JANCOS & ABELAS
[2020] FCCA 459
•20 February 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| JANCOS & ABELAS | [2020] FCCA 459 |
| Catchwords: FAMILY LAW – Costs – party/party costs – financial circumstances of the parties – conduct of the parties – where the respondent has been wholly unsuccessful. |
| Legislation: Family Law Act 1975 (Cth) ss.13E, 13H, 13H(2), 13J, 13K, 13K(2)(c), 69ZW, 79A, 79A(1)(a), 90SN, 117, 117(2A) Family Law Rules 2004 (Cth) sch. 1 |
| Cases cited: Allesch & Maunz [2000] HCA 40 Other articles cited: |
| Applicant: | MS JANCOS |
| Respondent: | MR ABELAS |
| File Number: | PAC 2440 of 2016 |
| Judgment of: | Judge Harman |
| Hearing date: | 20 February 2020 |
| Date of Last Submission: | 20 February 2020 |
| Delivered at: | Parramatta |
| Delivered on: | 20 February 2020 |
REPRESENTATION
| Counsel for the Applicant: | Ms De Vere |
| Solicitors for the Applicant: | PJM Lawyers |
| Respondent: | No appearance |
ORDERS
I dismiss the Application initiating proceedings of Mr Abelas filed 22 November 2019.
Mr Abelas shall, as a contribution to the costs of Ms Jancos incurred in these proceedings, pay to Ms Jancos, or as she may direct, the sum of $15,962.20, such costs to be a charge upon the interests of Mr Abelas with respect to the proceeds of sale of the properties B Street, Suburb C and D Street, Suburb E and to be deducted from the share of the proceeds of sale to which Mr Abelas is entitled (pursuant to the Arbitral Award of Mr F registered by this Court) and paid to Ms Jancos (or as she may direct) prior to any distribution of funds to Mr Abelas or any accounting to him with respect to those funds.
Remove all issues from the list of cases awaiting hearing.
Upon the expiration of the Appeal period and in the event that no appeal is lodged that all exhibits then be returned to the party who tendered same and that all material produced on subpoena or pursuant to section 69ZW of the Family Law Act 1975 be returned to the person or organisation who produced same or securely destroyed.
IT IS NOTED that publication of this judgment under the pseudonym Jancos & Abelas is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PARRAMATTA |
PAC 2440 of 2016
| MS JANCOS |
Applicant
And
| MR ABELAS |
Respondent
REASONS FOR JUDGMENT
These proceedings arise from a number of applications with a connection to the determination of a substantive property adjustment dispute between the parties. That determination occurred by way of arbitration.
The Applications before the Court are twofold. The first Application in time is an Application by Ms Jancos filed 26 June 2019. That Application seeks certain orders with respect to enforcement of the Arbitral Award and that which it provides. The second Application in time is an Application by Mr Abelas. That Application is filed on 22 November 2019. That Application, for reasons that I will return to and endeavour to tolerably explain, is incompetent.
The Application by Mr Abelas seeks relief which could not be ordered by the Court. The concession is made by counsel for Ms Jancos, perhaps generously, that the intention of Mr Abelas, and those then retained by him, must have been to seek either review of the Arbitral Award (pursuant to section 13J of the Family Law Act 1975 (Cth)) or to seek to set the Award aside (pursuant to section 13K of the Family Law Act 1975).
As Mr Abelas is absent, I will deal with all of the grounds which might have been available to and raised by Mr Abelas had he been present.
The substantive proceedings from which the two present applications arise were proceedings with respect to property adjustment commenced by Ms Jancos by an Application filed on 30 May 2016. Mr Abelas was the respondent in the substantive proceedings, having filed a Response on 27 July 2016. As would be apparent, these parties have been locked in somewhat heated controversy for now nearly four years. This judgment will, subject to any appellate intervention, conclude those controversies.
I will refer to the parties, as far as possible, by their names. For the purpose of this determination, I will treat Ms Jancos as the applicant. That is so, if nothing else, on the basis that she has been the applicant in the majority of Applications and, with respect to the two Applications before the Court today, is also the applicant first in time.
Due process
Mr Abelas does not appear today. Consistent with that which had previously been a Practice Direction of the Deputy Chief Magistrate of New South Wales, the proceedings were stood in the list for some little time to permit Mr Abelas an opportunity to attend and be heard. The matter now resumes at 10.15 am, having initially been listed at 9.30 am. I am satisfied that a sufficient period has passed to enable Mr Abelas to either attend or to make contact with the Court in the event that he has experienced misadventure. It is not apparent that any such contact has been made.
As the High Court discussed in Allesch & Maunz [2000] HCA 40, and particularly the erudite judgment of Kirby J, what is required to afford due process, to paraphrase his Honour, one would hope not impermissibly, is a reasonable opportunity for a party to be heard. That opportunity and its reasonableness is determined by reference to the facts and circumstances of the case.
With respect to the application filed by Mr Abelas, he was, on the last occasion that the proceedings were before the Court, legally represented. Those legal representatives have ceased to act. That may well arise as a consequence of their having considered a transcript of an earlier attendance in the proceedings prior to their retention, at which time Mr Abelas had asserted that the attorneys who had represented him in the substantive proceedings (being the same as those who were then retained and have now withdrawn) had misrepresented his interests, and possibly by having engaged in collusive and fraudulent behaviour.
I make clear that there is not a scintilla of evidence to support that assertion as raised by Mr Abelas. However, the making of the assertion would no doubt have placed those legal representatives and counsel retained thereby in an invidious position. Whether that is the basis for withdrawal or not, I need not be otherwise concerned. Suffice to observe, that a Notice of Withdrawal has been filed with the Court.
