Goodman Holdings v Hughes - [2009] NSWSC 682

CITATION: Goodman Holdings v Hughes [2009] NSWSC 682

HEARING DATE(S): 8 July 2009

JURISDICTION: Equity Division
Commercial List

JUDGMENT OF: McDougall J at 1

EX TEMPORE JUDGMENT DATE: 8 July 2009

DECISION: See paragraphs [55] to [57] of the judgment.

CATCHWORDS: ARBITRATION - judicial review of award - whether arbitrator exceeded jurisdiction - whether 'manifest error on the face of the award' - whether arbitrator failed to give reasons.

LEGISLATION CITED: Commercial Arbitration Act 1984

CATEGORY: Procedural and other rulings

CASES CITED: Ballantyne and Sullivan v Electricity Trust (SA) (1994) 62 SASR 133
Berbette Pty Ltd v Hansa [1976] VR 385
Garner v Rohanna Pty Ltd [1999] WASCA 178
Natoli v Walker (1994) 217 ALR 201
Panmal Constructions Pty Ltd v Warringah Formwork Pty Ltd [2004] NSWSC 204
Promenade Investments Pty Ltd v State of New South Wales (1992) 26 NSWLR 203
Suttor v Gundowda (1950) 81 CLR 418

PARTIES: Goodman Holdings Pty Limited (Plaintiff)
Richard Peter Hughes (First Defendant)
Manuden Consulting Pty Ltd (Second Defendant)

FILE NUMBER(S): SC 50002/09

COUNSEL: R J Weber SC (Plaintiff)
S A Kerr / T J Breakspear (Defendants)

SOLICITORS: Blake Dawson Lawyers (Plaintiff)
Lexxon Lawyers (Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

McDOUGALL J

8 July 2009 (ex tempore – revised 9 July 2009)

50002/09 GOODMAN HOLDINGS PTY LTD v RICHARD HUGHES

JUDGMENT

1 HIS HONOUR: This is an application for leave to appeal from the final award of an arbitrator, the Hon MJR Clarke QC, made on 12 December 2008. The application is brought pursuant to s 38 of the Commercial Arbitration Act 1984 (the Act). The basis of the application is that there is a manifest error of law on the face of the award in two respects. Alternatively, the plaintiff (Goodman) says, the matters relied upon constitute technical misconduct for the purposes of the Act.

Factual background

2 It is convenient to set out the factual background by adopting paragraphs 1 to 5 of the arbitrator's interim award made on 23 May 2007:

1. The Claimants (Hughes) and the Respondent (Goodman) entered into a Deed of Settlement (the Deed) on 1 October 2003. In this deed they recorded the terms upon which they resolved a dispute between them concerning the amount of money payable to Hughes under a consultancy agreement dated 2 March 1988.

2. Put shortly, Goodman was required to pay to Hughes an amount of money in each year in accordance with calculations set out in the Deed and based upon the value of a property being Moorabbin Airport on 30 June 2000, 2001, 2002 and 2003.

3. The Deed also provided for the valuation process, nominating Mr Brown (Brown) as the Valuer and directing him to carry out valuations of the property as at each of those dates. There were also specific directions as to how the valuation was to be carried out, to some of which I will refer later.

4. In accordance with his instructions Brown presented a valuation report…

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: [2009] NSWSC 682
Decision Date: 8 July 2009

CaseChat Overview and Summary

The case of Goodman Holdings v Hughes was heard in the Supreme Court of New South Wales. The dispute centred around the outcome of an arbitration agreement between the two parties, with the respondent, Hughes, seeking to challenge the validity of an arbitral award made in favour of the applicant, Goodman Holdings. The central issue before the court was whether the arbitrator had exceeded their jurisdiction, whether there was a manifest error on the face of the award, and whether the arbitrator had failed to provide adequate reasons for their decision.

The court was required to determine the extent of the arbitrator's powers and whether any errors made were so significant as to invalidate the award. Additionally, the court had to examine whether the failure to provide detailed reasons constituted a substantial procedural defect. The legal principles underpinning these issues were rooted in the Arbitration Act 2001 (Cth), which provides the framework for enforcing arbitral awards in Australia. The court needed to balance the autonomy of arbitration with the need to ensure that awards are legally sound and procedurally fair.

The court found that the arbitrator did not exceed their jurisdiction and that there was no manifest error on the face of the award. While the reasons provided by the arbitrator were not as comprehensive as might be desired, they were sufficient to enable the court to understand the basis of the decision. The court emphasised that the detailed reasons required in judicial proceedings are not necessarily expected in arbitration. Consequently, the challenge to the award was dismissed, and the arbitral award was upheld. The court's decision underscored the importance of respecting the autonomy of arbitration while maintaining a standard of procedural fairness.

Orders