McLaughlin & McLaughlin (No 2)
[2023] FedCFamC1F 516
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
McLaughlin & McLaughlin (No 2) [2023] FedCFamC1F 516
File number(s): SYC 3839 of 2022 Judgment of: CAMPTON J Date of judgment: 27 June 2023 Catchwords: FAMILY LAW – STAY APPLICATION – Application to stay an award that the wife vacate a property of the husband, pending the determination of her application to review the award –Where the wife does not seek to retain the property on a final basis – Where the balance of convenience favours not granting a stay – Where the wife’s application for review will not be rendered nugatory if the award is enforced – Application to stay award refused – Order for the wife to vacate the husband’s property.
FAMILY LAW – ARBITRATION – PRACTICE AND PROCEDURE – Consideration of the time limitation on filing an application for review of an award pursuant to s 13J of the Family Law Act 1975 (Cth) – Consideration of the nature and character of a s 13J review – Review of an arbitral award pursuant to s 13J mirrors an appeal from an order of the court, and is to be conducted and determined consistent with ordinary appellate procedures and principles – Application for review to be filed within 28 days of registration of an award.
Legislation: Family Law Act 1975 (Cth) ss 79, 13A, 13E, 13H, 13J, 13K, 79A, 90SN
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 26, 36
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) ch 13, rr 13.03, 14.07
Family Law Regulations 1984 (Cth)
Cases cited: Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40
Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27
Australian Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621; [1953] HCA 25
Braddon & Braddon (2018) 335 FLR 184; [2018] FCCA 1845
Federal Commissioner of Taxation v Myer Emporium Ltd (No 1) (1986) 160 CLR 220; [1986] HCA 13
Griffiths & Griffiths [2022] FedCFamC1F 219
Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63
Harris v Caladine (1991) 172 CLR 84; [1991] HCA 9
Jennings Construction Limited v Burgundy Royale Investments Pty Limited (1986) 161 CLR 681; [1986] HCA 84
Kioa v West (1985) 159 CLR 550; [1985] HCA 81
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
Paviello & Paviello [2022] FedCFamC1F 592
Division: Division 1 First Instance Number of paragraphs: 78 Date of hearing: 22 June 2023 Place: Sydney Counsel for the Applicant: Mr Heazlewood 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 1)
BETWEEN: MS MCLAUGHLIN
Applicant
AND: MR MCLAUGHLIN
Respondent
order made by:
CAMPTON J
DATE OF ORDER:
27 JUNE 2023
THE COURT ORDERS THAT:
1.Paragraphs 1 and 4 of the wife’s Application in an Arbitration filed 8 June 2023 and sealed 14 June 2023 are dismissed.
2.The wife shall vacate the property at B Street, Suburb C NSW by 5.00 pm on 7 July 2023, and thereafter the husband shall have exclusive occupation of the property.
3.The costs of each of the husband and the wife of the stay and enforcement applications shall be reserved to the review hearing before McClelland DCJ at 2.15 pm on 19 July 2023.
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 (No 2) has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CAMPTON J:
Mr McLaughlin (“the husband”) and Ms McLaughlin (“the wife”) were engaged in proceedings as to the adjustment of property pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) and as to the parenting of their child, X, who was born in 2019 and is currently aged four.
On 19 October 2022, consent orders were made referring the property aspect of the proceedings to arbitration pursuant to s 13E of the Act. The parties were initially scheduled to engage in the arbitration on 27 February 2022, however that hearing was abandoned. They then participated in the arbitration over 23 and 24 March 2023.
The arbitrator issued an arbitral award on 11 April 2023 (“the award”). On 20 April 2023, the husband filed an application to register the award, and on 12 May 2023 the award was registered with the consent of the wife. The property adjustment aspect of the parties’ dispute was thereby finalised, although the parenting litigation has been ongoing.
The award provided broadly for:
(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).
It was not controversial that the husband made the final payment to the wife on 1 June 2023 (albeit this payment was made one week after the date provided by the award). Upon him completing such payment, the wife had six weeks to vacate the Suburb C property. She was required to do so by 23 June 2023, being the date of the hearing before me. The wife continues to occupy the Suburb C property.
The wife now applies, by an Application in an Arbitration filed on 8 June 2023 and sealed on 14 June 2023 (“the wife’s Application in an Arbitration”) to review the determination made in the award and to stay the operation of all of the award pending the resolution of her review.
