PALGROVE & PALGROVE - [2020] FCCA 846

FEDERAL CIRCUIT COURT OF AUSTRALIA

PALGROVE & PALGROVE

[2020] FCCA 846

Catchwords:
FAMILY LAW – Where proceedings were referred to arbitration – Application made to discharge the referral to arbitration – allegations of significant family violence – concerns with respect to parties being physically present at the same location – whether it is open to the parties, by consent or otherwise, to withdraw their prior consent to a referral to arbitration and return the matter to Court – is the dispute arbitrable – where public interest in the subject matter or determination of the dispute could render a dispute non-arbitrable – what should occur if the dispute is arbitrable – Order made for the arbitration to proceed by one or both parties attending by video.

Legislation:

Family Law Act 1975 (Cth), ss.13E, 10L

Family Law Regulations 1984 (Cth) r. 67E

Federal Circuit Court of Australia Act 1999 (Cth), ss.66 - 73

Family Law Rules 2004 (Cth), r.26B.34

Cases cited:

Fulham Football Club (1987) Ltd v Richards and another [2012] Ch. 333

Loomis & Pattison [2020] FCCA 345

Applicant:

MR PALGROVE

Respondent:

MS PALGROVE

File Number:

PAC 3736 of 2018

Judgment of:

Judge Harman

Hearing date:

27 March 2020

Date of Last Submission:

27 March 2020

Delivered at:

Parramatta

Delivered on:

27 March 2020

REPRESENTATION

Solicitors for the Applicant:

Mr Skouteris of Andresakis & Associates

Solicitors for the Respondent:

Mr Marando of Marando Solicitors

ORDERS

Pursuant to section 13F of the Family Law Act 1975 I DIRECT that the arbitration of these proceedings is to proceed:
(a)By one or both parties attending by video; and
(b)The parties not being required to be present in the same building or physical location
Note: It is a matter for the Arbitrator to determine whether one party and their counsel are physically present with the Arbitrator and the other attending remotely or whether both parties attend remotely (the latter being particularly attractive in light of the present pandemic).
Each of the parties is to do all things within their power to ensure that the arbitration can be rescheduled and proceed as soon as practicable.
Remove the Application in a Case from the list of cases awaiting hearing.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PARRAMATTA

PAC 3736 of 2018

MR PALGROVE

Applicant

And

MS PALGROVE

Respondent

REASONS FOR JUDGMENT

(As Corrected)

These proceedings come before the Court today with respect to an Application in a Case filed 13 December 2019.
The Application in the Case seeks relief in the following terms:
a)That leave be granted to serve short notice of this application;
b)That all orders made referring this matter for arbitration be discharged.
As would be apparent, in light of the limitations upon referral to arbitration, the substantive proceedings to which the matter relates are financial.
The parties to the proceedings are a husband and wife, the applicant and respondent respectively.
The proceedings were referred to arbitration, pursuant to section 13E of the Family Law Act 1975 (Cth), by Orders made 18 June 2019. The referral to arbitration was made, as the section requires, with the consent of the parties.
Since the referral to arbitration, the parties have diligently engaged in the selection of an arbitrator and have executed an arbitration agreement. The arbitration agreement is not presently before the Court, but nor need it be.
The Application in the Case seeks to discharge the referral to arbitration, substantially on the basis of concerns with respect to Ms Palgrove’s ability to be present in the same location as Mr Palgrove. That arises from allegations, which may or may not be disputed in the proceedings, that significant family violence has been visited upon Ms Palgrove by Mr Palgrove.
In support of that position, and as annexed to a Case Outline document prepared by counsel for the wife, are certain reports from medical practitioners. Concerningly, those reports refer to an admission to hospital of Ms Palgrove as a consequence of stress and distress that she experienced as a consequence of the behaviours alleged towards her by Mr Palgrove.
The treating medical practitioner for Ms Palgrove has been clear in indicating that, whilst Ms Palgrove has the ability and mental capacity to provide instructions, that:
In view of the severe instances of violence perpetrated on her in the past by her ex-partner[1] her mental state has become fragile and I would strongly recommend that any evidence she provides in Court be provided away from his presence.
[1] It is the allegation, not a finding of fact made by this Court. Nor is it intended to invalidate Ms Palgrove’s experience or dismiss her allegation. However, it must be made clear that the view advanced by the medical practitioner, that there have been severe instances of violence, are based on Ms Palgrove’s self-report not a concluded enquiry.
The Court must have great empathy for Ms Palgrove and the distress she is experiencing, irrespective of how that comes about.
There are a number of matters that must be addressed in dealing with the application before the Court. Firstly, I must give some consideration to what might be arbitrable in relation to proceedings. Secondly, whether it is open to the parties, by consent or otherwise, to withdraw their prior consent to a referral to arbitration and insist that the matter return to the Court. Thirdly, I must consider what should occur in response to the application if the dispute is arbitrable.

