Elspan International Limited & Ors v Aerospatiale Holdings Australia Pty Limited

[1992] HCATrans 343

..

4

'

• ~

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No Sl25 of 1992

B e t w e e n -

ELSPAN INTERNATIONAL LIMITED

First Applicant

PETER ELLEN & ASSOCIATES

LIMITED

Second Applicant

PETER ELLEN

Third Applicant

ELSPAN (AUSTRALIA) PTY LIMITED

Fourth Applicant

and

AEROSPATIALE HOLDINGS AUSTRALIA

PTY LIMITED

First Respondent

EUROCOPTER INTERNATIONAL

PACIFIC LIMITED

Second Respondent

Elspan	1	19/11/92
GAUDRON J
(In Chambers)

ANTHONY GRIEVE PTY LIMITED

Third Respondent

ANTHONY GRIEVE

Fourth Respondent

Application for a stay of the reference order

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON THURSDAY, 19 NOVEMBER 1992, AT 10.19 AM

Copyright in the High Court of Australia

MR M.S. JACOBS, QC:  May it please Your Honour, I appear

together with my learned friend, MR G.A. SIRTES, for the applicant. (instructed by Messrs Colin

Biggers & Paisley)

MR R.C. McDOUGALL, QC:  May it please the Court, I appear

with my learned friend, MR I. FAULKNER, for the

first and second respondents. (instructed by

Messrs Henry Davis York)

MR N.G. REIN:  May it please the Court, I appear for the

third and fourth respondents. (instructed by

Messrs Moray & Agnew)

HER HONOUR:	Yes, Mr Jacobs.
MR JACOBS:	We move on the affidavits of Mr Ellen, sworn on

17 November and also, Your Honour, on a further

affidavit of Mr Crennan. May I tender that

affidavit? It is an affidavit in reply to an

affidavit put on by Mr Woods, I think it was, late

yesterday evening or afternoon.

HER HONOUR:  Yes. Do other counsel have a copy of it?

MR JACOBS:	I am instructed so, Your Honour.
MR McDOUGALL:	Yes, we do, Your Honour.
HER HONOUR:	It may be filed in Court.
MR JACOBS:	As Your Honour pleases.
HER HONOUR:	I, of course, have not read this affidavit but

I have read the others.	Do you wish to read it to
me at this stage?

Elspan 2 19/11/92

MR JACOBS: There is only one point that arises in that

affidavit. It appears to us, Your Honour, as if my

learned friend is seen to take the point that
because of the participation in the arbitration or

reference, there might have been some issue of

waiver. This is what I understand from Mr Woods'

affidavit. We just point out to Your Honour that annexed to that affidavit is a written submission

placed before the arbitrator/referee and it was
pointed out immediately that the appearance before

him was without prejudice and under reservation of

rights. And that is the sole purpose for which we

put in that affidavit.

HER HONOUR:	Yes, thank you.
MR JACOBS:	May we correct a submission that we made - and

we are indebted to my learned friend, Mr McDougall,

for pointing this out to me. It was pointed out to

me that in the decision of Southern Cross v All

Risks Insurance, 21 NSWLR 215, there is a note that the Court of Appeal in New South Wales ordinarily does not give reasons for the grant or refusal of leave to appeal. If that is the practice, we stand corrected in regard to the submissions which we

have placed before Your Honour.	We do not abandon
the point, because if we - - -

HER HONOUR:  But do you have any other point, because so far

as it is an application for special leave to

appeal, it is an application from the decision of

the Court of Appeal, and even if you were

successful in relation to your application, it

would be most unusual for this Court to embark on a

hearing of the matters that you say were wrongly

decided against you at first instance. They would

be referred back, in the ordinary course, to the

Court of Appeal.	So the only question really
is - - -

MR JACOBS: It is not our main point.
HER HONOUR:	But what is your other point? What is your

point?

MR JACOBS:  The point is simply this: on the alter of

commercial expediency the fundamental right of

privacy that we have in regard to an arbitration

has been sacrificed. The route to that sacrifice

is along two paths: one, under Part 72; two, under

section 47 of the Commercial Arbitration Act.

May we take Your Honour immediately to the

judgment of His Honour Mr Justice Cole.

Elspan	19/11/92
HER HONOUR:	How do you make the point that the Court of

Appeal was wrong in refusing you leave to raise

that matter? That is what you have got to do.

MR JACOBS:  We say that His Honour Mr Justice Cole was

wrong, and it is not only a question of practice,

he was wrong in law. We were denied the right to

have our arbitration in private. we say that the

Court of Appeal should have granted us leave.

HER HONOUR:  But at that stage, am I not correct in this,

there was no indication from Mr Samuels that the

arbitration and the reference would proceed

together anyway?

MR JACOBS: There was a provision in the short minutes

empowering Mr Samuels to make that decision.

Without that provision in the short minutes,

Mr Samuels would not have had the power. So, in

other words, what happened was that His Honour

Mr Justice Cole said to Mr Samuels, "I empower you and I arrive at this position from two paths:

under section 47 of the Commercial Arbitration Act

and under Part 72, I empower you, I give you that

power, to run these two in tandem.". We say that

was wrong.	He had no such power; there was no
jurisdiction.

HER HONOUR:  Yes. But you have now got to go to the other

point which is that the Court of Appeal was wrong

to refuse you leave in circumstances where it was

open to the arbitrator to proceed separately if he

so desired.

MR JACOBS:  Yes, we concede that. It was open to the

arbitrator to decide otherwise but, Your Honour, he

derives his power from that holding of His Honour

Mr Justice Cole. Now, it becomes with submission a

hollow argument to say, ah, but he might never

exercise the power. Mr Samuels has said, because

he has been empowered, he now exercises that power.

Therein lies the basis, the essence of our

submission.

May we take Your Honour to His Honour

Mr Justice Cole's judgment and Your Honour will see

how this point is developed. This is attached,

Your Honour, to the bundle of documents as EDCS.

HER HONOUR:  Yes, I have that.

MR JACOBS:  May I just pause for a minute, Your Honour. We

think, and this is our submission, and Your Honour

will correct us if we are wrong, that we have given

Your Honour sufficient authority for the

proposition that arbitrations are - not only is the

procedure to be in private, but the very nature of

Elspan 4 19/11/92

an arbitration carries with it an implicit

confidentiality. Your Honour has seen all the

references that have been made in our submissions,

so there are two elements to this point. There is

the privacy of the hearing and the confidentiality

of what happens.

HER HONOUR:  I know that argument but, Mr Jacobs, you start

in a position where you have curial proceedings

between these parties in any event. If it is not
referred, in any event much the same factual

matters in evidence must be traversed at some later

stage.

MR JACOBS:  Perhaps I should address that now. Your Honour,

as far as the first applicant is concerned, the

first applicant has contended that there is a

threshold point that falls for determination under
the second arbitration agreement and that is, who

terminated the second agreement and, if so - - -

HER HONOUR:	Mr Samuels has accepted that, has he not?
MR JACOBS:	Initially he had an idea of winkling out this

threshold point. His latest ruling is that this is

not going to happen, that everything is going to be

determined together; the two arbitrations -

although the first one is suspended, the reference,
the whole thing is going to be heard together as a

combined hearing. This is now the latest position.

There were submissions made to him originally. He

was persuaded, I think, that there was some merit

in finding a threshold point but this is not the
present scenario and this is why we are before you
today, Your Honour. This is the very reason why we

are here.

Now, may we take you to His Honour

Mr Justice Cole's judgment and Your Honour will see

at page 6 of that judgment in the third paragraph

he says as follows:

It was suggested that, assuming the model

law applied, the court had no power to give

directions to the arbitrator. I have found

that the New South Wales Commercial

Arbitration Act applies and there is thus a

power to give directions (section 47).

Now, we make the submission, Your Honour, that

section 47 of the Commercial Arbitration Act, which

relates to interlocutory orders, does not give a

court power to direct that an arbitration and a

reference under Part 72 can run in tandem.

HER HONOUR:  Good, I understand that, but did you take that

point in the Court of Appeal:

Elspan

19/11/92

MR JACOBS: 

Yes, that point, yes.

HER HONOUR: 

You will take me to that in due course and, of

course, you will have to satisfy me that that is in
fact the direction as well.

MR JACOBS: 

If Your Honour will have a look at the short

minutes. May we respectfully take Your Honour to

the short minutes, direction 13 of the short

minutes.

HER HONOUR:  What number is that?

MR JACOBS: It is the second-last paragraph.

HER HONOUR:	Of what?
MR JACOBS:	The short minutes of His Honour - - -
HER HONOUR:	What exhibit number is that?
MR JACOBS:	I am sorry, Your Honour; it is annexed to the

affidavit of Mr Ellen as the first annexure.

HER HONOUR:  Thank you. I have it.

MR JACOBS:  May we respectfully take Your Honour to

paragraph 13.

Subject to such directions as Mr Samuels QC

may give, the arbitration and the reference be

heard at the same time.

To the best of my recollection - I will just check

that is 100 per cent again - that point was taken

pertinently before Their Honours in the Court of

Appeal, but I will check that.

HER HONOUR:  Do you wish to take me to section 47, because

it is not on the list of references and I do not

think I have it.

MR JACOBS:  We have canvassed that, Your Honour, in our

written submissions.

MR McDOUGALL:  Would Your Honour like our copy while this is

proceeding?

HER HONOUR:  No. If it is in the outline of submissions, I

will find it.

MR JACOBS:	It is on page 8 of our written submissions.
HER HONOUR:	Yes, I have that, thank you.
MR JACOBS:	May we just take Your Honour through those

submissions?

