McLaughlin & McLaughlin
[2023] FedCFamC2F 1160
•5 September 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
McLaughlin & McLaughlin [2023] FedCFamC2F 1160
File number(s): SYC 3839 of 2022 Judgment of: DEPUTY CHIEF JUDGE MCCLELLAND Date of judgment: 5 September 2023 Catchwords: FAMILY LAW – REVIEW OF ARBITRAL AWARD – Application for review pursuant to s 13J and 13K of the Family Law Act 1975 (Cth) – Where, pursuant to s 13K of the Family Law Act 1975 (Cth), the Federal Circuit and Family Court of Australia (Division 2) has no jurisdiction to hear a review of an arbitral award registered in the Federal Circuit and Family Court of Australia (Division 1) – Review proceedings conducted pursuant only to s 13J of the Family Law Act 1975 (Cth) – Where the applicant wife has failed to particularise the questions of law upon which the review is sought – General discussion of matters constituting a question of law – Ground of procedural fairness advanced in arbitrator’s refusal of the wife’s application to adjourn the arbitration proceedings to peruse husband’s late filed evidence – Both parties mutually agreed for late filing and service of material – No error established – Grounds advancing questions of fact – An arbitral award is not reviewable in respect to a question of fact – No error established on the part of the arbitrator – Review dismissed – Written submissions as to costs. Legislation: Commercial Arbitration Act 1984 (NSW)
Evidence Act 1995 (Cth) s 50
Family Law Act 1975 (Cth) Pt IIIB, Pt VIII, ss 13A, 13E, 13H, 13J, 13K, 75, 79
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 67, 68
International Arbitration Act 1974 (Cth)
Family Law Regulations 1984 (Cth) reg 67I(2)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 14.07
UNCITRAL Model Law on International Commercial Arbitration 1985
Cases cited: Anson & Meek (2017) FLC 93-816; [2017] FamCAFC 257
Assistant Commissioner Michael James Condon v Pompano Pty Ltd (2013) 252 CLR 38; [2013] HCA 7
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321; [1990] HCA 33
Australian Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621; [1953] HCA 25
Australian Gas Light Co v The Valuer-General (1940) 40 SR (NSW) 126
Bahonko v Sterjov (2008) 166 FCR 415; [2008] FCAFC 30
Bonnett & Bonnett [2021] FedCFamC1A 95
Dickons v Dickons (2012) 50 Fam LR 244; [2012] FamCAFC 154
Dietrich v the Queen (1992) 177 CLR 292; [1992] HCA 57
Director-General, Department of Ageing, Disability and Home Care v Lambert (2009) 74 NSWLR 523; [2009] NSWCA 102
Edwards (Inspector of Taxes) v Bairstow [1956] AC 14
Edwards v Noble (1971) 125 CLR 296; [1971] HCA 54
Fabrizi v Grasso (Jnr) as the Legal Personal Representative of Mr Grasso (deceased) (No 2) [2022] WASCA 27
FJ & PN Curran Pty Ltd v Almond Investors Land Pty Ltd [2019] VSCA 236
Gronow & Gronow (1979) 144 CLR 513; [1979] HCA 63
Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd (No 2) [2023] WASCA 108
Haritos v Commissioner of Taxation (2015) 322 ALR 254; [2015] FCAFC 92
Harris v Caladine (1991) 172 CLR 84; [1991] HCA 9
Hearne v Hearne (2015) 53 Fam LR 454; [2015] FamCAFC 178
Hope v Bathurst City Council (1980) 144 CLR 1; [1980] HCA 16
Horrigan & Horrigan [2020] FamCAFC 25
House v The King (1936) 55 CLR 499; [1936] HCA 40
HT v the Queen (2019) 269 CLR 403; [2019] HCA 40
International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319; [2009] HCA 49
Jabour & Jabour (2019) FLC 93-898; [2019] FamCAFC 78
Keaty & Swann [2023] FedCFamC1F 178
Lee v Lee (2019) 266 CLR 129; [2019] HCA 28
McConnell Dowell Constructors (Aust) P/L & Anor v QCLNG Pipeline P/L [2014] QSC 157
McLaughlin & McLaughlin (No 2) [2023] FedCFamC1F 516
McPhee v S Bennett Ltd (1934) 52 WN (NSW) 8
Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421; [2019] HCA 3
Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30
Minister for Immigration and Multicultural Affairs v Al-Miahi (2001) 65 ALD 141; [2001] FCA 744
Newett & Newett (No 2) (2021) FLC 94-051; [2021] FedCFamC1A 11
Nimesh Watapaldeniya v Transport Accident Commission [2022] VSCA 50
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
Perras & Perras [2020] FCCA 3109
Reg v The District Court; Ex parte White (1966) 116 CLR 644; [1966] HCA 69
Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57; [2001] HCA 22
Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1; [2003] HCA 6
Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82; [2000] HCA 57
Robinson Helicopter Company Inc v McDermott (2016) 331 ALR 550; [2016] HCA 22
Rodgers & Rodgers (No 2) (2016) FLC 93-712; [2016] FamCAFC 104
SDCV v Director-General of Security (2022) 405 ALR 209; [2022] HCA 32
Simmonds v Gammell [2016] EWHC 2515 (Comm)
TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 533; [2013] HCA 5
Tianjin Jishengtai Investment Consulting Partnership Enterprise v Huang [2020] FCA 767
Waterford v The Commonwealth (1987) 163 CLR 54; [1987] HCA 25
Westport Insurance Corporation v Gordian Runoff Ltd (2011) 244 CLR 239; [2011] HCA 37
Yates Property Corporation Pty Ltd (in liq) v Darling Harbour Authority (1991) 24 NSWLR 156
Yesodei Hatorah College Inc v The Trustees of the Elwood Talmud Torah Congregation (2011) 38 VR 394; [2011] VSC 622
Zabarac & Zabarac and Anor [2016] FamCAFC 186
Division: Division 2 Family Law Number of paragraphs: 113 Date of hearing: 19 July 2023 Place: Sydney Counsel for the Applicant: Mr Hazelwood Solicitor for the Applicant: John & Co Lawyers Counsel for the Respondent: Ms Kennedy Solicitor for the Respondent: Santone Lawyers ORDERS
SYC 3839 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS MCLAUGHLIN
Applicant
AND: MR MCLAUGHLIN
Respondent
ORDER MADE BY:
DEPUTY CHIEF JUDGE MCCLELLAND
DATE OF ORDER:
5 SEPTEMBER 2023
THE COURT ORDERS THAT:
1.The wife’s application for review contained in her Application in an Arbitration filed 14 June 2023 is dismissed.
2.Within 14 days of the date of these orders, the parties are to file written submission of no more than five (5) pages in length in respect the issue of costs.
3.Within a further 7 days of receipt of those submissions the parties may, if they wish, file written submissions of no more than two (2) pages in reply.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym McLaughlin & McLaughlin has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
DEPUTY CHIEF JUDGE MCCLELLAND:
INTRODUCTION
This matter concerns a review of an arbitral award in respect to the division of the parties’ property made by Mr Othen of counsel (“the arbitrator”) on 11 April 2023, which was subsequently registered by a judge of the Federal Circuit and Family Court of Australia (Division 1) on 12 May 2023.
By way of an Application in an Arbitration filed 14 June 2023, the wife seeks a review of the arbitral award pursuant to s 13J of the Family Law Act 1975 (Cth) (“the Act”) and, or alternatively, s 13K of the Act.
For reasons which I set out, I have dismissed the application as being without merit and provide the parties with an opportunity to address me in respect to the issue of costs by way of written submissions.
BACKGROUND
The husband was born in 1983 and is currently 39 years of age, working as a professional in a self-employed capacity for R Pty Ltd. The wife was born in 1986 and is 37 years of age, employed as an administrative assistant.
The parties met in 2016, commenced cohabitation in 2017 and were married in 2019. Each party has one child from their respective previous relationships, both of those children being born in 2014. The parties also have a son together, X, who is now four years old.
