Pattison & Loomis
[2021] FamCAFC 41
•1 April 2021
FAMILY COURT OF AUSTRALIA
Pattison & Loomis [2021] FamCAFC 41
Appeal from: Loomis & Pattison [2020] FCCA 345 Appeal number(s): EAA 20 of 2020 File number(s): PAC 1065 of 2007 Judgment of: STRICKLAND, AINSLIE-WALLACE & RYAN JJ Date of judgment: 1 April 2021 Catchwords: FAMILY LAW – APPEAL – PROPERTY – ARBITRATION – Unequivocal consent required to validate the arbitration process pursuant to s 13E of the Family Law Act 1975 (Cth) – Where the appellant husband’s consent was conditional – Where the primary judge erred in dismissing the husband’s objection to the registration of the arbitration award – Appeal allowed – Costs certificates ordered. Legislation: Family Law Act 1975 (Cth) ss 13E, 79
Federal Proceedings (Costs) Act1981 (Cth) ss 6, 9
Cases cited: Loomis & Pattison [2019] FCCA 3887 Division: Appeal Division Number of paragraphs: 55 Date of hearing: 13 November 2020 Place: Sydney The Appellant: Litigant in person Counsel for the Respondent: Mr Givney Solicitor for the Respondent: Rafton Family Lawyers ORDERS
EAA 20 of 2020
PAC 1065 of 2007APPEAL DIVISION OF THE FAMILY COURT OF AUSTRALIA
BETWEEN: MR PATTISON
Appellant
AND: MS LOOMIS
Respondent
ORDER MADE BY:
STRICKLAND, AINSLIE-WALLACE & RYAN JJ
DATE OF ORDER:
1 APRIL 2021
THE COURT ORDERS THAT:
1.The appeal be allowed.
2.The orders made on 22 January 2020 be set aside.
3.Paragraph 4 of the order made on 19 March 2019 be set aside insofar as it referred the proceedings to arbitration pursuant to s 13E of the Family Law Act 1975 (Cth).
4.The Court grants to the appellant husband a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant husband in respect of the costs incurred by him in relation to the appeal.
5.The Court grants to the respondent wife a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent wife in respect of the costs incurred by her in relation to the appeal.
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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Pattison & Loomis has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
STRICKLAND, AINSLIE-WALLACE & RYAN JJ:
INTRODUCTION
This is an appeal brought by Mr Pattison (“the husband”) from orders made by a judge of the Federal Circuit Court of Australia on 22 January 2020. Ms Loomis (“the wife”) opposes the appeal.
The decision on appeal concerns the registration of an arbitration award of 15 November 2019, relating to property settlement proceedings between the parties (“the Award”). The wife had applied to the Federal Circuit Court of Australia for registration of the Award and the husband objected to that course.
The primary judge ordered that the Award be registered as if it were a decree of the Federal Circuit Court of Australia, dismissed the husband’s objection to the registration of the Award, dismissed all extant applications and responses, and made an order for costs in favour of the wife.
By his Notice of Appeal filed on 17 February 2020, the husband seeks orders, in effect, setting aside the registration of the Award, and the order for costs.
BACKGROUND
The husband was born in 1962.
The wife was born in 1956.
In about February 2000 the parties commenced to live together, and they married in mid-2001. In September 2006, the parties separated but resumed their relationship some time in 2010.
In March 2007, consent orders for property settlement were made in the Family Court of Australia.
On 8 April 2016, the parties separated again under the one roof, and physically separated in September 2017 when the husband vacated the former matrimonial home. In October 2017, a divorce order was made.
The wife commenced property settlement proceedings by Initiating Application filed on 13 September 2018.
On 4 October 2018, the husband filed a Response.
The proceedings came before the primary judge for the first time on 24 October 2018. His Honour made orders for disclosure, and the parties were directed to participate in family dispute resolution.
On 19 March 2019, the matter returned before the primary judge. The parties had failed to take advantage of the family dispute resolution opportunity as a result of an ongoing dispute regarding disclosure, and his Honour made the following relevant orders:
1.Discharge the order of 24 October 2018 requiring that the parties attend Family Dispute Resolution.