By a Response to an Application in an Arbitration filed on 20 June 2023 and sealed on 22 June 2023 (“the husband’s Response”), the husband seeks that the wife’s Application in an Arbitration be dismissed. He also seeks orders enforcing the award such that the wife vacate the Suburb C property by 7 July 2023, and for security for costs incurred pending the determination of the wife’s application to review the award.
On 23 June 2023 orders were made listing the application for review for hearing before McClelland DCJ on 19 July 2023 (being in less than one months’ time), together with a timetable for the preparation of an electronic review book index and filing of summaries of argument, costs notice and the electronic transcript. The following additional orders were made:
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.
These reasons determine the wife’s application for a stay of the award pending the determination of her review, and the husband’s application to enforce paragraph 4 of the award.
For the reasons that follow, the wife’s application for a stay of the award will be dismissed. An order is made enforcing paragraph 4 of the award for the wife to vacate the husband’s Suburb C property, adopting the indulgence proffered by the husband, on or before 5.00 pm on 7 July 2023. The costs of the parties of the application for stay and application for enforcement will be reserved to the hearing of the review on 19 July 2023.
THE MATERIAL RELIED UPON
The wife relied upon:
·Her Application in an Arbitration filed on 8 June 2023 (and sealed on 14 June 2023);
·Her affidavit filed 8 June 2023 and sealed on 14 June 2023 (“the wife’s primary affidavit”), including the annexures thereto (Exhibit 3);
·Her affidavit filed 22 June 2023 (“the wife’s supplementary affidavit”);
·The affidavit of Mr F filed 22 June 2023, including the annexures thereto (Exhibit 4); and
·Her Case Outline filed 22 June 2023 (Exhibit 1);
·A tender bundle (Exhibit 6).
The husband relied upon:
·His Response to an Application in an Arbitration filed 20 June 2023 and sealed on 22 June 2023;
·His affidavit filed 20 June 2023, including the annexures thereto (Exhibit 5);
·His Case Outline filed 21 June 2023 (Exhibit 2);
·A tender bundle (Exhibit 7).
THE CONDUCT OF THE ARBITRATION
The husband, the wife and the arbitrator entered into an Arbitration Agreement on 19 October 2022. The arbitrator made directions as to the conduct of the hearing on 1 November 2022 (when the arbitration was still listed to take place on 27 February 2023), requiring the parties to file their affidavits, Financial Statements, and expert evidence by 3 February 2023. They did not comply with those directions.
On 27 February 2023, rather than a hearing the arbitrator conducted a planning meeting. The parties agreed to have until 10 March 2023 to file and serve their affidavits ahead of the arbitration then adjourned to 23 and 24 March 2023. The award records that neither the husband nor the wife applied to vary those directions, and that:
19. The parties supplied their affidavit evidence and financial statements to me on 22 March 2023. Their evidence does not address why it is the affidavits were filed and served late.
Each of the husband and wife were represented by counsel at the arbitration.
On the first day of the hearing, counsel for the wife made an oral application to adjourn the arbitration hearing. That application was refused. The arbitrator gave reasons for his decision, which became Schedule 1 to the award reasons (“the adjournment reasons”).
The adjournment reasons record the following:
27. [Counsel for the wife] said the trial affidavits were served on the wife 11.18pm on 21 March 2023, and the wife’s ·were served on the husband 9.45am on 22 March 2023. The husband’s ran to more than 250 pages including annexures and he said this caused his client prejudice.
28. [Counsel for the husband] said that on 20 March 2023, the husband’s solicitor wrote to suggest an exchange of documents later that day, and this was agreed. There is no suggestion any objection to late filing and service was ever raised.
For the reasons then given, the arbitrator adjourned the hearing until 2.15 pm on the first scheduled day. After addressing objections (a process which was completed by 2.00 pm that day), counsel for each of the husband and wife agreed to adjourn the hearing until the following day.
On the second day of the arbitration, being 24 March 2023, the oral evidence was completed and counsel for each of the husband and wife made submissions.
THE AWARD AND SUSBEQUENT COMPLIANCE
On 25 April 2023, the husband paid the wife the sum of $50,000 pursuant to paragraph 1.1 of the award. On 1 June 2023 he paid the wife the balance of $317,000 pursuant to paragraph 1.2 of the award. He refinanced the existing mortgage on the Suburb C property to fund these payments. It was the husband’s evidence that prior to such refinance, his loan repayments on the Suburb C property mortgage were $225 per week and that after the refinance his repayments increased and are now $3,697 per month (or $853 per week).