The parties each owned property in their own names at the commencement of cohabitation; the husband with a property in Suburb T, which was subsequently sold in 2019, and the wife with a property in Suburb E that she currently holds, valued at $700,000 in late 2018 and subject to a mortgage of $480,000 (at [27]–[28] of the arbitrator’s reasons).
In mid-2018, the husband commenced renovations to a property owned by his father at V Street, Suburb N, with a view to subsequently moving in with the wife (at [16] of the arbitrator’s reasons). That took place in October 2018. The parties did not pay rent to live at the Suburb N property for a period of 18 months (at [34] of the arbitrator’s reasons).
In late 2019, the husband sold his property at Suburb T.
Early 2020, the husband entered into a contract for the purchase of his childhood home in Suburb C (“the Suburb C property”), which was owned by his father. The husband subsequently signed a Deed of Loan in favour of his father in early 2020 for $2,500,000, being the purchase price of the Suburb C property. The sale of the Suburb C property was completed in early 2020, with no funds changing hands, and the parties moved into the property in mid-2020 (at [43] of the arbitrator’s reasons).
On 11 November 2021, orders were made for the wife’s daughter, G, to spend time with her father, the wife’s previous partner, six days every fortnight.
Also in November 2021, the parties separated on a final basis and the husband vacated the Suburb C property.
The husband filed an Initiating Application in the Federal Circuit and Family Court of Australia (Division 2) on 6 June 2022, seeking property adjustment orders pursuant to Pt VIII of the Act, to which the wife filed her Response on 15 July 2022. The parties have subsequently filed amended applications and responses, however it is unnecessary to include details of those amendments for the purpose of this decision.
On 14 September 2022, the parties attended a conciliation conference with a registrar but failed to resolve the matter.
The parties then filed consent orders on 28 September 2022 for the matter to proceed to private arbitration pursuant to s 13E of the Act. Those orders appointed Mr Othen as the agreed arbitrator and, relevantly, Order 2 provided:
2. Each party shall forthwith:
a.Do all things, sign all documents and give all consents, authorities and instructions as are necessary to retain that arbitrator and execute an arbitration Agreement, if requested to do so by the other party or by the arbitrator;
b.Fix a date for arbitration, no later than 6 months from the date of appointment of the arbitrator; and
c.Attend at such times, dates and places as nominated by the arbitrator for the purpose of conducting and completing the arbitration.
(Emphasis added)
Shortly after those orders were entered into, on 30 September 2022, orders were made for the matter to be transferred to the Federal Circuit and Family Court of Australia (Division 1) for inclusion in the National Arbitration List, with the matter remaining listed before Wilson J for mention in October 2022.
The parties entered into an arbitration agreement with the arbitrator on 19 October 2022, which has been included in the review papers. Relevantly, that agreement provided at paragraph 8 that “the Arbitration shall be conducted in accordance with this Agreement and as directed by the Arbitrator or the Court prior to the hearing” (emphasis added).
On 1 November 2022, the arbitrator made directions for the matter to be heard in late February 2023 and for the filing of affidavits and financial statements by 3 February 2023. The hearing dates were subsequently adjourned to 23 and 24 March 2023, on the wife’s proposal, to suit the availability of counsel and the arbitrator.
At a planning meeting on 27 February 2023, further directions were made substantially in the terms proposed by the husband, within which the parties agreed to file and serve their evidentiary material by 10 March 2023.
At a mention of the matter before Wilson J on 3 March 2023, his Honour made the following notations and directions:
UPON THIS PROCEEDING coming before me for mention in the National Arbitration List AND UPON HEARING Ms A. Stephan, solicitor for the applicant and Mr N. Bruno, solicitor for the respondent AND UPON BEING INFORMED that the arbitration in this proceeding is to be conducted by Mr C. Othen for two days commencing on 23 March 2023 I DIRECT my associates to contact the parties on or before 17 March 2023 to confirm that the arbitration is in fact commencing on 23 March 2023 and if the arbitration is not proceeding on that day the parties must appear before me at short notice to explain why the proceeding is not proceeding to arbitration on 23 March 2023 AND I ORDER that the further hearing of this proceeding is adjourned to 10:00am on 5 May 2023 for mention in the National Arbitration List.
(As per the original)
Subsequent to the 27 February 2023 planning directions, the parties’ solicitors engaged in further communication between them agreeing for the filing of affidavits to be further deferred.
Relevantly for the purposes of this review, the parties filed their evidentiary material in the following manner:
·The husband’s father’s affidavit was filed on 21 March 2023 at 10.54 pm;
·The husband’s affidavit was filed on 21 March 2023 at 11.08 pm;
·The husband’s Case Outline was filed on 21 March 2023 at 11.41 pm;
·The wife’s affidavit was filed on 22 March 2023 at 9.38 am;
·The wife’s Financial Statement was filed on 22 March 2023 at 9.39 am; and
·The wife’s Case Outline was filed on 22 March 2023 at 6.20 pm.
On the first day of the arbitration hearing, being 23 March 2023, counsel for the wife made an oral application for an adjournment of the arbitration. The circumstances in which that application was made are set out in greater detail below.
The adjournment application was dismissed, save to the extent that the arbitrator deferred the calling of evidence until the afternoon, at which time the parties’ objections to affidavits were considered. The presentation of evidence subsequently commenced on 24 March 2023.
The arbitral award, which is the subject of review, was made on 11 April 2023 and, on 20 April 2023, the husband filed an application to register the award.
On 5 May 2023, the matter was again listed before Wilson J for directions, at which time the Court was advised that the wife intended “to review the arbitral award under s 13J or s 13K” of the Act, which resulted in the matter being adjourned until 12 May 2023 for further directions.
The arbitral award was subsequently registered on 12 May 2023 by the following orders and notations of Wilson J:
UPON THE APPLICANT APPLYING to register the arbitral award made by Mr C. Othen on 11 April 2023 AND UPON THE RESPONDENT consenting to the registration of the arbitral award I ORDER BY CONSENT that pursuant to s 13H of the Family Law Act the arbitral award in this proceeding 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.
Relevantly to this review, the wife filed an Application in an Arbitration on 14 June 2023, wherein she sought the following orders:
1.That the execution of Orders 1 to 12 in the Arbitration Award made on 11 April 23 and registered on 12 May 23 be hereby stayed with immediate effect, until the determination of this appeal.
2.That the Orders 1 to 12 in the Arbitration Award made on 11 April 23 and registered on 12 May 23 be set aside.
3.The Husband shall within 90 days of the date of these Orders pay to the Wife the sum of $1,016,814.00.
4.Upon such payment, the Wife shall within 14 days vacate the property situated at and known as [B Street, Suburb C].
5.In the event the Husband fails or neglects to pay the sum of $1,016,814 within 90 days of the date of these Orders, then the Husband shall do all acts and things necessary to sell the property and in respect of such sale the following shall apply:-
a. The parties shall place the property in the hands of a licensed auctioneer to sell by way of public auction at a reserve price agreed between the parties.
b. In the event the parties cannot agree on a reserve price then the parties or either of them shall appoint the President for the time being of the Real Estate Institute [NSW Division] or his or her nominee to assess the reserve price at auction and each of the parties shall be bound by such assessment and equally bear the costs of the assessment.
c. Upon sale the proceeds shall be paid as follows:-
i.In payment of agent's commission and legal fees occasioned by the sale.
ii.In discharge of the [Y Bank] mortgage secured upon the property.
iii.In payment to the Wife of $1,016,814.00.
iv.In payment of the balance to the Husband.
6.In the event the Husband's father fails or neglects to withdraw the Caveat registered against the property, then the Wife is at liberty to restore the matter to the court for the purposes of an Application to join the Husband's father to the proceedings.
(As per the original)
The wife’s Application in an Arbitration was accompanied by a supporting affidavit, attaching as annexure ‘F’ a document described as ‘Grounds for Review’ that the wife had been provided by her solicitors consequent to her request “to prepare Grounds of Appeal as to procedural fairness and any grounds that may be available as to questions of law”. Those grounds will be set out below.