Elspan 6 19/11/92

HER HONOUR: Section 47 says:

The Court shall have the same power of

making interlocutory orders for the purposes

of and in relation to arbitration proceedings

as it has for the purposes of and in relation

to proceedings in the Court.

MR JACOBS:  Yes. Now, there are a number of decisions of

the various States, Your Honour, which deals with

section 47 and we will be taking Your Honours to

those. In paragraph 3.2.1 we make the submission

that:

Even if Cole J was correct in holding that the

parties had opted out of the Model Law, it is

respectfully submitted that Cole J erred in

holding that the legislative intent under

Section 47 of the Commercial Arbitration Act

1984 (NSW) empowers a Court to issue

directions of the nature which Cole J made in

this case -

and these are directions 8 and 13. Direction 8

relates to costs and 13 relates to the most

important one, the running of the two together.

3.2.2. It is respectfully submitted that Cole

J failed to distinguish between permissible

interlocutory orders under Section 47 and the

impermissible directions.

3.2.3 Inherent in this direction is the

empowering of the Arbitrator/Referee to issue

a direction that the hearing of the

arbitration under the second Agreement ..... be

consolidated with the hearing of the

reference. It is respectfully submitted, that

Cole J had no jurisdiction to -

make that order.	We take Your Honour immediately
to 3.2.6 on page 9.

There are some decisions of the State Courts

as to the true construction of Section 47 of the Model Uniform Legislation and its intent

and purpose. These decisions each take up a

different position and in the interests of

uniformity -

we make the submission that this is a matter which

should merit the attention of Your Honour's Court.

HER HONOUR:  That may be so, but the problem is in showing

me that the Court of Appeal was wrong in this

regard; either that you raised it or that it was

wrong.

Elspan	19/11/92
MR JACOBS:	We have not been favoured with reasons - - -
HER HONOUR:	But I have been favoured with a transcript,

Mr Jacobs, by your solicitor, I think.

MR JACOBS:	Yes, we put that in.
HER HONOUR:	And it is not clear that you raised any point

about the construction of section 47 and, if you

had, as I understand the current philosophy of

statutory construction, it is that at least where

the powers of a court are concerned they are to be

given the widest possible construction and that if

there is any possibility of abuse, it is to be

dealt with by the development of proper

discretionary principles, rather than by reading

down the statute.

MR JACOBS:	Your Honour, I had written submissions before Their Honours in the Court of Appeal and my learned
friends will correct me if I am wrong, paragraph
3.2.1 is virtually identical to what was before Their Honours in the Court of Appeal. If
Your Honour will refer to the transcript in the
Court of Appeal Your Honour will see that I refer
to my written submissions. It was towards the
afternoon and Their Honour had told me that they
had read my written submissions. They asked me
whether there was anything else I had to say. I
think that is where the matter was left. But, if necessary, I can give Your Honour a copy of my
written submissions before the Court of Appeal. I
just wanted to check those.  But if I am wrong, my
learned friends will correct me, but to the best of
my recollection, this point was pertinently taken
and - - -
HIS HONOUR:	Certainly not at the forefront of your argument

in the Court of Appeal.

MR JACOBS:  Your Honour will see that I was attacked on

about four fronts as soon as I stood up. The

submissions were before Their Honours and it was a

point that I felt I just could not take any further when Their Honours intimated that they were against

me. There was nothing further I could really say
or do to persuade them. Your Honour will see - I

will give Your Honour the passage in the transcript

where that is referred to - where I refer them to

my written submissions and they wanted to know

whether there was anything further that I had to

say.

HER HONOUR:  In those circumstances, you have to show a

denial of natural justice to show an error on the

part of the Court of Appeal, do you not?

Elspan 19/11/92

MR JACOBS:	I have to show they were wrong, that they were wrong in rejecting this point.	I have to show that
section 47 means what -

HER HONOUR:	Even though you did not argue it in terms.
MR JACOBS:	It was there before them in my written

submissions, Your Honour. There is not much more I
could have done than that. Again, my learned

list and there was very little more that I could have said or done at that point of time.

friends will correct me if I am wrong, but court

HER HONOUR:  Your argument depends on reading section 47

down, does it?

MR JACOBS:  Whether section 47 empowers a court to make an

order empowering an arbitrator to run an

arbitration in tandem with a reference.

HER HONOUR:  But the success of your argument depends on

reading the section down, does it not?

MR JACOBS:  Yes. There are three different d_ecisions in the

State courts as to how section 47 is to be interpreted.

HER HONOUR:  Or to be applied. There is a difference.

MR JACOBS:  Yes. The view taken by His Honour

Mr Justice Rogers in the Imperial Leatherware case

is that section 47 is to be read down. In the

South Australian Superannuation Fund the majority

of the court, this is White and Mohr, with

Mr Justice Bollen dissenting, held that section 47
was wide in its terms and empowered the court to

interfere in arbitration proceedings at

interlocutory stages within its discretion.

In the Nauru Phosphate case, and we have given

Your Honour a copy of that decision,

Mr Justice Smith took a third view and that was

that the words were not to be read down but that a

court would be slow, having regard to a number of

discretionary factors, to give any directions.

At the point of time that this order was

granted, there were no arbitration proceedings on

foot. They had not started. And the point we

make, Your Honour, is how can there be an

interlocutory order in relation to proceedings that

are not yet commenced. If His Honour is right in

this regard it would mean that, within the context

of an application under the International

Arbitration Act for stay, a court - - -

Elspan	9	19/11/92
HER HONOUR:	How do you say it is to be read down?	Did you

ever submit, either to Mr Justice Cole or to the

Court of Appeal, the manner in which it should be

read down?

MR JACOBS:  I argued, again as I recall it, that the court

had no such power. I did not say exactly what the

section meant, but I did say that, as far as I

recall, Your Honour, that section 47 did not give

that power. This is an argument I put up to the

Court of Appeal. I think I had better get my

submissions to the Court of Appeal, Your Honour.

HER HONOUR:  Yes. Was it submitted also to Mr Justice Cole?

Was that argument also made to Mr Justice Cole?

MR JACOBS:  I am going to have to refresh my recollection.

I think it was, but may I check that. My solicitor

has found my submissions in regard to the Court of

Appeal. I will just ask my learned junior to check

those. It is our submission, Your Honour, that

this is not that kind of interlocutory

application - order, rather, which section 47

envisages.

The other route along which His Honour

travelled, with respect, in making this order was under Part 72, rule 2 and rule 8 of the New South

Wales Rules of Court. We had taken Your Honour to

Mr Justice Cole's judgment on this point and may we

take Your Honour back to that judgment. His Honour

said on page 7:

Elspan has argued that an arbitration is

a private affair - - -

HER HONOUR:  I am sorry, you will have to give me the

exhibit numbers.

MR JACOBS: It is exhibit EDCS.

HER HONOUR:  Thank you.

MR JACOBS:  My learned junior has assisted me. May I just

give Your Honour my submissions before the Court of

Appeal and direct Your Honour's attention to

pages 13, 14, 15 and 16. My memory was correct.

HER HONOUR:  Thank you. Is there any objection to these?

MR McDOUGALL:	Not at all, Your Honour.
MR REIN:	No, Your Honour.
MR JACOBS:	I did not have the Nauru case at that stage, it

was a subsequent decision.

Elspan 10 19/11/92

HER HONOUR:  Then the question still remains whether you

took that point before Mr Justice Cole.

MR JACOBS:  I had written submissions there as well. I just

want to satisfy myself as to how I put it before I

give Your Honour an assurance.

HER HONOUR:	Thank you.
MR JACOBS:	Does Your Honour have the judgment?
HER HONOUR:	Yes, I do.
MR JACOBS:	On page 7 His Honour says as follows:

Elspan has argued that an arbitration is

a private affair into which other parties may

not be intruded, even if it be obviously

convenient.

His Honour referred to the Oxford Shipping case

that I gave His Honour, and this is a judgment of

His Lordship Mr Justice Leggatt. Your Honour will

see that His Lordship Mr Justice Leggatt stated:

"The concept of private arbitrations derives

simply from the fact that the parties have

agreed to submit to arbitration particular

disputes arising between them and only between

them. It is implicit in this that strangers

shall be excluded from the hearing and conduct

of the arbitration and that neither the

tribunal nor any of the parties can insist

that the dispute shall be heard or determined

concurrently with or even in consonance with

another dispute, however convenient that

course may be to the party seeking it and

however closely associated the disputes in

question may be. The only powers which an

arbitrator enjoys relate to the reference in

which he has been appointed. They cannot be

extended merely because a similar dispute

exists which is capable of being and is

referred separately to arbitration under a

different agreement."

His Honour Mr Justice Cole distinguished that in

the following words. He said, "His Honour" - I

think he meant His Lordship:

was not dealing with a case such as this.	The
second, third and fourth defendants are all
within the Elspan interests. The fifth and sixth defendants, who acted as certifiers -

and they are represented by my learned friend,

Mr Rein -

Elspan 11 19/11/92

under the second agreement, are closely

associated with the very subject matter of the
disputes between the plaintiffs and the first

to fourth defendants. Although they may

technically be "strangers" to that dispute,
there is no realistic sense in which that is

so. Leggatt J was addressing a question of
the power of an arbitrator to order the
concurrent hearing of two arbitrations between

different parties without the consent of the

parties to those arbitrations.

And His Honour says:

No such question arises here.