On 1 June 2023, more than seven weeks after publication of the award, the wife wrote to the husband notifying him of her intention to review the award and to remain living in the Suburb C property pending the determination of such an application. The wife’s Application in an Arbitration and affidavit were served on the husband on either 14 or 15 June 2023. There was no evidence or explanation as to why those documents were not served on the husband when they were sent to the Court on 8 June 2023.
On 16 June 2023, the husband wrote to the wife advising that he would oppose the review and proposing to extend the time for her to vacate the Suburb C property until 7 July 2023.
THE RELIEF SOUGHT BY THE WIFE
In circumstances where the husband complied with paragraph 1 of the award for him to pay the wife the total sum of $367,000, the wife made an oral application (without objection) to vary her relief sought so that she only applied to stay paragraph 4 of the award, being that she vacate the Suburb C property.
The wife did not seek at the arbitration to retain the Suburb C property. She does not seek to retain it if she is successful in her review of the award. Instead, she seeks an order that upon the husband paying her a total of $1,016,814 (less the $367,000 he has already paid, hence requiring a further $649,814), she have two weeks after payment to vacate the property.
IS THE APPLICATION TO REVIEW THE AWARD MADE WITHIN TIME, AND WHAT IS THE NATURE AND CHARACTER OF THE REVIEW PROCESS?
The husband raised as an issue in his Case Outline that the wife’s application for review of the award was not filed “within time” and hence she required the indulgence of leave to prosecute that application.
As recorded, the wife’s Application in an Arbitration was sent to the Court for filing on 8 June 2023, some 58 days after the award was made and 27 days after it was registered. Two questions therefore arise:
(a)Does the legislation prescribe a timeframe in which an application to review an award must be filed?
(b)If yes, then from what date does the time limit commence – either the date of the award or the date of its registration?
Neither the Act, the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”), nor the Family Law Regulations 1984 (Cth) (“the Regulations”) explicitly prescribe a time limitation as to when an application to review an arbitral award must be filed with the Court. During the hearing before me, each of the parties said that it was their understanding that applications for review must be made within 28 days of an arbitral award being registered. They could not identify the source of their understanding in the legislation.
In the absence of an express provision, whether a limitation for filing exists is a matter of construing the sections of the legislation which permit a review of an award to be pursued.
Section 13H(2) of the Act provides that upon an award being registered, it ‘has effect as if it were a decree’ of a court. The section imports that a registered award:
(a)Has binding effect, and is enforceable having recourse to the relief afforded to court orders by way of the Act and the Rules; and
(b)Is to be treated, procedurally, as an order of the Court.
A challenge to a registered award may be made pursuant to s 13J or s 13K of the Act. Those sections are as follows:
13J 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)
13K 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.
Section 13J of the Act provides a pathway for review of an arbitral award that is not dissimilar to the appeal pathway for orders of the Court – that is, where the basis of the review is that the decision maker fell into error. Challenges to orders made by a Court on the basis of error are required to be made by an appellant filing a Notice of Appeal within 28 days of the order appealed from being made (r 13.03 of the Rules).
Section 13K of the Act closely mirrors in many respects s 79A (or s 90SN) of the Act, which permit the Court to set aside a determination which has been infected, not by error of the decision maker, but by some other element (including fraud, non-disclosure or where the decision is void, voidable or impractical to carry out). An exception to this analogy is found in s 13K(2)(d), which permits a Court to make a decree affirming, reversing or varying an award where the arbitration was ‘affected by bias’, or there was a lack of procedural fairness in the conduct of the arbitration. There is no time limit imposed on the filing of applications made pursuant to s 79A, s 90SN or s 13K of the Act. This is because those sections are engaged where there has been a corruption to the integrity of the process, such as fraud, which may not be known for some time. A possible exception to this circumstance may exist in the event an application for review of an award is grounded from s 13K(2)(d) of the Act. It is not necessary to consider this issue for the purpose of these reasons.
What is the nature of review pursuant to s 13J of the Act
If a challenge to an award pursuant to s 13J of the Act mirrors the challenge to an order of a court by way of the appeal process, it would be appropriate that the rules of Court that apply to the hearing of an appeal also apply to the hearing of a review (given the omissions in the legislation, and the conclusion expressed at [29(b)] above that awards are to be treated, procedurally, as if they were orders of the Court). It is therefore necessary to consider the nature of the review envisaged by s 13J of the Act.
