Garms v Telstra Corp Ltd - [1998] VSC 40

SUPREME COURT OF VICTORIA

CAUSES JURISDICTION

Not Restricted

No. 7093 of 1996

ANN MARY GARMS & ORS.	Plaintiffs
v.
TELSTRA CORPORATION LTD.	Defendant

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JUDGE:	HARPER, J.
WHERE HELD:	MELBOURNE
DATES OF HEARING:	8, 11-15, 18-22, 25-29 MAY; 1-3 JUNE 1998
DATE OF JUDGMENT:	21 AUGUST 1998
MEDIA NEUTRAL CITATION:	[1998] VSC 40

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CATCHWORDS:

ARBITRATION AND AWARDS - Application to set aside award, remove the arbitrator and appoint a new arbitrator - Whether arbitrator misconducted the arbitration - Alleged denial of natural justice - Alleged failure to provide appropriate reasons to justify the award - Role of arbitrator in the discovery process and generally - No appeal on a question of law sought by the plaintiffs - Procedural irregularities do not amount to misconduct - Commercial Arbitration Act 1984 (Vic.) ss.28, 38 and 42.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr. F.X. Costigan Q.C. with	Goldsmiths
Dr. L. Foreman
For the Defendant	Mr. C. Garde Q.C. with	Freehill Hollingdale & Page

HIS HONOUR:

I have before me an originating motion issued on 18 September 1996 and amended, pursuant to an order made by Master Kings, on 17 April 1997.
The plaintiffs, who are residents of Queensland and who were at all material times associated with a theatre restaurant known as the "Tivoli", complain about an award made on 8 August 1996 following an arbitration conducted by Dr. Gordon Hughes. The arbitrator found that Telstra Corporation Ltd., trading as Telecom Australia (variously referred to in this judgment as "Telstra" or "Telecom") was liable to three of four claimants. Those claimants were Ann Garms OAM, her husband Harry Garms, a company called Comlaw (No. 62) Pty. Ltd. and another company called Garms Roseville Pty. Ltd. (as trustee for the Harry Garms Family Trust). The sum awarded was $600,000, of which the arbitrator directed that $250,000 be paid to Comlaw (No. 62) Pty. Ltd., $250,000 be paid to Garms Roseville Pty. Ltd., and $100,000 be paid to Mr. Garms. No award was made in favour of Mrs. Garms.
Mr. Garms is not a party to the present proceeding. The present plaintiffs are the remaining three claimants. I shall refer to them as "the plaintiffs", except where it is appropriate to refer to all four claimants in the arbitration as "the claimants".
The plaintiffs now seek to set aside the award in part. They submit that the arbitrator failed to consider the claim of Mrs. Garms, and fixed the amount of damages payable to Comlaw (No. 62) Pty. Ltd. and Garms Roseville Pty. Ltd. at a sum which fell far short of the damages which each in fact suffered as a result of what is alleged to have been Telstra's failure to provide the Tivoli with a reasonable telephone service.
The dispute has a long history. Mr. and Mrs. Garms opened the Tivoli Theatre Restaurant at 48/52 Costin Street, Fortitude Valley, Brisbane, Queensland in August 1989. The business has continued ever since to operate at the same premises - a fact which…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1998] VSC 40
Decision Date: 21 August 1998

CaseChat Overview and Summary

The case of Garms v Telstra Corp Ltd involved a dispute between the plaintiff, Garms, and the defendant, Telstra Corp Ltd. The central issue in the arbitration was whether the arbitrator had misconducted himself, leading to a situation where the award should be set aside, the arbitrator removed, and a new one appointed. The dispute was heard in the Supreme Court of Victoria. The plaintiffs alleged that the arbitrator had denied them natural justice, failed to provide adequate reasons for the award, and mismanaged the discovery process. They sought to have the award set aside under the Commercial Arbitration Act 1984 (Vic.) and to have the arbitrator removed and replaced.

The court had to determine whether the conduct of the arbitrator warranted the setting aside of the award. Specifically, the court examined whether the procedural irregularities alleged by the plaintiffs amounted to misconduct by the arbitrator. The plaintiffs argued that the arbitrator's failure to provide appropriate reasons and his handling of the discovery process amounted to a denial of natural justice. They also contended that the procedural errors were so significant that they undermined the integrity of the arbitration process.

In ruling on these issues, the court found that the procedural irregularities did not constitute misconduct by the arbitrator. The court held that while the arbitrator's handling of the discovery process and the reasons provided for the award could have been better, they did not reach the threshold of misconduct as defined by the Act. The court emphasised that procedural irregularities alone, without a finding of misconduct, did not justify setting aside the award or removing the arbitrator. Consequently, the plaintiffs' application to set aside the award and remove the arbitrator was dismissed.

The final orders of the court were that the application to set aside the award and remove the arbitrator be dismissed. The court further ordered that the plaintiffs pay the costs of the defendant in relation to the application.

Orders