Leighton Contractors Pty Ltd v South Australian Superannuation Fund Investment Trust No. SCGRG 94/1380 Judgment No. 4846 Number of Pages 22 Arbitration
[1994] SASC 4846
•11 November 1994
COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA DEBELLE J
CWDS
Arbitration - Arbitrator's Award - builder's application for leave to appeal from the award - criteria to be applied - findings of the arbitrator reasonably open to him upon construction of the building contract - application for leave refused. Commercial Arbitration Act, 1986s38. Pioneer Concrete (SA) Pty Ltd v Jennings Group Ltd (1991) 161 LSJS 332; Pioneer Shipping Ltd v BTP Tioxide Ltd ("The Nema") (1982) AC 724; Promenade Investments Pty Ltd v New South Wales (1991) 26 NSWLR 184, (1991) 26 NSWLR
203; Natoli v Walker (unreported, 26th May 1994) and Commonwealth v Rian Financial Services and Developments Pty Ltd (1992) 36 FCR 101, applied.
HRNG ADELAIDE, 25 October, 2 November 1994 #DATE 11:11:1994
Counsel for plaintiff: Mr R Floreani with Mr M Rice
Solicitors for plaintiff: Floreani Coates and Co
Counsel for defendant: Mr J Wilkinson with Mr R Ross Smith
Solicitors for defendant: Thomsons
ORDER
Application refused.
JUDGE1 DEBELLE J The applicant Leighton Contractors Pty Ltd ("Leighton") applies for leave to appeal from the award of an arbitrator.
2. On 15th May 1987 Leighton entered into a contract with the South Australian Superannuation Fund Investment Trust ("SASFIT") to construct a substantial office building of seventeen floors on land owned by SASFIT in Pirie Street Adelaide. I will call the contract "the Building Contract". The contract sum was $35,794,488.00. The Architect was Woodhead Hall McDonald Shaw Pty Ltd ("the Architect").
3. The building work was completed in April 1989. There is a dispute as to the precise date when Leighton completed work on the site. Leighton asserts it was 7th April 1989. The Architect certified the date to be 13th April 1989. For present purposes the precise date is not material. Leighton also asserted that the date for Practical Completion was in fact 1st December 1989, almost eight months after it had completed work on the site.
4. A number of disputes arose in the course of the building work. On 15th September 1989 Leighton gave notice of those disputes. The disputes were referred to arbitration. Leighton's claim was for the cost of delay, for a bonus payable under the Building Contract, for variations, finance charges, interest and administration costs. The claim for delays was founded on the effect of both variations and alleged breaches in the Building Contract by the Architect. As will be seen, the validity of many of Leighton's claims depended on an interpretation it placed on the Building Contract. SASFIT made a claim for defective work and for liquidated damages.
5. Initially two arbitrators were appointed. On 1st April 1993 the parties agreed that the dispute should be heard by one arbitrator. One of the arbitrators agreed to stand aside and the other, Mr N. Sarah, conducted the arbitration. The hearing commenced on 19th May 1993 and continued for 116 sitting days until 30th March 1994. On 12th August 1994 Mr Sarah published his award. It contains 404 pages. His award was that Leighton pay SASFIT the sum of $438,617.00 plus interest at a rate fixed in the award. The award also required Leighton to pay SASFIT's costs of the arbitration. Thus, Leighton failed to establish its claim.
6. It is common ground that the question whether leave to appeal should be granted is governed by the provisions of s38 of the Commercial ArbitrationAct, 1986 as amended by the Act No. 64 of 1992. Section 38 provides:
"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 92)
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,
and where the award is remitted under paragraph (b) the
arbitrator or umpire shall, unless the order otherwise
directs, make the award within three months after the date
of the order.
(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
subsection (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) The Supreme Court may make any leave which it grants
under subsection (4)(b) subject to the applicant complying
with any conditions it considers appropriate.
(7) Where the award of an arbitrator or umpire is varied on
an appeal under subsection (2), the award as varied shall
have effect (except for the purposes of this section) as if
it were the award of the arbitrator or umpire."
7. Thus, Leighton must obtain leave to appeal and, in order to do so, must satisfy the Court of the requirements of subs(5). Section 40 of the Act is not relevant in this case.
8. The Act discloses a policy that, generally speaking, an arbitral award of this kind is final. As Cox J noted in Pioneer Concrete (SA) Pty Ltd v Jennings Group Ltd (1991) 161 LSJS 332 at 333, the commercial convenience of such a policy is obvious. That policy was evident before the Act was amended in 1992. It was then necessary to obtain leave to appeal and, in order to obtain leave, the applicant had to demonstrate that an error of law existed. However, courts in Australia took a more liberal view of the pre-1992 provisions as to leave than did courts in England. The approach in the English courts was epitomised in the speech of Lord Diplock in Pioneer Shipping Ltd v BTP Tioxide Ltd ("The Nema") (1982) AC 724. The Australian approach was epitomised in Qantas Airways Ltd v Joseland and Gilling (1986) 6 NSWLR 327.
9. The 1992 amendment was made as part of a scheme to achieve uniformity in arbitration in Australia. It was an acknowledged objective of the legislation to restrict the supervision and review by the courts of arbitral procedures and awards: Promenade Investments Pty Ltd v New South Wales (1991) 26 NSWLR
184, at 187. The amendment had the effect of requiring courts to take a different approach to applications for leave to appeal from the approach that had obtained before the amendment. The history of the court's control of arbitral awards and the background to the amendments made as part of the uniform scheme in the early 1990's is set out in the reasons for judgment of Sheller JA, delivering the judgment of the Court of Appeal in New South Wales in Promenade Investments Pty Ltd v State of New South Wales (1991) 26 NSWLR
203, at 216-223, a decision which approved the reasoning of Rogers CJ at first instance in 26 NSWLR 184. Those reasons have since been followed and applied by a differently constituted Court of Appeal in New South Wales in Natoli v Walker (unreported, 26th May 1994), where the background of the amendments made to s38 is summarised again by Kirby P., and by the Supreme Court of the Australian Capital Territory in Commonwealth v Rian Financial Services and Developments Pty Ltd (1992) 36 FCR 101. I respectfully agree with and adopt the reasons of Sheller JA.