In the absence of any clear direction or definition in the Act, the Regulations, or the Rules, the nature of the enquiry to be undertaken by the Court pursuant to s 13J must be discerned from a construction of the section in its context.
The word ‘review’ is not defined by the legislation. It is used elsewhere in the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“the FCFCOA Act”) and in the Rules in relation to the judicial review of an exercise of delegated power by a registrar of the Court. In that context, a court is obliged to hear an application for review as an original hearing or hearing ‘de novo’ (see r 14.07 of the Rules). Such review involves a court rehearing the whole matter, rather than simply reviewing the original decision.
However, the nature of arbitral awards differ from exercises of delegated power by Court registrars. It would be a mistake to treat reviews from each as if they were the same.
Section 13A of the Act sets out the objects of Pt IIB, relevantly:
(1)(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; …
It would be contrary to that stated objective to require a Court undertaking a review to begin afresh and exercise for itself all of the discretion and powers exercised by the arbitrator (as would be the case on review of an exercise of power by a delegated judicial office – see Harris v Caladine (1991) 172 CLR 84). An agreement to arbitrate is not an agreement to delegate judicial power. It is an agreement to have a third party to conduct what otherwise would have been the role of the Court in determining the issues in dispute in a way that is final and binding. Importantly, arbitration is a consensual process and is not unilaterally imposed on parties. Seen in this way, arbitration is a process in substitution of the Court’s processes to achieve finality. It is not an opportunity to obtain a quote, and to then resort to the Court for a final determination.
There has been some discussion in reasons of other judges of this Court and of the Federal Circuit Court (as it was then known) as to what, if not a hearing de novo, is required of the Court in reviewing an award pursuant to s 13J. It has been observed that the section does not specify that an applicant must establish an “error of law” (see Paviello & Paviello [2022] FedCFamC1F 592 at [19] (“Paviello”); Griffiths & Griffiths [2022] FedCFamC1F 219 (“Griffiths”) at [12], [51] and [52]; Braddon & Braddon (2018) 335 FLR 184 (“Braddon”) at [51]). The section is instead concerned with a “review of the award, on questions of law”. In my view, it is correct to observe that:
51.… It would, however, be nonsensical to suggest that an Award would be reviewed on the basis of anything but an error of law.
…
53. A review of “questions of law” without seeking to impugn the integrity of the Award by suggested error would be contrary to [the object of Pt IIB of the Act] and mischievous….
(Braddon, as per the original)
A critical feature of all forms of challenges to final determinations in this Court is the need to identify error. Without error, there can be no intervention on appeal. This principle derives from what was said by the High Court in Allesch v Maunz (2000) 203 CLR 172 (“Allesch v Maunz”), that:
23.For present purposes, the critical difference between an appeal by way of rehearing and a hearing de novo is that, in the former case, the powers of the appellate court are exercisable only where the appellant can demonstrate that, having regard to all the evidence now before the appellate court, the order that is the subject of the appeal is the result of some legal, factual or discretionary error, whereas, in the latter case, those powers may be exercised regardless of error. At least that is so unless, in the case of an appeal by way of rehearing, there is some statutory provision which indicates that the powers may be exercised whether or not there was error at first instance. And the critical distinction, for present purposes, between an appeal by way of rehearing and an appeal in the strict sense is that, unless the matter is remitted for rehearing, a court hearing an appeal in the strict sense can only give the decision which should have been given at first instance whereas, on an appeal by way of rehearing, an appellate court can substitute its own decision based on the facts and the law as they then stand.
(Emphasis added, footnotes omitted)
The High Court’s decision in Allesch v Maunz arose from a construction of (what were then) s 93A and s 94 of the Act. What was s 94(2) of the Act is now broadly embodied in s 36 of the FCFCOA Act.
There is a consistency between the powers of a Court enlivened upon the hearing of a review set out in s 13(J)(2)(b), being to “make such decrees as [it] thinks appropriate, including a decree affirming, reversing or varying the award” and those powers afforded to the Federal Circuit and Family Court of Australia (Division 1) exercising its appellate jurisdiction to “affirm, reverse or vary the judgment appealed from” (formerly s 94 of the Act, and now s 36 of the FCFCOA Act). In both instances, the Court is empowered, if error is established, to substitute its own decision for that of the primary decision maker.
For the reasons above and those that follow, I am satisfied that the nature of enquiry to be undertaken by a court in considering an application to review an arbitral award is identical to that undertaken by the Court exercising appellate jurisdiction in accordance with the Act in considering an appeal from an order of a court.
