Relationship property arbitration
(ii) Information-gathering powers
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- (iii) Speed
- (iv) Finality
- (v) Confidentiality
- (vi) Choice of decision-maker
- (vii) Ease of access
- (viii) Continuity
- (ix) Party autonomy
- (x) The possibility of “med-arbs”
- Conclusions
(ii) Information-gathering powersReference has previously been made to the extensive information-gathering powers of an arbitrator.72 Some of those powers are shared with courts. Discovery, interrogatories, and further particulars are obvious examples. The same is broadly true of the power to direct the appointment of an independent accountant to investigate and report. The courts can direct an investigation.73 The High Court (although not the Family Court) can also appoint an independent expert74 and/or order inspection of property and computer systems.75 However there is an important difference between arbitration and the courts when it comes to the examination of parties and witnesses in an inquisitorial setting. The closest the High Court comes to a general power of oral inquiry lies in certain powers following insufficient answers to interrogatories76 or refusal to swear affidavits.77 But the process of issuing interrogatories, and establishing insufficiency of answers, is time-consuming and cumbersome. Cross-examination is rarely ordered and, if granted, remains an adversarial exercise limited to obtaining a proper answer to the interrogatory.78 The courts have also shown a marked reluctance to direct oral examination following refusal to make an affidavit, preferring to direct witnesses to make an affidavit with examination as a mere sanction to secure compliance.79 Such an order will be declined altogether if the witness is prepared to swear an affidavit, albeit not the one sought by a party.80 In the Family Court there is an important power to examine a party on oath where he or she fails to file any, or a sufficient, affidavit of assets and liabilities.81 Even there, however, there are severe limitations. The Court’s hands are tied until one party chooses to file a formal application alleging default. There will inevitably be argument about the sufficiency of any affidavit of assets and liabilities already filed. The examination is confined to the defaulting party, as distinct from his or her accountant and other witnesses. Most importantly, the examination does not extend to events and transactions during the relationship.82 Such evidence is usually critical. Valuable though those court powers may be, they are no substitute for an arbitrator’s power to call the parties and their accountants to a conference, swear everyone present as witnesses, and lead a round table discussion designed to get to the bottom of a factual issue. (iii) SpeedNew Zealand has not escaped the world-wide pressure on family courts.83 It seems too early to say what effect the 2014 Family Court reforms will have on waiting times. What one can say with confidence is that in virtually all jurisdictions overseas, family courts struggle to cope with the number of cases requiring decision. Judges have little control over their workloads. Arbitrators do not have that excuse. If they accept only those arbitrations that they can handle expeditiously, they should be able to resolve cases more quickly than judges. (iv) FinalityArbitrations offer greater finality than court proceedings. Once an award is issued, there is less opportunity to prolong matters by appeal or review than would be the case with an equivalent Family Court judgment. The grounds for reviewing an arbitration award are circumscribed by statute. There is no opportunity to rehear the merits. For all practical purposes review under arts 34 and 36 is confined to excess of jurisdiction and denial of natural justice.84 An appeal from an arbitration award may or may not be possible depending on the wishes of the parties when drafting their arbitration agreement. If the right to appeal is desired, it must be limited to questions of law. Even then the appeal will be possible only with the Court’s leave unless the parties taking the unusual course of opting for appeals as of right.85 But if the parties really want a right of appeal to the courts, with its attendant costs, delays and publicity, it is hard to see why they would choose arbitration in the first place. In short, the opportunities for challenging an arbitration award are closely circumscribed. That may be contrasted with successive opportunities for challenging decisions originating in the Family Court. Appeals may be taken to the High Court as of right. The appeals extend to the facts as well as the law. If the parties are the unfortunate beneficiaries of leave to bring more than one appeal, it is possible to have as many as six hearings (Family Court substantive hearing.
The position is very different when it comes to publication of the decision. As a general principle, arbitration awards cannot be published. The same applies to any other information gleaned from arbitration proceedings.88 The discretion to override the presumption of confidentiality89 is easily side-stepped by contracting out of that power.90 Even if the parties have overlooked doing so in their arbitration agreement, it is hard to see any circumstances in which an arbitrator or judge would authorise disclosure of the award in the absence of an appeal or review.91 There is less certainty if one party chooses to take the arbitration award to the High Court on appeal, where the submission agreement so permits, or on review. Even there, however, one might reasonably expect a judge to take into account the fact that by submitting a private family matter to arbitration the parties had evidenced a wish for confidentiality. This would seem a powerful reason for continuing the confidentiality that the parties had enjoyed in the arbitration proceedings themselves.92 That may be contrasted with the position where the proceedings originate in the courts. With narrow exceptions, all decisions are published. The names of the parties will usually be anonymised on application and there are special protections for children, those under some form of special care, and domestic violence applicants.93 But with those qualifications the courts cannot prevent publication of a relationship property decision.94 Few are happy to have intimate details of their personal history published to all and sundry. That is likely to be seen by many as a significant reason for opting for arbitration.