10. In Pioneer Concrete Bank of SA Pty Ltd v Jennings Group Ltd (1991) 161 LSJS 332, Cox J had to deal with s38 before it was amended. I think the amendments to s38 require a stricter approach to the question of leave than he outlined in that decision. I add that it is common ground that I should follow and apply Promenade Investments in interpreting the meaning and effect of s38(5).
11. The legislative intent of s38 as amended was stated in Promenade Investments at 222-223 to be:
1. That Parliament intended to reject the broad
discretionary approach outlined in Qantas Airways Ltd v
Joseland and Gilling (supra).
2. That it is a corollary of that Parliamentary intention
that the courts should apply a more restrictive criterion
for the granting of leave to appeal than had hitherto
applied, the view being that the parties should be left to
accept the decision of the arbitrator who they have chosen
to decide the matter in the first place. The arbitration
should not be a dry run for later litigation.
3. That the requirements of a manifest error of law on the
face of the award or strong evidence that the arbitrator
made an error of law and that the determination of the
question may add substantially to the certainty of
commercial law suggests that the draftsmen were seeking to
constrain the exercise of court control over arbitral awards
in the manner described by the House of Lords in The Nema.
4. As Kirby P noted in Natoli v Walker, judges must be
faithful to the intention expressed in s38(5) and the
interventions of this Court must be strictly limited.
12. The regime as established by the amended s38 and as it applies to this application, may be stated in these terms (the propositions in paras 5 to 8 are in part taken from the decision in Promenade Investments at 225-227):
1. There is no appeal from an arbitrator on a question of
fact.
2. While s38 provides that an appeal shall lie from the
award of an arbitrator on a question of law, leave must
nevertheless be obtained unless both parties consent to the
appeal.
3. Leave will only be granted in the circumstances
prescribed in s38(5).
4. The applicant for leave must satisfy both paragraphs (a)
and (b) of s38(5). The fact that paragraph (a) is included
serves to emphasise that the Court will not hear appeals,
even on a question of law, unless they are of substantial
importance to the parties. Thus, a party might be able to
point to an obvious flaw in the reasoning of the arbitrator
but that flaw might not affect the ultimate conclusion.
Section 38(5)(a) requires the applicant to satisfy the Court
that the rights of the parties could be substantially
affected by the error. If it appears that the flaw could
not substantially affect the ultimate conclusion, leave
should not be granted.
5. The epithet "manifest" in the expression "manifest error
of law" is used to indicate an error which is evident or
obvious rather than one which is arguable. While a judge is
entitled to the benefit of adversarial argument in
determining whether a manifest error of law exists,
nevertheless, "manifest" denotes an error of law which is
more than arguable. As Sheller JA noted in Promenade
Investments (at 226): "There should ... be powerful reasons
for considering on a preliminary basis, without any
prolonged adversarial argument, that there is on the face of
the award an error of law." The applicant should, I think,
be able to point to an obvious, if not compelling error: cf
Lord Diplock in The Antaios (1985) AC 191 at 206. The
question is not whether the point is fit for argument but
whether an obvious error of law exists.
6. If the court determines that there is no manifest error
of law, an application based on this ground fails.
7. If the court is satisfied that a manifest error of law
exists, a question arises whether the court should, in the
exercise of its discretion, grant leave. In this context,
it is appropriate to admit evidence showing that a matter
not mentioned in the arbitrator's reasons was conceded on
the hearing of the arbitration: see the reasons of Brownie
J in Graham Evans and Co Pty Ltd v SPF Formwork Pty Ltd
(unreported, Brownie J, 9 April 1991) adopted by Sheller JA
at 226.
8. Assuming that there is not a manifest error of law on the
face of the award, it may be argued that there is strong
evidence that the arbitrator 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.
This requirement indicates that the question should be one
of wider and greater importance than, for example, the
construction of a one-off clause in the context of the
particular agreement between the parties. In this respect
the limitation which Lord Diplock had in mind in The Nema
can be discerned. The expression "commercial law" should
not be narrowly construed. The expression "strong evidence
that the arbitrator ..... made an error of law" suggests,
first, what might otherwise be called on a leave application
a strong prima facie case and, second, an error of law not
manifest on the face of the award and demonstrable by
evidence.
13. I add that, in the case of an interpretation of a contract, if the interpretation adopted by the arbitrator is reasonably open, the applicant will generally speaking have failed: cf The Nema (supra) at 744.
14. In Pioneer Concrete (SA) Pty Ltd v Jennings Group Ltd (supra) at 335, Cox J made some observations as to the function of the chamber judge hearing an application for leave to appeal:
"I should say a word, I think about the function of the
chamber judge to whom an application for leave must be made.
It will be his task to scrutinize the application, having in
mind the principles to which I have referred, but in the end
his is a screening function and it is not his
responsibility, as I see it, to anticipate the Court's final
decision on any question of law upon which he might give
leave. There is something of a dilemma here for the single
judge. He has to make a qualitative judgement about the
applicant's proposed grounds of appeal, to some degree at
least, and yet it is not his job to go into the matter in
depth and to treat the leave application as a dress
rehearsal for an actual appeal. There is confirmation for
that distinction, I think, in the circumstance that
applications for leave of this sort are usually heard ex
parte. They are also heard, as a general rule, on a short
appointment in the normal Friday chamber list. So there is
neither the opportunity nor the occasion for a thorough
consideration of the proposed grounds of appeal in this kind
of application, with the benefit of argument from both
sides."
15. I respectfully agree with His Honour's views. In this context it is relevant to note also that, generally speaking, a judge ought not normally to give reasons for a grant or refusal of leave to appeal from an arbitral award. He should follow the practice which is generally adopted in the case of application for leave to appeal. To do no more than say that the application is allowed or refused as the case may be: see The Antaios (1985) 1 AC 190 at 205-206 where Lord Diplock advances the reasons for this approach.
16. The hearing of this application has been an exception. There are at least two reasons. First, SASFIT as respondent learned of the application by Leighton. As with any application for leave to appeal, it is entitled to apply to be heard although it might be at risk as to costs if it attends without a prior direction from the Court: re Woolies Liquor Stores Pty Ltd
(1990) 155 LSJS 497. SASFIT sought and was granted leave to be heard. The claim by Leighton was substantial. The award was lengthy. It was therefore an appropriate occasion on which to hear the respondent to the application. Secondly, it was appropriate to consider how the leave provisions should be applied in the light of the amendments made to s38(5).
