Penhalligon & Penhalligon
[2022] FedCFamC1F 744
Federal Circuit and Family Court of Australia
(DIVISION 1)
Penhalligon & Penhalligon [2022] FedCFamC1F 744
File number NCC 1320 of 2020 Judgment of: WILSON J Date of judgment: 4 October 2022 Catchwords: FAMILY LAW –NATIONAL ARBITRATION LIST – application to review award of arbitrator – s 13J and s 13K invoked – defective disclosure found by arbitrator – wife asserting husband fraudulent before arbitrator – no question of law properly framed for s 13J review – asserted fraud for s 13K not made out – review application failed. Legislation: Family Law Act 1975 (Cth) ss 13J, s 13K and s 75(2) Cases cited: Air Canada v Secretary of State for Trade [1983] 2 AC 394
Al-Medinni v Mars UK Ltd [2005] EWCA Civ 1041
Allied Pastoral Holdings Pty Ltd v Comissioner of Taxation [1983] 1 NSWLR 1
Avon Downs Pty Ltd v Commissioner of Taxation (Cth) (1949) 78 CLR 353
Barker v Barker (2007) 36 Fam LR 650
Bellenden v Satterthwaite [1948] 1 All ER 345
Black v Kellner (1992) 15 Fam LR 343
Browne v Dunne (1893) 6 R 67
Chang v Su (2002) 29 Fam LR 406
De Winter v De Winter (1979) 4 Fam LR 583
Derry v Peek [1889] AC 337
Entezam & Devi (2021) 62 Fam LR 637
Flight v Robinson (1844) 50 ER 9
Goodridge & Beadle (2017) 57 Fam LR 425
Gronow v Gronow (1979) 144 CLR 513
Haritos v Commissioner of Taxation (2015) 233 FCR 315
HIA Insurance Services Pty Ltd v Kostas [2009] NSWCA 292
In the Marriage of Briese (1985) 10 Fam LR 642
In the Marriage of Clauson (1995) 18 Fam LR 693
In the Marriage of Giunti (1986) 11 Fam LR 160
In The Marriage of Kannis (2002) 30 Fam LR 83
In the Marriage of Marinko (1983) 8 Fam LR 849
In the Marriage of Mezzacappa (1987) 11 Fam LR 957
In the Marriage of Morrison (1994) 18 Fam LR 519
In the Marriage of Stein (1986) 11 Fam LR 353
In the Marriage of Suiker (1993) 17 Fam LR 236
In the Marriage of Weir (1992) 16 Fam LR 154
Kostas vHIA Insurance Services Pty Ltd (2010) 241 CLR 39
Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563
Lovell v Lovell (1950) 81 CLR 513
Mallet v Mallet (1984) 156 CLR 605
Monte & Monte [1986] FamCA 1
Norbis v Norbis (1979) 144 CLR 513
Oriolo v Oriolo (1985) 10 Fam LR 665
Sainsbury's Supermarkets Ltd and others v Mastercard Inc and others (European Commission intervening) [2020] 4 All ER 807
Victorian Stevedoring & General Contracting Co Pty Ltd v Dignan (1931) 46 CLR 73
Waterman & Waterman [2017] FamCAFC 23
Journal Articles Justice Duncan Kerr, What Is A Question of Law Following Haritos v Federal Commissioner of Taxation [2016] FedJSchol 18 Division: Division 1 First Instance Number of paragraphs: 48 Date of hearing: 31 August 2022 Place: Melbourne Counsel for the Applicant: Mr C. Othen Solicitor for the Applicant: Byrnes Lawyers Counsel for the Respondent: Mr J. Bunning Solicitor for the Respondent: Direct brief ORDERS
NCC 1320 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS PENHALLIGON
Applicant
AND: MR PENHALLIGON
Respondent
order made by:
WILSON J
DATE OF ORDER:
4 OCTOBER 2022
THE COURT ORDERS THAT:
1.The amended application in a proceeding filed on 24 August 2022 is dismissed.
