LOOMIS & PATTISON

[2019] FCCA 3887

FEDERAL CIRCUIT COURT OF AUSTRALIA

LOOMIS & PATTISON [2019] FCCA 3887

Catchwords:
FAMILY LAW – Court-referred arbitration – consent to referral – where the husband submits his consent was “conditional” upon the provision of certain disclosure – power of a Registrar to sign a document on behalf of a party – Order pursuant to section 106A to permit a Registrar of the Court to sign an arbitration agreement, should a party fail or refuse to do so.

FAMILY LAW – Costs – financial circumstances of the party – conduct of the parties.

Legislation:

Family Law Act 1975 (Cth), ss.13E, 106A, 117

Federal Circuit Court Rules 2001 (Cth), div.21

Cases cited:

Ebner v The Official Trustee in Bankruptcy (2000) CLR 337

Applicant: MS LOOMIS

Respondent: MR PATTISON

File Number: PAC 1065 of 2007

Judgment of: Judge Harman

Hearing date: 25 June 2019

Date of Last Submission: 25 June 2019

Delivered at: Parramatta

Delivered on: 25 June 2019

REPRESENTATION

Solicitors for the Applicant: Ms Rahhal of Rafton Family Lawyers

The Respondent appeared in person

ORDERS

1. That each of the parties shall do all acts and sign all necessary documentation to give effect to the terms of the orders made 19 March 2019 and in the event that either party refuses or neglects (within seven (7) days of a written request to do so) to sign any document necessary to give effect to the terms of the orders made 19 March 2019, a Registrar or Deputy Registrar of the Federal Circuit Court of Australia is hereby appointed, pursuant to s.106A of the Family Law Act 1975, to execute such documents on behalf of the defaulting party, and this order specifically authorises and directs execution of an arbitration agreement in accordance with the AIFLAM Arbitration Kit August 2016 on behalf of the Respondent husband, Mr Pattison, should he fail or refuse to do so and in the event that the Applicant wife is able to demonstrate through correspondence forwarded to the husband, a request for execution that has been made and unanswered for a period of not less than seven (7) days.

2. Direct that the arbitrator appointed by the President of the Australian Institute of Family Law Arbitrators and Mediators, namely Mr B, proceed with arbitration of the referred proceedings in accordance with the standard AIFLAM Arbitral Agreement August 2006 (as executed on behalf of the husband), including, as the arbitral agreement provides, to proceed on an undefended basis should Mr Pattison fail to participate in pre arbitration conferences or the arbitration itself, and/or fail to file material or comply with any other direction made by the arbitrator.

3. THE COURT NOTES that the matter remains listed 18 September 2019, such date to be vacated upon registration of an arbitral award.

4. The Respondent husband shall pay the wife’s costs of and incidental to today’s appearance, fixed in the sum of eight hundred and eighty dollars ($880), such costs to be a charge upon the husband’s interest in the assets the subject of these proceedings and to be deducted by the wife from any payment that she is required to make to the husband as a consequence of an arbitral award resolving the issue.

IT IS NOTED that publication of this judgment under the pseudonym Loomis & Pattison is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PARRAMATTA

PAC 1065 of 2007

MS LOOMIS

Applicant

And

MR PATTISON

Respondent

REASONS FOR JUDGMENT

1. These proceedings come before the Court today as a consequence of a relisting at the request of the solicitors for the applicant. 

2. The proceedings do not have any lengthy history before this Court as can be readily summarised by the following observable and non-contentious facts. 

3. The proceedings were commenced by Initiating Application filed 13 September 2018. That Application seeks certain relief with respect to property adjustment. Significantly, the wife seeks that she pay to the husband a sum of $50,000 and in return for that payment retain a parcel of real estate as set out within the Application.

4. A Response to that application was filed on 4 October 2018.  It proposes that the wife pay $383,000 and that upon such payment that the parcel of real estate be conveyed to the wife. 

5. The matter first came before the Court on 24 October 2018.  On that day, a number of Orders and Directions were made as to disclosure and the parties directed to participate in family-dispute resolution. 

6. The matter returned before the Court on 19 March 2019.  On that date, and with the consent of the parties, the prior Order for Family Dispute Resolution was discharged.  The parties were, instead, referred to arbitration. 

7. As is apparent from the wording of section 13E, such an Order can only be made by consent. Each party indicated to the Court that they consented to such an Order. The husband today appears and indicates that his consent was “conditional”.  No such conditional consent is recognised by the Act.  Consent is provided, or it is not. 

8. The husband suggests that his consent was conditional upon the provision of certain disclosure.  There would not appear to be any dispute that the wife has provided disclosure, whether within the time-frame set out within the order or otherwise. 

9. The wife, through her legal representatives, nominated two specific persons to be appointed as arbitrator in the proceedings.  The husband either did not respond or rejected each. 

10. An Application was made (within the terms of Order 4 of the Orders made 19 March 2019) to the President of the Australian Institute of Family Law Arbitrators and Mediators, (AFLAM), for the appointment of an arbitrator. 