With the consent of the husband, the review has been conducted on the basis of that document.
Justice Campton heard the mother’s application for a stay of the award on 22 June 2023 and subsequently dismissed that application on 27 June 2023 for reasons which his Honour sets out in McLaughlin & McLaughlin (No 2) [2023] FedCFamC1F 516.
On 23 June 2023, Campton J made orders listing the wife’s review application for hearing before myself, sitting as a judge of the Federal Circuit and Family Court of Australia (Division 2) with the hearing to proceed on 19 July 2023. Relevantly, those orders included the following:
1.The wife’s application to review the arbitral award of Mr Christopher Othen Arbitrator dated 11 April 2023 and registered on 12 May 2023 as filed on 14 June 2023 be listed for hearing before Deputy Chief Judge McClelland on 19 July 2023 at 2.15 pm by Microsoft Teams (“the review hearing”).
2.The wife’s counsel today advises that the application for review of the arbitral award is grounded pursuant to s 13J of the Act. In the event issue exists as to whether a review of an arbitral award on a question of law pursuant to s 13J of the Act excludes well-established principles grounding an error of law by a failure to afford procedural fairness, then insofar as is necessary, the wife contends a ground that part of her application for review from s 13K(2)(d) of the Act.
3.The parties acknowledge and agree that the wife’s Application in an Arbitration dated 8 June 2023 and filed on 14 June 2023, will be conducted and heard on a summary basis, without the testing of evidence or by way of adducing further or fresh evidence.
…
10.By consent, the relief sought by the husband in his Response to an Application in an Arbitration filed 20 June 2023 (and sealed 22 June 2023), by way of security for costs be discontinued without prejudice to the husband being permitted to bring any further application for costs or security for costs as he is advised in the future.
Having regard to the relevant legislative scheme set out in Division 4 of Pt IIIB of the Act, on 29 June 2023, the matter was transferred to myself sitting as a judge of the Federal Circuit and Family Court of Australia (Division 2). The jurisdiction relevantly conferred by ss 13J and 13K respectively will be set out below.
EFFECT OF ARBITRAL AWARD
The decision of Campton J dated 27 June 2023 helpfully provides a broad summary of the effect of the award at [4] as follows:
a.The husband to pay the wife the sum of $367,000 in two instalments, the last being due on 23 May 2023 (paragraph 1);
b.The wife to vacate the property at [B Street, Suburb C] (“the [Suburb C] Property”) owned at law by the husband, within six weeks from either the date of the award or the husband paying the wife $367,000 (paragraph 4);
c.A declaration that the husband is the sole legal and beneficial owner of the [Suburb C] property (paragraph 3), and that the wife is the sole legal and beneficial owner of a property at [D Street, Suburb E] (“the [Suburb E] property”) (paragraph 8); and
d.A process for the [Suburb C] property to be sold if the husband did not pay the wife $367,000 (paragraphs 5 and 6).
JURISDICTION
At the commencement of the proceedings before me on 19 July 2023 (“the review proceedings”), counsel for the wife advised the Court that the wife pressed her application for review of the award pursuant to both ss 13J and 13K of the Act.[1]
[1] Review transcript 19 July 2023, p.5 line 38 and p.6 lines 18–20.
Section 13J of the Act relevantly provides:
Federal Circuit and Family Court of Australia (Division 2) can review registered awards
(1)A party to a registered award made in section 13E arbitration or relevant property or financial arbitration may apply for review of the award, on questions of law, by:
(a) the Federal Circuit and Family Court of Australia (Division 2); or
(b) a single judge of the Family Court of a State.
Note: There may be Rules of Court providing for when, and how, an application for review of the award can be made (see paragraph 123(1)(sf)).
(2)On a review of an award under this section, the judge or Federal Circuit and Family Court of Australia (Division 2) may:
(a)determine all questions of law arising in relation to the arbitration; and
(b)make such decrees as the judge or Federal Circuit and Family Court of Australia (Division 2) thinks appropriate, including a decree affirming, reversing or varying the award.
(Emphasis added)
Section 13K of the Act relevantly provides:
Federal Circuit and Family Court of Australia may set aside registered awards
(1)If an award made in section 13E arbitration or relevant property or financial arbitration, or an agreement made as a result of such arbitration, is registered in:
(a) the Federal Circuit and Family Court of Australia (Division 1); or
(b) the Federal Circuit and Family Court of Australia (Division 2); or
(c) a Family Court of a State;
the court in which the award is registered may make a decree affirming, reversing or varying the award or agreement.
(2)The court may only make a decree under subsection (1) if the court is satisfied that:
(a)the award or agreement was obtained by fraud (including non-disclosure of a material matter); or
(b)the award or agreement is void, voidable or unenforceable; or
(c)in the circumstances that have arisen since the award or agreement was made it is impracticable for some or all of it to be carried out; or
(d)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.
(Emphasis added)
In circumstances where, consistent with s 13H(1)(a) of the Act, the award was registered by Wilson J presiding as a judge of the Federal Circuit and Family Court of Australia (Division 1), I determined, in the review proceedings, that I had no jurisdiction to consider the wife’s application pursuant to s 13K, as I was sitting as a judge of the Federal Circuit and Family Court of Australia (Division 2) and not as a judge of Division 1.[2] Accordingly, I advised the parties that I intended to proceed with the wife’s review application pursuant only to s 13J of the Act.
[2] Review transcript 19 July 2023, p.28 lines 3–10.
There is, in my view, no legislative justification for restricting the operation of s 13J of the Act to the Federal Circuit and Family Court of Australia (Division 2) and doing so has the potential to create the logical non sequitur that is apparent in this case. Nevertheless, it is my view that, fortunately, there is no detrimental consequence, in the circumstances of this case, where counsel for the wife indicated reliance upon s 13K only insofar as it expressly referred to a “denial of natural justice”[3] in the way in which the arbitration process was conducted and where counsel for the husband, appropriately, in my view, conceded that failure by an arbitrator to afford the parties procedural fairness would constitute an error of law and, thus, fall within the contemplation of s 13J.
[3] Review transcript 19 July 2023, p.6 lines 23–26.
NATURE OF THE REVIEW APPLICATION
At the commencement of the review proceedings, counsel for the wife foreshadowed a potential application for the parties to be permitted to provide additional submissions as to whether the review should be conducted as a rehearing, including affording the parties the opportunity to present updated evidence and submissions regarding their respective property applications. When pressed, however, it was confirmed, by counsel for the wife, that it was not submitted that the review proceedings that occurred on that day should proceed by way of a rehearing. As is self-evident from the transcript, I did not conduct the review proceedings on the basis of a rehearing.[4] In brief ex tempore reasons I provided during the review proceedings, I declined the wife’s application for permission to submit further written submissions on that question. In doing so, I acknowledged the potential appeal rights of the wife in the event that, on advice, she considers that I had failed to properly exercise jurisdiction.
[4] Review transcript 19 July 2023, p.27 lines 41–44.
While the issue was resolved within the review proceedings by my ex tempore reasons for judgment, I consider it appropriate to expand upon why I respectfully consider the course of action foreshadowed by counsel for the wife to be misguided. This is because the issue also has relevance to the appropriate framing and consideration of an application for review of an arbitrator’s award and, specifically, consideration of the wife’s application in this case.
Firstly, it is significant to note that the Pt VIII property proceedings between the parties was referred to private arbitration, with the consent of the parties, pursuant to s 13E of the Act. As such, the referral did not involve the delegation of the judicial power of the Commonwealth such that a review of the award necessitated a re-hearing.
Arbitration, including pursuant to the relevant provisions of the Act, has long been recognised as an efficient, impartial, enforceable and timely method of resolving disputes other than by litigation.[5] Arbitral awards are intended to provide an efficient means of resolving disputes with certainty and finality.[6]
[5] Tianjin Jishengtai Investment Consulting Partnership Enterprise v Huang [2020] FCA 767 at [19].
[6] TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 533 (“TCL”) per Hayne, Crennan, Kiefel & Bell JJ at [105].
