JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: D & M (AUSTRALIA) PTY LTD -v- CROUCH DEVELOPMENTS PTY LTD [2010] WASC 130
CORAM: BLAXELL J
HEARD: 18 NOVEMBER 2009
DELIVERED : 11 JUNE 2010
FILE NO/S: GDA 2 of 2009
ARB 8 of 2009
MATTER :Commercial Arbitration Act 1985 (WA)
Appeal against the interim award of Roger K F Davis given 7 May 2009 in an Arbitration
BETWEEN: D & M (AUSTRALIA) PTY LTD
Appellant
AND
CROUCH DEVELOPMENTS PTY LTD
First RespondentROGER K F DAVIS
Second Respondent
ON APPEAL FROM:
Jurisdiction : COMMERCIAL ARBITRATION
Coram :Mr R K F Davis
Citation :D & M (AUSTRALIA) PTY LTD and CROUCH
Catchwords:
Arbitration - Award of arbitrator - Application for leave to appeal on question of law - Whether various findings by arbitrator provide strong evidence of or amount to a manifest error of law
Arbitration - Application to set aside award for misconduct - Whether arbitrator breached rules of natural justice by determining an issue not pleaded - Factors governing the exercise of the discretion to set aside award
Legislation:
Commercial Arbitration Act 1985 (WA), s 38, s 42, 43
Result:
Application for leave to appeal dismissed - Application to set aside award for misconduct allowed in part - Matter remitted back to arbitrator for reconsideration of decisions as to costs
Category: B
Representation:
Counsel:
Appellant: Mr S D Pentony
First Respondent : Mr B P Wheatley
Second Respondent : No appearance
Solicitors:
Appellant: Lavan Legal
First Respondent : Mossensons
Second Respondent : No appearance
Case(s) referred to in judgment(s):
Anaconda Operations Pty Ltd v Fluor Australia Pty Ltd [2003] VSC 275
Banque Commercile v Akhil Holdings Ltd (1990) 169 CLR 279
Bovis Lend Lease Pty Ltd v W G E Pty Ltd [2002] NSWSC 939
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 52 ALJR 20
Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337
Dare v Pulham (1982) 148 CLR 658
Doran Constructions Pty Ltd v Health Administration Corp (1994) 12 BCL 59
Edible Oil v Jayant Oil (1982) Lloyds LR 95
Forsayth NL v Australasian Gold Mines NL (Unreported, WASC, Library No 920420, 18 August 1992)
Gas & Fuel Corporation of Victoria v Wood Hall Ltd [1978] VR 382
Imperial Leatherware v Macri (1991) 22 NSWLR 653
Kane Constructions Pty Ltd v Sopov [2005] VSC 237
King v Thomas McKenna Ltd [1991] 2 QB 480
Lamac Developments Pty Ltd v Devaugh [2003] 27 WAR 287
Melbourne Harbour Trust v Hancock (1927) 39 CLR 570
New Generation Enterprises Pty Ltd v WA Planning Commission [2007] WASCA 89
Oil Basins Ltd v BPH Billiton [2007] VCA 255
Peter Schwarz (Overseas) Pty Ltd v Morton [2003] VSC 144
Promenade Investments Pty Ltd v New South Wales (1991) 26 NSWLR 203
Qantas Airways Ltd v Joseland (1986) 6 NSWLR 327
Secured Income Real Estate (Aust) Ltd v St Martins Investments (1979) 144 CLR…
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- AGLC
- D & M (Australia) Pty Ltd v Crouch Developments Pty Ltd [2010] WASC 130
- Case
- [2010] WASC 130
- Decision Date
CaseChat Overview and Summary
The court was required to determine whether the findings of the arbitrator constituted a manifest error of law or provided strong evidence of an error of law, which could add substantially to the certainty of commercial law. Additionally, the court needed to consider whether the arbitrator had breached the rules of natural justice by determining issues not pleaded. This required a careful analysis of the statutory framework provided by the Commercial Arbitration Act 1985 (WA) and the principles established in relevant case law.
