Golden Mile Milling Pty Ltd v Novus Capital Ltd - [2022] WASC 364

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   GOLDEN MILE MILLING PTY LTD -v- NOVUS CAPITAL LTD [2022] WASC 364
CORAM:   KENNETH MARTIN J
HEARD:   29 AUGUST 2022
DELIVERED          :   7 NOVEMBER 2022
FILE NO/S:   ARB 7 of 2022
BETWEEN:   GOLDEN MILE MILLING PTY LTD
First Plaintiff
ENERGYOZ PTY LTD
Second Plaintiff
AND
NOVUS CAPITAL LTD
Defendant

Catchwords:

Arbitration - Proposed s 34A appeal - Need to show parties' agreement to appeal - Basis to ascertain agreement - Second requirement for Court to grant leave to appeal on a question of law - Need to show an 'obviously wrong' error - Considerations as to a grant of leave

Legislation:

Commercial Arbitration Act 2012 (WA)

Result:

Leave to appeal refused

Category: B

Representation:

Counsel:

First Plaintiff	:	Mr M Cuerden SC
Second Plaintiff	:	Mr M Cuerden SC
Defendant	:	Mr J P McGrath (by video link)

Solicitors:

First Plaintiff	:	Metaxas Legal
Second Plaintiff	:	Metaxas Legal
Defendant	:	Sparke Helmore Lawyers

Cases referred to in decision:

ASC AWD Shipbuilder Pty Ltd v Ottoway Engineering Pty Ltd [2017] SASCFC 150; (2017) 129 SASR 122
Ashjal Pty Ltd v Elders Toepfer Grain Pty Ltd [2012] NSWSC 545
Campbell v Back Office Investments [2009] HCA 25
Clark Equipment Australia Ltd v Covcat Pty Ltd (1987) 71 ALR 367
Inghams Enterprises Pty Ltd v Southern Cross Farms Australia Pty Ltd [2022] SASCA 7; (2022) 398 ALR 562
Jacobs Group (Australia) Pty Ltd v Commonwealth of Australia [2020] VSC 127
Sidhu v Van Dyke [2014] HCA 19; (2014) 251 CLR 505
The Nuance Group (Australia) Pty Ltd v Shape Australia Pty Ltd [2021] NSWSC 1498; (2021) 395 ALR 720
Warwick Entertainment Centre Pty Ltd v Alpine Holdings Pty Ltd [2005] WASCA 174

KENNETH MARTIN J:

Introduction

ARB 7 of 2022 was commenced by the plaintiffs, Golden Mile Milling Pty Ltd ('Golden Mile') and EnergyOz Pty Ltd ('EnergyOz'), by their originating summons of 8 August 2022, against the defendant, Novus Capital Ltd ('Novus').
By their originating summons, the plaintiffs are seeking leave to appeal from the Court against arbitral awards. The awards are the product of an arbitration between the parties - in which the arbitrator essentially, found in favour of Novus.
The plaintiffs rely on s 34A of the Commercial Arbitration Act 2012 (WA) to approach this Court.
By their originating summons, at the heading 'The grounds on which leave to appeal should be granted:', they say:
By their conduct before the end of the appeal period referred to in s 34A(6) of the Commercial Arbitration Act 2012, the parties have agreed that an appeal may be made under s 34A ...
Section 34A(1) of the Commercial Arbitration Act 2012 (WA) says:
(1)An appeal lies to the Court on a question of law arising out of an award if -
(a)The parties agree, before the end of the appeal period referred to in subsection (6), that an appeal may be made under this section; and
(b)The Court grants leave.
At a 29 August 2022 special appointment for this matter, senior counsel for the plaintiffs explained that the conduct claimed to engage with s 34A(1)(a) was by Novus, in it consenting to orders made on 22 July 2022 in another matter in this Court between the same parties
- ARB 6 of 2022, Novus Capital Ltd v Golden Mile Milling Pty Ltd.
In ARB 6 of 2022, Novus had applied to this Court seeking to enforce the arbitral award made in its favour.
The consent orders in ARB 6 of 2022, which I issued after and pursuant to a minute of consent order filed 22 July 2022 (folio 7), had programmed the hearing of an application for leave to appeal against the award to this Court.
The consent orders also required Golden Mile and EnergyOz to pay into court an amount claimed as owing to Novus by the arbitral award.
By ARB 7 of 2022, these plaintiffs are now arguing, in effect, that by it earlier agreeing in ARB 6 of 2022 to the programming of a hearing seeking leave to appeal against the arbitral award, Novus had agreed to an appeal. The plaintiffs argue that this conduct meets s 34A(1)(a) of the Commercial Arbitration Act 2012 (WA).

The arbitration

The underlying arbitration had proceeded for two days over 1 and 2 June 2022 and was heard before Mr Gordon Smith as sole arbitrator.