Across the page he says:

The question or difficulties arising from

third party involvement in matters ..... was

addressed by the learned authors of Mustill &

Boyd ..... Several solutions to avoid the waste of time, resources -

et cetera, and then he goes on to say:

In my view part 72 confers a clear power

to appoint a person, agreed as an arbitrator in respect of some issues in dispute between

particular parties, as referee to hear and

report to the court upon associated matters in

dispute between the same parties, and

additional parties. The court also has a

power to fix the hearing of that reference at

the same time as the arbitration (Part 72 r2

and r8). Equally it has a power to give

directions to regarding the conduct of an

arbitration ..... That includes a power to

direct when the arbitration is to be heard.

And we challenge that, Your Honour.

It is unnecessary now to decide whether s.47

confers upon the court a power to make orders

allowing the joinder of third parties in an

arbitration in circumstances where it is

convenient to do so.

The question of section 47 was agitated before

His Honour Mr Justice Cole. I am uncertain as to

the precise formulation but I will give Your Honour

that as soon as I get my submissions.

It is our submission, Your Honour, that

whatever the validity of Part 72 may be - and we

draw Your Honour's attention to the fact that the

way in which Part 72 is being implemented in New

Elspan 12 19/11/92

South Wales is presently the subject of a reserve

judgment, as we understand it, by His Honour

Mr Justice Gleeson - whatever the validity of that

part - of that rule is, it can never confer upon a
court the jurisdiction to give directions to a
referee that will do violence to the privacy

principle which has stood as part of English

jurisprudence - and we submit the jurisprudence of

Australia - for, I think, a number of hundreds of

years.

HER HONOUR:  Now, that is all very well, but I have not

presently got rules 2 and 8 of Part 72.	What do
they say?

MR McDOUGALL:  As long as I can have it back at some stage,

Your Honour.

HER HONOUR:  Yes. You may have the other volume back, thank

you. The relevant one is this, rule 8(1):

Where the court makes an order under

rule 2, the Court may give directions with
respect to the conduct of proceedings under

the reference.

MR JACOBS: Yes, that is so.

HER HONOUR:	And again you say that has to be read down.
MR JACOBS:	I would say on its face it does not refer to an

arbitration. On the face of it, it is - - -

HER HONOUR:  What Justice Cole has done is he has joined the

power under 47 with the power under Part 72 to give

a direction to the arbitrator under section 47 and

a direction to the referee under Part 72.	He has
combined them in one.

MR JACOBS: That is why I said initially he has taken two

paths to arrive at the same point.	He says to the
arbitrator, "I say under section 47 I can empower

or direct you to run your arbitration in tandem

with a reference.", and then he says to the same

person, wearing a different hat, "Under that rule, I empower you or I direct you to sit as referee at

the same time." Now, it is our submission,

Your Honour, that particularly where we deal with an international commercial arbitration in

Australia, and we point out to Your Honour that the

purpose of updating the International Commercial

Arbitration Act to its present position is to
attract international commercial arbitrations to

Australia.

HER HONOUR:  Now, Mr Jacobs, the purpose does not matter so

much. The question is in what respect, then, you

Elspan 13 19/11/92

say the Court of Appeal was wrong to refuse you

leave in circumstances in which you do not proffer,

so far as I can see, some other interpretation.

MR JACOBS:  We say, Your Honour, that under that rule, under

Part 72, there is no such power.

HER HONOUR: 

The trouble with your argument is that

section 47 and Part 72 rule 8, on their face, are
perfectly general.

MR JACOBS: It is our submission, Your Honour, that under

Part 72 the court can issue directions to a referee

but he cannot empower the referee to force his way
into an arbitration or he cannot, under the cloak

of that rule, allow my learned friend Mr Rein's

clients to litigate their disputes with the

plaintiffs at the same time. Under section 47 of

the Commercial Arbitration Act it is our submission

that, one, at the stage the order was granted there

were no arbitration proceedings in progress and,

accordingly, it was inappropriate to make

interlocutory orders. There was no jurisdiction to

do that. Two, in any event, section 47 in so far

as it relates to interlocutory orders, does not

empower a court to issue a direction that the

fundamental right of privacy is violated. And it

would take far clearer words under section 47 to

achieve that result.

Your Honour, the further problem that arises

is you have the same person now sitting as referee

and arbitrator. He has to put up a report and he

has to make an award. The only curial review in regard to the award really, apart from technical

misconduct under section 42, would be an

application for leave to appeal on a point of law
under section 38 of the Commercial Arbitration Act.

Under section 38 the right of curial review with

leave is dependent upon whether or not there is a

manifest error of law or whether there is clear

evidence of a mistake of law.

When the same gentleman sits as referee, one

does not quite know what happens to his report

because the law there is in a state of flux in New

South Wales. The very point is being determined

now, as we understand it, by the Court of Appeal in

another matter. Up until now the approach taken by
the judges in the Commercial Division in New South

Wales is that where there is a complicated factual or technical matter -

HER HONOUR:  What does this go to? If you could just tell

me what it goes to: does it go to construction or

does it go to convenience?

Elspan 14 19/11/92

MR JACOBS: It goes to both. It shows that it could never

have been the intention to have these two matters

running in tandem with one party sitting in two
capacities as, in our submission, it would be

calculated to lead to confusion and it could never

have been the intention of the legislature to

achieve that result, whether one goes through 47 or

through 72, because if the court, Your Honour, has

a comfortable feeling that the judgment or the

report of the referee is correct, it will then

accept it and there is no hearing de novo.	We have
given Your Honour the various decisions in paragraph 3.4.1 of our submissions.

The point we took before the Court of Appeal

was also the discretionary point as to whether or

not the court in any event should have forced a

reference on unwilling parties. In

paragraph 3.4.3, at the foot of paragraph 15 of our

submissions, we analyse the various cases for

Your Honour and we have shown the difference of

approach in - - -

HER HONOUR: Again, was that point taken in the Court of

Appeal?

MR JACOBS:	Yes.
HER HONOUR:	Can you point me to it here? Have you a copy?
MR JACOBS:	I have now retrieved my submissions to

His Honour Mr Justice Cole. Paragraph 10,

particular 10.4.

HER HONOUR:	You have a different task again in dealing with the error in relation to a discretionary judgment.
If it is a discretionary matter, that is - - -
MR JACOBS:	Yes, I understand that but it would appear,

Your Honour, as if - I think the present tendency

does appear, that if - the discretion was bad in

law. May we take Your Honour to paragraph 10,

particularly 10.4?

HER HONOUR:  Yes. I must say I do not read it as raising a

question of discretion having miscarried, 10.4,

unless I am reading the wrong one.

MR JACOBS:  Does Your Honour see reference to His Honour

Mr Justice Smart's judgment, the Park Rail case?

HER HONOUR:  Yes, I see that as raising a question of power

but I do not see it as raising any question of the

miscarriage of a discretion.

MR JACOBS: Sorry, may I crave Your Honour's permission then

to get the submissions back again? There was a

Elspan 15 19/11/92

long section which dealt with discretion.

"10. DISCRETIONARY CONSIDERATIONS".	I thought my
recollection had not let me down.

HER HONOUR:  Yes. I see the heading.

MR JACOBS:  And (vi) on page 18, the same point I was making

now, the difference in approach, Pt 72 rule 13, the

adoption of the referee's report.

HER HONOUR:	Yes.
MR JACOBS:	Depends upon the view taken by this court of
the ever-changing legal principles relating to
this aspect.
HER HONOUR:	Yes.  Was it the subject of oral argument?

MR JACOBS: Before the Court of Appeal?

HER HONOUR:	Yes.
MR JACOBS:	I submit, no, because I was virtually told, "Are

there any other points? If not, we've" - may I

just give Your Honour that paragraph?

HER HONOUR:  Yes.

MR JACOBS: It will just take me a minute to find. This is

an annexure to Mr Woods' affidavit. I think he has

put in the transcript before the Court of Appeal,

if I am not mistaken.

MR McDOUGALL:  JRE3, 22, last line, to 23, Your Honour.

MR JACOBS:  I am indebted to my learned friend. Yes,

Your Honour will see, at the to of page 23:

They are contained in our written submissions.

HER HONOUR:	Yes.
MR JACOBS: And then His Honour Mr Justice Priestley said:

Yes, well we have all looked at those, although, as I said at the beginning and as

our later questions would reveal we had not

resolved the whole of this rather complex

matter, I hope I am right in saying we do now

have a grasp of the leave issue.

It might have been a bit insensitive for me to push

the matter any further where Their Honours had told

they had read my written submissions.

HER HONOUR:  I am always intrigued by the notion of a brave

and independent bar, Mr Jacobs.

Elspan 16 19/11/92

MR JACOBS:	I am trying my best this morning.
MR McDOUGALL:	It is raised again at page 25 at about

point 6.

MR JACOBS:  The point was taken. Their Honours had assured

me they had read the point. There was very little

more I could have added to the submissions which I

put.

So, we say, Your Honour, it is going to be the

most terrible, awful mess at the end of the day

and, in this regard, the discretion is clearly

miscarried.

HER HONOUR: That is not obvious, Mr Jacobs, that it is

going to be a terrible, awful mess at the end of

the day. It is not at all obvious. I mean, you

will get the same sort of mess, or you can get the

same sort of mess, no matter how matters like this

are approached. If there had been no reference at

all, you could end up with precisely the same sort

of mess that you are hypothesizing. So, that is

one aspect. The other aspect is this:	it is not
obvious that that mess will ensue.

