Elkateb v Lawindi

[1999] NSWSC 720

CITATION:	Elkateb v Lawindi [1999] NSWSC 720
CURRENT JURISDICTION:	Construction
FILE NUMBER(S):	55011/1999
HEARING DATE(S):	11/06/99, 02/07/99
JUDGMENT DATE:	20 July 1999
PARTIES :	M. Safwat Elkateb - Plaintiff Wasfy Lawindi - First Defendant Lloyd Austin - Second Defendant
JUDGMENT OF:	Rolfe J

COUNSEL :	Mr J.D. Cummins QC/Mr R.E. Dubler - Plaintiff Mr L.G. Foster SC/Mr N.A. Nicholls - First Defendant
SOLICITORS:	Eddy & Moloney - Plaintiff Turner Freeman - First Defendant
CATCHWORDS:	Applications for leave to appeal from an interim arbitral award refused: principles stated in Promenade Investments Pty Limited v State of New South Wales (1991) 26 NSWLR 203 applied; Application to remove Arbitrator or to set aside Interim Award on ground of misconduct refused.; Necessity to take into account all the facts when considering such a claim: State of New South Wales v Coya (Constructions) Pty Limited (Rolfe J - 4 July 1994 - unreported) applied.; Meaning of "misconduct": Commonwealth of Australia v Cockatoo Dockyard Pty Limited (1995) 36 NSWLR 662 at p.673 applied.
DECISION:	Applications for leave to appeal from an interim arbitral award refused.

THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
CONSTRUCTION LIST

ROLFE J

TUESDAY, 20 JULY 1999

55011/1999 - ELKATEB v LAWINDI & ANOR

JUDGMENT

HIS HONOUR:

Introduction

1 This is another round in a lengthy litigious bout between the plaintiff, Dr M.S. Elkateb, the first defendant, Mr W. Lawindi, and the second defendant, an Arbitrator, Mr L. Austin: Lawindi v Elkateb & Anor and Elkateb v Lawindi (Giles CJCommD - 11 July 1997 - unreported); Elkateb v Lawindi (1997) 42 NSWLR 396; Elkateb v Lawindi (Giles CJCommD - 8 May 1998 - unreported); Elkateb v Lawindi & Ors (Hunter J - 30 October 1998 - unreported); and Elkateb v Lawindi & Anor (Rolfe J - 18 December 1998 - unreported). There has been a lengthy arbitration before Mr Austin over the building dispute, which is central to the litigation, between Dr Elkateb and Mr Lawindi. A preliminary conference was held on 15 January 1997, and the arbitration continued for some ten days during 1998. Mr Austin delivered an Interim Award on 20 February 1999 in which he found that Dr Elkateb, who was the proprietor, should pay Mr Lawindi, who sued as an and on behalf of the builder, $41,888 and interest thereon from 24 June 1996 until the date of settlement, at the rate set forth in the building contract to which I shall refer.

2    The amount involved is, in relative and absolute terms, quite small, and essentially insignificant when compared with the costs the parties must have incurred in the litigation and arbitration. By way of example, on the present application I have been furnished with six lever arch folders of documents comprising almost 3,000 photostated pages. These represent the evidence in the arbitration, submissions and various documents used in earlier proceedings. I do not propose to part from this matter without observing that it is unfortunate that the parties and their legal representatives have been unable to find a more satisfactory way of deploying their time and financial resources. I say that particularly in the light of various observations, which have been made by other Judges in relation to some of the applications made. For example, in his reasons of 11 July 1997, Giles CJCommD said, p.2:-

“There was, with respect, a degree of confusion in the submissions in this and other respects ..”

3    In his reported judgment his Honour referred to the unsatisfactory way in which the matter had been presented to the Court and, at p.399, observed:-

“There was no attention at all given in the hearing to the pre-conditions concerning substantial savings in costs and likelihood of leave to appeal. Only because, and to the extent that, the matters addressed on the hearing of the summons went to the jurisdiction of the arbitrator, that is, to whether it was open to him to proceed at all or in relation to certain of the claims in the points of claim, should the Court be involved, and it is involved not via s.39, not by way of intervention in the arbitration, but to settle whether and to what extent there is an arbitration. As with the framing of these orders, there was a regrettable lack of understanding of the appropriate function of the Court in relation to arbitrations.”

4    At p.404 his Honour felt compelled to say that:-

“The factual basis for this argument was somewhat confused”

and

“I confess that I was and still am unable to understand the argument to the conclusion, despite the earnestness with which it was repeated for my assistance.”

5    In his reasons of 8 May 1998 his Honour said:-

“Application by notice of motion in those proceedings was inappropriate, as they had been disposed of and the application was not an interlocutory application in or to do with them. When this was raised, leave was given to file a fresh summons returnable instanter in which the removal of the arbitrator was sought, and the affidavits prepared for use in the earlier proceedings were read in the new proceedings. Irregularities in the form of summons were waived, and so procedural integrity was preserved, albeit in a slightly damaged state.”

6    In his reasons of 30 October 1998 Hunter J said, pp.1 and 2:-

“That hearing has taken place and I am satisfied that there is no basis whatsoever for the application which is based upon what is said to be apprehended bias as that concept is understood in Livesey v New South Wales Bar Association (1983) 151 CLR 288 and actual bias in the second way in which actual bias is explained, namely, unconscious actual bias, in the cases cited by Einstein J in Gibson v O’Keefe (unreported 20 May 1998). Mainly because I regard the application as without any merit at all, I do not feel constrained to review the evidence as it has been adduced through the affidavits of the plaintiff’s solicitor and the plaintiff, added to which time constraints of the Court are such that it is simply not possible for me to address the matter in detail, even if it were necessary to do so, which I repeat I think is unnecessary.”

7    His Honour concluded his reasons thus:-

“In deciding against that course I think it should be emphasised that there have been a number of applications by the plaintiff to this Court relating to this contract and arbitration, and, in the case of the application which is the subject of the decision of Justice Giles, it seems to me that, as with this application, it was without merit and that the legal profession have an obligation to protect their clients from themselves.
In my view, forcefully advised the plaintiff should have been deterred from making this application notwithstanding his affidavit evidence of his belief of the bias of the arbitrator.
It may be at the end of the day this arbitration will conclude and the complaints as to matters of law which to some extent are reflected in the affidavit of the plaintiff may prove to be justified but it is no way to give voice to those complaints in the manner that the plaintiff has chosen to do so in these proceedings.”

8    The proceedings in respect of which I gave judgment on 18 December 1998 were ones whereby Dr Elkateb sought an order restraining the Arbitrator from re-commencing the hearing of the arbitration. I refused to make that order and in the course of doing so, said, pp.3-4:-

“The type of complaints to which the Summons adverts without, as I have said, any particularisation or specificity, may, and I put it no higher than that, in due course, be grounds for the Court to exercise its powers under either s.38, if there is an error of law which falls within the stringent requirements of that section, or under s.42. However, what the Court is being asked to do at this stage, towards the end of a lengthy arbitral process, which has been punctuated by several visits to the Court for relief, is to seek to put itself in the position of the Arbitrator, who has a particular knowledge of the arbitration, and who, on any view, must be the person best equipped at the moment to determine how the arbitration should proceed.”

9    I concluded that no ground had been made out for granting the relief sought; that the parties should direct their attention to concluding the arbitration as expeditiously as possible, so that the Arbitrator could present his Award; and that when that was done the time would have arrived when any application in relation to the Award, either by way of application for leave to appeal or to set it aside, could be considered.

