In the Matter of an Application Pursuant to the Commercial Arbitration Act 1986:Hedley Prosser v D J and J Barrie Trading as Bargold Constructions No. SCGRG 93/1978 Judgment No. 4369 Number of Pages 11

[1994] SASC 4369

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA MATHESON J

CWDS
Arbitration - the award - Arbitrator finding that a dispute did exist between the parties to a building contract - whether there has been an accord and satisfaction - application by proprietor for leave to appeal under s.38 of the Commercial Arbitration Act - whether arbitrator erred in law - application dismissed. Commercial Arbitration Act 1986. Foakes v Beer (1884) 9 App Cas 605; D and C Builders v Rees (1966) 2 QB 617; Chitty on Contracts General Principles 25th Edn pp 129-130; Day and Another v McLea and Another (1889) 22 QBD 610; Harris v Jenkins (1922) SASR 59; Aktiebolaget Legis v V Berg and Sons Ltd (1964) 1 Lloyds Rep 199 and Gunter Henck v Andre and Cie SA (1970) 1 Lloyds Rep 235, applied. Homeguard Products (MS) Ltd v Kiwi Packaging Ltd
(1981) 2 NZLR 322, not followed. HBF Dalgety Ltd v Morton (1987) 1 NZLR 411 and Haynes House Haulage Co Ltd v Gamble (1989) 3 NZLR 221, considered.

HRNG ADELAIDE, 14 December 1993 #DATE 21:1:1994
Counsel for applicant:     Mr J M Wilkinson
Solicitors for applicant:    Cowell Clarke
Counsel for respondents:     Mr D A Black
Solicitors for respondents: David Black and Co.

ORDER
Aplication dismissed.

JUDGE1 MATHESON J This is an application for leave to appeal from an order of an arbitrator, namely, Mr Don Sarah, AM, by way of an interim award that a dispute did exist between the parties hereto. Although a formal Agreed Statement of Facts has not been filed, the following facts are agreed (as I understand both counsel):
    1. On the 29 April 1992, the applicant and the respondents
    entered into a contract whereby the respondents agreed to
    build a new house for the applicant at Tintinara.
    2. The contract signed by the applicant and the respondent
    was a standard MBA, HB 1991 Building Contract ("the
    contract").
    3. During the course of the performance of the works
    pursuant to the contract, certain disputes arose between the
    parties. The applicant says they were ultimately settled,
    but the respondents gave a Notice of Dispute under the
    contract and requested the Master Builders Association of
    South Australia pursuant to clause 32 of the contract to
    nominate an arbitrator. The Notice read as follows: "
    NOTICE OF DISPUTE BETWEEN BARGOLD CONSTRUCTIONS: BUILDER AND
    MR H PROSSER: OWNER On 4/5/92 the Builder and the Owner
    entered into a written agreement comprising HB 1991 Building
    Contract. Under the terms of the contract the Builder was
    required to construct a dwelling for a contract price of
    $117,370 During the course of the construction being carried
    out the owner caused the work to be varied, ... The Builder
    has claimed variations to the contract. The Builder has
    notified the Owner of these variations in writing throughout
    the progress of the works. The Builder Claims to be
    entitled to:- 1. The balance of the contract sum $1623.00
    2. Instructed variations unpaid $7517.57 3. Interest on
    outstanding account $ 975.58 4. Expenses $5151.83 TOTAL
    CLAIM $15267.98 By reason of the Owner's persistent
    rejection of the Builder's claims for full payment of the
    contract sum, variations and expenses the Builder says that
    a dispute has now arisen and that by virtue of the provision
    of Clause 32(a), the Builder gives further advice that
    unless these disputes and differences are settled within the
    next 7 days the Builder will refer this matter to
    Arbitration. (Signed by D J Barrie)"
    4. On 6 September 1993, Mr Don Sarah, AM, was nominated by
    the Master Builders Association of South Australia to act as
    arbitrator.
