Nellie & Nellie (No 2)
[2024] FedCFamC1F 198
•26 March 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Nellie & Nellie (No 2) [2024] FedCFamC1F 198
File number: SYC 8520 of 2022 Judgment of: CAMPTON J Date of judgment: 26 March 2024 Catchwords: FAMILY LAW – ARBITRATION – APPLICATION FOR REVIEW OF A REGISTERED ARBITRAL AWARD – Where the husband seeks to review the registered arbitral award pursuant to s 13J of the Family Law Act 1975 (Cth) – Where the arbitrator made a minor mathematical error – Where the husband’s complaints on review do not in themselves raise questions of law – Construction of questions of law as to whether the arbitrator gave any reasons or adequate reasons, whether an inference is available on the evidence, and as to whether a s 75(2) factor was taken into account – Application dismissed. Legislation: Family Law Act 1975 (Cth) Pt IIIB, ss 13E, 13H, 13J, 75, and 79
Federal Circuit and Family Court of Australia 2021 (Cth) ss 25 and 149
Cases cited: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321; [1990] HCA 33
Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148
Burke & Burke (1981) FLC 91-055; [1981] FamCA 44
CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 67
Crescent Petroleum Company International Limited and Crescent Gas Corporation v. National Iranian Oil Company (PCA No. 2009-20)
De Winter and De Winter (1979) FLC 90-605
Finelvet AG v Vinava Shipping Co Ltd (The ‘Chrysalis’) [1983] 1 WLR 1469
Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63
Hedlund & Hedlund (2021) 64 Fam LR 458; [2021] FedCFamC1A 84
Housing Commission NSW v Tatmar Pastoral Co. Pty Ltd (1983) 54 ALR 155
Keaty & Swann [2023] FedCFamC1F 178
Lane & Nichols [2016] FamCAFC 234
McLaughlin & McLaughlin [2023] FedCFamC2F 1160
Nellie & Nellie [2023] FedCFamC1F 1050
Nevins & Urwin (2022) FLC 94-084; [2022] FedCFamC1A 57
Pollardv RRR Corporation Pty Ltd [2009] NSWCA 110
Simmonds v Gammell [2016] EWHC 2515 (Comm)
Sun Alliance Insurance Ltd v Massoud [1989] VR 8
TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 533; [2013] HCA 5
Vida & Vida [2023] FedCFamC1A 175
Westport Insurance Corporation v Gordian Runoff Ltd [2011] 244 CLR 239; [2011] HCA 37
Wright & Rebane (2021) 64 Fam LR 287; [2021] FedCFamC1F 154
Yesodei Hatorah College Inc v The Trustees of the Elwood Talmud Torah Congregation (2011) 38 VR 394; [2011] VSC 622
Division: Division 1 First Instance Number of paragraphs: 59 Date of hearing: 21 March 2024 Place: Sydney Counsel for the Applicant: Mr Hodgson Counsel for the Respondent: Ms Tabbernor Solicitor for the Respondent: Bay Legal ORDERS
SYC 8520 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR NELLIE
Applicant
AND: MS NELLIE
Respondent
ORDER MADE BY:
CAMPTON J
DATE OF ORDER:
26 MARCH 2024
THE COURT ORDERS THAT:
1.Paragraph 1(d) of the arbitral award made 8 November 2023 and registered in this Court on 8 December 2023 be amended to delete “$940,000.00 to the Applicant less any and all interim property settlement sums already paid to him in these proceedings, being $200,000” and inserting in lieu thereof “$768,256 to the Applicant”.
2.The Response to an Application in a Proceeding of the husband filed 8 November 2023, as amended by way of Exhibit 1, otherwise be dismissed.
3.On or before 15 April 2024, the wife file and serve any minute of order as to costs, affidavit in support thereof, and written submissions of no more than three pages.
4.In the even the wife complies with Order 3, the husband on or before 29 April 2024, file and serve any minute of order as to costs, affidavit in support thereof, and written submissions of no greater than three pages.
5.The costs judgment is otherwise reserved to chambers.