…
3.The wife shall, within seven days, provide to the husband:
a.a statement with respect to the wife’s Complete Access account covering and disclosing transactions for the period 3 – 14 August 2018 and;
b.copies of statements of the wife’s superannuation fund or funds covering the period October 2016 to February 2019.
4.Pursuant to section 13E of the Family Law Act 1975, the totality of proceedings between the parties pursuant to Part VIII/VIIIAB are referred to Arbitration to be conducted by an Arbitrator (being an arbitrator appearing upon the list of qualified arbitrators maintained by AIFLAM pursuant to Regulation 67B Family Law Regulations 1984) as agreed between the parties or failing agreement between the parties as to an Arbitrator within 14 days of the date of this order then the parties or either of them shall be at liberty to make application in writing to the President for the time being of AIFLAM requesting the appointment of an arbitrator.
…
The wife then applied to the President of the Australian Institute of Family Law Arbitrators and Mediators (“AIFLAM”) to nominate an arbitrator. Mr Edwards (“the Arbitrator”), an accredited arbitrator appearing on the list of AIFLAM arbitrators, was nominated.
The husband rejected that nomination and refused thereafter to participate in the arbitration.
On 9 May 2019, the husband provided an email to the wife’s solicitors and the Arbitrator confirming his refusal to participate in the arbitration.
On 31 May 2019, the Arbitrator advised the wife’s solicitors that the matter should be taken back before the primary judge for further directions in light of the husband’s rejection of him as the Arbitrator.
On 25 June 2019, the matter returned before the primary judge. The husband submitted that his consent to the proceedings being referred to arbitration was “conditional” and he rejected the appointment of the Arbitrator (at [52]).
The primary judge delivered ex tempore reasons for judgment, and made the following orders (Loomis & Pattison [2019] FCCA 3887 (“Loomis & Pattison”)):
1.That each of the parties shall do all acts and sign all necessary documentation to give effect to the terms of the orders made 19 March 2019 and in the event that either party refuses or neglects (within seven (7) days of a written request to do so) to sign any document necessary to give effect to the terms of the orders made 19 March 2019, a Registrar or Deputy Registrar of the Federal Circuit Court of Australia is hereby appointed, pursuant to s.106A of the Family Law Act 1975, to execute such documents on behalf of the defaulting party, and this order specifically authorises and directs execution of an arbitration agreement in accordance with the AIFLAM Arbitration Kit August 2016 on behalf of the Respondent husband, [the husband], should he fail or refuse to do so and in the event that the Applicant wife is able to demonstrate through correspondence forwarded to the husband, a request for execution that has been made and unanswered for a period of not less than seven (7) days.
2.Direct that the arbitrator appointed by the President of the Australian Institute of Family Law Arbitrators and Mediators, namely [the Arbitrator], proceed with arbitration of the referred proceedings in accordance with the standard AIFLAM Arbitral Agreement August 2006 (as executed on behalf of the husband), including, as the arbitral agreement provides, to proceed on an undefended basis should [the husband] fail to participate in pre arbitration conferences or the arbitration itself, and/or fail to file material or comply with any other direction made by the arbitrator.
…
On 9 July 2019, the wife’s solicitors provided the Arbitrator with a copy of the orders of the primary judge of 25 June 2019. Thereafter, the Arbitrator corresponded with the wife’s solicitors (with the husband copied into those correspondences) in respect of progressing the arbitration.
On 15 July 2019, at the request of the wife, a Registrar of the Federal Circuit Court of Australia executed the arbitration agreement on behalf of the husband.
On 23 July 2019, the Arbitrator conducted a preliminary telephone conference with the wife’s solicitor in attendance, but with no attendance by the husband. The Arbitrator made certain directions on 23 July 2019 for the purpose of progressing the arbitration, and adjourned the matter to a further conference to be held on 1 August 2019.
On 30 July 2019, the husband provided an email to the wife’s solicitors advising that he was currently overseas and unavailable to participate in the proceedings until mid-September 2019.