The subject matter of the arbitral claims determined arose out of the terms of a written agreement entered between Golden Mile, EnergyOz and Novus on 31 August 2021.
The parties' written agreement is referred to as a 'Mandate Agreement'. It comprises multiple written constituent components, as explained by the arbitrator, including a so-called Mandate Letter of 10 pages - also dated 31 August 2021.
At the arbitration, Golden Mile and EnergyOz argued that Novus had engaged in misleading or deceptive conduct under s 18(1) of the Australian Consumer Law (ACL). But Novus counterclaimed - arguing that Golden Mile and EnergyOz breached the Mandate Agreement.
On 22 June 2022, Mr Smith published a partial award which incorporated extensive written reasons for decision, extending over some 75 pages.
By this partial award, Arbitrator Smith determined that Golden Mile and EnergyOz had failed to establish a misleading or deceptive conduct claim against Novus under s 18(1) of the ACL - as articulated at [243].
Arbitrator Smith also determined by the partial award that Golden Mile and EnergyOz had indeed breached the Mandate Agreement and were to pay Novus damages of $537,020.44 (inclusive of GST and interest), on or before 6 July 2022 at [273].
On 8 July 2022, Mr Smith published a further and final award addressing the issue of the costs of the arbitration. In essence, he awarded Novus its legal costs of the arbitration in an amount he assessed at $48,262.50 inclusive of GST.
It is convenient at this stage to point out some key clauses within the Mandate Letter.
At cl 46, the Mandate Letter displays a clause stating that where there is a dispute or difference between the parties, the matter would be referred to arbitration. The orthodox content of the clause is found set out at [9] of the reasons accompanying Mr Smith's partial award of 22 June 2022.
I also set out below cl 41 and cl 42 of the Mandate Letter. These clauses are also set out at [41] of the partial award.
Under a subheading, 'Conditions of the Mandate', those two express clauses provide:
41.Novus acknowledges that the Companies have entered into this agreement in reliance upon representations made by Novus that it will be able to raise a loan of A$28m for EnergyOz within 45 days from the date of this agreement being signed by the Companies.
42.Time is of the essence as regards Novus arranging a loan for A$28m for EnergyOz within 45 days from the date of this agreement being signed by the Companies. If the loan is not arranged in that time and A$28m advanced then ipso facto the mandate hereby granted to Novus for all of the contemplated services will cease to be exclusive and the Companies may terminate the mandate in its entirety by notice in writing.
As will be seen, much is made by Golden Mile and EnergyOz of cl 41 - concerning the issue of their contended reliance towards their s 18(1) ACL misleading or deceptive conduct claims in the arbitration.
Their claim had failed ultimately on that pivotal issue of reliance before the arbitrator.

ARB 6 of 2022

On 1 July 2022, Novus commenced an action in this Court against Golden Mile and EnergyOz under s 35 of the Commercial Arbitration Act seeking that the 22 June 2022 arbitral award be enforced. The action is ARB 6 of 2022 Novus Capital Ltd v Golden Mile Milling Pty Ltd. It will be remembered that, in the arbitration, Novus was, in effect, the victor.
By an affidavit sworn 1 July 2022, in support of the originating summons commencing ARB 6 of 2022, Mr Julian Patrick McGrath, a partner in the lawyers of record for Novus, Sparke Helmore Lawyers, attached a true copy of Mr Smith's partial award of 22 June 2022 (reasons included).
Mr McGrath subsequently swore two more affidavits in ARB 6 of 2022.
By a second affidavit of 12 July 2022 (folio 3), he attached a copy of Mr Smith's final award of 8 July 2022. Paragraph 5 of the affidavit observed that the cumulative sum awarded and thus falling due to Novus by Golden Mile and EnergyOz was $585,280.94 inclusive of GST.
Mr McGrath swore a third affidavit of 21 July 2022 (folio 5) concerning, in effect, the issue of a market announcement provided to him by his clients from the Toronto stock exchange in Canada.
The announcement indicated that a Canadian entity, Karora Resources Inc, announced it had just entered into a binding agreement to acquire, for A$70 million cash and A$10 million of Karora shares, the Lakeford Mill gold processing facility in Western Australia. The assets were, in effect, being purchased from Golden Mile.
Also appended to the third affidavit of Mr McGrath, as attachment JM‑7, was his letter of 18 July 2022 sent to Golden Mile and EnergyOz's lawyers of record, Metaxas Legal. That letter expressed then, in effect, his client's concerns over the looming acquisition of assets from Golden Mile, observing:
As Mr Hargraves is the sole director [ie, of Golden Mile] and a 60% shareholder of [Golden Mile], he would legally be in a position to dissipate the proceeds of the sale beyond the reach of our client. In earlier correspondence, you have recorded that this will not occur and that 'our client will not be prejudiced' but our client currently has no legal means of ensuring that that will remain the case post-completion.
Security for the sum which was the subject of the arbitral awards being sought, by Mr McGrath requesting then:
Your clients [pay] the full amount of the Arbitral Awards (together with some allowance for the costs of the application] into Court or into trust or controlled moneys account between the two sets of lawyers.
A first return date for the originating summons of Novus in ARB 6 of 2022 was fixed for 22 July 2022 at 2.15 pm (WST) in chambers.
However, on that day, in the morning, all parties submitted to the Court a minute of their proposed consent orders for the chambers hearing. The as submitted consent minute became subject of the Court's orders - issued in like terms that day. I refer to the terms of those consent orders a little later in these reasons. As a consequence, a foreshadowed afternoon hearing in chambers on 22 July 2022, at the first return of Novus' originating summons in ARB 6 of 2022, was redundant and did not proceed.