Choosing the decision-maker may not matter in the general run of cases. However it can be important in cases where the issues are less about traditional family law concepts than about complex commercial and equitable relationships. Analysing a complex web of companies, trusts, partnerships, and inter-entity finances can be time-consuming and exacting. In such cases the parties may prefer to select a decision-maker whose skill-set and time availability are thought to fit the particular task in hand. (vii) Ease of accessArbitrators are usually accessible at short notice through direct emails (with the important proviso that they are copied to the other party) and telephone conferences with both counsel. Most interlocutory matters can be disposed of with a minimum of time and formality. Court processes are necessarily more measured. The volume of cases filed in court is high. Standardised procedures are the only way of processing multiple cases and judges. Some classes of litigation (parenting, domestic violence etc) are particularly inflammatory. Family Court Judges must be protected from abuse. A system which permitted direct approaches to judicial officers would not be feasible, even where the communications were joint ones. (viii) ContinuityKnowing that he or she will ultimately have to decide a case, an arbitrator will have a personal stake in its management from the outset. Arbitrators have the luxury of familiarising themselves with the file, running all interlocutory matters with the benefit of that knowledge, and structuring the hearing in a way that will suit their particular methods. It is no criticism of judges that rostering requirements usually make that level of continuity impracticable. (ix) Party autonomyIn their agreement to arbitrate existing or future property disputes the parties choose the relationship property regime that will be applied, the procedure that will be followed, and the person who will make the decision. Parties are more likely to be satisfied with the result of a process that they themselves devised.95 It also accords with the 2013 Family Court Proceedings Reforms which were designed to place greater emphasis upon resolving family disputes by private agreement.96 It is a short step from agreement on the substantive outcome to agreement on the way in which the outcome should be achieved. (x) The possibility of “med-arbs”So long as an arbitrator does not caucus with the parties, or give the impression that the case has been predetermined, it is possible to combine an arbitration with a mediation.97 Similar benefits can be obtained during an expert determination. In the Family Court it is not appropriate to combine distinct forms of dispute resolution before the same judge. ConclusionsSo long as appropriate signing formalities are observed, and the adopted relationship property regime is an acceptable one, agreements to submit relationship property disputes to arbitration will be binding and the awards they produce enforceable. Whether arbitration will serve the parties better than court proceedings depends on the nature of the particular dispute. There will be an overwhelming preference for court proceedings wherever it is foreseeable that resolution of a relationship property dispute will need to be combined with claims under other statutes such as the Trustee Act 1956 or the Family Protection Act 1955. The same will be true whenever the dispute is likely to involve third parties who are unable or unwilling to commit to arbitration. It seems doubtful whether court proceedings offer additional advantages of any significance. For the remainder of cases, arbitration appears to offer significant advantages. These include speed, finality, procedural flexibility, confidentiality, choice of decision-maker, ease of access to the tribunal, continuity and the opportunity to combine the arbitration with mediation. Of particular importance is the efficiency of an arbitrator’s information-gathering powers. Information-gathering is normally the key to resolving relationship property disputes. At present the use of arbitration to resolve New Zealand relationship property disputes is surprisingly limited. If overseas experience is anything to go by, that is about to change. ** Hon Robert Fisher QC, LLD, arbitrator and mediator. My thanks are due to Augustine Choi and Kate Tolmie Bowden for their assistance with this article. 1 For backlogs in the Family Court in general see Ministry of Justice publication “Reviewing the Family Court, A Summary” September 2011 p 1. Subsequent reforms are too recent to assess their effectiveness. 2 David Hodson “England Needs Binding Family Law Arbitration” (July 2002) 3 Institute of Family Law Arbitrators 4 FLAGS 5 Rima Evans “A Decent Proposal” May 2013, The Resolver (Quarterly magazine of the Chartered Institute of Arbitrators) 11. 