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 Nellie & Nellie has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CAMPTON J:
By way of a Response to an Application in a Proceeding (agreed to constitute an Application in an Arbitration) filed 8 November 2023 Mr Nellie (“the husband”) sought to review a registered arbitral award pursuant to s 13J of the Family Law Act 1975 (Cth) (“the Act”). Ms Nellie (“the wife”) opposes the Application for Review.
For the reasons that follow the husband’s Response to an Application in a Proceeding, save for an amendment to paragraph 1(d), is dismissed, and orders will be made for the filing of material to progress any costs application.
BACKGROUND
By way of an Initiating Application filed 30 November 2022 in the Federal Circuit and Family Court of Australia (Division 2), the husband sought orders for the adjustment of property pursuant to s 79 of the Act. By way of a Response to Final Orders filed 2 February 2023, the wife sought different orders as to the adjustment of that property.
A consent order was made pursuant to s 13E of the Act on 7 August 2023 referring the Pt VIII matter to arbitration. On 9 August 2023, the matter was transferred to the Federal Circuit and Family Court of Australia (Division 1) and was placed in the National Arbitration List.
The arbitration was conducted on 25 and 26 September 2023 before Mr B (“the Arbitrator”). There was no transcript of the hearing before the Arbitrator. The Arbitral Award (“the Arbitral Award”) was dated and published on 8 November 2023 (Exhibit 2).
The husband filed an Application in a Proceeding on 8 November 2023, sealed by the Court on 16 November 2023, seeking, amongst other things, an order restraining the wife from seeking to register the Arbitral Award. On 21 November 2023, that Application in a Proceeding was withdrawn and dismissed on a without admissions basis. Other directions were made.
On 21 November 2023, the wife filed a Form 8 – Application to register the Arbitral Award. The husband initially opposed the registration of the Arbitral Award. The Arbitral Award was registered on 8 December 2023 and the husband’s objection to registration was dismissed. These reasons assume familiarity with that determination (see Nellie & Nellie [2023] FedCFamC1F 1050).
JURISDICTION – THE HUSBAND’S APPLICATION FOR REVIEW PURSUANT TO S 13J
Section 13J of the Act 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.
Both parties agreed that this Court has jurisdiction to hear and determine the husband’s application for review pursuant to s 13J of the Act. It is trite to record that parties cannot vest the Court by agreement with jurisdiction. The Court either has jurisdiction or it does not. I am satisfied that this Court has jurisdiction to hear and determine the husband’s Application for Review pursuant to s 13J of the Act for the following reasons.
In Vida & Vida [2023] FedCFamC1A 175, the Full Court considered a challenge to the determination of a primary judge of the Federal Circuit and Family Court of Australia (Division 1) in dismissing the review of an arbitral award pursuant to s 13J of the Act. Notwithstanding the provisions of s 13J as highlighted in bold in [8] above, the Full Court did not identify any circumstance that prevented the determination of the s 13J review by the Division 1 judge.
As recorded by Deputy Chief Justice McClelland in McLaughlin & McLaughlin [2023] FedCFamC2F 1160 (“McLaughlin”) there is “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…”.
The order made 9 August 2023 transferred the proceeding from the Federal Circuit and Family Court of Australia (Division 2) to this Court pursuant to s 149 of the Federal Circuit and Family Court of Australia 2021 (Cth) (“the FCFCOA Act”). On 8 December 2023, the Arbitral Award was registered in this Court pursuant to s 13H of the Act. This reasoning as to the jurisdiction of the court in this matter resonates a consistency with that as identified by the Full Court in Nevins & Urwin (2022) FLC 94-084 as to s 25 of the FCFCOA Act:
20From 1 September 2021, the FCFCA Act substituted the original jurisdiction of Division 1 in these terms:
25 Original jurisdiction
(1)The Federal Circuit and Family Court of Australia (Division 1) has original jurisdiction:
(a)if a matter, being the subject of a family law or child support proceeding, is transferred to the Court by the Court under section 51—as set out in paragraphs 132(1)(a), (b), (c) and (d); or
(b)if a matter, being the subject of a family law or child support proceeding, is transferred to the Court by the Federal Circuit and Family Court of Australia (Division 2) under section 149—as set out in paragraphs 132(1)(a), (b), (c) and (d); or
(c)as is conferred on the Court, or in respect of which proceedings may be instituted in the Court, by any other Act.