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 Penhalligon & Penhalligon has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
WILSON J
INTRODUCTION
By amended application in an arbitration dated 24 August 2022, the wife sought orders under s 13J of the Family Law Act setting aside the arbitral award dated 5 April 2022 registered on 21 April 2022.
If successful, the wife sought orders remitting the entire proceeding to Division 2, notwithstanding that –
(a)a modest amount is involved (a little over $300,000); and
(b)the fees of any such remitter when aggregated with the expenses incurred to date are likely to be disproportionately burdensome.
The wife contended that the arbitrator’s reasons were affected by error of law. In essence the wife argued that the husband “deliberately deceived” the arbitrator (her counsel’s words) about the value of the husband’s company, erroneously assigning a negative value to it of $67,235. The wife contended that the husband breached his duty of disclosure yet he benefitted from that breach, so the wife said. The wife argued that the arbitrator should have awarded the home to the wife.
The husband resisted the wife’s s 13J review application. On behalf of the husband it was contended –
(a)that the review application was commenced out of time;
(b)while put as a review under s 13J, in reality the wife’s application was premised on non-disclosure to which s 13K(2)(a) applies;
(c)no question of law, as contemplated by s 13J, was identified by the wife; and
(d)in reality the wife was dissatisfied with the outcome of the arbitration and was purporting to invoke s 13J as a vehicle for an expansive review of the arbitrator’s exercise of discretion.
As these reasons reveal, in my judgment the review applicant failed. I dismiss her application to set aside the award of the arbitrator dated 5 April 2022 registered on 21 April 2022.
Statutory Framework
In several previous decisions[1] I have observed that the operation of s 13J is wholly different to s 13K. Section 13J is as follows –
[1] Paviello & Paviello [2022] FedCFamC1F 59, Bakalov & Bakalov [2021] FedCFamC1F 161 and Entezam & Devi (2021) 62 Fam LR 637.
(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)a single judge of the Family Court; or
(b)a single judge of the Family Court of a State; or
(c) the Federal Circuit Court of Australia.
(2) On a review of an award under this section, the judge or Federal Circuit Court of Australia may:
(a) determine all questions of law arising in relation to the arbitration; and
(b) make such decrees as the judge or Federal Circuit Court of Australia thinks appropriate, including a decree affirming, reversing or varying the award.
Section 13K is as follows –
(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 Family Court; or
(b) the Federal Circuit Court of Australia; 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.
It will be immediately apparent that s 13J(2)(a) provides for the determination of all questions of law on a review application. The court is empowered to make such a decree as the judge considers appropriate including a decree affirming, reversing or varying the award. Setting aside the award may be among the decrees that are appropriate, although the setting aside of the award is not expressly stated in s 13J(2)(b).
Section 13J does not speak of “error of law” and instead it postulates the determination of “questions of law”. Further, s 13J speaks of “review”, not appeal.
On the hearing of this application counsel did not take up my invitation to address on the metes and bounds of the word “review” where used in 13J. I invited the parties’ attention to the learning on “review” where considered by the High Court in Victorian Stevedoring & General Contracting Co Pty Ltd v Dignan[2] and also in Avon Downs Pty Ltd v Commissioner of Taxation (Cth).[3] However, neither counsel took up the invitation. In the absence of submissions on point it would not be appropriate for me to make any definitive observations on point and so I do not.
[2] (1931) 46 CLR 73, 85, 107.
[3] (1949) 78 CLR 353, 760.
The case as put by the review applicant
Counsel for the review applicant relied on written submissions in which the review applicant contended that regulations 67I(i) and 67P(2) of the Family Law Regulations required the arbitrator to determine the issues in dispute between the parties, to make clear findings and to provide a statement of reasons for the making of the award. That was true. Those regulations do say that.