This conclusion is buttressed by the following observations:
(a)There exists parallels in the legislative pathways as identified above, between s 13J of the Act and the appellate process, and s 13K of the Act and the processes for setting aside orders pursuant to s 79A and s 90SN of the Act.
(b)Undue significance should not be placed on the use of the word ‘review’ as opposed to ‘appeal’ in s 13J of the Act. Elsewhere in the Act, ‘appeal’ is used to describe the challenge of a decree, judgment or order of a court to a superior court exercising appellate jurisdiction. Section 26 of the FCFCOA confirms that an appeal lies to the Federal Circuit and Family Court of Australia (Division 1) from various kinds of judgments of a court. Plainly, an award is not a ‘decree’ or ‘judgment’ as contemplated by the FCFCOA Act in that it is not made by a court. The use of the word ‘review’ in the context of s 13J of the Act is therefore unsurprising.
(c)Similarly, unwarranted concern should not be placed on the use of the phrase “question of law” in the section. This phrase has, in this context and in others, been apt to mislead. Briefly stated, the use of the phrase ‘question of law’ in s 13J of the Act does not import some other unidentified standard of review, not used anywhere else in the Act nor in other contexts (for example, the judicial review of administrative decisions under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth)) as was seemingly envisaged in Paviello at [19]. It does not excuse a court of the need to establish error. It does not require the parties to specifically identify in the form of ‘questions’ what the Court ought to consider upon review. Grounds, as ordinarily understood in an appellate context, are sufficient. In my view, the inclusion of the phrase does little more than to confirm that a court on review of an award must not engage in the fact finding enquiry afresh, as it would if were conducting a de novo hearing.
I accept my conclusion is contrary to the gravamen of the reasons of Wilson J in Paviello and Griffiths. In those circumstances, this issue may be an appropriate matter for consideration by the Full Court or for further legislative guidance (including by way of clarifications to the Act, the Rules or the Regulations).
Conclusion
Having regard to the above reasoning, I conclude that a ‘review’ of an arbitral award as contemplated by s 13J of the Act ought to be:
(a)Conducted in accordance with the procedures for conducting appeals, as set out in ch 13 of the Rules; and
(b)Determined consistently with established appellate principles.
Rule 13.03(1) requires that a Notice of Appeal be filed within 28 days from the date of the order appealed from was made. Applying this standard, the wife had 28 days to file her application for review from either:
(a)The date of the award (11 April 2023); or
(b)The date of the registration of the award (12 May 2023).
As has been observed, under the current legislative regime it is the process of registering the award that enlivens its treatment as an order of the Court: until it is registered, the award is not enforceable in this Court using the procedures otherwise available for enforcement of court orders. It would, for example, be open for parties who are each dissatisfied with an award to refrain from registering the award or to file consent orders in terms different to the award. There would be no need for a litigant to apply to a court to review an award, if the award was not yet enforceable. Hence, it is appropriate that the time limit within which an application for review must be filed commence from the date of registration.
Even if I am wrong about my conclusion as to the nature of a s 13J review, or as to application of the Rules to the filing of an application for review, I am satisfied that a 28 day time limit for filing was appropriate and reasonable, having regard to the following:
(a)It would be counterintuitive to the principle of finality and absurd if it were held that the legislation made no provision for a time limit on the filing of an application to review an award, so that such application could be initiated at any time after the award issued (including many years in the future). Again, this may be an appropriate matter for consideration by the Full Court, or for further legislative guidance.
(b)Each of the husband and wife proceeded in this matter as if a ‘review’ of an award and an ‘appeal’ from an order were one and the same. They at times used the two phrases interchangeably.
(c)In prosecuting and resisting the application for stay, each of the parties relied upon High Court authority relevant to stays of court orders pending an appeal.
(d)The husband and wife each conceded that 28 days was an appropriate limit on the time in which the wife ought to have filed her application to review the award after it was registered.
The wife’s Application in an Arbitration was sent to the Court within 27 days of the date of the award being registered, and hence was filed in time. Again, even if I am wrong about this conclusion, it was agreed during the hearing before me that insofar as is necessary, the time for the wife to file and serve her Application in an Arbitration would be extended to 15 July 2023.