…
21That provision is supplemented by two others: one which prohibits the commencement of family law and child support proceedings within the original jurisdiction of Division 1 (s 50) and another which establishes the exclusive original jurisdiction of Division 2 in those causes of action (s 132).
22It follows that, aside from legacy cases which are in question here, the original jurisdiction of Division 1 is now entirely dependent upon the transfer to it of causes of action validly before Division 2 (pursuant to either s 51 or s 149).
THE REVIEW AS PROSECUTED BY THE HUSBAND
In his Amended Response to an Application in a Proceeding dated 14 March 2024 (Exhibit 1), the husband purported to pose the question or questions of law which, if decided in his favour upon review, would result in an order setting aside or varying the registered Arbitral Award, as follows:
1.That pursuant to the provisions of Section 13J of the Act, that the Registered Arbitral Award of [Mr B] (the Arbitrator) be reviewed and set aside upon the basis of the questions of law enumerated in paragraphs 2 to 6 herein.
2.That the Arbitrator was in error in law in failing to provide any or adequate reasons upon determining that the Husband was entitled to 20% of the net asset pool of the parties available for distribution (being an amount of $4,956,398) and calculating that 20% of such amount was equivalent to $940,000, whereas 20% of such amount is in fact an amount of $991,279.
3. That the Arbitrator was in error in law in failing to provide any or adequate reasons in failing to consider the unchallenged evidence of some nine (9) third‑party witnesses as to the contributions which the Husband had made through his physical endeavours to the renovation and improvements of properties owned by the parties, and preferring the evidence of the Wife as to the extent of such contributions, and substantially disregarding such contributions because the Husband was not a qualified tradesperson.
4.That the Arbitrator was in error in law in failing to provide any or adequate reasons for his determination that after a period of cohabitation of some 34 years, that the parties respective contributions should favour the Wife as to 78% and the Husband as to 22%.
5.That the Arbitrator was in error in law in determining that as the Husband could not satisfactorily account for the expenditure of those monies received by him by way of partial property settlement after the time of separation (a total amount of $200,000), that this would lead to a strong inference that he had lost money gambling during cohabitation, as had been asserted by the Wife.
6.That the Arbitrator was in error in law in his determination of a further adjustment of 2% in favour of the Wife, to reflect Section 75(2) factors by failing to have regard to and consider all of those relevant factors, which if properly considered, may have led to an adjustment in favour of the Husband or alternatively counterbalanced the adjustment he made in favour of the Wife.
7.That these proceedings be remitted for hearing before a Justice of the Federal Circuit and Family Court at Sydney.
8. That the Wife pay the Husband’s costs of and incidental to these proceedings.
The s 13J review generally
The head of justiciable subject matter of this s 13J review is confined to questions of law. The scheme of Part IIIB of the Act is to hold the parties to their agreement to accept factual findings by the arbitrators (see Westport Insurance Corporation v Gordian Runoff Ltd [2011] 244 CLR 239 (“Westport Insurance”)). The husband’s complaints on review as to factual findings made by the arbitrator have relevance only to a question of law (see Keaty & Swann [2023] FedCFamC1F 178; Westport Insurance at [27]). As recorded by McClelland DCJ in McLaughlin at [53]:
53As 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”.
(Footnotes omitted)
A review of an arbitrator’s award is not to be conducted as a merits review (Yesodei Hatorah College Inc v The Trustees of the Elwood Talmud Torah Congregation (2011) 38 VR 394 (“Yesodei”) at [12]).
The distinction between errors of fact and errors of law is not simple and can be deceptive, especially when it is suggested that an error of law arises as the result of the failure by an arbitrator to consider, or properly consider, relevant admissible evidence.
The husband constructed appellate grounds in Exhibit 1. The subject matter of the questions of law to be posed will be fashioned and addressed from the appellate grounds in Exhibit 1.