17. The most substantial issue between the parties concerns Leighton's Delay Analysis and its claim for extensions of time because of delay. Shortly stated, Leighton's position was that the parties had agreed upon what the Building Contract called a "Contract Programme" and that, in order to be entitled to extensions for delays and an agreed bonus for early completion, Leighton had to do no more than show that delays had affected the Contract Programme. Relying in particular on Clauses 15.08 and 15.09.06(a), Leighton asserted that the only means by which to measure the effect of activities on the critical path established by the Contract Programme is to undertake a critical path analysis by the computer programme established pursuant to Clause 15.08. It says that this contract differs from the Standard Form JCC Contract and provides a different regime for computing delays. Leighton claims that its entitlement to extensions of time arises not from what is actually happening on the site but from what the computer program calculates. For its part, SASFIT says that Leighton is entitled to extensions only if it could demonstrate actual delays in the construction of the building work and has made claims for those delays in accordance with the procedure in the Building Contract. SASFIT says that Leighton's claim is for theoretical delays, unrelated to what actually occurred on site and with the capacity to produce unconscionable claims, evidenced, it says, by Leighton's claim that the date for Practical Completion was extended to 1 December 1989, some seven months or more after Leighton completed work on the site. Central to the resolution of this dispute was the proper interpretation of the Building Contract. In his reasons, the arbitrator called the Contract Programme "the Approved Programme". I shall refer to it as "the Contract Programme".
18. The Building Contract is the Standard Form JCC Contract which had been amended by what is Clause 15, a substantial part of the Building Contract containing 24 sub-clauses and constituting 50 pages of the 119 pages of the Contract.
19. I set out the clauses of the Building Contract relevant to the claim for delays. Clause 1.06.10 fixes the date for Practical Completion. It provides:
"The Date for Practical Completion - The date on or before
which the Builder is to bring the Works to Practical
Completion, namely 6th day of February 1989 subject to
adjustment as provided for in Section 9."
20. Clause 6 provides for the scope of the work and other matters including variation. Clause 6.05 requires Leighton to comply with all relevant statutes and statutory instruments. It provides:
"The Builder shall comply with the requirements of the
provisions of all Acts of Parliaments, ordinances,
regulations or by-laws of all competent Authorities and with
the lawful requirements of public, municipal and other
authorities which have jurisdiction over the Site or the
Works and which arise by reason of the execution of the
Works, including all Variations, subject to the following
...
6.05.03 Should compliance with any such requirement
necessitate a Variation then the Builder shall promptly and
before proceeding with the Variation give written notice to
the Architect setting out the circumstances, including any
time requirement for compliance, and requesting his
instructions. The Architect shall, as soon as practicable
after receiving the Builder's written notice, give to the
Builder such proper instructions as he thinks fit. Should
such instructions be not given as soon as practicable after
receipt by the Architect of the Builder's written notice
then provided the Builder gives a further notice in writing
to the Architect of his intention to proceed with the Works
so as to comply with such requirement as necessitates a
Variation then the Builder may after the expiry of ten (10)
days from the date of receipt by the Architect of the
Builder's further written notice proceed with the execution
of the Works so as to comply with that requirement."
21. Clause 6.10 requires Leighton to comply with variations issued by the Architect subject to the terms and conditions stated therein. Clause 6.10 is in these terms:
"The Architect may instruct Variations and the Builder shall
carry out the same subject to the following:
6.10.01 Unless otherwise agreed all Variations shall be
within the general scope of this Agreement so as to be of a
character and extent contemplated by and capable of being
executed under the applicable conditions of this Agreement.
6.10.02 The Contract Sum shall be subject to any appropriate
adjustment under Clause 10.16 and the Date for Practical
Completion shall take into account any extra time or
reduction of time under Clauses 9.07 and 9.08 respectively.
6.10.03 All such Variations shall be authorised in writing
by the Architect and certified by the Proprietor before the
variation work is commenced. The provisions of Clause 5.04
shall be read and construed subject to the provisions of
this paragraph."
22. Clause 9 is an important provision. Among other things, it provides for claims for delay. It must be noted that it is to be read and interpreted as being subject to Clause 15.09. The relevant provisions in Clause 9 are:
"9.01 If progress of the Works is delayed by reason of any
event specified in Clause 15.09 but not otherwise the
Builder shall, if he desires to claim an extension of time
for Practical Completion of the Works, not later than ten
(10) working days after the cause of delay arose give a
notice in writing to the Architect stating the nature, the
cause and, where possible, the extent of delay.
9.02 Not later than ten (10) working days after the Builder
gives notice to the Architect pursuant to Clause 9.01 the
Builder shall give a further notice in writing to the
Architect stating a fair and reasonable time by which in his
opinion the time for Practical Completion of the Works
should be extended.
9.03 Subject to the Builder having complied with the
provisions of Clauses 9.01 and 9.02 the Architect shall as
soon as practicable after receiving the Builder's notice
pursuant to Clause 9.02 determine what, if any, extension of
time for Practical Completion of the Works shall be granted
to the Builder and shall thereupon notify in writing the
Builder accordingly.
9.04 If the Architect does not notify the Builder in terms
of Clause 9.03 the time for Practical Completion of the
Works shall be deemed to be extended by the time stated in
the Builder's notice given under Clause 9.02.
9.05 Notwithstanding that the Builder has not given either
of or both notices pursuant to Clauses 9.01 and 9.02 the
Architect may at any time by notice in writing addressed to
the Builder extend the time for Practical Completion of the
Works if in his opinion the Builder would otherwise be
entitled to such an extension.
9.06 Notwithstanding the preceding provisions of this
Section 9 the Builder shall not be entitled to any extension
of time unless he shall have taken proper and reasonable
steps both to preclude the occurrence of the cause of delay
and or to avoid or minimise the consequences thereof.
9.07 If the execution of a Variation is likely to cause a
delay in the Works reaching Practical Completion the Builder
shall notify the Architect in writing prior to commencing
the execution of that Variation or as soon as the likelihood
of delay becomes or should reasonably have become evident to
the Builder of the extent or likely extent of that delay and
then:
9.07.01 If an extension of time is agreed either when the
Variation is instructed or subsequently the time for
Practical Completion of the Works shall be deemed extended
by the agreed extension of time.
9.07.02 Failing such agreement the Builder shall be allowed
an extension of time determined in the same way as an
extension of time is determined under Clauses 9.03 or 9.04
as if the Builder's notice under Clause 9.07 were the
Builder's notice referred to in Clause 9.02 and the
provisions of Clause 9.01 had been complied with by the
Builder."