An arbitral award registered pursuant to the provisions of s 13H of the Act is binding and enforceable by either party, subject to potential review pursuant to ss 13J or 13K.
In considering how that review process operates, the decision of the High Court in TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 533 (“TCL”) is instructive. In that case, it was argued that relevant provisions of the International Arbitration Act 1974 (Cth) (“the IA Act”) that provided for the registration and enforcement of “foreign awards,” made in the context of international commercial arbitration, were unconstitutional as a result of having the effect of; firstly, substantially impairing the institutional integrity of the Federal Court of Australia and secondly, impermissibly vesting the Commonwealth judicial power on arbitral tribunals.
The judgment provides an interesting and important overview of the history of the development of private arbitration as a recognised and respected means of resolving disputes between parties other than by court adjudication. At [107] the plurality, their Honours Hayne, Crennan, Kiefel and Bell JJ, held that “the determination of a dispute by an arbitrator does not involve the exercise of sovereign [judicial] power of the State to determine or decide controversies” and, significantly at [108], “to conclude that a particular arbitral award is final and conclusive does no more than reflect the consequences of the parties having agreed to submit a dispute of the relevant kind to arbitration”.
In their joint judgment, French CJ and Gageler J noted at [8] that, in substance, the UNCITRAL Model Law on International Commercial Arbitration 1985 (“Model Law”) that provides the legislative foundation for the IA Act embodies ‘common law’ concepts developed over several centuries in respect to private arbitrations. That history is relevant to understanding the conduct of arbitrations pursuant to s 13E of the Act and the limited circumstances in which they can be reviewed.
In respect to the IA Act, their Honours noted at [11] that the Model Law reflected in the IA Act is “designed for consensual arbitration”, being “arbitration based on voluntary agreement of the parties”. In that respect, as is the case at common law, the foundation of arbitration pursuant to the Model Law was found at [9] to be “the determination of the parties’ rights by the agreed arbitrators pursuant to the authority given to them by the parties”.
Consistent with the decision of the plurality, French CJ and Gageler J held, at [31], that the exercise of a power conferred on an arbitral tribunal by the agreement of the parties “lacks the essential foundation for the exercise of judicial power”, being sovereign power exercisable independently of consent”. The absence of the exercise of coercive power is the key (at [28]–[29]). Their Honours concluded that there was nothing in the arbitral tribunal’s determination of the rights and liabilities of the parties that encroached upon Commonwealth judicial power.
As a related issue, their Honours also held at [5] and [34] that the relevant provisions of the IA Act that empowered the Federal Court of Australia to enforce the award of an arbitral tribunal, in respect to an arbitration conducted pursuant to the Model Law, did not undermine the institutional integrity of the Federal Court. This was because the enforcement of an arbitral award, made within the arbitral tribunal’s scope of authority, was held to be no more than an enforcement of the binding result of the arbitral agreement. In those circumstances, the making of orders for enforcement of the award by the Federal Court was held not to signify the Federal Court’s endorsement of the legal contents of the award.
In TCL, the plurality noted at [98] that legislation creating a statutory means of review of awards can create an exception to the general rule that “an award is final and conclusive and cannot be challenged either at law or in equity on the ground that the arbitrator has committed an error of fact or of law” (TCL at [81]). Sections 13J and 13 K of the Act provide for such an exception.
In Westport Insurance Corporation v Gordian Runoff Ltd (2011) 244 CLR 239 (“Westport”), the High Court considered an analogous statutory scheme for review of awards pursuant to s 38 of the Commercial Arbitration Act 1984 (NSW) which provides that, with leave, “an appeal shall lie to the Supreme Court on any question of law arising out of an award”.[7] In Westport at [168] per Kiefel J (as her Honour then was), it was held that the limited right of appeal on “a question of law” was an exception to the parties being bound to “the outcome of the arbitration they have agreed will take place”. The plurality, their Honours French CJ, Gummow, Crennan and Bell JJ emphasised at [27] however, that “the subject matter of this “appeal” is confined to questions of law; the scheme of the legislation is to hold the parties to their agreement to accept the factual findings by arbitrators”.
[7] Commercial Arbitration Act 1984 (NSW) ss 38(2), (4) and (5).
That observation can, in my view, be equally applied to arbitrations conducted pursuant to the Act and the limited right of review provided by s 13J. By way of summary:
(1)A right of review lies on a “question of law”;[8]
(2)The subject matter of any review is confined to questions of law;[9] and
(3)The scheme of the Act is to hold parties to their agreement to accept factual findings made by the arbitrator.[10]
[8] Family Law Act 1975 (Cth) s 13J(1).
[9] Westport at [27].
[10] Westport at [27].
As noted by Basten J in Director-General, Department of Ageing, Disability and Home Care v Lambert (2009) 74 NSWLR 523 at [59], a review ‘on’ a question of law is narrower that an appeal or review ‘involving’ a question of law and connotes at [61] that “the [arbitrator] is to be the final adjudicator of the facts and the merits of the case, so long as he or she acted within the limits prescribed by law”. As confirmed in several Australian authorities, arbitrations are “not to be used as dummy runs to subsequent litigation”.[11]
[11] Keaty & Swann [2023] FedCFamC1F 178 at [70].
Having regard to the authorities to which I have referred, it is clear that a review of an arbitrator’s award is not to be conducted as a merits review.[12] That is, the situation is to be distinguished from the review of a decision involving the exercise of delegated judicial power of the Commonwealth, as is the case, for instance, in respect to the review of a decision of a registrar of the Court exercising delegated power conferred by the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) and made pursuant to power bestowed by the Act and the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“FCFCOA Act”). In those particular circumstances, consistent with Harris v Caladine (1991) 172 CLR 84, r 14.07 of the Rules clearly requires a hearing de novo. For reasons which I have explained, that is not the case in respect to a private consensual arbitration.
[12] Yesodei Hatorah College Inc v The Trustees of the Elwood Talmud Torah Congregation (2011) 38 VR 394 (“Yesodei”) at [16].
GROUNDS FOR REVIEW
As earlier noted, annexed to the wife’s affidavit filed 8 June 2023 and marked ‘F’ are her grounds for review, which are as follows:
1.The Applicant was denied procedural fairness by the Arbitrator by refusing the Applicant’s Application for Adjournment for a reasonable time upon being served with the Respondent’s Affidavit of 254 pages in length and the Respondent’s support Affidavit, the court witness Affidavit within 24 hours of the trial commencing, in circumstances where such adjournment would not have resulted in an injustice to the Respondent.
2.The Arbitrator was in error in refusing the Application for Adjournment by rely upon extraneous and irrelevant considerations.
3.The Arbitrator in finding that the Applicant’s contributions to the asset pool with 22.5 percent was unreasonable and plainly unjust.
4.The Arbitrator in assessing contributions erroneously considered irrelevant matters including:-
4.1 The wife took no steps to her detriment. [A57]
4.2 The wife did not pay rent for the last 18 months of cohabitation. [A57]
5.The Arbitrator failed to property balance the contributions of the Applicant as a homemaker and parent when assessing the financial contributions of the Respondent as four times greater than that of the Applicant as being the determinant or only factor in assessing the contribution based entitlement of the parties.
6.Notwithstanding the Arbitrator found that crucial parts of the evidence of the Respondent [and this father] was untruthful, not acceptable, and/or where there was conflict between the parties, accepted the evidence of the Applicant including:-
6.1The period of contributions as maintained by the Applicant. [A26]
6.2The conversations as to the dispute between the parties as to the Loan Agreement occurred after it was executed as maintained by the Applicant. [A55]
6.3The maintaining of the Respondent and his father that there were no conversations between them prior to the demand of $500,000.00. [A101]
6.4The finding that the Respondent and his father had not been frank. [A104]
6.5The father’s oral evidence as to repayment of the sum of $500,000.00 was contrary to his Affidavit evidence.
Found the alleged liability of $2.6 million would be repaid by the Respondent.
