from the point of the parties completing a pension form on 6 February 2006 and the applicant’s receipt of a disability pension and other benefits from 10 February 2006. The arbitrator analysed those portions of the application form the applicant completed and those portions on the form the respondent told the applicant to complete. The arbitrator stated that the contents of the application form was internally inconsistent and did not represent the true state of affairs with respect to the parties’ financial affairs. The respondent’s legal representative challenged the applicant[61] to the effect that the respondent had not told the applicant about what to insert in the form for the reason that she had nothing to gain from it. The arbitrator rejected that proposition as put on behalf of the respondent. The arbitrator concluded that the respondent always had a financial interest in the applicant making an application for the pension. The arbitrator then held as follows –
162.The impact of the declaration to Centrelink with respect to the terms of reference has to be considered in the context of the evidence how the application came about.
163.The Applicant’s evidence is that he completed the application as instructed by the Respondent. The Respondent on the other hand says she did not know anything about it until she discovered the documents when preparing for the proceedings.
164.I have already commented on my view of the Respondent's evidence. In this instance, given the manner in which she gave it, her demeanour and my findings about her being manipulative, I have little hesitation to accept the Applicant's account.
165.In other words, at the time the application was completed I accept that the parties were in a relationship different from the one represented in the application and both parties were involved in the completion of the application.
166.Whilst the Applicant signed the application any illegality was perpetrated by both of them or with respect to the Respondent she at least aided in the illegal conduct.
[61] This is the gravamen of paragraph 116(d)(vi) of the reasons in the substantive award.
In reality, the respondent is now inviting me on the return of this application to conclude under s 13K(2)(d) that the arbitrator denied the respondent procedural fairness by reason of the arbitrator not alerting the respondent to the possibility that the arbitrator might conclude that the respondent had been implicated in illegal activity associated with the completion of the Centrelink pension application form. I do not accept that submission. In this case the arbitrator regarded the respondent as being a witness whose evidence was not to be preferred over the applicant’s when their evidence conflicted.[62] The arbitrator found that he could only rely on those parts of the respondent’s evidence that corresponded with the applicant’s evidence where she made admissions against her interest or where her evidence was corroborated by other credible evidence.[63]
[62] In various parts of his reasons in the substantive award the arbitrator used phrases such as “the respondent’s tenuous attachment to the truth” [50], she was “entirely unreliable” [46], her affidavits were “replete with vituperative and ill-tempered conclusions” [48] and she gave three versions of the purchase of the parties’ home [49(a)].
[63] Paragraph 51 of the reasons in the substantive award.
Those findings were open, it seemed to me. Where the evidence on key issues was as diametrically opposed as was the applicant’s and the respondent’s, the arbitrator was required to make a finding of fact of whose evidence the arbitrator accepted. Here, the arbitrator stated, properly and in accordance with established orthodoxy in resolving conflicting evidence, that the respondent’s evidence would be preferred only where it corresponded with the applicant’s evidence on same point, where the respondent made an admission against her interest or where her evidence was corroborated.
Having regard to those findings, according to Stead v State Government Insurance Commission,[64] even if I took the view that there had been a departure from the rules of procedural fairness, which I do not, the result was likely to be the same having regard to the arbitrator’s views of the reliability of the respondent’s evidence generally. On 21 July 2021 I invited Mr Strik to make submissions about Stead’s case. He did not take up that invitation. It is relevant to observe that nowhere in the parties’ submissions was there any mention made that the respondent’s legal representative invited the arbitrator to caution the respondent, or for that matter the applicant, before giving evidence in relation to the Centrelink pension application form.
[64] (1986) 161 CLR 141, 145.
It was also relevant to record that the arbitrator’s observations in paragraph 166 of his reasons in the substantive award were not determinative nor dispositive of the arbitration. It had no bearing on the declaration made.
