ABB Service v Pyrmont Light Rail - [2006] NSWSC 187

Reported Decision:
57 ACSR 122

New South Wales

Supreme Court

CITATION: ABB Service v Pyrmont Light Rail [2006] NSWSC 187

HEARING DATE(S): 10 March 2006; 17 March 2006

JUDGMENT DATE :
17 March 2006

JURISDICTION: Technology & Construction List

JUDGMENT OF: McDougall J at 1

EX TEMPORE JUDGMENT DATE: 03/17/2006

DECISION: See paragraph [52] of judgment

CATCHWORDS: COSTS - security for costs of arbitration under s 1335 of the Corporations Act 2001 and s 47 of the Commercial Arbitration Act - where parties agree to amount and form of security - from what date security should operate - where cross-claims are defensive or seek indemnity on basis of matters alleged by claimant - where cross-claims involve same evidentiary dispute - whether security extends to costs of cross-claims - no question of principle

LEGISLATION CITED: Commercial Arbitration Act
Corporations Act 2001

CASES CITED: Johnson v Macri and Marcellino Pty Limited (8 June 1990; unreported; BC 9002978)
Pacific Acceptance Corporation Ltd v Forsyth (No 2) [1967] 2 NSWR 402

PARTIES: ABB Service Pty Limited (Plaintiff)
Pyrmont Light Rail Company Limited (Defendant)

FILE NUMBER(S): SC 55089/05

COUNSEL: F G Lever SC (Plaintiff)
L V Gyles (Respondent)

SOLICITORS: Abbott Tout (Plaintiff)
Piper Alderman (Respondent)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
TECHNOLOGY & CONSTRUCTION LIST

McDOUGALL J

17 March 2005 Ex tempore (revised 17 March 2005)

COMPANY LIMITED

JUDGMENT

1 McDOUGALL J: The plaintiff in these proceedings (ABB) is the respondent in an arbitration in which the defendant in these proceedings (PLRC) is the claimant. The arbitrator is the Hon M L Foster QC. There are two cross-claims in that arbitration: one brought by ABB against PLRC and the other brought by ABB against Microelectronic (Aust) Pty Limited (Microelectronic).

2 In these proceedings, ABB seek an order for security for its costs in the arbitration. It relies on s 1335 of the Corporations Act 2001 and on the Court's power pursuant to s 47 of the Commercial Arbitration Act. It was not disputed that s 47 is a sufficient basis for this Court to order a claimant in an arbitration to give security for the costs of the respondent in that arbitration; clearly, it is. See, for example, the decision of Cole J in Johnson v Macri and Marcellino Pty Limited (8 June 1990 unreported; BC 9002978).

3 The parties have now agreed that security should be given and on the amount and form of that security. There are, however, a number of matters that require to be decided. The first is the date from which the security should operate. The second is whether or not it should extend to any costs incurred by ABB in relation to either or both of the cross-claims to which I have referred. The third is as to the costs of the proceedings in this Court. There is also some dispute as to the mechanism to be followed in the event that ABB makes an application for further, or "top-up" security.

4…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2006] NSWSC 187
Decision Date: 17 March 2006

CaseChat Overview and Summary

In the case between ABB Service and Pyrmont Light Rail, the parties engaged in arbitration under the Corporations Act 2001 and the Commercial Arbitration Act. The primary dispute concerned the form and amount of security for costs of arbitration, an issue that the parties had agreed upon. However, the disagreement arose from the date upon which this security should commence. Additionally, the matter involved cross-claims that were either defensive or sought indemnity based on the matters alleged by the claimant. These cross-claims involved the same evidentiary dispute, raising questions about whether the agreed-upon security for costs extended to these cross-claims.

The legal issues before the court required clarification on the scope of the agreed security for costs. Specifically, it was necessary to determine if the security applied to costs incurred in relation to the cross-claims. The court needed to interpret the terms of the agreement between the parties and assess whether the cross-claims were sufficiently linked to the main arbitration to fall within the scope of the agreed security.

The court determined that the security for costs, as agreed upon by the parties, did extend to the costs of the cross-claims. It reasoned that since the cross-claims were defensive or sought indemnity based on the same evidentiary dispute as the main claim, they were sufficiently linked to the arbitration. Therefore, the agreed security for costs covered these additional expenses. The court concluded that there was no new principle at stake, merely the application of existing legal principles to the specific facts of the case.

The final orders of the court affirmed that the security for costs, as agreed upon by the parties, applied to the costs of the cross-claims. This decision provided clarity for the parties moving forward in their arbitration proceedings.

Orders