KAN & AAMER
[2020] FamCA 1014
•4 December 2020
FAMILY COURT OF AUSTRALIA
| KAN & AAMER | [2020] FamCA 1014 |
| FAMILY LAW – NATIONAL ARBITRATION LIST – application to register arbitral award – respondent to arbitration opposing registration of award – no basis shown – award registered. |
| Family Law Act 1975 (Cth), ss 10L(2), 10M, 13E, 13H, 13K 10L Family Law Regulations 1984 (Cth), regs 67B, 67F, 67J, 67Q |
| Angelides v James Stedman Henderson’s Sweets Ltd (1927) 40 CLR 43 J. Beames, General Orders of the High Court of Chancery (1815) |
| APPLICANT: | Ms Kan |
| RESPONDENT: | Mr Aamer |
| FILE NUMBER: | BRC | 5739 | of | 2019 |
| DATE DELIVERED: | 4 December 2020 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Wilson J |
| HEARING DATE: | On the papers |
| DATE OF LAST SUBMISSIONS: | 26 November 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Not applicable |
| SOLICITOR FOR THE APPLICANT: | Stolar Law Pty Ltd |
| COUNSEL FOR THE RESPONDENT: | Not applicable |
| SOLICITOR FOR THE RESPONDENT: | Not applicable |
Orders
I make an order nunc pro tunc under s 13E referring the whole of this proceeding to arbitration before Ms C, arbitrator, qualified as an arbitrator for the purposes of s 10M of the Family Law Act and regulations 67B and 67J of the Family Law Regulations.
Pursuant to s 13H of the Family Law Act the arbitral award made by Ms C on 21 August 2020 be and is hereby registered.
The arbitral award that has by the preceding paragraph been registered has, pursuant to s 13H(2) of the Family Law Act, effect as if it is a decree made by this Honourable Court.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Kan & Aamer has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: BRC 5739 of 2019
| Ms Kan |
Applicant
And
| Mr Aamer |
Respondent
REASONS FOR JUDGMENT
Introduction
The applicant has attempted to register an arbitral award given in her favour on 21 August 2020, registration of which the respondent opposes, alleging that the award is –
a)affected by fraud;
b)void, voidable or unenforceable;
c)the product of procedural unfairness and bias; and
d)is otherwise affected by error of law.
The applicant wishes to register the award under s 13H of the Family Law Act so that the award, once registered, takes effect as a decree of this Court. For the reasons that now follow, I order the award be registered.
The arbitral award and accompanying form 8 given pursuant to regulation 67Q of the Family Law Regulations were served by email on the respondent on 26 August 2020.[1] The respondent had 28 days within which to “bring to the attention of the court any reason why the award should not be registered”, as was provided for in regulation 67Q(3). That 28 day period expired on 23 September 2020.
[1] Mr B made an affidavit of service on 25 September 2020 deposing to those facts.
The applicant in this proceeding swore in her affidavit made 30 October 2020 that on 24 September 2020 (being outside of the 28 day period prescribed by regulation 67Q(3) of the Family Law Regulations) the respondent provided an unsworn affidavit contesting the registration of the award. The applicant asserted in her affidavit that the respondent’s unsworn affidavit was not available on the Commonwealth Courts portal and that it had not been filed or served. She said she had been advised by her solicitors that the document could not be used as evidence in this proceeding.
It seemed that the respondent’s unsworn affidavit of which the applicant spoke was sealed on 22 October 2020. Yet it was not an affidavit as it was not witnessed by a person legally authorised to take affidavits. The relevant portions of the affidavit, to the extent that they bear upon registration of the arbitral award, are as follows –
Reason for rejecting the registration of the award:
Reason one
10. Error of fact
a.The award has dublicated (sic) the Country D property; The AWARD – CONTRIBUTIONS (page 9 of 14) identified “stand E property” AND “F property” to be two separate properties when in fact it is the same property.
b.I incidentally duplicated the property in my financial statement for a sum of US$30,000) and ownership of 40%.
c.The correct number of properties (ONE) is shown in ALL other documents such as my affidavits.
d.In considertion (sic) of the above, the removal of the wrong property value ($46,330) from the property pool changes my portion of the award (24.7%) to a defecit (sic) of $29,939.92.
e. The Applicant will owe me a sum of $29,939.92.