On page five of his written submissions Mr Strik contended that the arbitrator somehow exhibited actual or apprehended bias or the arbitrator conducted the hearing by denying the respondent procedural fairness because the applicant “should not be allowed to profit from his illegal act in obtaining Centrelink benefits, and then being able to come back against Ms Devi later.” Precisely how the respondent construed the arbitrator’s findings as amounting to the applicant profiting “from his illegal acts…then being able to come back against Ms Devi later” was not the subject of reasoned articulation. Mr Strik made no submission to me to the effect that the legal representative then appearing for the respondent addressed the arbitrator in reliance upon the observations of the High Court in Berowra Holdings Pty Ltd v Gordon.[65] The arbitrator did not refer to that decision. Nor is it mentioned in any of the material. In any event the passage extracted by Mr Strik from that authority was relevant to principles of statutory interpretation. It was difficult to see what the respondent drew from that authority.
[65] (2006) 225 CLR 364.
In my view no bias or denial of natural justice was exhibited in relation to the arbitrator’s omission to refer to Berowra Holdings Pty Ltd v Gordon. The submission that the applicant used the document to obtain government funds to which the applicant was not entitled and thereby had “free money from the Australian government” was not a proper submission. It should not have been made. It is one thing for counsel to enthusiastically advocate his client’s case. It is another thing altogether to overreach in counsel’s submissions. If the respondent takes the view that a criminal offence has been committed, she has her remedies outside this litigation.
In paragraph 3(b)(v) of the respondent’s statement of contentions, the respondent asserted that the arbitrator was biased or the arbitrator denied the respondent procedural fairness in relation to the applicant’s evidence concerning his gambling. In her statement of contentions the respondent asserted that the applicant lied about his gambling. The applicant stated that the arbitrator’s findings at paragraph 25 of the reasons for the substantive award do not amount to bias or a denial of procedural fairness.
I agree with Mr Singh. In paragraph 25(d) of the arbitrator’s reasons for the substantive award the arbitrator made a finding of fact based on the information in the gambling records, namely, that the applicant attended on a number of occasions for an hour or thereabouts on consecutive days but in the main the applicant’s attendances amounted to one day a month with significant periods of absence. The arbitrator concluded that such frequency did not correspond with the respondent’s appellation of “gambling addiction”. On the facts, that seems correct. I am unable to see how the arbitrator’s construction of that evidence could amount to bias, as alleged, or to a denial of procedural fairness. The respondent did not further articulate her contentions in that regard.
In paragraph 3(b)(vi) of her statement of contentions the respondent asserted that the arbitrator exhibited bias or denied the respondent procedural fairness in relation to the sum of $8,000. The written submissions prepared by Mr Strik[66] bear no resemblance to the assertions in paragraph 3(b)(vi) of the respondent’s statement of contentions. The only common link is the mention in both of the sum of $8,000. The written submissions[67] prepared by Mr Singh explained the context of this issue. There, Mr Singh submitted as follows –
42.The respondent claims that there was an inconsistency in the evidence of the applicant relating to his $8,000 contribution to the purchase of the former matrimonial home. This issue was fully ventilated before the arbitrator and dealt with. It was raised by the respondent’s lawyer in his closing submissions (see transcript – page 801) and responded to by the applicant’s counsel (see transcript – page 810). There was no error by the arbitrator on this issue.
[66] Section 8, page 10, headed “The Arbitrator not giving appropriate weight to the applicant’s versions”.
[67] At paragraph 42.
The issue was the subject of address in final addresses. It could hardly be said therefore that an issue of denial of procedural fairness was enlivened. The respondent’s dissatisfaction with a finding of fact, after debate by both sides, will rarely amount to a denial of procedural fairness. It did not in this case. No bias was alleged so that aspect of the respondent’s complaint must be rejected.
In paragraph 3(b)(vii) of her statement of contentions the respondent asserted that the arbitrator exhibited bias and denied the respondent procedural fairness by making findings about the date of separation when the applicant’s version of that date changed three times. Mr Singh submitted that the arbitrator accepted the applicant’s evidence of the date of separation and that it was on or about the date of the respondent’s birthday. Mr Singh submitted that any inconsistency in the parties’ evidence emerged from the respondent’s evidence.
