CPC Energy Pty Ltd v Bellevarde Constructions Pty Ltd - [2007] NSWSC 1397

CITATION: CPC Energy Pty Ltd v Bellevarde Constructions Pty Ltd & Anor [2007] NSWSC 1397

HEARING DATE(S): 27/11/07, 28/11/07

JUDGMENT DATE :
5 December 2007

JURISDICTION: Equity Division
Technology and Construction

JUDGMENT OF: Einstein J

DECISION: Referees report to be adopted.

CATCHWORDS: Adoption of referees' report - Fraud finding - Jones v Dunkel - Principles to be applied on challenge to referees' report - Cost plus contracts

LEGISLATION CITED: Arbitration Act 1902
Supreme Court Rules
Uniform Civil Procedure Rules 2005

CASES CITED: Allied Constructions Pty Limited v Hyder Consulting (Australia) Pty Limited & Ors [2004] NSWSC 808
Amaca Pty Ltd v State of New South Wales (2003) 199 ALR 596
Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139
Buckley v Bennell Design and Construction Pty Ltd (1978) 140 CLR 1
Cape v Maidment (1991) 98 ACTR 1
Chloride Batteries Australia Ltd v Glendale Chemical Products Pty Ltd (1988) 17 NSWLR 60
Chocolate Factory Apartments Pty Ltd v Westpoint Finance Pty Ltd & Ors [2005] NSWSC 784
De Groot v The Nominal Defendant [2005] NSWCA 61
Derry v Peek (1889) 14 App Cas 337
Foxman Holdings Pty Ltd v NMBE Pty Ltd (1994) 38 NSWLR 615
Homebush Abattoir Corporation v Bermria Pty Ltd (1991) 22 NSWLR 605
Jones v Dunkel (1959) 101 CLR 298
Lazarus Estates Ltd v Beasley [1956] 1 QB 702
M & E M Hull Pty Limited v Thompson [2001] NSWCA 359
Multiplex Constructions Pty Limited v HSH Hotels (Australia) Limited & Anor [2003] NSWSC 1069
New South Wales Bar Association v Meakes [2006] NSWCA 340
Peabody Resources Ltd v Macquarie Generation (unreported, Supreme Court of New South Wales, 19 November 1998, Einstein J)
Reynell v Sprye (1852) 1 De GM & G 660
Smith v Kay (1859) 7 HL Cas 750
Super Pty Ltd v SJP Formwork (Aust) Pty Ltd (1992) 29 NSWLR 549
White Constructions (NT) Pty Ltd v Commonwealth of Australia (1990) 7 BCL 193
Yorke & Anor v Lucas (1985) 158 CLR 661

PARTIES: CPC Energy Pty Ltd (Plaintiff)
Bellevarde Constructions Pty Ltd (First Defendant)
John Francis Fielding (Second Defendant)

FILE NUMBER(S): SC 55062/05

COUNSEL: Mr R Parsons (Plaintiff)
Mr I Bailey SC, Mr R Marshall (Defendants)

SOLICITORS: Summit Law (Plaintiff)
Dibbs Abott Stillman (Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
TECHNOLOGY AND CONSTRUCTION LIST

Einstein J

Wednesday 5 December 2007

55062/05 CPC Energy Pty Ltd v Bellevarde Constructions Pty Ltd & Anor

JUDGMENT

The reference

1 These proceedings were referred to the Honourable Moreton Rolfe QC and to Ms Janet Grey as joint referees. Their report was dated 9 July 2007.

The notices of motion

2 Presently before the Court are cross notices of motion:

i. by the plaintiff for the adoption of the report and for the entry of judgment against each of the first and second defendants in the sum of $791,042 plus interest;

a) for the adoption only of certain conclusions of the referees in the report;

b) for the…

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: [2007] NSWSC 1397
Decision Date: 5 December 2007

CaseChat Overview and Summary

In the case of CPC Energy Pty Ltd v Bellevarde Constructions Pty Ltd, the dispute arose from a cost plus contract for the construction of a power station. The matter was referred to arbitration, and a report was issued by the referees. CPC Energy sought to set aside the report, arguing that it was procured by fraud, while Bellevarde Constructions argued for the adoption of the report. The court was required to determine whether the principles laid out in Jones v Dunkel applied to the circumstances of this case, and whether the referee's report should be adopted despite the allegations of fraud.

The court examined the principles from Jones v Dunkel, which require that a party seeking to set aside a referee's report must establish that the report was obtained by fraud or that there was a serious irregularity in the proceedings. The court held that the onus was on the party challenging the report to demonstrate that the fraud or irregularity was material and affected the outcome of the arbitration. The court also considered whether the contract's terms allowed for the adoption of the referee's report despite the challenge. In this case, the contract provided that the referee's decision was final and binding, unless there was fraud or serious irregularity. The court found that the principles of Jones v Dunkel applied to this case and that the challenge to the referee's report did not meet the threshold for setting it aside.

Given the findings of the court, the challenge to the referee's report was dismissed, and the report was adopted. The court held that the principles of Jones v Dunkel required a high standard of proof for a challenge to a referee's report to be successful, and that the evidence presented by CPC Energy was insufficient to meet this standard. The court also noted that the contract's terms provided for the finality of the referee's decision, which supported the adoption of the report. The court ordered that the referee's report be adopted, and that Bellevarde Constructions was entitled to recover the costs awarded in the report from CPC Energy.

Orders