Arbitrability

Notwithstanding that the Family Law Act 1975 (supra) defines the categories of cases that are capable of being arbitrated (and it is not suggested that this case falls outside of those categories), there remains a broader consideration of whether arbitration is appropriate in any given case or, put another way, whether the dispute is arbitrable.
A good starting point from which to consider arbitrability is the English Court of Appeal decision in Fulham Football Club (1987) Ltd v Richards and another [2012] Ch. 333 in which Patten LJ stated [40]:
It is necessary to consider, in relation to the matters in dispute in each case, whether they engage third party rights or represent an attempt to delegate to arbitrators a matter of public interest which could not be determined within the limitations of a private contractual process.
What his Honour was referring to by reference to “private contractual processes” is the reality that arbitration is not, as the definition of the term with the Family Law Act 1975 (supra),[2] a judicial process. It is the parties, through their consent or contract, investing an independent third party with jurisdiction to determine their dispute in a binding fashion. Public interest in the subject matter of the dispute or in the determination of the dispute, whether as to outcome or process, could be argued to render a dispute non-arbitrable.
[2] Section 10L defines arbitration as “…a process (other than the judicial process) in which parties to a dispute present arguments and evidence to an arbitrator who makes a determination to resolve the dispute”.
In the absence of any settled precedent, at least in the field of family arbitration within Australia, (and noting the current limitations of arbitration to financial proceedings), it could be argued that disputes are not arbitrable if the dispute relates to or will involve a finding of fact relating to a matter in which there is a public interests such as:
a)The perpetration of fraud by a party (whether upon the other party or a third party such as the Office of State Revenue of ATO);[3]
b)Relief that will impact third parties;[4]
c)Allegations of criminal conduct. This may include allegations of family violence, whether prosecuted as a criminal offence or otherwise;
d)Cases involving significant allegations of family violence.[5]
[3] This is especially so as arbitration is a non-reportable and confidential process that may result in the fraud being concealed if the dispute is arbitrated. For duties of confidentiality relating to family arbitration see Judge Joe Harman ‘The Protection of Confidentiality in Australian Family Law’ (2020) 58(1) Family Court Review 126
[4] It is on this basis that section13E Family Law Act 1975 (Cth) arbitration is limited. However, if proceedings were within the parameters of what can be arbitrated but involved applications to bind third parties, then such third parties would need to be joined and would also need to consent to arbitration.
[5] This may arise in cases in which a Kennon& Kennon (1997) FLC 92-757 (“Kennon”)claim is being advanced or if there are concerns as to the safety of a party involved in arbitration given the availability or absence of physical security. For example, section102NA of the Family Law Act 1975 (Cth) (the prohibition on direct cross-examination) would not allow the appointment of a legal representative for arbitral as opposed to Court proceedings and, hence, an important public policy issue arise.
It must be observed that both parties are presently legally represented. If one party ceased to be represented then it may well dramatically impact the arbitrability of this dispute.
The issue that is raised is a desire to ensure that Ms Palgrove need not be present in the same physical space as Mr Palgrove for the purpose of any determination of this dispute, whether by judicial hearing or otherwise, as it is suggested that this would cause severe distress to Ms Palgrove. Again, I can only empathise with Ms Palgrove’s position which, irrespective of findings of fact that may ultimately be made, is real and, I accept, genuine.
It is suggested that Ms Palgrove was present for the previously scheduled and intended arbitration of the dispute and whilst present with her counsel, in a separate room but anticipating her presence within the same room, became distressed to a point of subsequently requiring medical treatment.
Clearly what should happen in this case, as will be discussed shortly, is for any determination of the matter, whether that determination is by a Judge or an arbitrator, to occur with a clear safety plan in place. That is an available, contractual option as between the parties, but of course requiring consent of all.
In light of what is raised, Ms Palgrove should not be required to be physically present in the same room or, ideally, not even in the same premises, as Mr Palgrove.
If the matter were heard and determined by the Court, this would be facilitated through the Court’s video facilities. The same arrangement is also able to be facilitated, by the Court or by an arbitrator, in a number of other ways which do not require physical presentation or static video. There are any number of readily available applications that enable it to be so, such that the parties need not be present at all in the same physical locality, nor the parties made aware of the location of each other.
Technology enables the Court or an arbitrator to proceed with one party and their counsel physically with them and the other remotely attending through video app or both attending remotely and by video. Indeed, hearings of that fashion, by the Court[6] or by arbitrators, have become necessary in light of the present COVID-19 pandemic. It is a mechanism well known to and used by Family Dispute Resolution Practitioners. If nothing else, the current COVID-19 pandemic is accelerating consideration of the use of such technologies.
[6] Part 6 Division 5 of the Federal Circuit Court of Australia Act 1999 (Cth) specifically permits the Federal Circuit Court to allow or direct appearance and the conduct of the Court’s business by video or audio links (ss.66-73).
It is and has, at all times, been open to the parties to negotiate such an arrangement as part of the arbitration agreement between they and the arbitrator.