The review applicant argued that the husband made a material non-disclosure but that the arbitrator did not act on that material non-disclosure. The review applicant said such non-disclosure amounted to fraud for the purposes of s 13K(2)(a) of the Family Law Act. The review applicant, in written submission dated 1 August 2022, put the position in the following terms –
In summary, the injustice identified is that the husband deliberately deceived the tribunal about the value of his company and has gone on to benefit from this deceit.
Of particular relevance was counsel’s use of the following –
(a)“the injustice identified”;
(b)“the husband deliberately deceived the tribunal”; and
(c)the husband “has gone on to benefit from his deceit”.
Deceit is a species of fraud.[4] An allegation of fraud should not be made lightly. It calls for particular proof. The review applicant in this case asserted that the husband deliberately deceived the tribunal, invoking the notion that he actively set about to mislead the arbitrator. In other words, the review applicant argued this case before me on the basis that the husband, with a concerted purpose, intended to mislead the arbitrator about the value of the husband’s business. The review applicant referred to the husband’s activities as being “deliberate non-disclosure”.
[4] Derry v Peek [1889] AC 337 and Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563.
The entirety of the arbitral hearing was transcribed. The transcription was undertaken to the usual extremely high standard that proceedings in this court are transcribed. If evidence existed that the husband deliberately deceived the tribunal about the value of his company, any such deliberate deception should have been apparent from the husband’s answers to questions put to the husband in cross-examination by counsel for the wife. It must not be overlooked that authority of undeniable veneration has held that allegations of fraud must be specifically pleaded and proved.[5]
[5] Those authorities were collected together in Goodridge & Beadle (2017) 57 Fam LR 425.
The review applicant’s particulars of the so-called deliberate deception by the husband was said to be reposed in several factors. According to paragraphs 13 and 14 of the review applicant’s written submissions dated 1 August 2022 the chain in reasoning was as follows –
(a)the arbitrator held that the husband’s interest in the business was negative $67,235;
(b)the husband deliberately concealed the true takings of the business;
(c)the husband deliberately concealed the actual assets (including stock) of the business;
(d)the arbitrator found that the husband made a material non-disclosure about the husband’s circumstances; and
(e)the husband was required to pay the wife only $193,866 reflecting that the husband benefitted from his own non-disclosure.
Taken in isolation, those assertions told nothing of the detail on which the wife was relying in her contentions of deliberate concealment. Taken in isolation, those assertions amounted to little more than the wife’s contentions that the arbitrator valued the husband’s interest in the business at negative $67,235, that the husband was ordered to pay the wife $193,866 and that in arriving at both monetary conclusions the husband perpetrated on the arbitrator deliberate concealment. Had the review applicant’s case under s 13K(2)(a) rested there, she would have failed to discharge her obligations when asserting and proving an allegation of fraud, or as here, deceit.
However, there was some, albeit scant, information on which the review applicant relied on what her counsel called “questions of law”. They were as follows –
(a)In respect of the evidence of [Ms C], the Arbitrator:
(i)failed to give reasons in either accepting for rejecting this evidence such that its impact on the overall award made cannot be discerned;
(ii)failed to give any weight to the unchallenged evidence of [Ms C] being that at paragraphs 37 and 38 of her Affidavit;
(b)The Arbitrator made a material error of fact at paragraph 28(b) of the Award as to the wife’s case.
It was curious that in the context of s 13K(2)(a) the review applicant postulated “questions of law” because questions of law were mentioned in s 13J, not s 13K.
The precise form of the questions posed in the passages set out immediately above invited examination. A distinction is frequently drawn in the authorities between a “question of law”, “a question of fact” and a “question of mixed fact and law”. A question expressed with imprecision, such as “did the tribunal err in law” will not be sufficient to transform what is in reality a question of fact into a question of law.[6] The Court of Appeal of the Supreme Court of New South Wales examined the content of a question of law in HIA Insurance Services Pty Ltd v Kostas[7] which was not upset on appeal to the High Court in Kostas vHIA Insurance Services Pty Ltd.[8] Writing extra-judicially, former Federal Circuit Court of Australia Justice Duncan Kerr examined what is a question of law.[9]
[6] Haritos v Commissioner of Taxation (2015) 233 FCR 315, 341-342 (Allsop CJ, Kenny, Besanko, Robertson and Mortimer JJ).