There is one issue of potential concern that might arise with respect to due process, that being that the Notice of Intention to Withdraw was posted to Mr Abelas at an address at which he could not, at the date of posting, have resided, it being one of the two properties the subject of the controversy in these proceedings and which were sold some little time ago. However, that is overcome by the reality that the notice also makes clear that Mr Abelas was served with the notice by email.
On that basis, I am satisfied that Mr Abelas would, in all probability, not labour under any delusion that the solicitors formerly retained by him continued to act or that they would be appearing to represent his interests today. In any event, Mr Abelas has an obligation and responsibility, whether legally represented or not, to be present before the Court to prosecute his application.
Mr Abelas was present on the last occasion when the adjourned date was fixed. I am satisfied, accordingly, that:
a)Mr Abelas would, in all probability, be aware and is aware of the listing of the proceedings today;
b)Mr Abelas would, in all probability, be aware and is aware of the fact that he was no longer legally represented by those who had previously been on record;
c)Mr Abelas has been afforded due process;
d)The matter can, without impeaching the integrity of the process, proceed on an undefended basis and in his absence, Mr Abelas having been afforded an opportunity to be heard.
This tranche of proceedings have, from the date of filing of the first Application, now been before the Court for nearly eight months. Mr Abelas, in those circumstances, has been afforded a reasonable opportunity to place evidence before the Court, put submissions and be heard.
I also make clear, as will be enumerated shortly, that I have read and considered the evidence filed in these proceedings by Mr Abelas. That is so notwithstanding that he is not present to prosecute his application. I have done so to ensure that, as far as possible, the opportunity that the High Court appropriately advances, that being an opportunity to present evidence and be heard, is afforded to Mr Abelas.
Material considered
In dealing with the proceedings, I have read and considered the following documents.
In the case of Ms Jancos:
a)Her Initiating Application filed 26 June 2019. That application, as already observed, seeks orders to enforce an Arbitral Award as well as an order for costs on an indemnity basis. An application for costs is pressed, although it would not appear to be pressed on an indemnity basis. In any event, that will be addressed in due course
b)A Response filed 3 December 2019 that is filed by Ms Jancos in response to the incompetent application of Mr Abelas seeking relief pursuant to section 79A of the Family Law Act 1975;
c)There are a number of affidavits which I have read and considered as filed by Ms Jancos or those retained by her, as enumerated by counsel. I have not read and considered all of the affidavits that have been filed, only those which would appear germane to today’s determination. That is not to suggest that the other affidavits not considered for today’s determination are improperly filed. They are not. The matter has been an evolving narrative as to the steps taken with respect to compliance and enforcement of orders. To the extent that the two properties the subject of the Arbitral Award (and the application for enforcement) have now both been sold and the sales settled, some affidavits are simply no longer relevant, (although they were relevant at the time of filing). The affidavits that I have read and considered comprise the affidavits of Ms Jancos filed, respectively, on 26 June 2019, 13 September 2019, 27 September 2019, 8 November 2019 and 13 November 2019.
d)In addition, there is a final affidavit considered in the case of Ms Jancos, being an affidavit of her legal representative filed on 14 February 2020. It is the demonstrated proof that the two parcels of real estate the subject of these proceedings have, in fact, been sold and accounts for the funds resulting from those sales.
In the case of Mr Abelas, I have read and considered each of the following:
a)His Initiating Application filed 22 November 2019;
b)An affidavit filed by Mr Abelas on 16 September 2019;
c)An affidavit filed 22 November 2019; and,
d)The financial statement of Mr Abelas, also filed 22 November 2019.
In addition to that material, I have also had regard to the Application to Register the Arbitral Award, the date of filing of which is unclear but which would appear to have been filed in or about early February 2019.
I have also had regard to correspondence from the Registry to the legal practitioners of the parties dated 13 February 2019, which will be exhibit A, together with a response received by the Court from the legal representatives then retained by Mr Abelas on the same date, exhibit B. The above correspondence has some relevance to this determination as I am conscious, the matter concluding in the absence of Mr Abelas, to ensure that the entire narrative of these proceedings is made clear.
The arbitration
The parties attended arbitration with an appropriately qualified and accredited arbitrator in January or February 2019, that is, some 12 months ago. An Arbitral Award was issued by the arbitrator on 6 February 2019.
The Arbitral Award was then the subject of an Application for Registration of an Arbitral Award filed by the legal representatives for Ms Jancos and dated 9 February 2019.
The proceedings were listed for mention and directions on 13 March 2019, that date having been allocated on the basis that the substantive proceedings, the totality of which had been referred to arbitration, were effectively stayed pending registration of an Arbitral Award. It was hoped that the date might be vacated. It is clear, however,[1] that a period of 28 days must pass from the date of service of the Application for Registration of the Arbitral Award before the Arbitral Award can be registered. The 28-day period is, in effect, a disallowance period, as it were, affording to any party who seeks to oppose registration of the Arbitral Award the opportunity to do so.
[1] Regulation 67Q(3) Family Law Regulations 1984 provides that a party may, within 28 days after service of an Application to Register an Arbitral Award, bring to the attention of the court any reason why the award should not be registered. This, in effect, creates a “disallowance period” that can be waived with the consent of all parties but which, absent consent, would preclude registration being affected until 28 day have passed from service of the Application to Register an Arbitral Award.