On this issue the evidence was contradictory. I accept that. The arbitrator elsewhere in his reasons expressed his preference for the applicant’s evidence over the respondent’s evidence when their evidence conflicted. He was entitled to reach that conclusion. By preferring the applicant’s evidence over the respondent’s in respect of the date of separation, the arbitrator did not exhibit bias nor did the arbitrator deny the respondent procedural fairness. To the contrary. Where conflicting evidence emerges the arbitrator is required to make a finding about the version the arbitrator prefers. The arbitrator did precisely that. I reject the respondent’s contentions in that regard.
Under the rubric of bias and denial of procedural fairness the respondent advanced five contentions in paragraph 3(c) of her statement of contentions, headed “inadequate and inconsistent reasons given”. The adequacy of reasons is not, strictly speaking, a matter of bias or procedural fairness and instead, if demonstrated, is an error of law.[68] It is necessary to take each assertion made by the respondent.
[68] Public Service Board of New South Wales v Osmond (1986) 159 CLR 656, 660, Pettitt v Dunkley [1971] 1 NSWLR 376 and Campbelltown City Council v Vegan (2006) 67 NSWLR 372, 399.
In paragraph 3(c)(i) the respondent asserted that the arbitrator applied an incorrect onus of proof when stating in paragraph 46 of his reasons that the respondent had a manipulative nature and in paragraph 47 of his reasons stating that he (the arbitrator) would not put it past her to have influenced her witnesses to be sparse with the truth. She said those propositions were not put to her.
Not every single detail in the evidence needs to be put to a person against whom a finding is made in order to comply with procedural fairness obligations.[69] Further, as was held in Stead v State Government Insurance Commission[70] even if procedural fairness was denied in the particular circumstances of a case, an appeal will not necessarily be allowed if the denial asserted would not have made any difference to the outcome.
[69] AYX16 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCAFC 99 (at [70]).
[70] (1986) 161 CLR 141.
Here, it may fairly be said that the respondent did not impress the arbitrator generally as a witness of truth. The arbitrator was expressing his view of her overall veracity in stating that she struck him as having a manipulative manner. Using his words carefully, the arbitrator then stated that he was unable to make a finding on the particular matter but that he would not put it past the respondent to do the thing there stated. His express mention of being unable to make a finding on the particular matter represented a statement by the arbitrator that he expressly declined to so find. It could not be said, therefore, that the arbitrator used the phrase “I would not put it past her” in his path of reasoning in making any particular finding. If anything, the reverse is true, namely he expressly distanced himself from any finding on point.
The contention advanced in paragraph 3(c)(i) by the respondent is without merit.
In paragraph 3(c)(ii) of her contentions the respondent asserted that paragraphs 46, 47 and 164 of the arbitrator’s reasons are “internally inconsistent”. The respondent did not say how she cast her application in respect of those three paragraphs, namely, as evidence of bias, as evidence of a denial of procedural fairness or as an error of law. That was significant.
Paragraph 46 of the arbitrator’s reasons were as follows –
For the reasons set out below, I regard the evidence of the Respondent as entirely unreliable. Indeed, as I will explain, she strikes me as having a manipulative nature who will say anything that will suit her purposes, whatever they might be at any given time.
Paragraph 47 of the arbitrator’s reasons were as follows –
Although I am unable to make findings to this extent, I would not put it past her to have sought to enlist or at least influenced her witnesses to be sparse with the truth and indeed to bend it to her ends.
Paragraph 164 of the arbitrator’s reasons were as follows –
I have already commented on my view of the Respondent's evidence. In this instance, given the manner in which she gave it, her demeanour and my findings about her being manipulative, I have little hesitation to accept the Applicant's account.
The finding in paragraph 164 was underpinned by the statement in paragraph 46. There is no inconsistency. I reject the respondent’s contentions in that regard. Paragraph 47 does not bear on this issue. I do not accept that any bias, denial of procedural fairness or error of law exists in relation to the alleged inconsistency in the three paragraphs impugned by s 3(c)(ii) of the respondent’s statement of contentions.
In paragraph 3(c)(iii) of her statement of contentions the respondent asserted that the arbitrator described passages of the respondent’s affidavit evidence as being “replete with vituperative and ill-considered conclusions” yet the arbitrator made no comparable comments about the applicant’s affidavit evidence. Similar observations were made in paragraph 9 of the respondent’s written submissions.