    5. On 15 September, the parties attended a preliminary
    conference before the arbitrator.
    6. At the preliminary conference, the parties agreed to
    argue a preliminary point raised by the applicant, namely,
    that no dispute existed, as it had been settled. It was
    agreed that this would be the subject of an interim award.
    It was set down for argument before the arbitrator on 21
    September.
    7. The material facts which were put before the Arbitrator
    by the applicant were as follows:-
    7.1 In September 1992 the respondents handed to the
    applicant a summary of variations purportedly claimed
    pursuant to the contract. The position set out in the
    summary by the respondents was as follows:- Contract Price
    $117,370.00 Variations claimed 8,919.(49) Amended contract
    price $126,289.49 Paid to date 113,500.00 BALANCE OWING
    $ 12,789.49
    7.2 On 3 November 1992, the applicant's solicitors, Cowell
    Clarke, wrote to the respondents setting out the applicant's
    position. The applicant claimed that the contract price had
    been varied from $117,370.00 to $115,747.00 by a verbal
    agreement when certain work was removed from the scope of
    work. The applicant's position was set out as follows:-
    Amended contract price $115,747.00 Variations admitted
    l,807.46 TOTAL $117,554.46 Less paid to date 113,500.00
    BALANCE OWING $ 4,054.46
    7.3 A reply by letter dated 12 November was received by
    Cowell Clarke from the respondents. In the respondents'
    letter, the balance owing as claimed had increased by the
    sum of $2,655.48. The respondents' amended position was as
    follows:- Contract price $117,370.00 Variations claimed
    11,574.97 TOTAL $128,944.97 Less paid to date 113,500.00
    BALANCE OWING $ 15,444.97
    7.4 A reply by letter dated 8 December 1992 (the front page of
    the letter was incorrectly dated 30 November 1992) was sent by
    Cowell Clarke to the respondents. The letter said in part:- "In
    an effort to commercially compromise the matter and settle all
    differences, our client offers to pay without any admission of
    liability the following variations:- Item No Amount P16 $ 20.00
P21 60.00 P31 326.32 P66 44.33 P81 l,500.00 P82 l,800.00 P89
    306.75 $4,057.40 In offering to pay the variations set out
    above, the amounts outstanding would be as follows:- Amended
    contract price $115,747.00 Variations as set out above 4,057.40
    TOTAL $119,804.40 Less amount paid to date 113,500.00 AMOUNT
    OWING $ 6,304.40 Our client encloses a cheque in the sum of
    $6,304.40 in full and final settlement. Should this cheque be
    banked by you,you are accepting in full and final settlement our
    client's offer of compromise. Should the offer not be
    acceptable, the cheque should be returned to our offices. In
    these circumstances our client will withdraw all offers and
    instruct us to defend any claim you may make."
