Lin Tiger Plastering Pty Ltd v Platinum Construction (Vic) Pty Ltd
[2018] VSC 221
•10 May 2018
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
ARBITRATION LIST
S ECI 2018 00058
| LIN TIGER PLASTERING PTY LTD | Applicant |
| v | |
| PLATINUM CONSTRUCTION (VIC) PTY LTD | Respondent |
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JUDGE: | CROFT J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 12 April 2018 |
DATE OF JUDGMENT: | 10 May 2018 |
CASE MAY BE CITED AS: | Lin Tiger Plastering Pty Ltd v Platinum Construction (Vic) Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2018] VSC 221 |
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ARBITRATION – Application for ruling on the jurisdiction of a domestic arbitral tribunal – Whether the prohibition of arbitration agreements under the Domestic Building Contracts Act 1995 applies – Dallah Real Estate and Tourism Holding Company v The Ministry of Religious Affairs of the Government of Pakistan [2010] 3 WLR 1472 – Commercial Arbitration Act 2011 s 16(9) – Domestic Building Contracts Act 1995 ss 5, 6 and 14 – Domestic Building Contracts Regulation 2017 reg 7 – International Arbitration Act 1974 (Cth) sch 2 – UNCITRAL Model Law on International Commercial Arbitration 1985 art 16(3)
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | N J Phillpott | Ward & Co Legal Consultants |
| For the Respondent | J B Waters | Tisher Liner FC Law |
HIS HONOUR:
By its Originating Application of 9 March 2018, Lin Tiger Plastering Pty Ltd (“the Applicant”) seeks a determination by this Court under section 16(9) of the Commercial Arbitration Act 2011 (“the CAA”) that the arbitral tribunal does not have jurisdiction to determine a sub-contracting dispute between the Applicant and Platinum Construction (Vic) Pty Ltd (“the Respondent”). The Applicant is a sub-contractor which performs plastering works, as well as supplying and installing metal wall framing works, ceiling framing, insulation, fire and acoustic rated caulking and the installation of metal door jambs and cement cladding.[1] The Respondent is a builder of both commercial and residential developments.[2] On 22 September 2015, the Applicant contracted with the Respondent to perform specific building works on two Melbourne properties (“the Sub-Contracts”). A dispute arose in relation to the Sub-Contracts, and the Respondent commenced the arbitration, with the arbitrator appointed by the President of the Master Builders Association of Victoria. On 21 February 2018, the arbitrator, Mr David Thyer, delivered a ruling on jurisdiction in which he found that the arbitral tribunal had jurisdiction to determine the dispute because the alleged arbitration agreements within the Sub-Contracts were valid and relevantly unaffected by the operation of the Domestic Building Contracts Act 1995 (“the DBCA”).[3]
[1]Affidavit of Bo Lin (9 March 2018), [3].
[2]Affidavit of Elliot Verblun (21 March 2018), [5].
[3]Exhibit BL-15 to the Affidavit of Bo Lin (9 March 2018) (“Arbitrator’s Ruling on Jurisdiction”).
It is well established that the circumstances in which judicial intervention in the arbitral process is appropriate are narrowly circumscribed.[4] Section 16 of the CAA governs applications for review of a decision of an arbitral tribunal on jurisdiction, and relevantly provides:
[4]See Commercial Arbitration Act 2011, section 5; Larkden Pty Ltd v Lloyd Energy Systems Pty Ltd (2011) 279 ALR 772, 783 and the authorities there cited.
Competence of arbitral tribunal to rule on its jurisdiction (cf Model Law Art 16)
(1)The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement.
(2)For that purpose, an arbitration clause which forms part of a contract is to be treated as an agreement independent of the other terms of the contract.
(3)A decision by the arbitral tribunal that the contract is null and void does not of itself entail the invalidity of the arbitration clause.
Note
The Model Law provides that such a decision does not ipso jure entail the invalidity of the arbitration clause.
(4)A plea that the arbitral tribunal does not have jurisdiction must be raised not later than the submission of the statement of defence.
…
(8)The arbitral tribunal may rule on a plea referred to in subsection (4)… either as a preliminary question or in an award on the merits.
(9)If the arbitral tribunal rules as a preliminary question that it has jurisdiction, any party may request, within 30 days after having received notice of that ruling, the Court to decide the matter.
(10)A decision of the Court under subsection (9) that is within the limits of the authority of the Court is final.
(11)While a request under subsection (9) is pending, the arbitral tribunal may continue the arbitral proceedings and make an award.