MR JACOBS: It becomes obvious, in our submission, because

you have different criteria for the adoption or

rejection of the report or the award. You have

different procedural considerations along the way,

if this is a reference or an arbitration. The

fundamental point which perhaps I must come back to

is this question of confidentiality. A reference,

Your Honour, is merely an extension of the court's

powers. The referee sits almost as a delegate of

the court. There is no confidentiality whatsoever in regard to a reference. Either in regard to the report, the proceedings, witnesses' statements,

evidence that is heard in the court, nothing would

prevent any one of the litigants to a reference

going outside and telling anybody else exactly what

was happening before the referee.

If we are correct that there is a fundamental

right not only of privacy but of confidentiality

implicit in arbitrations - and we have given

Your Honour not only our views, with respect, in
that regard. But the judgment of His Lordship

Mr Justice Parker in the Dolling-Baker case, on

page 10 of our submissions - we have given

Your Honour statements made by no less eminent

persons than Sir Michael Kerr, Russell and

His Lordship Mr Justice Steyn in England who, I

believe, is very much involved in arbitrations, and

may we take Your Honour to page 13 of our

submissions where, His Lordship, writing in the

Elspan 17 19/11/92

ICCA International Handbook on Commercial

Arbitration says:

It is regarded as implicit in the arbitration

agreement (subject to express agreement to the contrary by all parties) that each arbitration

is private to the parties, requiring strangers

to be excluded from the hearings and conduct

of the arbitration.

Now, that is strong language, with respect.	I do
not know whether Your Honour has available the

book, "The Art of Arbitration" where there is - - -

HER HONOUR:  Yes. The difficulty with that submission that

you make, Mr Jacobs, is this: such principles must

give way to statutory provisions to the contrary.

MR JACOBS:  It would take clearer words, in our submission,

to erode that fundamental principle. It would take

very clear language to erode a principle that has

been around as early as the Hewett v Lycock which

refer to at the top of page 13 and before.

If it is correct that Part 72 means that and

section 47 entitles a court to make an

interlocutory order to that extent, then we can put

it no better than this:  it would mean that this

fundamental principle of privacy and

confidentiality which has been around for hundreds

of years - perhaps for centuries, I do not know -

longer, is now - - -

HER HONOUR:	Which, in turn, when it prevents the exercise of the jurisdiction of courts, precludes that other
fundamental importance that matters such as this should be conducted in public.
MR JACOBS:	I would submit, Your Honour, that the

fundamental right of privacy and confidentiality

would override any such public policy

consideration. It would be a sorry day for

arbitrations if this order would be allowed to

stand because - my clients want their affairs kept

confidential and in private and they want the
litigation limited to what they have agreed upon,
and that is what they are trying to achieve and

that is what they have been attempting to achieve

from day one. They have, by their consensus

expressed in the arbitration agreement, determined

their own dispute resolution mechanism only to find

that the agreement that they have arrived at is now

overridden under Part 72. With respect, we cannot

really put it any higher than that.

We draw Your Honour's attention to the fact

that Part 72, in itself, is under attack in the

Elspan 18 19/11/92

sense that we have indicated to Your Honour - in

the case of Leda v S.J.F Formwork, judgment has

apparently been reserved on that very point and

that is that it is inappropriate for a court to
give that status to a referee's report where merely

a comfortable feeling will result in the report

being adopted or rejected and where the litigant is
not entitled to a hearing de novo before a judge.

Your Honour will see on page 14 of our submissions that we cite a number of authorities

where this approach has been taken, particularly

the Chloride Batteries case which set the trend of
the decisions in New South Wales, with respect, as
to how the courts would approach the adoption or

rejection of a referee's report. His Honour

Mr Justice Cole held in that matter, as we

understand it, that it was on the basis, "Well, if

it's a complicated, technical or construction

matter or factual matter, if there's a comfortable

feeling that the referee has addressed his mind to

the right questions, that's the end of the inquiry.

The court will adopt the report."

We point out, Your Honour, that His Honour

Mr Justice Young, in the case we cite at the foot

of page 14, held, with one or two exceptions, that

that was not necessarily the position. On page 15,

we point out that a referee appointed by the court

is not a judicial officer and need not have any

legal training or qualifications. In the case of

persons, for example, registrars, they exercise

powers under Part 61 of the rules and they are

subject to a review procedure. We make the

submission that the comfortable feeling which has

been held to be the basic minimum for the

acceptance of a referee's report is a poor

substitute for the right of full curial review.

We draw Your Honour's attention to the Harris

v Caladine case.	Of course, we know that that was
dealing with federal jurisdiction but we make the	submission that by a parity of reasoning the same
principle should apply.

Your Honour, then subject to my checking my

submissions to Cole J, those are out submissions.

HER HONOUR:  There are a number of matters that you have

not, I think, addressed in terms, Mr Jacobs. First
of all, if I could just be clear about this: the
stay that you request, I take it, is a stay of the

reference to Mr Samuels?

MR JACOBS:	That is so.
HER HONOUR:	Only the reference?

Elspan 19 19/11/92

MR JACOBS:  I cannot quarrel with the arbitration

proceeding. I am sorry, if I have not made that

clear, that is so.

HER HONOUR:  Yes, all right. The application for special

leave to appeal is also with respect to the

reference order?

MR JACOBS:	Yes.
HER HONOUR:	And is it limited to that?
MR JACOBS:	The summons for special leave is amongst

Your Honour's papers.

HER HONOUR:  Yes, I have it here. You say the whole of the

Court of Appeal judgment but I presume the effect of that is to deal with the reference order and nothing else?

MR JACOBS:  Your Honour, there was another point agitated

before the Court of Appeal. There was some doubt

as to whether His Honour Mr Justice Cole - our

reading of the judgment was that he had enlivened

the first arbitration as well. I do not know

whether Your Honour knows the background but - - -

HER HONOUR:  That was the major point of your submissions in the Court of Appeal.

MR JACOBS:  Yes. That was a problem which we had, but then

there was an undertaking given by my learned

friend, Mr Faulkner, who appeared that it was not

intended to make the submission that His Honour

Mr Justice Cole had re-enlivened the first

arbitration. So, that point was taken as well but

that was covered by the undertaking and the

interpretation of His Honour Mr Justice Cole's

judgment that that is what he must have meant.

HER HONOUR:  So, at the end of the day the only matter that

is in issue - - -

MR JACOBS:	Was the reference.
HER HONOUR:	- - - is the reference, very well.
MR JACOBS:	Yes, that is so.
HER HONOUR:	Now, there are two matters that, it seems to

me, you must deal with, Mr Jacobs. First, the

necessity for the subject-matter of the proceedings

to be in jeopardy before a stay will be granted

and, secondly, the convenience of the parties.	I
take your submissions thus far to have been
directed in substance, at least, to the merits of your special leave application.

Elspan 20 19/11/92

MR JACOBS:	Yes, to show that there are - - -
HER HONOUR:	Yes, but you must go beyond that to obtain a

stay. You must show that the subject-matter of the

proceedings is in jeopardy.

MR JACOBS:  Yes. We addressed that in a supplementary note

which we sent to Your Honour yesterday.

HER HONOUR:  Yes. Do you wish to add anything to that?

MR JACOBS:	We do not wish to add anything.
HER HONOUR:	And the convenience of the parties all round,

the balance of convenience?

MR JACOBS:  We say the central question is the issues which

we have addressed in our supplementary note.

However, in regard to the balance of convenience,

we say that once the reference now commences, the

damage is done, the confidentiality is out.

HER HONOUR:	Am I not right in thinking that a substantial part of the matter that was before Mr Justice Cole
must be arbitrated - must be; cannot be otherwise
determined?

MR JACOBS:  Yes. We, in fact, asked for a stay of the

curial proceedings to send the major dispute off

for arbitration. That was at our request.

HER HONOUR:  And you say if you get the stay, the

arbitration will proceed?

MR JACOBS:	Yes.
HER HONOUR:	But without regard to - - -

MR JACOBS: Without having the pleasure of Mr Rein and his

clients there; without running the risk of the

breach of privacy and confidentiality and without

the additional costs.

HER-HONOUR: That does not necessarily follow.

MR JACOBS:  The case against the certifiers - I do not know

whether there is any evidence as to how long that

will take but it will certainly add an additional

dimension to the dispute. There are additional

pleadings; there will be additional witnesses and

we feel that that is another matter for another day

before another tribunal and should not be married

to our arbitration which we want maintained in

private and confidential.

Elspan 21 19/11/92

If the matter begins, Your Honour, the damage

is done. You cannot go back on it and say that it

has not happened, and this is what - - -

HER HONOUR:  Is that the subject-matter of the proceedings?

When this Court talks about the necessity to

preserve the subject-matter of the proceedings, is
it not talking about the matters in dispute between
the parties rather than the method of their
resolution? Is it not talking about the

substratum, as it were, rather than the issue in

the appeal, for example, particularly when it comes

to - - -?

MR JACOBS:  We would make the submission in this case there

is an identity between the two, because this is

what this case is all about.

HER HONOUR:  It is about procedure, is it not, at the end of

the day?

MR JACOBS:	It is correct that it is a question of how the disputes are to be resolved but that is the case.
There would be a difference, Your Honour, between a dispute about a motor car that goes to arbitration
and the arbitrator takes up a view as to how he is
going to run the arbitration, but what this case is
all about is whether there can be a marriage between the two procedures along the routes
referred to.

HER HONOUR:  The one further point is this: I certainly

read Mr Justice Cole's judgment as dealing with an

argument raised as to the exercise of discretion to

give the direction involved in direction 13; to

make the reference and to give the direction. But

I do not read the judgment as yet to have raised
any question of power, to have been directed to the

power or jurisdictional issue that you rely on here

today.

MR JACOBS:  I am going to give Your Honour my written

submissions before His Honour Mr Justice Cole.