[7] [2009] NSWCA 292.
[8] (2010) 241 CLR 390.
[9] Justice Duncan Kerr, What Is A Question of Law Following Haritos v Federal Commissioner of Taxation [2016] FedJSchol 18.
Only the question posed in paragraph (c)(iv) related to the husband’s non-disclosure. It was grammatically erroneous. It was as follows –
The arbitrator’s finding that the value of the business was as asserted by the husband (at paragraph 43) in circumstances where –
….
(iv)failing (sic) to have regard to the husband’s non-disclosure and its impact on the value.
Nowhere is there any articulation of the non-disclosure engaged in by the husband which somehow adversely impacted on the arbitrator’s finding that the value of the business was as asserted by the husband.
That seemed to me to be no more than a factual matter. But even if it could somehow be construed as a question of law or a question of mixed fact and law, which it was not, then nowhere is it said how and in what circumstances the husband actively deceived the arbitrator in the manner alleged by the wife.
Instead, counsel for the review applicant submitted to me that the wife had made out a case that the husband had deliberately deceived the wife, the arbitrator and the single expert. The precise assertion was as follows –
The wife made out a case that the husband had deliberately deceived her, the Arbitrator and the single joint expert valuer as to the extent of the income of the entity, and the extent of its assets including stock. By means of his deception, the valuer was unable to attribute a goodwill value to the entity. The wife asked the valuer then to make certain assumptions about revenue, which resulted in an alternative valuation including goodwill. The Arbitrator accepted that the wife had made out her case of a failure to make a full and frank disclosure, but then failed to explain why he would accept the single joint expert opinion based on that false information. The Arbitrator also rejected the wife’s alternate hypothesis.
The assertion that the wife had made out a case that the husband had deliberately deceived her, the arbitrator and the single expert was not the subject of a pinpoint reference in the award. Deliberate deception was a very large allegation to make. It seemed uncontroversial that the arbitrator was persuaded that the husband had not fully and frankly provided disclosure to the wife. Counsel for the wife submitted that having found there to have been a failure to make full and frank disclosure, the arbitrator “then failed to explain why he would accept the joint single opinion based on that false information”.
That seemed to amount to an assertion that the husband was derelict in complying with his disclosure obligations, the expert prepared a report despite deficiencies of disclosure and that the arbitrator proceeded to consider the evidence even though disclosure was defective. The review applicant characterised that state of affairs as the arbitrator failing to explain why he accepted a report “based on that false information”. The review applicant did not identify the information she said was false or why it was false.
Some insight into the wife’s contentions about the husband’s deliberate non-disclosure emerged in paragraphs 23 and 24 of the wife’s counsel’s written submissions. In paragraph 23 the wife’s counsel asserted that certain paragraphs of the wife’s affidavit were important because those paragraphs, so it was said, represented admissions by the husband that “he was storing cash and equipment at the property which he was deliberately not disclosing to the wife or her lawyers”. One wonders why it was important to the wife to persist in her assertions that any non-disclosure was deliberate. In issues of non-disclosure, intention is irrelevant as the duty of disclosure is absolute.[10]
[10] In the Marriage of Kannis (2002) 30 Fam LR 83.
Counsel for the wife made no attempt to bring to my attention the husband’s evidence in any line of questioning in the arbitration during the husband’s cross-examination to the effect that the husband deliberately concealed information. She was under an obligation to squarely put that assertion[11] and to obtain the husband’s response if it was of importance.
[11] Browne v Dunne (1893) 6 R 67 and Allied Pastoral Holdings Pty Ltd v Comissioner of Taxation [1983] 1 NSWLR 1.
