Objection to a Family Law Financial Award
The hard work has been done and you have received your award from the arbitrator. Or, a new client attends your office with an award from an arbitrator. What steps you take next for the client, depends upon whether the client accepts and wishes to enforce the award or does not accept.
Objection to a Family Law Financial Award
The hard work has been done and you have received your award from the arbitrator.
Or, a new client attends your office with an award from an arbitrator.
What steps you take next for the client, depends upon whether the client accepts and wishes to enforce the award or does not accept.
To make the award enforceable, it needs to be registered (see section 13H of the Family Law Act 1975). The award then has effect as if it were a decree made by that court. If the registered award is not complied with, steps to enforce same can be taken pursuant to the relevant rules of court as if the award were an order made under Part VIII of the Act, regulation 67S.
The options for a party unhappy with the award are limited.
From a pragmatic point of view, this should be the case. Underpinning arbitration of disputes is the need to minimise costs and bring about timely outcomes to parties in dispute. It would be counter-intuitive to that dispute resolution process to leave open more litigation.
In the context of family law financial arbitrations, it should also be borne in mind that reviewing (synonymous with “appealing”) an award has a lower bar than say reviewing an award pursuant to the Commercial Arbitration Act.
A party that is dissatisfied with the award, does have some limited options;
Object to the registration of the award (see reg. 67Q of the Family Law Regulations 1984 );
Apply for a review of the award (see sect.13J of the Act); or
Apply to reverse or vary the award (see sect. 13K of the Act).
The second and third options appear to be only available after the award is registered. So much seems obvious from the plain reading of both of those sections;
s13J(1) A party to a registered award …may apply for review
s13K(1) If an award…..is registered in…..
For a recent article concerning reviews on a question of law, see “An award – can it be appealed ?”.
The grounds contained in sect. 13K follow closely the grounds for setting aside an order or a binding financial agreement (see s79A and s90K respectively). There is a wealth of jurisprudence developed around this avenue of redress and it is not proposed to consider reviews or setting aside awards here.
When and How Can I Object?
When a party can object to an award, is not clearly expressed in either the Act or the Regulations.
Section 67Q(2) is pithy in it’s terms;
“A party on whom an application is served may, within 28 days after service, bring to the attention of the court any reason why the award should not be registered. “
Section 67Q(5) is also minimalistic and unhelpful;
“If a party brings a matter to the court’s attention under sub regulation (3), the court must, after giving all parties a reasonable opportunity to be heard in relation to the matter, determine whether to register the award.”
There is no prescribed Form in the Regulations for lodging an objection, however one might consider filing a Form 7.
Neither the Act or Regulations prescribe what category of matters could be brought to the court’s attention that could enliven the court’s jurisdiction to not register the award.
Further, if the court determines not to register the award, what happens next? The regulations don’t provide an answer.
Grounds to Object
In my view, the categories of matters that give rise to an objection must not include matters that would otherwise be solely grounds for a review or setting aside of the award.
Other writers have suggested, that the objection process relates to some form of irregularity in the process relating to the registration of the award.
In referencing some other jurisdictions where arbitration is more common it would be my respectful opinion that “irregularity” in the broader civil litigation context falls within the ambit of a regulation 69Q objection.
The provisions in the Family Law Regulations 1984 affecting arbitrations were introduced in 2001. The Explanatory Statement provides little information other than to restate the regulations.
The term “object” is not foreign to family lawyers as the child support forum provides parents with the option of objecting to an assessment. The grounds for objection however are prescribed in either the Child Support (Assessment) Act 1988 or the Child Support (Registration and Collection) Act 1988.
Other arbitration jurisdictions
The Commercial Arbitration Act (Qld) 2013 is somewhat more prescriptive in terms of the grounds for not recognizing an award.
Section 36 (1) Recognition or enforcement of an arbitral award, irrespective of the State or Territory in which it was made, may be refused only—
(a) at the request of the party against whom it is invoked, if that party furnishes to the Court proof that—
(i) a party to the arbitration agreement was under some incapacity, or the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication in it, under the law of the State or Territory where the award was made; or
(ii) the party against whom the award is invoked was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present the party's case; or
(iii) the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognised and enforced; or
(iv) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, failing such agreement, was not in accordance with the law of the State or Territory where the arbitration took place; or
(v) the award has not yet become binding on the parties or has been set aside or suspended by a court of the State or Territory in which, or under the law of which, that award was made; or
(b) if the Court finds that—
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law of this State; or
(ii) the recognition or enforcement of the award would be contrary to the public policy of this State.
