Australian Power and Water Pty Ltd v Independent Public Business Corporation of Papua New Guinea

[2003] NSWSC 1227

CITATION:	Australian Power and Water Pty Ltd v Independent Public Business Corporation of Papua New Guinea [2003] NSWSC 1227
HEARING DATE(S):	17/12/03, 19/12/03
JUDGMENT DATE:	19 December 2003
JUDGMENT OF:	McDougall J at 1
DECISION:	See paras [80] to [83] of judgment
CATCHWORDS:	CONFLICT OF LAWS - private international law - stay of proceedings - appropriateness of forum - statutory jurisdiction - relevant considerations - Supreme Court Rules 1970 (NSW) Pt 10, r 6A - Pt 11, r 8A
LEGISLATION CITED:	Supreme Court Rules 1970 (NSW) Pt 10, r 6A; Pt 11, r 8A
CASES CITED:	Gosman v Ockerby (1908) VLR 298, 305-6 Earthworks and Quarries Limited v F T Eastment and Sons Pty Ltd (1965) 8 FLR 32, 34 Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491, 503-4, 521 Voth v Manildra Flour Mills Pty Limited (1990) 171 CLR 538 Oceanic Sun Line Special Shipping Co Inc v Fay [1988] 165 CLR 197, 247 Henry v Henry (1996) 185 CLR 571, 586-7 Spiliada Maritime Corp v Cansulex Ltd [1987] 1 AC 460, 477-578 Forsythe v Saudi Arabian Airlines Corporation (1989) F.2d, 285 James Hardie & Co Pty Ltd v Hall (1998) 43 NSWLR 554, 573 Sharif v Azad [1967] 1 QB 605 A/S Tallinna Laevauhis v Estonian State Steamship Line (1947) 80 LLLR, 99, 108 Elizabeth Bay Developments Pty Ltd v Boral Building Services Pty Ltd (1995) 36 NSWLR 709 Aiton Australia Pty Ltd v Transfield Pty Ltd (1999) 153 FLR 236, 252 Scott v Avery (1856) 10 ER 1121 Makita (Australia) Pty Ltd v Sprowles (2002) 52 NSWLR 705, 729
PARTIES :	Australian Power and Water Pty Ltd v Independent Public Business Corporation of Papua New Guinea
FILE NUMBER(S):	SC 50139/03
COUNSEL:	D R Sibtain (Counsel for plaintiff and respondent to the motion) F Kunc (Counsel for respondent and plaintiff to the motion)
SOLICITORS:	Corrs Chambers Westgarth (for Australian Power and Water) Truman Hoyle (for IPBC)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

McDOUGALL J

19 December 2003 (Revised 22 December 2003)

INDEPENDENT PUBLIC BUSINESS CORPORATION
OF PAPUA NEW GUINEA

JUDGMENT

HIS HONOUR:

Introduction and background

1 HIS HONOUR: The plaintiff sues to recover fees said to be due under two "Consultancy Contracts" (as said to have been varied from time to time) made between it and the then Privatisation Commission of Papua New Guinea. The defendant is sued as the statutory successor of the Privatisation Commission.

2 The defendant moves, without having filed an appearance, for orders to stay, strike out, or "set aside" the Summons and for declaratory relief, to the effect that this Court is an inappropriate forum, or that service was not authorised by the Supreme Court Rules.

The contracts

3 Each contract covers the provision by the plaintiff of consultancy services relating to the privatisation of the Electricity Commission of Papua New Guinea.

4 Relevant provisions of the two contracts include clause 10 (in each), which deals with "disputes and arbitration" and clause 11 in one, clause 13 in the other, which deal with "laws applicable".

5 Clause 10 reads:

“10. DISPUTES AND ARBITRATION

10.1. In the event of any dispute arising between the parties under this agreement, that dispute shall first be referred to mediation and then if necessary expert determination, to be conducted by and in accordance with the guidelines and practices of the PNG Commercial Disputes Centre, Inc.”

