Browne's Limestone Constructions Pty Ltd v Georgiou Group Pty Ltd

[2021] WASC 181

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   BROWNE'S LIMESTONE CONSTRUCTIONS PTY LTD -v- GEORGIOU GROUP PTY LTD [2021] WASC 181

CORAM:   KENNETH MARTIN J

HEARD:   ON THE PAPERS

DELIVERED          :   10 JUNE 2021

FILE NO/S:   ARB 3 of 2021

BETWEEN:   BROWNE'S LIMESTONE CONSTRUCTIONS PTY LTD

Plaintiff

AND

GEORGIOU GROUP PTY LTD

Defendant

Catchwords:

Arbitration - Discontinuance application - Agreed summary determination of costs orders

Legislation:

Commercial Arbitration Act 2012 (WA)
Rules of the Supreme Court 1971 (WA)

Result:

Costs orders made

Category:    B

Representation:

Counsel:

Plaintiff	:	No appearance
Defendant	:	No appearance

Solicitors:

Plaintiff	:	McAllister Legal
Defendant	:	Minter Ellison

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

Nil

KENNETH MARTIN J:

The application

1. In the wake of the plaintiff's commencement of this proceeding by originating summons (dated 15 April 2021) seeking that the court make an order under s 11(3) of the Commercial Arbitration Act 2012 (WA) appointing a sole arbitrator to resolve its dispute with the defendant, it was ultimately unnecessary for the court to issue any such appointment ruling. The parties were able to reach a consensus over who was to be their arbitrator and, as a result, it was agreed that the plaintiff's application by its originating summons would, by leave of the court, be discontinued.

2. Consent orders to that end duly issued on 5 May 2021.  However, they were subject to some further as agreed terms in relation to the court resolving summarily, without written reasons and on the papers, the parties' ongoing disagreement over who (if anyone) should be responsible for the costs of the plaintiff's application.

3. To that end and again by consent, I had issued on 5 May 2021 some timetabling orders allowing for the parties to file and serve, sequentially, some limited written submissions as to proposed costs orders and any further supporting affidavit materials to be relied upon relating to costs orders.

4. In brief summary, the defendant by its submissions of 20 May 2021 contends it should not be responsible for any of the plaintiff's costs of this proceeding or, alternatively, that there should be no order as to costs for various reasons.  Essentially, the defendant submits it was unnecessary for the plaintiff to ever bring its application at all in this court.  Instead, it argues the plaintiff could have acted unilaterally, by making a request to the Chairperson of the Resolution Institute (as a contended successor to a no longer existing appointor organisation mentioned in the parties' subcontract).  That submission is made notwithstanding the defendant had refused to agree to various proposals made to it by the plaintiff via its lawyers as to two possible arbitrators from Francis Burt Chambers, or for an arbitrator nominated by, in effect, a neutral third party organisation.

5. On the other hand, by its written submissions of 27 May 2021, the plaintiff says that in the end and despite its best efforts to achieve a consensual resolution as to nominating an agreed upon arbitrator, it had got nowhere with the defendant.  As a result, it became necessary to file the present proceeding seeking that the court make the appointment.  The plaintiff rejects the defendant's arguments that it might have acted unilaterally itself to achieve the appointment of an arbitrator - pointing to omissions in the annexure to the subcontract and to the redundancy of the default nominating organisation mentioned as well.  The plaintiff also rejects the defendant's contention that the parties' agreement could or can be read in a fashion that replaces the original nominating organisation with a later emerging national organisation (the Resolution Institute) that came to fill the role (inter alia) of the original organisation (at a time after the parties' entry into the subcontract).

6. On that basis, the plaintiff seeks its costs of and incidental to the commencement of this proceeding, modest though they must be, given what was a short duration of the present proceeding in this court prior to its eventual discontinuance and before any substantive hearing of the application to appoint an arbitrator needed to be heard by this court.

7. For the purposes of providing the costs ruling sought, the parties have filed further affidavits and, to that end, I record my reading of the contents of the affidavit of Michael Geoffrey Hales, a partner of the defendant's lawyers of record, sworn 20 May 2021, and essentially attaching exchanged communications between the disputant parties' lawyers between 17 March 2021 and 13 April 2021.  For the plaintiff I received the affidavit of Evan David Vivian, a legal practitioner employed by the plaintiff's lawyers of record, sworn 27 May 2021 and also attaching some further lawyer to lawyer correspondence of 23 April 2021 as well as some website information for the Resolution Institute of Australia printed on 25 May 2021.

Summary determination as to costs

1. Order 66 r 1 of the Rules of the Supreme Court 1971 (WA) gives this court the discretion to award costs of and incidental to all proceedings.

2. Having received and read the parties' submitted material, I am of the end view that the submissions of the plaintiff are the more persuasive as to the costs orders sought.  In particular, I am persuaded it was both necessary and reasonable for the plaintiff to commence this proceeding in order to break what was then a stalemate over the identity of their arbitrator - which deadlock had been holding up arbitral progress.  That inertia needed to be brought to a head and some arbitral progress achieved.

3. In particular, I must reject the defendant's submission that the parties' subcontract could be interpreted so as to have allowed the plaintiff to have unilaterally acted so as to have alone achieved an arbitrator's appointment, without needing to take the step of commencing the present proceeding. Instead, I agree with the plaintiff that the omissions found in the annexure to the parties' subcontract were such that the appointment result could never have been legitimately achieved unilaterally. Moreover, even if it had, my view is that there would then have been an unacceptable level of uncertainty over the validity of the unilateral appointment - to be measured against the relative ease and security of invoking the assistance of this court to appoint an arbitrator under s 11(3) of the Commercial Arbitration Act, where the parties cannot reach agreement.

4. Consequently, my end determination is that as a matter of discretion the plaintiff should have its costs as sought.  If these costs cannot be agreed within a reasonable time, then they should be taxed.

Orders

1. So then, there should be, upon the publication of these summary reasons, a further order issued as to costs in, essentially, the terms sought by the plaintiff, providing:

   The defendant is to pay the costs of and incidental to the application of the plaintiff under its originating summons of 15 April 2021, to be taxed if not agreed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

RC

Research Associate to the Honourable Justice Martin

10 JUNE 2021