HER HONOUR:  There is no doubt that there was power to make

the reference.

MR JACOBS: There is no doubt that His Honour - well, when I

say, "doubt as to whether His Honour had power to

make a reference", subject to the procedure being a

valid procedure.

HER HONOUR: Subject to the direction?

MR JACOBS:  No, with respect, Your Honour; subject to

whether or not Part 72 is valid.

Elspan 22 19/11/92

HER HONOUR:  Is valid, but that is not a point that you have

taken as such. It is certainly not a point you

took in the Court of Appeal.

MR JACOBS:  I did not take that before His Honour

Mr Justice Cole.

HER HONOUR:	Or in the Court of Appeal.
MR JACOBS:	Not directly, that is so.

HER HONOUR:  Yes. Thank you, very much. Yes, Mr McDougall.

MR McDOUGALL:  Your Honour, in our submission, there are

three fundamental difficulties which face the

applicants in these proceedings. The first is that

to obtain either an injunction to preserve the

status quo pending determination of the application

for special leave or a stay of the decision in
question, they must show some exceptional
circumstances. The second fundamental difficulty
is that they are seeking to challenge an exercise
of discretion and questions of procedure, neither

of which have the effect of determining substantive

rights. Those, of course, are circumstances in

which this Court has indicated a strong prejudice

against interference and a strong prejudice in

favour of leaving the question of review to the

intermediate appellate court. The third problem is

that the underlying basis on which the applicants

found their submissions seeks to elevate a right of

privacy or confidentiality arising out of contract

to a position of primacy over an Act of Parliament

and the rules of court.

In any event, Your Honour, it is our

submission that the right to privacy, so called, is

something which the Commercial Arbitration Act

itself recognizes may be overcome in certain

circumstances. We say that, Your Honour, because

section - and I will hand it up in a moment -

enables the consolidation of different arbitrations	section 26 of the Commercial Arbitration Act	in circumstances where some common question of law
or fact arises in all of them; where the rights to
relief claimed in all of them arise out of the same
transaction or series of transactions; or, where,
for some other reason, it is desirable to make the order for consolidation - section 26.
So, the legislation itself, in our submission, contemplates circumstances in which the so-called
fundamental right of privacy may be violated. The
conditions that I have referred to are set out in
subsection (3), which is over the page. Of course,
Your Honour, there is nothing in there which
requires that the parties to the differing

Elspan 23 19/11/92

arbitration proceedings which may be consolidated

need or must be the same.

So, the fundamental right on which the whole

of this submission is now based is a right which

not only has no statutory recognition but appears

to be inconsistent with a provision of a statute

governing arbitrations. I am reminded that the

power to consolidate is said, by subsection (7) to

exist:

whether or not all or any of the parties are

common to some or all of the proceedings.

HER HONOUR: Sorry, I missed that.

MR McDOUGALL: Section 26(7) provides that the power to

consolidate applies:

in relation to arbitration proceedings whether

or not all or any of the parties are common to

some or all of the proceedings.

In the face of those provisions, Your Honour,

it is, in our .submission, impossible to give the
so-called right of privacy, the so-called right of

confidentiality, the authority to overwhelm the

express provisions of section 47 of the Commercial

Arbitration Act and Part 72 of the Supreme Court

Rules. It is, at most, a discretionary

consideration and it was a circumstance which was

put to Mr Justice Cole and considered and dealt

with by him, put to the Court of Appeal and

considered and dealt with by it.

Now, Your Honour, to the extent that in the

course of the hearing before Mr Samuels any
question of confidence arises, that can be dealt

with by making appropriate orders for evidence to

be taken in confidence or for documents to be

received in confidence and, if need be, for

exacting undertakings as to confidentiality from

the parties.

The reality is, of course, as Mr Justice Cole

pointed out, that there is a wide gap between the

right to privacy and the reality, the reality being

that the only parties to these proceedings are the

persons who were always involved and who, on any

view, would be well and truly aware of whatever it

is is said to be confidential.

Your Honour, the further reality is that

sooner or later, whether or not the applicants

succeed before this Court today, whether or not

they persuade Mr Samuels to split the two

proceedings, the matters which are not the subject

Elspan 24 19/11/92

of an arbitration agreement but which are raised by

my clients in their proceedings in the commercial

division, are going to be dealt with either by a

referee or by a judge and are going to be dealt

with subject to any order to the contrary in a

public hearing in the ordinary way. It cannot be

suggested that the right to privacy arising out of

an agreement to submit some - - -

HER HONOUR:  That is not the argument, Mr McDougall. The

argument is that the matter which must be dealt

with by arbitration will proceed into the public

domain at least to the extent that Mr Rein's

clients are there present for it.

MR McDOUGALL:  Mr Rein's clients who were the certifiers

under the second agreement, which contains the

arbitration clause in question and who were privy

to the - - -

HER HONOUR:	The argument is not the one you are answering.
MR McDOUGALL:	No, but what I am submitting is that the

argument can only be a matter of discretion, and

these are discretionary considerations which

indicate that it ought not to weigh very heavily.

The fundamental argument is that if there is such a

right, it cannot overwhelm the powers of the court.

HER HONOUR:  Mr Jacobs does not say it is only a

discretionary matter. He does - - -

MR McDOUGALL:	No, and we submit that it is, the reason being that it has no statutory recognition and that
it is inconsistent with the provisions of
section 26 of the Commercial Arbitration Act, so
that it can be no more than a contractual right and
a matter to be taken into account in exercising the
discretion conferred under section 47 and under Part 72.

Now, Your Honour, I started by saying that the

applicants, to succeed, had to show exceptional

circumstances before this Court would interfere by

granting a stay or, in our submission, an
injunction pending determination of the special

leave application, and that proposition, if

authority be needed for it, is supported by the

judgment of Justice Toohey in Manfal Pty Limited v
Trade Practices Commission, 65 ALJR 256, where
His Honour relied on Jennings Construction v

Burgundy Royale and Attorney-General v Heinemann -

both in this Court, of course - to support that

proposition. I think that is a case on the

applicants' list of authorities.

Elspan 25 19/11/92

Your Honour, the second proposition which I

put was that this Court would be slow to interfere,

given that what is sought to be appealed from is

either a matter of discretion or a matter of

procedure and in either case an interlocutory

matter could have happened. This Court has

considered that matter recently in Paringa Mining &

Exploration Company v North Flinders Mines, (1988)

165 CLR 452. That came to us late in the date and I

will hand up a copy of the report, if I may.

HER HONOUR:	A stay was granted in that case, was it not?
MR McDOUGALL:	Yes, but that was for a very special reasons because if the stay was not granted, the shares
would have been dealt with and the action would
have been rendered futile.  Your Honour, of course,
would be more aware of the reasons than I for that decision but the question in point was canvassed at
pages 457 to 458 of the joint reasons. At
page 457, at about point 4:

In the ordinary case, it would be most

inappropriate for this Court to entertain an

appeal -

et cetera, et cetera.	Then a little lower down the
Court referred to:

where an interlocutory order does not

determine the rights of the parties, the order

would usually be an exercise of discretion on

a point of practice or procedure.

And the Court referred to Adam P. Brown v Philip

Morris and cited with approval what

Sir Frederick Jordan had said in that very

well-known passage from F.B. Gilbert:

material difference between an exercise of

discretion on a point of practice or procedure	and an exercise of discretion which determines	substantive rights. In the former class of
case, if a tight rein -

et cetera, et cetera.	And then over the page, the
Court said:

In general, the orderly administration of

justice would be impeded if this Court

intervened in interlocutory proceedings in a

matter pending in a court of trial. It is the

responsibility of a court of trial to

determine the course of interlocutory

proceedings, subject to appeal to the relevant

intermediate appellate court.

Elspan 26 19/11/92

And we submit that that, with respect, is the

principle by which Your Honour should be guided in

determining this application.

There is no question here, as there was in

Paringa, of the subject-matter being destroyed or

disposed of if the interlocutory order were not

granted. Of course, we would acknowledge that

where the effect of the refusal of interlocutory

relief is to render the proceedings futile, then

the case for appellate intervention may be

stronger. That is not the case here.

Your Honour, we are a little uncertain as to

the extent to which the various grounds proposed in
the application for special leave are pressed but
rather than take a chance, it is probably

appropriate that we go through them.

HER HONOUR: 

I think that was clarified to this extent, that

at the end of the day what is challenged is the
reference, not as a matter of power, as I

understand it, there being power to refer as such,

but on the basis that there was no power to order
the combined hearing and consequently the

discretion with respect to the reference itself

miscarried, being based on the premise that there

was such a power.  Mr Jacobs is nodding his head as

an - - -

MR JACOBS: 

Yes, Your Honour has summed up my submissions.

HER HONOUR: 

Yes. That is as I understand what is involved.

MR McDOUGALL: In that case, I can avoid some needless

explorations into some interesting paths of the

law.

Your Honour, the question of power, in our

submission -

HER HONOUR: There is a power question about section 47 and

Part 72 rules 2 and 8 which eventually come back to discretion in the reference.

MR McDOUGALL:  Yes. The difficulty we see there is that my

learned friend did indicate a challenge to Part 72

on the basis that it was thought to derogate from

the constitutional right or the implied

constitutional right at the trial in a court before

a judge. As to that, we would simply say - - -

HER HONOUR:  That is not a point that was taken by him in

the Court of Appeal, it is not a point that was

taken before Mr Justice Cole and he conceded to me

today, I think, that it had not been taken.

Elspan 27 19/11/92

MR McDOUGALL:  Yes, and we would submit it is too late for

him to take it now.

