Wade v Wade

[2022] NZHC 3254

NOTE: PURSUANT TO S 139 OF THE CARE OF CHILDREN ACT 2004, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B, 11C AND 11D OF THE FAMILY COURT ACT 1980.

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

I TE KŌTI MATUA O AOTEAROA TE PAPAIOEA ROHE

CIV-2022-454-056

[2022] NZHC 3254

UNDER

the Care of Children Act 2004

BETWEEN

DONNA WADE

Appellant

AND

BRIAN WADE

Respondent

Hearing:	3 October 2022
Counsel:	J C LaHatte and J C R Cooper for the Appellant T L Wheelan for the Respondent
Judgment:	6 December 2022

JUDGMENT OF COOKE J

[1]        The appellant appeals against the decision of the Family Court dated 15 June 2022 pursuant to which the Court varied certain final parenting orders made under the Care of Children Act 2004 (COCA).1 In that decision Judge Moss varied the order she had earlier made by judgment dated 23 August 2021.2 The relevant background was outlined in the 15 June judgment in the following way:3

In this long running matter, the children … have come to be settled in a regime for care in their father’s care, after three years of ceaseless and difficult litigation.

1      Wade v Wade [2022] NZFC 5482. These are not the parties’ real names.

2      Wade v Wade [2021] NZFC 7843.

3      Wade v Wade, above n 1, at [1]–[3].

WADE v WADE [2022] NZHC 3254 [6 December 2022]

When a parenting order was submitted in two options proposed by counsel to be sealed as a final order in August 2021, the parents agreed to the provision at sub para X of the general conditions. This reads:4

The parties agree that any guardianship issues not covered by these orders will be resolved between the parties via OFW. If agreement cannot be reached via OFW then, the parties agree to take the matter to a family law arbitrator on the basis they shall be bound by the arbitrator’s decision. The costs of arbitration shall met by the party who is unsuccessful.

In the succeeding months, the mother has sought to invoke the arbitration provision, and has become confounded by the reasonable demands of the Family Dispute Resolutions Centre, which suggests that the order does not provide an appropriate procedure nor authority for the appointment of an arbitrator. The mother sought refinement of [the] order as a correction, by application of the slip rule.5

[2]        The Judge concluded that the care of children disputes between the parties were not appropriately determined by arbitration in accordance with s 10 of the Arbitration Act 1996, and that para X was contrary to public policy.6

[3]        The Judge accordingly amended the order by excluding the two sentences contemplating reference to binding arbitration. The appellant appeals against that decision.

The issues raised on appeal

[4]        The appeal came before me for hearing on 3 October 2022. Whilst the written submissions of the appellant contained general criticisms of the Family Court decision, the primary ground of appeal was that the Family Court had no jurisdiction to vary the final parenting order in this way. The Court had purported to exercise jurisdiction under r 204 of the Family Court Rules 2002 — commonly referred to as the slip rule. The appellant argued that the slip rule could not be exercised to make the substantive change to the final parenting orders made by the Court. The final parenting order had been sealed, and could not be recalled under r 197 of the Family Court Rules. What was involved was a substantial amendment to the order which required an application under s 56 of COCA, and that no such substantive order had been sought, and neither was it intended by the parties.

4      The reference to “OFW” is to an on-line parenting communication and resolution service named “Our Family Wizard”.

5      Family Court Rules 2002, r 204.

6      Wade v Wade, above n 1, at [10].

[5]        In responding to these issues the respondent raised further procedural points, including that the High Court had no jurisdiction to deal with the appeal because it was an appeal from an interlocutory order, and no leave to appeal had been sought. The respondent also argued that in the circumstances of the present case the arbitration clause was not in the children’s best interests, and was accordingly contrary to public policy.

[6]        At the commencement of the hearing I raised with counsel that there was a more profound issue that needed to be addressed. That was whether the COCA regime permitted the Family Court to order that binding arbitration would be used to resolve their care of children disputes at all. I drew the parties’ attention to some of the matters that I refer to below, as summarised in a minute dated 3 October 2022. The hearing was adjourned to allow each of the parties to file further written submissions following which I would determine the appeal. Further submissions were then filed and served.

Assessment

[7]        Having considered all submissions of the parties, I have reached the conclusion that it is not possible for parties to submit their care of children disputes to arbitration in a manner that is binding and enforceable by the courts, and for this reason the Family Court Judge was correct to exclude the terms that included binding arbitration from the final parenting order. The Family Court had no power to initially make an order including such terms.