Whilst the Australian Law Reform Commission in their recent report[2] has recommended the removal of a right to objection, the right is important. As discussed in Blanco & Blanco(No. 2) [2019] FCCA 2458, objection is an opportunity to impugn or impeach the integrity of the arbitral process and to raise matters relating to a denial of due process, bias, or some alleged failure by the arbitrator to act within the terms and parameters of their contractually created jurisdiction.
[2] “Family Law for the Future — An Inquiry into the Family Law System” ALRC 135 March 2019. See Chapter 9 and specifically recommendation 27.
In any event, no objection was raised.
On receipt of the Arbitral Award, correspondence was forwarded by my Chambers seeking to vacate the listing date in the event that no objection was raised. Whilst it is not expressed within the Family Law Rules 2004 (Cth) or Family Law Regulations 1984 (Cth), which facilitate the arbitral process, one might assume (and in this case, I accept, validly) that it is a matter for the parties to seek to waive that disallowance period (or the period in which they are entitled to object). Such waiver has most clearly occurred.
On the very same day that my Chambers contacted the legal representatives for the parties, the legal representatives for Mr Abelas responded by email indicating that no objection was raised to the immediate registration of the Award. Accordingly, it was registered. Thereafter began the difficulties, as enumerated in the various affidavits referred to above and culminating in the Application for Enforcement filed by Ms Jancos.
I propose to shortly turn to each of the grounds upon which Mr Abelas might seek to impeach the Arbitral Award, inferred or expressed (although incompetently, as I have already described) by the Application filed. Before doing so, it is germane to consider the Arbitral Award, albeit briefly.
The Arbitral Award
The Award is registered and speaks for itself.
What is clear and apparent from the Award is that the substantive assets of the parties and the subject of the dispute comprised two parcels of real estate:
a)The property at B Street, Suburb C; and,
b)A second property at D Street, Suburb E.
The parties were the joint registered proprietors of the first parcel, not the second. The Arbitral Award sets out eruditely and sufficiently the factual history of the relationship between these parties. It should be observed from the outset that the parties were engaged with each other in a de facto relationship, not a marriage. That has some relevance as regards the above comment as to the incompetence of the Application filed by Mr Abelas.
The Arbitral Award at pages 12 and 13 records certain events that had passed in relation to the receipt of an inheritance by Mr Abelas not long before the termination of the relationship. That inheritance included a property at Suburb G which was ultimately sold by Mr Abelas and resulted in Mr Abelas receiving a sum of $500,000. It cannot be ascertained, nor need it be ascertained, whether that sale was for the realisable commercial value of the property.
The sale, as noted at page 13 of the Arbitral Award, occurred between Mr Abelas and his niece. The Arbitral Award sets out the manner in which the proceeds received were dealt with, (or alleged to have been dealt with), by Mr Abelas. A sum of $204,750 remained at the time of arbitration.
The Arbitral Award sets out clearly the considerations that led to the Award ultimately delivered. It is also important to observe (page 15 of the Arbitral Award and annexure B to Mr Abelas’ affidavit of 20 November 2019) that there was no dispute between these parties or presented to the arbitrator as to the value of the two parcels of real estate.
An agreed valuation was arrived at per annexure B, being a letter from the two valuers who had previously provided differing valuations, and dated 18 January 2019. Accordingly, the parties each urged the arbitrator to adopt those agreed values as set out within a jointly tendered balance sheet. Thus, to the extent that the findings made by the arbitrator as to the assets available for division between the parties might be challenged, they simply could not be. They were presented as agreed facts. Thus, there could be no suggestion that an error of law occurred through an incorrect finding not supported by evidence.
At page 15, it is made clear that the intention of the Arbitral Award is to distribute the identified assets as to 39.12 per cent to Ms Jancos and 60.88 per cent to Mr Abelas (at least, that is the assertion of Mr Abelas). However, a careful and proper reading of the Arbitral Award makes clear that the percentage calculations contained within the Arbitral Award are based on the assets that are known and, thus, included. It is possible that some other asset or financial resource may have been available to one or other of the parties, but nothing of substance turns upon that issue.
The award required that Mr Abelas pay to Ms Jancos a sum certain - $630,000 - and refinance certain mortgages relating to the B Street, Suburb C and D Street, Suburb E properties. In return for payment of the sum certain, Ms Jancos was to transfer to Mr Abelas her interest in those properties, whether legal or equitable. Each party was otherwise to retain all other property and resources to which they were entitled or which were in their possession.
The sum certain was not paid by Mr Abelas. Mr Abelas asserts in his sworn evidence that he had made inquiries with respect to borrowing but had been advised that he could not do so. Accordingly, the mechanisms included within the Arbitral Award triggering the sequential sale of those properties came to bear.
The jointly owned property was to be sold first, that being the property at B Street, Suburb C. If funds realised from that sale were not sufficient to discharge both the secured mortgages and make payment in full to Ms Jancos of the sum of $630,000, then the second property was to be sold.
There is significant controversy between the parties as to the efficacy of actions undertaken by Mr Abelas with respect to the listing and sale of, certainly, the first property at B Street, Suburb C. I need not weigh into that controversy as the property has now been sold. It was the subject of an earlier determination in the enforcement proceedings which, of itself, was unremarkable. What is remarkable is that the property sold for significantly less than the value that was agreed between the parties and, thus, presented as an agreed fact to the arbitrator.
The property had an agreed value of $800,000. It was sold to the brother-in-law of Mr Abelas for $455,000. Mr Abelas is at pains in his material to point out that his brother-in-law was not an anticipated bidder. Indeed, his evidence is that his brother-in-law registered during the course of the auction. Again, I need not weigh into these controversies. It is simply the reality. It is germane to observe, however, that Ms Jancos does not accept the assertions of Mr Abelas, and the evidence that is led by her suggests a degree of chicanery, not so much in that transaction, but in disingenuous steps taken or not taken by Mr Abelas earlier in the marketing and offering for sale of the property.