7.There was no evidence to support a “view” or “finding” that “it is unlikely it [the loan of $2.6 million] would be called upon in the short to medium term” when the evidence [or lack of evidence] supported a finding that the loan would never be called upon by the Applicant’s father. [A107]
8.The finding that the adjustment in favour of the Applicant was 8 percent was plainly wrong and inadequate in the circumstances including:-
8.1The comparison between the parties’ financial positions after the assessment of the contribution based entitlement.
8.2The effect of the evidence that the loan between the Respondent and his father would not be payable “in the short to medium term”.
8.3The credit issues relating to the Respondent and his father’s evidence relating to the asserted loan.
8.4The young age of the subject child and the Applicant’s financial responsibility towards that child for of period of at least 10 years.
8.5The greater financial security of the Respondent as opposed to the Applicant.
(As per the original)
Requirement for grounds to identify questions of law
It was necessary for the wife to identify, in her Application in an Arbitration, the question or questions of law which, if decided in her favour on review, would result in an order setting aside the award and granting other relief pursuant s 13J of the Act.[13] Such a statement of the relevant question of law “with sufficient precision is a matter of great importance to the efficient and effective hearing and determination” of the review application.[14] This is because properly identifying the question of law goes “to the exercise of [the] jurisdiction” conferred by s 13J of the Act. Regrettably, that has not occurred in this case.
[13] See, by way of analogy: McConnell Dowell Constructors (Aust) P/L & Anor v QCLNG Pipeline P/L [2014] QSC 157 at [21].
[14] Haritos v Commissioner of Taxation (2015) 322 ALR 254 at [62(2)].
In exercise of the jurisdiction conferred by s 13J of the Act, the Court may not substitute its judgment or discretion for that of the arbitrator unless error in relation to a question of law is established. In this case, it is neither necessary nor appropriate for me to attempt to identify the parameters of what constitutes an error of law for the purpose of s 13J of the Act. It is appropriately acknowledged by all parties that whether there has been a breach of the obligation to afford procedural fairness to the parties is a question of law.[15]
[15] Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421 at [78].
In so far as the debate in this case focused upon the difference between an ‘error of law’ and an ‘error of fact’, some guidance has been provided in the area of administrative law. With the exception of a ‘mistake of facts’, those principles are similar to but do not replicate the criteria for review of a discretionary decision adumbrated in the well-known case of House v The King (1936) 55 CLR 499 (“House v The King”) at 505. In the context of this case, the following guidance emerges from relevant authorities.
The following are generally regarded as questions of law:
·Whether there is any evidence of a particular fact that would reasonably support the conclusion reached.[16]
[16] Minister for Immigration and Multicultural Affairs v Al-Miahi (2001) 65 ALD 141 (“Al-Miahi”) at [34]–[35], McPhee v S Bennett Ltd (1934) 52 WN (NSW) 8 at 9; Australian Gas Light Co v The Valuer-General (1940) 40 SR (NSW) 126 (“Australian Gas Light”) at 137–138.
·Whether there is an absence of evidence to support the making of a finding and the drawing of inferences.[17]
[17] Al-Miahi at [35]; Australian Gas Light at 137–138; Hope v Bathurst City Council (1980) 144 CLR 1 at 6–7.
·Whether a particular inference can be drawn from facts found or agreed,[18] or whether the evidence reasonably admits of a different conclusion.[19]
[18] Al-Miahi at [35]; Australian Gas Light at 137–138; Hope v Bathurst City Council (1980) 144 CLR 1 at 6–7.
[19] Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 353.
·In determining whether an inference or conclusion is reasonably open, a factual finding or a conclusion by an arbitrator that is so unreasonable and unsupported by evidence as to be irrational and perverse may amount to a question of law.[20]
·Whether findings of fact have been made by an arbitrator “as a result of failing to consider or properly consider the relevant admissible evidence” may, in particular circumstances, amount to a question of law.[21]
·Whether there has been a correct application of the law to the facts.[22]
·Whether a written agreement between private parties has been properly interpreted.[23]
·Whether a tribunal has arrived at a perverse conclusion in circumstances where a correct application of the law to the facts found would have lead inevitably to one answer.[24]
The following are not generally regarded as errors of law;
·The making of a wrong finding of fact. This is so even if the reasoning whereby the Court reached its conclusion of fact were demonstrably unsound.[25]
·The adoption of a faulty process by the decision maker in inferring the existence of a particular fact, for example by engaging in an illogical course of reasoning, so long as the particular inference is reasonably open.[26]
·Error as to what was actually agreed between parties may not involve a question of law.[27]
[20] Edwards (Inspector of Taxes) v Bairstow [1956] AC 14.
[21] Yesodei at [16].
[22] Simmonds v Gammell [2016] EWHC 2515 (Comm) (“Simmonds”) at [33].
[23] Westport at [82].
[24] Simmonds at [33].
[25] Simmonds at [33]. See also Waterford v The Commonwealth (1987) 163 CLR 54 at 77 per Brennan J and similarly observed by Menzies J in Reg v The District Court; Ex parte White (1966) 116 CLR 644 at 654.
[26] Simmonds at [33].
[27] Westport at [146].
CONSIDERATION
Having regard to the long established principle that arbitral awards are intended to provide an efficient means of resolving disputes with certainty and finality,[28] as is the case in respect to appellate review of a trial judge’s decision,[29] there is a strong presumption in favour of the arbitral award. I must be satisfied that it is clearly wrong before interfering with the award.
[28] TCL at [105].
[29] Australian Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621 at 627.
Ground 1 – Alleged failure to afford procedural fairness
It is well established that a failure to afford procedural fairness, where there is a requirement to do so, constitutes error of law.[30] The arbitrator in this case was under such an obligation. Relevantly, reg 67I(2) of the of the Family Law Regulations 1984 (Cth) provides:
An arbitrator must conduct an arbitration with procedural fairness (for example, giving each party to the arbitration a reasonable opportunity to be heard and to respond to anything raised by another party).
[30] Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at [26]–[42] per Gaudron and Gummow JJ (Gleeson CJ agreeing); Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57 at [213] per Kirby J; Yates Property Corporation Pty Ltd (in liq) v Darling Harbour Authority (1991) 24 NSWLR 156 at 186 per Handley JA.
The question, in this case, is whether the parties have been given such a reasonable opportunity. In considering that issue, it is important to appreciate that:[31]
[T]he rules of procedural fairness do not have immutably fixed content; the content of procedural fairness may vary according to the circumstances of the particular case. Procedural fairness is essentially practical; it is not an abstract concept. The concern of the law is the avoidance of practical injustice.
[31] Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd (No 2) [2023] WASCA 108 at [203], referring to Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 (“Ex parte Lam”) at [37]; HT v the Queen (2019) 269 CLR 403 (“HT”) at [18]; Fabrizi v Grasso (Jnr) as the Legal Personal Representative of Mr Grasso (deceased) (No 2) [2022] WASCA 27 at [92].
Contrary to the submission of learned counsel for the wife by reference to the affidavit of Mr F filed on 22 June 2023, the concept of procedural fairness is not fixed nor, on the facts of this case, established, so it was submitted, by the mere fact that counsel for the wife advised the arbitrator that he had inadequate time to consider and respond to the husband’s evidentiary material as set out in the husband’s affidavit filed on 21 March 2023. As succinctly stated by Gageler J in SDCV v Director-General of Security (2022) 405 ALR 209 at [174]:
… “[t]he rules of procedural fairness do not have immutably fixed content ... ‘[F]airness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice’”.[32] Procedural fairness necessarily has a variable content; it can be “provided by different means in different contexts and may well be provided by different means in a single context”.[33] It “is defined by practical judgments about its content and application”.[34]
[32] Assistant Commissioner Michael James Condon v Pompano Pty Ltd (2013) 252 CLR 38 (“Pompano”) at [156], quoting Ex parte Lam at [37]; see also [105] and [108]. See also HT at [46] and [64].
[33] Pompano at [177] and [195]. See also Dietrich v the Queen (1992) 177 CLR 292 at 364; International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319 at [54].
[34] Pompano at [68].