Jurisdiction to facilitate arbitration

The application to the Court and the ability to direct or facilitate how the arbitration is to proceed is, I am satisfied, within the Court’s jurisdiction.
The Court is authorised to make orders facilitating arbitration. Those powers are found in section 13F of the Family Law Act 1975 (supra), regulation 67E of the Family Law Regulations 1984 (Cth) and rule 26B.34 of the Family Law Rules 2004 (Cth). Thus, whether video appearance is presently negotiated as part of the arbitration agreement or otherwise, I am satisfied the Court has a sufficient jurisdiction to meddle, as it were, in the arbitration process.
The arbitration process is best determined contractually and consensually between the parties and the arbitrators. However, I am satisfied that it is appropriate for the Court to be prescriptive as to process in a circumstance such as this.
It is not argued that the matter is, per se, not arbitrable, (although argument might be available in that regard). It is suggested that what is required is some clear and specific direction as to how the matter will proceed, whether through Court hearing or otherwise. That is an entirely sensible and appropriate position to adopt.
I propose to make an order, by reference to section 13F of the Family Law Act 1975 (supra), requiring that the arbitration be conducted by video conferencing facilities, such that the wife need not be present in the same physical locality as the husband.
That leaves open to the arbitrator, whose discretion I should interfere with as little as possible, to determine whether it is the wife who is physically present with him or the husband or whether neither is physically present and the entire matter is conducted by video conferencing. That is, after all, how hearings before this Court will need to be conducted in light of the current pandemic and the restrictions necessary to protect the health of all as a consequence.