As has already been observed, on the hearing of this review application counsel for the review applicant did not take me to any aspect of his cross-examination of the husband during the arbitration. That was surprising having regard to the review applicant’s characterisation of information as “false information”. Further, having regard to the repeat allegations of deceit by the review applicant, it was surprising that she did not endeavour to show from the transcript of the arbitration that she demonstrated on the balance of probabilities that she had proven the existence of deceit by the husband.
On behalf of the husband, Mr Bunning of counsel submitted that the husband was cross-examined at length about his alleged non-disclosure. Counsel for the husband did not take me to the precise passages of the transcript that supported the husband’s contentions about material non-disclosure. In other words, counsel for the husband resisted the notion that the husband had engaged in material non-disclosure. As this review application was adversarial in nature,[12] it fell to the review applicant to prove her propositions on the balance of probabilities. In my view, she failed in that regard.
[12] Air Canada v Secretary of State for Trade [1983] 2 AC 394, Sainsbury's Supermarkets Ltd and others v Mastercard Inc and others (European Commission intervening) [2020] 4 All ER 807 and Al-Medinni v Mars UK Ltd [2005] EWCA Civ 1041.
Counsel for the husband contended that no question of law was raised on this review application, assuming the review applicant relied on s 13J of the Family Law Act rather than s 13K of the Family Law Act. Mr Bunning submitted that in reality, the review applicant was complaining about the manner in which the arbitrator exercised his discretion in arriving at the findings he did.
In order to better understand the competing contentions, it became necessary to examine the complaints raised by counsel for the wife when compared to the submissions on each complaint as contended for by counsel for the husband. The task of divining the complaints raised by the review applicant was made all the more difficult because they were dotted among the review applicant’s solicitor’s affidavit and the review applicant’s counsel’s submissions.
The “first issue”, as the review applicant’s counsel described it in paragraph 21 of his submissions, was the arbitrator’s treatment of the whistleblower’s evidence. Two aspects were said to have arisen from the arbitrator’s treatment of the whistleblower’s evidence, namely –
(a)the arbitrator’s failure to make findings in relation to the evidence of Ms C (which the review applicant said amounted to an error of law); and
(b)the arbitrator’s failure to give reasons thereby denying the National Arbitration List Judge (me, in other words) the ability to know the impact, if any, Ms C’s evidence had on the outcome of the arbitration.
No authority was relied on by the review applicant to support the review applicant’s contentions.
Counsel for the husband advanced a collection of submissions on the issue of Ms C’s evidence. They included –
(a)the arbitrator was not required to make a finding about each and every fact in the case;
(b)the arbitrator did in fact make findings about Ms C’s evidence at paragraph 23 of the arbitrator’s reasons;
(c)the arbitrator expressed the view that he had real concerns about Ms C’s evidence based on her friendship with the husband and that her relationship coloured her recollection of events;
(d)the review applicant’s real complaint about Ms C’s evidence was one of weight the arbitrator attached to her evidence;
(e)a complaint about weight is not a question of law but rather is a complaint about the exercise of discretion;
(f)there was no error in paragraph 28(b) of the arbitrator’s reasons as the arbitrator recorded in express terms that it was not part of the wife’s case that the husband had secretly removed money outside of the domain of the court;
(g)the wife advanced a case to the effect that there was stock which was not included in the valuation from the expert such that the books of the company did not properly record cash takings of the husband and so the figures for the future maintainable earnings of the business were wrong;
(h)she did not advance a case that the husband had secretly removed money from the domain of the court;
(i)even if she had advanced a case that the husband secretly removed money from the domain of the court, the determination of that matter was purely factual and no question of law was thereby enlivened;
(j)submissions of the parties to the arbitrator were to the effect that the value of the business was negative $67,235 (as was found) or as the wife asserted that it was ($243,628) or that the business should be sold and of those three, the arbitrator found in accordance with the husband’s contentions;
(k)after the arbitrator struck out the aspects of the wife’s evidence in relation to cash takings, no evidence survived before the arbitrator as was recorded in paragraphs 37, 38 and 39 of the arbitrator’s reasons;
(l)the arbitrator considered, but rejected, the contention that the business should be sold, as was recorded in paragraphs 41 and 42 of the arbitrator’s reasons;
(m)once the arbitrator declined to accept the submission of selling the business and once the arbitrator rejected the wife’s assertions about cash takings, the only contention presented by the parties about the value of the business was the husband’s, which the arbitrator accepted; and
(n)that was purely a question of fact raising no question of law.