The conference of 1 August 2019 proceeded with the wife’s solicitor in attendance. The husband did not attend. The Arbitrator directed that the matter be listed for hearing at 9.30am on Friday 11 October 2019, and set a filing schedule for documents to be relied on by the parties in the hearing. The Arbitrator emailed these directions to the parties on 16 August 2019.
On 18 September 2019, the matter returned before the primary judge on application by the wife to address the ongoing difficulties in advancing the arbitration. The primary judge made orders providing for the arbitration to proceed on 11 October 2019, for the Arbitrator to proceed on an undefended basis should either party fail to attend, listed the matter for mention at 9.30am on 22 January 2020, and ordered costs in favour of the wife of $440.
On 11 October 2019, the arbitration proceeded undefended with only the wife in attendance, and the Arbitrator made an Award altering the parties’ property interests pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”).
On 20 November 2019, the wife filed an Application for Registration of Arbitration Award.
The husband objected to the registration of the Award by affidavit filed on 17 December 2019.
On 22 January 2020, the primary judge heard and determined the application and the husband’s objection. His Honour gave ex tempore reasons for judgment, and made the orders set out above.
THE APPEAL
Unfortunately the husband filed his Notice of Appeal without legal assistance, and his grounds of appeal are not precisely to the point.
In his first ground of appeal he raises issues as to the “arbitrator’s impartiality”, and the agreement being signed by a Registrar, both of which he asserts renders the arbitration process void. In his second ground of appeal he contends that the Award was obtained by fraud, namely the non-disclosure of material matters, and that it was “extremely biased”.
However, as recognised by the wife, they are not the real issues here, and indeed, they could not be the subject of an objection to the Award being registered. The real issue is whether the husband gave his consent to the arbitration. Importantly, if the husband did not provide his consent, that renders the entire process invalid, and it does not matter what happened thereafter, and in particular, whether the arbitration was impartial, or who signed the arbitration agreement, or whether there was proper disclosure, or whether the Award was biased.
Section 13E of the Act provides that a court can only make an order referring property settlement proceedings to arbitration with the consent of all of the parties.
Thus, the appeal was run on the basis of whether his Honour had erred in finding that the necessary consent had been given by the husband, with the result that, if it had not, then the husband’s objection to registration of the Award should have been upheld.
In the primary reasons for judgment his Honour explored at great length the question of on what basis or bases an objection to registration of an Award could be pursued. It is unnecessary to revisit that issue in this appeal though, because there can be no doubt that lack of consent provides a prime basis for an objection to be taken. Indeed, we hasten to add that his Honour did not suggest otherwise.
The husband had made the question of consent an issue before his Honour, and his Honour dealt with it in this way:
52.[The husband] asserts that his consent was conditional. No such thing is known or understood in the context of a referral to arbitration. [The husband] would suggest to the Court that his consent to arbitration was conditional upon the wife’s compliance with the Order for disclosure. That is not the manner in which the Order is set out. In any event, it is addressed in not one, but two earlier judgments in these proceedings pre-dating this determination, those of 25 June 2019 and again on 18 September 2019. On each occasion, short reasons for judgment were delivered rejecting [the husband’s] position.
53.[The husband’s] position on each occasion had been fundamentally prefaced upon his assertion that his consent was withdrawn and, thus, the arbitration process was void and could not proceed. I will turn to that shortly.
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81.The relevant time in which one is to consider consent is, as I have already indicated, the time of referral. I have no doubt that the referral to arbitration was with [the husband’s] consent. He does not suggest that there was duress such as to obviate or render void his consent. What he suggests is that his consent was “conditional”. He would only agree to arbitration if the wife gave full disclosure. It, perhaps, begs the rhetorical question as to what he would say if the matter were to be heard and determined by the Court and he, similarly, alleged that there was a failure of disclosure. Presumably, he would seek to withdraw from that process also although, of course, one need not consent or further consent to the judicial determination of dispute. Consent is inherently provided due to the nature of a democratic society, and through being a member and participant therein.
82.I accept that there may be circumstances in which the withdrawal of consent would be valid and upon which the Court would act. This is no such case. The only two complaints that are, in any way, referrable are those with respect to disclosure and those with respect to imputed bias of the arbitrator. Each is rejected.