At an earlier listing of the proceedings when the enforcement application only was before the Court, an Order was also made appointing a trustee for sale of the second property at D Street, Suburb E as it was clear and apparent that the proceeds of sale realised from sale of B Street, Suburb C were insufficient to discharge Mr Abelas’ obligations to Ms Jancos. That property has now been sold. That property has also been sold at something less than the agreed value presented by the parties at arbitration, although not by the same magnitude of variance as occurred with respect to the B Street, Suburb C property.
I am not satisfied that anything of significance turns upon the issue, although it is one of the bases upon which Mr Abelas agitates for relief.
The Arbitral Award need not be further considered. It is registered with the Court without objection - indeed, with the consent of both parties, albeit with an abridgement of time in relation to the disallowance period. I am not concerned that this in any way affects the registration of the Award. There is no question raised or challenge mounted that it would impact upon the registration, and thus, the enforceability of the Award.
It is also important to observe that the Award, upon registration, takes effect pursuant to section 13H(2) of the Family Law Act 1975:
…as if it were a decree made by…
the Court which attended to registration.
From the outset, it must be observed that the Award is not a decree of the Court. It has effect as if it were a decree of the Court. Thus, it is not a decree or order of the Court that can be challenged. It is an Arbitral Award. That much must be clear from the fact that sections 13J and 13K provide separate and specific bases upon which Arbitral Awards might be challenged or impeached, (section 13J providing for review, section 13K providing grounds to set aside registered Arbitral Awards).
It is also clear, as previously determined,[3] that registration of the Arbitral Award is a necessary precondition to invocation of sections 13J and 13K of the Family Law Act 1975 in seeking to review or set aside the Award. If the Arbitral Award is not registered, it cannot be reviewed and it cannot be set aside. Indeed, there would be no need for it to be so as the Arbitral Award cannot be enforced if not registered.
[3] Blanco & Blanco (No. 2) [2019] FCCA 2458.
Determination
I propose to address the Application of Mr Abelas by posing a number of questions and answering them by reference to the above discussion of evidence and the relevant provisions and precedents. The questions will address the relief sought or as may have been sought by Mr Abelas.
As I have described, the relief sought by Mr Abelas is incompetent. It is, perhaps, important to be clear what the relief that is sought is.
Mr Abelas seeks orders pursuant to section 79A(1)(a) of the Family Law Act. As would be apparent from the above comments, section 79A has no application to the circumstances of this case. There is no order which might be set aside. There is a registered Arbitral Award which has effect as though it were a decree of the Court, but it is not a decree of the Court. It is an Arbitral Award which arises from a separate, albeit court-ordered,[4] contractual determination of the dispute between these parties.
[4] Section 13E of the Family Law Act 1975 (Cth).
There are two further problems. Firstly, the parties were not married. Thus, section 79A, founded in matrimonial causes, has no application to the proceedings. The section upon which Mr Abelas would proceed would be section 90SN of the Family Law Ac 1975. Secondly, the ground that is relied upon and specified within the relief sought, section 79A(1)(a), provides to the Court a jurisdiction to set aside an order if:
…there has been a miscarriage of justice, by reason of fraud, duress, suppression of evidence, the giving of false evidence or any other circumstance.
Clearly, in considering the evidence filed by Mr Abelas in support of his application, the first four grounds could not be relied upon. There has been no fraud, duress, suppression of evidence or false evidence. There has been a joint consensual statement by the parties through their Counsel to the arbitrator, and thus adopted and relied upon by the arbitrator, as to the agreed value of the properties. That the eventual sale prices realised for each of those properties is at variance with the agreed value could not fall within the above descriptors.
The phrase “any other circumstance” has been dealt with consistently by the Full Court and High Court over some time, including in Gebert & Gebert (1990) FLC 92-137, Suiker & Suiker (1993) FLC 92-436, Lane & Lane (2016) FLC 93-699, Flickling & Flickling (1995) FLC 92-664, In the Marriage of Holland (1982) FLC 91-243 and by the High Court, in Taylor & Taylor (1979) 143 CLR 1. The circumstances which might be alleged need not be connected with, similar to or arise from fraud, duress, suppression of evidence or giving false evidence. However, it is difficult to understand what circumstances could be relied upon by Mr Abelas (even if the section applied) as having achieved a miscarriage of justice, save and except the one simple reality that the properties sold for less than the agreed value that was taken into account by the arbitrator with the consent of the parties. I will deal with that issue shortly.
Is section 79A or section 90SN an available ground of relief?
No.
This is for the reasons already described. What is sought to be impeached is an Arbitral Award. Thus, it is open to Mr Abelas to seek to review the Arbitral Award or to set it aside. But as the registration of the Arbitral Award does not, in reality, represent an order of the Court, (the Arbitral Award merely has effect, pursuant to section 13H of the Family Law Act 1975, as though it were an order of the Court), the grounds could not apply.
Are any of the grounds for review of the Arbitral Award under section 13K available to Mr Abelas?
No.
Whilst Mr Abelas does not make any application under this section, I propose to deal with the ground for the sake of completeness. Section 13K provides that an Arbitral Award may be reviewed on questions of law. What might constitute a question of law was dealt with authoritatively (from my perspective) in Blanco & Blanco (No. 2).
