Haley v Haley

When a party objects to converting a family arbitration award into a financial remedy order, the Family Court must apply the ordinary appellate approach rather than the stringent challenge regime under the Arbitration Act 1996. The objector must first show a real prospect of establishing that the award is wrong.

If that threshold is met, the court normally conducts a review rather than a rehearing. It may substitute its own order if the award is wrong. The error need not be obvious, serious, exceptional or apparent on the face of the award. The parties’ agreement to arbitrate remains important, but cannot oust the court’s independent statutory responsibility under the Matrimonial Causes Act 1973.

The parties referred their unresolved financial remedy proceedings to arbitration under the Institute of Family Law Arbitrators scheme. The husband considered the resulting award unfair and sought relief in the High Court under sections 68 and 69 of the Arbitration Act 1996. He also asked the court to decline to make a financial remedy order in the award’s terms.

Deputy High Court Judge Ambrose dismissed the statutory challenges and made an order reflecting the award. The husband’s appeal was confined to the court’s approach under the Matrimonial Causes Act 1973. The central question was whether an objection to incorporating a family arbitration award was governed by a test akin to sections 68 and 69 of the 1996 Act or by the ordinary test applicable to appeals in financial remedy proceedings.

1. Appeal allowed. The deputy judge applied the wrong test. An objection to the incorporation of a family arbitration award must be addressed through an approach analogous to the ordinary financial remedy appeal process, rather than the more restrictive regime governing commercial arbitration challenges.
2. A family arbitration agreement does not oust the court’s jurisdiction. Enforceable financial remedy orders derive their authority from the court and the Matrimonial Causes Act 1973, not from the arbitration agreement. The court must therefore discharge its independent statutory responsibility, including its obligation to consider all the circumstances and achieve a fair result under section 25.
3. The agreement to arbitrate remains an important consideration. Ordinarily, the resulting award will be incorporated into a court order. It does not follow, however, that an objecting party must establish a qualifying challenge under sections 57, 68 or 69 of the Arbitration Act 1996, a mistake or a supervening event.
4. The court should initially triage the objection through the notice-to-show-cause procedure. The objecting party must demonstrate on paper a real prospect of showing that the award is wrong. An objection which fails that threshold may be dismissed summarily, with an order made in the award’s terms and an appropriate costs sanction.
5. If the threshold is met, the ensuing hearing is ordinarily a review, not a rehearing. A rehearing remains available where the interests of justice require it. The court may substitute its own order if the award is wrong. The award need not be seriously wrong, obviously wrong, exceptionally wrong or so wrong that the error leaps from the page.
6. The approaches in J v B and S v S, which restricted resistance to an incorporating order substantially to the statutory arbitration grounds, mistake or supervening events, were rejected. The wording of the ARB1 FS form was also too restrictive insofar as it suggested that substitution could occur only in exceptional circumstances.
7. The husband had a real prospect of demonstrating that the award was wrong. The case was remitted for case management and determination by a circuit judge authorised to hear financial remedy appeals. Moylan and Popplewell LJJ agreed with King LJ.

1. Court of Appeal (Civil Division): The appeal was allowed. The court held that the ordinary appellate test governed the challenge to incorporation of the family arbitration award and remitted the proceedings to an appropriately ticketed circuit judge.
2. High Court of Justice, Family Division: Deputy High Court Judge Ambrose dismissed the husband’s applications under sections 68 and 69 of the Arbitration Act 1996, declined to interfere with the award under the Matrimonial Causes Act 1973, and made an order in the award’s terms. No neutral citation is stated in the judgment.
3. Family Court: The parties’ financial remedy applications were referred to arbitration before their listed trial. The arbitrator made a final award on 23 October 2019.