The court examined the statutory provisions of the Commercial Arbitration Act 1985 (WA), which limit the circumstances under which an award can be set aside or appealed. It noted that leave to appeal on a question of law is only granted if there is a manifest error of law or strong evidence of an error of law that could add substantially to the certainty of commercial law. The court found that D & M had not demonstrated a manifest error of law in the arbitrator's findings. While there were some issues with the reasoning, the findings were supported by evidence, and thus no error of law was evident. The court also held that the arbitrator did not breach the rules of natural justice by deciding issues not pleaded, as the scope of the arbitration was not strictly confined to the pleaded issues. The application for leave to appeal was dismissed.
The Supreme Court ordered that D & M (Australia) Pty Ltd pay Crouch Developments Pty Ltd's costs of the application.
Orders
Orders of the court
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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
The Commercial Arbitration Act 1985 (WA) is part of uniform legislation throughout Australia which regulates arbitrations. The clear policy of the Act is to achieve speedy, economic and informal relief to parties to arbitration agreements, with only limited scope for intervention by the courts: (New Generation Enterprises Pty Ltd v WA Planning Commission [2007] WASCA 89; Lamac Developments Pty Ltd v Devaugh [2003] 27 WAR 287 [110]). This policy is reflected in s 38(1) which provides that the court has no jurisdiction to set aside or remit an award on the ground of error of fact or law, other than on an appeal under s 38(2). The right of appeal under s 38(2) is restricted to any question of law arising out of an award. This right is further limited by s 38(4) which provides that an appeal can only be brought with the consent of all other parties or, alternatively, with the leave of the Supreme Court. Section 38(5) goes on to provide that:The Supreme Court shall not grant leave under subsection (4)(b) unless it considers that -(a)having regard to all the circumstances, the determination of the question of law concerned could substantially affect the rights of one or more parties to the arbitration agreement; and(b)there is -(i)a manifest error of law on the face of the award; or(ii)strong evidence that the arbitrator or umpire made an error of law and that the determination of the question may add, or may be likely to add, substantially to the certainty of commercial law. Accordingly, this court's discretion to grant leave only arises when an appellant meets the threshold requirements of s 38(5)(a) combined with either of s 38(5)(b)(i) or s 38(5)(b)(ii). When the discretion does arise, it is unfettered, and is to be exercised after considering all of the circumstances of the case (Qantas Airways Ltd v Joseland (1986) 6 NSWLR 327, 333; Forsayth NL v Australasian Gold Mines NL (Unreported, WASC, Library No 920420, 18 August 1992) (Ipp J); Thiess Contractors Pty Ltd v Water Corporation (Unreported, WASC, Library No 970561, 22 October 1997) (Parker J). As to the requirement that there be an error of law, there can be no such error in respect of a factual finding if there was evidence to support that finding (Ukrainian Association v Squire Constructions Pty Ltd [2004] WASC 4 [11]). This is so even if the finding is based on reasoning which is demonstrably unsound (New Generation Enterprises [3]). Nevertheless, a failure to provide proper and adequate reasons for decision can amount to an error of law (Oil Basins Ltd v BPH Billiton [2007] VCA 255 [62] ‑ [65]). For an error of law to be 'manifest' it must be more than arguable. There must be powerful reasons for concluding on a preliminary basis, without any prolonged adversarial argument, that there is on the face of the award an error of law (Promenade Investments Pty Ltd v New South Wales (1991) 26 NSWLR 203, 226; New Generation Enterprises [4]). In the absence of a manifest error of law, an appellant needs to establish strong evidence of such an error and also show that the determination of the question may be likely to add substantially to the certainty of commercial law. Such a question of law is one of wider and greater importance than (for example) the construction of a one off clause in a particular agreement (Promenade Investments, 226).