    7.5 On 9 December 1992, the respondents wrote to Cowell Clarke,
    and I set out the letter: "We are in receipt of your letter and
    cheque dated November 30, 1992 and December 8, 1992. We do not
    agree that this is the final payment nor will we accept a
    conditional payment, but will deduct this amount from the monies
    still outstanding. If the balance is not paid within 5 working
    days further action will be taken. Amount owing 15,444-97
    Interest to 4.12.92 44-55 Accounting Fee 5-00 Balance 15,494-52
    Amount Paid 8.12.92 6,304-40 Balance 9,190-12 Interest to
    8.12.92 25-47 Accounting Fee 5-00 Outstanding Amount $9,220-59
    Yours faithfully, (Signed) D.J Barrie"
    7.6 On 31 December 1992, Cowell Clarke wrote to Baker O'Loughlin
    (the respondents' then solicitors), and I set out that letter:
    "PROSSER AND BARGOLD CONSTRUCTIONS AND CONSTRUCTION OF HOUSE AT
    HAZEL TERRACE, TINTINARA We refer to your letter of 18th
    December 1992. We presume from the contents of your letter that
    you have not seen our letters to your client of 3rd November
    1992 and the 30th November 1992. We enclose copies. The
    correspondence sets out client's position. Notwithstanding that
    most of the variations carried out by your clients were not
    carried out in accordance with the provisions of clause 12 of
    the contract our client accepted some of these by way of
    compromise. We refer you to our letter of 3rd November 1992
    which sets out those variations which were not agreed with by
    our client in accordance with clause 12 of the contract and with
    which our client disputes their value in any event. Further,
    and more importantly, in our letter to your clients of 8th
    December 1992 (incorrectly dated 30th November 1992 on the first
    page) we set out our client's position and tendered our client's
    cheque in full and final settlement of all claims in the sum of
    $6,304.40. The last paragraph of our letter clearly sets out
    the terms and conditions upon which the cheque was tendered and
    your client chose to accept the cheque and our client's offer of
    compromise by banking the same. Our letter made it clear that
    our client was offering to compromise the claim and tendered a
    cheque for the compromised amount. In the circumstances there
    has been good consideration and accord and satisfaction. We
    refer to you the decision of Homeguard Products (NZ) Limited v
Kiwi Packaging Limited (1981) 2 NZLR 322 in this regard. The
    matter is simply at an end."
    8. On 18 October 1993 the arbitrator handed down his interim
    award in which he held that a dispute did exist on the basis
    that there had been no accord and satisfaction. The applicant
    submits that the arbitrator should have applied the law as
    stated in the Homeguard Products case, and found that there had
    been an accord and satisfaction, and that the applicant owed the
    respondents no further monies. Further, he submits that the
    arbitrator should have found that there was no dispute between
    the parties which could be referred to arbitration pursuant to
the contract. 2. The relevant statutory provision relating to the judicial review of awards is s.38 of the Commercial Arbitration Act 1986 ("the Act"):
    "38.(1) Without prejudice to the right of appeal conferred
    by subsection (2), the Court shall not have jurisdiction to
    set aside or remit an award on the ground of error of fact or
    law on the face of the award.
    (2) Subject to subsection (4), an appeal shall lie to the
    Supreme Court on any question of law arising out of an award.
    (3) On the determination of an appeal under subsection (2)
    the Supreme Court may, by order -
    (a) confirm, vary or set aside the award; or
    (b) remit the award, together with the Supreme Court's
    opinion on the question of law which was the subject of the
    appeal, to the arbitrator or umpire for reconsideration or,
    where a new arbitrator or umpire has been appointed, to that
    arbitrator or umpire for consideration ...
    (4) An appeal under subsection (2) may be brought by any of
    the parties to an arbitration agreement -
    (a) with the consent of all the other parties to the
    arbitration agreement;
    or
(b) subject to section 40, with the leave of the Supreme
    Court.
    (5) The Supreme Court shall not grant leave under subjection
    (4)(b) unless it considers that -
    (a) having regard to all the circumstances, the determination
    of the question of law concerned could substantially affect
    the rights of one or more parties to the arbitration
    agreement;
    and
    (b) there is -
    (i) a manifest error of law on the face of the award; or
    (ii) strong evidence that the arbitrator or umpire made an
    error of law and that the determination of the question may
    add, or may be likely to add, substantially to the certainty
    of commercial law.