THE STAY APPLICATION
The relevant law
The principles applicable to a stay in financial proceedings where an order is made by the Court are well settled, and were referred to by each of the parties in their Case Outlines. The enquiry is directed to whether circumstances exist that warrant the exercise of discretion to depart from the presumption that a party is entitled to the fruits of the judgment, and to assume that such judgment is correct (Jennings Construction Limited v Burgundy Royale Investments Pty Limited (1986) 161 CLR 681 (“Burgundy Royale”)).
Circumstances which may justify a stay of an award pending the outcome of a review include the need to prevent the review from being rendered nugatory or when there is a real risk it will not be possible for the prospectively successful applicant to a review to be restored substantially to his or her former position if the award is executed (Federal Commissioner of Taxation v Myer Emporium Ltd (No 1) (1986) 160 CLR 220 at 222–223).
However, the Court should also consider the prospects of the appeal (or review) and where the balance of convenience lies between the parties (Burgundy Royale at 685). Since the award was discretionary in nature, it should be presumed to be correct (Australian Coal and Shale Employees’ Federation v The Commonwealth (1953) 94 CLR 621 at 627).
The wife accepted that she bears the onus to establish that the circumstances warrant a departure from the general rule that an award is presumed correct and enforceable upon its registration, although she is not required to establish that those circumstances are ‘special’ or ‘exceptional’.
Consideration
A consideration of the strength of the wife’s application for review of the award, for the reasons given above, involves an assessment of her eight “grounds of review” (as contained in Exhibit 3) against established appellate principles (including those set out by the High Court in House v The King (1936) 55 CLR 499 (‘House v The King’).
Ground 1 asserts a denial of procedural fairness by the arbitrator’s refusal to grant an adjournment (as recorded in [16]–[18] above). In support of this ground, the wife’s primary affidavit records the following:
13. The Application for Adjournment was refused at approximately 11:30 am. [The wife’s counsel] made a further Application for an adjournment to 9:30 am the following morning which was granted. I was overwhelmed by the process. I was unable to focus on [the husband’s] Affidavit or any of the supporting Affidavits. I had completely lost any confidence in the process
14. I was extremely concerned about cross-examination, I lacked confidence. I was unable to read [the husband’s] Affidavit material during the period of the adjournment due to my feelings of being overwhelmed.
15. I am of the view that I was denied procedural fairness and in such circumstances I appeal the Arbitrator's award.
The affidavit of the wife’s counsel further records:
20. I asked [the arbitrator] to commence the hearing on the second day which was acceded to. Thus the matter was adjourned to 9:30am on 23 March 2023. I formed the view that I could not read the whole of the material and have never read it all. I doubt [the wife] read any of it.
21. It was impossible due to the time restraints to take [the wife] through the material. I decided not to even try. In any event I could not prepare in the short time available and take her through the material. As such, I did not have her instructions in relation to all of the volume of material that had been served. The fact that I knew the issues did not make up for the fact that I could not read nor take instructions with respect to the material that had been served.
22. I am of the view that [the wife] was placed in an unfair and invidious position. [The wife] was cross-examined when she had not been taken through the Affidavits and not been able to absorb, contemplate and give proper consideration and provide comprehensive instructions.
The adjournment reasons (see [16] above) record the consideration given by the arbitrator to:
(a)The fact that each of the overarching purpose of the Rules and the FCFCOA Act to facilitate the resolution of family law disputes according to law, as quickly, inexpensively and efficiently as possible (at [20]);
(b)The expectation of the Court that awards in matters referred to arbitration by the Court be provided within six months of the referral (at [22]);
(c)The consent that each of the husband and wife had given to the other to delay filing their affidavits, despite the arbitrator’s directions for such filing to occur in advance of the hearing (at [33]–[36]); and
(d)The wife having time over the two days of the hearing to consider the husband’s fresh material (at [37]).
The husband contends that the prospects of Ground 1 being made out are poor, having regard to the arbitrator’s reasons above. He further contends that a submission that the wife suffered prejudice by the refusal to adjourn could not be maintained in circumstances where:
(a)The late-filed material subject of the wife’s complaints comprised only 19 pages of substantive evidence, and of those pages, much of the evidence was a reproduction of material previously filed by the husband in June 2022. Exhibit 5 in the hearing before me was a marked up version of the 19-page affidavit relied upon by the husband at the arbitration, indicating the not substantial differences between it and the husband’s June 2022 affidavit.
(b)Contrary to the wife’s assertions, the schedules created pursuant to s 50 of the Evidence Act 1995 (Cth) which formed part of the husband’s evidence at the arbitration had not taken the wife by surprise, having regard to the earlier correspondence between their solicitors, and the fact that the wife was provided with marked up source documents supporting the schedules. The source documents were contended to be either the wife’s own documents or documents previously disclosed by the husband.