6 The clause dealing with laws applicable reads as follows (for convenience, I set out the version contained in the contract dated 1 November 2001):

“13. LAWS APPLICABLE

13.1. This Agreement is governed by and shall be construed in accordance with the laws of Papua New Guinea.”

7 It is also necessary to note the provisions of clause 6 of and schedule 2 to each contract, which deal with payments.

8 Clause 6.2 in each contract states as follows:

“6.2 Method of Payment

In respect of the remuneration detailed under this Section, the Commission shall pay to the Project Manager as specified in schedule 2 hereto [sic].”

9 Schedule 2 provides, among other things, for the payment of fees by way of monthly retainer and for the payment of "reimbursables". It states:

“Fees and recovery of expenses will be net of PNG VAT and can be payable to [sic]. All other taxes would be the responsibility of the Project Manager.”

10 It is also necessary to note the provisions of each contract dealing with notices - clause 12 in one and clause 14 in the other. Although those clauses do not, in terms, deal with payments, they do deal with the giving of "any notice or request required to or permitted to be given or made under this agreement". In the case of the plaintiff, they specify an address in Macquarie Street, Sydney.

11 I interpolate that the address specified is also the address given at the commencement of each contract as the address of the plaintiff where the parties to the agreement are stated.

The issues

12 The defendant puts its case for relief on three bases.

13 Firstly, it says, service of the Summons upon it was not authorised by the Supreme Court Rules.

14 Secondly, it says, this Court is an inappropriate forum.

15 Thirdly, it says, clause 10 of each contract should be enforced by staying these proceedings to enable attempts to be undertaken to resolve the dispute by mediation or, if necessary, by expert determination.

16 In relation to what I have called the second ground, the defendant relies, both on Part 10 Rule 6A, and on the inherent power of the Court.

Was service authorised?

17 It is convenient, at this stage, to set out the terms of Part 10 Rule 6A:

[10.6A] Setting aside service outside Australia
6.A (1) The Court may make an order of a kind referred to in Part 11 rule 8 (which relates to setting aside etc originating process) on application by a person on whom an originating process is served outside Australia.
(2) Without limiting subrule (1), the Court may make an order under this rule on the ground -
(a) that the service of the originating process is not authorised by these rules; or
(b) that this Court is an inappropriate forum for the trial of the proceedings.”

18 The plaintiff relies on part 10 Rule 1A(c)(iv). That rule authorises the service of process outside Australia where the subject matter of the proceedings is a contract and the contract is one, a breach of which was committed in the State.

19 The plaintiff submits that, absent any stipulation in the contracts to the contrary, the obligation of the defendant was to pay the plaintiff in Sydney where the plaintiff has its office and where (at its bank by electronic funds transfer) it had hitherto been paid.

20 The defendant submitted that, since the plaintiff seemed to have an address in Papua New Guinea, the common law presumption (to which I will turn shortly) did not apply. However, the "address" relied upon was shown to be the post office box of the defendant itself. The only communication to the plaintiff at that address that was disclosed by the evidence was, in fact, shown to have been forwarded by the defendant to the plaintiff at the plaintiff's address in Sydney.

21 The plaintiff relied upon the presumption that is referred to in cases such as Gosman v Ockerby (1908) VLR 298, 305-306 and Earthworks and Quarries Limited v F T Eastment and Sons Pty Ltd (1965) 8 FLR 32, 34.

22 In the latter case, Dean J pointed out at 35 that, if there was no specific obligation in the contract dealing with the place of performance (where the performance consisted of the payment of money) then, in general terms, the debtor was obliged to find the creditor and to pay the creditor where the creditor could be found. However, his Honour said:

“But if the creditor refuses to take the money, or goes away and leaves no-one behind to receive it, the debtor is excused. He is not bound to follow the creditor to a foreign country.”

23 That was, of course, a citation from the judgment of Cussen J in Gosman at 306.

24 In the present case, the plaintiff cannot be said to have gone abroad. On the evidence, the plaintiff is located where it has always been and where it was always contemplated that it would be. In my view, if the contract on its proper construction does not so provide, then the obligation of the defendant (I use this term interchangeably with the original contracting party, the Privatisation Commission) was to pay the plaintiff where the plaintiff may be found.