10    In due course it will be necessary for me to refer in some detail to the way in which the legal representatives, and particularly the former legal representative for Dr Elkateb, Mr J. Assi, solicitor, conducted the arbitration on the last hearing day before the Arbitrator. It is clear that the Arbitrator was not given any real assistance by Mr Assi in resolving, in an orderly way, how the arbitration should be concluded.

11    I have referred to these matters in order that the reader may have some background knowledge of what has transpired, which may indicate, in part, the reasons for the difficulties in the litigious and arbitral process, which have occurred thus far. I also consider that it is very important to bear in mind that in arbitral proceedings before a lay arbitrator, in the sense of an arbitrator with particular knowledge of the subject matter of the dispute but not of all legal aspects involved, there is, in my opinion, an obligation on legal representatives to give the arbitrator all proper assistance, consistently with the duty to the client, to ensure that the arbitration does not fail on technical legal grounds.

The Dispute

12    On 23 April 1995 a Building Contract was entered into, in a form produced by the Master Builders’ Association of New South Wales. There is no dispute that Dr Elkateb was the proprietor. There is a dispute as to the identity of the builder. The back sheet of the agreement described the builder as “Lotus Constructions .. represented by Wasfy Lawindi”. The operative part of the agreement identified the builder as “Lotus Constructions Wasfy Lawindi (trading as Lotus Constructions) of 24 Rickard Street Guildford 2161 NSW”.

13    It was not in issue that the agreement was signed by Mr Lawindi, nor, as I understand it, that at all material times he and Mr George Hadidi carried on business in partnership under the name of Lotus Constructions.

14    The building work involved the erection of ten new home units at Bankstown and, so far as the evidence discloses, that work was carried out. A dispute arose between Dr Elkateb and “the builder”, the latter claiming $142,141 in respect of carrying out the works and variation works; damages; a reasonable sum in respect of carrying out the works; and a declaration as to whether $6,689 was paid by the “builder” to Dr Elkateb under a mistake of fact. Dr Elkateb asserted an entitlement to liquidated damages for delay in the sum of $62,500 and damages.

15    The agreement contained an arbitration clause, which provided, inter alia:-

“25(a) In case any dispute or difference shall arise between the Proprietor and the Builder, either during the progress of the Works or after the determination, abandonment or breach of the Contract, as to the construction of the Contract or as to any matter or thing of whatsoever nature arising thereunder or in connection therewith, then either party shall give to the other notice in writing of the dispute or difference and at the expiration of seven days, unless it shall have been otherwise settled, the dispute or difference shall be and is hereby submitted to the arbitration of an Arbitrator who shall be (at the option of the party who first shall serve the Notice of Dispute) either the President of the Royal Australian Institute of Architects, NSW Chapter, or his nominee, or the President of the Master Builders’ Association of NSW or his nominee provided that the Arbitrator shall be a graded member of the Institute of Arbitrators, Australia.”

16    The jurisdiction thus conferred is, relevantly for present purposes, in the case of any dispute or difference between “the Proprietor”, who undoubtedly was Dr Elkateb, and “the Builder”, the identity of whom was in dispute. Put another way, Dr Elkateb had not agreed to confer upon an arbitrator jurisdiction to hear a dispute between him and any person or entity other than “the Builder”. It was, essentially, this jurisdictional question to which Giles CJCommD was referring in his reported judgment.

17    Clause 29 provided definitions and, relevantly for present purposes, “Builder” was defined as:-

“The Builder or any person acting by his authority and on his behalf.”

18    On 2 April 1995 Mr Lawindi and Mr George Hadidi signed a document headed “Partners Agreement”, which stated:-

“This is to certify that either partners of the registered business ‘lotus constructions’ (BRN4419645) is able to act as an agent for the businesses abovementioned. The agent’s tasks shall include signing of building contracts & public relations with clients & Statutory Authorities.
I There For give my consent to the above condition.”

19    It seems to me that a fair reading of this document leads to the conclusion that either Mr Lawindi or Mr Hadidi was authorised to act as the agent for the partnership in respect of its business, thereby confirming the prima facie position to which their relationship as partners would give rise. Whilst certain of the agent’s tasks are nominated, that is not stated as being an exclusive prescription of them, and, in my opinion, acting for the business of Lotus Constructions would also involve the enforcement of any building contract into which the agent had entered. Accordingly, as between Mr Lawindi and Mr Hadidi, Mr Lawindi had authority to enter into the contract on behalf of the partnership and to take steps necessary to enforce it.

20    The agreement between Dr Elkateb and “the Builder” included an agreement between him and “any person acting by his” (the Builder’s) “authority and on his behalf”.

21    Therefore, when one returns to clause 25(a), any dispute or difference is one in respect of which the Arbitrator has jurisdiction if it is between Mr Elkateb and “any person acting by” (the Builder’s) “authority and on his behalf”. The Partners’ Agreement was in evidence before the Arbitrator and I am satisfied that both the partnership relationship and it allowed Mr Lawindi to enter into the building contract and to enforce it through the arbitral process on behalf of the partnership.

22    On 4 December 1996 a Notice of Dispute was furnished to Dr Elkateb, which named Mr Lawindi and Mr Hadidi trading as Lotus Constructions as the Builder. It was signed by Mr Lawindi:-

“.. for himself and on behalf of George Hadidi pursuant to an Authority dated 2nd April 1995”.

This was a clear recognition that the Notice of Dispute was given by Mr Lawindi on behalf of himself and Mr Hadidi.

23    Dr Elkateb wished to assert that the partnership was the Builder for at least two reasons. Firstly, because the partnership did not hold a building licence pursuant to the Building Services Corporation Act 1989, so that it could not recover for the work done. Secondly, because he asserted that he had entered into an agreement with Mr Hadidi, which had compromised the proceedings.

24 In his reported judgment Giles CJCommD considered declarations sought by Dr Elkateb that Mr Lawindi had no standing to bring the arbitration proceedings, and that the Building Agreement was unenforceable by Mr Lawindi. Dr Elkateb also sought orders that the Points of Claim filed by Mr Lawindi be struck out and that the arbitration proceedings commenced by him be dismissed. His Honour considered the position under the Building Services Corporation Act and, at p.407, said:-

“Taking together all these considerations, I prefer the view that submission of disputes to arbitration pursuant to an arbitration clause is not enforcing a remedy within the meaning of s.10 … In my view, Mr Lawindi was not precluded by s.10 from invoking the arbitration clause and submitting to arbitration the disputes in claims (a), (b), (c), (d) and (f).”

25 In O’Connor v LEAW Pty Limited (1997) 42 NSWLR 285, I held that a claim by an unlicensed contractor based on quantum meruit is not a remedy “in respect of a breach of the contract” and thus was not prohibited by s.10(1)(a) of the Act, and that a reference to arbitration is not a remedy or the enforcement of a remedy in respect of a breach of contract, which s.10(1)(a) prohibits.

26    It may be that in view of these two decisions Dr Elkateb has not pursued his claim that the Arbitrator could not determine the matter if the Builder was the partnership and if the partnership was not licensed. Whatever the reason that claim has not been pressed, although the claim in respect of the alleged compromise with Mr Hadidi has been.

The Parties To The Contract

27    In his reported decision Giles CJCommD said, at p.405:-

“The factual findings which might be necessary, given one of the grounds in the Points of Defence taking up s.4 and s.10 of the Building Services Corporation Act, will fall to the Arbitrator if the Arbitrator is not precluded, and in the circumstances I think it best if I expressly hold back from any factual or other findings in connection with the contracting parties and licences.