Consent orders of 22 July 2022 in ARB 6 of 2022

The terms of the consent orders, issued by the Court in ARB 6 of 2022 on 22 July 2022, are now critical. They provide part of the context for the further arbitral proceedings, which commenced on 8 August 2022.
Novus' application in ARB 6 of 2022, seeking the enforcement of the arbitral award, preceded the application by Golden Mile and EnergyOz in ARB 7 of 2022. ARB 6 of 2022 now sees a subsequent application made by Golden Mile and EnergyOz, as plaintiffs, seeking leave to appeal against both of Arbitrator Smith's awards favouring Novus, pursuant to s 34A of the Commercial Arbitration Act, in ARB 7 of 2022.
In due course, I will set out more components from s 34A. It is only necessary at present to observe that s 34A(1) of the Commercial Arbitration Act2012 (WA) provides limited potential for an appeal against an arbitral award to the Supreme Court of Western Australia. Any appeal is upon a question of law arising out of an arbitral award, once two critical threshold criteria, as specified by s 34(1), are both met.
The first of two necessary criteria to pursue an appeal on a question of law against an award in this Court is that, by s 34A(1)(a), the parties 'agree' before the end of a finite appeal period as specified (being, in effect, by s 34A(6), within three months from after the making of the award that is challenged

7

) 'that an appeal may be made under this section'.
The second essential threshold criteria requirement under s 34A(1)(b) remains necessary, notwithstanding the agreement of the parties to that end, that the court itself grants its leave to appeal for the nominated question(s) of law. That is, a court may still refuse to grant leave to appeal - even if the parties themselves had agreed to the appeal.

Agreement under s 34(1)(a) in the Originating Summons

Concerning the first tier hurdle, by showing the parties' agreement for an appeal to the Supreme Court, ARB 7 of 2022 was obviously commenced by Golden Mile and EnergyOz against the partial award and final awards as rendered by Arbitrator Smith.
The originating summons identified, on its face, four suggested questions of law to be determined by the Court at any appeal - once the leave of the Court to that end were to be granted under s 34A(1)(b). I elaborate upon those proposed questions of law in due course.
Significantly, however, by an ensuing section in the originating summons commencing ARB 7 of 2022, under a heading 'The grounds on which leave to appeal should be granted', subpar (1) is phrased in the following terms:
By their conduct before the end of the appeal period referred to in s. 34A(6) of the Commercial Arbitration Act 2012, the parties have agreed that an appeal may be made under s. 34A. (my emphasis in bold)
A further part of the ARB 7 of 2022 originating summons headed 'Accompanying documents', par 1(a), equivalently refers to 'an agreement' between the parties to an appeal under s 34A of the Commercial Arbitration Act 2012. This refers to accompanying documents.
But what is the suggested agreement by conduct and when was it so 'perfected'?
None of that is clear from the originating summons.
The ARB 7 of 2022 originating summons, at the component headed 'Notice to defendant', refers to s 34A(5) of the Commercial Arbitration Act 2012. But it merely observes:
... the Court will determine the summons for leave to appeal without a hearing unless it appears to the Court that a hearing is required.
For there to be any utility in this Court hearing an application for leave to appeal upon suggested question(s) of law, it is obviously necessary to first ascertain a perfection of the parties' agreement to an appeal is met.
But as now seen, by the terms of the originating summons commencing ARB 7 of 2022, the anterior s 34A(1)(a) issue concerning showing the necessary 'agreement' to an appeal by the parties is raised in oblique fashion only.
So-called 'grounds' upon which leave to appeal is being sought from the Court by the originating summons that is ARB 7 of 2022 make reference to the three parties having agreed to an appeal (to this Court) 'By their conduct ...'.
Yet no such conduct is precisely identified towards the showing of a satisfaction of that fundamental platform for an appeal.

The return of ARB 7 of 2022 on 29 August 2022

ARB 7 of 2022 was listed for a first return in chambers on Monday, 29 August 2022.
The purpose of the listing was so that I could, in effect, clarify the anterior issue of the parties' agreement to an appeal - before deciding if it was appropriate to resolve any further arising questions under the criteria specified by s 34A(1)(b). The Court could do that wholly on the papers - as was being sought by Golden Mile and EnergyOz under their ARB 7 of 2022 originating summons at the section headed 'Notice to defendant'.
Before 29 August 2022, there had been further filed at the Court on behalf of Golden Mile and EnergyOz:
(a)written submissions of 8 August 2022 - expressed to be pursuant to r 23(5) of the Supreme Court (Arbitration) Rules 2016; and
(b)the affidavit of Arthur Metaxas sworn 8 August 2022 - which contains copies of Mr Smith's partial and final awards, an 18 July 2022 letter from Sparke Helmore to Metaxas Legal, further solicitor to solicitor communications of 22 July 2022 and a copy of the Court's consent orders made in ARB 6 of 2022.
There had also been filed on behalf of Novus:
(a)a memorandum of appearance of 9 August 2022;
(b)written submissions of 22 August 2022 - in opposition to the originating summons. The submissions exceed 18 pages and were signed by the junior counsel that had appeared in the arbitration; and
(c)a list of authorities of 22 August 2022.
A significant component of Novus' opposing written submissions took strong issue against the contention that it had ever agreed, for the purpose of s 34A(1)(a), to any appeal being taken to this Court against the arbitral awards. Consequently, the s 34A(1)(a) pre-requisite agreement was now being put strongly in issue by Novus.
The contested absence of any agreement of the parties for an appeal to be taken to this Court, against the awards of Mr Smith, is a fundamental concern. The originating summons commencing ARB 7 of 2022, now seen, only obliquely referred in that respect to unspecified 'conduct' (otherwise unspecified) of the parties, before the end of the appeal period, as a basis of the suggested agreement.
It is logical to address the foundational issue of an agreement by conduct at the outset.
If the agreement threshold can be surmounted, the next key enquiry is how the Court would evaluate the further requirement for its leave to an appeal - by reference to the terms of s 34A(1)(b). If the required agreement to an appeal cannot be found between the parties, then it is, essentially, 'game over' for Golden Mile and EnergyOz in ARB 7 of 2022.