(6) - (7) ..." 3. It is convenient to state here that the parties agreed that s.40 of the Act does not apply. 4. The arbitrator discussed the law relating to accord and satisfaction. He quoted from Chitty on the Law of Contract, and referred to Homeguard Products (NZ) Ltd v Kiwi Packaging Ltd (supra), which had been cited by the applicant and to two cases cited by the respondents, namely, Foakes v Beer (1884) 9 APP CAS 605 and D and C Builders Ltd v Rees (1966) 2 QB 617. The arbitrator thought the cases quoted by the respondents were "more apt" and said:
    " the Client only tendered to the Builder the amount which
    they acknowledged was owing. In that case where is the
    consideration for the alleged compromise for the balance of the
    Builders claim. In my view the banking of the Proprietor's
    cheque, by the Builder has complicated this matter
    unnecessarily, although the Builder made an attempt to prevent
    the depositing of the cheque into his account. I am not
    satisfied that the Proprietor's actions have satisfied all the
    principles of accord and satisfaction and that a dispute does
    exist between the parties, and that therefore the Respondents
    application fails." 5. Earlier in his award under the heading "The History", the arbitrator said:
    "The Builder, by his own admission sought advice from
    several quarters as to the effect of banking the cheque in terms
    of the Proprietors correspondence and decided that banking the
    cheque, would not be terminal to his ability to recover the
    balance sought by him. In the event, the Builder banked the
    cheque, which he treated as a progress payment and wrote to the
    Proprietor on 9th December, 1992 advising that he did not accept
    the payment as final and that unless the balance of $9,220.59
    was remitted within 5 days, further action would be taken.
    Prior to doing this the Builder attempted to withhold depositing
    the cheque but was advised by the bank that it was too
    late." 6. The respondents' letter to the applicant's solicitors dated 9 December, 1992 has a date stamp on it indicating it was not received until 17 December, 1992, but I do not think this assists the applicant in the light of the other facts. 7. The two cases which the arbitrator regarded as "apt" for his decision are discussed in Chitty on Contracts, General Principles, 25th Edn. At pp.129-130, the learned author says:
    "A debt can only be discharged by accord and satisfaction.
    A promise by the debtor to pay only part of the debt provides no
    consideration for the accord, as it is merely a promise to
    perform part of an existing duty owed to the creditor. And the
    actual payment is no satisfaction under the rule in Pinnel's
    Case that 'Payment of a lesser sum on the day in satisfaction of
    a greater sum cannot be any satisfaction for the whole.' This
    rule was finally approved by the House of Lords in Foakes v
    Beer. Mrs Beer obtained a judgment against Dr. Foakes for
    2,090 19s. Sixteen months later, Dr. Foakes asked for time to
    pay. A written agreement was made whereby Mrs Beer undertook
    not to take 'any proceedings whatever' on the judgment in
    consideration of an immediate payment by Dr. Foakes of 500 and
    on condition of his paying specified instalments 'until the
    whole of the said sum of 2,090 19s. shall have been paid and
    satisfied.' Some five years later, when Dr. Foakes had paid
    2,090 19s., Mrs Beer claimed 360 for interest on the judgment
    debt. The House of Lords upheld her claim and the actual result
    does not appear to be unjust; for it seems that in making the
    agreement Mrs Beer only intended to give Dr. Foakes time to pay
    and not to forgive interest. ... The rule established in
    Foakes v Beer sometimes performs the useful function of
    protecting a creditor against a debtor who too ruthlessly
    exploits the tactical advantage of being a potential defendant
    in litigation. This aspect of the matter is well illustrated by
D. and C. Builders Ltd v Rees (1966) 2 QB 617; Chorley (1966)
    29 MLR 165; Cornish (1966) 29 MLR 428; and see post 225. The
    defendant owed 482 to the plaintiffs, a firm of builders. Six
    months after payment was first demanded, the defendant's wife
    (acting on his behalf) offered the builders 300 in full
    settlement. The builders accepted this offer as they were (to
    the wife's knowledge) in desperate straits financially and
    needed the money immediately. It was held that they could
    nevertheless sue for the balance; and the majority of the Court
    of Appeal based their decision to this effect on the rule in
    Foakes v Beer." 8. I draw attention to the following passage in the judgment of Lord Denning MR in D and C Builders v Rees, supra, at pp. 624-625:
    "... we can now say that, when a creditor and a debtor
    enter upon a course of negotiation, which leads the debtor to
    suppose that, on payment of the lesser sum, the creditor will
    not enforce payment of the balance, and on the faith thereof the
    debtor pays the lesser sum and the creditor accepts it as
    satisfaction: then the creditor will not be allowed to enforce
    payment of the balance when it would be inequitable to do so ...