For reasons to which I now come, even assuming that the contract was entered into in contravention of s.4, I do not think that s.10 precluded Mr Lawindi from invoking the arbitration clause or submitting the disputes (less claim (e)) to arbitration. That being so, the proper forum for considering the effect of s.10 on the substantive claims is the arbitration.”

28    In his Interim Award the Arbitrator considered who were the parties to the contract in the following terms:-

“THE PROPER PARTIES TO THE CONTRACT
The Claimant has submitted that the parties could have contracted in one of three possible ways.
a) The Claimant (Lawindi) as builder and the Respondent (Elkateb) as proprietor.
b) Lawindi for himself and as agent for an undisclosed Principal, namely, the Partnership of Lotus Constructions and Elkateb as proprietor.
c) Lotus Constructions as builder and Elkateb as proprietor.
The Respondent has submitted that the parties could have contracted in one of a further two possible ways.
d) Lotus Constructions and Tony Hadidi (as builders) and the Respondent.
e) Wasfy Lawindi and Tony Hadidi (as builders) and the Respondent.
The contract is ambiguous. It refers to Lotus Constructions Wasfy Lawindi (trading as Lotus Constructions). This implies that both Lawindi and Lotus Constructions are parties and that Lawindi is Lotus Constructions. However the cover sheet implies that Lawindi was acting as an agent for Lotus Constructions. In view of the ambiguity I have looked at the events leading up to the signing of the contract to determine who are the parties. This evidence is as follows:
1 Lotus Constructions is a partnership between Wasfy Lawindi and George Hadidi. I accept the evidence of an affidavit sworn by Wasfy Lawindi on 6th June 1997 which reads in part ‘ The agreement (the building contract dated 23rd April 1995) was signed by myself and on behalf of George Hadidi. Prior to signing the agreement George Hadidi had signed a document dated 2 April 1995 ’.
2 The document dated 2nd April 1995 reads in part ‘ This is to certify that either partners of the registered business “lotus construction” (brn 4419645) is able to act as an agent for the businesses above mentioned. ” It is signed by George Hadidi and Wasfy Lawindi as partners.
3 The pre-contract negotiation was between Lawindi and Elkateb. Tony Hadidi was also involved but I am satisfied that Tony Hadidi is not a party to the contract because at all times he was described as the building supervisor. On pages 605, 606 the Repondent said ‘Tony Hadidi in the preliminary meeting that we had was to look at the drawings and make some kind of assessment to what prices are by negotiating with my architect and structural engineer and nothing else …. ’
‘ This came later on when they submitted a tender and they have Tony Hadidi’s name noted as a supervisor … ’
4 The tender was on a Lotus Constructions letterhead and signed by Lawindi with Tony Hadidi’s name noted as supervisor and his licence number.
5 All documents were signed by Lawindi.
6 The Respondents admitted that all correspondence between himself and Lotus was with Lawindi.
In all the above circumstances I find that the contracting parties were Lawindi as builder and agent for Lotus Constructions (a partnership between Lawindi and George Hadidi).”

29    Whilst, at least at one stage, Mr Lawindi sought to argue that the partnership was not a party to the Building Contract, that is a submission which, in my view, cannot be sustained and, Mr L. Foster of Senior Counsel, who appeared at the conclusion of the hearing for Mr Lawindi, did not seek to maintain that that was the true position. He conceded that the finding was that the contracting parties were Mr Lawindi acting on his own behalf and as agent for the partnership, his entitlement to act in the latter capacity flowing from the document dated 2 April 1995, and the fact that he was acting in that capacity coming from his concession referred to in paragraph 1 of the Arbitrator’s Reasons. However, Mr Foster submitted that this finding did not deprive the Arbitrator of jurisdiction because, in bringing and prosecuting the arbitration, Mr Lawindi was acting as agent for the Builder which, by dint of the definition of “Builder”, included Mr Lawindi acting on behalf of the Builder. Therefore, so Mr Foster submitted, it was established that as between Mr Lawindi and Mr Hadidi, Mr Lawindi was entitled to act on behalf of the partnership, and that as between Dr Elkateb and the partnership, Mr Lawindi, as the agent of the partnership, it being the Builder, was entitled to bring the arbitration.

30    In those circumstances it was not, ultimately, in issue that the contract was entered into between Dr Elkateb, as the Proprietor, and the partnership, as the Builder. This may leave for other litigation any dispute between Mr Lawindi and Mr Hadidi as to their respective rights as partners, but that was not a matter which could be resolved in the arbitration, and it is not a dispute which concerns Dr Elkateb once it is established, as in my view it is, that the arbitral proceedings were brought properly against him.

31    A question was raised as to whether the matters to which I have referred gave the Arbitrator jurisdiction to hear the matter, or whether it was necessary for Mr Hadidi to be joined as a party to the arbitration. It seems to me clear that as Mr Hadidi had authorised Mr Lawindi to bring the arbitration proceedings, and as Mr Lawindi and Dr Elkateb had agreed that the Builder, for the purposes of the Building Agreement, meant a duly appointed agent of the Builder, that Mr Lawindi was entitled to bring the proceedings. There was, accordingly, in my opinion, no absence of necessary parties.

32    I think it is convenient to conclude this portion of the matter by referring to the submissions made before me on behalf of Dr Elkateb and the extent to which they went. The submissions were that the issue was whether the partnership was the contracting party. They continued to seek to establish that and referred to the various material which, in my opinion, does establish that point.

33    In paragraphs 9 and 10 it was written:-

“9. Thereafter however, Lawindi by his Points of Claim (p.1864) alleged, wrongly that he was the sole contracting party. The Arbitrator, at p.12, appears to have permitted Lawindi to proceed in the arbitration in his own name only because he was a contracting party in his own name and was agent for the partnership named in the Notice of Dispute.
10. The Arbitrator had, however, no jurisdiction to uphold such a claim in the name of Lawindi in his own right when the dispute notice was in the name of Lawindi and Hadidi, as the joint contracting parties.”

34    In my opinion the jurisdictional question must be answered adversely to Dr Elkateb, for the reasons I have given.

35    On the question of jurisdiction it is necessary to note that the Arbitrator had regard to Mr Lawindi’s Amended Points of Claim in which, in paragraph 1A, it was pleaded:-

“In the alternative, on 23 April 1995 the Applicant entered into an agreement with the Respondent for and on behalf of himself and as agent for Lotus Constructions, a partnership then constituted between the Applicant and George Hadidi.”

The Arbitrator continued, p.12:-

“As Lawindi was a contracting party in his own right and also as an agent for Lotus Constructions he had authority to commence the arbitration and to issue the Notice of Dispute.
I find that I have jurisdiction.”

36    In my opinion, for the reasons I have sought to give, this was correct.

37    The argument put forward by Dr Elkateb was that as there was no jurisdiction the Award has no legal effect. In my view this submission must be rejected.

38    Various submissions were put as to whether Mr Lawindi was acting as agent for an undisclosed principal. Even if he was, about which I have some doubt, it does not seem to me that this affects the analysis of the contracting parties I have undertaken.

The Present Proceedings

39 By an Amended Summons filed on 28 May 1999 Dr Elkateb sought orders pursuant to s.38(4) of the Commercial Arbitration Act 1984, (“the Act”), that the plaintiff be granted leave to appeal against the Interim Award in respect of various questions of law, and that pursuant to s.42 of the Act the Interim Award be set aside wholly. He also sought an order pursuant to s.44 of the Act that the Arbitrator be removed and, alternatively, an order pursuant to s.43 that the questions or issues set out in Schedule 3 be remitted to him.