83.The documents that are suggested to have not been disclosed are modest at the very least. However, as is submitted by [the husband] in his affidavit, “there is no such thing as 75 per cent or 90 per cent disclosure, only full and frank disclosure”. But, of course, that is to ignore that [the husband] is, in this case, an instrument of his own destruction as a consequence of the attitudes that he has adopted and his withdrawal from the proceedings. It has always been within his power to proceed to obtain the material which he alleges is so relevant and has not, he alleges, been provided (although the wife suggests it has been). Accordingly, I am not satisfied that either the arbitration process, the referral to arbitration, or the arbitral award are void or voidable.
Although the husband did not include the issue of consent in his grounds of appeal, his Summary of Argument filed on 27 May 2020, which was generally of little assistance, at least adverted to this issue, and he submitted as follows:
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6.The Appellant Husband’s consent to be referred to arbitration was conditional as follows from transcript (Transcript of proceedings, pp 3-7) and was relying on two factors: promise of Wife’s solicitor… to him before the hearing that full and frank disclosure will be provided and joint balance sheet will be settled, as well as statement of His Honour… that the case will be considered no earlier than around Christmas 2020 or early 2021 (Transcript of proceedings p.7[10]). Both later turned out to be not true. Only two points put by His Honour in orders out of missing many in disclosure were provided. Request of the Husband to provide the rest was ignored. As for hearings; since 19.03.2019, there were hearings on 25.06.2019, 18.09.2019, 22.01.2020 and 27.04.2020. And we are not even close to Christmas 2020.
7.When condition for full and frank disclosure and settled balance sheet was not met, consent to arbitration was withdrawn. Moreover, the Wife’s Lawyers were pushing arbitration with a person whose office was just a coffee shop away from their office in Parramatta. He was declined by Husband on five different occasions and still considered himself to be in a position of Arbitrator in a “voluntary process”, which raises more questions about integrity of arbitration.
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(As per the original)As referred to by the husband, and as was accepted by the wife’s counsel, the transcript of the hearing before his Honour on 19 March 2020 is vital in determining this issue.
That transcript relevantly commences as follows:
HIS HONOUR: Okay. Thank you. That will do me. Sir, what do you want me to do? Because there’s two ways this case comes to a conclusion. One is you agree with each other on an outcome. If you don’t agree with each other, someone has to determine the dispute and impose an outcome. Just to complicate life, there’s two ways that can happen. One is it gets heard by the court as the judicial branch of executive government wielding the authority of Parliament, as it were, and we get the consent to impose a decision on people through everyone’s consent. It’s part of a democracy to being governed. The other is a contractual arrangement where the two of you agree to go to arbitration and you consent to the arbitrator telling you how you’re going to divide your assets. One is very quick. One is very slow. Court is the slow one.
So I’m not trying to sell you a product you may not want, but on the basis that your wife is living in the house, you want some money out of the house, whether it’s the $50,000 that your wife is proposing or $383,000 you’re proposing, you won’t see a cent until someone determines the dispute. For me, that will be about Christmas next year or early 2021. For an arbitrator, about three months.
[THE HUSBAND]: So we had a problem because last time you were talking about first the process. And the first is to finalise the financial disclosure and to have the joint balance sheet.
(Transcript 19 March 2019, p.3 lines 10–30)
And continues:
HIS HONOUR: Yes. But is the balance sheet finalised now?
[THE HUSBAND]: No. No.
HIS HONOUR: So what’s in dispute about your balance sheet?
[THE HUSBAND]: So in dispute about the balance sheet is missing stuff in statements. So then… so because it’s unknown, you know. There is, for example, cash withdrawal, $5000.
HIS HONOUR: Yes.
[THE HUSBAND]: So what was it over?
HIS HONOUR: But can I just be clear, a balance sheet reflects your present legal and equitable interests in property – nothing else. So it’s designed to say here’s what there is today, irrespective of what there may have been at some other time, and what it’s worth today. So it’s houses, cars, money in the bank today, and if somebody is arguing that there was money that was in the bank that has been spent, that’s a different issue. But coming back to the question, it’s a matter for you, sir, how quickly you want this finished. I can keep you here for two years, and will, because I just don’t have any dates. Arbitration is the only way it will be finished quickly.