Mr Abelas does not suggest any error of law. His evidence, having considered all of the affidavit material that he has filed in the proceedings to date, could, at best, suggest that the arbitrator has misled himself by adopting a value for one or both of the parcels of real estate, which is inaccurate. However, that is not open to be alleged. The value adopted was an agreed fact.
Thus, no error of law could arise. The question need not be determined further or beyond that discussion.
Is a ground under section 13J, (the power to set aside a registered Award), available?
No.
The grounds for setting aside a registered Arbitral Award are more limited and confined than those which relate to an order made by the Court open to impeachment under either section 79A or section 90SN of the Family Law Act 1975.
The grounds available under section 79A and section 90SN of the Family Law Act 1975 are themselves not identical, although far more similar than the grounds that relate to setting aside an Arbitral Award.
Section 13K of the Family Law Act 1975 provides the following bases for setting aside an Award. The section is clear and specific that a discretion is to be exercised by the Court in that the subsection commences with the expression “The Court may only make a decree”. Whilst this imports and implies that it is clearly the Court’s discretion, it also suggests that the test that must be met is confined to the ground specified. The decree can only be made if the Court is satisfied that one of the specified grounds exists.
There are four grounds available. I will deal with each separately:
The Award or agreement was obtained by fraud, including non-disclosure of material matter
For the reasons already set out above, this could not apply in this case:
The Award or agreement is void, voidable or unenforceable
The Arbitral Award might be argued to be void or voidable if any of the duties of the arbitrator or matters which related to the validity of constitution of the arbitral tribunal could be established. They could not.
On the basis that one might seek to oppose registration of an Arbitral Award on the basis that it is void or voidable, it might also be argued – and, I accept, validly so – that Mr Abelas has waived any right or entitlement to raise this argument, having consented to registration of the Arbitral Award.
As to whether the Award is unenforceable, clearly, it is not. The Application which commenced this tranche of proceedings was an Application to Register the Arbitral Award, followed by an Application for Enforcement made by Ms Jancos in June 2019.
Clearly, the Award is effective in achieving that which is provides: the sale of two parcels of real estate. They have been sold. Thus, it could not be argued – although Mr Abelas does not seek to agitate the issue in the evidence he has placed before the Court – that the Award is unenforceable.
In the circumstances that have arisen since the Award or agreement was made, is it impractical for some or all of it to be carried out?
This is perhaps the greatest aspect of variance between the Court’s power to set aside its own Orders and the Court’s power to set aside a registered Arbitral Award. The circumstance is not related to a miscarriage of justice. It is solely founded in impracticability.
It is not at all impractical for the Arbitral Award itself or any portion of the Arbitral Award to be carried out. The Arbitral Award provides for the actions by these parties or either of them.
The Award, as delivered, comprises two components:
a)The Award itself; and,
b)The reasons for the Award.
The reasons assist in affording due process and explaining the basis for the Award. The Award itself is that portion which provides for payment of a sum certain by Mr Abelas to Ms Jancos and, in default thereof, sale of the two parcels of real estate. What is provided is not at all impractical. It has, in fact, occurred as regards the sale of the two properties, albeit after this court’s intervention in the enforcement proceedings.
I could not be satisfied on the evidence of Mr Abelas that it is impractical for the Award itself to be carried out.
The argument of Mr Abelas is that the intention of the Award is not carried out. However, that is not the basis of the Court’s power to intervene under section 13K(2)(c) of the Family Law Act 1975. It is the Award itself which must be impractical. That aside, as already indicated, I am not satisfied that the argument mounted by Mr Abelas that the intention of the Award is frustrated, or that it cannot be carried out or is in any way impracticable, is made out.
The argument of Mr Abelas would appear to be that as a consequence of properties selling for less than the agreed values, the payment of a sum certain to Ms Jancos represents her receiving a greater percentage than is used in the calculation of the Arbitral Award itself. That may well be so. However, that is to assume that:
a)The reasons that are given are the Arbitral Award. They are not and the two cannot and should not be conflated; and,
b)The “intention” of the Arbitral Award is relevant. What is relevant is the Award itself; and,
c)The intention of the arbitrator is, in fact, found by reference to the inclusion within the arbitrator’s reasons of the percentages used to calculate the Award and as the basis of explaining the Award that is ultimately made. A reading of the Arbitral Award in its totality, rather than simply that one portion of the Award, makes clear that myriad considerations applied and exercised the mind of the arbitrator to achieve the Award that was made.
I am not satisfied that this ground is or could be made out.
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
This ground is not argued by Mr Abelas but, if it had been, it must fail.
This ground would face the same difficulties as the ground subsection (b) above. This and subsection (b) are grounds which would also have entitled Mr Abelas to oppose registration of the Arbitral Award as they are grounds seeking to impugn the integrity of the arbitral tribunal or the arbitral process, and thus rendering the Award unregistrable and unenforceable. Those grounds are not argued, were not argued and, thus, must be taken as abandoned.
Leaving that aside, on the evidence filed by Mr Abelas, none of these matters are alleged, save and except that Mr Abelas uttered an allegation at an earlier court event that there had been some form of collusion. That simply is not supported by the evidence and is, indeed, having regard to the integrity of the professionals involved as counsel representing the parties and each of them and the arbitrator, offensive.
Accordingly, none of those grounds could be available even if they had been pleaded by Mr Abelas.
If section 79A or section 90SN applied, could they be a basis to interfere?
I will deal with this issue, lest I am wrong in my categorisation above, (that the Arbitral Award, whilst it has effect as though it were an Order of the Court, is not in fact an order of the Court and thus those provisions could not apply to permit review).