11. The husband purports to reject the appointment made by the AIFLAM President on the basis of having “no confidence” in the arbitrator appointed, Mr B. 

12. Mr B is an accredited arbitrator appearing upon the list of AFLAM arbitrators. Accordingly, he is a person to whom arbitration work can be referred. He is an arbitrator who has previously undertaken arbitration work and has written arbitral awards registered with the Court.  He is a solicitor with more than 30 years’ experience. 

13. Whilst the husband indicates that he has a lack of confidence in the appointed arbitrator, the sole basis for that would appear to be that the offices of Mr B, at least his Suburb C office, (there being several offices of the firm of which he is a partner or director) is within relatively close proximity of the office of the wife’s legal representatives.  Indeed, so is the Court. 

14. There is no suggestion, beyond that geographical proximity, offered to suggest what might be referred to as an apprehension of bias.  Accordingly, I reject the claim as invalid.  It could not withstand the test of the reasonable lay observer as discussed by the High Court in Ebner v The Official Trustee in Bankruptcy (2000) CLR 337. 

15. The Court has every confidence that Mr B, as a qualified, competent and experienced practitioner, would conduct the arbitration without bias and by bringing to it an appropriate degree of qualification and experience. 

16. The Orders that were made on 19 March, 2019 (referring the proceedings to arbitration) otherwise require that the parties, upon agreement to or appointment of an arbitrator, do certain things, including execution of an arbitration agreement in accordance with the standard AFLAM arbitration agreement (drafted August 2016).  That is yet to be attended to. 

17. There is an issue, thus, as to how the arbitration might now proceed, bearing in mind that the husband would appear to stridently reject participation. The arbitration agreement, at least that which is promulgated by AFLAM, deals with that circumstance. Upon its execution the terms of the arbitration are guided. The arbitration agreement permits undefended hearing of proceedings. 

18. In those circumstances I propose to make two Orders: firstly, an Order pursuant to section 106A to permit a Registrar of the Court to sign the arbitration agreement, should the husband fail or refuse to do so and, secondly, a direction that the arbitration proceed, should the husband fail to participate, on an undefended basis. It is a matter for the husband, whether he chooses to participate.

19. One can no more compel a litigant to participate in arbitration than they can in a Court hearing. This matter would proceed, if it were listed before the Court, on an undefended basis. Parties do not pick and choose which Orders of the Court they comply with. There is some issue[1] as to whether an arbitrator has an inherent power to proceed on an undefended basis. There are, certainly, abundant authorities in the commercial jurisdiction that would indicate such a power exists. 

    [1] See for example Margaret L Moses, ‘Inherent and Implied Powers of Arbitrators’ (Research Paper No. 2014-015, Loyola University Chicago School of Law , 8 August 2014); Franco Ferrari and Friedrich Rosenfeld, Inherent Powers of Arbitrators, (JurisNet, 2019)

20. With respect to arbitration under the Family Law Act1975 (Cth), however, the arbitral agreement is the basis upon which all such controversies are resolved and, accordingly, and on that basis, I satisfied that the Orders as above would sufficiently guide the matter to conclusion.

21. Lest there be any controversy as to the terms of section 106A and thus the power of the Registrar to sign the document on behalf of a party, the terms of the section are as follows:

    If an order under this Act is has directed a person to execute a deed or instrument and that person has failed or refused to comply with the direction or for any other reason the Court considers it necessary, to exercise the powers of the Court under this section, the Court may appoint an officer of the Court or other person to execute the deed or instrument in the name of the person to whom the direction was given and do all acts and things necessary to give validity and operation to the deed or instrument. 

22. Much thus turns upon the definition of “deed or instrument”.  I do not propose to consider the matter in detail.  It is not referred to or defined within the Act itself.  Thus, the ordinary common English usage would arise. I am satisfied that the arbitral agreement is an instrument at the very least and, certainly, a document which the Court has directed the parties to execute, and accordingly I am satisfied it is appropriate for the order to be made.

23. In those circumstances Orders as made as follows. 

Costs

1. Application for costs is made with respect to these proceedings.

2. Costs are dealt with under section 117 of the Family Law Act 1975 (supra). 

3. Subsection (1) creates what is often referred to as “the general rule”, being that each party shall bear his or her own costs. 

4. A general discretion to award costs is provided by subsection (2). 

5. Subsection (2A) provides a list of considerations to which the Court must have regard in determining whether the discretion is to be exercised and, one would think, in determining the quantum of costs to be awarded. 

6. Subsections (3), (4), (4A) and (5) are not relevant, dealing as they do with applications by or involving Independent Children's Lawyers or child welfare agencies. 

7. I propose to consider each of the factors in subsection (2A). 

Financial circumstances of the parties

1. Each of the parties has filed a statement of financial circumstances.  The wife’s statement of financial circumstances discloses that she is a self-employed labourer earning an income of some $520 per week.  In addition she receives a small stipend from a superannuation fund together with Centrelink benefits. The receipt of Centrelink benefits would suggest that the level of income that the wife receives places her at or near the poverty line. 

