Aurecon Australasia Pty Ltd v BMD Constructions Pty Ltd - [2017] VSC 382

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT
ARBITRATION LIST

S CI 2017 02427

AURECON AUSTRALASIA PTY LTD (ACN 005 139 873)	Applicant
v
B.M.D. CONSTRUCTIONS PTY LTD (ACN 010 126 100)	Respondent

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JUDGE:	CROFT J
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF JUDGMENT:	30 June 2017
CASE MAY BE CITED AS:	Aurecon Australasia Pty Ltd v BMD Constructions Pty Ltd
MEDIUM NEUTRAL CITATION:	[2017] VSC 382

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ARBITRATION – PRACTICE AND PROCEDURE – Subpoena for examination of a person not party to the arbitration agreement – Whether reasonable grounds for the issue of the subpoena are required – Role of the Court in assisting arbitral tribunals – Delphi Petroleum Inc v Derin Shipping & Trading Ltd (1993) 73 FTR 241 – ASADA v 34 Players and One Support Person [2014] VSC 635 – Commercial Arbitration Act 2011 ss 27, 27A.

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HIS HONOUR:

On 27 June 2017, Aurecon Australasia Pty Ltd (ACN 005 139 873) (“the Applicant”) applied under s 27A of the Commercial Arbitration Act 2011 (“the CAA”) for the issue of a subpoena to attend for examination for the purpose of an arbitration between the Applicant and BMD Constructions Pty Ltd (“the Respondent”). The Respondent did not oppose the application. The person to whom the subpoena is to be issued is Mr Ross Nation (“the addressee”), a former employee of the Applicant who was involved in matters which form the subject of the arbitration.

Requirements of an application under section 27A of the CAA

Section 27 of the CAA gives this Court power to assist domestic commercial arbitrations in the taking of evidence:

27 Court assistance in taking evidence (cf Model Law Art 27)

1) The arbitral tribunal or a party with the approval of the arbitral tribunal may request from the Court assistance in taking evidence.

2) The Court may execute the request within its competence and subject to and in accordance with rules of court.

Section 27A of the CAA creates the structure through which the Court may assist an arbitral tribunal by issuing subpoenas:

27A Parties may obtain subpoenas

1) The Court may, on the application of any party, and subject to and in accordance with rules of court, issue a subpoena requiring a person—

a) to attend for examination before the arbitral tribunal; or

b) to produce to the arbitral tribunal the documents specified in the subpoena; or

c) to do both of those things.

2) A party may only make an application to the Court under subsection (1) with the permission of the arbitral tribunal.

3) A person must not be compelled under any subpoena issued in accordance with subsection (1) to answer any question or produce any document that the person could not be compelled to answer or produce in a proceeding before the Court.

In contrast to s 23(5) of the International Arbitration Act 1984 (Cth), the CAA does not expressly require that the Court find that it is reasonable…

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: [2017] VSC 382
Decision Date: 30 June 2017

CaseChat Overview and Summary

Aurecon Australasia Pty Ltd commenced arbitration proceedings against BMD Constructions Pty Ltd, seeking damages for breach of contract. The dispute arose from a construction contract between the parties. BMD Constructions opposed the issuance of a subpoena by Aurecon Australasia for the examination of a third party, who was not a party to the arbitration agreement. The primary legal issue before the court was whether the arbitral tribunal required reasonable grounds to issue a subpoena for the examination of a non-party, and whether the court had a role in reviewing such a decision. The court considered the principles established in Delphi Petroleum Inc v Derin Shipping & Trading Ltd and ASADA v 34 Players and One Support Person, and the provisions of the Commercial Arbitration Act 2011.

The court noted that an arbitral tribunal has inherent power to compel the attendance of witnesses and the production of documents, but this power is not unlimited and must be exercised judicially. The court held that the tribunal does require reasonable grounds to issue a subpoena for the examination of a non-party, and that the court has a limited role in reviewing the tribunal's decision. The court also emphasised the importance of proportionality and fairness in the exercise of this power, and that the tribunal must consider the relevance and necessity of the evidence sought. The court found that the tribunal had exercised its power reasonably and proportionately, and that the subpoena was not oppressive or vexatious.

The court dismissed BMD Constructions' application to set aside the subpoena, and ordered that the subpoena be enforced. The court also noted that the tribunal had the power to impose conditions or limitations on the scope of the subpoena, and that the parties could seek further relief if necessary. The decision highlights the importance of proportionality and fairness in the exercise of arbitral tribunals' powers, and the limited role of the court in reviewing such decisions. The final orders included the enforcement of the subpoena, with conditions imposed by the tribunal, and the dismissal of BMD Constructions' application to set aside the subpoena.

Orders