Can there be found an agreement for the purposes of meeting s 34A(1)(a) of the Commercial Arbitration Act 2012 (WA)

At the first return of the originating summons commencing ARB 7 of 2022, Golden Mile and EnergyOz were represented by senior counsel, Mr Cuerden SC.
For Novus as defendant in ARB 7 of 2022, their solicitor of record, Mr McGrath, appeared by video link from New South Wales.
On the pivotal question of showing an agreement reached as between the parties for an appeal, senior counsel immediately sought to clarify the position for the as contended agreement. Such an agreement was pressed.
It was said Novus had agreed to an appeal being heard by this Court on question(s) of law - and that the s 34A(1) criteria would be satisfied if the Court itself later came to be independently satisfied that leave under s 34A(1)(b) should be granted.
Mr Cuerden SC now submitted that the contended 'agreement' to an appeal was to be implied, in effect, from out of the parties' agreed minute of consent orders - as they had been mutually submitted to the Court in ARB 6 of 2022 on 22 July 2022 - and as ultimately reflected in the Court's orders duly issued in the face of that consent on that day.
In other words, it was the agreeing to those consent orders by Novus, as they had been submitted on 22 July 2022, and as were ultimately made, that was relied upon as the relevant 'conduct'.
In effect, what was being contended for, on the as clarified basis, was a finding of an agreement by implication - arising out of the consent orders as submitted and later implemented by the Court in ARB 6 of 2022, at 22 July 2022.
There was no objection to the s 34A(1)(a) question of the parties' agreement being so evaluated, as it came to be clarified by Mr Cuerden SC.
To that end, I now set out below pars 2, 3, 4 and 5 from out of the submitted minute of consent orders in ARB 6 of 2022 - and as orders subsequently issued in those agreed terms by the court, on 22 July 2022.
The consent orders as issued, were:
...
2.The hearing of the plaintiffs' Amended Originating Summons be adjourned sine die, to be relisted for hearing as soon as practicable following the hearing of any application by the defendants for leave to appeal to this Court from the arbitral awards handed down by Mr Gordon Smith on 22 July 2022 and 8 July 2022 (the Awards) and, if the application for leave is successful, then after the hearing of the substantive appeal.
3.The defendants do file any Originating summons seeking leave to appeal the Arbitral Awards under section 34A of the Commercial Arbitration Act 2012 (WA) within 14 days hereof and will diligently prosecute that application for leave to appeal, once filed.
4.The defendants undertake to the Court to immediately notify the solicitors for the plaintiff of the date of the completion of the sale of the business, assets and undertaking of the first defendant [ie, Golden Mile] to Lakewood Mining Pty Limited ACN 659 952 066 (Sale of Business) once that information is known to the first defendant and will otherwise keep the plaintiff notified as to the progress of the Sale of Business.
5.Upon receipt of the proceeds of sale from the Sale of Business and before discharging any other creditors, the first defendant will pay into Court within 5 business days from the completion of the Sale of Business an amount of $650,000.00 (the Security Amount) representing the total amount of the arbitral awards of $580,895.44 (the Arbitral Sum) in favour of the plaintiff together with an allowance for prospective costs of these proceedings and any appeal and interest on the Arbitral Sum to be held by the Court until further order of this Court.
...

Examining the terms of the consent orders as issued in ARB 6 of 2022 on 22 July 2022, it will be first noted, by reference to order 2, that there was an amendment that day to the originating summons as first filed by Novus in ARB 6 of 2022.
The amendment added, in effect, a claim for enforcement relief sought by Novus, concerning the additional enforcement by the Court of the final award of 8 July 2022 - as well as the earlier partial award by Mr Smith.
Next, it may be observed, by reference to consent order 3, as has been seen, Golden Mile and EnergyOz did later at 8 August 2022 commence ARB 7 of 2022 seeking then, as seen, leave to appeal, under s 34A. There has been no suggestion that ARB 7 of 2022 has not been diligently prosecuted towards an underlying application seeking leave to appeal, since that filing.
Indeed, the originating summons of 8 August 2022, commencing ARB 7 of 2022, was then accompanied, as seen, by written submissions and by Mr Metaxas' affidavit. That originating summons, as seen, seeks the application for leave to appeal under s 34A(1) be determined by the Court without a physical hearing (ie, in effect, seeking the application be determined on the papers) per s 34A(5).
Next, by reference to consent order 4, it is not in dispute that an acquisition by a Canadian corporation earlier mentioned, Karora, concerning the business and assets and undertaking of Golden Mile, has been undertaken and is now completed. There is no suggestion there was any lack of notification of those events to the solicitors for Novus, by regard to the terms of consent order 4.
Finally, by reference to order 5 of 22 July 2022 as seen above, a designated amount of security, in the sum of $650,000, has since been paid into Court on behalf of Golden Mile and EnergyOz. This is apparent from the notice of payment into court of 29 July 2022 filed in ARB 6 of 2022 (folio 11) confirming this Court's receipt of $650,000 in that proceeding which, in effect, is to be held to abide the outcome of an appeal by order 5.