[8]        Arbitration under the Arbitration Act is an important part of the overall civil justice system. But the Arbitration Act itself recognises it cannot be used in all cases. The Judge referred to s 10 of the Arbitration Act which provides:

10       Arbitrability of disputes

(1)Any dispute which the parties have agreed to submit to arbitration under an arbitration agreement may be determined by arbitration unless the arbitration agreement is contrary to public policy or, under any other law, such a dispute is not capable of determination by arbitration.

(2)The fact that an enactment confers jurisdiction in respect of any matter on the High Court or the District Court but does not refer to the determination of that matter by arbitration does not, of itself, indicate

that a dispute about that matter is not capable of determination by arbitration.

[9]As the authors of Williams & Kawharu on Arbitration explain:7

Section 10 reflects a public policy limitation on party autonomy. Regardless of whether an arbitration agreement is otherwise valid between the parties in contract terms, by virtue of s 10 it may not be given effect at all, or not given effect in relation to disputes arising between the parties in respect of certain subject matters. Where a dispute implicates public rights and/or the private interests of third parties, public policy may demand that an agreement to resolve the dispute by arbitration should not be given effect, and instead that the dispute be brought before a court. That said, given the legislative confidence in the arbitral process which is reflected in s 5 of the NZ Act, it is suggested that few types of arbitration agreement or subject matters will be deemed non-arbitrable for s 10 purposes. Instead, the Act creates a general preference in favour of the arbitrability of disputes, which, as a matter of New Zealand law, are capable of settlement by direct agreement between the parties.8 In contrast to the Model Law, the NZ Act is not restricted to “commercial” arbitrations.9

[10]      The relevant question becomes whether the COCA creates a mandatory regime for making binding determinations in relation to care of children matters covered by that Act. If so, under s 10(1) of the Arbitration Act there would be other law that determines that the disputes are not capable of being determined by arbitration.

[11]      In my view the COCA clearly does create a mandatory regime. The short point is that the COCA creates a comprehensive regime, with detailed substantive and procedural provisions, which regulates how care of children disputes are to be resolved by binding decision. That is understandable as the decisions affect not just the parties to the disputes but also the children who are the subject of the disputes. There is also a strong public or social interest in having a regime for determining such matters. The only way to obtain a binding determination when there is a dispute about care of children matters is in accordance with the COCA.

[12]      Section 3 of the COCA outlines the purpose of the Act in a way that contemplates a comprehensive regime concerning the promotion of the welfare and best interests of children. Section 4 provides that the welfare and best interests of a

7      David Williams and Amokura Kawharu Williams & Kawharu on Arbitration (2nd ed, LexisNexis, Wellington, 2017) at [7.2.1].

8      Law Commission Arbitration (NZLC R20, 1992) at [230]–[231].

9      Arbitration Act 1996 (the New Zealand Act), s 10; compare Model Law, art 1.

child in his or her particular circumstances is the first and paramount consideration under the Act,10 as later elaborated upon. Section 13 then provides:

13       Act a code

(1)Except as otherwise expressly provided in this Act, this Act has effect in place of the rules of the common law and of equity as to the guardianship and custody of children.

…

[13]      By itself s 13 creates a difficulty for the suggestion that parties can arbitrate care of children disputes. That is not just because the heading of the section describes the Act as a code. In addition, all pre-existing substantive law relating to the care of children is replaced by the COCA. There is no law for an arbitrator to apply apart from that set out in the COCA. And the provisions of the COCA create powers, and set principles and requirements, to be exercised exclusively by the Family Court or the High Court. There is accordingly no law for an arbitrator to legitimately apply.

[14]      The machinery for the resolution of all care of children disputes is comprehensively set out in the COCA. It includes both procedural, and substantive elements. The procedural requirements are as significant as the substantive principles. For example, the COCA contemplates the appointment of counsel for the child under s 7. In the context of the regime so established it seems to me that s 13 means what it says and that the COCA is a code for determining disputes in relation to care of children matters.

[15]      This is further confirmed when the specific provisions of the COCA are considered more closely. Sections 30, 31 and 125 outline the exclusive jurisdiction of the courts. Section 125(1) specifies that the Family Court must determine the specified proceedings, but in certain specified situations under the COCA the High Court has jurisdiction. That is also specified in s 11 of the Family Court Act 1980.11  I accept Mr LaHatte’s argument that these provisions may not, by themselves, exclude the potential for arbitration, particularly as there is no definition of “proceedings”, and given the terms of s 10(2) of the Arbitration Act. But these provisions form part of an

10     Care of Children Act 2004, s 4(1).

11     Family Court Act 1980, s 11(1)(c).

overall regime that, interpreted as a whole, gives exclusive jurisdiction to the Family Court or the High Court to determine disputes in relation to care of children matters.