11. I am requesting the court to vary the award by ordering
a.Applicant to pay (corrected award value) $29,939.92 to the respodent (sic).
b.Applicant to tranfer (sic) money (11a) into the respondent’s norminated (sic) bank account.
c. Nil conditions to affect the payment of the money.
On 28 September 2020 his Honour Judge Dunkley of the Federal Circuit Court of Australia transferred this proceeding to this court and thereafter I assumed responsibility for the conduct of the case.
On 16 October 2020 I made orders for the respondent to file any affidavit material stating his claims for the purposes of regulation 67Q(5) by 23 October 2020 and for the applicant wife to file any affidavit material in rely by 30 October 2020. Otherwise I adjourned the application to 13 November 2020.
On 13 November 2020 Mr Stolar, the applicant’s solicitor appeared yet the respondent did not. At Mr Stolar’s request I ordered that the applicant’s registration of the arbitral award would be determined on the papers.
Mr Aamer made contact with my associates, despite not participating in the mention on 13 November 2020, and requested the convening of a further directions hearing which I did on 19 November 2020. On that latter date Mr Stolar appeared by telephone as did the respondent. In the upshot I ordered the respondent to file any further affidavit material on which he wished to rely to oppose registration on the award by 4pm on 26 November 2020. He duly filed an affidavit and exhibits spanning 126 pages.
Regulation 67Q of the Family Law Regulations
It is important to point up that in arbitrations under the Family Law Act, the phase of applying to register the arbitral award is different to the phase of applying to vary, affirm or reverse the registered award. In this application, the parties were at the phase of applying to register the award. That is important because the award does not possess the legal effect of a decree of this court unless and until it is registered. Once registered, a party is entitled to apply to vary, affirm or reverse the award. But at the stage of seeking registration, several relevant issues emerge from regulation 67Q. The first is one of timing. A party opposing registration has 28 days within which to bring relevant matters to the attention of the court. The second matter is one of content. The party opposing the award’s registration may “bring to the attention of the court any reason why the award should not be registered”. The words “any reason”, self-evidently, go beyond the reasons prescribed, for example, in s 13K where the grounds entitling a court to affirm, vary or reverse the award are limited to –
a)fraud;
b)the void, voidable or unenforceable nature of the award;
c)altered circumstances rendering it impracticable for some or all of the award to be carried out; or
d)bias or want of procedural fairness.
Regulation 67Q(4) sets out how the court is to proceed if a party does not bring anything to the court’s attention under regulation 67Q(3). In that eventuality the court must (mandatory in terms) register the award.
Conversely, if a party does in fact bring to the court’s attention a matter under regulation 67Q(3), then under regulation 67Q(5) the court must –
a)give all parties a reasonable opportunity to be heard in relation to the matter; and
b)then determine whether to register the award.
Before addressing the issues raised by the respondent as amounting to “any reason why the award should not be registered” for the purposes of regulation 67Q(3), it is necessary to say something about this case’s path to arbitration.
The path to arbitration in this case
This proceeding was commenced in the Federal Circuit Court of Australia by initiating application filed 21 May 2019. It was limited to property issues only. The applicant’s affidavit sworn 16 April 2019 was filed at the same time along with her financial statement. The respondent prepared his own response dated 30 July 2019 in which he advanced three responses –
1.Sale of property. Each party receives 50 percent of proceeds after mortgage, commission, expenses fees and secured personal loan.
2.Each party to share 50 percent of the matrimonial asset pool.
3.Each party to share 50 percent of the matrimonial liability pool.
The respondent filed a financial statement on 30 July 2019.
The respondent also made an affidavit on 30 July 2019. In it he addressed his contentions in relation to the property alteration proceeding.
Various interlocutory orders were made, four of which were relevant to the arbitration of this proceed, each which calls for examination.