Your Honour, if it be acknowledged that

section 47 gives the court power to give directions
in relation inter alia to questions of procedure

before the arbitrator and that Part 72 rules 2 and
8 empowers the court to give directions with
respect to procedure before a referee, then the

only way that the exercise of the power to give

directions can miscarry, in our submission, is if,

firstly, it was wrong to appoint one person as both

referee and arbitrator, leading to the conclusion

that it was wrong to conjoin those two powers to

support directions in whatever capacity the person

sat or, secondly, if the particular direction given

could in some way be said to be outside the scope
of the section or the rule empowering the giving of

directions generally.

Now, Your Honour, in the present case

Mr Samuels is agreed to be the arbitrator for the

purpose of conducting the arbitration pursuant to

the second agreement. He was appointed by the

court as referee for the purpose of considering and

reporting upon other matters in issue other than

those which were the subject of the suspended

arbitration under the first agreement. So that, if

one leaves aside that first arbitration, in one

capacity or another, Mr Samuels was empowered to

deal with the whole of the disputes between the

parties.

It is to be noted, contrary, I think, to a

submission put by my learned friend, that the Court

of Appeal has acknowledged in its decision in

Homebush Abattoir Corporation v Bermria Pty Ltd,

(1991) 22 NSWLR 605:

That the powers conferred by Pt 72 can be -

utilized -

to direct trial before a referee ..... in cases

where the parties do not consent or indeed

actively oppose the making of such orders.

That appears from the court's judgment at page 609C

to D. Although it probably does not really matter,

that case also dealt with and resolved, in our

submission, the conflict at first instance as to

the approach which the Court should take when

considering whether or not to adopt a referee's

report. But that, as we understand it, is very

much a side matter.

Elspan 28 19/11/92

So, Your Honour, in our submission, there can be no doubt that Part 72 empowered Mr Justice Cole

to refer to Mr Samuels those issues which were not the subject of the arbitration agreement and, that

being so, it empowered him to give directions with

respect to the conduct of the reference, and it did

so.

Section 47 authorized the court to make

interlocutory orders in relation to the

arbitration, if those orders could have been made

for the purposes of and in relation to proceedings

in the court. The court every day makes orders

either for form or consolidation or for the hearing

together of proceedings before it, so that the

order which is impugned was within the power

conferred by section 47. Once that is recognized,

what is left is the question of discretion: should

such an order be made?

It has been acknowledged that the relevant discretionary considerations were considered. It

is said that those considerations must have been

considered wrongly because the order which the

applicants now challenge was made but that, in our

submission, cannot succeed as a general

proposition. For an exercise of discretion to be

challenged, one has to show that there was a

material error law, a material misapprehension as

to the nature of the discretion, that sort of

thing:  House v R proposition. That error has not

been shown.

At the end of the day the only error which is

pointed to is the loss of the right of privacy and,

for the reasons that we have tried to make clear,

that is not an error of law because the right to

privacy, although it may be important, cannot take

away powers given by statute. But, Your Honour, it

is to be noted from a form of the order which

Mr Justice Cole made that his direction was subject

to any order to the contrary which Mr Samuels might

make. I think the actual orders can conveniently

be found behind exhibit JREl, the last two pages of

that exhibit. Does Your Honour have those?

HER HONOUR:	Yes, thank you.
MR McDOUGALL:	Your Honour will see that paragraph 10

provides:

the provisions of Pt 72 r8 shall apply to the

conduct of proceedings under the reference;

the reference will commence on a date to be

set by Mr Samuels QC -

Elspan 29 19/11/92

he to -

consider and implement such manner of
conducting proceedings -

et cetera, et cetera. And then paragraph 13:

Subject to such directions as Mr Samuels QC

may give, the arbitration and the reference be

heard at the same time.

Now, to say, with respect, that that empowered Mr Samuels to hear the two together is not correct.

It directed him to do so unless he thought

otherwise and, in our submission, that is the only

meaning which can be attached to the words with

which paragraph 13 commences. It is clear, in our

submission, that Mr Samuels had and has a

discretion, upon application made to him and upon

him being satisfied, of course, to separate the

hearings and, whatever may be the position in

respect of a technical referee without legal
training, it could not be suggested, in our
respectful submission, that Mr Samuels would not be

fully appreciative of that point.

Even if it be correct to say that

Mr Justice Cole purported to exercise a power which

he lacked and that he purported to empower

Mr Samuels to do something, it does not matter

because the question remains whether Mr Samuels in

fact has that power and whether, upon application

being made to him, he decides to exercise it. It

is still within his province to determine whether

or not the arbitration and the reference proceed

together.

HER HONOUR:  There has been no decision made on that?

MR McDOUGALL:  He has indicated that they should. That is a

matter for him. It is a matter for him,	as the
short minutes make clear, regardless of
Mr Justice Cole's obvious and expressed	preference
for that to happen.

Now, Your Honour, as we understand it, it was

submitted that the decision of Mr Justice Rogers in the Imperial Leatherware case in some way supported

a submission or a proposition that section 47 did

not empower the court to give directions of a kind

which are now under attack. There is certainly, if

we may say so, a divergence in views as to the full

extent of section 47 and what it does and does not

authorize and that is apparent from

Mr Justice Rogers' judgment in Imperial

Leatherware, (1991) 22 NSWLR 653. The distinction

is that the Supreme Court of South Australia had

Elspan 30 19/11/92

taken the view that the policy of section 47 was to

keep a tight hold on arbitrators in the course of

their pre-trial and trial procedures. This appears

from the citation at page 666 in Mr Justice Rogers'

decision.

His Honour did not agree with that view of

section 47 but he did point out at pages 666 and

667 that it was the foundation for the exercise of

a number of interlocutory powers, security for

costs, Mareva injunctions and, as he put it over the page:

ancillary orders of the first importance.

It was suggested that it might also extend to the:

power to stay arbitration proceedings pending

the resolution of proceedings in the court.

And His Honour expressed some reservations about

that conclusion. But there is nothing in what

His Honour said, in our submission, which provides

any foundation whatsoever for a submission that

section 47 ought to be read down to the point where

it does not empower the court to give to the

arbitrator, in his capacity as arbitrator, a

direction of the kind now under challenge,

particularly where the direction is not expressed

to be final but is expressed to be, in effect,

subject to any different view to which the

arbitrator may come. With respect, one can see the

importance of that reservation because it is

entirely conceivable that in the course of

preliminary hearings or whatever, as statements are

delivered, if they ever are, it may become apparent
to the arbitrator that some different course is

preferable and the reservation of power is there to

enable him to adopt that different course.

Your Honour, for those reasons, we submit that there is simply no case made out for this Court to

intervene. But there is another matter to be
considered and that is the question of the conduct

of the parties and, in that context, we note that

on both 8 and 15 October, when there were

preliminary conferences before Mr Samuels, and

when, of course, the application for special leave

in this Court had been filed, the applicants

intimated to Mr Samuels that they would be making

an application for an injunction or for a stay in

this Court and Mr Samuels, having regard to the

decision of the Court of Appeal, said, in our

submission quite rightly, that he should proceed

with the arbitration and the reference until such

time as this Court said otherwise.

Elspan 31 19/11/92

That was over a month ago. Since then, as

Mr Woods' affidavit shows, a vast amount of

preparatory work has been done, at least by my

clients, to enable the arbitration and the

reference to proceed. It was fixed to start on

Monday this week and to accommodate - and I will

not go into the detail unless I have to - some

procedural difficulties in which the applicants in

this Court found themselves, the start was

adjourned until yesterday when the applicants made

an application for adjournment. No application was

made to this Court until the summons for an
injunction or for a stay was filed which we think

was on Monday this week.

Now, Your Honour, if the applicants had been

seeking to do anything more than simply to

frustrate and delay the arbitration and the

reference, the time for them to act was long ago in

October before the parties got locked into the

expensive pre-trial preparation and before the

matter got to the stage of commencement of hearing.

In our submission, that is a very powerful

discretionary consideration weighing against the

grant of relief at this point in time even if,

contrary to our principal submission, any ground

for relief whatsoever is made out.

Now, we acknowledge that in Manfal

Justice Toohey recognized that these sorts of

proceedings do not really involve weighing

advantage and detriment or in balancing convenience

but the question of discretion which has regard to

the conduct of the parties, in our submission, is

quite outside the separate heads of consideration

of detriment and balance of convenience and is a

matter which remains open to this Court where what

is being sought is, of its nature, discretionary

relief. In our submission, the conduct of the

applicants, in waiting until the last moment, in

circumstances where they must have known that vast

expense in preparation was being incurred, weighs

very heavily against the grant of relief in any
event.

The only other matter which arises from that is the question of conditions on which relief ought

to be granted but it may be appropriate to address
those if we ever get to that point, unless

Your Honour want to hear from me now?

HER HONOUR:	No.
MR McDOUGALL:	Your Honour, those are our submissions.

HER HONOUR:	Thank you.	Mr Rein?
Elspan	32	19/11/92

MR REIN:  If it please Your Honour. Your Honour, as

Your Honour is aware, we are not parties to either

the first arbitration agreement or the second

arbitration agreement. I think I should draw

Your Honour's attention to a fact which has not

been emphasized by either of my learned friends at

the bar table but which is referred to in the

judgment of His Honour Mr Justice Cole, and that is

that that comment about being parties to the

arbitration equally applies to the second

applicant, the third applicant and the fourth

applicant. They are also parties who, in effect,

would be required to take part in a reference under

Part 72 in the same way that my clients have been

required to take part in that reference. I should

perhaps correct something which my learned - - -

HER HONOUR:  I do not follow that, Mr Rein, I am sorry. You

might have to explain it.