In any event, even if these provisions did apply, they could not support the relief that is sought by Mr Abelas.
Justice Thackray, sitting as a single judge hearing an appeal in Keil & Kingscote [2018] FamCAFC 169, dealt with this issue somewhat authoratively. His Honour, commencing at paragraph 25, considered the utility of default orders for sale, including what his Honour refers to as, “rise and fall provisions”. His Honour opined that in circumstances where a sum certain is to be paid in return for a transfer of property but the sum is not paid and, in default, the property is sold, that the distribution of proceeds might then default to percentages.
Whilst His Honour expresses the view, based on the authorities considered therein, that it might be preferable in most circumstances for this to occur, His Honour was not persuaded that it would be an appellable error for an adjudicator, whether a judge of the Court or, in this case, an arbitrator, to proceed on the basis of payment out of a sum certain, including the addition of interest in the event of late payment. His Honour considered and recognised that it might result in disadvantage to one party or the other. If the property sold for less than anticipated, the party who was to receive the sum certain being would be advantaged, and if the property had increased in value, the party receiving payment of a sum certain, subject to payment of any interest thereupon, being disadvantaged. However, His Honour was clear that it would not represent, as was specifically considered in that case, an appellable error.
Similarly, I am conscious of that which fell from the High Court in Taylor & Taylor, and as discussed by the Full Court in Simpson & Hamlin (1984) FLC 91-576:
The importance of bringing an end to litigation remains an important consideration. The remarks of Mason J remain applicable to paragraph (d) [Not a section relied upon by Mr Abelas or pleaded in his application] To paraphrase his Honour’s remarks, it is not sufficient that it appears that circumstances have arisen of an exceptional nature resulting in hardship to the applicant. The Court must consider, in the exercise of its discretion, whether that hardship is of such serious nature and results in such inequality that it can only be rectified by the extreme step of setting aside or varying an existing Order of the court.
The same principles of finality have been adopted by the High Court with respect to arbitration, (see for example, the High Court’s decision in TCL Air Conditioner (Zhongshan) Co Ltd v The Judges of The Federal Court of Australia & Anor [2013] HCA 5).
In this case, there is also the difficulty for Mr Abelas that the circumstance that has arisen, (i.e., the sale of properties at a lesser value than was considered as an agreed fact by the arbitrator in formulating the Arbitral Award), would need to be established as:
a)Exceptional; and,
b)Resulting in a serious hardship and inequality.
I could not be satisfied that it is so.
Firstly, the inclusion in the Arbitral Award of an obligation upon Mr Abelas to pay a sum certain, even in the event the properties were sold, is tolerably explained and anticipated by the arbitrator. It relates to and connects with the earlier disposal of property by Mr Abelas. Whilst it was not necessary, as it was not agitated on Ms Jancos’ behalf, and appropriately so, that a specific finding be made that the sale by Mr Abelas to his niece of his share in the property at Suburb G may or may not have been for its full commercial value, it was certainly apprehended that it may have been so.
No finding was made and thus no appellable error could be argued, or more correctly, no basis for review of the Arbitral Award.
What was also anticipated was the reality that Mr Abelas was, effectively, in control of both of the parcels of real estate that were to be sold in the event of default in payment in a sum certain. The B Street, Suburb C property was occupied by Mr Abelas. His evidence, when considered alongside the evidence of Ms Jancos, as to the steps and extraordinary lengths taken to effect a sale of those properties must cause some doubt as to the full and proper engagement of Mr Abelas in the marketing and sale of that property.
The second property at D Street, Suburb E was the property of Mr Abelas. He was the sole registered proprietor. It was suggested by Mr Abelas that the property was tenanted, however, he had full and effective control of the property at all times. Thus, the Arbitral Award, at least inferentially, suggests and supports a basis for that which Thackray J referred to as “perhaps the less preferred option” of a sum certain, even in the event of sale. Thus, any disadvantage which follows could not be complained of, even if it had not been anticipated in the Arbitral Award.
I remain dissatisfied that it could be a basis relied upon by Mr Abelas pursuant to either section 79A or, more correctly, section 90SN.
Conclusion
For all of those reasons, I am satisfied that the Application by Mr Abelas must fail.
Costs
The Application by Ms Jancos has succeeded. She has successfully prosecuted her Application not only on this occasion but on an earlier listing of the proceedings, and obtained relief.
On 14 November 2019, Orders were made in relation to the sale and conduct of the sale of the B Street, Suburb C property as well as the appointment of a trustee for sale. On 8 October 2019, similarly, Orders were made as a consequence of Ms Jancos’s enforcement application.
For those reasons, the Application for Costs contained within Ms Jancos’s Application is pressed, albeit now increased as a consequence of her being the respondent in this second Application.
The issue of costs must be addressed by reference to section 117 of the Family Law Act 1975. Section 117(1) creates what is often referred to, (including by the High Court in Penfold & Penfold [1980] HCA 4), as the “general rule” that each party shall bear his or her own costs. That general rule is, however, subject to the discretion reserved by section 117(2), namely, if the Court is satisfied of the dual test of both justification and justice are met, (see ReJJT; Ex parte Victoria Legal Aid [1998] HCA 44) that an order for costs might be made in departure from the general rule.
Section 117(2A) sets out a list of prescriptive but non-exhaustive considerations. Subsections (3), (4), (4A) and (5) are not relevant as those sections deal with applications by or involving Independent Children’s Lawyers or child welfare agencies.
I will deal with each of the factors in subsection (2A).
