By Patrick Parkinson -
Snapshot
- New arbitration rules commence at the beginning of April, creating a comprehensive framework for the resolution of property disputes under the Family Law Act.
- Once registered, an arbitration award takes effect as if it were a decree of the Court.
- Review of an arbitral award is only on a question of law, but the scope for review is not as narrow as this might suggest.
- There are currently no CGT or stamp duty exemptions for arbitral awards but this problem can be dealt with through the arbitration agreement and the terms of the award.
Arbitration has been possible in property cases under the under the Family Law Act 1975 for 25 years. It can only be undertaken on a voluntary basis. Legal Aid Queensland has operated a property arbitration scheme since 2001 with considerable success.
However, arbitration has otherwise not been much utilised, despite efforts being made by the Bar at least in Melbourne and Brisbane, and despite the widespread acceptance of arbitration as a means of resolving commercial disputes.
With the Family Court of Australia and the Federal Circuit Court under enormous pressure due to the cumulative effect of the government’s ‘efficiency dividends’, and delays in replacing judges, there is no longer, in Australia, a quick, simple and cheap option for resolving family law disputes by means of adjudication.
That had been the mission of the Federal Magistrates Court, but in many parts of the country, the time taken in getting from filing to trial in the Federal Circuit Court in cases which lack urgency (such as property cases) may well be over two years.
Properly, the courts prioritise children’s cases, particularly those involving safety issues. Federal Circuit Court judges now have an unrelenting diet of very difficult children’s matters, and even when a property matter reaches the door of the court, there is some likelihood that the lawyers will be urged to sort it out in the corridor.
It can be extraordinarily expensive for legally represented parties to get through the various steps and procedural hearings that are required before a judge will give them their day in court. There has to be another option for middle Australia.
One of the reasons why arbitration has been little utilised in the past has been because of gaps in the regulatory framework for arbitration.
Although the Family Law Regulations filled in a lot of the detail, they left to Rules of Court some significant matters such as the processes surrounding the issue of subpoenas.
New rules, the Family Law Amendment (Arbitration and Other Measures) Rules 2015, came into effect on April 1st 2016. These amend the Family Law Rules 2004 to insert a new chapter 26B on arbitration. They address the lacunae in the regulatory framework.