Submissions on an Agreement to Appeal

The essential submission put on behalf of Golden Mile and EnergyOz is that, having regard to the 22 July 2022 consent minute and then orders, when objectively assessed, this conduct is only capable of being sensibly rationalised as showing Novus had agreed, by necessary implication, to an appeal proceeding.
On my assessment, that submission by Golden Mile and EnergyOz must be accepted. The conclusion arises as a matter of necessary inference from out of the terms of the orders made by the Court on 22 July 2022. It is also consistent with the terms of Sparke Helmore's communication as was sent to Metaxas Legal (see attachment AM-4 to Mr Metaxas' 8 August 2022 affidavit) of 18 July 2022.
Novus' written submissions, at par 20, point to a suggested commercial unlikelihood in it as, in effect, the victor in the arbitration, ever agreeing to an appeal. As the successful party at the arbitration, Novus would be agreeing to a deferment of its rights to press swiftly to attain the fruits of its arbitral success - whilst any curial appeal process unfolds (subject to a grant of leave) to potentially interrupt its rights to enforce the awards in its favour.
Novus' written submissions highlight an observation made in an article by A. Ashce 'Appeals From Awards/Judicial Review' (1991) 10(2) The Arbitrator 59 at 63 and to that author's (very understandable) observation towards it being 'remarkably altruistic in a successful party to agree to put in hazard the fruits of victory'.
Be that as it may, in present circumstances, the consent orders of 22 July 2022 self evidently did, as seen, deliver a pragmatic benefit of better securing for Novus the fruits of its arbitral victory - being a payment into court of $650,000 security, including an amount for court costs. The security benefit outcome for Novus may be viewed, in effect, as a price paid then for its agreement to allow an application for leave to appeal to be made to this Court.
That, of course, is not to say Novus at any point has accepted on the second limb issue that leave to appeal should be granted by the Court, or that there is any level of merit in the later to be identified questions of law as proposed by Golden Mile and EnergyOz for an appeal hearing. It will not be forgotten that, in addition to the agreement of the parties, the Court itself must also grant leave to appeal under s 34A(1)(b).
Nevertheless, the anterior question concerning the parties' necessary agreement to an appeal must, on my assessment, be taken to have been accepted by Novus by implication. If not, then the very point of Novus agreeing, at 22 July 2022, to a process towards it obtaining security for the claimed moneys and for costs, pending a making of an application for leave to appeal, would be a complete waste of time and wholly pointless.
Absent anterior agreement for an appeal as between the parties to satisfy s 34A(1)(a), a later application to the Court for leave to appeal on a question of law would be lacking in its required and essential first tier foundation.
The present situation, therefore, I must in the end evaluate as being one of those rare and exceptional cases, as hypothesised by Doyle JA in Inghams Enterprises Pty Ltd v Southern Cross Farms Australia Pty Ltd [2022] SASCA 7; (2022) 398 ALR 562 at [111]. There his Honour had observed:
... It is unlikely that both parties would agree to an appeal after receipt of an award ...
The observation was rendered, with respect, in that appeal's context of a very careful evaluation by his Honour concerning rival arguments put towards the ascertaining of an agreement to an appeal against an award. It concerned the force of a contractual term on the subject of a challenge - as embodied in the parties' agreement to the arbitration process itself. Those facts are not this present case at all.
Here, there is no suggestion the relevant arbitration cl 46, as is found in the so-called Mandate Letter, ever sought to establish a basis for a later appeal pathway against an award - with that same clause only attempting to render a submission to arbitration by the contracting parties.
Nevertheless, once again, with great respect, I would fully adopt the general observations by Doyle JA concerning the South Australian equivalent to s 34A, particularly at [84], [85] and at [106] ‑ [115], upon agreements being found for the purposes of s 34A(1)(a).
But the present case is one of a different fact situations - where what is an ad hoc agreement that has been reached by implication and conduct, as between the arbitrating parties, which is relied upon as being the foundational basis for finding their necessary agreement as parties and so, meeting the parameters of s 34A(1)(a).
That finding also answers another of the opposing submissions put by Novus against the finding of any agreement. Novus says it is unlikely it could or would have ever agreed to an appeal being taken against the awards to this Court under circumstances where the questions of law relied upon were not then finally formulated in a temporal sense by Golden Mile and EnergyOz.
There had emerged only, at 8 August 2022, the four questions, as now seen under the ARB 7 of 2022 heading 'Question of law to be determined' as items (1) through (4) in the originating summons commencing ARB 7 of 2022, on 8 August 2022.
I later set out two of those contended questions of law.
At the hearing, Mr Cuerden SC made the position plain towards his client's reliance for leave being grounded upon only the first and second questions of law as so seen - rather than residual further questions (3) and (4).
An emergence of these suggested questions of law for an appeal at a time well after the events of 22 July 2022, on my assessment, does not detract from the finding of an agreement by implication for an appeal, as being earlier perfected with Novus.
Returning to the decision in Inghams Enterprises v Southern Cross Farms, four leading case authorities were seen canvassed on the issue of agreement by Doyle JA at between [87] and [105] of his Honour's reasons (namely, Ashjal Pty Ltd v Elders Toepfer Grain Pty Ltd [2012] NSWSC 545 (Hammerschlag J); ASC AWD Shipbuilder Pty Ltd v Ottoway Engineering Pty Ltd [2017] SASCFC 150; (2017) 129 SASR 122 (Kourakis CJ, Stanley and Nicholson JJ); Jacobs Group (Australia) Pty Ltd v Commonwealth of Australia [2020] VSC 127 (Riordan J); and The Nuance Group (Australia) Pty Ltd v Shape Australia Pty Ltd [2021] NSWSC 1498; (2021) 395 ALR 720 (Rees J).
A review of those four case authorities establishes (beyond showing that an agreement to an appeal, by an ad hoc agreement of the parties, is open) that where appropriately drawn, it is also open to parties to provide their agreement to an appeal, in advance of any commencement of the arbitration - indeed by a clause in the same document containing their submission to arbitration in the event of a dispute. A clause could meet the parameters of s 34A(1)(a) for agreement to an appeal - at the time of the parties making their arbitration agreement. Plainly, at that time, questions of law underlying such an appeal from an arbitration not even begun, would be most unlikely to then exist.
Conceptually then, an agreement to open up the potential for a later appeal to a Court in the wake of an arbitral award, where the Court itself grants leave for such an appeal, could be agreed to, well before any question(s) of law arising from an arbitral dispute and award ever emerge.
By the words of s 34A(1)(a), is it only stated that there must be an agreement. What is required then is only that the parties agree:
... that an appeal may be made under this section;
Agreement over the terms of the questions of law themselves is obviously desirable - but is not, in my view, required by s 34A(1)(a).