40    Mr Lawindi filed a Summons on 1 April 1999 seeking leave to cross-appeal. His complaint was that the Arbitrator was in error in failing to find that Dr Elkatab repudiated the Building Agreement, and by failing to make a finding that the Builder was entitled to extensions of time for carrying out variations to the works, thereby further extending the date for practical completion beyond 22 April 1996.

A Consideration Of The Questions Of Law

41 The questions of law raised by Dr Elkateb are articulated in paragraph 3 of Schedule 1 to the Amended Summons. In order to be granted leave to appeal Dr Elkateb, relevantly for immediate purposes, must establish that there is a manifest error of law on the face of the Interim Award and that, having regard to all the circumstances, the determination of that question could substantially affect the rights of one or more parties to the arbitration agreement. The necessity for the question to be one of law has been made abundantly clear by the decisions in Promenade Investments Pty Limited v State of New South Wales (1991) 26 NSWLR 203 and Natoli v Walker (Court of Appeal - unreported - 26 May 1994). Questions of the proper exercise of discretion also arise.

42    Paragraphs 3(a) to (g) are concerned with the question of parties. For the reasons I have given I am satisfied that Mr Lawindi was entitled to bring the arbitration. However a further point was raised, namely whether Mr Lawindi “as sole claimant”, could maintain the proceedings either without issuing a Notice of Dispute in his own name, or in circumstances where the Notice of Dispute was issued in the name of the partnership. Another question was stated to be whether the Notice of Dispute is at law defective since it was not authorised by the partnership, and whether the arbitration clause can be invoked where there is no dispute between the partnership and the plaintiff.

43    I do not think I can usefully add to what I have written on this point. The Arbitrator did not find that Mr Lawindi was the “sole” claimant. He found that he and the partnership were the claimants and the Notice of Dispute was executed by Mr Lawindi both for himself and on behalf of the partnership on any fair reading of it. I am satisfied that Mr Lawindi had the necessary authority to bring the arbitration proceedings.

44    Paragraphs 3(h) and (i) state:-

“(h) Whether the release of the plaintiff by George Hadidi bound the first defendant.
(i) Whether the settlement between George Hadidi (acting on behalf of Lotus Constructions) and the plaintiff extinguished the first defendant’s cause of action.”

45    In submissions Dr Elkateb did not seek to pursue these matters. I can understand the reason for this and, as the matter was not pursued, I could content myself by passing over it. However, I think it necessary, at least in fairness to the Arbitrator, to observe that he dealt with the matter at pp.12-13 of the Interim Award. He found that an agreement entered into between Mr George Hadidi and Dr Elkateb on 21 June 1996 was not an agreement binding on Mr Lawindi as he was not a party to it. In these circumstances the only way Mr Lawindi could have been bound was if it was one made on behalf of the partnership and, therefore, was binding on him.

46    The Arbitrator made detailed findings of fact. It was not suggested that the agreement of 2 April 1995 authorised the entry into the alleged compromise agreement. Indeed, on the Arbitrator’s findings of fact that could not have been suggested because, by 8 June 1996, Mr George Hadidi was stating that any correspondence from Lotus Constructions should be signed by both Mr Lawindi and himself. The Arbitrator referred to a letter from Mr Hadidi seeking a meeting with Dr Elkateb “to discuss, reconcile and finish this matter in a satisfactory manner between yourself and us (George and Tony Hadidi)”. The meeting was held on 21 June 1996 and, on 26 June 1996, minutes were signed as the Settlement Agreement. However, from the findings of fact made by the Arbitrator that was a meeting to conclude the matter as between Dr Elkateb, on the one hand, and Mr George Hadidi and his son, Mr Tony Hadidi, who was not a party to the partnership, on the other. It was not suggested that it was in any way to conclude matters between the partnership. The Arbitrator held:-

“I find that the agreement is not binding on the partnership, Lotus Constructions. Section 5 of the partnership Act provides that one party may bind a partnership ‘unless the partner so acting has in fact no authority to act for the firm in the particular matter and the person with whom a partner is dealing .. knows that the partner has no authority ..’. In this matter I am satisfied that George Hadidi had no authority from Lawindi and the respondent knew this.”


In my opinion the finding was either one of fact or of mixed fact and law.

47    I have dealt with this issue, although it was not the subject of submissions, because it seems to me that the Arbitrator is entitled to the Court’s noting the care with which he dealt with it and because, in any event, even if the matter had been pursued, I do not consider it is one where Dr Elkateb could establish the prerequisites to obtaining leave to appeal. There is also the question of the proper exercise of discretion, which is relevant in considering the grant of leave. I have referred to the amount involved. As Mahoney JA pointed out in Natoli v Walker the Court retains a discretion as to whether to grant leave and, in exercising that discretion, it may have regard, inter alia, to the amount in issue as such, or to that amount compared to the costs involved. Even if this point had been pursued by Dr Elkateb and I had been of the view that it was one upon which he was otherwise entitled to succeed, I would have entertained serious doubt whether leave should be granted having regard to the amount involved.

48    Paragraph 3(j) posed as a question of law:-

“Whether the Arbitrator had jurisdiction to determine whether a $24,000 payment from the first defendant to the plaintiff was a loan or a refund for certain variations wrongly claimed; and whether the first defendant was estopped from re-claiming the refund.”

49    This was a matter with which the Arbitrator dealt at length, pp.13-14, and which was not the subject of any submissions. As it involves questions of jurisdiction and estoppel I do not see that it is possible for the Court to further consider it in the absence of any submissions. It seems to me, in any event, that the matter was one of fact as dealt with by the Arbitrator and, further, having regard to the amount involved of some $2,971.78, the exercise of discretion would justify refusal of leave to appeal.

50    Paragraph 3(k) posed:-

“Whether the date of commencement of the building works by the first defendant is at law NOT the actual date of commencement of the works BUT some other date made possible FOR commencement by the contract.” (The emphasis is added by the pleader.)

51    The written submissions of Dr Elkateb stated that Mr Lawindi had asserted that he commenced work in April 1995, whereafter work progressed satisfactorily without any dispute. Under clause 5 of the contract the date for practical completion was to be 165 days from “the date of commencement”, which was not defined. Further, by clause 5, the Builder was to commence work within fourteen days from the date of down payment. Dr Elkateb submitted this was a separate obligation “as to when the Builder must commence, but otherwise the date of commencement is the date that the Builder actually does commence the work”. He further submitted that the Arbitrator erred in construing the contract to deem the date of commencement to be fourteen days after down payment, rather than the date of actual commencement.

52    In order to consider granting leave to appeal on this point there must either be a manifest error of law on the face of the Interim Award, or strong evidence that the Arbitrator 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.

53    It seems, from Dr Elkateb’s submissions, that it is the latter provision upon which he relied, it being stated that the contract is a standard form one and its interpretation on this “key clause will be of significance in the industry”.

54    The Arbitrator noted clause 5, which is beside the words “Date for Practical Completion”. The clause is in the following terms:-

“5. The Builder shall commence the works within fourteen days from receipt of down payment and shall diligently proceed with the works and bring them to practical completion within 165 working days from the date of commencement.”

The Arbitrator posed the question as to when the work commenced, which he answered by stating that under the terms of the contract it was to commence within fourteen days from the date of down payment, which occurred on 18 May 1995. He construed “days” as meaning “working days” and stated that the date for commencement was therefore 7 June 1995. No complaint is made about the construction that “working days” was the relevant yardstick.

55    Dr Elkateb’s submission was that the Arbitrator should have taken, as the starting point, the date when the work “actually” commenced.