23. Clause 15.08 is another important provision. It is central to Leighton's argument. It is unnecessary to recite all of Clause 15.08. The relevant provisions are:
"Programming and Time
15.08.01 Contract Programme
The Proprietor and the Builder hereby expressly acknowledge
and agree that:-
(a) Within one month of taking possession of the site, the
Builder shall submit for the Architect's acceptance a
Programme in the form of a critical path time scale network
which shall detail the activities comprising the works and
clearly indicate their interrelationships. Upon acceptance
by the Architect, the programme shall become the Contract
Programme. The responsibility for the programme content
shall always remain with the Builder;
(b) The Contract Programme shall meet the following
criteria:-"
(The Clause then sets out the criteria which the Contact
Programme must meet.)
"15.08.02 Analysis
The network data shall be computer analysed. The following
analysis information is required:-
A time analysis schedule indicating activity proceeding and
succeeding event numbers, activity description and duration,
early and late start and finish dates and total float for
each activity."
24. Clause 15.08.07 requires Leighton to construct the works in accordance with the Contract Programme unless otherwise agreed. Clause 15.08.03 provides for revision of the Contract Programme when the Architect considers that the Programme is not practically achievable. Clause 15.08.04 provides for a Supplementary Programme should Leighton fail to comply with the Contract Programme. Clause 15.08.09 provides for monthly meetings to review the Contract Programme and to update it. What is noticeable about the provisions for revision of the Programme, the Supplementary Programme, updating of the Programme, and indeed in the whole of Clause 15.08 is the absence of any provision concerning claims for delays and the entitlement of Leighton to extensions of time for delays. They are to be found in Clause 15.09.
25. As already noted Clause 15.09.01 provides that Clause 9 is subject to Clause 15.09. It provides:
"15.09.01 Interpretation
The provisions of Section 9 of the General Conditions shall
be read construed and interpreted as being subject in all
respects to the provisions of this sub-section 15.09."
26. Clause 15.09 contains provisions enabling Leighton to give notice of delays and seek extensions of time. It is unnecessary to recite all of the provisions in Clause 15.09. However, it is necessary to note Clause 15.09.02 which provides:
"15.09.02 Extensions
For the purposes of sub-section 9.01 of Section 9 the
Builder may only give a notice pursuant to that sub-section
and seek an extension of time pursuant to Section 9 if the
progress of the Works is delayed by reason of either:-
(a) An industrial dispute strike or lock-out which also
occurs at a state and/or national level (but not a dispute
occurring only in respect of the Site or other building
sites or works elsewhere upon which the Builder is engaged);
or
(b) Subject to paragraph (e) hereof a Variation authorized
or requested by the Architect in accordance with
Clause 6.10.03 other than pursuant to Clause 15.06.02 (c);
or
(c) Subject to paragraph (f) hereof the failure or neglect
of the Architect to issue instructions to the Builder within
fourteen (14) days of being requested so to do by the
Builder in writing where the absence of such instructions
delays the progress of the Works; or
(d) Fire (other than arising from the wilful or negligent
act or omission of the Builder or any person claiming
through the Builder), storm, tempest, earthquake or act of
god or force majeure;
(e) A Variation authorized by the Architect pursuant to
Clause 6.05 other than that referred to in Clause 6.05.06;
(f) The failure of the Architect:-
(i) To issue a response of the type mentioned in
Clause 15.11.03 hereof to a notice issued by the Builder
in accordance with Clause 15.11.02 hereof; or
(ii) to issue an instruction concerning a matter which
would but for the provisions of the exception to Clause
1.06.11 constitute a variation; within such period of
being requested so to do as is determined in the manner
herein set out where the absence of such a response delays
the progress of the Works and for which purpose it is
agreed:-
(iii) the Builder may nominate in a notice given by the
Builder under Clause 15.11.02 or in a written request for
an instruction of the type mentioned in placitum (ii)
hereof, as the case may be, a period of less than fourteen
(14) days within which, in the opinion of the builder, a
response to the same should be provided having regard to
the likely effects of a failure to issue the same
expeditiously; and
(iv) the Architect shall forthwith assess the request made
under paragraph (iii) hereof having regard to the relevant
circumstances, including the cause of the urgency and the
conduct of the Builder in relation thereto and either
accept or adjust the time in which such a response is to
be made or determine that it shall be provided within
fourteen (14) days thereof."
27. Clause 15.09.04 provides for Time and Notices:
"15.09.04 Time and Notices
(a) Time shall be of the essence as regards the service by
the Builder of all notices required to be given by the
Builder pursuant to Section 9 of the General Conditions and
this sub-section 15.09;
(b) The service by the Builder upon the Proprietor and/or
the Architect of any notice or notices required to be given
by the Builder pursuant to Section 9 of the General
Conditions and this sub-section 15.09 within the respective
times thereby appointed shall be conditions precedent to the
substantiation and pursuit by the Builder of any claim for
an extension of time in respect of the relevant event or
delay which is required to be the subject of such notice or
notices.
28. Clause 15.09.06 provides for claims for an extension of time because of variations:
"15.09.06 Variations
(a) The Builder shall not be entitled to any extension of
time under paragraph 9.07.02 of the General Conditions
unless the Variation directly affects one or more activities
which can be shown to be critical to the maintenance of
progress in the execution of the works so as to achieve
Practical Completion of the Works by the relevant date for
same as adjusted from time to time.
(b) Upon the issue by the Architect of instructions to the
Builder to undertake a Variation in accordance with Clause
6.10.03 hereof or a Claimed Variation in accordance with
sub-clause 15.11.03 (a)(ii) hereof the Architect shall
notify the Builder whether the Architect proposes to allow
to the builder an extension of time and if practicable and
ascertainable the extension of time which the Architect
proposes to grant (if applicable);
(c) If the Builder shall not within seven (7) days of
receipt of a notice pursuant to paragraph (b) notify the
Architect in writing that the Builder disputes the refusal
of an extension of time by the Architect or the extent if
any of the extension of time proposed to be granted by the
Architect in respect of the relevant Variation or Claimed
Variation the Builder shall be deemed to have accepted the
same and shall thereafter be estopped from making any claim
for any extension of time in respect of that Variation or
Claimed Variation in excess of that proposed by the
Architect in the aforesaid Notice from the Architect;
(d) Time shall be of the essence as regards the giving of
any notice required to be given by the Builder pursuant to
paragraph (c) hereof;
(e) The giving of a notice required pursuant to paragraph
(c) hereof shall be a condition precedent to the enforcement
by the Builder of its rights or claimed rights pursuant to
Section 9 and/or Section 13 of the General Conditions;
(f) The provisions of Section 6Section 9 and Section 13 of
the General Conditions shall be read and construed as being
subject in all respects to the provisions of this Clause
15.09.06 and the duties and obligations of the Builder
hereunder shall be separate and distinct from its
obligations pursuant to those provisions of the General
Conditions.