    In applying this principle, however, we must note the
    qualification: The creditor is only barred from his legal rights
    when it would be inequitable for him to insist upon them. When
    there has been a true accord, under which the creditor
    voluntarily agrees to accept a lesser sum in satisfaction, and
    the debtor acts upon that accord by paying the lesser sum and
    the creditor accepts it, then it is inequitable for the creditor
    afterwards to insist on the balance. But he is not bound unless
there has been truly an accord between them." 9. The arbitrator obviously had this passage in mind and paraphrased it on p.13.2. of his award. 10. Perhaps a more helpful and more relevant English decision is Day and Another v McLea and Another (1889) 22 QBD 610, which was not cited to the arbitrator. The facts are set out at p.610:
    "The action was brought to recover damages for breach of
    contract. The defence was that the plaintiffs had agreed to
    accept and had accepted l02.18s.6d., in full satisfaction of all
    demands in respect of the breach. It appeared that, after the
    breach, the plaintiffs made a claim on the defendants, who
    thereupon sent them a cheque for 102.18s.6d., being less than
    the amount claimed, stating that it was 'in full of all
    demands,' and inclosing a receipt in that form for signature by
    the plaintiffs. The plaintiffs wrote in reply that they took
    the cheque on account, and had placed it to the defendants'
    credit, at the same time inclosing a receipt on account, and
    asking for a cheque for the balance of the claim. In answer to
    this letter the defendants wrote stating that the payment was
    made in full of all demands, and asking for a receipt in full.
    It was contended on behalf of the defendants that the keeping of
    the cheque by the plaintiffs was in law an accord and
    satisfaction of the claim. Charles, J, held that there was no
    accord and satisfaction, and gave judgment for the
    plaintiffs." 11. The defendants' appeal was dismissed. At p.612-613, Lord Esher MR said:
    "It was contended that the keeping of the cheque so sent
    was, as a matter of law, an accord and satisfaction of the
    claim, and that the plaintiffs were bound either to take it in
    full satisfaction or to return it. The contention, therefore,
    was that the plaintiffs having kept the cheque must be taken in
    law to have accepted it in satisfaction. Upon the other side it
    was contended that the keeping of the cheque could only be
    evidence of accord and satisfaction, and that whether or not it
    was taken in satisfaction was a question of fact to be
    determined according to the circumstances of the case. That
    argument raises the question whether the fact of keeping a
    cheque sent in satisfaction of a claim for a larger amount is in
    law conclusive that there has been an accord and satisfaction.
    It is said that that inference of law must be drawn even though
    the person receiving the cheque never intends to take it in
    satisfaction and says so at the time he receives it. All I can
    say is that if that is a conclusive inference it would be one
    contrary to the truth. I object to all such inferences of law.

    This very question, however, came before this Court in Miller v
    Davies Not reported. In that case the action was upon a
    solicitor's bill of costs for 50., and there was a plea of
    accord and satisfaction. Before action the defendant sent the
    plaintiff a cheque for 25., with a letter stating that, in order
    to put an end to the matter, he sent the cheque for 25., on the
    terms that the plaintiff would receive it in settlement. The
    plaintiff kept the cheque and cashed it, and wrote to the
    defendant that he declined to accept it in settlement and that
    he required a cheque for the balance. The defendant thereupon
    wrote in reply requesting the plaintiff to return the cheque if
    he would not accept it in satisfaction. The jury found that
    there was no accord and satisfaction. It was contended there as
    in the present case that the fact of the plaintiff keeping the
    cheque was conclusive in law that he had taken it in accord and
    satisfaction of the claim, inasmuch as it had been sent in
    satisfaction and the plaintiff was bound either to keep it upon
    the terms on which it had been sent or to return it. This
    Court, however, held that the fact of keeping the cheque was not
    conclusive in law, that the question was one of fact, and that
    the jury having found that there was no accord and satisfaction
    the Court would not interfere. That case is clearly in point.