(c)The reality was that the wife’s adjournment application was successful in part, given the hearing did not commence until the second day (24 March 2023). No further application for adjournment was made by the wife when the hearing recommenced.
(d)The ‘fresh’ evidence relied upon by the husband was not significant, such that the wife would have been able to adequately review and prepare to respond during the period of the adjournment on 23 March 2023.
The husband further identified that the wife’s complaint as to his late-filing of evidence was made somewhat disingenuously, given she filed and served her own evidence after him. The husband’s observations are seemingly supported by the fact that the wife did not object to him relying on his affidavit, nor the schedules which were admitted into evidence.
Procedural fairness requires each party to be given an adequate opportunity to be heard, and to present their cases (Kioa v West (1985) 159 CLR 550 at 582). However, it is only the opportunity to present evidence and argument which the interests of justice requires, not the actuality of it. Thus where a party has had a sufficient opportunity to put forward his or her case, it may be necessary for the court to make a decision for the sake of doing justice to the other party and to other litigants (Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [94]). Without determining the wife’s review application, it is unclear, having regard to the timeline set out above and the evidence before me, how the wife will establish that she was deprived of an opportunity to be heard and present her case, or that she otherwise suffered procedural unfairness.
Ground 2 alleges error in the arbitrator “relying upon extraneous and irrelevant considerations” but does not particularise those considerations. Ground 4 complains of the arbitrator taking into account “irrelevant matters” in his assessment of the parties’ contributions. The two identified considerations seem, prima facie, relevant to the task undertaken by the arbitrator. It is difficult, on the material identified to date by the wife, to foresee that these grounds will have reasonable prospects of success.
Grounds 6 and 7 challenge factual findings made by the arbitrator. To establish these grounds, the wife will be required to demonstrate that the impugned findings were not reasonably open on the evidence in the case. They will not be reversed merely because the judge hearing the review would not have made the same findings. The husband contended that those findings were open on the evidence before the arbitrator.
Grounds 3, 5 and 8 assert an error of the kind identified in the fourth limb of House v The King at 505, being that the arbitrator failed to properly exercise his discretion such that the award was “unreasonable or plainly unjust”. The weight afforded to particular considerations are quintessentially matters for the decision maker, such that challenges to weight face a high bar (Norbis v Norbis (1986) 161 CLR 513; Gronow v Gronow (1979) 144 CLR 513).
Whilst I am doubtful about the merit of many of the grounds as currently identified, it cannot be contended that the review is completely devoid of merit.
I am further required to weigh the balance of convenience and the competing rights of the parties, to determine whether a stay is appropriate and if so, on what terms it should be made to ensure fairness to both parties. The wife strongly submitted that the balance of convenience favoured the granting of the stay. This was resisted by the husband, who submitted that the balance of convenience and the competing rights of the parties supported its refusal.
The wife’s application for a stay is premised on a contention that if she is required to vacate the Suburb C property prior to the determination of the review of the award (implicitly in her favour), she will suffer “significant hardship and distress” (paragraph 6 of her supplementary affidavit). She gives evidence that:
(a)The parties’ child, X, lives primarily with her and attends childcare nearby the Suburb C property, and that her child from a previous relationship, G, who also lives with the wife, attends primary school nearby;
(b)G’s father lives in close vicinity to Suburb C;
(c)The Suburb E property, being wholly owned by the wife, is tenanted. It was the wife’s evidence that she “will need to provide a [three] month notice to existing tenants before it can be vacated”, and that she may been required to take legal action to enforce vacation. Those opinions were made absent evidence, and their foundation was opaque. The documents tendered by the husband (Exhibit 7) suggest the property is subject to a week-to-week tenancy;
(d)The Suburb E property is a significant distance away from X’s day care, G’s primary school, and the wife’s place of employment.
She further said:
7.8. It is my intention to continue residing in the [Suburb C] area as moving away will make it extremely difficult for me to fulfil my current parenting arrangements to the best of my ability. It will also cause significant distress to the children in my care.
I accept that the wife has a reasonable desire to remain living in the Suburb C area. That said, her evidence did not explain why she needed to continue living in the Suburb C property. There was no evidence that the wife has sought out alternate accommodation for herself, X and G, be that a rental property in the Suburb C area or otherwise. This was an express factor considered by the arbitrator, who recorded in his reasons for the award:
153. The wife currently has no housing costs but she will vacate the former matrimonial home as a consequence of this Award. I infer she will need to remain living in the same region as at present by reason of the parenting and educational arrangement for [G] and [X], and there appears no prospect she can secure rent-free or low cost accommodation.