[THE HUSBAND]: No, of course I am interested to finish it quickly, you know, but of course I want it done, you know, properly. So - - -
HIS HONOUR: Sure. Then you need to tell me what material it is that you say you don’t have that you want to have, and I will make an order about it…
(Transcript 19 March 2019, p.4 line 47 to p.5 line 26)
And further:
HIS HONOUR: … Do you want to go to arbitration, where somebody that you privately agree to and pay to determine your dispute – and by paying, it’s somewhere between $2000 upwards each to have it determined – or do you want to wait until the end of next year or early 2021 for me to get around to hearing it?
[THE HUSBAND]: I’m keen to go to arbitration provided the financial disclosure is finalised.
HIS HONOUR: Fine. Well, I will make orders about those two classes of documents you’ve described – the bank statements for 3 to 14 August ’18 for the wife’s Complete Access Account with whatever bank that’s with, and super statements that cover the period October ’16 to February ’19. Okay?
[THE HUSBAND]: Thank you.
(Transcript 19 March 2019, p.7 lines 6–20)
The question that arises is, can it be said that the result of this discussion is that the husband has consented to an order being made pursuant to s 13E of the Act referring the property settlement dispute to arbitration?
The husband’s case is that his consent was conditional upon the requisite disclosure, and the balance sheet then being able to be finalised, but because that did not happen, along with other issues that he had, he refused to participate in the arbitration.
For his part, the wife’s counsel ultimately argued during the hearing of the appeal, that although the consent may have been conditional, the condition, if you like, was “fixed up” by his Honour making the order for the wife to provide certain documents to the husband.
There is no doubt that the consent was conditional. That is evident from the husband saying that he was “interested” to finish it quickly, but wanting it done “properly”, and further, that he was “keen” to go to arbitration “provided” the financial disclosure was “finalised”.
Pausing there, it is not open to interpret the husband saying “Thank you” after his Honour indicated the order that he would make for production, as meaning anything other than an acknowledgement of that proposal; it cannot mean, for example, that he was satisfied with that as meeting his conditional consent, and thus he was now consenting to the arbitration.
It is also trite to emphasise that the time to determine whether there is consent or not is when the order for referral to arbitration is made, and his Honour recognised that (at [81]).
With that background, and in the further knowledge that consent is pivotal and must be provided to allow the referral to arbitration, it is plain that the husband’s conditional consent was insufficient.
The consent needs to be unequivocal, and as his Honour put it in his ex tempore reasons for judgment delivered on 25 June 2019, “[c]onsent is provided, or it is not” (Loomis & Pattison at [7]).
His Honour took the view that conditional consent is not recognised in the Act. That is true, but it is not the case, as his Honour seems to find, that because it is unknown, the condition should in effect be disregarded. We consider the opposite is the case, and conditional consent cannot be treated as consent for the purposes of s 13E.
Nor is it saved by his Honour making the order for production of the required documents. That did not satisfy the condition. Thus, the consent remained conditional at the time the order was made, and was not the unequivocal consent that is required.
Given that the absence of the requisite consent invalidated the process, and his Honour erred in dismissing the objection of the husband to the registration of the Award, the appeal must be allowed.
The consequence of that outcome is that his Honour’s order made on 22 January 2020 should be set aside, including the order for costs.
Further, paragraph 4 of the order made on 19 March 2019, should also be set aside insofar as it referred the proceedings to arbitration pursuant to s 13E of the Act.
That will also reverse the dismissal of, and leave in place, the wife’s Initiating Application seeking orders for property settlement filed on 13 September 2018, and the husband’s Response filed on 4 October 2018. They should be listed for directions before another judge of the Federal Circuit Court of Australia at the earliest available opportunity.
COSTS
In the event that the appeal was allowed, both parties sought a costs certificate pursuant to the provisions of the Federal Proceedings (Costs) Act 1981 (Cth).
The appeal is being allowed on a question of law, and with no costs being awarded, it is appropriate for costs certificates to be issued.
I certify that the preceding fifty-five (55) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Strickland, Ainslie-Wallace & Ryan. Associate:
Dated: 1 April 2021