56    I disagree with this submission. Clause 5 is not solely concerned with the date of commencement, but the date for practical completion, the significance of that date being that liquidated damages may run from it. The commencement contemplated in clause 5 is that defined in the opening words of the clause and it is, in my opinion, only from the application of that formula that the starting period for the 165 working days is to be calculated. The fact that the builder entered upon the work prior to receiving the down payment simply means that he was carrying out work at his own risk and for his own reasons, but clause 5 does not provide in terms, or upon a proper construction, that the commencement shall be “the date of actual commencement”.

57    In my opinion the Arbitrator’s construction was correct and, certainly, there is no strong evidence that he made an error of law. Nor is there any evidence that the determination of the question may or may be likely to add “substantially” to the certainty of commercial law.

58    Nextly, it was submitted that the Arbitrator erred in allowing fifteen days for “Christmas shut down” because the contract only refers to week-ends, public holidays and rostered days off as being days not to be taken into account for the purpose of calculating days. The Interim Award, at p.41, referred to “Christmas shut down plus public holidays 15 days”. Clause 5 provides for “working days”. Prima facie the fifteen days were not “working days” or, whether they were or were not was a question of fact.

59    It was nextly submitted that by reason of a slip or miscalculation of figures, the Arbitrator miscalculated the number of working days between 7 June 1995 to 22 April 1996, which he ought to have corrected, pursuant to s.30, but declined to do so because he misconstrued the import of the section.

60    By letter dated 2 March 1999 the former solicitors for Dr Elkateb wrote to the Arbitrator setting out certain alleged errors and, in relation to this point, suggesting that the proper calculation was 195 days for the reasons set out in the letter. By letter dated 11 March 1999 the solicitors for Mr Lawindi responded thus:-

“The respondent is again seeking to review the evidence tendered during the course of the hearing. The respondent appears to be challenging the evidence, notwithstanding that the Interim Award has been published. The respondent is clearly not entitled to review the evidence in this way. Even if the respondent’s belated calculations are correct (and we do not concede that they are), the applicant would nonetheless be entitled to extensions of time for completion of the work over and above allowance for week-ends, wet days, public holidays and RDO’s on account of variations to the works which have been allowed.
It is then suggested that the period within which the works were required to achieve practical completion is to be determined by reference to a date commencing from when the applicant was given access to the site. It is then suggested that the evidence of the parties in this way raises some question of law. Clearly it does not. The date of commencement is to be determined by reference to the Contract itself.”

61    On 15 March 1999 the Arbitrator responded:-

“I can only alter the Award if the ‘slip’ rule applies and my opinion is that it does not in this case. I cannot consider new evidence and the matters you have raised now should have been raised earlier. The times and dates for completion of the work should have been questioned during cross-examination of Mr O’Mara and reimbursement for the carpets was not in the cross-claim.”

62    It is clear from the letter of 2 March 1999 that Dr Elkateb accepted that the calculations were based on Mr O’Mara’s figures. That was the evidence the Arbitrator accepted and he was not prepared to consider new evidence. It seems to me that for the reasons set out in his letter it could not be said that the Interim Award contained a mistake or error of the type to which s.30 refers. The matter was one of substance, which the Arbitrator decided on the evidence before him, and, as he pointed out, any other evidence should have been raised at the hearing and, if contrary evidence was available, it should have been placed before him.

63    The matter to which I have just referred is dealt with in paragraph 3(m), the question asked being whether the Arbitrator misapplied s.30. In my opinion, on the material placed before me, it has not been shown that he did.

64    The final issue raised, as a mistake of law, was:-

“(l) Whether the plaintiff was entitled to claim compensation for the loss of the sale value of the units.”

Dr Elkateb submitted that evidence was led that four of the ten units were sold by him at an under value of between $10,000 and $15,000 per unit due to their being sold with unremedied defects, and that no evidence was led in reply.

65    At p.41 of the Interim Award the Arbitrator said:-

“The respondent has submitted that each unit dropped $10,000 in value because of the defects and the poor quality of finish.
I accept the evidence of the claimant that claiming loss of value and rectification of defects is double dipping.”

In those circumstances he did not allow compensation for loss of value.

66    It was submitted by Dr Elkateb that this mistook the true position at law when the property had been sold. His submission was:-

“Where the defects have impacted on the sale price the proprietor’s loss will be the impact of the defects on the sale price rather than the cost of rectification. Hence, no ‘double dipping’ is involved.”

67    In my opinion there is no question of law involved. The Arbitrator’s point was quite simple. It was that if Dr Elkateb chose to sell the units in the defective condition, and thereby took a lesser price, he may have been entitled to damages based on that lesser price, but he could not recover those damages and also claim in the arbitration damages for the cost of rectifying the units, which he had already sold. Put another way, it would have been open to Dr Elkateb to carry out the repairs and, accordingly, mitigate his damages and sell the units for the best price possible. Further there is an implicit, and, in my opinion, impermissible assumption, in Dr Elkateb’s submission, viz that Mr Lawindi was contractually responsible for such defects as existed. In so far as he was, he was compensated, the Arbitrator making it clear that there could not be a claim for loss of value and defects. The Arbitrator’s conclusions in this regard do not involve a manifest error of law nor, in my opinion, any such error.

68    In my view the Amended Summons, in so far as it deals with asserted errors of law, must be dismissed.

Alleged Misconduct

69    In Schedule 2 to the Amended Summons the question is posed as to whether the Interim Award should be set aside by reason of the Arbitrator’s alleged misconduct, or his alleged misconduct of the arbitration. It is alleged that he misconducted himself or the proceedings in that:-

“1. He has mishandled the questions and issues referred to in Schedule 3 to this Summons.
2. He has awarded amounts for variations on an incorrect basis. For example, in Variation 1B & C he calculated the original cost of the excavation with reference to the quote of the builder obtained from the sub-contractor and not the quote the builder gave to the proprietor.
3. Denying the Plaintiff natural justice. The Arbitrator cut the proceedings short and denied the Plaintiff the opportunity to cross-examine the First Defendant’s key witnesses whose testimony the Arbitrator subsequently accepted.
4. On the face of the award, he failed to consider all of the evidence. The Arbitrator neglected to consider important evidence tendered in the proceedings on behalf of the Plaintiff with respect big-item defects. On the face of the award it appears he does not know the existence if (sic) this evidence.”

70 Section 42 of the Act provides:-

“(1) Where
(a) there has been misconduct on the part of an arbitrator .. or an arbitrator .. has misconducted the proceedings;
…
the court may, on the application of a party to the arbitration agreement, set the award aside either wholly or in part.”

Section 44 provides:-

“Where the Court is satisfied that:
(a) there has been misconduct of an arbitrator … or an arbitrator … has misconducted the proceedings
……………………………..
the Court may, on the application of a party to the arbitration agreement, remove the arbitrator …”

71 Kirby P, in considering “misconduct” in relation to s.44, pointed out that it referred to “misconduct” “of a technical kind”: Commonwealth of Australia v Cockatoo Dockyard Pty Limited (1995) 36 NSWLR 662 at p.673. His Honour said that “misconduct” may fall far short of the understanding of that term “in the popular sense of the word” and “may involve no personal turpitude on the part of the arbitrator”. He considered it may “amount to little more than a mishandling of the arbitration likely to occasion an injustice”.

72 In my opinion any allegation of such misconduct must be considered in the context of the arbitration as a whole and the way in which the parties conducted it: State of New South Wales v Coya (Constructions) Pty Limited (Rolfe J - 4 July 1994 - unreported). I also consider that “misconduct” has the same meaning in s.42 as in s.44 and, also, it must be noted that the granting of the remedy in both sections is discretionary.

