Lieschke v Lieschke - [2022] NSWSC 1705

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Lieschke v Lieschke [2022] NSWSC 1705
Hearing dates: 13 October 2022; final submissions 14 October 2022
Date of orders: 16 December 2022
Decision date: 16 December 2022
Jurisdiction: Equity - Commercial Arbitration List
Before: Rees J
Decision:
Set aside arbitral award.

Catchwords:
COMMERCIAL ARBITRATION – conduct of arbitral proceedings – Commercial Arbitration Act 2010 (NSW), s 18, “reasonable opportunity of presenting the party’s case” – Commercial Arbitration Act 2010 (NSW), ss 34(2)(a)(ii), 34(2)(b)(ii) – principles at [4]-[28].
COMMERCIAL ARBITRATION – ARBITRAL AWARDS – dissolution of family farming partnership – father and son each retain accounting experts – issue whether farms were gifts or held on trust for partnership – directions for interim award on trusts – interim award in favour of son – father retains new lawyers – father seeks to broaden attack on partnership accounts – arbitrator declines – father retains new accounting expert – arbitrator restricts arbitral process to existing experts – arbitrator prohibits experts from communicating with new expert – whether “unable to present the party’s case – whether award in conflict of public policy – award set aside – interim award stands.
COMMERCIAL ARBITRATION – SET ASIDE OR SUSPEND – Commercial Arbitration Act 2010 (NSW), ss 34(4) – principles at [147]-[155] – whether Court should set aside suspension of setting aside order and remit to arbitrator to correct defects – whether arbitrator can continue in fair manner – arbitrator made extremely critical remarks – no suspension of setting aside order.

Legislation Cited:
Arbitration Act 1996 (UK)
Commercial Arbitration Act 2010 (NSW), ss 1(1), 1C, 2A, 5, 18, 19, 33D, 34(1), 34(2)(a)(ii), 34(2)(a)(iii), 34(2)(b)(ii), 34(3), 34(4), 34A, 34A(7)(d)
International Arbitration Act 2010 (Cth), s 18C
UNCITRAL Arbitration Rules (15 December 1976, UNGA Res 31/98, UN Doc A/RES/31/98), art 15(1)
UNCITRAL Model Law on International Commercial Arbitration (as adopted by the United Nations Commission on International Trade Law, 21 June 1985, as amended on 7 July 2006), art 18

Cases Cited:
AKN v ALC [2015] SGCA 18
Amasya Enterprises Pty Ltd v Asta Developments (Aust) Pty Ltd [2016] VSC 326
Cameron Australasia Pty Ltd v AED Oil Ltd [2015] VSC 163
Colin Joss & Co Pty Ltd v Cube Furniture Pty Ltd [2015] NSWSC 735
Corporacion Trans Nacional de Inversiones SA de CV v STET International SpA (1999) 45 OR (3d) 183
DongwooMann+Hummel Co Ltd v Mann+Mann GmbH [2008] 3 SLR(R) 871
FE Hookway & Co Ltd v Alfred Isaacs & Sons [1954] 1 Lloyds Rep 491
Grand Pacific Holdings Ltd v Pacific China Holdings Ltd (in liq) [2012] HKCU 971
HagopArdahalian v Unifert International SA, The Elliser [1984] 2 Lloyds Rep 84
Hui v Esposito Holdings Pty Ltd [2017] FCA 648; (2017) 345 ALR 287
Ivankovic v West Australian Planning Commission [2020] WASC 401
Joint Stock Company ‘Aeroflot-Russian Airlines’ v Berezovsky [2013] EWCA Civ 784
Lloyd Del Pacificio v Board of Trade (1930) 37 Ll L Rep 103
Mango Boulevard Pty Ltd v Mio…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] NSWSC 1705
Decision Date: 16 December 2022

CaseChat Overview and Summary

Lieschke v Lieschke was a case heard by the Supreme Court of New South Wales, where the primary issue was the conduct of arbitral proceedings in a dispute over the dissolution of a family farming partnership. The son, who had previously been awarded an interim order in relation to trusts and the partnership's accounts, sought to have the arbitral award set aside due to perceived procedural unfairness. The father, on the other hand, argued that the arbitral process had been fair and that the award should be upheld.

The central legal issues the court had to decide were whether the arbitrator had provided the father with a reasonable opportunity to present his case and whether the award was in conflict with public policy. Additionally, the court considered whether the arbitrator had acted in a manner that would prevent a fair arbitral process, particularly in light of the arbitrator's critical remarks.

The court found that the arbitrator had restricted the arbitral process to the existing accounting experts and prohibited them from communicating with a new expert retained by the father, which resulted in the father being unable to present his case effectively. The court also found that the arbitrator's critical remarks had the potential to undermine the impartiality of the arbitral process. Consequently, the court set aside the arbitral award but allowed the interim award to stand.

The final orders of the court were that the arbitral award be set aside, but the interim award in favour of the son remain in effect. The court declined to suspend the setting aside order or remit the matter to the arbitrator for correction, finding that the arbitrator could not continue in a fair manner.

Orders