MR REIN:  I am making the point that it was suggested by

Mr Jacobs that the only parties that he does not

wish to have present at the arbitration and which
he is forced to have present because of the orders

which have been made are my clients and I am just

seeking to, for Your Honour's information, point
out that he also has present at the reference and
the arbitration those other parties whom he

represents and who were not parties to the

arbitration agreement.

The second thing is that I think Mr Jacobs may

have implied that, in a sense, we asked for this

litigation to take place and that we are somehow a

moving party in relation to that.	We were joined
by the -

MR JACOBS:	I did not say that.
MR REIN:	- - - first and second respondents to the

litigation and -

HER HONOUR:  They are the Aerospatiale

MR REIN: Aerospatiale interests. We were joined by them in

the court proceedings and although there was a

brief interlude when we were also the subject of a

cross claim by one of the clients that Mr Jacobs

represents, that has been discontinued, so we are

effectively at the reference because of

Aerospatiale and not in any way at our own behest.

We have always been concerned that we have

been drawn into a major piece of litigation

between, effectively, the owner and the builder,

when we saw the disputes against us as being within

fairly narrow confines. That was a point which was

made by us before Mr Justice Giles before whom the

Elspan 33 19/11/92

matter originally came before it was heard by Mr

Justice Cole and, interestingly, it is a matter that His Honour Mr Justice Cole refers in his

judgment on the last page of his judgment. If I

could just take you to that, Your Honour. It is

EDCS, Your Honour, the second paragraph,

effectively, the first fresh paragraph on the last

page of the judgment.

HER HONOUR:	Yes.
MR REIN:	Your Honour will see that in fact His Honour picks

up this matter as being a matter which was taken up

by the applicants as a reason why he should not

refer or join the arbitration and the reference

proceedings, and His Honour indicated that he

anticipated that administrative arrangements could

resolve that difficulty. It is a difficulty we

have been concerned with all along, hich we are

still concerned with. We understand that it is

something which may be very speedily dealt with in

the reference as it is now constituted.

Having said that, Your Honour, essentially our

position is that we will abide and we are content
to abide by any decision of this Court in relation

to the matter.

HER HONOUR:	You have no choice about that.
MR REIN:	We have no choice, but I say that, really, in a

sense to say that, given our position in the

matter, we do not - - -

HER HONOUR:  You neither oppose nor consent.

MR REIN: That is so, Your Honour.

HER HONOUR:  Yes, thank you.

MR REIN:  May it please the Court.

HER HONOUR:	Yes, Mr Jacobs?
MR JACOBS:	May I just deal with my learned friend,

Mr McDougall's point shortly? In regard to my

submissions before His Honour Mr Justice Cole, they

have now come to hand.	May I give Your Honour the
submissions?	I am sure my learned friends will not

have any objection.

HER HONOUR:  Yes.

MR JACOBS: Particularly, paragraph 13 and paragraph 8. Now,

in regard to section 47, if I may just

explain - - -

Elspan	19/11/92
HER HONOUR:	Could you just wait. Paragraph 13, you said?

MR JACOBS: Eight.

HER HONOUR: Just paragraph 8?

MR JACOBS:  On page 13, et seq.

NO JURISDICTION TO ORDER A COMPULSORY

REFERENCE TO RUN IN TANDEM WITH AN ARBITRATION

Now, again, Your Honour, subject to Mr McDougall or

Mr Faulkner correcting me, they did not advance

section 47 to Mr Justice Cole as a ground in law

for him making the order which he did.

HER HONOUR:  But that was the only source of power with respect to the arbitration. He had to use both.

MR JACOBS: That is right, but it was not put up - if

Your Honour will have a look at any of the documents before Your Honour, that point was not

argued before His Honour Mr Justice Cole. I did

not take that point.

HER HONOUR: Section 47 was not taken?

MR JACOBS: Was not argued. It was not raised in - again, I

stand -

HER HONOUR:  But that does not help your position,

Mr Jacobs, for it not to have been argued.

MR JACOBS: Well, my learned friends did not take it. I did

not answer it. I did not answer nothing. I took

the point that there was no jurisdiction.

HER HONOUR:	Yes, but by reference to Part 72 rules 2 and 8.
MR JACOBS:	I did not put up a skittle and say, "There is

section 47 but you cannot follow that route". That

would have been a point for my learned friends to

have taken and I would have replied. But my

learned friends, Mr McDougall and Mr Faulkner, will

tell me if I am right or wrong, but to the best of

my recollection and checking from their

submissions, it was not for me to put up the

skittle and then knock it down. But I certainly

took the point before the Court of Appeal. So,

once they did not take the point - in any event,

that is how it arose, and perhaps my learned

friends will correct me if I am wrong.

Now, the delay in bringing these proceedings:

Your Honour, may I take Your Honour to the

transcript of the proceedings before Mr Samuels,

JRE6.

Elspan 35 19/11/92

HER HONOUR:	Yes, I have that.
MR JACOBS:	It is on 15 October 1992, and take Your Honour

to page 24.

HER HONOUR:  No, you cannot do that. I go page 1, 28, 29

and then to 30 and 31.

MR JACOBS: That is JRE6, Your Honour.

HER HONOUR: It is so numbered, yes.

MR McDOUGALL:  Your Honour, in the copy that was served on

us, some of the exhibits got mixed up and we had

thought it might have been a photocopying problem

in our instructing solicitor's office. It appears

that it was not. May I hand Your Honour my copy of

the exhibit and I will take Mr Faulkner's.

HER HONOUR:	Thank you.
MR JACOBS:	I am sorry about that, I was not aware there was

that problem. JRE6, page 24. Now, the initial

pages, from 1 and 22, concern themselves primarily

with the submission as to whether or not there

should be a consolidation between the two

arbitrations, the first and second, and there was

also the submission as to whether or not there

should be a threshold point determined that did not

involve the reference and did not involve Mr Rein's

client. At page 24, at about point 2, Mr Samuels

said:

What I propose to do therefore is to

adjourn this application for consolidation and

to proceed with the timetable which we have

already settled and to give thought to whether

there is a viable means available of

determining the preliminary point in a

convenient fashion.

Now, that preliminary point is what we were

contending for all along. This is the only point

that should be determined initially.

I think I have to look at that for myself in

the first instance and then, of course, I

would raise the matter with the parties .....

If it is possible to determine that

question expeditiously, then I would think

there is much to be said in favour of that

course.

Now, there would have been no point at that stage

in rushing off to this Court for an injunction or

for any relief if what we were going to achieve,

Elspan 36 19/11/92

what we were attempting to achieve was going to be

achieved in any event.

Now, the next step in the saga, Your Honour,

is the next preliminary conference where the

application for consolidation was reactivated and

Mr Samuels then granted a provisional order for

consolidation and it was inherent in that that

there would be no preliminary point because

everything would be thrown into the proverbial

melting point. The date of that preliminary

conference was 5 November.

The fallacy, with respect, in my learned

friend's submission lies in the further submission

which he made as follows. He says, "You haven't

got to look to direction 13 of His Honour

Mr Justice Cole's short minutes, you don't have to

look at that because", so I understood my learned

friend to submit, "it was within Mr Samuels' power

in any event to consolidate the arbitration and the

reference." I know of no authority for that and I

would be surprised if there is any.

The fons et origo of Mr Samuels' power to act

by consolidating the two sterns from direction 13 of

the short minutes. Without that, Mr Samuels would

have not been empowered or have any authority in

law to order the arbitration and the reference to

run in tandem.

Now, my learned friend's point that there is

some other power elsewhere is, with respect,

unfounded, with no substance, and the only route

then is section 47, on the one hand, and Part 72 on

the other. This is, in fact, what His Honour

Mr Justice Cole purported to do. Again,

Your Honour, this then depends upon the true

construction of section 47 and the true

construction of Part 72 and whether it could ever

have been the intention of the legislature, in the

absence of clear language to that effect, to deny

the rights of privacy and confidentiality, and one

must not confuse the two. There are two rights,

Your Honour: the one is privacy, and that is

privacy in regard to the proceedings and who can

attend; and the other fundamental right but equally

as important and equally as important as a

motivating factor for parties entering into

arbitration agreements is that the proceedings and

all that happen is confidential.

This confidentiality would embrace a vast

spectrum of matters and it is, with respect, again,

if we may be permitted to repeat this, of

fundamental importance in arbitrations and it

involves witnesses' statements, it would involve

Elspan 37 19/11/92

what happens at the arbitration. This cannot take

place now because it is a free-for-all, anybody can

say what they like to anybody, and the whole

purpose of them going to arbitration is, with

respect, undermined.

My learned friend has submitted that

section 47, as interpreted by His Honour

Mr Justice Rogers in the Imperial Leatherware case

is not inconsistent with his submissions. In my

submission, that is incorrect. Upon a reading of

His Honour's judgment, he held that a court should

not, excepting in cases such as a Mareva injunction

or security for costs, give instructions to an

arbitrator as to how he should run an arbitration.

Your Honour, there is a long history

concerning the debate of curial intervention in be, with respect, the tendency here - is that
arbitration proceedings and a tendency,

courts should not intervene at an inappropriate

interlocutory stage to tell arbitrators how to

conduct an arbitration or what to do. This was the

effect of His Honour Mr Justice Bollen's decision - although in the minority - in the South Australian case of Leighton Contractors and, with respect,

this approach is consonant with and is supported by

decisions of the English courts.	I just want to
give Your Honour one -

HER HONOUR:  I do not know that this really arises in reply,

does it?