73    The matters referred to in Schedule 3 include in paragraphs 1, 2, 3, 7, 8 and 9 matters with which I have already dealt as asserted errors of law with, perhaps, the possible exception of 9. As I have come to the conclusion that the Arbitrator dealt with these matters properly there is no basis for concluding that he misconducted himself.

74    Paragraphs 4, 5, 6 and probably 9 raise questions of the sufficiency of reasons. No written submissions were furnished in relation to the alleged insufficiency of reasons and, in those circumstances, I do not propose to examine the matter further, save to say that, in my opinion, it would require a very compelling case to show that an arbitral award did not set forth sufficient reasons such as to constitute misconduct, as opposed to a relevant error of law.

75    The second matter raised was a matter squarely for the determination of the Arbitrator and, even assuming for the moment, that the Arbitrator proceeded on an incorrect basis, error, in itself, does not amount to misconduct. The type of error alleged is in relation to matters of fact and for the Court to intervene it would be necessary to show that the error was of an egregious kind in circumstances where it was not open to the Arbitrator to make the finding, before it could be characterised as misconduct.

76 On the question of denial of natural justice it is necessary to bear in mind a number of matters. Firstly, s.14 of the Act provides that the Arbitrator may conduct proceedings under the agreement in such manner as he thinks fit. Obviously the Arbitrator is obliged to ensure that the parties are afforded natural justice in all its various manifestations. , and whilst s.14 confers very wide powers, they are not limitless: Cockatoo Dockyard.

77    Secondly, it is necessary to note how the arbitration had proceeded. There had been extensive pleadings articulating the various issues, a preliminary conference on 15 January 1997 and a lengthy hearing over the period to which I have referred, during which the main witnesses were cross-examined at length. The Arbitrator had viewed the site twice and raised matters for the parties’ consideration with their experts.

78    Thirdly, the Arbitrator was confronted with a position of some difficulty. After recounting what had transpired at the arbitration, on pp.3 and 4 of the Interim Award, he continued:-

“On the eighth hearing day, 2nd November, the respondent was unable to attend. His solicitor produced a doctor’s certificate for severe anxiety depression and sought an adjournment for two weeks. By telephone conference with the Respondent’s doctor and psychiatrist it was determined that the Respondent’s condition could be short term, a matter of hours, and the hearing was adjourned until 4th November.
On the 3rd November the Respondent was admitted to hospital and a further adjournment was sought. The relevant doctor, Dr Burn, was cross-examined on 4th November and an adjournment was granted, the length of the adjournment to be subject to an update on the Respondent’s condition.
Following a further medical certificate that due to the Respondent’s mental condition he would be unable to attend a hearing for four months I called a preliminary hearing on 24th November and invited the parties to submit ways in which the arbitration could be finalised without the Respondent being present.
The Claimant proposed that we proceed on documents and statements only with the appropriate weight being given to these documents and statements.
I directed that the week starting 7th December be set aside for a hearing either with or without the Respondent being present. The only condition under which I would grant a further adjournment was the Claimant be given permission to examine the Respondent with his own psychiatrist. This permission was not granted.
At the hearing on 7th December Counsel for the Respondent sought an adjournment on the grounds that the Respondent had suffered further medical problems, this time being a blood clot that had resulted in him being admitted into intensive care. I accepted Counsel’s claim but refused the adjournment.
After considering the delays to date, the uncertainty of the Respondent’s medical condition and the extent of the cross-examination already heard I determined that the arbitration would be concluded on the evidence tendered plus those statements and documents yet to be tendered with the appropriate weight placed on those statements and documents .
During the hearing some matters were concluded on the understanding that they would be dealt with further when appropriate witnesses were brought in for cross-examination. These were the formworker, the plumber, the painter and occupants of the units. I have taken this into consideration and asked the Parties to provide further information in relation to plumbing matters.
I directed the Parties forward their final submissions by 14th December 1998 but following an application from the Respondent I extended this time to 11th January 1999.” (My emphasis.)

79    There are a number of matters to be noted from what the Arbitrator wrote. Firstly, he granted an adjournment initially. Secondly, there being no resolution to the problem, he convened a further preliminary hearing on 24 November 1998. Thirdly, although setting the matter down for further hearing to commence on 7 December 1998, he left open the possibility of granting a further adjournment, if Dr Elkateb was suffering from a psychiatric disorder, provided Mr Lawindi’s representatives were given permission to examine Dr Elkateb, which permission was not granted.

80    Fourthly, on 7 December 1998 an adjournment was sought because of a different medical condition. At this point the matter had been adjourned since 2 November 1998 and the question as to whether a further adjournment should be granted was one peculiarly within the Arbitrator’s discretion.

81    Fifthly, the Arbitrator had to have regard to how he would conclude the arbitration and, in a paragraph I have quoted, he set out the matters to which he gave consideration. I have emphasised what appears to be the critical passage, in which he disclosed his reasons. In my opinion, these were proper matters for the Arbitrator to take into account in deciding whether to grant a further adjournment, and I am not satisfied that, having taken them into account, the Arbitrator’s discretion miscarried. He also had to have regard to the position of Mr Lawindi. I shall refer shortly to the way in which Mr Assi put the matter to the Arbitrator on 7 December 1998 against the background of which the Arbitrator came to his conclusion. Finally, the Arbitrator subsequently extended the time to those representing Dr Elkateb to furnish their written submissions, and there is no suggestion that any application was made to him for leave to re-open the evidence or to further cross-examine.

82    It was submitted by Dr Elkateb that on 7 December 1998 the Arbitrator, having declined his application to adjourn the proceedings notwithstanding that he was in hospital, over-ruled Mr Assi’s objections to his receiving into evidence various documents and proceeding with submissions. It was submitted that this approach “unjustly prejudiced and surprised the plaintiff in four broad ways”, namely:-

“(a) The plaintiff was denied a fair opportunity to reply to new material tendered by the defendant on that day;
(b) The plaintiff was denied the opportunity to cross-examine the witnesses whose statements the arbitrator was to rely upon;
(c) The plaintiff was prejudiced by having the new material received irrespective of its form when previously the rules of evidence had been applied to the plaintiff’s evidence; and
(d) The rule in Browne v Dunn .”

83    Each of these propositions was expanded upon. It was submitted that Dr Elkateb was entitled to a fair hearing and a fair opportunity to present his case, including the right to respond by evidence in reply “to evidence being led and with submissions”. The submissions then traced through the various statements. It was submitted that it was reasonable for Dr Elkateb to assume that he would be given an opportunity to respond to all of the new material, once Mr Lawindi had clearly decided to rely upon it; that Dr Elkateb was taken by surprise at the arbitration’s being aborted, as it was described in the submissions; and that the plaintiff ought to have been given the opportunity to reply before the Arbitrator closed the evidence. Alternatively, it was submitted, the Arbitrator should have adjourned the hearing, or at least proceeded in the absence of the plaintiff for the three days allocated from 7 December 1998. In my opinion, these submissions must be considered against the background of the following:-

(a) the Arbitrator had stated that he would only grant an adjournment on 7 December 1998 on specific terms;

(b) although Dr Elkateb was suffering from a different illness on that day, no prior notice had been given to either the Arbitrator or Mr Nicholls that he would not be available;

(c) Mr Assi chose to conduct the matter on 7 December 1998 on the basis that if an adjournment was refused, he would proceed with the application for an injunction; and

(d) the consequence of (c) was that Mr Assi had not put in place any plans for continuing the arbitration if the application was refused, (it not being seriously open to doubt that it would be opposed), and, therefore, made no constructive suggestion as to how the alleged prejudice to Dr Elkateb could be overcome.

