APM Group (Aust) Pty Ltd v Galwin Pty Ltd - [2006] VSC 325

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 9866 of 2005

APM GROUP (AUST) PTY LTD	Plaintiff
v
GALWIN PTY LTD	Defendant

No. 4261 of 2006

GALWIN PTY LTD	Plaintiff
V
APM GROUP (AUST) PTY LTD	Defendant

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JUDGE:	HANSEN J
WHERE HELD:	Melbourne
DATE OF HEARING:	29 August 2006
DATE OF JUDGMENT:	12 September 2006
CASE MAY BE CITED AS:	APM Group (Aust) Pty Ltd v Galwin Pty Ltd
MEDIUM NEUTRAL CITATION:	[2006] VSC 325

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Contract – Expert determination of disputes under building contract – Whether stipulated timetable for determination followed – Purported withdrawal from agreement by one party – Determination made – Whether binding.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff in 9866 of 2005 and the Defendant in 4261 of 2006	Mr C W R Harrison	Phillips Fox
For the Defendant in 9866 of 2005 and the Plaintiff in 4261 of 2006	Ms S L Bingham	McMullan Solicitors

HIS HONOUR:

The issue brought forward for determination by cross motions is whether an expert determination made pursuant to an agreement is binding on the parties thereto.

The parties are APM Group (Aust) Pty Ltd (“APM”) and Galwin Pty Ltd (“Galwin”). By a contract dated 19 December 2002 Galwin engaged APM to construct an apartment building at 693-697 Orrong Road, Toorak. Warren and Rowe (Aust) Pty Ltd was appointed by Galwin as superintendent for the purpose of the contract (“the contract”). Works duly commenced but disputes arose between APM and Galwin on various matters. On 16 March 2003 APM commenced a proceeding against Galwin in the Domestic Building List of the Victorian Civil and Administrative Tribunal (“VCAT”). The proceeding was settled on 5 August 2003. The settlement agreement varied some of the terms of contract. Thereafter works continued but, disputes again occurring, on 8 January 2004 APM commenced a second proceeding in the Domestic Building List at VCAT. Then, on 21 February 2005 APM and Galwin entered into a Contract Variation and Completion Agreement (“the completion agreement”). Among other things the completion agreement provided for the settlement of the second VCAT proceeding. In Background clauses to the completion agreement it is stated, by way of explanation for entering into the completion agreement, that:

“APM and Galwin wish to minimise the expense and delay associated with litigating the matters in dispute between them and wish to facilitate completion of the remaining works under the Contract.”

The completion agreement provided for the basis on which the construction works would proceed to completion. As to that, the provisions of the contract continued in force except to the extent they were varied by the agreement which settled the first VCAT proceeding and the completion agreement. Further, the appointment of the current superintendent was terminated and in lieu Trevor Main and Associates (“Main”) was appointed as superintendent under the contract. It is not necessary to set out the extensive provisions in cl 4 for the completion of the works. What is important is that by cl…

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] VSC 325
Decision Date: 12 September 2006

CaseChat Overview and Summary

The Federal Court was asked to consider the validity of a determination made by an expert under a building contract between APM Group (Aust) Pty Ltd and Galwin Pty Ltd. The dispute centred on whether the stipulated timetable for expert determination was followed, and if a purported withdrawal from the agreement by one party affected the binding nature of the determination. The court was tasked with determining whether the expert's determination was valid and binding on the parties, despite the alleged withdrawal.

The key legal issues revolved around the enforceability of the expert determination process outlined in the contract, specifically whether the timetable for the determination was adhered to, and if the purported withdrawal by one party affected the validity of the determination. The court had to assess whether the expert's determination was binding, despite any attempts by one party to withdraw from the agreement.

In its decision, the court found that the stipulated timetable for expert determination was not strictly followed, as there were delays in the process. However, the court held that the determination was still valid and binding on the parties. The court reasoned that the delays did not invalidate the determination, as the essence of the agreement to resolve disputes through expert determination was still fulfilled. Furthermore, the court found that the purported withdrawal by one party did not affect the binding nature of the determination, as the agreement to resolve disputes through expert determination remained in effect.

The court ordered that the determination made by the expert was binding on both parties and that they were required to abide by the terms of the determination. The court did not provide specific monetary or other remedies, but rather focused on the enforceability of the expert determination process as outlined in the contract.

Orders