Counsel for the husband additionally submitted that the arbitrator made no error in law relying on Black v Kellnar[13] and In the Marriage of Weir.[14]Further, Mr Bunning contended that the arbitrator correctly observed in paragraph 43 of the arbitrator’s reasons that the husband’s disclosure was properly the subject of concern which resulted in the arbitrator stating in paragraph 45 of his reasons that in the exercise of his discretion he should be more generous to the wife. Mr Bunning submitted, correctly in my view, that there was no error in such an approach, consonant with the views in In The Marriage of Kannis.[15] Recently, in the context of arbitration, I examined the duty of disclosure and the consequences of any dereliction of that duty in Paviello & Paviello.[16] In any event, as Mr Bunning submitted, having undertaken the tasks required of him in a s 79 application the arbitrator was more generous to the wife in financial terms.
[13] (1992) 15 Fam LR 343.
[14] (1992) 16 Fam LR 154
[15] (2002) 30 Fam LR 83.
[16] [2022] FedCFamC1F 592
As is apparent from the foregoing, the wife’s contentions about the husband secretly removing money beyond the domain of the court represented a major component of the wife’s case on this review application. The wife contended that the arbitrator failed to determine the issues and thereby made an error of law. Conversely, the husband argued that the wife did not press the point or, if the point was as important as the wife said, to the extent that the success of the wife’s case depended on the acceptance of the evidence of Ms C then the arbitrator did not accept her evidence. That emerged from paragraph 23 of the arbitrator’s reasons. The arbitrator saw and heard that witness. The arbitrator took the view that Ms C’s evidence was of real concern by reason of her friendship with the husband and that the breakdown of that relationship coloured her recollection of events. The arbitrator was entitled to make those observations having observed the witness, heard her evidence and formed a view about her veracity. Far from that revealing some reviewable conduct, the arbitrator did as he was required to do.
The review applicant’s complaint, described in paragraph 27 of her counsel’s written submissions as “a further error” related to the arbitrator’s finding about the valuation of the business. The wife put her case on this review application that the husband had not been diligent in his disclosure (described by the wife as his “deliberate non-disclosure of his true takings”). As has been observed already, the arbitrator was presented with three options in relation to the value of the business. The first was the husband’s valuation. Another was the wife’s based on her thesis of cash taken from the business, which the arbitrator rejected. The third was a sale, which the arbitrator also rejected. The mere fact that the arbitrator rejected the wife’s valuation did not constitute error, still less did it postulate a question of law. In my view, the review applicant failed in that contention.
In paragraph 30 of his written submissions, counsel for the review applicant narrated without actually posing what were described as questions of law that he said arose from the arbitrator’s findings in this case. Most were questions of fact, such as the propositions set out in paragraphs 30(a), 30(c) and 30(d)(ii). However, embedded in the review applicant’s contention in paragraph 30 of her counsel’s written submissions was a criticism of the arbitrator’s treatment of defective disclosure. Having recently examined this issue in Paviello & Paviello,[17] it is utile to set out what I there held. It was as follows –
[17] [2022] FedCFamC1F 592.
(a)rule 13.04 of the Family Law Rules, in operation in the lead up to the commencement of the arbitration in this case, imposed a duty of disclosure;
(b)that duty can be traced back to 19th century equitable principles;[18]
[18] Flight v Robinson (1844) 50 ER 9.