84    In general terms the submissions made on behalf of Dr Elkateb set out the prima facie way in which arbitral proceedings are to be conducted. However, every situation has to be judged in the context of a given arbitration. In the context of this arbitration, which had been on foot for many months, in which much evidence and cross-examination thereon had already been heard by the Arbitrator, and in which a lengthy adjournment had been granted to accommodate Dr Elkateb’s position, the Arbitrator was faced with the dilemma of concluding the arbitration or adjourning it with no guarantee as to when it may resume or whether, when it did, Dr Elkateb would be available. He was obliged to take into account not only the position of Dr Elkateb, but also that of Mr Lawindi. I do not consider that in having regard to the matters to which he did, and in the particular circumstances of this arbitration, his discretion miscarried. Nor do I consider that it caused any injustice. Certainly I am not satisfied that it miscarried in a way which amounted to misconduct. I am fortified in this view by the failure by Dr Elkateb to seek to re-open the arbitration thereafter, or to produce any statements in reply for the Arbitrator’s consideration, or to take any other steps, save for furnishing submissions. These submissions neither raised any complaints about what the Arbitrator had done, nor pointed to any areas in which Dr Elkateb was prejudiced by the Arbitrator’s conduct.

85    The next series of submissions deals with the denial of the right to challenge the new material by cross-examination. It was submitted that two witnesses, Mr Lawindi and Mr O’Mara, who had already been cross-examined, were still to be cross-examined further in respect of certain variations. However, there was no application made to the Arbitrator on 7 December 1998 to further cross-examine Mr Lawindi and Mr O’Mara in the time remaining. In these circumstances the submission that the Arbitrator misconducted himself by preferring their evidence, where there was said to be no relevant cross-examination, over that of Dr Elkateb, who had been cross-examined, is not made out. Mr Lawindi and Mr O’Mara had been cross-examined at length, and I shall refer to Mr Assi’s final submissions as to how the Arbitrator should treat their evidence.

86    It was submitted that Mr Assi was not offered the opportunity to cross-examine Mr Lawindi’s witnesses or lead further evidence in the absence of the plaintiff who was in hospital. It was conceded that was previously suggested by the Arbitrator as an option, but, as I have just said, it was not a matter taken up by Mr Assi on 7 December 1998.

87    As Mr Assi had already had the opportunity of cross-examining relevant witnesses the complaint now made that “serious issues of fact and credit .. were intended to be raised by the plaintiff in cross-examination of the defendant and his witnesses” lacks real force. It disappears when Mr Assi’s submissions as to their credibility are considered.

88    I think it is now necessary to look with some care at the transcript of what transpired on 7 December 1998. After the application for an adjournment was made the Arbitrator asked Mr Assi whether he had any witnesses arranged for “to-day”: Tp.106. This was a completely reasonable question from the Arbitrator, who, in my opinion, was entitled to assume that Mr Assi would have approached the hearing on the basis that if the adjournment application was refused, he would be in a position to proceed. It was for that purpose that three hearing days had been set aside. There was then a dispute between the Arbitrator and Mr Assi as to whether the matter was to proceed without Dr Elkateb being present and, after some disputatious discussion between the legal representatives, Mr Assi said:-

“I have not come here to-day with further evidence.”

Mr Assi offered no explanation as to why he had adopted that course and, thereafter the matter degenerated and, if I may say so with respect to the legal representatives before the Arbitrator, it did so because they chose to engage in a disputatious harangue between themselves rather than seeking to provide any assistance to the Arbitrator as to what should be done to complete the arbitration.

89    At Tp.110 the Arbitrator asked whether there was a problem if he took the balance of the evidence without cross-examination. Mr Assi said there was, and that he believed that both parties ought to have the opportunity to cross-examine properly.

90    Thereafter, Mr Nicholls requested the Arbitrator to receive the written submissions and, at Tp.112, he said:-

“Most of the hearing so far as variations are concerned, proper parties to the contract, has been concluded. You’ve heard cross-examination in relation to that. All of those matters are set out in my written submissions. I don’t propose to say anything more about it.”

91    Mr Assi then said that it was proposed to seek an injunction from this Court, which was the injunction I refused to grant.

92    Certain statements were tendered and, in response to an invitation from the Arbitrator, Mr Nicholls commenced to address. The totally unacceptable situation, which had developed before the Arbitrator, manifested itself at Tp.123:-

“MR ASSI: Mr Nicholls, would you let me complete my submissions.
MR NICHOLLS: It is not a submission in the sense ..
MR ASSI: You are an absolute disgrace to the Bar and to the legal profession.
THE ARBITRATOR: Mr Assi, just speak to it.
MR ASSI: This fellow wants to rush through awards.
THE ARBITRATOR: Mr Assi, just come on.
MR ASSI: Wants to trample on all forms of legal procedure and natural justice. You are an absolute disgrace.
THE ARBITRATOR: Mr Assi, just ..
MR ASSI: Again I’m saying this for the record, Mr Arbitrator, that the way Mr Nicholls has conducted himself to-day is an absolute disgrace and yet again he is showing that by this ridiculous submission he is trying to rush matters as quickly as possible by having concurrent submissions.
For the record I state the proper course of events is that the applicant completes his submissions and we’ll reply to them and then, if he wants to reply to ours, he is welcome to do so. But all of this is subject to a summons we are going to put in the Supreme Court.”

93    This passage of transcript, as I have indicated, gave no assistance to the Arbitrator and, if I may say so, appears to have fallen far short of the conduct of responsible legal representatives engaged in arbitral proceedings. However, the concluding portion is significant. Mr Assi there asserted what he considered the proper course to be, although subject to the application for an injunction.

94    The way in which the matter concluded, particularly so far as Mr Assi was concerned, did not assist matters. I quote from Tpp.124-125:-

“THE ARBITRATOR: Mr Assi, I would like your statement by Friday, your submissions. I would like you to still exchange them. If you see that they’ve introduced something into it that hasn’t been brought up in here, you can make a note of it and inform me of that .
MR ASSI: This is getting more ridiculous by the minute, Mr Arbitrator.
THE ARBITRATOR: That’s the way ..
MR ASSI: Have we finished for the day?
THE ARBITRATOR: Yes.
MR ASSI: Good.
THE ARBITRATOR: Have you got any more?
MR NICHOLLS: If Mr Assi wants to leave he can leave. But, no, if Mr Assi is asking - who are you asking that question to?
MR ASSI: I am asking to the Arbitrator have we finished for the day?
THE ARBITRATOR: Is there anything else you want to ..
MR NICHOLLS: Mr Arbitrator, I would like to tender a statutory declaration from have you got a copy for Mr Assi.
….
MR ASSI: Mr Arbitrator, the farcical nature of these proceedings is yet again exposed. We have further declarations and statements being handed up. My client hasn’t even seen them, for obvious reasons, and you’re asked to make an award without my client having the benefit of reading these further statements. He is handing statements even after submissions. I have got nothing further to say, Mr Arbitrator.
THE ARBITRATOR: OK. We will finish. Thank you very much.” (My emphasis.)

95    The passage I have quoted makes clear that the Arbitrator was leaving it open to Mr Assi to draw to his attention any new material. As I read Mr Assi’s final submission no such matter was referred to. The passage is also important because it showed that the Arbitrator was not concluding the hearing in a pre-emptory or unfair way. He expressly provided Mr Assi with the opportunity to raise the existence of new material, which, in the event, was not done. The only reasonable inference is that there was none, or, if there was, Mr Assi had no instructions or reason to raise it with the Arbitrator or seek to challenge it.