Question 2
The Arbitrator found at paragraph 64 of the Arbitral Award that the total property of the parties available for adjustment was $4,956,398. His determination at paragraph 147 concluded that the husband ought to receive 20 per cent of that property. This is an amount of $991,256 of the property of the parties. At paragraphs 1(d) of the determination and 154 of the Arbitral Award, the Arbitrator recorded that the husband would receive “$940,000 less $200,000 for the two interim property payments”, being the sum of $740,000 from the proceeds of sale of a real property at E Street, Suburb C (“the Suburb C property”).
The reasons for the Arbitral Award recorded that the husband had the benefit of the following property:
(a)Motor Vehicle 2 $18,000;
(b)Motor Vehicle 1 $28,000;
(c)Furniture $5,000;
(d)Proceeds of interim property distributions $172,000.
Totalling $223,000.
Hence, the adjusted sum payable to the husband from the proceeds of sale of the Suburb C property ought to have been $768,256 (less any reimbursement to the wife for her payment of the husband’s share of some expenses and fees identified in paragraph 1(c) of the determination). This was a mathematical error of $28,256 in a pool of property of the parties valued at $4,956,398, being 0.57 per cent of the property available for adjustment.
During the hearing of the review, the parties agreed that the mathematical error could be rectified by this Court by application of the slip rule (see Wright & Rebane (2021) 64 Fam LR 287). It is uncontroversial that minor arithmetic errors do not necessarily mean that the determination by way of an arbitral award cannot stand. Minor errors that are of no consequence do not give rise to error or generate questions of law that ought to disturb the determination by way of an arbitral award (see Burke & Burke (1981) FLC 91-055). It cannot be said that this minor mathematical error is material such as to impugn the determination (see De Winter and De Winter (1979) FLC 90-605).
Subject to determination of the remaining questions of law as posed by the husband, paragraph 1(d) of the determination of the Arbitrator as registered in this Court will be corrected so that the husband is to receive sum of $768,256.
Question 3
The husband contended that whether the Arbitrator provided any or adequate reasons for failing to consider the unchallenged evidence of “nine third-party witnesses”, was an error of law grounding the s 13J review. The focus of his challenge during submissions was the conclusion recorded at paragraph 135(e) of the reasons, being:
135. In my view, the contributions significantly favour the wife, for these reasons:
…
e)The Husband claims to have been involved in working on the renovations to the various properties owned by the parties as a non‑financial contribution. There is evidence that he did attend the properties and performed some work, but he does not have any trade qualifications and the vast bulk of the work was performed by builders and other tradesmen.
The husband encountered challenges in framing a question of law grounded from this complaint.
The wife conceded that a failure to provide adequate reasons could generally be constructed as a question of law, citing Westport Insurance.
The submissions of the husband on this question, being that the Arbitrator failed to consider, or properly consider, relevant admissible evidence, amounted to the question of law posed (see Yesodei).
As to the “nine third-party witnesses” relevant to this question, the reasons recorded:
65.The Husband’s evidence came from his affidavit of 21 September 2023 and the affidavits of [Mr F], [Mr G], [Mr H], [Mr J], [Mr K], [Mr L], [Mr M], [Mr N], [Mr P] and [Mr Q].
The husband’s affidavit evidence broadly was as to him undertaking a renovation to two properties in Suburb S including the kitchen, bathroom, and tiling of the floor area, painting inside and out, and paving the garden, with the assistance of two people including a brick layer. He also gave evidence as to undertaking work on the Suburb C property for six days a week until completion, including internal walls, removal of structures, work to the ceilings, stacking roof tiles, and building an internal laundry and back bathroom.
The evidence of the other witnesses was imprecise and broad, going to the husband being a “hard worker”, “hands on”, “in control of the job”, and “undertaking improvement and maintenance work”. The evidence of Mr J was more particularised as to the husband’s work on the Suburb C property including removing roof tiles, demolishing brick walls, managing waterproofing, planting, getting rid of waste, and managing the build.
The reasons record the consideration of this evidence in the following paragraphs of the Arbitral Award:
66.The Applicant Husband and [Mr J] gave oral evidence. The other deponents were not required for cross-examination.