[16]      Part of that regime involves the facilitation of agreements between parties to care of children disputes. Sections 39 and 40 of the COCA provide:

39Purpose of sections 40 to 43

The purpose of sections 40 to 43 is to encourage parents, guardians, and donors to agree to their own arrangements for the child’s care, development, and upbringing.

40Agreements between parents and guardians

(1)A party to an agreement to which subsection (2) applies may seek to have the terms of the agreement embodied in an order of the court that may be enforced, as provided in subsections (3) and (4).

(2)This subsection applies to an agreement between parents or guardians of a child so far as it relates to when 1 or more specified persons have the role of providing day-to-day care for the child or have contact with the child, or to the upbringing of the child, or to any combination of those matters.

(3)An agreement to which subsection (2) applies cannot be enforced under this Act, but some or all of the terms of the agreement may be embodied in an order of the court if, under 1 or more provisions of this Act other than this section (for example, under section 48(1)),—

(a)some or all of the parties to the agreement may apply for the order; and

(b)the order may be made by the court.

(4)The order may be enforced under this Act in the same way as an order that does not embody terms of an agreement to which subsection (2) applies.

[17]      Section 41 is in similar terms in relation to agreements between parents and donors.

[18]      As Ms Wheelan pointed out, court endorsement of such agreements is then subject to r 416V(2) of the Family Court Rules 2002, which provides that every application made for an order by consent must be considered by a judge in chambers. That consideration is essential to ensure consistency with the principles of the COCA before such orders become enforceable. Ms Wheelan advised that it is not uncommon for a judge to appoint a lawyer for the child before approving such agreed orders.

[19]      There are no provisions in the COCA that contemplate arbitral awards being registered, or becoming otherwise enforceable by the Family Court. That is because such awards do not form any part of the regime established by the COCA.

[20]      In the present case the agreement between the parties, and the proposed Family Court order, was inconsistent with the COCA provisions. The Family Court cannot order that a disagreement between parents in relation to the care of their children will be subject to binding determination by an arbitrator. Even an agreement between the parents themselves must be submitted to a Family Court judge under s 40 to ensure that it is consistent with the principles under the COCA before it can become enforceable.

[21]      It is, of course, possible for parents and other guardians to reach agreements in relation to care of children matters without any involvement of the courts. Parents and guardians make decisions every day of that nature. But when there is a dispute the sole pathway for having a binding determination of the dispute, enforceable by the courts, is in accordance with the COCA.

[22]      Sections 46D to 46F of the COCA also establish an alternative dispute resolution procedure. This contemplates the utilisation of the family dispute resolution (FDR) processes under the Family Dispute Resolution Act 2013 (the FDRA). FDR processes must be undertaken before proceedings are commenced under s 46E, and under s 46F(2) a Family Court judge may direct the parties to attend FDR at any stage before final determination of proceedings. There is also provision for counselling under s 46G.

[23]      FDR processes are undertaken by approved FDR providers appointed under the FDRA. The duties of such providers are set out under s 11 of the FDRA in the following terms:

11       Duties of FDR providers

(1)An FDR provider must determine whether it is appropriate to start family dispute resolution for a family dispute.

(2)If an FDR provider determines that it is appropriate to start family dispute resolution for a family dispute, the FDR provider must make every endeavour to—

(a)identify the matters in issue between the parties; and

(b)facilitate discussion between the parties in respect of those matters; and

(c)assist the parties to reach an agreement on the resolution of those matters that best serves the welfare and best interests of all children involved in the dispute.

[24]      Mr LaHatte sought to argue that an arbitrator could be an FDR provider. I do not accept that submission. Both the COCA and the FDRA contemplate that FDR providers provide services in the nature of mediation to “assist the parties to reach an agreement”.12 This provision, and the associated provisions clearly contemplate that the FDR processes are facilitative, and designed to support the parties reaching agreed resolutions of their disputes. They do not contemplate binding determinations by an FDR provider.

[25]      Any doubt about this is removed by the provisions of the Family Dispute Resolution Regulations 2013. There are limits to using subordinate legislation, such as regulations, to interpret primary legislation.13 But here the regulations are contemporaneous with the primary legislation, and form part of an overall regime. Regulation 7 sets out the qualifications and competency requirements for FDR providers, including the following:

7        Qualification and competency requirements

The following qualification and competency requirements must be applied in deciding whether a person meets the criteria in section 9(1) of the Act:

…

(b)the person must have enough experience of resolving disputes using mediation to provide reasonable assurance of competence in providing dispute resolution services in the context of Family Court processes:

12     Family Dispute Resolution Act 2013, s 11(2)(c) (emphasis added).

13     Interfreight Ltd v Police [1997] 3 NZLR 688 at 692 (CA); Off Road New Zealand (1992) Ltd v Machinery Inspector [2019] NZHC 1996, [2019] NZAR 1712 at [59]–[60].