96    I have quoted from the transcript at some length because it demonstrates that Mr Assi made no real attempt to provide a constructive regime within which to deal with the matters about which complaint is now made. Rather, as I read the transcript, having advised the Arbitrator that an application would be made to this Court for an injunction, Mr Assi chose to do nothing more than seek to conclude the day’s proceedings. There was ample opportunity for him to put forward constructive suggestions as to how the time remaining on the rest of that day and on the following two days might be utilised to overcome any problems and to consider, in a constructive way, how such material as was before the Arbitrator could be answered. As I have said, the Arbitrator invited submissions on new material. There was ample opportunity for submissions to be made as to the need to cross-examine and to seek to arrange to have witnesses available for cross-examination. However, Mr Assi, in essence, invited the Arbitrator to terminate the day’s proceedings so that the injunction proceedings could go ahead.

97    In all these circumstances it seems to me that complaints about the failure to be allowed to cross-examine, the receipt of hearsay evidence and the failure to adhere to the rule in Browne v Dunn must be rejected. On 7 December 1998 there was no request for a short adjournment to consider the further material upon which Mr Lawindi sought to rely, nor, so far as I am aware, was the Arbitrator referred to any hearsay evidence or any breach of the rule in Browne v Dunn or to the way in which that rule applied in the present case.

98    The submissions on behalf of Dr Elkateb, which were sent to the Arbitrator under cover of a letter of 11 January 1998, commence at p.2548 of the bundle. They deal with the proper parties to the contract; jurisdiction; value of variations/defects; settlement of all disputes; matters relating to credibility of witnesses; and variations. These were the matters in issue.

99    On the question of Mr Lawindi’s cross-examination it was written:-

“There is no need to burden the Arbitrator with every detail of Lawindi’s evidence which points to his complete lack of credibility. It is sufficient to highlight the following ..”

Various matters were then set forth. Mr Assi was asserting that Mr Lawindi should not be believed. I must assume that this was a submission responsibly made. In the circumstances complaints that further cross-examination was needed can scarcely be taken seriously.

100    In relation to Mr O’Mara it was written:-

“No weight can be put to O’Mara’s evidence as he admitted to merely utilising figures supplied to him by Lawindi. This is dealt with in more detail in Annexure D to these submissions.”

I make the same observation about the complaint that Mr O’Mara was not available for further cross-examination.

101    My reading of the submissions discloses nothing raising any of the issues upon which Dr Elkateb now places such reliance, namely denial of the right to challenge the new material, (which would, in the light of what the Arbitrator had said, not be tenable), receipt of hearsay evidence and the breach of the rule in Browne v Dunn. Rather the submissions deal with the matters on their merits and, so far as credibility is concerned, make a forceful challenge to that of Mr Lawindi and Mr O’Mara.

102 The material before me completely fails to satisfy me that the Arbitrator was in any way guilty of misconduct. Even if it could have been argued that on 7 December 1998 the Arbitrator should have afforded Mr Assi some short adjournment to enable him to respond to the position with which he was presented in a constructive manner, the right to make that submission has, in my opinion, been lost by the way Mr Assi chose to proceed. The transcript is clear that he was prepared to rest upon the fate of the application for an injunction to the Supreme Court and, in my opinion, effectively waived his client’s other rights. Therefore, even if I had come to the view that there had been any misconduct on the part of the Arbitrator I would not, in the exercise of my discretion, had made an order pursuant to either s.42 or s.44.

Mr Lawindi’s Application For Leave to Cross-Appeal

103    By his Summons seeking leave to cross-appeal Mr Lawindi asserted that the Arbitrator was in error, as a matter of law, in failing to find that Dr Elkateb repudiated the Building Agreement by purporting to serve a notice of intention to terminate it on 20 February 1996, and by purporting to terminate it by a notice dated 14 May 1996, notwithstanding that the Arbitrator found that the date for practical completion was 22 April 1996.

104    It was further asserted that the Arbitrator erred in law in failing to make any finding that Mr Lawindi was entitled to extensions of time for the carrying out of variations to the works, thereby further extending the date for practical completion beyond 22 April 1996.

105    The Summons stated that a finding that Dr Elkateb repudiated the Building Agreement would have entitled Mr Lawindi to recover the cost of carrying out the works on a quantum meruit basis, and that the value of so doing on that basis was $1,204,403.03 compared to the contract price of $783,500.

106    The Summons continued:-

“7. The Arbitrator has found that the date for practical completion of the building works was 21 April 1996 allowing extensions of time for Christmas shut down, rostered days off and public holidays.
8. The chronology set forth in the Award refers to a Notice of Intention to Terminate the Agreement dated 20 February 1996 and a letter terminating the Agreement dated 14 May 1996.
9. The respondent was not entitled to issue a Notice of Intention to terminate the building agreement on 20 February 1996 and wrongfully purported to terminate the building agreement by the letter dated 14 May 1996.
10. It must follow that the issuing of the Notice of Intention to Terminate and the letter terminating the Agreement constituted a repudiation by the respondent of the building agreement, which repudiation was accepted by the applicant vacating the site of the works.”

107    The Summons asserted that the determination of the questions of law raised issues concerning the repudiation of a standard form of building contract in circumstances where a proprietor wrongfully exercised a contractual right to terminate, and that Mr Lawindi contended that the following matters ought to be remitted to the Arbitrator for reconsideration and determination:-

“(a) Extensions of time to which the applicant is entitled following upon the carrying out of variations to the works.
(b) The amount the applicant is entitled to be paid for the carrying out of the building works valued on a quantum meruit basis.”

108    The written submissions for Mr Lawindi, which were not elaborated upon in oral addresses, were that the Arbitrator found that the date for practical completion was 22 April 1996. It was then submitted that Dr Elkateb purported to terminate the building contract based on his assertion that Mr Lawindi was required to achieve practical completion by February 1996, but that the Arbitrator failed to hold that Dr Elkateb repudiated the agreement, thus entitling Mr Lawindi to recover on a quantum meruit basis, which would have substantially increased his claim. It was also submitted that in determining the date for practical completion the Arbitrator only extended it by reference to wet weather, week-ends, public holidays and rostered days off. No extension was given, although claimed, in respect of additional time taken in carrying out the variation works, the Arbitrator not needing to deal with the extensions of time because time was extended to 22 April 1996 in any event.

109    The attack made by Mr Lawindi is based on the assertion that the Arbitrator should have found that Dr Elkateb repudiated the Building Agreement rather than finding, as he did, p.2 of the Interim Award, that Dr Elkateb “terminated the agreement by notice in writing dated 14th May 1996 and the claimant left the site”. It also necessary to note that the Arbitrator found that the work was completed on 22 April 1996. In these circumstances it seems to me that the further claim propounded by Mr Lawindi cannot be supported, because the alleged termination of the Building Agreement occurred after the work was completed and, accordingly, the completion of the work occurred pursuant to the terms of the contract.

110    In my opinion the attacks sought to be mounted by Mr Lawindi are challenges to factual findings and do not give rise to any error of law and, accordingly, the Summons for leave to cross-appeal should be dismissed.

Costs

111    The conclusions to which I have come require the dismissal of both Summonses. By far the greater part of the time was taken up with Dr Elkateb’s Summons. I think that this is an appropriate case to apportion the costs having regard to the knowledge of it and to the time taken on the various issues. In my opinion, that is accommodated properly by providing that Dr Elkateb should pay seven eighths of Mr Lawindi’s costs.

Orders

112    I order that:-

(a) Dr Elkateb’s Summons be dismissed.

(b) Mr Lawindi’s Summons be dismissed.

(c) Dr Elkateb pay seven eighths of Mr Lawindi’s costs of Dr Elkateb’s Summons, otherwise no order as to costs.

(d) Exhibits be returned.

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