29. Clause 15.11 provides for the procedure to be adopted in relation to claims for variations:
"15.11 Variations
15.11.01 Failure of Builder to Notify or Await Architect's
Response
In the event that the Builder shall commence to carry out
any Works otherwise than in accordance with the Contract
Documents as varied in accordance with this contract without
giving a notice in writing to the Architect in accordance
with sub-clause 15.11.02 hereof or, having given a notice as
aforesaid, without having first received response in
accordance with paragraphs (i) and (ii) of sub-clause (a) of
Clause 15.11.03 hereof then the Builder shall be precluded
from claiming at any time thereafter that the Works so
commenced included or constituted a Variation.
15.11.02 Builder to Notify Potential Variations
The Builder shall within fourteen (14) days of the Builder
becoming aware of any act matter or thing, including but
without limiting the generality of the foregoing any
instruction by the Architect, which constitutes in the
opinion of the Builder a Variation (hereinafter in this
clause called 'the claimed Variation') give notice in
writing to the Architect specifying in reasonable detail:-
(a) those acts matters or things which constitute the
Claimed Variation; and
(b) any consequential changes which in the Builder's
reasonable opinion should be made to the Contract Programme;
and
(c) the period of delay or gain in time (if any) arising
form such Claimed Variation as estimated by the Builder the
change to the Date for Practical Completion of the whole of
the Works and the extensions of time to which the Builder
may be entitled; and
(d) the order of magnitude of cost of the Claimed Variation;
AND the Builder shall request the Architect's instructions
in respect thereof.
15.11.03 Architect's Instructions concerning the Builder's
Notice
(a) The Architect shall as soon as is practicable but in any
event within fourteen (14) days or such lesser period as may
be determined in accordance with paragraph (f) of Clause
15.09.02 hereof respond to the Builder's Notice given under
sub-clause 15.11.02 hereof in writing:-
(i) accepting the Builder's claim and issuing an
appropriate authorisation by the Architect and certificate
by the Proprietor in accordance with Clause 6.10.03
hereof; or
(ii) not accepting the Builder's claim and issuing an
authorisation by the Architect and a certificate by the
Proprietor requiring the Builder to give effect to the
Claimed Variation without prejudice to the Builder's
entitlement to arbitrate the dispute and the Builder shall
forthwith thereafter give effect to that authorisation and
certification; or
(iii) issuing an instruction not to do the act matter or
thing which is the Claimed Variation.
(b) The provisions of Section 6Section 9 and Section 13 of
the General Conditions shall be read and construed as being
subject in all respects to the provisions of this paragraph
15.11.02 and the duties and obligations of the builder
hereunder shall be construed accordingly;
(c) For avoidance of doubt the Builder is not expected to
make any change to the program or order and method of work
until such time as an appropriate Proprietors' certificate
if any is received by the Builder.
15.11.04 Effect of Issue of Proprietor's Certificate
The issue of a certificate by the Proprietor to effect a
Variation in accordance with Clause 6.10.03 shall constitute
a waiver of the obligation of the Builder to give a notice
in respect of that Variation in accordance with Clause
15.11.02 hereof.
30. The arbitrator reviewed all of these provisions and concluded:
"All of these words were agreed by the parties and their
effect is quite clear: actual events causing actual delays
to the progress of the Works, and to the completion of the
Works, are the only delays which the Builder can claim."
31. He enlarged upon his reasons in the following pages in the award. He was very critical of the grounds on which the Delay Analysis was put forward. I will not repeat his reasons. It is sufficient to note that he concluded that the relevant provisions of the Building Contract do not support Leighton's claim.
32. The first ground on which Leighton seeks leave to appeal is that the arbitrator has made a manifest error of law in failing properly to construe Clause 15.08 and in concluding that Leighton's claim fails because the Building Contract is not to be construed in the manner in which Leighton contends. In my view, the arbitrator referred to all the relevant clauses and in particular Clause 15.08. A proper reading of his award discloses that he was particularly alive to the effect of Clause 15.08. I have examined all of the relevant provisions of the Building Contract. On an application for leave to appeal, it is not as a general rule appropriate to provide detailed reasons for granting or refusing leave. It is sufficient to note in this case that the construction which the arbitrator placed on them was a reasonable one and was fairly open to him. There is much which points to the validity of his conclusion. In addition, the arbitrator examined all the implications of the interpretation which Leighton sought to put on the Building Contract and concluded they militated against that interpretation. His examination of them discloses no obvious error of law. It follows that Leighton has failed to demonstrate that the arbitrator has made a manifest error in determining the meaning of these provisions of the Building Contract.
33. In support of this ground, Leighton was critical of several aspects of the arbitrator's reasoning. I shall not refer to them all. None of them demonstrated that the arbitrator had made a manifest error of law. Leighton contended, inter alia, that the arbitrator had looked only at the provisions of the Standard Form JCC Contract, had ignored Clause 15.08, and had selectively referred to Clauses 9.01 to 9.07 and how they were affected by Clause 15.09. This criticism is not justified. Try as I might, I find no substance in it. The arbitrator's reasons show that he referred to all relevant provisions and was particularly alive to the fact that Clause 9 was subject to Clause 15.09. Leighton also was critical of the arbitrator's use of the expression "actual events causing actual delays" in the passage just quoted and elsewhere in his reasons, pointing out, quite correctly, that the expression does not appear in the contract. The expression is being used, in my view, as a convenient means of distinguishing Leighton's argument from that of SASFIT as to the effect of the Building Contract in relation to claims for extensions for delays. In no respect does the arbitrator's use of that expression betray a misunderstanding of the Building Contract. This and other criticisms are not sustained. In any event, even if Leighton could make good any of its criticisms, it must nevertheless demonstrate that the arbitrator's conclusion as to the meaning of the Building Contract was manifestly wrong. This it has failed to do.