(c)the person must be able to determine and facilitate appropriate processes to help parties to mediation reach agreements that best promote the welfare of children:

(d)the person must be able to help people to participate effectively in mediation:

(e)the person must be able to help participants in mediation to develop skills and strategies for managing future disagreements:

(f)the person must have knowledge and understanding of Family Court processes and family law, particularly—

(i)      the Care of Children Act 2004 and the effect of sections 4, 5, and 6 of that Act; and

(ii)     the Act:

…

(j) the person must be able to address diversity in parties to mediation:

…

[26]      This makes it clear that the processes in question involve mediation, not arbitration.

[27]      The COCA therefore not only contemplates how agreements between parties to disputes are to be reflected in binding orders of the Family Court, but it also sets out a regime that facilitates resolution through mediation processes. But the parenting order that the parties sought the Court to make here required the parties to go to arbitration to resolve outstanding issues, with the decision of the arbitrator being binding. That is inconsistent with the COCA regime.

[28]      The position can be contrasted with arbitration of disputes arising under the Property (Relationships) Act 1976. That is because parties to disputes under that Act can contract out of the Act. That is made clear by s 21. Moreover s 21A(1) provides:

21A     Spouses or partners may settle differences by agreement

(1) Spouses or civil union partners or de facto partners may,  for  the  purpose of settling any differences that have arisen between them concerning property owned by either or both of them, make any agreement they think fit with respect to the status, ownership, and division of that property.

[29]      Robert Fisher KC has persuasively explained why arbitration is permitted for relationship property disputes in light of these provisions.14 The contrast between the provisions of that Act and the COCA is significant.

[30]      There are, of course, benefits of arbitration, as Mr Fisher has explained. One of them is confidentiality. It is also important to recognise that those responsible for the care of children are perfectly entitled to reach agreement on how that care should take place, and avoid going to court at all. There is also no reason why parties cannot privately agree for a third party to assist them with decisions if they are having difficulties. It may even be possible for them to ask a third party to engage in a form of expert determination of the care of children issues that exist between them.15 But if such decisions are to be binding in the sense of being enforceable before the courts, the COCA regime must be applied. There is no room for arbitrators to make enforceable determinations in relation to care of children matters.

Outcome for the present appeal

[31]      In her judgment of 15 June 2022 the Family Court Judge considered that the order that she had earlier made with the agreement of the parties — which contemplated outstanding disputes being resolved by binding arbitration — was unlawful in accordance with s 10 of the Arbitration Act. I agree with that conclusion, reiterated by the terms of the COCA I have outlined above. The parts of the earlier order that Judge Moss excluded were in conflict with the COCA and were unenforceable. It was accordingly right for her to remove those parts from the order.

[32]      As to the arguments advanced on appeal that this should not have been addressed by the Family Court under the slip rule, or that this decision was an interlocutory decision where leave to appeal to this Court was required, I see no utility in addressing these technicalities. The simple fact of the matter is that the relevant parts of the order that the Family Court had earlier made were inconsistent with the legislation, and invalid. The sooner the Court recognised that the better. Strictly speaking it may be that only the High Court could formally quash the unlawful parts

14     Robert Fisher Relationship Property Arbitration (2014) 8 NZFCJ 15.

15     See David Williams and Amokura Kawharu Williams & Kawharu on Arbitration, above n 7, at [1.1.10].

of the order, but they were unenforceable in any event, and it seems to me that it was correct for the Family Court to have recognised the aspects of the order which were invalid.

[33]      The formal orders I make are that the appeal is dismissed, and for the avoidance of doubt I declare that the orders made by the Family Court in the judgment of 15 June 2022 correctly excluded the parts of the earlier order that were invalid.

[34]      On the question of costs the respondent may file a memorandum within      10 working days, to be responded to by the appellant within five working days. The memoranda may be no longer than five pages plus a schedule. My preliminary view is, however, that costs should lie where they fall. That is because the original form of the order, invalid as it was, was initially agreed to by both the parties. So this has been a problem partly of the parties’ own making, and it may have been necessary for them to come to this Court for the matter to be formally resolved.

Cooke J

Solicitors:

Ord Legal, Wellington for the Appellant

Wilkinson Rodgers, Dunedin for the Respondent