…
72.He also deposed that, over the years, he worked on the various homes in which the parties lived, from painting them through to adding extensions, at [1 & 2 R Street, Suburb S] and [E Street, Suburb C], through to major renovations.
73.It was the Husband’s evidence that he was the one who did the vast bulk of the major renovation work on the properties at [E Street] and [T Street, Suburb C]. This evidence is disputed by the Wife.
…
77.He was asked about helping the builders when working on the properties which were being renovated. His evidence was that, although he does not have a trade, he was “pretty handy” with his hands.
…
80.[Mr J] was the only witness for the Applicant who was required for cross‑examination.
81.In his affidavit of 19 September 2023, [Mr J] deposed that he is 82 years old and has been a [tradesperson] all his life. He stated that he had worked with [Mr Nellie] at the properties at [E Street]and [T Street].
82.[Mr J] set out in paragraph 6 (i)-(xxiv) a list of all the work in which he recalled [Mr Nellie] had been involved at [T Street]. At paragraphs [7]-[10] of his affidavit he described the work that he did on the [E Street] property and the work that [the husband] did, which was removing the roof tiles, placing them on the scaffolding for re-use, and painting the exterior and interior of the second storey addition.
83.In cross-examination by Mr Gardiner, [Mr J] said that, on the jobs he was doing, [the husband] told him what he wanted done before he started work. He denied that when [the husband] was on site he caused conflict with the builders. He said that [the husband] did a lot of things on the site when he was not there, saying “He done the cleaning, he was a good worker”.
84.The affidavit evidence of the other deponents on behalf of the [the husband] did not, in my view, add anything significant to the [husband’s] case.
…
93.The [wife’s] evidence about the [husband’s] involvement in the renovations is set out in paragraph [22] of her affidavit. She deposed that the [husband] assisted the builder and workmen by carrying and removing items. She quoted [Mr J] as saying that they did not [sic] want the [husband] there and would prefer that he was not. [Mr J] did not support this contention in cross‑examination.
…
99.The [wife] stated that the [husband] suffered a mental health breakdown, which the [husband] disputes, in or about 2008. She asserted that after he was discharged from hospital he stopped attending the [T Street] property and “could barely function – he just sat and did not talk.”16 The [wife] asserted that she was essentially his carer at the time.
100.The [wife] deposed that from that time on she was not only responsible for homemaker duties but she also took over the daily management of the renovation and development work to the [T Street] property.
…
110.When it was put to her that the Husband was extensively involved in the renovation of [2 R Street], [the wife] said that he was there but he did not do the work, saying that he was there on a day to day basis because he had no work. She stated firmly that “[the husband] is not a builder.”
111.When asked about the renovation of the [T Street] property, [the wife] said that her intention for [T Street] was that [the husband] “would have something to do and would stop gambling”, She never envisaged the Husband building the property. It was to be renovated by [Mr B]. It was [the husband] who decided to put on a second storey.
112.The [wife] was firm in her denials of the [husband’s] claims of the work that he said he had done on the properties.
…
121.Whilst the Husband claimed to have done building work on the parties’ properties, there were builders there.
122.Further, Mr Gardiner submitted, the Wife paid for everything in relation to the mortgages; there is no evidence to the contrary.
123.The Husband ate, and eats, out three meals a day. He said he was doing everything of a non-financial nature, but this has not been substantiated.
…
130.[The husband’s solicitor] took issue with the [wife’s] contention that the Husband did not do any meaningful work on the renovation of the properties. He referred to the affidavits of [Mr H], [Mr F], [Mr K], [Mr Q] and [Mr N], all of which attested to the work [the husband] had done on the properties.
131.In particular, [Mr J] had given extensive evidence of the Husband’s involvement in the renovation work. I note that [Mr J’s] evidence was not shaken in cross-examination.
(Emphasis added)
This evidence, including that of the husband, the wife, Mr J, and the “nine third-party witnesses” led to the concluding determination of the Arbitrator at paragraph 135(e), as referred to above. Additionally, the balance of the concluding determination, not identified by the husband, was as follows:
135. In my view, the contributions significantly favour the wife, for these reasons:
…
f)The Husband did not involve himself in any renovation work from 2008 onwards.