    The question, therefore, whether there has been an accord and
    satisfaction is one of fact. It was for the judge to decide
    whether the plaintiffs agreed to take 102.18s.6d. in
    satisfaction of their claim. The learned judge has found that
    fact in favour of the plaintiffs and consequently this appeal
    must be dismissed." 12. At p.613, Bowen LJ said:
    "I am of the same opinion. It seems to me, as a matter of
    principle as well as of authority, that the question whether
    there is an accord and satisfaction must be one of fact. If a
    person sends a sum of money on the terms that it is to be taken,
    if at all, in satisfaction of a larger claim; and if the money
    is kept, it is a question of fact as to the terms upon which it
    is so kept. Accord and satisfaction imply an agreement to take
    the money in satisfaction of the claim in respect of which it is
    sent. If accord is a question of agreement, there must be
    either two minds agreeing or one of the two persons acting in
    such a way as to induce the other to think that the money is
    taken in satisfaction of the claim, and to cause him to act upon
that view. In either case it is a question of fact." 13. Fry LJ also agreed. This case was followed by the Full Court of the Supreme Court of South Australia in Harris v Jenkins (1922) SASR 59. The facts and the decision are sufficiently set out in the following passage from the judgment of Murray CJ at p.74 (Gordon J concurring):
    "The defendant offered to pay the plaintiff 100 in full
    settlement of her claim. The plaintiff refused, but expressed
    her willingness to accept 200. Without rejecting this offer the
    defendant's solicitors made a counter-offer of 150. When this
    was rejected they sought to accept the plaintiff's offer to take
    200. They forwarded the money in Commonwealth Bank notes to the
    plaintiff's solicitors by letter. The defendant's solicitors
    replied: 'We ... do not accept the sum of 200 in full
    settlement of Mrs Harris's claim. ... We are holding the 200
    you forwarded us today on account of Mrs Harris's claim for
    2,000.' The money was afterwards appropriated and applied to the
    use of the plaintiff. I agree with the learned Judge that after
    a counter-offer is made the original offer cannot be accepted
(Hyde v Wrench, (1840) 3 Beav.334), but it does not follow that,
    if the original amount is afterwards tendered in full settlement
    and retained, there is in law accord and satisfaction. It
    depends on the intention of the parties, which is a question of
fact in each case (Ackroyd v Smithies, (1886) 54 LT 130; Day v
McLea, (1889) 22 QBD 610; Nathan v Odgens Ltd., (1905) 93 LT
    553). Here the evidence is that the plaintiff's solicitors
    expressly declined to take the 200 on the terms on which it was
    forwarded to them, but said that they would hold it on account
    of the 2,000 which their client claimed. There was, therefore,
    no consensus between the parties. The subsequent use of the
    money may have been improper, but it could not constitute an
    agreement." 14. Before the arbitrator, the applicant had relied on the decision of Homeguard Products (NZ) Ltd v Kiwi Packaging Ltd., (supra), and in particular on the following dictum of Mahon J at pp. 333-334:
    "When the creditor receives a cheque for a lesser sum on
    condition that it be accepted in full settlement of a disputed
    or unliquidated debt, there are only two courses open to him.
    He may accept the payment, and by so doing the debtor's original
    obligation will be finally discharged by accord and
    satisfaction. The only other course is to return the cheque to
    the debtor, and then to proceed against him for the full amount
    said to be due." 15. Mr Black, who appeared for the respondents before me, pointed out that this dictum has been criticised in subsequent cases in New Zealand. For example, in HBF Dalgety Ltd v Morton (1987) l NZLR 411, Hillyer J said at pp.416-417:
    "In a careful and fully researched article in (1987) 12
    NZULR 259, Professor D W McLauchlan has examined that principle.