Conclusion concerning agreement

Exceptional as the present circumstances may present towards an (objective) ascertainment, by implication, of an ad hoc agreement for an appeal, for the purposes of meeting s 34A(1)(a) of the Commercial Arbitration Act 2012 (WA) - here I am left presently satisfied that such an agreement was reached between the parties to that end and must be so found.
Much of what is found in the consent orders would be pointless towards programming of the determination of an application for leave to appeal against the awards of Mr Smith - in an absence of an agreement by Novus to that door being first opened. And as has been seen, there was also a tangible fiscal benefit (ie, a receipt of legal consideration) for Novus, arising from it reaching such an agreement

- namely, getting the full claim sums as the security that it obtained under those consent arrangements in the amount of $650,000 paid into Court - to abide the fate of what could still be a contested application for leave to appeal.
That being my s 34A(1)(a) conclusion, I next need to determine on the papers, in effect, as both parties move - the next level issue that presents, over the further required leave of the Court to an appeal, under s 34A(1)(b).

Application for the Court to grant leave to appeal under s 34A(1)(b) on a question(s) of law

Concerning a Court granting leave to appeal under s 34A(1)(b), it is necessary to note some further parameters of s 34A expressed towards a Court granting leave on question(s) of law arising out of an arbitral award.
To that end presents s 34A(3), (4) and (5). They say:
...
(3)The Court must not grant leave unless it is satisfied -
(a)that the determination of the question will substantially affect the rights of one or more of the parties; and
(b)that the question is one which the arbitral tribunal was asked to determine; and
(c)that, on the basis of the findings of fact in the award -
(i)the decision of the tribunal on the question is obviously wrong; or
(ii)the question is one of general public importance and the decision of the tribunal is at least open to serious doubt; and
(d)that, despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the Court to determine the question.
(4)An application for leave to appeal must identify the question of law to be determined and state the grounds on which it is alleged that leave to appeal should be granted.
(5)The Court is to determine an application for leave to appeal without a hearing unless it appears to the Court that a hearing is required.
...
In present circumstances, there is no difficulty providing an affirmative answer to the (3)(a) question posed - concerning the rights of one or more of the parties being substantially affected by the court's determination of the question of law.
Plainly, as Golden Mile and EnergyOz contend, if there has been error by the arbitrator upon a question of law going to the issue of reliance, in respect of an otherwise misleading or deceptive representation (regarding the second of the three representations relied upon), as the basis of the s 18 ACL cause of action, that is significant. An accompanying prospect of those parties otherwise succeeding on their statutory misleading or deceptive conduct action, on the second representation, would necessarily bear upon their rights, and substantially so.
Likewise, the question of reliance was plainly an issue which the arbitral tribunal had been asked to determine for the purposes of satisfying s 34A(3)(b) - which Arbitrator Smith did eventually determine adversely to Golden Mile and EnergyOz.
However, for the purposes of criteria under s 34A(3)(c)(ii), the questions of law presently sought to be advanced, whilst obviously of importance to the arbitrating parties, particularly to Golden Mile and EnergyOz - are clearly not questions of any wider or more general public importance. The particular circumstances and questions of law as presented are commercially unique to these parties and there is no wider public importance.
Consequently, Golden Mile and EnergyOz in seeking the leave of the Court need to succeed, if they can, under the alternative, s 34A(3)(c)(i), to show the decision on the question of law by the arbitral tribunal they contend for, is 'obviously wrong'.
As I will seek to explain, my end assessment is that Golden Mile and EnergyOz must fail at this hurdle. This result presents as a fair reading of the arbitral reasons underlying the 22 June 2022 partial award, as a whole, on the issue of reliance - for the purpose of establishing a statutory cause of action by Golden Mile and EnergyOz under s 18(1) of the ACL against Novus.
Criteria under s 34A(3)(d), by reference to its terminology of just and proper, also provide the Court with a principled discretion on the question of granting leave to appeal - and hence some flexibility towards its grant of leave to appeal, or otherwise, in any event.