136.Overall, the Wife impressed as a more credible witness than the Husband, and her account is to be preferred over that of the Husband.
The husband made no challenge as to the conclusions of the Arbitrator in paragraphs 135(f) and 136 of the reasons. These additional conclusions carry important context to the conclusions of the Arbitrator.
The adequacy of reasons will depend upon the circumstances of the case, but the authorities make it plain that reasons will be inadequate if justice is not seen to be done, or if a party or a court on review is unable to ascertain the process of reasoning undertaken (see Sun Alliance Insurance Ltd v Massoud [1989] VR 8 at [18]). It is not necessary for an arbitrator exercising a discretion of the type exercised in this matter to detail every fact which he found relevant or irrelevant, nor are they required to make an explicit finding on every disputed piece of evidence (Housing Commission NSW v Tatmar Pastoral Co. Pty Ltd (1983) 54 ALR 155).
In so far as the question of law posed by the husband as to the Arbitrator failing to provide any reasons on the subject matter subject of complaint, such challenge is unsustainable having regard to the paragraphs of the Arbitral Award as identified above.
In so far as the question of law posed by the husband as to the Arbitrator failing to consider the identified evidence, the requirement to “consider” does not mean every piece of evidence must be discussed, especially where the evidence leads to a particular conclusion. In Bennett and Bennett (1991) FLC 92-191 the Full Court said that the adequacy of the reasons will depend upon the circumstances of the case.
The reasons in this matter expose succinctly the various integers in the pathway leading to the determination of the points critical to the contest between the parties, including importantly, why the evidence of the wife was preferred over that of the husband, and why the case of the husband on the subject matter of the complaint was not wholly accepted. It was the task of the Arbitrator to evaluate, weigh, and determine the party’s various contentions on disputed factual matters. That is what he did.
The reality of the complaint is that after considering the evidence, the Arbitrator did not wholly accept the husband’s case as he constructed it, preferring a conclusion more favourable to the case of the wife. Such an outcome on the complained subject matter does not ground a question of law that, if determined in his favour on review, results in varying or setting aside the registered Arbitral Award.
Question 4
Although constructed as a question of law as to the Arbitrator failing to provide any reasons, the substance of the complaint of the husband as a question of law posed, being whether the Arbitrator arrived at a perverse conclusion in circumstances where a correct application of the law to the facts found would have led inevitably to one answer (see Simmonds v Gammell [2016] EWHC 2515 (Comm) (“Simmonds”) at [33]; Crescent Petroleum Company International Limited and Crescent Gas Corporation v. National Iranian Oil Company (PCA No. 2009-20) at [58] citing Finelvet AG v Vinava Shipping Co Ltd (The ‘Chrysalis’) [1983] 1 WLR 1469 at 1475D-E per Mustill J), or there is a manifest error on the face of the Arbitral Award. This question is whether the result could not be a proper exercise of discretion (Hedlund & Hedlund (2021) 64 Fam LR 458 (“Hedlund”) at [12]). Such challenge by way of this question faces a high bar, requiring the husband to effectively demonstrate that the outcome is plainly wrong or unreasonable (Gronow v Gronow (1979) 144 CLR 513).
The complaint of the husband was that the weight given by the Arbitrator to the contentions made by the parties during the arbitration was unreasonably or plainly wrong because his contentions were not given decisive weight. This complaint is no more than a submission that the Arbitrator erred by not accepting the husband’s case, and the question is an invitation to substitute my view for that of the Arbitrator. Different decision makers can quite properly achieve different outcomes on the same evidence (see CDJ v VAJ (1998) 197 CLR 172 at 218‑219).
To the extent that this question as posed by the husband constitutes a criticism “as to whether the consideration was “proper” as to weight, none of these qualifiers is a valid justification” for disturbance of the Arbitral Award “unless the result achieved is unreasonable or plainly unjust” (see Hedlund at [37]). The husband made no submission to ground foundation for such question as to the result. This part of the complaint here does not amount to a question of law that, if determined in the husband’s favour on review, results in varying or setting aside the registered Arbitral Award.