While not expressly stated, it seemed that the respondent was endeavouring to argue that the arbitrator was biased against the respondent because he stated in paragraph 48 of his reasons that the respondent’s affidavit material was replete with vituperative and ill-considered conclusions, yet no similar comments were made about the applicant’s affidavit material.
Mr Singh of counsel explained in written submissions (he was counsel in the arbitration) that instead of relying on a single trial affidavit, the respondent chose to rely on six affidavits she made during the life of this litigation. Mr Singh submitted in his written submissions filed in support of this application that a portion of those six affidavits on which the respondent relied contained irrelevant information as well as comments, a matter that Mr Singh brought to the attention of the arbitrator. The respondent chose to rely on all six affidavits. Mr Singh submitted as follows –
76.Having adduced evidence through those affidavits that were irrelevant and/or unhelpful to determining facts in issue in the arbitration, the respondent cannot now complain if justifiable comments are made about them.
In my view there is merit in Mr Singh’s submission extracted immediately above. It was open for the arbitrator to make the observations he did about the respondent’s affidavit evidence. Those observations did not amount to bias. Nor was the arbitrator required to give the respondent any opportunity to make submissions to the arbitrator before the arbitrator expressed the view that the respondent’s affidavit evidence contained vituperative and ill-considered conclusions. I reject the contention that the comment on which the respondent focused in paragraph 3(c)(iii) of her statement of contentions amounted to bias, a denial of procedural fairness or error of law.
In paragraph 3(c)(iv) of her statement of contentions the respondent asserted that the arbitrator “appeared to infer that people like the respondent who were smarter and more resourceful were in some way less truthful and that the converse was true with the applicant being more truthful.”
In paragraph 11 of his written submissions Mr Strik recorded, in terms, paragraph 116(a)(iv)(3) of the arbitrator’s reasons. It was as follows –
The respondent is a smart and resourceful person whose brother is a professional and sister works at a government department. It would have been easy for her to obtain assistance as she had in 1992.
The passage extracted by the respondent failed to put the arbitrator’s comment in context. The arbitrator was dealing with the respondent’s assertions that the applicant had committed family violence.
I do not accept the characterisation placed on that paragraph by the respondent. No inference of the sort asserted arose. The manner in which inferences are permissibly drawn was examined in Wei & Wei.[71] At all events to my mind it was open for the arbitrator to conclude that the respondent was smart and resourceful, that her brother was a professional and her sister worked at a government department. I do not agree with Mr Strik’s submission that such reasoning is inappropriate, whatever that meant. Mr Strik’s analogy between this case and the cost of a bat and ball was unhelpful. Counsel must be more selective in writing submissions than to put before the court a submission of such dubious utility.
[71] [2020] FamCA 98.
I reject the contentions in paragraph 3(c)(iv) of the respondent’s statement of contentions.
In paragraph 3(c)(v) of her statement of contentions the respondent asserted that the arbitrator either denied the respondent procedural fairness, or was biased or made some error of law by not defining the property the subject of the proceeding with a neutral term and instead used the words “former matrimonial home”. The respondent offered no insight in written submissions about why that nomenclature was said to somehow be noxious.
The phrase “former matrimonial home” first appears in paragraph 25(a) of the arbitrator’s reasons in the substantive award. It is there used as a short hand expression to describe the parcel of land and improvements of the land described more particularly in exhibit 1 in the arbitration. In my view, no sinister complexion arises out of the description “former matrimonial home” even though the parties were not married. It was common ground they were not married.
I reject the assertions in paragraph 3(c)(v) of the respondent’s statement of contentions. No bias, denial of procedural fairness or other error of law was thereby disclosed.
In my view, all challenges to the substantive award under s 13K of the Family Law Act failed.
SECTION 13J OF THE FAMILY LAW ACT
As has already been observed, the respondent also relied on s 13J of the Family Law Act in her challenges to the substantive arbitral award.