For the following reasons, counsel for the wife has failed to satisfy me that, in the circumstances of this case, she has experienced any practical injustice as a result of the conduct of the arbitrator.
·The husband’s affidavit which gave rise to the application for adjournment was, together with the affidavit of the wife, served outside the time specified in the directions made by the arbitrator as a result of mutual agreement between the parties’ lawyers. The parties could have sought to change the date of the arbitration, but did not do so.
·Insofar as it is contended that, despite that agreement by the parties’ respective lawyers, the wife nonetheless suffered practical injustice as a result of the length of the affidavit, the following is to be noted.
·The affidavit of the husband sworn on 21 March 2023 and filed at 11.18 pm on that day consisted of 19 pages. This is in comparison to 25 pages of sworn evidence contained in the wife’s affidavit sworn on 22 March 2023 and filed at 9.45 am on that same day.
·While there were 235 pages of annexures to the husband’s affidavit, it was conceded that much of that documentation had previously been served upon the wife by way of attachments as referred to in paragraph 32 of the husband’s affidavit sworn on 6 June 2022. Having been alerted to that fact, counsel for the wife withdrew his reference to the attachment of that documentation to the husband’s affidavit of 21 March 2023 as justification for his application for adjournment.[35]
·This left the remaining documentation to be identified as consisting of schedules prepared by the husband and his legal advisers in an endeavour to rely upon the provisions of s 50 of the Evidence Act 1995 (Cth) (“the Evidence Act”), that is, tables summarising much more voluminous documentation.
·The proceedings were adjourned on the morning of 23 March 2023 to enable the wife and her legal representatives to crosscheck the information contained in those schedules as against source documentation. It can reasonably be inferred that it was accepted that the information had been checked and it was accepted that the information contained in the tables was correct in circumstances where those tables, prepared in accordance with s 50 of the Evidence Act, were tendered into evidence by consent on 24 March 2023.[36]
·It was not exceptional for the arbitrator, on the facts of this case, to expect the competent and experienced counsel representing the wife to have familiarised himself and his client with the husband’s 19 pages of sworn evidence in circumstances where he had that opportunity for the entirety of 22 March 2023 and the substantial portion of the day on 23 March 2023. This was in circumstances where counsel for the wife advised the arbitrator at the commencement of the hearing on 23 March 2023 that his client had had the opportunity of reading the affidavit and he had read ‘the non-annexure pages’ to her on the morning of 23 March 2023.[37]
[35] Arbitration transcript 23 March 2023, p.11 line 38 to p.12 line 4.
[36] Arbitration transcript 24 March 2023, p.46 lines 21–41.
[37] Arbitration transcript 23 March 2023 p.7 lines 26–27.
In summary, I am satisfied that in the circumstances of this case, the arbitrator adopted appropriate means to avoid practical injustice by adjourning the proceedings until the afternoon of 23 March 2023, with cross-examination on the material contained in the husband’s affidavit not commencing until the following day.
During that adjournment, counsel for the husband undertook to clarify those documents for the wife, as well as the information contained in the s 50 schedules which were attached to the husband’s affidavit and which may not have already been within the knowledge of the wife. The arbitrator, appropriately, in my view, formed the view that the information that fell within that category was relatively limited, such that reasonably competent counsel could sufficiently master the material. The schedules that had been prepared in accordance with s 50 of the Evidence Act were tendered without objection on 24 March 2023. Consequently, I am satisfied that the wife did not suffer any practical injustice as a result of the arbitrator not adjourning the proceedings for a longer period of time. This was in circumstances where the parties, through their lawyers, had agreed to late service of the material and necessarily must have considered that the task of becoming familiar with the other party’s material would require the allocation of time and particular focus on the day before the arbitration.
Ground 2 – Error in the exercise of discretion by asserted reliance on extraneous and irrelevant considerations in refusing the adjournment application
It is to be noted that this ground refers to the arbitrator relying upon extraneous and irrelevant considerations in refusing the adjournment, rather than the arbitrator failing to have regard to relevant considerations. Even in that context, it is difficult to comprehend the substance of this ground in circumstances where neither the wife’s grounds of review nor her case outline filed on 3 July 2023 identify those “extraneous and irrelevant considerations” said to have been relied upon by the arbitrator that establishes this is an appropriate ground of review.
In that respect, I have already explained why it is important that each asserted ground of review of an arbitrator’s award should be expressed as a specific and concise statement of the question of law in respect to which error has occurred. Moreover, just as an appellate court is not required to scrutinise the judgment under review with a view to establishing appellable error, a court reviewing an arbitrator’s award cannot be expected to rummage through the transcript of an arbitration and the arbitrator’s award with a view to distilling a specific and concise ground or grounds of review: Newett & Newett (No 2) (2021) FLC 94-051 at [34] referring to Bahonko v Sterjov (2008) 166 FCR 415 at [3].
Doing the best I can, however, it appears from the oral submissions made by counsel for the wife at the review hearing, that the two irrelevant considerations relied upon as constituting this ground consisted of firstly, the arbitrator having regard to the fact that the parties’ solicitors had agreed to the late filing of affidavits and, secondly, that the arbitrator had regard to, as but one consideration, the overarching purpose set out in s 67 of the FCFCOA Act.
I have earlier set out why, in considering the context in which the wife sought an adjournment of the arbitration, it was entirely appropriate for the arbitrator to have regard to the background circumstances in assessing the degree of prejudice potentially faced by each party. In particular, in circumstances where both parties, through their lawyers, had agreed to the late service of their respective affidavits, it could reasonably be assumed that each party anticipated that it would be necessary to apply time and intellectual energy to familiarise themselves with the other party’s case in a relatively short period of time.
Further, it was entirely appropriate, in my view, for the arbitrator to have regard to the overarching purpose. The overarching purpose is set out in s 67(1) of the FCFCOA Act as being to facilitate the just resolution of disputes according to law and “as quickly, inexpensively and efficiently as possible”.
It is axiomatic that the adjournment of the arbitration would have caused delay and additional expense including, according to clause 18 of the arbitration agreement, the obligation of the parties to pay the arbitrator as a result of any last-minute abandonment of the arbitration.
Section 68(1) of the FCFCOA Act states that “the parties to a civil proceeding before the Federal Circuit and Family Court of Australia (Division 1) must conduct the proceeding (including negotiations for settlement of the dispute to which the proceeding relates) in a way that is consistent with the overarching purpose”. Significantly, s 68(2) imposes an obligation on practitioners to:
(a) take account of the duty imposed on the party by subsection (1) and
(b) to assist the parties to comply with the duty.
It is to be noted that the reference to the duty applying to “negotiations for settlement of the dispute to which the proceedings relates” is made in an inclusive context. That is, it confirms that the parties’ obligations and that of their legal advisers applies not only to their conduct in matters that are directly before the Court, but also in respect to efforts that they make, away from the Court, with a view to resolving the dispute. While arbitration is not specifically referred to as an example of a situation in which the overarching purpose applies, it was entirely appropriate for the arbitrator to regard that as being the case.
Indeed, the arbitrator’s reference to the relevance of the overarching purpose was entirely consistent with the objects set out at the commencement of Division 1 of Pt IIIB of the Act, which includes in s 13A(1):
(b)to encourage people to use dispute resolution mechanisms (other than judicial ones) to resolve matters in which a court order might otherwise be made under this Act, provided the mechanisms are appropriate in the circumstances and proper procedures are followed; and
(c)to encourage people to use, in appropriate circumstances, arbitration to resolve matters in which a court order might otherwise be made, and to provide ways of facilitating that use.
Accordingly, there is no merit in this ground of review.
Ground 3 – In finding that the wife’s contributions to the asset pool justified a 22.5 per cent adjustment, the arbitrator was unreasonable and plainly unjust
In form, this ground is expressed as a question of fact, rather than a question of law. For reasons which I have earlier explained, an arbitrator’s award is not reviewable in respect to a question of fact.