The financial circumstances of the parties
Mr Abelas, having filed a financial statement, suggests that he is employed as a labourer by a private company of which, by reference to the Arbitral Award, he is or was the sole proprietor. There is some issue raised in the Arbitral Award as to deregistration of the company, but it is the evidence of Mr Abelas that he continues to operate it, whether appropriately or otherwise.
Mr Abelas asserts that he receives an income of $400 per week from that business, together with rent paid with respect to the D Street, Suburb E property, now sold, of $500 per week - thus, an income of $900 per week. I need not engage in any consideration as to whether that evidence is accurate. It is merely recited to reflect that which is put before the Court by Mr Abelas.
Mr Abelas disclosed the two properties now sold. He would appear to significantly underestimate the value of one of the two, (i.e, the D Street, Suburb E property, sold for $200,000 more than he asserts its value to be), albeit sold for something less than the agreed value at arbitration. Mr Abelas owns a number of assets, including the company that he includes as having a value, as was found and accepted in the Arbitral Award.
There is no particularisation of expenses by Mr Abelas, save and except that he asserts that he is servicing a mortgage at $768 per week, although that mortgage would now be discharged with sale of the property, albeit with loss of the rental income deposed to. His only other expenses of significance referred to are insurances, rates and tax.
Thus, the document is of very little assistance in understanding Mr Abelas’ present financial circumstances.
Ms Jancos is not a person of great substance. I do not express it in those terms to be offensive to her. She is not a woman who earns significant income, and save for receipt of funds from these proceedings, which have now been nearly 4 years in their prosecution and conclusion, she does not own any substantial assets in her own right.
There is little assistance rendered, save to observe that the costs which have been incurred by Ms Jancos and as sought in the annexure to the affidavit of Ms Jancos’ legal practitioner filed 14 February 2020 are modest and entirely reasonable.
There is great controversy at this present time, including before Parliamentary Inquiries, as to the role of legal practitioners in complicated proceedings and inflating cost. Most, if not all, of that discussion is simply ill-informed and ill-advised. It is an attack upon officers of the Court, whose predominant and primary duty is to the rule of law - that which is fundamental to the operation of a functioning democracy, a fact apparently escaping those raising such criticism.
One would expect that people seized of specific legal knowledge would be well renumerated. They are not process workers. One would not expect them to work at minimum wage. The overheads involved are significant. But, more importantly, their expertise and knowledge is of value to society, not just individual litigants.
The costs charged in this matter are less than that which would arise under the Scale of Costs, schedule 1 of the Federal Circuit Court Rules 2001 (Cth). The costs are less than they would have been entitled to charge for the degree of complexity involved in the proceedings, dealing as they do with somewhat novel areas of law relating to registration and enforcement of arbitral awards, as well as dealing with Mr Abelas, who has, on the occasions that he has appeared before the court, been anything but easy to deal with - uttering threats and making unsupported assertions at will.
Leaving that aside, the costs that Ms Jancos will incur, modest and reasonable as they are, will result in her being deprived, to some small extent, of the fruits of her litigation. She is in no better position to meet those costs from her capital, which is the source from which they will be met, than Mr Abelas would be.
This factor does not assist in justification. It is not a case in which one can assert that Mr Abelas has used vastly superior wealth to oppress Ms Jancos. He has, however, used his control of the assets to some extent and he has been, at best, belligerent, obstructive and obfuscatory in his address of issues relating to compliance with the Arbitral Award, let alone these proceedings. I am satisfied it certainly speaks to the issue of justice.
Whether a party is in receipt of Legal Aid
Neither is.
Conduct of the parties with respect to the proceedings
This is a substantial issue in this case that, of itself, supports a finding that a departure from the general rule is both justified and just.
These proceedings were commenced with respect to enforcement. One would envisage that in those circumstances, particularly noting subsection 117(2A)(d) of the Family Law Act 1975, to which I will shortly turn, that Ms Jancos would be entitled to costs.
Whilst the general rule creates a departure from the usual civil principle that “costs follow the cause”, in enforcement proceedings there must be something verging upon – although I do not suggest in fact being – a presumption to be rebutted. It is found in subsection 117(2)(c) of the Family Law Act 1975. Mr Abelas, both in relation to these proceedings and compliance with his obligations under the Arbitral Award, has been less than forthcoming or of assistance to himself, let alone Ms Jancos or the Court.
Mr Abelas has not engaged in his duties and responsibilities in prosecution of his litigation in any meaningful way. On the first two occasions, he appeared self-represented. On the third occasion, he had re-engaged the legal representatives who had previously appeared for him and the counsel who had previously appeared for him - counsel of the utmost integrity - and did so without deigning to inform them that he had impugned their ethics on an earlier occasion in an attempt to divert attention from enforcement of the Arbitral Award.
On this occasion, Mr Abelas simply does not attend and does not attempt to communicate with either those retained by Ms Jancos or the Court to explain that absence or seek indulgence. That conduct, as well as the reality that the Application that he has made, as it were, at the death knell has been found entirely incompetent, (although Mr Abelas, perhaps, could not be entirely blamed for that). His solicitors might have some role to play in the ill-framing and ill-considered framing of his Application.
Mr Abelas has simply incurred costs for Ms Jancos that were entirely unnecessary, having then, apparently, abandoned the application in any event.
I am satisfied that Mr Abelas’ conduct justifies an order for costs and departure from the general rule. It would be unjust for an order for costs not to be made in those circumstances. That would be so, even if Ms Jancos had simply been engaged in resistance of Mr Abelas’ Application, but she has been prosecuting her own Enforcement Application.