(c)the duty is owed to the court as well as to the parties to the proceeding;[19]
[19] Waterman v Waterman [2017] FamCAFC 23.
(d)full and frank disclosure of all material facts is a fundamental requirement in financial matters;[20]
[20] Black v Kellner (1992) 15 Fam LR 343, In the Marriage of Giunti (1986) 11 Fam LR 160 and In the Marriage of Mezzacappa (1987) 11 Fam LR 957.
(e)a party to a financial proceeding has a duty to make full disclosure of his or her financial affairs;[21]
[21] In the Marriage of Weir (1992) 16 Fam LR 154.
(f)the duty to disclosure is absolute;[22]
[22] In the Marriage of Kannis (2002) 30 Fam LR 83.
(g)the duty is crucial to the functioning of courts administering the Family Law Act;[23]
[23] In the Marriage of Morrison (1994) 18 Fam LR 519.
(h)full and frank disclosure of financial matters between the parties is basic to the process of the court and is one of the elements of the Family Law Act;[24]
(i)parties are expected to cooperate in the conduct of the proceeding in order to bring about an early and prompt conclusion with a minimum of expense;[25]
(j)the duty involves full and frank disclosure in a timely manner;[26]
(k)if a party breaches the duty of full and frank disclosure as outlined above, the uppermost limit of what can be ordered to be transferred to one party in a s 79 application is the whole of the ascertained property of the parties;[27]
(l)it is not open to a party who has failed to fulfil the duty of full and frank disclosure to rely on that failure so as to prevent the making of orders against the party in default;[28]
(m)any failure to disclose relevant financial information may lead a court to draw inferences against the person who failed to disclose the relevant financial information;[29]
(n)where there is clear evidence of non-disclosure the court should not be unduly cautious about making findings in favour of the innocent party;[30]
(o)once there is sufficient evidence to support a finding that a party has not made full and frank disclosure, the court has jurisdiction to make orders in relation to unidentified and undisclosed property;[31]
(p)the duty to disclose is absolute and it is beside the point whether the non-disclosure was wilful, accidental, the result of misfeasance or nonfeasance;[32] and
(q)in the case of deliberate non-disclosure, the court is entitled to draw inferences against the non-disclosing party.[33]
[24] In the Marriage of Suiker (1993) 17 Fam LR 236.
[25] In the Marriage of Marinko (1983) 8 Fam LR 849.
[26] In the Marriage of Briese (1985) 10 Fam LR 642, Waterman & Waterman [2017] FamCAFC 23, In the Marriage of Morrison (1994) 18 Fam LR 519 and In the Marriage of Suiker (1993) 17 Fam LR 236.
[27] Monte & Monte [1986] FamCA 1.
[28] In the Marriage of Giunti (1986) 11 Fam LR 160, Black v Kellner (1992) 15 Fam LR 343 and Oriolo v Oriolo (1985) 10 Fam LR 665.
[29] In the Marriage of Stein (1986) 11 Fam LR 353.
[30] In the Marriage of Weir (1992) 16 Fam LR 154 and Monte & Monte [1986] FamCA 1.
[31] Ibid.
[32] Chang v Su (2002) 29 Fam LR 406, In the Marriage of Weir (1992) 16 Fam LR 154 and In the Marriage of Kannis (2002) 30 Fam LR 83.
[33] In the Marriage of Stein (1986) 11 Fam LR 353, In the Marriage of Mezzacappa (1987) 11 Fam LR 957, In the Marriage of Giunti (1986) 11 Fam LR 160, In the Marriage of Morrison (1994) 18 Fam LR 519 and Barker v Barker (2007) 36 Fam LR 650.