6 Arbitration Act, 1991, S.O. 1991, c. 17, Family Arbitration, O. Reg. 134/07, and Family Law Act, R.S.O. 1990. 7 Burleson “Family Law Arbitration” (2008) 30 Campbell L Rev 297 at 297. 8 The statement is based on personal and anecdotal evidence, there presently being no statistics on the subject. 9 Law Commission Arbitration NZLC R20, 1991 at [231]. 10 Willetts v Ryan [1968] NZLR 863 (CA). 11 Attorney General v Barker Bros Ltd [1976] 2 NZLR 495, 498-499. 12 Law Commission Arbitration NZLC R20, 1991 at [231]. 13 Arts 34(2)(b)(ii) and 36(1)(b)(ii)). 14 For example ss 13, 14A, 15, 15A, 17 and 17A. 16 For the same view see AAP Willy Arbitration in New Zealand (Butterworths, Wellington, 1997) at [1.5]. 17 PRA ss 15 and 15A. 18 s 26. 19 s 27. 20 s 28. 21 ss 26, 29, 30, 31 and 33. 22 s 32. 23 A v A [1967] NZLR 357. 24 Re Julso [1975] 2 NZLR 536. 25 Deans v Supplementary Benefits Commission [1972] NZLR 536. 26 Currently the Child Support Act 1991 s 58. 27 Ministry of Justice “Family justice reform: Questions and answers” (23 May 2014) http://www.justice.govt.nz/policy/justice-system-improvements/family-court-reform/family-justice-reform-questions-and-answers. 28 Attorney General v Mobil Oil NZ Ltd [1989] 2 NZLR 649 (HC) (importance of upholding arbitration agreements given greater weight than competing policy objectives of the Commerce Act 1986); CBI NZ v Badger Chiyoda [1989] 2 NZLR 669 (CA) (agreement contracting out of right to seek High Court review of award valid). 29 s 5(a). 30 For a helpful discussion of potential problems for Islamic Arbitration of relationship property disputes, albeit considered from an undue influence perspective, see Laura Ashworth “Islamic Arbitration of Family Law Disputes in New Zealand” (unpublished dissertation for LL.B (Hons) University of Otago 2010) at pp 36 to 38. 31 Ashworth, above, tackles that issue. 32 PRA, s 21. 33 PRA, s 21A. The writer has seen both forms of arbitration in New Zealand. 34 PRA, s 21F. 35 PRA, s 21J(1). 36 PRA, s 26(3). 37 PRA, s 21F. 38 PRA, s 21H. 39 See further Ashworth, above, n 30. 40 See cases assembled in Fisher on Matrimonial and Relationship Property (loose leaf ed, LexisNexis) at paras 18.83 and 18.84. 41 Arbitration Act sch 2, cl 5; Ewan and Brookside Farm Trust Ltd v Gallaway Cook Allan [2014] NZSC 75 at [14] and [89]. 42 For review see sch 1, art 34 and for refusal to enforce see sch 1, art 36. 43 Arts 34(2)(a) and 36(1)(a)(i) 44 Arts 34(2)(b)(ii) and 36(1)(b)(ii) 45 See text to n 42. 46 1st sch, arts 34(2)(a) and for refusal to enforce see art 36(1)(a)(i). 47 PRA, s 21F(4)(b) and (d). 48 PRA, ss 21G and 21J(3). 49 PRA, ss 4 and 4A 50 Arbitration Act, s 9(1). 51 Arbitration Act, sch 1, art 35. 52 Carr v Gallaway, above, n 41 at [3], [73] to [86] and [95]. 53 For a contrary view see Ashworth, above, n 30 at 33 and 38. 54 See generally Arbitration Act 1996, sch 1, art 19. 55 Schedule 2, cl 3(1)(a). 56 Clause 3(1)(j) 57 Art 27(2)(a) sch 1. 58 Art 26 sch 1; PRA s 38. 59 See the IFLA scheme discussed earlier in the text accompanying n 3. 60 Family Courts Fees Regulations 2009, reg 5B and sch 3. 61 High Court Fees Regulations 2013 reg 5 sch item 4. 62 Item 20. 63 Arbitration Act 1996, sch 1, art 11. 64 Same place art 16. 65 Same place art 12(2). 66 See discussion of s 21J in connection with finality of awards below. 67 Arb Act sch 1 arts 17A to 17J, 19(2) 23, 24, 27 and sch 2 cl 3; see also the power to issue interim awards: s 2(1) and art 35. 68 Arbitration Act 1996, sch 1 art 18. 69 Arts 34 and 36. 70 Art 18. 71 Art 19. 72 Above, see text accompanying n 53 and following. 73 PRA s 38; Family Court Rules 2002, rr 399(2)(b) and 400(2)(b). 74 High Court Rules, r 9.36. 75 HCR r 9.34; Transpacific All Brite Ltd v MPC Traders Ltd & Ors HC Napier CIV-2011-441-169, 24 November 2011. 76 HCR 8.42(b). 77 HCR r 9.75. 78 Litchfield v Jones (1884) 54 LJ Ch 207 (Ch). 79 Archives & Records Assoc of NZ Inc v Blakeley 18 February 1998, Heron J, HC Wellington CP 226/97. 80 Stewart v Judicial Committee of the Auckland Racing Club Inc 10 June 1991, Temm J, HC Auckland M102/90. 82 see rr 400(2)(b), 398(2) and form P(R)1. 83 Ministry of Justice publication “Reviewing the Family Court, A Summary” September 2011 p 1. 84 Arbitration Act 1996, sch 1, arts 34 and 36. 85 sch 2, cl 5. 86 Arbitration Act s 14A 87 Family Courts Act 1980, s 11A. 88 Arb Act s 14B. 89 ss 14D and 14E. 90 s 14. 91 ss 14D and 14E. 92 s 14F(2). 93 PRA s 35A; Family Courts Act 1980 s 11B(3) and (4). 94 Family Courts Act 1980, s 11B(1). 95 Ashworth, above, n 30 at p 31; Marion Boyd Dispute Resolution in Family Law: Protecting Choice, Promoting Inclusion (prepared for Ministry of Attorney General, Ontario, Canada 2004) at 74. 96 Ministry of Justice release at http://www.justice.govt.nz/policy/justice-system-improvements/family-court-reform. 97 For the hazards to avoid see Acorn Farms v Schnuriger [2003] 3 NZLR 121. 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