The questions of law

I turn then to identify the two questions of law as are identified from on the originating summons commencing ARB 7 of 2022 - and which remain as relied upon by senior counsel for the purposes of this Court granting its leave to appeal. As mentioned, four potential questions of law so-called were originally identified on that originating summons.
Nevertheless, at the hearing on 29 August 2022, Mr Cuerden SC made it clear that the major reliance was on only the first two questions, as formulated.
Consequently, I will not set out the further questions seen as numbered (3) and (4). I will say very briefly that neither, on my view, could be classified as conveying questions of law, when properly evaluated in any event. Rather, they carry along with them too much factual baggage. They would not have been proper or eligible for grants of leave as questions of law had that position been pressed.
Hence, the two residual key questions of law as are still relied upon for obtaining the leave from the Court, are:
(1)Whether the arbitrator erred in law in that in considering the issue of reliance he acted on a wrong principle, namely that the express admission and acknowledgment by the defendant contained in clause 41 of the Mandate Agreement that the plaintiffs had entered into the agreement in reliance upon the defendant's representation (which representation the arbitrator found to have been misleading or deceptive), was effectively to be ignored and/or given no weight by supposed analogy to the principle that an acknowledgment of non-reliance provision or an entire agreement provision does not prevent a finding of reliance ...
[There follows a reference to [229] from the reasons of Mr Smith in his partial award of 22 June 2022. For convenience and context, I will set it out below:]
[229]I am of the opinion that the existence of an "acknowledgement of reliance" provision in clause 41 of the Mandate Agreement is analogous to, but opposite in effect to, an acknowledgment of non‑reliance provision or an entire agreement provision, in the context of a misleading or deceptive conduct claim under section 18(1) of the ACL. Whether conduct is misleading or deceptive is a question of fact, to be decided by reference to all of the relevant circumstances, one of which is the terms of the contract, as noted by the High Court in Campbell v Back Office Investments Pty Ltd [[2009] HCA 25, citing paragraph 130]:
'It is as well to add, however, that, of itself, neither the inclusion of an entire agreement clause in an agreement nor the inclusion of a provision expressly denying reliance upon pre‑contractual representations will necessarily prevent the provision of misleading information before a contract was made constituting a contravention of the prohibition against misleading or deceptive conduct by which loss or damage was sustained. As pointed out earlier, by reference to the reasons of McHugh J in Butcher [Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592], whether conduct is misleading or deceptive is a question of fact to be decided by reference to all of the relevant circumstances, of which the terms of the contract are but one.'
The other proposed question of law advanced for purposes of a grant of leave to appeal in ARB 7 of 2022 also raises the issue of reliance. It reads:
(2)Whether by reason of the matter referred to in (1) the arbitrator erred in law in that he failed to determine the question of reliance on the whole of the evidence including the defendant's admission and acknowledgement of reliance contained in clause 41 of the Mandate Agreement.
Essentially, the reliance issue focus must be directed back to cl 41 from out of the Mandate Letter, which clause I set out earlier in these reasons along with cl 42.
As now seen, proposed questions of law (1) and (2) are limited and so, interrelated - upon the issue of showing the element of reliance by Golden Mile and EnergyOz, so as for them to make good a s 18(1) ACL misleading or deceptive conduct cause of action. The preface to (2) also makes that connection clear.
As also now seen, question (2), in effect, is an elaboration upon question (1).

Evaluation: causation

It is necessary to direct attention first to the terms of cl 41 in the Mandate Letter. Its content was seen earlier in these reasons.
The learned arbitrator's evidentiary ascertainment task was to determine if Golden Mile and EnergyOz had established that a so-called representation had been relied on. This was in the context of argued misleading or deceptive conduct by that representation under s 18(1) of the ACL at the arbitration.
The reliance issue for a s 18(1) ACL statutory cause of action was a question of fact - never a question of law - in that arbitration.
Reliance is always a question of fact - to be ascertained at a trial, or in an arbitration.
In Sidhu v Van Dyke [2014] HCA 19; (2014) 251 CLR 505, a plurality French CJ, Kiefel, Bell & Keane JJ, observed towards reliance, within that appeal's context of a proprietary estoppel action, at [58]:
In point of principle, to speak of deploying a presumption of reliance in the context of equitable estoppel is to fail to recognise that it is the conduct of the representee induced by the representor which is the very foundation for equitable intervention. Reliance is a fact to be found; it is not to be imputed on the basis of evidence which falls short of proof of the fact. It is actual reliance by the promisee, and the state of affairs so created, which answers the concern that equitable estoppel not be allowed to outflank Jorden v Money [citation omitted] by dispensing with the need for consideration if a promise is to be enforceable as a contract … (my emphasis in bold)