On 3 September 2019 his Honour Judge Middleton of the Federal Circuit Court of Australia made orders referring the proceeding to mediation and, if that was unsuccessful, adjourning the proceeding for further mention on 27 November 2019. The arbitrator referred to this order.
The mediation was not successful.
On 27 November 2019 his Honour Judge Middleton made three orders of present relevance. The arbitrator referred to his Honour’s orders. They were as follows –
1.That the solicitor for the applicant is to provide a panel of 3 Arbitrator’s to the Respondent by 4:00pm on 11 December 2019.
2.That the respondent is to choose an Arbitrator from the panel provided by the solicitor for the applicant within 7 days of receiving the panel.
3.That the parties are to engage in the arbitration process in accordance with the Arbitrator’s practice.
4.That the matter is adjourned for further mention to 9:30am on 6 March 2020 at the Federal Circuit Court of Australia at Brisbane.
It seems apparent enough that by 27 November 2019 the parties were exploring the possibility of this proceeding being arbitrated but the identity of the arbitrator had not been agreed. That may account for paragraphs 1 and 2 of the orders made by his Honour Judge Middleton on 27 November 2019. Then, in paragraph 3 of his Honour’s orders, his Honour ordered that the parties were “to engage in the arbitration process in accordance with the Arbitrator’s practice”.
No order was made under s 13E of the Family Law Act.
On 6 March 2020 his Honour Judge Middleton made orders requiring the respondent to pay half the arbitrator’s fee.
On 25 May 2020 his Honour Judge Middleton made directions adjourning the proceeding to 8 July 2020.
In none of those orders was an order under s 13E of the Family Law Act made. This was a “section 13E arbitration” as defined in s 10L(2)(a) of the Family Law Act, as opposed to a “relevant property or financial arbitration” as defined by s 10L(2)(b) of the Family Law Act. Accordingly, under s 13E(1) of the Family Law Act an order needed to be made referring the proceeding as a whole or any part of it or any matter arising in the proceeding to an arbitrator for arbitration.
That was not done in this case. It should have been done. The fact that it was not done does not invalidate the arbitration and, should the point be hereafter relevant, I make an order nunc pro tunc under s 13E referring the whole of this proceeding to arbitration before Ms C, arbitrator, qualified as an arbitrator for the purposes of s 10M of the Family Law Act and regulations 67B and 67J of the Family Law Regulations.[2] The parties entered into an arbitration agreement in writing that satisfied the stipulations of regulations 67F of the Family Law Regulations. It seemed to me that in circumstances where no formal defect in the nomination of the arbitrator existed, the arbitrator entered into an arbitration agreement in the prescribed form and the parties participated in the arbitration process, consensually, the oversight of an order under s 13E was just that – an oversight, capable of correction by an order made nunc pro tunc.[3]
[2] In the arbitral award Ms C recited her compliance with s 10M, regulation 67B and regulation 67J.
[3] Emanuele v Australian Securities Commission (1997) 188 CLR 114, In the Marriage of Caska (2001) 28 Fam LR 307, Finlayson v Finlayson (2002) 29 Fam LR 460, In the Marriage of Caska (No 3) (2004) 32 Fam LR 606.
I have made such an order.
At a high level of abstraction it may nowadays be fairly said that the administration of justice in more recent times has generally not favoured the application of procedural rigidities and instead prefers a more flexible approach to statutory preconditions of a procedural character.[4] As Ormiston JA pointed out in Hartley Poynton Ltd v Ali,[5] the learning on the legal principle known by the Latin epithet nunc pro tunc can be reckoned to the times of Charles II.[6]
[4]Emanuele v Australian Securities Commission (1997) 188 CLR 114, 147 (Kirby J).
[5] (2005) 11 VR 568.