Withdrawal of consent

It would seem that the parties are relatively agreed in their position that the referral to arbitration should be discharged and the parties, instead, referred to a conciliation conference. A conciliation conference, of course, is a facilitative rather than determinative mode of dispute resolution.[7]
[7] The parties were previously referred to Family Dispute Resolution by order 19 March, 2019. Whilst it is not suggested that facilitative modes of dispute resolution cannot and, in many cases, should not be invoked more than once, this matter is at a point where the parties have previously indicated that further facilitated dispute resolution was unlikely to assist. In any event, the parties are able to engage with facilitated dispute resolution without Court order (indeed, the appointed arbitrator is an experienced FDRP who might assist).
I do not intend to take that path, even though both parties consent.
As discussed in Loomis & Pattison [2020] FCCA 345 and the authorities referred to therein, the Court should be loath to interfere in the arbitration process, other than its facilitation and support once it is ordered. That is not to suggest that there are not circumstances where it is impossible or inappropriate for the Court to interfere. I am not, however, satisfied that this is such a case.
The outcome the parties desire to achieve can be achieved through the prescriptive order I have referred to. It was possible for it to be achieved, subject to the consent of the parties, as part of negotiation of the arbitration agreement.
It was not clear and apparent, at the time that the arbitration agreement was negotiated, that Ms Palgrove’s degree of distress would be at the level described and, I accept, as observed and commented upon by Ms Palgrove’s medical practitioners.
Whilst consent is purported to be withdrawn, I am not satisfied that I should simply accept that position and return the matter to the Court’s jurisdiction. There are a number of reasons for that. Firstly, the arbitrator is clearly seized of the matter. The arbitration has commenced. There was a contested application for adjournment of the arbitration, both parties and their counsel having presented for the purpose of the arbitration proceeding. The parties have already expended time, effort and funds in procuring that process and have commenced it.
It would be more cost effective for the arbitration to proceed on the basis proposed, by video, subject to the dispute remaining arbitrable and both parties being sufficiently supported in the process to feel safe.
Secondly, the delay that these parties will face, if the matter returns before the Court, is extreme. At present and as a consequence not only of response to the pandemic, but as a consequence of an underlying chronic absence of resourcing, this case could not and would not be heard until 2021 at the earliest, if even then. That disadvantage to the parties, when it can be cured through a prescriptive order as to how the arbitral process should proceed and thus that disadvantage avoided, should play some significant role in determining the issue.
I do not seek to comment upon whether any application involving an allegation of family violence, or a Kennon claim as they are often referred to,[8] should be considered as “non-arbitral”. I am certainly aware of cases within those categories that have, with the consent of the parties, been referred to and successfully proceeded to arbitration, notwithstanding such claims being pressed.
[8] Kennon & Kennon (1997) FLC 92-757 (“Kennon”)
There is certainly a public interest in ensuring that aberrant behaviour such as family violence is addressed and appropriately addressed through judicial process. Arbitration is private and results in a confidential determination and thus “privacy” as to findings of fact. Judicial process, on the other hand, is open, transparent and published (albeit in anonymised form using non-identifying pseudonyms).
In the context of this individual case, the evidence not yet tested and the arbitration ready to proceed, I am satisfied that the matter can be safely arbitrated with prescription as to process. That is particularly so as there is no suggestion that the Kennon claim was not crystallised and apparent before the parties each provided their consent for referral to arbitration.[9] Each party was legally represented and advised at the time the referral to arbitration was made. I am not satisfied that mutual consent to a discharge of the referral should dictate the outcome.
[9] The wife’s Response and Affidavit filed 30 October, 2018 clearly articulated a Kennon claim.

What should be done

As I have indicated, I am satisfied that the Court should use its powers to facilitate arbitration in a prescriptive fashion.
Certainly, the facilitation of arbitration would more commonly involve orders made in aid of the arbitration process, rather than seeking, in any way, to interfere in the conduct of the arbitration. Process is, after all, best left to the arbitrator and the parties to contractually negotiate.
In this case, it is unclear whether video appearance has been advanced as an option. It is no criticism of the parties if it has not. The immediate difficulty was addressed by application for adjournment and appropriately so. The adjournment was granted and appropriately so.
All are awaiting the determination of this Application in the Case to see where the matter will go. I am satisfied the matter should return to the arbitrator who is already seized of the case. However, for the integrity of the process and to ensure that justice is served, Ms Palgrove cannot and should not be required to be in the same locality as Mr Palgrove. The matter can, with free and readily available software, proceed by video conferencing in exactly the same way that it would before this Court and, accordingly, I am satisfied those orders are appropriate.

I am not, in any way, critical of the wife’s application. Far from it. It is an entirely appropriate application and the concerns that are raised in relation to Ms Palgrove are entirely valid. It is best that they are raised. There are important issues that require attention.
Orders are, accordingly, made as follows.

I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of Judge Harman

Date: 15 April 2020

CORRECTION

In paragraph 5 the date “18 June 2009” was changed to “18 June 2019”.