Whether the proceedings are necessitated by the failure of a party to comply with a previous order
Strictly, Mr Abelas has not failed to comply with an Order. He has failed to comply with an Arbitral Award, but the Arbitral Award has effect as though it were an Order, even though it is not. Thus, I am satisfied the consideration is relevant. Lest I am wrong in that regard, it could still be considered under section 117(2A)(g) of the Family Law Act 1975 “other matters considered relevant”.
This factor adds to and supports both justification and justice of an order for costs. The primary proceedings, those first in time, relate to enforcement of obligations with respect to which I am satisfied Mr Abelas, in his disregard, has demonstrated obfuscation and belligerence.
Whether a party has been wholly unsuccessful
Mr Abelas has been wholly unsuccessful. His own Application, ill-considered and poorly framed- incompetent as it were, has been dismissed in his absence. He has also been wholly unsuccessful in resisting the relief sought by Ms Jancos in her Application.
Ms Jancos has been wholly successful. Again, as the Full Court has been clear,[5] this is a relevant factor that the Court can consider.
[5] Davida and Davida (Costs) [2011] FamCAFC 61
Whether an offer has been made in writing
There is no specific evidence in this regard. It must be observed that strident steps have been taken by Ms Jancos, and those who have represented her interest, to engage Mr Abelas in proper compliance with that required of him under the Arbitral Award. He has failed to do so.
Determination and quantum
For all of those reasons, I am satisfied that an order for costs is not only justified and just, but irresistible.
In determining the quantum of costs, I must have regard to both that which is sought and that which is provided by division 21 of the Federal Circuit Court Rules 2001 and schedule 1.
Annexure B to the affidavit of Ms H filed 14 February 2020 sets out the costs that are sought, totalling $15,962.20. That comprises solicitor’s fees and counsel’s fees as well as numerous disbursements and other expenses.
In dealing with schedule 1 of the Federal Circuit Court Rules 2001, it is apparent, on its face, that Ms Jancos would be entitled on a party/party basis or equal quantum without encountering controversy through address of whether the circumstances of this case, consistent with the Full Court’s decision in Prantage & Prantage (Costs) [2014] FamCA 850, would warrant indemnity costs.
The scale would support the following:
a)Two allowances of $2241. There have been two Applications initiated or opposed by Ms Jancos and she is entitled to those costs, together with daily hearing fees. These amounts would produce costs of $4482.
b)Ms Jancos is entitled to the appearances that have occurred. There have been four, including today. Counsel has appeared on each occasion. Schedule 1 does not include specific provision for counsel’s fees. I would be loath to include counsel as a disbursement, with photocopying and other things, as though they were the loose change down the back of the couch. Counsel deserve far greater respect. Certainly, the Court has been ably assisted by counsel who have appeared on each occasion.
c)The daily hearing fee, one would assume, is intended to incorporate the hearing itself. I would be loath to encourage the practice of counsel being sent to Court to conduct proceedings without instructors. Thus, it might be desirable that some amendment be made to the schedule to incorporate both. Counsel is, after all, retained by the solicitor, not the client (unless on direct brief, a practice which counsel should be left to consider as its advisability in individual cases).
d)The daily hearing fee at item 13 of schedule 1 of the Federal Circuit Court Rules 2001 should be allowed with respect to each of the attendances, whether at short mention, half day or full day. On each of the occasions, counsel has been briefed. To the extent that it is necessary, I certify as to counsel. This is most assuredly a matter in which retention of counsel is appropriate. On that basis, I must have regard to the basis upon which counsel are retained. They are not retained on an hourly rate. They are retained on a brief fee for the day. Accordingly, and counsel having appeared on each of the four occasions, I am satisfied that item (c) should apply, a full day hearing of $2,241. Even if one of the attendances were treated as short, reducing the payment to $305, the allowance that would be made for three full days would be $6,723. I am satisfied that this is appropriate.
e)I am also satisfied, having certified for counsel, that the advocacy loading at item 12 of schedule 1 of the Federal Circuit Court Rules 2001 is appropriate, a 50 per cent increase in the daily hearing fee or a further allowance of $1,120.50 on each of those three occasions, (although, it might well be pressed as four). Even allowing three, it would add $3,361.50 together with, if it were treated as a short mention, a further $305.
f)There are then expenses claimed in relation to filing fees, service fees and the like. They are all entirely appropriate party/party expenses incidental to the proper conduct of the litigation. Those expenses are $897.10 together with further expenses then incurred with the Land Titles Office of $215.
g)No specific claim is made, as Ms Jancos’s legal representatives would be entitled, to items such as photocopying, (item 15 of schedule 1 of the Federal Circuit Court Rules 2001). If that were included, noting the volume of material that it has been necessary and appropriate to file in this case, that would add at least some hundreds, if not thousands, of dollars.
Accordingly, I must be satisfied that the amount that is sought, albeit that it is expressed on an indemnity basis, is entirely appropriate on a party/party basis. It is less than that which could be calculated by reference to the scale.
Accordingly, an Order will be made in that sum.
There is an issue as to time for payment. No application is made by Mr Abelas as to time for payment. On the basis that settlement of the second property has recently occurred, there would be no need for time to pay. There is a ready means by which payment can be secured - deduction from those funds as held by the wife’s solicitors and payment to Ms Jancos before payment is made to Mr Abelas. That is the course I propose to take. It will obviate against the need for interest to accrue or be calculated and, thus, obviate against further controversy.
For those reasons, Orders are made as follows.
I certify that the preceding one hundred and thirty-five (135) paragraphs are a true copy of the reasons for judgment of Judge Harman
Date: 17 July 2020
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