Karkoulas v Newmans of Kogarah Pty Ltd

The District Court of New South Wales was asked to determine whether it had the power to refuse a referral of a matter to arbitration after a jury had been requisitioned. The dispute involved an application to refer the matter to arbitration, which the primary judge had refused.

The central legal issue before the Court of Appeal was whether the District Court possessed the discretion to refuse a referral to arbitration when a jury had been requisitioned. This involved considering the interplay between the court's power to order arbitration and the right of a party to have a jury trial.

The Court of Appeal held that the District Court did have the power to refuse a referral to arbitration, even where a jury had been requisitioned. However, it found that the primary judge had erred in exercising that discretion. The Court reasoned that the right to a jury trial was a significant one, but it was not absolute and could be displaced by a court's power to order arbitration in appropriate circumstances. The Court emphasised that the discretion to refuse arbitration should be exercised judicially, considering all relevant factors.

Consequently, the appeal was allowed, and the judgment and orders of the District Court were set aside. The matter was remitted to the District Court to determine the application to refer the matter to arbitration according to law.