[6] The origins of orders made nunc pro tunc can be traced to Williamson v Henshaw [1747] 21 ER 217, Jesson v Brewer [1763] 21 ER 312, Donne v Lewis [1805] 32 ER 1221, Lawrence v Richmond [1820] 37 ER 367 and Ex parte Swift [1835] 131 ER 1300. More recently in Australia the learning on the doctrine of nunc pro tunc was explained by the High Court in Emanuele v Australian Securities Commission (1997) 188 CLR 114, 131 to mean “now instead of then” citing Lord Clarendon’s speech in Ex parte Robert Devenish and Henry Devenish v Richard Bernford (1691) referred to in J. Beames, General Orders of the High Court of Chancery (1815). In Australia, the concept of nunc pro tunc has been considered in Parsons v Bunge (1941) 64 CLR 421, In the Matter of Excelsior Textile Supply Pty Ltd [1964] VR 574, Re Testro Bros Consolidated Ltd [1965] VR 18, Re Sydney Formworks Pty Ltd (in liq) [1965] NSWR 646, Battiston v Maiella Construction Co Pty Ltd [1967] VR 349, Re Horsham Kyosan Engineering Co Ltd [1972] VR 403, Woods v Bate (1986) 7 NSWLR 560, National Mutual Holdings Pty Ltd v Sentry Corporation (1989) 22 FCR 209, Crayford Freight Services Ltd v Coral Seatel Navigation Co (1998) 82 FCR 328, Hartley Poynton Ltd v Ali (2005) 11 VR 568 and Simonds v Coyle (2019) 59 Fam LR 410, although in that last case one judge called the principle of nunc pro tunc a “rule of practice and procedure to regularise the records of the court”. The above survey of cases reveals that the principle goes very much further than a practice rule to regularise the court records. In Emanuele Dawson J mentioned the false dichotomy of dividing a statutory provision affecting an entitlement to commence a legal proceeding into jurisdictional and procedural issues.
The respondent’s contentions
In his affidavit filed 26 November 2020, the respondent purported to set out matters on which he relied for the purposes of regulation 67Q(3). In paragraph 3 of that affidavit the respondent stated that he sought to have the arbitral award set aside by reason of fraud, voidability, bias, breach of the arbitrator’s duties and for error of law. Strictly speaking, he was not “setting aside” the award. He was opposing the registration of the award. In doing so, he needed to put before me “any reason why the award should not be registered”, as was prescribed by regulation 67Q(3). Allegations of fraud, voidability, and bias or want of procedural fairness may be relevant to an application to vary, affirm or reverse the arbitral award. None of those were relevant on this applicant to register the award.
That said, I have read the respondent’s affidavit as narrating his reasons why the award should not be registered. It is necessary to go to the reasons he advanced.
The respondent made several allegations about the manner in which the arbitration was conducted. They were –
a)the arbitrator did not respond to the respondent’s enquiries when the respondent asserted that the arbitration exceeded the proposed deadline;
b)conversely, the respondent asserted that the applicant’s solicitor was provided with correspondence from the arbitrator about which the respondent felt a sense of “lack of inclusion”;[7]
c)the respondent proposed a change of arbitrator, citing among other things, the arbitrator’s demeaning remarks towards him;
d)the applicant’s refusal of the respondent’s request to change the arbitrator; and
e)the arbitrator’s inference in correspondence dated 12 August 2020 that any delay in progressing the arbitration was the respondent’s fault.
[7] Paragraph 39 of the respondent’s affidavit.
It is necessary to address each.
The first issue was the respondent’s concern that the arbitrator did not respond to the respondent’s correspondence. The respondent sent an email to the arbitrator on 21 July 2020. It was in the following terms –
Dear Solicitors,
I have not received any correspondence about the progress of the arbitration despite several enquiries.
I am concerned about my lack of inclusion in this matter considering that the process is meant to be impartial and both parties contributed 50/50 for this service. As one may expect, a person my position will be concerned about impartially when my enquiries are repeatedly ignored only to learn about updates, during court hearings, from the other party. On that note, Mr Stolar told the court, on 08 July 2020, that “…the arbitrator said it will take her another week…”.
Please can you provide an update about the outcome for the arbitration matter between myself (Mr Aamer) and Ms Kan.