In paragraph 4 of her statement of contentions the respondent asserted that under s 13J, the arbitral award should not be registered. The award has already been registered, a matter already canvassed above in these reasons. Section 13J does not bear upon registration of an award. It operates to permit the court to make an order for the review of the award on a question of law. Under s 13J(2) of the Act, the court is empowered to determine all questions of law arising in relation to the arbitration.
In this application the respondent did not identify the question of law on which she relied under s 13J(2). She did not postulate the question of law she sought answered by me. Instead she incorporated paragraph 4(a) of her statement of contentions which was in the following terms –
The Applicant should not be allowed to profit from his illegal acts in obtaining Centrelink benefits, and then being able to come back against the Respondent later. Public Policy is clear in this regards, the Applicant was able to benefit from fraudulent monies and now is able to “have his cake, and eat it too” in these proceedings. The Arbitrator has erred here with his quoting of Holman v Johnson (1775) 1 Cowp 341. In Berowra Holdings Pty Ltd v Gordon [2006] HCA 32 at [92], the highest Court in Australia stated –
Seventhly, whilst it is true that "no Court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act"[89], where illegality and contrary public policy are propounded, and the rule is expressed in legislation, the obligation of a court is to derive the purpose and intended operation of the legislation from its language and apparent purpose.
That is a discursive, imprecise, broad and ill-conceived statement. It is not a question of law. Section 13J was not thereby invoked. On this issue the applicant submitted as follows –
101.The respondent takes issue with the arbitrator’s findings relating to the Centerlink document, by selectively quoting a passage from Berwora Holdings Pty Ltd v Gordon HCA 32 at [92].
102.The arbitrator made his finding on this issue after applying the relevant principles set out in all the relevant authorities and after interpreting the relevant legislation. There was no error of law in his reasoning.
It seemed to me that Mr Singh’s contentions on point were correct. There was no merit in paragraph 4 of the respondent’s statement of contentions.
For those reasons in my view the challenges to the substantive award under s 13K as well as under s 13J failed. In my view the respondent failed to demonstrate –
(a)the arbitrator was biased;
(b)the arbitration was conducted with a denial of procedural fairness; and
(c)that an error of law affected the arbitrator’s reasons.
THE COSTS AWARD
The respondent challenged the arbitrator’s award in relation to costs. Being concerned about aspects of the parties’ submissions in relation to costs, I invited the parties to make further submissions. Mr Strik and Mr Singh appeared by video link on 21 July 2021. It is necessary to record the shifting nature of the respondent’s contentions in relation to costs. In her statement of contentions, the respondent put her position as follows –
The Arbitrator acted outside of his power in making the Costs Award. The Arbitration Agreement requires the parties to bear their own costs and for each party to pay one half of the costs of the Arbitration. The Arbitrator is only given the power to decide costs if both parties agree to this. There was no agreement by the parties for the Arbitrator to decide costs and therefore the Arbitral Costs Award is made ultra vires.
The respondent’s primary position, at least as recorded in her statement of contentions, was that –
(a)the arbitrator only had power to decide costs if both parties agreed to that course;
(b)there was no agreement between the parties for the arbitrator to decide costs in this case; and
(c)therefore, the costs award was ultra vires.
In Mr Singh’s written submissions, he contended that the respondent’s position on costs was incorrect. Mr Singh referred to paragraph 7 of the orders of Benjamin J made on 20 March 2019. That order was as follows –
7.The fees of the arbitrator shall be paid in the first instance by the wife, however the applicant shall pay one half of those fees within seven days of payment and in default interest shall accrue in accordance with the rules under the Family Law Act 1975 (Cth). Nothing in this direction shall prevent either one or other parties seeking costs orders against the other including their share of the arbitration at the conclusion of that determination.
Mr Singh also submitted that paragraph 2 of the orders of Henderson J made on 25 May 2020 recorded the parties’ agreement in relation to costs. That order provided as follows –
2.The parties agree the costs of arbitration are to be paid from monies held on trust in both parties’ names administered by Mr Nathan and the arbitrator will determine if either party should bear the costs or whether they ought be shared.