25 However, I think, an equivalent result may be achieved as a matter of construction. The contract provides for the defendant to make payment to the plaintiff. It does not, in terms, say that that is to be done at the plaintiff's Sydney address (or at any other address). However, in two places, the contract indicates where the plaintiff is to be found. In one of those cases, it does so in the context of specifying an address for service for the purposes of notice. As a matter of construction, I hold that the contract obliges the defendant to pay the plaintiff at the stated address, unless the plaintiff and the defendant otherwise agree.

26 On either view, therefore, there would be (if the facts alleged by the plaintiff be proved and if no defence be proved) a breach within New South Wales.

27 Alternatively, if evidence as to the history or practice of payment is relevant, and if it is capable of showing that the plaintiff and the defendant have "otherwise agreed", then the same result would follow because the evidence shows, as I have said, that payments have been made to the plaintiff's bank, which is located in Sydney.

Inappropriate forum

28 The basis of the Court's power, both statutory and inherent, to stay proceedings where the Court is an inappropriate forum has been explained by the High Court in a number of cases; most recently, in Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491, 503. The Court looked at the position in the context of Part 10 Rule 6A as it presently stands.

29 The majority pointed out that the words "an inappropriate forum" in Part 10 Rule 6A were "less emphatic" than the test that the Court had adopted in its earlier decision, Voth v Manildra Flour Mills Pty Limited (1990) 171 CLR 538.

30 However, their Honours said:

“Because a Court's power to stay proceedings is an aspect of its inherent or implied power to prevent its own processes being used to bring about injustice, the same concepts and considerations necessarily inform the test of 'inappropriate forum' in paragraph (b) of Pt 10 r 6A(2), as inform the 'clearly inappropriate forum' test adopted in Voth and because the ultimate consideration is the prevention of injustice, they inform it in the same way.”

31 At 504, their Honours gave content to this by referring to the decision of Deane J in Oceanic Sun Line Special Shipping Co Inc v Fay [1988] 165 CLR 197, 247. His Honour there stated the test, as to "clearly inappropriate forum", as one involving consideration of whether continuation of the proceedings would be oppressive, in the sense of "seriously and unfairly burdensome, prejudicial or damaging", or vexatious, in the sense of "productive of serious and unjustified trouble and harassment".

32 That test was adopted by the Court in Voth and approved in Henry v Henry (1996) 185 CLR 571, 586-587 and, as I have indicated, in Renault at 503-504.

33 The effect of the majority's decision in Renault is that the same analysis is to be used in consideration of whether the Court is "an inappropriate forum" for the purposes of Part 10 Rule 6A.

34 It may further be noted that, notwithstanding the rejection in Oceanic Sun and in Voth of the statements as to the meaning of "forum non conveniens", by the House of Lords in Spiliada Maritime Corp v Cansulex Ltd [1987] 1 AC 460, the High Court has recognised in Henry at 586, 587 and in Renault at 503-504, the utility of the discussion by Lord Goff of Chievely of the relevant connecting factor as legitimate personal or juridical advantage: [1987] AC at 477-578 and 482, 484.

35 The parties in the present case each rely on a list of the factors that, they say, tip the balance one way or the other. Thus, for the defendant, reliance is placed upon the inclusion of clause 10 providing for alternative dispute resolution, the lack of connection to Australia, the circumstance that the contracts were negotiated in Papua New Guinea and the nomination of the law of Papua New Guinea as the law of contract.

36 A number of other factors are also relied upon by the defendant. However, it seems to me, many of those factors are, in truth, no more than the inevitable, or natural, consequences of the exercise of long arm jurisdiction. Others do not seem to me to be factors that bear upon a consideration of injustice, or that indicate relevant injustice.

37 Thus, the provision for alternative dispute resolution is not, in my view, something that is relevant to the inappropriate forum test. It is relevant, if at all, to the question whether these proceedings should be stayed to enable the parties' bargain to be worked out.

38 The absence of connection to Australia is productive of injustice only if the results of that absence of connection meet the description given by Deane J in Oceanic Sun, to which I have referred. Further, the nomination of the law of Papua New Guinea as the law of the contracts is not, of itself, a sufficient reason to find that there is injustice in the relevant sense: see for example, Renault at 521 [81].