In so far as the question posed is directed to the adequacy of reasons, this question is dependent on the circumstances of the arbitration and should be seen in the context of the issues for determination. The determination by way of this Arbitral Award did not involve complex issues of fact or law. There was no resolution of expert evidence required. The reasons reflect the simplicity of the matter.
As identified by the wife during the hearing of the review, the husband did not challenge the determination of the Arbitrator at paragraph 136, as to the wife being a more credible witness of the husband and her account to be preferred over his. Nor did the husband challenge the findings by way of the overwhelming direct financial contributions made by the wife and the use and application of them as recorded in the reasons, including:
20.The Wife owned a property in [U Street, Suburb C], which she sold in 1998 or 1999 for [over $450,000], the net proceeds being about $300,000.
…
22.In […] 2002 the Wife inherited an equal share in her late mother’s estate, worth $2,400,000. Although there was a family provision claim, the Wife still ended up with an equal share of four apartments at [V Street, Suburb D] and a property at [W Street, Suburb C]. The four apartments at [Suburb D] were all leased.
23.In late 2004 or 2005 the Wife received the sum of $258,169 from a medical negligence claim, from which she netted about $122,000.
…
26.Between 2007 and 2010 three of the apartments in [V Street, Suburb D], were sold for a total of $1,348,000. The [remaining unit] was retained by the Wife and her sister.
…
29.In October the Wife sold the property at [W Street, Suburb C], for about [$3,400,000].
30.In […] 2012 the Wife’s sister commenced living with the parties. In […] 2013 she lent them the sum of $1,650,000 from her share of the sale proceeds of the [W Street] property on an interest free basis. This enabled the parties to pay off all outstanding loans.
31.The Wife’s sister died in […] 2017. The Wife inherited her sister’s entire estate, comprising funds of approximately $1,250,000.
It is fundamental that the reasons discharge the obligation to enable the parties to identify the basis of the decision and the extent to which their arguments have been understood and accepted, canvassing, and explaining why one case is preferred over another (see Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110).
The Arbitral Award discharges the obligation to enable the parties to identify the basis of the determination and to the extent which their arguments have been understood and accepted, explaining why one case is preferred over the other. In so far as this complaint poses a question of law as to inadequate reasons, it does not amount to a question that, if determined in the husband’s favour on review, results in varying or setting aside the registered Arbitral Award.
Question 5
The focus of the husband’s complaint is found at paragraph 135 of the reasons, being:
135. In my view, the contributions significantly favour the wife, for these reasons:
…
d)Whilst the parties dispute the amount of time and money the Husband has spent gambling, the Wife’s account is far more credible. The fact that the Husband received two interim property settlement payments, each of $100,000, in October 2022 and April 2023, but is unable to account for $172,000, leads to a strong inference that he has lost money gambling. His explanation that he eats out each day hardly accounts for the discrepancy in his funds.
The question posed is whether the inference can be drawn from the facts found or agreed, or whether the evidence reasonably admits of a different conclusion (McLaughlin at [58]; Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 353).
The husband’s construction of the conclusion of the Arbitrator was that the first sentence of the sub-paragraph that related to the husband’s post-separation financial conduct was inferred by the second sentence, and that the inference as to the loss of money by gambling occurred during cohabitation, hence the drawing of the inference was “impermissible”, being an improper basis for a finding of fact.
The husband’s complaint posed by this question fails on a reading of the reasons for the Arbitral Award as a whole. The finding in the first sentence of 135(d) of the Arbitral Award is anchored by the preference of the Arbitrator to the wife’s evidence as to the husband gambling during cohabitation at paragraphs 78 and 103. The findings in the second and third sentences of paragraph 135(d) are grounded from the findings at paragraphs 79 and 119 as to the husband’s use and application of funds provided by interim property distributions made to him during the proceeding.
The question posed by the husband is not available on review.