In any event, this ground is without merit even if it is treated as being in substance, as opposed to form, an assertion of error on the part of the arbitrator that falls within the fifth criteria of review set out in House v The King, relating to potential unreasonableness and injustice of outcome. In that respect, in their joint judgment in Norbis v Norbis (1986) 161 CLR 513, Mason and Deane JJ explained that a decision in respect to the adjustment of property pursuant to s 79 of the Act necessarily involves the exercise of a broad decision on the part of the decision-maker. As noted by their Honours at 518, the determination of what is a ‘just and equitable adjustment’ calls for “an overall assessment in the light of the factors mentioned in s 79(4), each of which in turn calls for an assessment of circumstances”. Their Honours went on to explain that “[b]ecause these assessments call for value judgments in respect of which there is room for reasonable differences of opinion, no particular opinion [is] uniquely right”.
In my view, the arbitrator’s assessment that the wife was, in the circumstances of the case, entitled to an adjustment of 22.5 per cent having regard to s 79(4) contributions was within the appropriate range that can be regarded as just and equitable. Moreover, it has not been established that the arbitrator’s conclusion in respect to the contribution finding falls within the category of “perversity” referred to in Simmonds at [33].
Ground 4 – The arbitrator considered irrelevant matters
In this ground, it is contended that the arbitrator erroneously considered irrelevant matters, including the findings contained in paragraph 57 of the arbitrator’s Reasons that:
4.1 The wife took no steps to her detriment. [A57]
4.2 The wife did not pay rent for the last 18 months of cohabitation. [A57]
(As per the original)
While expressed in inclusive terms, for reasons which I have explained, it is not for the Court, in conducting a review of an arbitrator’s award, to rummage through the award nor the transcript of arbitral proceedings with a view to potentially expanding the grounds of review by seeking potentially irrelevant matters that may have been considered by the arbitrator. Accordingly, while this ground is expressed in terms that are ‘inclusive’, I will treat the ground as being specific in respect of those specific irrelevant matters that are said to have been erroneously considered by the arbitrator.
The wife has, with respect, provided little assistance in considering this ground in circumstances where it has not been addressed in her written submissions filed 12 July 2023.
Paragraph 57 of the arbitrator’s reasons is as follows:
The wife again took no step to her detriment. She did not sell her unit at [Suburb E] to assist with the purchase or renovation, for example. She in fact invested none of her own money in the property. She has had the opportunity to live in a substantial family home in [Suburb C] for the past three years without paying for the right to occupy it, including for nearly 18 months after separation.
In oral submissions made at the review hearing, counsel for the wife clarified that the point being made in these grounds relates to the finding by the arbitrator that, after the husband acquired the Suburb C property in early 2020 and the parties moved into the property in mid-2020, the wife did not invest any of her money in the acquisition or improvement of the property and that she remained living in the property with the parties’ child for a period of three years.
It is clear that the reference to the wife taking “no steps to her detriment” relates to her retention of the Suburb E property and obtaining the ongoing benefit of that ownership while not contributing to the purchase or renovation of the Suburb C property in which she had the benefit of living after mid-2020, including in the period subsequent to the parties’ separation. They were clearly matters that the arbitrator was entitled to consider in assessing the totality of the parties’ contributions.
In oral submissions, it was contended that the fact of the wife’s ongoing occupancy should not have been treated as a relevant consideration because, in the period subsequent to the parties’ separation, the wife required a place for herself and the parties’ child to live. While that is unquestionably the case, the fact that she had the benefit of living rent-free in the Suburb C property, which was owned by the husband, is again a matter that the arbitrator was entitled to consider in evaluating the parties’ respective contributions.[38]
[38] Review transcript 19 July 2023, p. 14 lines 26 to p. 15 line 27.
Accordingly, this ground of review is also without merit.
Ground 5 – Failure to properly balance the contributions of the wife as homemaker and parent with the financial contributions of the husband
Again, little assistance is provided by the wife’s written submissions in understanding this ground, save to the extent that reference is made to Perras & Perras [2020] FCCA 3109 and Anson & Meek (2017) FLC 93-816 to support the contention that any disparity in initial contributions is of “critical importance”. The only further assistance provided by counsel for the wife in respect to this ground during the review hearing was as follows:[39]
And [Ground] 5, that is a question of his finding at paragraph 140. The argument there, the husband brought three times as much wealth to the relationship than did the wife, and further significant contributions were made by his father, and he renovated the property. But the wife gave evidence that she worked at the property. There’s no comment about that in that paragraph, but he might be talking about financial contributions there. He did find, in paragraph 141, that the contributions were equal.
[39] Review transcript 19 July 2023, p.15 lines 29–35.
Relevantly, [140] and [141] of the arbitrator’s Reasons are as follows:
Ultimately, the husband brought almost three times as much wealth to a 4 year relationship than did the wife. Further significant contributions were made by him by reason of the highly favourable arrangement to acquire the former matrimonial home with his father, arrangements which gave the parties an opportunity to accumulate significant wealth in the form of desirable property in [Suburb C], property which the husband could afford to acquire and renovate himself using his pre-relationship property and with only modest indirect contribution by the wife to the [Y Bank] mortgage payments. Otherwise, the parties had to contribute nothing at all to the acquisition and improvement of the property from their own resources, since the husband's father has never asked for any of the purchase price to be paid under the terms of the Deed - and when he did, it seems he didn't mean what he said.
These contributions arc weighed together with 5½ years of personal exertion contributions which I found to be equal.
It is, with respect, quite wrong to assert that the arbitrator’s findings in those paragraphs were the determinant or only factor considered by the arbitrator in assessing the contributions-based entitlement of the parties. The arbitrator specifically acknowledged that, in the context of a relationship of a little over four years, “from May 2019 until November 2021, the wife made substantially greater parenting contributions than the husband did”, further noting that “the wife likely made slightly greater homemaking contributions than the husband did” (at [129]).
It is significant that, at paragraph 3.1 of the wife’s written submissions and by reference to [75] to [79] of the arbitrator’s Reasons, it was acknowledged “the learned arbitrator correctly took into account his obligations in respect of a property adjustment”. That concession was, with respect, appropriately made. It is clear that the arbitrator correctly took a holistic approach in assessing and weighing the parties’ respective contributions. That approach is consistent with authorities confirming that, in weighing the parties’ respective contributions, the arbitrator was required to take into consideration the myriad of contributions, including both parties’ initial contributions, contributions during the marriage and post-separation contributions in a holistic fashion.[40] Moreover, the arbitrator adopted the preferable course of weighing all contributions collectively, rather than segmenting, compartmentalising or weighing one contribution against the remainder.[41]
[40] Dickons v Dickons (2012) 50 Fam LR 244 at [24] and [26]. See also Jabour & Jabour (2019) FLC 93-898 (“Jabour”) at [86].
[41] Jabour at [73]–[87]; Horrigan & Horrigan [2020] FamCAFC 25 at [42]–[48].
For reasons which I have earlier explained, after correctly adopting that approach, the arbitrator arrived at a conclusion that, in my view, assessed the parties’ respective contributions as being within a reasonable and just range.
Accordingly, this ground of review is without merit.
Ground 6 – Asserted error in respect to various factual findings, leading to the arbitrator’s finding that the alleged liability of $2.6 million would be repaid by the husband
The Court was provided with no assistance in respect to this ground of review in the wife’s submissions.
At the review hearing, counsel for the wife provided very brief oral submissions in respect to Ground 6.[42] It is clear from those oral submissions that it is contended that, after making several findings of fact as set out in that particular ground, the arbitrator made an ultimate finding that the “alleged liability of $2.6 million” payable by the husband in respect to the acquisition of the Suburb C property would be repaid by him to his father.
[42] Review transcript 19 July 2023, p.15 line 35 to p.16 line 8.
I respectfully agree with the submission of counsel for the husband that, both in form and substance, this ground raises a question of fact, not a question of law.
Accordingly, the jurisdiction conferred on the Court pursuant to s 13J of the Act is not enlivened by this ground and it is without merit.