…
169. The wife shall vacate when she receives the whole of her payment from the husband and no earlier, if necessary by way of sale of the [Suburb C] properly. The Award has been framed so that the earliest she is required to vacate is in 6 weeks time, to allow her a reasonable amount of time in the rental market to find suitable accommodation for herself, [X] and [G].
(As per the original)
The husband puts into issue the prejudice asserted by the wife should she be required to vacate the Suburb C property. It was his submission that:
(a)The wife has capacity to give notice to the current tenants living in the Suburb E property. Even if it were accepted that she was required to give three months’ notice to the current tenants, she could have done so when the award issued on 11 April 2023 and has not. In any event, he submits that the notice the wife is required to give the current tenants is significantly less than what she asserts; and
(b)Arising from his compliance with the award, the wife has the sum of $367,000 in her possession, and therefore has capacity to rent in the Suburb C area.
The wife has been on notice as to her need to vacate the Suburb C property since the award was issued on 11 April 2023 (two and a half months ago). As recorded, she did not seek at the arbitration to retain the Suburb C property, so the need to find alternate accommodate has been on her horizon for some time. She has had the financial capacity to obtain rental accommodation since at least 25 April 2023, when the husband made the first $50,000 payment pursuant to paragraph 1.1 of the award. The wife’s failure to do so is entirely a matter within her control.
The tenor of the wife’s evidence and submissions was that the primary reason for her failure to find alternate accommodation (and it would appear, for pursuing a review of the award) is her preference to purchase a property rather than to rent. Counsel for the wife submitted that a determination of her application for review would be expected in two to three months after the review hearing. In the circumstances, this significantly extends the delay in implementation of the award. The wife’s preference is not a reasonable foundation for denying the husband the fruits of the award and to the presumption as to its correctness, to which he is entitled. These are considerations that militate against the relief sought by the wife.
Conversely, it was submitted on behalf of the husband that should he be continued to be denied the fruits of the award, he will suffer real prejudice in that his current circumstances are as follows:
(a)By reason of his compliance with the award, the loan repayments he is required to make on the Suburb C property have increased;
(b)By way of the orders made on 16 June 2023, X lives with him on six nights per fortnight in addition to half of each school holiday;
(c)His child from a previous relationship, J, also spends substantial and significant time with him; and
(d)He presently lives in his sister’s two-bedroom apartment and pays board, a situation which is increasingly untenable given his increased care of X and the fact that he and his sister both work from home.
I accept the husband’s evidence for the purpose of this determination. No probative submission was made by the wife directed to the rights of the husband to enjoy the fruits of the agreed arbitration process.
Accepting that the wife’s review application will likely be determined expeditiously and hence the stay will be only short-term, I nonetheless consider that the balance of convenience does not favour a stay. I place particular weight on the fact that the wife has otherwise benefited from the implementation of the award and the husband has only suffered detriment from it (without having the benefit of occupation of the Suburb C property). As recorded above, the wife delayed in filing her application for review until after the husband had complied fully with his obligations under the award, including meeting the full payment required under paragraph 1 of the award, and refinancing the Suburb C property so that the liability secured on the property was in his sole name. There is some mischief the wife notifying the husband of her intention to challenge the award on the same day he made the final payment of $317,000.
It is a weighty consideration that the wife’s application to review the award will not be rendered nugatory if the stay order is not made. As recorded above, the wife seeks on review that the Court vary the award so that she will receive an additional adjusting payment of $649,814. She agrees the husband should retain the Suburb C property, and concedes that she will vacate it within 14 days of receiving any further funds from the husband.
CONCLUSION
Balancing each of the above factors, I am not persuaded to grant the wife’s stay application and thereby deprive the husband of the fruits of the award. Paragraphs 1 and 4 of her Application in an Arbitration are dismissed.
The husband sought that the wife vacate the Suburb C property by 5.00 pm on 7 July 2023, and that he thereafter have exclusive occupation of the property. Given my determination above, such an order enforcing paragraph 4 is appropriate and will be made in the terms proposed by the husband. The costs of the dismissed application for a stay and the application for enforcement shall be reserved to the review hearing.
I certify that the preceding seventy-eight (78) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 27 June 2023
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