2. The husband’s statement of financial circumstances discloses that he is employed as a professional with a large employer, earning an income of $1,309 per week. 

3. The parties own the property that is the subject of their dispute.  It is suggested to have a value, in the husband’s statement of financial circumstances, of $921,000 and is encumbered by a modest mortgage, less than $200,000. Based upon the addresses disclosed in the respective statements of financial circumstances it is suggested, that the parties live separately and apart under the one roof within that property, although the Court is disabused of that understanding. 

4. Certainly, the financial circumstances of the parties would not warrant or justify an order for costs. They would go to the issue of justice.  I will return to that. 

Whether a party is in receipt of grant of legal aid

1. Neither is.

The conduct of the parties with respect to the proceedings

1. This might also conveniently be considered with subsection (d), whether the proceedings (or in this case the listing of the proceedings today) is necessitated by the failure of a party to comply with a previous order – that is the gravamen of this determination. 

2. The parties are not strangers to the resolution of financial issues.  They had resolved a previous tranche of proceedings between them by an Application for Consent Orders. The parties subsequently reconciled and purchased the current property. I need not delve into the circumstances relating to that transaction, merely to observe it. 

3. Whilst the parties have now returned with this new controversy, neither suggests that there is any impediment or barrier arising from the earlier Orders. Clearly, there could not be. In this case, the parties had the opportunity to attend Family Dispute Resolution. That came to naught as a consequence of controversies between the parties as to selection and payment of the Family Dispute Resolution Practitioner and issues with respect to disclosure. As a consequence, the opportunity of facilitated resolution was abandoned. 

4. The parties were then ordered, by consent, to attend arbitration. As already observed, the husband suggests that his consent was conditional upon a number of matters. No such conditions are apparent from the Order, nor could they be.

5. The matter returns today as a consequence of relisting by the wife’s attorneys on the basis that arbitration has not occurred and cannot be advanced due to either a lack of involvement by the husband or active opposition as discussed above. Those circumstances would appear to be based on a misapprehension of the nature of consent to arbitration, the referral of the totality of the dispute and the manner in which the case advances. It is not a matter for the husband to simply refuse to comply with an Order on the basis that it is suggested, that the other party has been negligent in compliance. 

6. Most of the suggested noncompliance of the wife or her legal representatives is founded in the Orders of 24 October 2018.  The suggested noncompliance is largely irrelevant. 

7. It is suggested that the wife had failed to provide certain documents ordered on that occasion. Certainly, that might be inferred from the fact that a further Order for very specific disclosure was made on 19 March.  However, that Order has been complied with, and there is no basis at all upon which the matter would not or should not have now proceeded to arbitration.  Indeed, if the husband had participated in that process, a pre-arbitration meeting could have occurred, and directions could have been made by the arbitrator to cure any suggested complaint. Instead, the husband has, simply, withdrawn. 

8. I am satisfied, thus, that:

   a)The relisting of the proceedings today is appropriate;

   b)That the relisting is occasioned by the husband’s obstreperous response to the suggested deficiencies in the wife’s compliance, although I made clear that those complaints are not made out based on that put by the husband. 

9. In those circumstances, I am satisfied that a justifying circumstance is made out. 

10. There is then the issue of justice.

Whether a party has made an offer in writing

1. This is not particularly germane, although it is clear that the wife had proposed arbitrators who were either rejected or ignored, and thus the wife has been put to the additional cost of proceeding to have an appointment made by the President of AFLAM. Even that has not quelled the controversy. The husband suggests, as discussed above, some lack of qualification or perceived bias which would appear, at best, nonsensical. 

Conclusion

1. In light of the financial circumstances of the parties, the nature of the relisting, the basis upon which it has come about and the wife’s success in obtaining orders to now advance the arbitration, I am satisfied that there is also justice in an Order for costs being made.  It can be a charge upon the husband’s interest in the proceedings and not necessarily met from income. He is not in receipt of a substantial income. It might be used, for example, to offset or reduce the amount that is to be paid by the wife upon determination of the matter at arbitration. 

2. The quantum of costs that is sought is $880, including GST. 

3. I must have regard to division 21 of the Federal Circuit Court Rules2001 (Cth), incorporating Schedule 1. By reference thereto, today might best be described as falling within either item 11, application for enforcement, (although strictly that is a power exercised by a Registrar in Chambers), or by reference to item 13, an interim or summary hearing, (although that is perhaps to overstate the issue). Neither perfectly describes this relisting. It is, certainly, by way of enforcement but by the Court rather than by a Registrar in Chambers and thus involving at least item 13, a daily-hearing fee.

4. If I was to take item 11 and the daily-hearing fee for even a short mention, that exceeds the amount that the wife seeks. 

5. Accordingly, I am satisfied that the amount sought is appropriate.  Thus, further Orders are made as follows. 

I certify that the preceding fifty-one (51) paragraphs are a true copy of the reasons for judgment of Judge Harman.

Date: 3 April 2020