Ground 7 – Contention that the arbitrator’s finding that “it is unlikely [the loan of $2.6 million] will be called upon in the short to medium term” was not supported by the evidence
In the wife’s written submissions, it appears that an inconsistency in findings is contended; that is, it is contended that the finding that the husband’s loan to his father is repayable and the finding that the loan was “unlikely to be called upon in the short to medium term” cannot be mutually sustained. Insofar as it was addressed during the course of the review proceedings, it was acknowledged that the arbitrator’s finding that there was an enforceable loan agreement between the husband and his father in respect to the sum of $2.6 million was a finding of fact.
It was nonetheless contended that:[43]
…when it’s coupled with the observation that it will be unlikely to be repaid in the short to medium term, that has to be taken into account somehow, and that’s ignored, completely ignored. And that, your Honour, has to be an error of law – just failed to consider that. Having made the finding, he failed to then equate that to the balance sheet.
[43] Review transcript 19 July 2023, p.17 lines 8–12.
I take from that concession that there is no challenge to the arbitrator’s finding that there was an enforceable loan agreement between the husband and his father in the sum of $2.6 million. While not expressed in this ground of review it appears that, in substance, the wife’s complaint is that the amount of $2.6 million was included as a liability on the balance sheet, described as “mortgage from Mr Z” (at [166] of the arbitrator’s Reasons).
The inclusion of the secured loan on the balance sheet by the arbitrator was unremarkable, indeed, it was in accordance with general practice.[44] The liability, which was confirmed by deed, could not be said to be “vague or uncertain”.[45] The arbitrator appropriately considered the likelihood of the loan being repaid and, while he found that it was “unlikely” that it would be called upon by the husband’s father “in the short to medium term”, nonetheless found that it was likely to be repaid by the husband at some point.
[44] Rodgers & Rodgers (No 2) (2016) FLC 93-712 at [41].
[45] Rodgers & Rodgers (No 2) (2016) FLC 93-712 at [41].
That inference drawn from the arbitrator’s consideration of primary facts was an inference that was reasonably open to the arbitrator on the basis of the primary facts,[46] and cannot be said to be “contrary to compelling inferences”.[47] Accordingly, the applicant has not established error.
[46] FJ & PN Curran Pty Ltd v Almond Investors Land Pty Ltd [2019] VSCA 236 at [203] referring to Lee v Lee (2019) 266 CLR 129 at [55].
[47] Robinson Helicopter Company Inc v McDermott (2016) 331 ALR 550 at [43].
Moreover, I respectfully agree with the submission of counsel for the husband that, in the absence of establishing that the finding of the arbitrator was “wrong by ‘incontrovertible facts or uncontested testimony’, or was ‘glaringly improbable’ or ‘contrary to compelling inferences’”,[48] this ground raises a question of fact and not one of law that enlivens of jurisdiction of s 13J of the Act.
Ground 8 – The arbitrator’s finding that the adjustment in favour of the wife was eight per cent was plainly wrong and inadequate in the circumstances
[48] Robinson Helicopter Company Inc v McDermott (2016) 331 ALR 550 at [43].
Again, with respect, the wife’s written submissions and the oral submissions made by counsel for the wife provided limited assistance in understanding this ground. Just as is the case in respect to an application seeking appellate review of a trial judge’s decision, grounds of review of an arbitral award should be expressed as a “specific and concise statement of the points sought to be argued by the applicant”.[49]
[49] Nimesh Watapaldeniya v Transport Accident Commission [2022] VSCA 50 at [2].
Additionally, it refers to circumstances that are inclusive rather than specific. As earlier noted, a court on review of an arbitral award cannot be expected to sift through broadly expressed arguments made in oral submissions, with a view to distilling a specific and concise ground of review.
I respectfully agree with counsel for the husband that this ground is, in form, expressed as raising a question of fact. Even construing the ground, as contended by counsel for the wife in oral submissions, that this ground, in substance, challenges the arbitrator’s conclusion that an eight per cent adjustment was appropriate having regard to the factors set out in s 75(2) of the Act, the ground is, in my view, without merit.
The brief oral submissions made by counsel for the wife contended that the adjustment made by the arbitrator pursuant to s 75(2) should have been “at least 15 per cent”,[50] taking into account the various factors set out in that subsection. In support of that contention, the following points were made:
·The arbitrator failed to properly compare the financial positions of the parties. This was contended in circumstances where the husband conceded that he was adjusting his income to avoid child support obligations for his first wife.
·The arbitrator failed to have regard to the comparative assets that would be available to the parties after the adjustment is made.
·The failure by the arbitrator “to adjust this $2.6 million loan. In other words, he should have said, ‘well, maybe $1 million of it is going to get repaid or something, but not 2.6’”.[51] This was in circumstances where, it was contended, the arbitrator did not believe what was being said about the requirement of repayment and that the “credit issue means that it’s not likely to be a $2.6 million debt owing”.[52]
·The arbitrator failed to give adequate consideration to the fact that the child was spending 11 days per fortnight with the wife.
[50] Review transcript 19 July 2023, p.17 line 24.
[51] Review transcript 19 July 2023, p.18 lines 1–3.
[52] Review transcript 19 July 2023, p.18 line 10.
For reasons which I have earlier set out, the finding of the arbitrator that there was a legally enforceable loan payable by the husband to his father was a question of fact and a finding to that effect was reasonably open on the evidence presented to him.[53] In the context of reading the arbitral award, including the reasons of the arbitrator, as a whole,[54] it is clear that the arbitrator did give consideration to the fact that the loan would not be repaid in the short to medium term. The weighting given by the arbitrator to that finding in assessing the future needs of the parties, in accordance with the provisions of s 75(2), cannot be said to have been perverse or otherwise justify judicial interference, having regard to the principles adumbrated by the High Court per Stephen J in Gronow & Gronow (1979) 144 CLR 513 at 520 that “an appellate court should be slow to overturn a primary judge’s discretionary decision on grounds which only involve conflicting assessments of matters of weight”.
[53] Edwards v Noble (1971) 125 CLR 296 at 302–304 and 307.
[54] Zabarac & Zabarac and Anor [2016] FamCAFC 186 at [64] and [66]; Hearne v Hearne (2015) 53 Fam LR 454 at [78]; Bonnett & Bonnett [2021] FedCFamC1A 95 at [22].
The additional matters referred to in respect to this ground by counsel for the wife similarly go to matters of weight and are not such that they justify interference with the arbitrator’s discretionary decision.
The arbitrator’s conclusion of an eight per cent adjustment in favour of the wife having regard to those matters set out in s 75(2) was, in my view, towards the lower end of what could be considered an appropriate adjustment, however it could not be said to one that was unreasonable or “plainly unjust” within the second limb of the House v the King principle at 505. It is not to the point, however, that if the court reviewing the arbitral award had been in the position of the arbitrator, the court would have taken a different course.[55]
[55] Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541 at [38] per Gageler J, referring to House v the King at 505.
I respectfully agree with the submission by counsel for the husband in noting that the decision of the arbitrator to determine an adjustment of eight per cent in favour of the wife having regard to s 75(2) was not below “the generous ambit within which reasonable disagreement is possible” such that it can be determined to be “plainly wrong”.[56]
[56] Norbis v Norbis (1986) 161 CLR 513 at 540.
CONCLUSION
The existence of error in respect to a question of law on the part of the arbitrator is an indispensable condition of judicial review pursuant to the provisions of s 13J of the Act.
The wife has failed to establish any such error and, accordingly, for the reasons which I have set out, each ground of review is without merit. The application for review must therefore be dismissed.
COSTS
During the course of the review proceedings it was acknowledged that, subsequent to the parties being provided with this decision, they would be provided with the opportunity of filing written submissions in respect to the question of costs. Accordingly, the orders I make will provide for each party to file and serve written submissions as to costs of no more than five pages within 14 days of the date of the orders. Thereafter, within seven days of receiving the other party’s submissions, each party may, if they wish, file written submissions in reply of no more than two pages.
I certify that the preceding one hundred and thirteen (113) numbered paragraphs are a true copy of the Reasons for Judgment of Deputy Chief Judge McClelland. Associate:
Dated: 5 September 2023
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