Remembering that the grounds for review (appeal) are more restricted in commercial arbitration, some of these grounds would fall within the grounds provided for in section 13J or 13K of the Family Law Act (e.g. issues of procedural fairness, failing to conduct the arbitration in the way that was agreed, are provided for in sec 13K(2). Indeed, section 34. 34A and 36 of the Commercial Arbitration Act (Qld) overlap.
In TCL Air Conditioner (Zhongshan) Co Ltd v Castel Electronics Pty Ltd (“TCL”), the Full Federal Court said that an arbitral award will not be set aside or refused recognition or enforcement under arts 34 and 36 of the Model Law;
unless there is demonstrated real unfairness or real practical injustice in how the international litigation or dispute resolution was conducted or resolved, by reference to established principles of natural justice or procedural fairness. The demonstration of real unfairness or real practical injustice will generally be able to be expressed, and demonstrated, with tolerable clarity and expedition.
In the commercial arbitration sphere, the role of the courts under the Commercial Arbitration Acts is understood to be limited to the enforcement of contractual obligations—that is, holding the parties to their bargain to finally determine disputes using arbitration. The courts’ role does not involve determining substantive disputes between the parties as to fact or law, or otherwise reviewing the decision of an arbitral tribunal, save as provided for under those acts.
Examples of where section 36 has been argued include;
Larkden Pty Limited -v- Lloyd Energy Systems Pty Limited where the dispute was submitted to arbitration pursuant to a clause in a licensing agreement requiring the arbitration of all disputes. The unsuccessful ground argued was that the award went outside the terms of reference of the dispute to arbitration.
Andent Pty Ltd v Thornhill Machine Tools Australia Pty Ltd where a party unsuccessfully relied upon incapacity as a ground to prevent recognition of the award.
Amasya Enterprises Pty Ltd v Asta Developments (Aust) Pty Ltd where a party contended the arbitrator “went off on a frolic of his own”.
Other similar civil provisions
Rule 290 of the Uniform Civil Procedure Rules (Qld) 1999 provides;
The court may set aside or amend a judgment by default under this division, and any enforcement of it, on terms, including terms about costs and the giving of security, the court considers appropriate.
Commercial litigators are well familiar with this procedure which permits the settings aside (or the preventing of entering judgment) due to some form of irregularity.
The following principles are extracted from the judgment of Mason CJ in Autodesk Inc v Dyason (No 2) The decision turned on the inherent jurisdiction of the High Court but the same principles would apply to the most civil procedure rules;
“1. The power is to be exercised “with great caution” in view of the public interest in the finality of legal proceedings.
2. The power may be exercised where, through no fault on the applicant’s part, the applicant has not been heard on a matter decided by the court.
3. The jurisdiction also extends to cases where a court has good reason to consider it has proceeded on a misapprehension as to the facts or the law (such as a failure to recognise that a line of authority relied upon in the determination had been overruled or a mistaken assumption that certain evidence had not been given at an earlier hearing).
4. The jurisdiction is not a back door for re-arguing the case. It is not to be used for the purpose of re-agitating arguments already considered by the court or because a party has failed to present the argument in all its aspects or as well as it might have been put.”
Per Muir JA, “The cases in which default judgments have been held to be irregular are ones in which there was either some deficiency in the steps prerequisite to the entering of default judgment or an abuse of process or something akin to it resulting from the plaintiff’s obtaining a judgment to which the plaintiff knew or ought reasonably have known he or she was not entitled.”
In this era of emerging jurisprudence relating to family law arbitrations it is difficult to be definite in terms of how a court will interpret and implement regulation 69Q other than to draw in examples from other jurisdictions.
For the vast majority of disputes referred to family law financial arbitration, it is unlikely that the provision will be relevant as the candidates for arbitration will have experienced (and probably even accredited) family lawyers acting for the parties and arbitrating. The likelihood of something “irregular” occurring would be remote.
Where a client has come to a solicitor seeking a “second opinion” after an arbitration, or where they have been poorly or not represented at the arbitration may raise the spectre of objecting pursuant to s69Q.
For most other cases, the question of whether there has been an error of law, and hence a section 13J application for review, will be more probably the likely recourse for a dissatisfied client.
Always remember that the whole point of arbitration – as a non-court based form of dispute resolution – is to limit cost and time. The tradeoff therefore must be in restricting the forms of redress to a limited category.
For assistance in this area, please contact Bruce for more information at email@example.com