Firedam Civil Engineering Pty Ltd v Shoalhaven City Council

Firedam Civil Engineering Pty Ltd (the appellant) and Shoalhaven City Council (the respondent) were parties to a contract for civil engineering works. Disputes arose under the contract, and the parties agreed to refer these claims to an expert determination. The expert, Mr Neil Turner, issued a determination on 6 February 2009. The appellant sought to have this determination set aside, arguing it was not binding. The matter proceeded to the Court of Appeal of New South Wales.

The central legal issue before the Court of Appeal was whether Mr Turner's expert determination was binding on the parties, notwithstanding alleged inconsistencies in the reasons provided by the expert. This required the court to consider the nature of the reasons an expert is contractually obliged to give in such a determination and the consequences of any failure to provide adequate or consistent reasons.

The Court of Appeal reasoned that where parties contract for an expert determination, and that contract requires the expert to give reasons for their decision, the expert is bound to provide reasons that are not only intelligible but also logically coherent. The court found that the reasons provided by Mr Turner contained inconsistencies that rendered the determination fundamentally flawed. Applying principles of contract law and the law relating to expert determinations, the court concluded that such inconsistencies meant the determination did not satisfy the contractual requirements and was therefore not binding on the parties.

Consequently, the Court of Appeal allowed the appeal, set aside the orders made at first instance, and declared that the Expert Determination of Mr Neil Turner dated 6 February 2009 was not binding upon the parties. The respondent was ordered to pay the appellant's costs of the proceedings at first instance and on appeal, with a certificate under the Suitors' Fund Act 1951 granted to the respondent if qualified.