Mr Singh argued that the arbitrator’s costs award was made pursuant to the orders of Benjamin J and of Henderson J set out above.
On 21 July 2021 Mr Strik clarified his contentions in relation to costs. He submitted –
(a)the arbitrator did in fact have power to determine costs;
(b)the costs in respect of which the arbitrator had power to determine were “direct costs” meaning the arbitrator’s fees but not party/party costs;
(c)in making a costs order that went beyond ordering his fees, the arbitrator made an error of law because the parties only agreed that the arbitrator had power to deal with his fees and not party/party costs; and
(d)the respondent did not have an opportunity to address on costs.
It was common ground that the arbitrator’s fees were $33,400. Those fees were not party party costs.
The arbitrator ordered the respondent to pay the applicant’s costs in the amount of $64,423.56.
The arbitrator’s costs award revealed important matters bearing upon costs. They included the following –
(a)the terms of paragraph 7 of the orders of Benjamin J, extracted above;
(b)only the applicant provided an updated financial statement;
(c)both parties were unemployed and in receipt of government benefits;
(d)the only asset of significance was the proceeds of sale, now in trust, of the home in which the parties once lived;
(e)under Regulation 67H of the Family Law Regulations, absent a contrary written agreement, each party must pay half of the costs of the arbitration, subject to any order relating to costs and Benjamin J’s order made on 20 March 2019 in respect of costs was such an order;
(f)the respondent made no submissions in relation to costs;[72]
(g)the arbitrator examined applicable factors enlivened under s 117(2A) of the Family Law Act;
(h)indemnity costs were not to be ordered in the circumstances of this case; and
(i)the finding that “the respondent should be liable for the costs of the arbitrator”.[73]
[72] Mr Singh told me on 21 July 2021 that the arbitrator invited both parties to provide submissions yet the respondent did not avail herself of that opportunity.
[73] Costs award paragraph 29.
The path of reasoning adopted by the arbitrator in expressing the finding in paragraph 38 for an order requiring the payment of costs in the sum of $64,423.56 was less than linear. Under the heading “conclusion” the arbitrator stated in paragraph 28 of his reasons that the applicant had established a basis for a costs order in his favour. Under the heading “quantum of applicant’s costs” the arbitrator –
(a)recited in paragraph 30 the applicant’s claim for a sum as indemnity costs and a different sum as scale costs;
(b)canvassed indemnity costs in paragraphs 31 – 37; and
(c)stated that the applicant had made out a case for payment to him of scale costs of $64,423.56.
Nowhere was there any dissection of the figure of $64,423.56. That is a substantial sum. In paragraph 30(b) of the costs award the arbitrator merely stated that the applicant claimed $64,423.56 “calculated on scale”. Which scale was not stated. What component items made up that amount was not stated. Whether that sum was just, in accordance with the decision in In the Marriage of Hogan,[74] was not stated. I was unable to conclude that the imposition of a costs order of $64,423.56 on a litigant who was unemployed and in receipt of government benefits was just.
[74] (1986) 10 Fam LR 681.
The failure of a decision-maker, whether curial or administrative, to expose his or her path of reasoning for deciding in the way the decision maker has decided represents an error of law.[75]
[75] Pettitt v Dunkley [1971] 1 NSWLR 376, Watson v Anderson (1976) 13 SASR 329, Wright v Australian Broadcasting Commission [1977] NSWLR 697, McCarroll v Fitzmaurice [1979] 2 NSWLR 100, Australian Timber Workers' Union v Monaro Sawmills Pty Ltd (1980) 42 FLR 369, 374, 380, R v Immigration Appeal Tribunal; ex parte Khan [1983] QB 790, 794, Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378, 385, Public Service Board of New South Wales v Osmond (1986) 159 CLR 656, 666, Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (2001) 207 CLR 72 (at [26]), Campbelltown City Council v Vegan (2006) 67 NSWLR 372, 399 (at [130]), Goodrich Aerospace Pty Ltd v Arsic (2006) 66 NSWLR 186, 191 (at [28]), AK v Western Australia (2008) 232 CLR 438, 453 (at [45]), Transport Accident Commission v Kamel [2011] VSCA 110, Cantwell v Beitzel (2014) 87 NSWLR 103, 111 (at [31]) and Resi Corporation v Munzer [2016] SASCFC 15 (at [91]).