Whether or not the respondent’s basis for writing that email was well founded, the respondent did no more than request an update. In my view the arbitrator was not required by that gentle prompt from the respondent to separately write to him, any more than a judge whose judgment was reserved in a matter is required to cause his or her associates to write to parties in answer to an enquiry while judgment is reserved.
In my view for the purposes of regulation 67Q(3) of the Family Law Regulations no “reason why the award should not be registered” was demonstrated by that. I do not accept that the respondent was subjected to a “lack of inclusion” by that email. This basis for opposing the registration of the award was devoid of merit.
Next, the respondent contended that the applicant’s refusal of his request to change arbitrator represented a reason why the arbitral award should not be registered. That was a peculiar contention. The respondent entered into the arbitration agreement with the arbitrator thereby attesting his assent to the arbitral process and yet, when he took the view that he was being addressed in an unparticularised and (in his view) demeaning way, no details whatsoever did he give, he implored the applicant to abandon this arbitration and used her refusal to accede as a reason why the arbitral award in this case should not be registered.
As it happened, the applicant refused to change arbitrators. She was not obliged to accede to the respondent’s request. Dare I say it would have been most peculiar if she had.
No merit was disclosed in this ground as a reason why the arbitral award should not be registered.
Next, the respondent asserted that the arbitrator gave him the impression that the respondent was responsible for delays occasioned by the provision of documentation in a manner that was otherwise than prompt. The relevant email emanated from the arbitrator and was dated 12 August 2020. It was in the following terms –
Dear Mr Aamer and Mr Stolar,
I refer to the correspondence of Mr Aamer dated 11 August 2020.
I had to chase you to supply the court documents. Then I had to chase you to provide a full copy of the report annexed to your affidavit which was incomplete. This report was an important matter in your case. That has only been recently supplied. You called yesterday however did not leave a telephone number and the return number was blocked. My server is down and has been for two days however should be fixed by tomorrow. The report is written with the exception of addressing the annexure which I now have a full copy of.
I did recently talk to you about the report.
The materials are all listed in the award.
I deny that I have made any demeaning remarks to Mr Aamer. The award will be completed as soon as my server is back up.
On a fair reading of that email the arbitrator pointed out to the respondent that the arbitrator was put to the trouble of pursuing the respondent for the provision of information the respondent should have earlier supplied. There was nothing improper in those comments. Nor was there anything improper in the arbitrator’s denial of making demeaning remarks to the respondent.
In my view, no merit existed in the contention that in the circumstances surrounding the email of 12 August 2020 or the contents of the email itself provided a reason why the award should not be registered.
That addressed issues pertinent to regulation 67Q(3) of the Family Law Regulations. In my view, none of the issues raised by the respondent were sufficient to prevent the registration of the award.
However, the respondent contended that he wished to set aside the award under s 13K. While the heading of s 13K says that the court “may set aside registered awards”, 13K(1) does not use the word “set aside” and instead provides that the court in which the award is registered may make a decree “affirming, reversing or varying” the award. In other words, the body of s 13K(1) does not provide for an order setting aside the arbitral award.
The point may be more academic than real, in any event, because s 13K is not enlivened unless and until the award is registered.
The respondent wishes to pursue such course as he may be advised to engage s 13K and to obtain the relief of varying or reversing the award. Self-evidently he does not wish to pursue an order affirming the award. On the return of his s 13K application he will be heard, but only when he files a proper affidavit setting out the grounds and particulars on which he relies.
At all events, the respondent relies on fraud. Fraud is a very serious allegation to make. In recent cases I have examined the requirements in law a person must discharge when alleging fraud. I canvassed them when sitting as a judge of the Federal Circuit Court of Australia in Goodridge & Beadle[8] –
[8] (2017) 57 Fam LR 425.
