AUSTRALIAN MARITIME SYSTEMS LTD -v- McCONNELL DOWELL CONSTRUCTORS (AUST) PTY LTD [2016] WASC 52 (S)

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2016] WASC 52 (S)
Case No:	CIV:2724/2015	Heard:	19 FEBRUARY 2016 & ON THE PAPERS
Coram:	MITCHELL J	Delivered:	1/04/16
No of pages:	8	Judgment Part:	1 of 1
Result:	Costs to be paid on party-party basis
Category:	A
PDF Version

Parties:	AUSTRALIAN MARITIME SYSTEMS LTD McCONNELL DOWELL CONSTRUCTORS (AUST) PTY LTD
Catchwords:	Costs Application for a stay of proceedings under Commercial Arbitration Act 2012 (WA) Whether costs should be awarded on indemnity basis for proceedings brought in breach of an arbitration agreement
Legislation:	Rules of the Supreme Court 1971 (WA), O 66 r 1
Case References:	A v B [No 2] [2007] EWHC 54 (Comm); [2007] 1 Lloyd's LR 358 Anderson v Bowles (1951) 84 CLR 310 Ansett v Malaysian Airline System [No 2] [2008] VSC 156 Australian Maritime Systems Ltd v McConnell Dowell Constructors (Aust) Pty Ltd [2016] WASC 52 Ballantyne v Boylan [2013] SASC 177 Bartlett v Director of Public Prosecutions (Cth) [2013] WASCA 223 Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115; (2009) 41 WAR 1 Gray v Sirtex Medical Ltd [2011] FCAFC 40; (2011) 193 FCR 1 IMC Aviation Solutions Pty Ltd v Altain Khuder LLC [2011] VSCA 248; (2011) 38 VR 303 John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [No 2] [2015] NSWSC 564 Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 Pipeline Services WA Pty Ltd v Atco Gas Australia Pty Ltd [2014] WASC 10 (S) Re Bond Corporation Holdings Ltd (1990) 1 WAR 465 Re Ikon Group Ltd [No 3] [2015] NSWSC 982 Saraceni v Jones [2012] WASCA 59 (S) Sino Dragon Trading Ltd v Noble Resources International Pte Ltd [No 2] [2015] FCA 1046 Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S) Union Discount Co Ltd v Zoller [2001] EWCA Civ 1755; [2002] 1 WLR 1517 Wenpac Pty Ltd v Allied Westralian Finance Ltd (1994) 123 FLR 1

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION : AUSTRALIAN MARITIME SYSTEMS LTD -v- McCONNELL DOWELL CONSTRUCTORS (AUST) PTY LTD [2016] WASC 52 (S) CORAM : MITCHELL J HEARD : 19 FEBRUARY 2016 & ON THE PAPERS DELIVERED : 1 APRIL 2016 FILE NO/S : CIV 2724 of 2015 BETWEEN : AUSTRALIAN MARITIME SYSTEMS LTD

Plaintiff

AND

McCONNELL DOWELL CONSTRUCTORS (AUST) PTY LTD

Defendant

Catchwords:

Costs - Application for a stay of proceedings under Commercial Arbitration Act 2012 (WA) - Whether costs should be awarded on indemnity basis for proceedings brought in breach of an arbitration agreement

Legislation:

Rules of the Supreme Court 1971 (WA), O 66 r 1

Result:

Costs to be paid on party-party basis

Category: A

Representation:

Counsel:

Plaintiff : Mr T J Porter

Defendant : Mr S J Davis

Solicitors:

Plaintiff : DLA Piper

Defendant : Norton Rose Fulbright Australia

Case(s) referred to in judgment(s):

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: [2016] WASC 52 (S)
Decision Date: 1/04/16

CaseChat Overview and Summary

Australian Maritime Systems Ltd filed an application against McConnell Dowell Constructors (Aust) Pty Ltd in the Supreme Court of Western Australia seeking an order for the stay of proceedings pursuant to the Commercial Arbitration Act 2012 (WA). The dispute arose from a construction contract where an arbitration agreement had been entered into. Australian Maritime Systems argued that McConnell Dowell breached this agreement by initiating legal proceedings instead of proceeding to arbitration, and sought indemnity costs for the breach.

The court was tasked with determining whether the party who initiated proceedings in breach of an arbitration agreement should be liable to pay the other party's costs on an indemnity basis. The court considered the principles underpinning the enforcement of arbitration agreements and the consequences of breaching such agreements. It examined the relevant statutory provisions and case law that guided the court in assessing the appropriate costs order in such circumstances.

The court found that while breaches of arbitration agreements are serious, the statutory framework did not provide for indemnity costs as a matter of course. Instead, the court considered the overall conduct of the parties and the proportionality of the costs order. Given the circumstances, the court deemed it appropriate to award costs on a party-and-party basis rather than on an indemnity basis. This balanced approach reflected the nature of the breach and the overall conduct of both parties in the proceedings.

The court made an order that the costs of the application were to be paid on a party-and-party basis. This decision highlights the court's discretion in determining costs orders in cases involving breaches of arbitration agreements, focusing on the proportionality and fairness of the outcome.

Orders

Orders of the court

Costs to be paid on party-party basis

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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