In this case the arbitrator canvassed the elements of s 117(2A) then ordered the sum of $64,423.56 to be paid, reasoning that by virtue of the orders made in the substantive award the respondent’s financial circumstances were such that she could in fact meet an award as to costs. The consideration of the elements of s 117(2A) did not address whether the specific sum claimed by the applicant was “just”, nor did the arbitrator say anything about the quantum beyond it being scale, without identifying the scale, or whether the integers of sums making the total sum claimed were properly recoverable in the circumstances.
Mr Strik argued that the arbitrator had no power to make an order for costs. I reject that submission for several reasons. First, the whole of the proceeding was referred to arbitration under s 13E of the Family Law Act. That included debate about costs. Second, I do not accept the contention that costs can only be determined by an arbitrator with the consent of the parties. Rarely is a costs order made by consent. Third, the orders of Benjamin J made 20 March 2019 in paragraph 7 addressed not only the fees of the arbitrator but also (in the final sentence) costs. That order did not speak of consent being first required for a costs order to be made. Nothing in the orders of Henderson J altered that position.
In the upshot, in my view –
(a)the arbitrator’s fees were the subject of an express order;
(b)the arbitrator was authorised by s 13E to determine all issues in the proceeding including costs;
(c)all parties’ consent was not required before a costs order was made;
(d)the making of a costs order had to be just in all the circumstances and the elements of s 117(2A) had to be addressed;
(e)in making any costs order the path of reasoning for the making of the order had to be manifest; and
(f)a failure to expose the path of reasoning including the path of reasoning in arriving at a particular sum for a costs order represented an error of law.
I take the view that the arbitrator’s path of reasoning for the costs order of $64,423.56 was defective in that the arithmetic in arriving at that amount was not recorded. It should have been. The question of law that such an issue enlivens is whether the amount of costs in the costs order was made according to law. I take the view it was not. In my judgment it was in order for the arbitrator to make a costs order, even one under s 117(2) once the elements of s 117(2A) were considered. But any such costs order needed to be reasoned in accordance with orthodox legal principle. The costs order made by the arbitrator was not. The sum ordered must be reduced. Recognising that indemnity costs were claimed but rejected, $90,544.82 was not ordered. The other amount mentioned was $64,423.56, said to be scale costs, yet the scale was not stated.
It seemed to me that at least one method of calculation of the appropriate sum was as follows –
(a)a component for counsel’s fees representing a daily appearance fee for five days plus two days’ preparation;
(b)a component for the costs of the instructing solicitor for each day of the arbitral hearing plus two days’ preparation; and
(c)the arbitrator’s fees, in the known amount of $33,400.
Expressed arithmetically, those sums would be –
(a)counsel – $1,500 per day for five hearing days and two preparation days being $10,500; plus
(b)instructing solicitor – $1,000 per day for five hearing days and two preparation days being $7,000; plus
(c)the arbitrator’s fees of $33,400.
But even that is unscientific. It is little more than guesswork. I am not authorised to guess when arriving at a decision.
The question of law under s 13J is therefore answered by substituting for the costs order ordered by the arbitrator of $64,423.56, some other sum. That sum must be determined by the registrar.
ORDERS
The upshot of this application is orders in the following terms –
(1)In relation to the substantive award I dismiss the respondent’s application to review the award under s 13J of the Family Law Act and I dismiss the respondent’s application for an order reversing or varying the substantive award under s 13K of the Family Law Act.
(2)In relation to the costs award, I order the review of the costs award and vary the costs award by substituting for the sum ordered by the arbitrator of $64,423.56 such sum, less than $64,423.56, as assessed by a registrar.
(3)The registrar must assess those costs by 4pm on 29 September 2021.
(4)The costs assessed by the registrar pursuant to paragraph 3 hereof must be paid by 4pm on 29 October 2021.
I certify that the preceding one hundred and twenty-two (122) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wilson. Associate:
Dated: 28 July 2021
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