    He goes through the English cases, referring to Ackroyd v
Smithies (1885) 54 LT 130 and then in particular refers to Day v
    McLea, the case quoted by Mahon J in the Homeguard case. There
    the statement is made that accord is a question of fact,
    depending upon all of the circumstances of the particular case.
    Lord Esher said at p 612: 'It is said that that inference of
    law must be drawn even though the person receiving the cheque
    never intends to take it in satisfaction and says so at the time
    he receives it. All I can say is that if that is a conclusive
    inference it would be one contrary to the truth. I object to
    all such inferences of law.' If the question is one of fact,
    there will be accord and satisfaction only if there is a meeting
    of two minds, or if one of the persons involved acts in such a
    way as to induce the other to think the money is taken in
    satisfaction of the claim. But if the creditor does not agree,
    and if at the time that he accepts the amount he makes it clear
    to the debtor that he is not accepting it in full satisfaction,
    it seems to me that it cannot be said that there has been accord
    and satisfaction. If there were a rule of law that acceptance
    of a cheque is conclusive evidence of assent to the conditions
    on which the cheque was sent, the matter would no longer be a
    question of fact, but of law. In the article to which I have
    referred, Professor McLauchlan sets out the position in
    Scotland, Canada and Australia, and finds in the decisions that
    have been given in those countries support for the suggestion
    that the principles in Day v McLea should be applicable in this
    country ... It seems to me as a matter of ordinary common
    sense, that if at the time a person receives a cheque he writes
    a letter saying that he is not accepting the cheque in full
    settlement, it would be hard to hold that he was behaving in
    such a way as to make people believe that he was. It may be
    that the cheque was forwarded on condition that it be accepted
    in that way. It is possible that taking the cheque in those
    circumstances would amount to conversion, but if the debtor then
    sued the creditor for conversion, the creditor could
    counterclaim for the amount of this debt. There have been a
    number of cases in New Zealand referred to by the District Court
    Judge in his decision, and by Professor McLauchlan in the
    article to which I have referred. The Courts in a number of
    cases have held that an amount paid less than the full amount,
    will not operate as accord and satisfaction, because of some
    actions on the part of one or other party which could indicate
    that the agreement had been altered. Such a case was Brown v
Reardon (1985) 2 NZLR 530. There Casey J held that
    correspondence after the cheques were sent was sufficient to
    prevent the original basis operating when the cheques were
    subsequently banked. In Bayswater Marine Ltd v Bay of Island
    Charter Co Ltd (Auckland, A 151/81, 16 September 1983) Wallace J
    held that a statement that payment was 'conditional upon
    immediate delivery of a boat' and threatening legal proceedings
    for damages if it was not delivered, did not amount to a
    contention that the cheque be accepted in full satisfaction.
    The learned Judge held the defendant's letter did not clearly
    state that the cheque was tendered on the basis it was to be in
    full and final settlement. All it really said was 'Here is the
    money which we say is owing, now hand over the boat or we will
    sue you for damages'. It did not say that the plaintiff could
    not accept the money and still sue for the alleged balance.
    That case of course, is similar to this case in that the wording
    of the condition was not clearly 'in full and final
    satisfaction'. Other cases however in the New Zealand Courts
    have held to the principle enunciated by Mahon J in the
    Homeguard case. Those were all decisions of the High Court.