34. Leighton also criticised another aspect of the arbitrator's reasoning. Having examined the relevant clauses in the Building Contract and determined their meaning, the arbitrator then went on to consider the actual intentions of the parties. He did so, having reminded himself of submissions to the effect that he should not. He said:
"Having found the proper construction of the Agreement
concerning delay matter, I understand from the submissions
which were made to me in relation to the rules for the
construction of contracts that I do not have to refer to the
actual intentions of the parties, or the 'factual matrix'
leading to the execution of the agreement. It is only for
the sake of completeness, and not for any assistance in
finding the true meaning of the Agreement, that I now refer
to the actual intentions of the parties."
35. The arbitrator then concluded that his interpretation was supported by the intentions of the parties and the factual matrix. The arbitrator ought to have heeded the submissions made to him. As I understand the submissions made on this application, this was not a case where it was appropriate to examine the negotiations and factual matrix leading to the Building Contract. The fact that the arbitrator has examined this matter, is not, however, fatal to the award. It does not establish any manifest error in his construction of the Building Contract and it is that which Leighton must demonstrate if it is to succeed on this application.
36. The second ground on which Leighton seeks leave to appeal is that the arbitrator erred in law in failing properly to construe the provisions of the Building Contract relating to the time within which notices were to be given with respect to claims for extensions of time. In particular, Leighton alleges the arbitrator made a manifest error in law in failing properly to construe Clauses 9.01, 9.02 and 9.07 of the Standard Form of Contract and Clauses 15.09.02 and 15.09.06(a) of the Special Conditions.
37. It was Leighton's contention at the hearing before the arbitrator that there were two regimes for giving notice for claims for delay, the first in Clauses 9.01 and 9.02 and the second in Clause 9.07; that the two regimes were inconsistent; and that, given the inconsistency, there was an ambiguity which had the consequence that the time within which to make claims was at large and Leighton had only to claim within a reasonable time. Leighton submitted that it had to give notice of delay when the likelihood of delay became apparent and was critical to the Contract Programme: see Clause 15.09.06. Leighton's case was that it could pursue claims for delay many months after the delay event and even after Leighton had quit the site. In the result, said Leighton, SASFIT could not rely on the provisions as to the time for notice of claims for extensions. Leighton also relied heavily on Clauses 6.10, 9.07, 10.16 and 15.09.06(a).
38. The arbitrator reviewed all of the relevant provisions of the Building Contract. I have also reviewed them. Again, it is not appropriate on an application for leave to deal with each of the arguments advanced by Leighton. In my view, the arbitrator's construction of the relevant provisions in the Building Contract was reasonably open and, again, there is much which points to the validity of his conclusion. It follows, therefore, that there is no manifest error of law and the application on this ground fails. Even if, as counsel for Leighton contends, there are difficulties in interpreting the Building Contract because matters have been overlooked in the marrying of the Standard Form JCC Contract with Clause 15, it does not follow that leave to appeal should be granted. Instead, it points up the difficulty which Leighton faces, namely, that there might be room for more than one interpretation of the Contract so that Leighton falls short of establishing manifest error.
39. The third ground of appeal is that the arbitrator erred in law in failing properly to construe the provisions of the Building Contract as they related to Leighton's entitlement to a bonus under the provisions of Clause 15.23. Clause 15.23 provides:
"15.23 Bonus
If the Builder shall bring the whole of the Works to
Practical Completion prior to the Date for Practical
Completion as extended in respect only of extensions of time
granted in respect of a Variation of the type referred to in
Clause 15.09.02(b) hereof then in respect of every Contract
Working Day prior to the Date for Practical Completion as
adjusted in the manner referred to in this paragraph during
which the Works have been so brought to Practical Completion
the Builder shall receive the sum of NINE THOUSAND ONE
HUNDRED DOLLARS ($9,100.00)."
40. This ground of appeal is closely aligned with, if not inextricably bound to, Leighton's Delay Analysis and the interpretation Leighton seeks to put on the Building Contract in order to support the Delay Analysis, that is to say, it stands or falls with the first and second grounds of appeal. Leighton's contention, based on its Delay Analysis, was that the date for Practical Completion was 1st December 1989 so that, having completed work on the site on 7th April 1989, it was entitled to a bonus of $9,100.00 per day for the period from 7th April to 1st December 1989. The arbitrator rejected the claim on the ground that Leighton's Delay Analysis was unsupported by the Building Contract. As counsel for Leighton properly conceded, this ground of the application must fail if the first and second grounds have failed. There is no manifest error of law in the arbitrator's construction of the Building Contract and in particular Clause 15.23.
41. Counsel for Leighton sought to sustain this ground of the application by other means. He referred to the following passage in the award at (p63):
"Thirdly, the Delay Analysis seeks recovery by the
Predetermined Allowance for a period of time that Leighton
was not on the site undertaking the Works, namely the period
April 13th 1989 to December 1st 1989. The parties would
agree that the Predetermined Allowances measure costs
associated with the continuing presence on the site."
42. He submitted that the passage shows that the arbitrator had ignored or wholly misunderstood Clause 15.23 which anticipates that, if the Builder finished earlier than the date for Practical Completion as extended in respect of every working day prior to the date of Practical Completion as extended, Leighton is entitled to a bonus. This submission is based on a misreading of the arbitrator's reasons and must fail. The passage quoted appears in a series of criticisms of Leighton's Delay Analysis in a section of the award which follows the rejection of the claim based on Clause 15.23. It was not advanced by the arbitrator as a reason for refusing the claim for bonuses made under Clause 15.23. Further, as I read the whole of his reasons, the arbitrator was aware that the proper construction of Clause 15.23 provided an entitlement to the bonus if the Builder finished earlier than the date of Practical Completion as extended by claims for extension properly made in accordance with the Building Contract. Indeed, that was the thrust of the case for SASFIT. Leighton did not demonstrate any manifest error of law. The application based on the third ground of appeal must fail.
43. The fourth, fifth and sixth grounds of appeal each raise different issues but what is common to them all is that they are claims which are founded on the validity of Leighton's Delay Analysis and Leighton's interpretation of the Contract. It is unnecessary to go into the detail of each ground. Leighton has failed to demonstrate any manifest error in relation to the arbitrator's interpretation of the Building Contract and his rejection of Leighton's Delay Analysis. The premise on which grounds four, five and six are founded falls and each ground therefore fails.