39 The defendant says that the plaintiff cannot point to any legitimate personal or juridical advantage in the requisite sense, submitting in this context that the concept goes beyond "matter of obvious convenience". Whilst that is, no doubt, a consideration to be taken into account, it is, in my view, a “negativing” factor from the defendant's perspective. Clearly enough, to the extent that the submission may be correct, it is not something that is productive of relevant injustice to the defendant.

40 The defendant submits that there will be a juridical disadvantage if the proceedings are brought in New South Wales. Again, that may be so. For example, the defendant instances the facility of obtaining documents on subpoena (from corporations or individuals in Papua New Guinea) if the proceedings are commenced there, compared with the difficulty of obtaining such documents if the proceedings are continued here. That, however, seems to me to be one of those circumstances that I have said is either an inevitable or a natural consequence of the exercise of long arm jurisdiction.

41 To the extent that it produces injustice, it will produce injustice for both parties. However, the extent to which it produces injustice is something which is impossible to evaluate at present, particularly where, as the evidence shows, the relevant documents are held by the plaintiff in Sydney.

42 (I interpolate that, on the evidence, there is reason to think that the former officials of the defendant or its predecessor have, in effect, stripped the relevant files. The evidence shows that the defendant informed itself as to the dispute only after it had obtained relevant documents from the plaintiff.)

43 The defendant points to the circumstance that Papua New Guinea is a developing country. It submits that the emanations of Papua New Guinea "should not be put to the additional expense of the kind that will be incurred in having to litigate the case in Sydney." Equally, one may say, the plaintiff, having a right to litigate in this jurisdiction (as I have found) should not be put to the expense of having to litigate in Papua New Guinea. This is one of those factors that seems to be a balancing exercise, in the sense that, whichever way one decides, expense and inconvenience will be incurred.

44 The defendant submits that the Court should allow it to have its disputes heard in the Courts of its own country, particularly because the contracts in question were "so intimately connected with that country". It relies on a decision of the US Court of Appeals, Fifth Circuit, in Forsythe v Saudi Arabian Airlines Corporation (1989) F.2d, 285. Even if that is a circumstance that is a legitimate matter to consider in the balancing exercise, it does not seem to me to be a circumstance that, if ignored, produces relevant injustice to the defendant.

45 Each party has referred to considerations of delay and costs. As the defendant submits, in my view correctly, the question of delay is not simply one of comparing the length of time that it might take proceedings to get on in this state with the length of time that it might take proceedings to get on in Papua New Guinea, if the defendant be correct in its submission that clause 10 should be enforced. However, I put that aside for one moment. Having considered the evidence that the parties have adduced, I do not find that there is such a disparity, in terms of delay, to dictate that the choice of one forum rather than the other would be thereby rendered unjust. In other words, it seems to me that, on the evidence, the question of delay is neutral.

46 The parties also relied on considerations of costs. Again, on the evidence, I am not prepared to find that there is such a disparity as to costs that would render one forum rather than the other unjust.

47 The plaintiff's submissions, in substance, are the mirror image, or reverse, of those made by the defendant. The plaintiff emphasises, among other things, the primary place of business, the fact of payment in Sydney, the retention of documents in Sydney and the availability of witnesses in Australia. None of those matters, of themselves, seem to me to be anything more than, as I have said, balancing considerations.

48 One matter that the plaintiff has raised, although in a somewhat oblique way, is a fear as to law and order, or safety, if the proceedings were to be heard in Papua New Guinea. I do not propose to take that into account. It seems to me to be verging on the hypocritical for the plaintiff to take the benefit of the contracts, knowing that they involved the performance of work in Papua New Guinea (with, on the submission, its attendant risk to safety) but to decline to litigate in Papua New Guinea for the same reason.

49 The plaintiff submits, with more force, that even if hearing the proceedings in this state would impose a financial burden on the defendant, that burden can be limited in a number of ways. One way, of course, is the availability of video technology for the cross-examination of witnesses, where that may be appropriate. In my view, the defendant's fears as to the expense of litigating in Sydney, although real, are to some extent exaggerated and the real impact upon the defendant of those costs can be mitigated, to some extent, by the appropriate use of technology.