With the greatest respect I am unable to agree with them." 16. At p.418, he said: "Were it necessary, I should have held in this case that provided the letter which was referred to was written at the time the cheque was received and banked, and that it made clear that the receipt and banking was not an acceptance of the statement that it must be taken in full and final satisfaction, that letter would have prevented the appellant being bound to accept the smaller amount in lieu of the larger." 17. In Haines House Haulage Co. Ltd v Gamble (1989) 3 NZLR 221, Barker J said at p.223:
    "This decision of Mahon J has been the subject of a number
    of learned articles and has been referred to in a number of
    decisions of other Judges. I think it correct that the decision
    of Mahon J on this point does not represent the current view of
    this Court. I do not find it necessary to summarise the cases
    because that exercise has been very comprehensively done by
    Smellie J in Dunrae Manufacturing Ltd v C L North and Co Ltd
(1988) 2 NZLR 602." 18. I do not consider that the fact that these later New Zealand cases were not cited before the arbitrator matters. What I have to decide is whether he made an error of law, not whether his citation of authorities was appropriate or inappropriate. 19. I think some reference by me to two of the leading authorities on appeals from arbitrators is called for. 20. In Aktiebolaget Legis v V. Berg and Sons, Ltd (1964) l Lloyd's Rep 199, Roskill J said at p 214:
    "Mr Lloyd also prayed in aid a passage in the judgment of
Sir Alexander Cockburn, CJ, in Re Hopper, (1867) LR 2 QB 367,
    and quoted at p 333 of Russell on Arbitration, where the learned
    Chief Justice said (ibid., at p 375): ... I would observe that
    we must not be overready to set aside awards where the parties
    have agreed to abide by the decision of a tribunal of their own
    selection, unless we see that there has been something radically
    wrong and vicious in the proceeding ... Finally, on this point,
    Mr Lloyd referred me to a passage at the end of a recent
    judgment of Mr Justice McNair in Henry Bath and Son, Ltd v
    Birgby Products, (1962) l Lloyd's Rep 389, at p.399, where the
    learned Judge said at the end of his judgment: I part with this
    case merely with this observation. I think that great care has
    to be used in reading the decisions of a century or half a
    century ago as to the powers of arbitrators to-day. As it has
    been pointed out on many occasions, by Lord Justice Scrutton and
    Lord Goddard and others, the growth of commercial arbitration in
    the City has been so wide and, as a whole, so beneficial, that
    the Courts show increasing reluctance to interfere with the
    manner in which these trade bodies carry out their important
    functions and only interfere in the very rare case where it has
    been shown that some real impropriety has been committed.
    With those passages in mind, I think Mr Lloyd is right in
    saying that the Courts should be very slow to upset an award
    made by a commercial umpire because he may not have used or has
    not used the precisely correct legal phrase when expressing his
decision." 21. And in Gunter Henck v Andre and Cie, S.A. (1970) 1 Lloyd's Rep. 235, Mocatta J said at p.238:
    "It is well established on the authorities that although the
    Courts are entitled to and, indeed, must set aside awards
    containing errors of law on their face, this jurisdiction is not
    lightly to be exercised. If parties choose to have their
    disputes settled by arbitrators, then, subject to certain
    limited exceptions, the attitude of the Courts has been that the
    parties should take arbitration for better or for worse. They
    have chosen their tribunal. No doubt arbitration has great
    attractions for commercial men and others. One of its major
    attractions indubitably is the lack of publicity in relation to
    proceedings before arbitrators. Sometimes (and I dare say in
    the case of this arbitration) there is a saving in expense, but
    by no means always. Whatever the advantages may be (and there
    are, of course, other additional attractions inasmuch as the
    tribunal in question is usually chosen from gentlemen in the
    trade in question who may be assumed to know very much more
    about its technicalities than any Judge could hope to know), the
    law does take the view I have indicated that, where the parties
    do not ask for awards to be stated in the form of a special case
    for the decision of the Court, the Courts will only interfere in
    certain limited categories of case." 22. I attach importance to the following passage towards the end of the award in the case at bar. The arbitrator said:
    "The principle of accord and satisfaction would appear to
    require a meeting of the minds as stated by the magistrate
    in the Homeguard v Kiwi case, but rejected in the appeal.
    Certainly there was a far greater meeting of the minds in
    that case than in this matter, where there appears to have
been very little if any at all." 23. Having carefully considered the arguments and the authorities, I have reached the conclusion that the arbitrator's decision does not reveal any error of law. The applicant has not brought himself within (i) or (ii) of s.38(5)(b) of the Act. Leave is refused.