112.In most types of ligation, including family law, allegations of fraud require special care. In courts regulated by pleadings, fraud must be specifically pleaded supported by full particulars as was held by the High Court in Krakowski v Eurolynx Properties Pty Ltd.[9] That requirement for full particularisation of an allegation of fraud is underpinned by the court’s insistence that a claim of fraud is sufficiently clear so that the party against whom the allegations made may answer it. A recent observation to that effect was made by Forrest J in Perpetual Trustees Victoria Ltd v Dunlop.[10] But even in a proceeding not governed by pleadings as was this case, nonetheless allegations of fraud must be specifically put to the alleged fraudster at the trial of the proceeding as the High Court of Australia held in Permanent Trustee Australia Ltd v FAI General Insurance Co Ltd (in liquidation)[11] (McHugh, Kirby and Callinan JJ).
113.Historically, Anglo Australian jurisprudence has so deeply held the view that fraud must be specifically identified with detailed particularity that it has imposed ethical obligations and consequences upon legal practitioners who make allegations of fraud against a party in the absence of specific instructions and evidence to support those allegations. The authorities on that point are extensive but for present purposes it is sufficient to identify the English authorities to include
Ex parte James,[12] Davy v Garrett,[13] Wallingford v Mutual Society[14] Reddaway v Banham,[15] Associated Leisure Ltd (Phonographic Equipment Co) Ltd v Associated Newspapers Ltd[16] and Medcalf v Mardell.[17]
114.The Australian cases are plentiful also. They include Angelides v James Stedman Henderson’s Sweets Ltd,[18] Protean (Holdings) Ltd v American Home Assurance Co,[19] Banque Commerciale SA en Liquidation v Akhil Holdings Ltd[20] (“Akhil”), White Industries (Queensland) Pty Ltd v Flower & Hart (a firm)[21] and Ghazal v Government Insurance Office of New South Wales[22] (“Ghazal”).
115.In cases such as this where the material facts are recorded in affidavit form, the word “fraud” need not be used. However, the person making the allegation must clearly set out all the matters upon which the accuser proposes to rely to establish the alleged fraud. That point was established by the decision of the Supreme Court of Queensland in Retailers Association of Queensland Ltd v Queensland Retail Traders’ Association of Grocers, Drapers and General Stores.[23] Further, in Downs Distributing Co Pty Ltd v Associated Blue Star Stores Pty Ltd (in liquidation)[24] (“Downs”) Latham CJ held that before fraud is found the issue must be clearly raised and the evidence must be convincing.
[9] (1995) 183 CLR 563, 573.
[10] [2009] VSC 331.
[11] (2003) 214 CLR 514, [38].
[12] (1874) LR 9 Ch 60.
[13] (1877) 7 Ch D 473.
[14] (1880) 5 App Cas 685.
[15] [1896] AC 199.
[16] [1970] 2 QB 450, 456.
[17] [2003] 1 AC 120.
[18] (1927) 40 CLR 43.
[19] [1985] VR 187.
[20] (1990) 169 CLR 279.
[21] (1998) 29 ACSR 21.
[22] (1992) 29 NSWLR 336.
[23] [1955] St R Qd 369.
[24] (1948) 76 CLR 463.
The applicant will need to go into greater detail than paragraph 45 of his 26 November 2020 document to make out a case for fraud.
Equally, the applicant must be told of the case she has to meet under the guise of the respondent’s fraud allegations. She must have time to defend those assertions.
I make similar comments about the need for particulars and real detail in relation to the respondent’s contentions concerning the assertion that the award is void, voidable or unenforceable.
Allegations of bias call for attention similar to fraud allegations. The respondent must not lightly gloss over them.
Going forward
It is already plain from my reasoning so far that I dismiss the respondent’s challenge to the registration of the arbitral award. I make an order as follows –
I ORDER that pursuant to s 13H of the Family Law Act that the arbitral award made by Ms C on 21 August 2020 be and is hereby registered AND I FURTHER ORDER that the arbitral award that has by this order been registered has, pursuant to s 13H(2) of the Family Law Act, effect as if it is a decree made by this Honourable Court.
It remains to be seen whether the respondent will file and serve an application in a case for orders under s 13K. If he does I will hear what he says.
I certify that the preceding fifty-two (52) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson delivered on 4 December 2020.
Associate:
Date: 4 December 2020
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