Golden Mile and EnergyOz accept, by senior counsel's submission, that in a misleading or deceptive conduct action under s 18(1) of the ACL, that proving reliance upon a contended misleading representation is essential - and that the reliance issue as presented for the arbitral tribunal, was indeed a question of fact, not a question of law.
However, as explained by Mr Cureden SC, the contended question (ie, error) of law as sought to be raised, in effect, in this Court under both questions (1) and (2) - is that the learned arbitrator erred in law by his approach used towards proving of reliance by regard to cl 41. That suggested erroneous approach raises, it is put, a relevant question of law that is appropriate to presently support a grant of leave to appeal.
If the learned arbitrator had, as was contended, effectively just disregarded, or had wholly put aside and overlooked cl 41, whilst conducting his factual evaluation towards ascertaining the issue of a reliance upon the second representation, then subject to possible discretionary considerations, I would likely be left very close to being satisfied that such an error was 'obviously wrong' - and that the omission did raise a question of law by an erroneous approach taken to the issue of causation.
However, read fairly and evaluated in overall context, and without applying any unduly legalistic analysis to a picking apart of the provided reasons, that is not my end assessment. The approach taken by the learned arbitrator under his reasons accompanying his partial award did not, on my reading of the reasons, ignore cl 41.
Put another way, I am not satisfied that a negative factual determination in this respect, as reached by the arbitrator, over the question of reliance was obviously wrong, or that the approach taken by the arbitrator towards cl 41 of the Mandate Letter, was 'obviously wrong'. There are a number of reasons for that conclusion.
First, I have already identified by reference to [229] in the learned arbitrator's accompanying reasons, his express reference to cl 41, seen at just prior to his referring to the High Court's decision in Campbell v Back Office Investments [2009] HCA 25.
At this point of his reasons the learned arbitrator had acknowledged the question of fact (for the proving statutory misleading or deceptive conduct) was to be decided by reference to 'all of the relevant circumstances'. That was a correct statement of the law. The learned arbitrator then observed in the same context of relevant circumstances, that 'one of which is the terms of the contract'. Such terminology is not akin to saying that cl 41 was to be ignored.
Second, the ensuing quotation seen from [130] of the arbitrator's reasons to the High Court in Campbell v Back Office Investments only reinforces the arbitrator's principled application of a holistic fact finding approach to the question of reliance - rather than an elimination approach for terms of the contract, including cl 41. The deciding paragraph only says that the terms of the contract were, in effect, 'but one' of the relevant circumstances. That is correct. That approach was well removed from erroneously saying that cl 41 was to be ignored or that it carried no weight in the overall factual evaluation.
Third, it is not my assessment that the learned arbitrator was bound, as a matter of law, to find that cl 41 within the Mandate Letter was conclusive upon the issue of s 18(1) ACL reliance concerning a misleading or deceptive representation made by Novus about it being able to raise, on a best endeavours basis, a loan of A$28m within 45 days. The content of cl 41 was to be weighed. But it would not in a s 18 ACL dispute, conclusively pre‑empt the learned arbitrator taking account overall of further countervailing evidence over the factual issue of reliance - supporting his ultimate negative finding of fact against reliance being shown in fact.
A strong sentiment found conveyed by proposed questions of law (1) and (2) is that the drafted content of cl 41 in the Mandate Letter had shut out, or had pre‑empted, upon the issue of fact raised concerning a finding of reliance, any consideration and weighing in that overall factual exercise of other evidence. On my assessment, it did not.
Fourth, a careful scrutiny of the arbitrator's reasons, particularly across his [147] though to [242], does not unearth any particular sentence or paragraph at which the arbitrator says he had 'ignored', or had 'given no weight' to, the potential ramifications in overall context, of cl 41.
Rather, in my view, a fair and non-legalistic reading of those reasons is that the learned arbitrator, at the end, was simply not left persuaded, taking account of other countervailing evidence as it is mentioned at between [232] and [238], that the content of cl 41 had trumped all other evidence upon the reliance issue. Manifestly such an evaluation of the facts was open. The approach reflected a principled evaluation on what was a question of fact by way of that negative finding on reliance, reached by taking account of all the evidence.
Fifth, the arbitrator's citation from out of the observations of the Court of Appeal in Warwick Entertainment Centre Pty Ltd v Alpine Holdings Pty Ltd [2005] WASCA 174 does not suggest any erroneous approach, by effectively ignoring completely, or putting aside as irrelevant, cl 41 on the factual issue of reliance. The passage cited indicates that this evaluation was always a factual question into which the content of a clause like cl 41 will be one ingredient, but nonetheless an ingredient still to be assimilated and weighed along with the other evidence in the trial or in the arbitration, upon the reliance issue of fact.
It is clear the Court of Appeal in Warwick Entertainment recognised that in a (then) s 52 Trade Practices Act (predecessor to s 18 of the Australian Consumer Law) case, that the terms of a contract could never pre‑empt a holistic factual evaluation exercise where such statutory relief is sought. The sentence cited by the Court of Appeal by reference to Clark Equipment Australia Ltd v Covcat Pty Ltd (1987) 71 ALR 367 at [371] read in plenary terms:
If, as a result of the [misleading] conduct, a person is induced to enter into a contract and suffers loss, an action to recover it lies.
Sixth, assessed as a whole, my view is that there was no erroneous conflating by the learned arbitrator towards cl 41 to the position of entire agreement clauses in contract cases - or an acknowledgment of a non‑reliance provision in a contract at [229] of the learned arbitrator's reasons. Evaluated fairly in overall context, the arbitrator's observation at the first line of [229] was simply to the effect that the content of cl 41, on the issue of reliance in a s 18(1) ACL case, raised a question of fact and that cl 41 was not pre‑emptive of that issue.
A fair reading of the reasons as provided does not, as I have said, suggest that the approach of the learned arbitrator was to wholly ignore that clause, or to give it no weight at all. In the end, the other evidence adduced in the arbitration towards an absence of reliance trumped any effect from that clause in the Mandate Letter. The clause obviously was drafted well before the parties fell into dispute. This was a factual determination of fact open to the arbitrator on the evidence before him.
Consequently, I can detect, notwithstanding the submissions of Golden Mile and EnergyOz, no arguable error of law arising in the approach of the learned arbitrator towards the effects of cl 41 of the Mandate Letter over the factual issue of reliance - let alone an approach by the learned arbitrator that was 'obviously wrong' - for the purposes of meeting s 34A(3)(c)(i).

Conclusion

I am of the end view that leave to appeal under s 34A(1)(b), as sought by the plaintiffs in ARB 7 of 2022 against the partial award and the final award of Arbitrator Smith by reference to the contended questions of law, must be refused. As a result, the application in ARB 7 of 2022, fails on that basis.
Absent an objection communicated in writing to my chambers, a dismissal order in such terms will issue 24 hours after the publication of these reasons to the parties in ARB 7 of 2022. All other issues, including as to costs orders, will be reserved.
Notwithstanding the as ascertained level of earlier success of Golden Mile and EnergyOz on the first question concerning agreement for the purposes of s 34A(1)(a), an overall end failure to obtain leave to appeal from the Court inclines me, prima facie, on the question of costs, that they should bear the taxed costs of the present failed application for leave which has now been determined, as requested, on the papers.
Nevertheless, I will hear the parties in writing concerning costs orders if they still wish to be heard, notwithstanding my prima facie indication expressed above as to the question of costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
DM
Associate to the Honourable Justice Martin
7 NOVEMBER 2022