50 I therefore conclude that the defendant has not shown that this Court is an inappropriate forum.

Clause 10

51 Each party has led expert evidence as to, among other things, the relevant law of Papua New Guinea. The defendant led evidence from Mr Gregory James Lay, and the plaintiff led evidence from Mr Jeffery Leonard Shepherd. Mr Lay expressed an opinion, among other things, as to the validity and enforceability under the law of Papua New Guinea, of Clause 10 of the contracts. His evidence on that topic was as follows:

“ The validity and enforceability of the ADR Clause
16. I am aware of cases where the National Court of PNG (National Court) has stayed actions involving contracts containing an arbitration clause drafted in Scott v Avery terms, and where the applicant for a stay has not unduly delayed or taken other steps in the action before making the stay application. For example, I am aware of one instance where, when a party to a contract containing a clause similar to the ADR Clause (but referring to arbitration rather than mediation) commenced proceedings in the National Court (WS 133 of 2001 Gaman Holdings Limited v the State and the National Forests Authority), the National Court stayed the court proceedings on the basis of the similar clause and referred the matter to CDC for arbitration. The decision is not reported. There is only occasional access to unreported decisions of the National Court. Due to a restriction on the resources available to the Court Reporting service, the audiotapes of proceedings are only typed up if an appeal is lodged and a party requests a transcript.

17. I am not aware of any case in PNG in which the ADR Clause has been considered. However I am of the opinion that the Court would enforce the ADR Clause having regard to:
(a) the fact that a procedure for giving effect to the ADR Clause is in place with CDC; and
(b) the views expressed in other jurisdictions, that the mediation process should not be thwarted by insistence on overly complex rules of procedure: Aiton Australia Pty Limited v Transfield (1999) 153 FLR 236, a decision of Einstein J and Computer Share Ltd v Perpetual Registrars Limited [2002] VSC 233, a decision of Warren J.
18. According to the ADR Clause, in the event mediation is unsuccessful, the dispute is to be determined by expert determination. I am unaware of any instance where this has occurred. However, in my opinion, the CDC would apply Rule 46 in choosing the expert in the event the parties were unable to agree on an expert.” (emphasis supplied)

52 Mr Lay was not cross-examined on that evidence. Further, Mr Shepherd was not asked to aside to, and did not, express an opinion on this point. However, in paragraph 14 of his affidavit, under the rubric "Status of Present Services of the CDC", Mr Shepherd said:

“I have carefully perused the contents of the affidavit of Mr Greg Lay sworn in these proceedings on 28 November 2003, particularly insofar as Mr Lay deposes to the ADR procedures of the CDC. I take no issue with any of the contents of Mr Lay’s affidavit except that I disagree with Mr Lay’s statement in paragraph 11 of his affidavit to the effect that the CDC has not published any procedural guidelines other than the Rules of CDC. In fact the CDC has published, inter alia, a set of commercial mediation guidelines. A set of those guidelines is attached and Marked “ C ”. Apart from this correction, I believe that all of the other facts deposed to by Mr Lay in his affidavit are accurate. However there are certain additional matters which I consider are also of relevance to any assessment of the present status of the CDC. I now address those additional matters.”

53 Each of Messrs Lay and Shepherd gave evidence concerning the operation of the Commercial Disputes Centre, or "CDC". It is not said that, if clause 10 were to be activated, the CDC would not be able to, or would not, appoint a mediator, nor is it said that, if necessary, the CDC would not be able to, or would not, appoint someone to carry out an expert determination.

54 Mr Lay proved the current rules of the CDC and Mr Shepherd proved the current mediation guidelines.

55 I find that, if clause 10 is enforceable, a mediation and, if necessary, an expert determination, could be carried out through the CDC.

56 The real dispute, however, is whether Clause 10 is, in terms, enforceable. The parties concentrated their submissions on this. I should note that the plaintiff did not submit that, if I held that Clause 10 were enforceable, nonetheless I should not, on some discretionary ground, withhold the relief that would otherwise follow.