44. Counsel for Leighton had a further submission in relation to Grounds 4, 5 and 6. He contended that the arbitrator had made findings of fact based on grounds which had neither been tested in cross-examination nor had been raised by the arbitrator as grounds for challenging the claims by Leighton. In a case such as this, an arbitrator must, of course, reach his conclusion by reference to evidence adduced before him: Sabemo (SA) Pty Ltd v AIW Engineering Pty Ltd (24 September 1992, unreported, Mullighan J, Judgment No S3630) and the cases there cited. He must also act in accordance with the rules of natural justice. There was a conflict as to the extent to which there had been cross-examination on the matters the subject of these grounds of appeal. It seems that SASFIT had questioned at some length the premises on which Leighton advanced its thesis, though it did not descend to detailed cross-examination of each part of the claim. I am not satisfied that the arbitrator has been guilty of misconduct as Leighton alleges. Certainly, I am in no way persuaded that he has acted in a way which so colours his reasoning that, even though Leighton is unable to appoint to a manifest error of law, I should give it leave to appeal.
45. The seventh ground of appeal is that the arbitrator erred in law in failing properly to construe the terms of the Building Contract as they relate to alternative claims made by Leighton under paragraph 14 of its Points of Claim. The claims in paragraph 14 were founded on Clause 10.09 which provides an entitlement to Leighton as the Builder to recover from SASFIT damages incurred by it as a result of delay in the progress of the works for reasons beyond Leighton's control and which were caused by an act or default on the part of SASFIT and its Architect other than a variation. Clause 10.10 is also relevant. Clauses 10.09 and 10.10 provide:
"10.09 Subject to compliance with all of the provisions of
Clause 10.12 the Builder shall be entitled to recover from
the Proprietor damages sustained and incurred by him as a
result of delay in the progress of the Works by any cause or
causes beyond the control of the Builder being an act (other
than any instruction by the Architect as to a Variation)
default or omission on the part of the Proprietor, the
Architect, any Separate Contractor, employee or agent of the
Proprietor or as a result of any suspension by the Builder
under the provisions of Clause 12.06.
10.10 Subject to compliance with all of the provisions of
Clause 10.12 the Builder shall be entitled to reimbursement
of any costs and expenses incurred by him as a result of
delay in the progress of the Works by any cause or causes
beyond the control of the Builder being one or more of the
causes of delay detailed in Item L of the Appendix hereto to
the extent (if any) stated in Item L of the Appendix
opposite to each such cause of delay."
46. However, Clause 10.12 provides that the entitlement of Leighton to recover damages is subject to compliance with the conditions therein specified, conditions which, on one reading, include the requirement that an extension of time has been made or should properly have been allowed. Clause 10.12 provides:
"10.12 The entitlement of the Builder to recovery of damages
or reimbursement of any costs and expenses incurred by him
as a result of delay in the progress of the Works shall be
subject to compliance with all of the following conditions:
10.12.01 An extension of time has been made or should
properly have been allowed pursuant to Clause 9.03;
10.12.02 the Builder has taken all practicable steps to keep
any such damages, costs and expenses to a minimum;
10.12.03 any such damages, costs and expenses have not been
and should not be included in the value of any Variation;
10.12.04 the Builder has given to the Architect details in
writing of the nature of the claim under either
Clauses 10.09 or 10.10 as soon as practicable after
commencement of the delay giving rise to the claim and at a
time when those details are capable of being adequately
checked by the Architect, such details being given
progressively where necessary; and
10.12.05 the Builder has within a reasonable time of an
extension being allowed under Clause 9.03 or deemed allowed
under Clause 9.04 given to the Architect written details
substantiating any such damages, costs and expenses and the
actual or closely estimated amounts therefor."
47. It will be noticed that Clause 10.12.04 requires the Builder to give the Architect notice of the claim as soon as reasonably practicable after the commencement of the delay. Clause 15.10 must also be read with the relevant provisions in Clause 10. It provides the measure of damages for claims properly made pursuant to Clause 10.09.
48. While it may be possible to show that the arbitrator's approach might be flawed in that he has failed to refer to all relevant provisions including Clauses 10.09 and 10.10, I do not think he has erred in his ultimate conclusion. In other words, the rights of Leighton could not, I think, be substantially affected by what is an inconsequential error in the arbitrator's approach. The arbitrator determined that, unless any breach of agreement by SASFIT gave rise to a claim for extension of time under one of the specified causes referred to in Clause 15.09.02, Leighton could not pursue its claim for extension of time for delay as claimed in paragraph 14. The arbitrator's construction of the provisions of the Building Contract was reasonably open to him particularly in the light of the terms of Clause 10.12 of the Building Contract, which is expressly stated to be a condition precedent to a claim under Clause 10.09. The invocation of Clauses 9.03 and 9.04 could, on one view, attract the operation of Clause 15.09.02. The obvious policy consideration in requiring the builder to give notice of claims under Clause 10.09 is to prevent the builder accumulating a log of claims until the end of the building work and then presenting it to the owner. The scheme and purpose of the Building Contract is that the builder and owner should keep each other continually informed of matters which might affect the progress of the building work or might lead to a claim for delay which could result in an extension of time or an additional cost to the owner. In this way the builder and the owner can take appropriate action at an early stage. In short, the arbitrator might have expressed his reasons a little better but he arrived at a result which is fairly open on the Building Contract. In other words, Leighton has not demonstrated manifest error of law in his interpretation of those provisions and I am unable to detect any.
49. The eighth ground of appeal relates to findings by the arbitrator that Leighton had failed to prove its entitlement to claims or variations, extensions of time, and costs as set out in pages 151-318 of the award. This ground of appeal is founded on the assertion that the arbitrator failed correctly to interpret Clause 6.09 of the Building Contract which provides the procedure to remedy defective workmanship and the resolution of disputes whether the workmanship is in fact defective. Clause 6.09 provides:
"6.09 Should the Architect consider that the quality of any
work or materials is not in accordance with the requirements
of this Agreement then:
6.09.01 The Architect may instruct the Builder to remove
and/or re-execute and/or replace any such work or materials
or to make good any defect, and
6.09.02 notwithstanding the provisions of paragraph 5.02.03
the Builder shall be obliged to carry out any such
instruction but shall be entitled, provided that prior to
carrying out the instruction he shall have given to the
Architect written notice of his intention so to do,
thereafter to refer to arbitration under Section 13 the
question of whether he should be allowed payment for such
removal, re-execution, replacement, amendment or making good
as Variation."