MR JACOBS: Yes. Well, my learned friend said I was wrong

in regard to my interpretation of section 47.

HER HONOUR:	Yes, all right.
MR JACOBS:	The point that I wanted to make, Your Honour, is that in many, many decisions in other parts of the
world one finds that the courts have taken up the
attitude that it is hands off arbitration until an award is made unless there is some irregularity, of which there is no such suggestion of that here.
Now, my learned friend has drawn attention to section 26 which is the consolidated provision
under the Commercial Arbitration Act. But,
Your Honour, there there is a specific statutory
provision which entitles a court to consolidate.

HER HONOUR: Entitles the arbitrator to consolidate.

MR JACOBS: Entitles the arbitrators to consolidate, I am

sorry. Your Honour, the case I was looking for I

Elspan 38 19/11/92

have just found. I have not cited it in my heads.

May I give it to Your Honour?

HER HONOUR: Certainly.

MR JACOBS:  It is a case of KIS A/S Bill Biakh v Hyundai

Corporation, (1988) 1 Ll LR 187, at page 189, where

His Lordship Mr Justice Steyn in England held that there was no inherent jurisdiction to exercise a

supervisory control and give over interlocutory

directions and tell arbitrators how to conduct

arbitrations, and if Your Honour happens to refer

to that decision, Your Honour will see that he

explained the decision in the House of Lords in the
celebrated Bremer Vulkan case where the House of

Lords sets, I think, four or five instances of

where there can be curial intervention at an

interlocutory stage but not elsewhere, and this is

not one of them.

HER HONOUR:  Yes, but we are not concerned with inherent

jurisdiction here, are we? We have a statutory

provision and a rule of court.

MR JACOBS:  Yes. My submission is, Your Hon9ur, that the

framers of the rules and the draftsman or

draftspersons of section 47 must have known what

the common law was and it would have required very

special words to have taken away that fundamental

right, and those words are not there. If

Your Honour pleases.

HER HONOUR:  Thank you. Yes, well I will give my decision

in this matter at 2.15.

AT 12.25 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.15 PM:
HER HONOUR:	This is an application to stay an order made by

Cole J. in the Supreme Court of New South Wales

referring so much of certain proceedings as were

not the subject of an arbitration agreement to a

referee, the referee being the same person as was

appointed arbitrator, namely, Mr Samuels QC.

An application for leave to appeal from the decision and order made by Cole J. to the Court of

Appeal of the Supreme Court of New South Wales was

refused.	The applicants have applied for special
leave to appeal from that refusal of leave.	The

issue involved in the application for special leave

Elspan 39 19/11/92

to appeal is confined to the reference order made

by Cole J .. Another issue which was involved in

the proceedings in the Court of Appeal is no longer

a live issue.

The argument to be advanced in support of the

application for special leave to appeal, as I

understand it, is that the reference order,

although technically within power, involved the

wrong exercise of a discretion because it proceeded

from the view that an order could be made

empowering Mr Samuels to hear the arbitration and

the reference together. That was wrong, it is

said, because the provisions which Cole J.

identified as sources of power in that regard

either cannot be construed as authorizing or, as a

matter of discretion, should not be applied to

authorize the conjoint hearing of an arbitration

and reference.

The provisions in question are section 47 of

the Commercial Arbitration Act 1984 of New South
Wales and Part 72 rule 8 of the Rules of the
Supreme Court of New South Wales. Section 47 gives

the Supreme Court the same power to make:

interlocutory orders for the purposes of and

in relation to -

arbitration proceedings as it has for the purposes

of and in relation to proceedings in the court.

Rule 2 of Part 72 of the Rules empowers the reference "of proceedings or any question or

questions arising in the proceedings" to a referee, and rule 8 further provides that the Supreme Court:

may give directions with respect to the

conduct of proceedings under the reference.

It was argued on behalf of the applicants before Cole J. that Part 72 rule 8 did not confer

power to direct a conjoint hearing of the reference

and the arbitration but no like argument was put
with respect to section 47 of the Commercial

Arbitration Act, that issue, apparently, not having arisen in the proceedings.

In the Court of Appeal the applicants' written

argument asserted that neither section 47 nor

Part 72 rule 8 authorized the course taken.

Alternatively, if they did, the argument asserted

that the discretion which each conferred

miscarried.

However, in the Court of Appeal the oral

submissions were directed, in the main, to the

Elspan 40 19/11/92

issue which is no longer alive and so far as the

present issue is concerned, the oral argument was

directed to the possible inconvenient consequences

attending the joinder of the arbitration and the

reference and not to the construction of section 47

and rule 8 of Part 72.

The consequences asserted are of two kinds.

First: the incurring of costs which might not have

to be incurred if the arbitration proceedings were

heard separately and determined in favour of the

first applicant. Second: the involvement of persons not parties to the arbitration or the

arbitration agreement in the arbitration hearing,

thus infringing the applicants' rights to privacy

and confidentiality.

It is clear from the transcript of the

proceedings in the Court of Appeal that that court

considered that in the particular circumstances of

the case neither of the foreshadowed consequences

was such as to cast doubt upon the exercise of the

discretions which were taken to be conferred by

sections 47 and Part 72 rule 8 respectively.

However, the Court of Appeal did not advert to the construction point which denied the existence of

those discretions. However, and as I have already

indicated, no argument was put to Cole J. with

respect to section 47 and no oral argument was put

to the Court of Appeal with respect either to it or

to Part 72 so far as power was concerned.

There are two matters which must be considered

on an application for a stay pending the hearing of

an application for special leave to appeal. The

first is whether the stay is necessary to preserve

the subject-matter of the litigation. The second

is whether there is a substantial prospect of leave

being granted, see Jennings Construction Limited v

Burgundy Royale Investments, (1986) 161 CLR 681.

The applicants contend that the privacy and

confidentiality which are of fundamental importance

to arbitral proceedings will be lost unless a stay

is granted, but this misstates the principle which

applies to the grant of a stay. The Court is

concerned in such cases with substantive rights,

not procedural measures and their consequences.	So
much is clear from Paringa Mining & Exploration v
North Flinders Mines, 165 CLR 452, especially at
pages 457 to 458, although, of course, the Court

was there considering the circumstances in which it

is appropriate to entertain an appeal on matters of

practice and procedure. However, and more to the

point, it is not clear that the applicants' privacy

and confidentiality cannot be protected by

Elspan 41 19/11/92

appropriate directions from Mr Samuels in his
capacity as arbitrator or referee, or both.

The second matter concerns the prospect of leave being granted. Without canvassing the issues

in detail, it is sufficient to say that neither the

order of Cole J. nor that of the Court of Appeal
determined the substantive rights of the parties,
and the decision of the Court of Appeal refusing
leave to appeal does not purport to settle any
matter of principle or of general application or,
indeed, even to deal with the issues which the
applicants would wish to argue if leave were

granted.

Having regard to the subject-matter of the

application for special leave to appeal which, in

essence, concerns matters of practice and

procedures, and to the matters which I have

indicated concerning the prospects of leave being
granted, the application for a stay of the

reference order must, in my view, be refused.

Costs?

MR McDOUGALL:  We ask for costs of the stay, Your Honour.

This is a matter quite outside the special leave

application and, in our submission, would be

inappropriate to be reserved to that application.

MR REIN:	Your Honour, we also seek costs.
HER HONOUR:	What do you say to costs?
MR JACOBS:	Your Honour, I cannot resist my learned friend,

Mr McDougall, asking for costs but, really, Mr Rein

did not have to prepare anything. He did not even

have to be here. His attitude was he left the

matter to the Court. His rights were not affected

by this.

HER HONOUR:	In one respect his rights were affected but, yes, I understand.	He was served.	He was a
necessary party.

MR JACOBS:	We had to tell him but he did not have to come. The fact that he was served did not necessarily
invite him to the proceedings.
MR REIN:	Your Honour, I would submit that it was

appropriate that we be here to deal with the matter

and indicate our attitude towards it. There may

well have been matters that Your Honour would want

to have raised with us as being parties affected

potentially by the order that Your Honour might

make and we would submit it was appropriate for us

to be here.

Elspan	42	19/11/92
HER HONOUR:	Yes.	I will order that the applicants pay the

costs of all respondents. But there is a further

question, and that is certifying for counsel.

MR McDOUGALL:  I think, Your Honour, we have to ask

Your Honour to do that, do we not?

HER HONOUR:  Yes. Well, should I? I mean, that really

seems to me to be the point in relation to Mr Rein

as, indeed, the question whether two counsel were

required seems to arise.

MR McDOUGALL: From our point of view, Your Honour, it was

clearly necessary, in our submission, for counsel to appear on the application and, on the question

of two counsel, I can say no more than that the

sums in issue are substantial and in the ordinary

course of events, having regard to the attendance
of two counsel on behalf of the applicants, it

could hardly be said that it was necessary for us

to come less fully armed.

MR JACOBS:  I cannot say anything on that, Your Honour,

excepting in regard to my learned friend, Mr Rein's

position. There could have been a solicitor in

Court; there could have been a letter sent, "We

abide by judgment of the Court". Because he really

did not contribute to the debate, with no

disrespect to him.

HER HONOUR:  I think that is right. I think, Mr Rein, the

problem is that I should not certify for counsel

for your clients but I should otherwise certify for

counsel.

MR REIN: If Your Honour pleases.

HER HONOUR:	The Court will now adjourn.
AT 2.25 PM THE MATTER WAS ADJOURNED SINE DIE

Elspan 43 19/11/92