57 The defendant submitted that I should accept the uncontroverted evidence of Mr Lay. Indeed, the defendant submitted, on one view, his evidence, on the enforceability of Clause 10, should be regarded as agreed. The defendant relied upon the decision of the Court of Appeal in James Hardie & Co Pty Ltd v Hall (1998) 43 NSWLR 554. In that case, Sheller JA, with whom Beazley and Stein JJA agreed, said at 573:

“In my opinion, it would be only in a rare case that a trial judge, required to make findings about foreign law, would find, contrary to the opinion of an appropriately qualified expert, in favour of his or her own interpretation of the law, unless that interpretation was supported by other expert evidence, or the opinion was shown to be inconsistent with high judicial authority in the country concerned. An Australian Court should only in exceptional circumstances make a finding about the meaning and effect of a foreign statute over many years applied daily in the country concerned, contrary to the uncontradicted evidence of a qualified expert in the law of that country".

58 It may be observed that, on the facts of this case, the second sentence is not really significant. However, the first sentence is.

59 The question of what might be a "rare case" would appear to be a reference back to what Sheller JA said immediately before the passage that I have quoted, when he attributed to Diplock LJ in Sharif v Azad [1967] 1 QB 605, the proposition that the Court should be reluctant to reject the uncontradicted evidence of a skilled witness unless it be patently absurd or inconsistent.

60 It does not, in fact, appear that Diplock LJ used those words in Sharif. However, his Lordship did refer with evident approval (and, I would think, effectively incorporated into his reasons) the judgment of Scott LJ in the Court of Appeal in an earlier case, A/S Tallinna Laevauhis v Estonian State Steamship Line (1947) 80 LLLR, 99. In that case, Scott LJ considered the basis upon which an English Court accepted proof of foreign law, and the duty of the Court when confronted with expert evidence. His Lordship said at 108 that:

“The witness, however expert in the foreign law, cannot prevent the Court using its common sense; and the Court can reject his evidence if he says something patently absurd or something inconsistent with the rest of his evidence...".

61 Whatever the precise derivation of the reference to patent absurdity or inconsistency, I think, as I have had indicated, that Sheller JA intended thereby to indicate how far one would have to go before finding the requisite "rare case" that would justify the making of a finding about foreign law, contrary to the opinion of an appropriately qualified expert.

62 The plaintiff submitted, relying on the evidence of Mr Shepherd, that the National Court of Papua New Guinea would follow Australian cases dealing with the question of enforceability of an alternative dispute resolution clause. The plaintiff referred to such cases as Elizabeth Bay Developments Pty Ltd v Boral Building Services Pty Ltd (1995) 36 NSWLR 709 and Aiton Australia Pty Ltd v Transfield Pty Ltd (1999) 153 FLR 236.

63 In the latter case, Einstein J, at 252, set out what his Honour called the "minimum requirements" that would be met before an alternative dispute resolution clause would be enforced. His Honour said that these minimum requirements were:

· The clause must be in the form described in Scott v Avery (1856) 10 ER 1121, that is, it should make completion of the alternative dispute resolution a condition precedent to the commencement of court proceedings.

· The process established by the clause must be certain; there must not be stages where some agreement is needed, so that, if the parties do not agree, the procedure will come to an end.

· The administrative processes for selecting a mediator and determining the mediator's remuneration should be certain.

· The clause should set out in detail the processes of mediation to be followed.

64 It was submitted for the plaintiff that, on this analysis, clause 10 was insufficiently certain to be enforced.

65 The real difficulty that I have with the plaintiff's submissions on this point is that, as I have noted, Mr Lay was not cross-examined to the effect that I have just referred to, nor was evidence led from Mr Shepherd. The issue is troubling for two reasons. Firstly, Mr Lay's reasoning is neither detailed, nor what might be called transparent: compare Makita (Australia) Pty Ltd v Sprowles (2002) 52 NSWLR 705, 729 ff (Heydon JA).

66 Secondly, Mr Lay, in fact, referred to the decision of Einstein J in Aiton on one, subsidiary, issue. However, he did not consider his Honour's views on the principal issue, namely, what is necessary for an alternative dispute resolution clause, such as Clause 10, to be enforceable.