The arbitrator in this case relied on Black v Kellner as well as In the Marriage of Weir in dealing with disclosure deficiencies. There was no error in so doing, although the authorities that address the issue go beyond Kellner and Weir. There was no error in the arbitrator being more generous to the wife in consequence of the husband’s deficiencies of disclosure. The review applicant contended that the arbitrator stated he would be more generous to the wife by reason of the husband’s non-disclosure yet the arbitrator failed to do so. Specifically, the review applicant submitted that the arbitrator’s attribution of only 10% of the pool on account of s 75(2) factors represented an erroneous application of the observations in In the Marriage of Clauson.[34] Counsel for the review applicant did not say why there was any such erroneous application of observations in that case. That authority is important for its considerations about “the generous ambit of reasonable disagreement (that) marks the area of immunity from appellate interference”.[35]
[34] (1995) 18 Fam LR 693.
[35] De Winter v De Winter (1979) 4 Fam LR 583, Mallet v Mallet (1984) 156 CLR 605, Norbis v Norbis (1979) 144 CLR 513, Lovell v Lovell (1950) 81 CLR 513, Gronow v Gronow (1979) 144 CLR 513 and the English Court of Appeal decision in Bellenden v Satterthwaite [1948] 1 All ER 345.
But the review applicant drew from the decision in Clauson a different point, namely, the court’s observations about the tendency of courts to assess s 75(2) factors in percentage terms without considering its real impact. In Clauson the court held that such a tendency operates to artificially delineate boundaries. Embedded in the court’s observations in Clauson was the suggestion that it is desirable (although not mandatory) for the trial judge to have separately considered the elements of s 75(2), rather than for the trial judge to have apportioned a blanket 15% to them in aggregate. The court held that there was nothing in the trial judge’s reasons that pointed to particular error as there is no uniquely right answer. I respectfully agree. On the facts of that case the court elected to alter the percentage attribution. I decline to do so in this case as, to my mind, it is apparent from the arbitrator’s reasons that he was alive to the elements of s 75(2). The fact that the wife was dissatisfied with the percentage attribution speaks of dissatisfaction but not error.
To that end, the wife’s insistence that she receive the former matrimonial home self-evidently represented her conception of the justice and equity of this s 79 application. She said that the upshot of this arbitration in which she did not receive the former matrimonial home spoke of there being no justice and no equity in the arbitrator’s award, heightened all the more by the husband’s non-disclosure.
Notions of palm tree justice in the family law jurisdiction have long been eschewed.
The use by the review applicant’s counsel of unhelpful phrases such as “the husband has profited from his fraud at the wife’s expense” do not improve the wife’s position.
THE argument as TO TIME
In written submissions, counsel for the respondent argued that the review applicant’s application was out of time. He said the order made 21 April 2022 registering the arbitral award is a decree of the court. That much is true. Section 4 of the Family Law Act defines “decree” as follows –
“decree” means decree, judgment or order and includes:
(a)an order dismissing an application; or
(b)a refusal to make a decree or order.
Counsel for the respondent contended that a “decree” of the court takes effect as though it is an order of the court. That much is also true. Mr Bunning then contended that the 28 day limitation period prescribed by rule 13.01(b), which applies to appeal decrees, also applies to decrees made under s 13H. Mr Bunning contended that the application for review, having been filed outside the 28 day limitation period, was therefore out of time.
A decree may be appealed (not reviewed) in accordance with the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 and a time limit applies to the commencement of any such appeal.[36] However, rule 13.01(b) does not include a review from a decision of an arbitrator under s 13J. Rule is 13.01(b) expressly provides that the rule does not apply to an appeal from an application to a judge for the review of a decision of a judicial registrar under chapter 14. Rule 13.01 does not apply to an order under s 13H registering the award. In my view, the respondent failed to show that the review applicant was out of time.
[36] Rule 13.01(b).
Conclusion
The review applicant failed. I dismiss her application to set aside the award of the arbitrator dated 5 April 2022 registered on 21 April 2022.
I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wilson. Associate:
Dated: 4 October 2022
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