Question 6
This question, was whether there had been a correct application of the law, being the integers of s 75(2) of the Act, to the facts. The question of law posed was whether the arbitrator failed to give proper consideration to that section of the Act guiding the determination.
The subject matter of this complaint is the failure of the Arbitrator to consider s 79(4)(e), which in turn identifies s 75(2)(b) of the Act in the adjustments to the contribution findings. Those sections are as follows:
79 Alteration of property interests
…
(4) In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
…
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
…
75 Matters to be taken into consideration in relation to spousal maintenance
…
(2) The matters to be so taken into account are:
…
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
…
After assessing contributions as to 78 per cent in favour of the wife and 22 per cent to the husband, the Arbitral Award records:
Subsection 75(2) factors
139. There are no children of the relationship.
140. The Husband was born [in] 1945. He is therefore 78 years old.
141. The Wife was born [in] 1948. She is 75 years old.
142. The Husband gives no evidence of disability or ill health.
143.By comparison, the Wife deposes that she is in poor health. She had been diagnosed with [medical conditions], requiring regular surgery and hospitalisation. She suffers from [several medical conditions and symptoms].
144.As a result of her compromised immune system, the Wife is prone to infections, and has suffered from constant […] infections requiring visits to her GP.
145.The Wife has [had surgeries], causing restrictions, pain, discomfort and pain, requiring analgesics, sleep medication and injections every six months.
146.I am satisfied that a 2% adjustment in the Wife’s favour is appropriate for subsection 75(2) issues, which is the amount claimed by the Wife.
The reasons do not record any submission made on behalf of the husband during the arbitration as to what adjustment, if any, ought to be made to the contribution findings.
The husband prosecutes the review. He bears the onus to establish the relevant foundations to ground the question of law he poses. On the hearing of the review, the husband did not identify by way of transcript, affidavit evidence, or by way of the arbitrators’ notes, any submission he made as to the subject matter of complaint by way of this question. The material on review suggests this is a belated formulation of a question of law constructed by the husband. The husband did not identify evidence of a failure of Arbitrator to respond to, or engage with, a substantial and clearly articulated argument on this subject matter advocated by him during the arbitration hearing. Caution ought to be undertaken on review in circumstances where it is unknown if the subject matter of this complaint has simply not been addressed or has been overlooked. There is no suggestion that the husband did not have an adequate opportunity to make such submission as he considered appropriate at the arbitration as to any relevant s 79 consideration.
As to the justice and equity of the proposed determination, the Arbitrator recorded:
156.Again, I am required by s 79(2) of the Family Law Act to consider whether the proposed orders are just and equitable. I consider that they are. The Husband will receive a lump sum of money, which he should use to rehouse himself, if he can. The Wife will receive the bulk of the proceeds of sale of [E Street] and she will retain her interest in [V Street, Suburb D], which she inherited from her late mother. I understand she will use it as her home.
This paragraph of the Arbitral Award implicitly considers the import of s 75(2)(b) of the Act, leading to the conclusion that the question of law, being a failure to consider that section, as posed by the husband, to not be available on review.
If this conclusion is in error, the question becomes whether this answer, if achieved by the husband, is material to the ultimate decision and occasioned a “substantial miscarriage of justice” as found in Lane & Nichols [2016] FamCAFC 234. The approach reinforces the High Court’s reasoning that arbitral awards are an efficient means of resolving disputes with certainty and finality (TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 533 at [105]). The differential generated by way of the adjustment to the contribution finding is within a reasonable range of the s 79 discretion exercised by the Arbitrator and does not create a substantial miscarriage of justice. Therefore, I would not be satisfied that, even if this question is answered in the husband’s favour, that intervention on review is justified. The Arbitral Award would be affirmed.
CONCLUSION
For all the above reasons, the Application in an Arbitration, save the amendment to paragraph 1(d) of the determination in the registered Arbitral Award pursuant to the slip rule, will be dismissed.
As to costs, it was agreed at the conclusion of the hearing that if any party sought to make an application for costs, directions would be made as to a timetable for the filing any other evidence as to costs and written submissions, with costs then being reserved to be determined in chambers. Such orders will be made.
I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 26 March 2024
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