67 I have, therefore, given consideration to the question of principle to see if I have a rare case before me. That was the approach taken by Diplock LJ in Sharif at 616, 617. Having taken that approach, I have concluded that this is not a rare case. I do so for the following reasons.

68 Clause 10 provides for mediation and, if necessary, expert determination by and in accordance with the guidelines of the CDC. It my view, that means, if it matters, those guidelines that are current at the time the dispute arises. There is, therefore, no uncertainty, in my view, as to what guidelines are called up by clause 10.

69 The guidelines that have been proved, in so far as they deal with mediation, provide a detailed framework. They include Clause 4, which obliges the parties to enter into a mediation agreement. That clause reads as follows:

“4. Mediation Appointment Agreement

Prior to the mediation, the parties shall sign a mediation appointment agreement, which sets out the terms of the mediation. The terms of the appointment agreement are consistent with these guidelines . The appointment agreement is also signed by the mediator.” (emphasis supplied).

70 In my view, the guidelines themselves, with which the terms of the appointment agreement are to be consistent, provide a sufficiently certain framework for the conduct of a mediation. To understand why this is so, it is necessary to do no more than refer to the subject matters of the various clauses of the guidelines, as denoted by their headings. I shall not burden this judgment with that exercise, but it is apparent that the matters covered by the guidelines with which, as I repeat, the appointment agreement must be consistent, cover the matters that are normally the subject of enforceable mediation agreements in this State.

71 There does not seem to me to be any essential matter left out, with the possible question of fixing the mediator's fees.

72 As to that, the mediation guidelines provide that the fees are to be shared. They do not themselves say what the fees are to be (nor would one expect this to be so). However, it is to be noted that, under the guidelines, the parties are to seek to agree upon an appointment of a mediator. If they cannot do so then, in substance, they must accept the CDC appointment. In my view, either by agreement, or by accepting a person appointed by the CDC, the parties will have agreed to accept liability for whatever the fees of that person may be.

73 In summary, by reference to the minimum standards identified by Einstein J in Aiton, I think those standards are met.

74 Of course, Clause 10 refers, not just to guidelines, but to practices. There is no evidence of what those practices are. I would not be prepared, in the absence of evidence, to infer that there are practices that have the potentiality to conflict with, let alone to render uncertain, the guidelines that the CDC, no doubt with substantial effort, has produced.

75 There is no evidence of any equivalent guidelines for expert determination. That, of course, does not mean that no such guidelines exist. Even if there are no such guidelines, it does not mean that such guidelines cannot, if necessary, be developed ad hoc by the CDC.

76 In any event, and more substantially, it seems to me that appropriate guidelines for expert determination could be developed by analogy with the mediation guidelines. That would require little more than the exercise of good faith and co-operation of the parties and I have not the slightest doubt that an obligation to exercise good faith and to co-operate would be implied into contracts of the present kind.

77 Equally, I have no doubt that, if such duties are implied, then the bona fide application of them would resolve the problems, if any, that may result from the lack of guidelines for the conduct of the expert determination.

78 I therefore conclude that the process established by Clause 10 is enforceable. It follows that, in principle, I should grant relief to enable the Clause 10 possess to be worked through.

79 Having come to that conclusion, I do not need to consider the defendant's fall-back argument, that, at least, I should stay these proceedings on appropriate terms, to enable the defendant to seek relief from the National Court of Papua New Guinea in relation to Clause 10.

Relief

80 I therefore conclude that it is appropriate, in principle, that these proceedings should be stayed to enable the defendant to activate the Clause 10 procedures. It is appropriate that the stay be conditioned to ensure that the defendant uses appropriate endeavours to procure the mediation and, if necessary, expert determination, to be brought on and conducted expeditiously.

81 It is also appropriate to reserve liberty to apply, both in respect of the performance of those conditions and generally.

82 Finally, it is appropriate the Summons be stood over to a date in the new term to enable the defendant and, I add, the CDC, to put in place the activation of Clause 10.

Order

83 I order that the proceedings be adjourned to a date to be arranged with my Associate, to enable the parties to bring in short minutes of order to reflect these reasons and to put such submissions as they may wish on costs.

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Last Modified: 02/19/2004