Arnwell Pty Ltd v Teilaboot Pty Ltd - [2010] VSC 123

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL COURT

No. 1633 of 2010

ARNWELL PTY LTD

Plaintiff

TEILABOOT PTY LTD (ACN 006 474 415)

MESLEN NOMINEES PTY LTD (ACN 005 790 698)

GIBINS PTY LTD (ACN 108 927 037)

E. WILLIAM GILLARD QC

Firstnamed Defendant

Secondnamed Defendant

Thirdnamed Defendant

Fourthnamed Defendant

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JUDGE:	CROFT J
WHERE HELD:	Melbourne
DATE OF HEARING:	29 March 2010
DATE OF JUDGMENT:	12 April 2010
CASE MAY BE CITED AS:	Arnwell Pty Ltd v Teilaboot Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2010] VSC 123

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COMMERCIAL ARBITRATION — Domestic arbitration — Application to restrain arbitral proceedings from recommencing — s 47 of the Commercial Arbitration Act 1984 (Vic) —Court’s inherent power to prevent injustice — Commonwealth of Australia v Cockatoo Dockyard Pty Ltd (1995) 36 NSWLR 662 — State of Victoria v Seal Rocks Victoria (Australia) Pty Ltd (2001) 3 VR 1 — Whether the Court can intervene in procedural matters

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P Cawthorn SC Mr M H Whitten	Moray & Agnew
For the Defendants	Mr S Anderson SC Mr J D S Barber	Mr John Dimitropoulos

HIS HONOUR:

Background

This matter came before the Court as an urgent application which was made on 29 March 2010 with a view to preventing arbitration proceedings re-commencing the following day, 30 March 2010.

The arbitration the subject of this application is a private arbitration between the plaintiff and the first, second and third defendants under an Arbitration Agreement, dated 9 December 2009, which they entered into, collectively as the parties, with The Honourable E.W. Gillard QC as arbitrator (“the Arbitration Agreement”). For convenience the learned arbitrator is referred to as “the Arbitrator”.

The genesis of the Arbitration Agreement appears from the recitals to that agreement. The parties executed an agreement dated 28 September 2009 (“the September Agreement”) whereby they agreed to mediate the division of various parcels of identified property (see recital A) and, in the event that the mediation failed to resolve all issues identified in the 28 September 2009 agreement, to arbitrate in respect of the remainder of the issues unresolved.

The parties entered into an Agreement for Partition and Division of Property dated 16 October 2009 (“the October Agreement”) and agreed to divide the identified property as provided for in that agreement.

Recital D of the Arbitration Agreement states that “the parties wish to engage the Arbitrator in respect of the matters identified in clause 3 of the September Agreement and otherwise refer to clause 3 of the October Agreement”. Clause 3 of the September Agreement provides as follows:

“3. The Arbitrator is to determine upon the following points
i.The Division of the Land between the parties in the above proportions or as close as possible to the said above proportions or in any other proportion that the parties may mutually agree upon.
ii.For the purposes of (i) above the Arbitrator is to take into account the existence…

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: [2010] VSC 123
Decision Date: 12 April 2010

CaseChat Overview and Summary

Arnwell Pty Ltd sought to restrain Teilaboot Pty Ltd from recommencing arbitral proceedings that had been suspended. The matter was before the Supreme Court of Victoria. The core of the dispute centred on the interpretation and application of section 47 of the Commercial Arbitration Act 1984 (Vic) and the court's inherent power to prevent injustice in arbitration proceedings. The legal issues at the heart of the case revolved around whether the court had the jurisdiction to intervene in procedural matters of an arbitration agreement and whether the court could restrain the recommencement of arbitral proceedings that had been previously suspended.

The court examined the specific provisions of section 47 of the Commercial Arbitration Act 1984 (Vic) and the case law precedents, including Commonwealth of Australia v Cockatoo Dockyard Pty Ltd and State of Victoria v Seal Rocks Victoria (Australia) Pty Ltd. It considered the balance between the autonomy of arbitration and the court's inherent jurisdiction to prevent injustice. The court found that while the arbitration clause provided for a binding resolution of disputes, the court retained the power to intervene in exceptional circumstances to prevent a manifest injustice. It concluded that the court could restrain the recommencement of arbitral proceedings if it was satisfied that an injustice would result.

In light of its findings, the court determined that it had the authority to intervene in this instance. It restrained Teilaboot Pty Ltd from recommencing the arbitral proceedings until certain conditions were met, thus ensuring a fair and just resolution of the underlying dispute. The court's decision underscored the importance of preventing manifest injustice while respecting the autonomy of arbitration agreements. The final orders of the court included the restraint on the recommencement of arbitral proceedings pending further orders of the court.

Orders