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Hewitt v Mckensey

Hewitt v Mckensey

Case [2003] NSWSC 1186 16 December 2003

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CITATION: Hewitt v McKensey [2003] NSWSC 1186

HEARING DATE(S): 5 December 2003

JUDGMENT DATE:
16 December 2003

JUDGMENT OF: McDougall J at 1

DECISION: See paragraph 83 of judgment

CATCHWORDS: ARBITRATION - Commercial Arbitration Act 1984 - leave to appeal - whether error of law - whether "no evidence" submission raises error of law arising out of award - whether alleged error substantially affects plaintiff - ARBITRATION - Commercial Arbitration Act 1984 - misconduct - technical misconduct - whether technical misconduct made out - whether discretion to set aside if technical misconduct made out

LEGISLATION CITED: Commercial Arbitration Act 1984
Commercial Arbitration (Amendment) Act 1990 (No. 100)

CASES CITED: Balcombe v R A & A R Young Pty Ltd (18 October 1991, unreported)
Doran Constructions Pty Ltd v Health Administration Corporation of NSW (CA, 10 October 1994, unreported)
Elkateb v Lawindi [1999] NSW SC 720
Ex parte Herman: re Mathieson (1960) 78 WN (NSW) 6
Holland Stolte Pty Ltd v Murbay Pty Ltd (1991) 105 FLR 304, 310
Maccarrone v Oxley (20 June 1986, unreported: BC8600910)
Melbourne Harbour Trust Commissioners v Hancock (1927) 39 CLR 571, 588
Qantas Airways Ltd v Gubbins (1992) 28 NSWLR 26
Rolland v Cassidy (1888) 13 App Cas 770, 772
R v Orcher [1999] NSW CCA 356
Taciak v Commissioner, Australian Federal Police (1995) 59 FCR 285, 295
The Barenbels [1985] 1 Lloyd's Rep 528, 531-532
Universal Petroleum Co Ltd v Handels und Transport GmbH [1987] 1 WLR 1178, 1189
Warley Pty Ltd v Adco Constructions Pty Ltd (1988) 5 BCL 141
Woodbud Pty Ltd v Warea Pty Ltd (15 June 1995, unreported: BC 9504818)

PARTIES :
Christopher Michael Hewitt (Plaintiff)
Hugh Stanley McKensey, Victor John Lewis and Peter Charles Hicks (Defendants)

FILE NUMBER(S): SC 50143/03

COUNSEL: M A Ashhurst (Plaintiff)
T A Alexis SC/F P Hicks (Defendants)

SOLICITORS: Hewitts Commercial Lawyers (Plaintiff)

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

McDOUGALL J

16 December 2003

HUGH STANLEY McKENSEY & ORS

JUDGMENT

HIS HONOUR:

Introduction and background

1 Prior to 28 August 1994, the plaintiff, the defendants and Phillip Anthony Nelson were partners in a firm of accountants known as “Forsythes”. At some time prior to 28 August 1994, Mr Geoffrey Francis Page had also been a partner in that firm. It is not clear when Mr Page left the partnership.

2 On 10 September 1994, the plaintiff, the defendants and Mr Nelson entered into a written agreement described as:

“Proposed basis on which Christopher Michael Hewitt and Phillip Anthony Nelson will retire from the partnership of Forsythes”.

3 By orders of this Court made on 17 June 1999, and entered on 2 July 1999 (and amended on 6 July 1999), a number of disputes relating to the financial accounts of the partnership for the year ended 30 June 1994 and the period from 1 July to 28 August 1994 were referred to…

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.

Continue reading Hewitt v Mckensey

Details

AGLC: Hewitt v Mckensey [2003] NSWSC 1186
Case: [2003] NSWSC 1186
Decision Date: 16 December 2003

CaseChat Overview and Summary

The plaintiff, Mr Hewitt, brought proceedings against Mr Mckensey for leave to appeal an arbitration award made by an arbitrator. The dispute involved an agreement for the purchase and sale of shares in a company. The arbitration was conducted under the Commercial Arbitration Act 1984, and the plaintiff contended that there was an error of law in the award which necessitated the appeal. The plaintiff also argued that the arbitrator had committed technical misconduct during the arbitration, which should result in the setting aside of the award.

The court had to determine whether the "no evidence" submission raised an error of law arising out of the award, and whether such an error substantially affected the plaintiff. Additionally, the court had to decide whether the technical misconduct alleged by the plaintiff warranted the setting aside of the award under the discretion provided by the Commercial Arbitration Act 1984.

The court found that the "no evidence" submission did not raise an error of law arising out of the award. The court held that the submission was not about the existence of evidence but rather the weight to be given to the evidence. The court further held that the alleged error did not substantially affect the plaintiff, as the plaintiff had not demonstrated how the alleged error affected the outcome of the arbitration. On the issue of technical misconduct, the court found that the plaintiff had not made out a case of technical misconduct that warranted the setting aside of the award. The court held that the discretion to set aside an award on the ground of technical misconduct should be exercised sparingly and only in cases where the misconduct has a significant impact on the fairness of the arbitration process.

The court dismissed the plaintiff's application for leave to appeal and for the setting aside of the award. The court held that there was no error of law in the award and that the alleged technical misconduct did not warrant the setting aside of the award. The court emphasised that the setting aside of an award on the ground of technical misconduct should only be done in exceptional circumstances where the misconduct has a significant impact on the fairness of the arbitration process.

Orders