50. The Architects had requested Leighton to carry out extensive remedial work to eleven concrete floors in the building. Leighton did the work but protested that the work required was not remedial but a variation. Similar issues arose in relation to installation of pavers.
51. The arbitrator's finding on the facts was that the work did not constitute a variation. However, the arbitrator then went on to find that Leighton had failed to comply with Clause 6.09.02 in that it had failed to give notice of its intention to refer the matter to arbitration under Clause 13 of the Building Contract. Clause 13 must be read together with Clause 15.24. Clauses 13 and 15.24 establish a regime for giving notice of the dispute, for reference of the dispute to arbitration, and for the time within which certain steps should be taken to effect the arbitration. There is, however, no provision as to the time within which notice under Clause 13 should be given. The arbitrator found that, although there was some evidence of discussions about an appropriate adjudicator, the question of arbitration was not actively pursued by Leighton. All that Leighton did in relation to this aspect of the matter was to give notice of a claim for delay to the Contract Programme, but not until 26th May 1989, almost two months after it had ceased work on the site. Leighton had earlier given several notices of its intention to claim extensions of time for actual delays during the repair of the concrete floors. The arbitrator found that Leighton could have given notice as early as 20th September 1988 when the delays were alleged to have started and could have quantified the delays at any time after 10th March 1989 when the delays were alleged to have finished. In addition, the arbitrator found that although the Architect, in the course of correspondence requiring the remedial work to be done, had given notice to Leighton that the Architect relied on Clause 6.09, Leighton, nevertheless, had failed to lodge a claim in accordance with Clause 6.09.02. The arbitrator held that, on the proper construction of the Building Contract and, in particular, Clause 6.09, Leighton's failure to give notice disqualified it from prosecuting this aspect of its claim.
52. In reaching this conclusion the arbitrator rejected a submission that there was a conflict between Clause 15.24 and Clause 13 which relieved it of the obligation to comply with Clause 13. Leighton does not question this part of the arbitrator's reasons. Leighton had also submitted to the arbitrator that the provisions of Clause 6.09 are a matter of form, not substance, and that on a proper construction of the Building Contract time was not of the essence of this provision, that the provisions lay largely outside of the main stream of the Contract, and that neither Leighton nor SASFIT was prejudiced by the fact that there might not have been notice given pursuant to Clause 13. The arbitrator rejected each aspect of that submission in these terms:
"My view is that this submission is quite extraordinary and
I can find no support in the Agreement that 'time is not of
the essence according to the intention of the parties'. The
express term of the Agreement, as we have seen, is that time
is of the essence; intentions are irrelevant, but, even if
they were relevant, it was clearly never Sasfit's intention
that time would be anything else but of the essence.
Secondly, I doubt the proposition that clause 6.09 lies
outside the mainstream of the Agreement; it provides the
machinery for instructions for the removal and re-execution
of remedial work and, as such, is an integral part of the
building Agreement. Finally, my view is that Sasfit would
not agree to the proposition that it would never be
prejudiced by Leighton's failure and, in relation to the
concrete floors, to be dealt with later, the provision of a
timely notice by Leighton may well have altered the way that
that part of the dispute developed."
53. Leighton submits that the arbitrator has made a manifest error of law in reaching this conclusion. Here, again, Leighton must satisfy me that the point is not merely arguable but that the arbitrator's area is obvious. It has failed to do so. In my view, the effect of the arbitrator's reason on the question whether time was of the essence of the contract is that although neither Clause 6.09 nor Clause 13 make time of the essence of the Contract, the circumstances of this Building Contract require precise compliance with the terms of Clauses 6.09 and 13 and that they must be complied with in a reasonable time. That is a conclusion of law which was plainly open to the arbitrator: see Alliance Petroleum Australia NL v Australian Gaslight Co
(1985) 39 SASR 84 at 91 and in the particular reference to paragraph 482 in Volume 9 of Halsbury's Law of England (4th ed) therein cited. Although the arbitrator sought to distinguish the decision of Cox J in Alliance Petroleum Australia NL v Australian Gaslight Co, the grounds on which he sought to rely and other parts of his reasons show that he took the view that the circumstances of this case indicated that it was the intention of the parties that there be precise compliance with Clauses 6.09 and 13. That is a view which is plainly open. I have already referred in another context to provisions as to notice of claims and the policy considerations which require compliance with the terms of the Building Contract. The building work involved the construction of a substantial office block of seventeen floor. Considerable difficulties would be likely if the parties did not adhere to the Building Contract. There might be room for another view as to the effect of Clause 6.09. But that is not sufficient to demonstrate a manifest error of law. Leighton, therefore, fails on this ground.
54. The ninth and final ground of appeal relates to the arbitrator's rejection of Leighton's claim for direct costs incurred with respect to work on the concrete floors. Leighton asserts that the failure of the arbitrator to make any finding as to Leighton's entitlement to this claim for direct costs constitutes a manifest error of law.
55. The arbitrator found that Leighton had some entitlement to direct costs, although not for the total amount claimed. He did not, however, make an award of costs because in his view there was insufficient evidence upon which to determine the costs to which Leighton was entitled. This ground of appeal is bound up with the question of Leighton's failure to comply with Clause 6.09 and can only be sustained if Leighton makes good its application for leave to appeal in respect of the eighth ground of appeal. As Leighton has failed in relation to the eighth ground of appeal, it must fail on this ground also.
56. In respect of each of the grounds of appeal, Leighton made its application for leave on the ground that the award disclosed a manifest error of law. In every ground of appeal as stated in the affidavit sworn in support of the application, the expression "manifest error of law" is relied on. I have, out of an abundance of caution, also considered whether there is any ground on which Leighton could rely on para (ii) of s38(5)(b). Leighton did not advance any evidence, strong or otherwise, to suggest that there was such an error or law. I have been unable to find strong evidence of an error of law sufficient to justify leave to appeal. In this respect, it is relevant to note that, as a standard form contract which has been extensively modified by Clause 15, the Building Contract falls within the category of a "one-off" contract, not a standard form contract, see The Nema (supra) at 742-743.
57. For all of these reasons I refuse the application for leave to appeal.
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