…
The proposition for which section 16 of the CAA stands is that the arbitral tribunal has the competence to rule on its own jurisdiction. This is sometimes referred to as the principle of “competence-competence”.[5] The principle is well established under article 16 of the UNCITRAL Model Law on International Commercial Arbitration (“the Model Law”),[6] and is widely recognised in international commercial arbitration both in Australia and abroad.[7] The principle operates to promote a prima facie assumption “that the arbitrators themselves will…be able to reach decisions which are fair and protect the interests of society as well as those of the parties to the dispute.”[8] The principle of competence-competence does not, however, have the effect of empowering an arbitral tribunal to find in favour of its jurisdiction where, for example, a mandatory law prevents parties from submitting a certain kind of dispute to arbitration. This is recognised by the CAA at section 1(5):
This Act does not affect any other Act by virtue of which certain disputes may not be submitted to arbitration or may be submitted to arbitration only according to provisions other than those of this Act.
[5]See Emmanuel Gaillard and John Savage (eds), Fouchard Gaillard Goldman on International Commercial Arbitration (Kluwer, 1999) 395 – 491.
[6]As adopted by the United Nations Commission on International Trade Law on 21 June 1985, and as amended by the United Nations Commission on International Trade Law on 7 July 2006.
[7]Hancock Prospecting Pty Ltd v Rinehart (2017) 350 ALR 658; Rinehart v Rinehart (No 3) (2016) 337 ALR 174; TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 533; Altain Khuder LLC v IMC Mining Inc (2011) 276 ALR 733; for a particularly extensive review of the principle see Tomolugen Holdings Ltd v Silica Investors Ltd [2015] SGCA 57 [25]–[44].
[8]Emmanuel Gaillard and John Savage (eds), Fouchard Gaillard Goldman on International Commercial Arbitration (Kluwer, 1999) 400.
On the first return of this application on 14 March 2018, the Applicant sought a stay of the arbitral proceedings pending the final hearing and determination of this application.[9] As is clear from section 16(11) of the CAA, such a stay is not available as of right. The position of the arbitral tribunal was that the arbitral proceedings ought to proceed while the present application was heard and determined, and timetabling Orders for the determination of the costs of the jurisdictional challenge made by the Applicant before the arbitral tribunal were made on this basis.[10] The Applicant submitted that this process would result in unnecessary costs if the present application were successful, and that the Respondent would suffer no prejudice from the arbitral proceedings being stayed, other than a slight delay of a month or so.[11] On this basis, and given the acceptance by the Respondent of the practicality of the stay,[12] the parties undertook by their counsel not to take any further steps in the arbitration and to request that the arbitrator do the same, until further Order of the Court.[13]
[9]Originating Application for Orders under Certain Miscellaneous Provisions of the Commercial Arbitration Act 2011 (9 March 2018), [3]–[4].
[10]See Exhibit BL-17 to the Affidavit of Bo Lin (9 March 2018).
[11]Transcript (14 March 2018), 5–6.
[12]Transcript (14 March 2018), 8.
[13]Transcript (14 March 2018), 9–10; Order of the Honourable Justice Croft on 14 March 2018.
Both the Sub-Contracts contain dispute resolution clauses in exactly the same terms:[14]
41.2 Domestic Building Disputes
[14]Exhibit BL-4 to the Affidavit of Bo Lin (9 March 2018) (“the South Melbourne Sub-Contract”), [41.2], [41.4]; Exhibit BL-5 to the Affidavit of Bo Lin (9 March 2018) (“the Hawthorn East Sub-Contract”), [41.2], [41.4].
Save for any disputes under Clause 41.3 below, all disputes between a Head Contractor carrying out domestic building work and its Sub-Contractor on that work, which arise from under or with respect to that Sub-Contract or the Works of that Sub-Contract are “domestic building disputes” pursuant to the Domestic Building Contracts Act 1995; and they must be dealt with accordingly.
The primary forum for resolution of domestic building disputes is the Victorian Civil and Administrative Tribunal [“VCAT”].
The parties may, at the time that a domestic building dispute arises, wish to submit it to some alternative dispute resolution [“ADR”] process – such as conciliation, mediation or expert determination. Any resolution, compromise or settlement the parties may reach through an ADR process needs to be made the subject of a legally enforceable Deed or an order of a Court or of the VCAT. Before embarking on such a course, each party should first obtain independent legal advice.
41.4 Other Disputes
(a)Matters in dispute between the Builder and the Sub-Contractor, which do not involve the Principal
Whenever a dispute or difference shall arise between the Builder and the Sub-Contractor either during the progress of the Sub-Contract Works or after the completion, discharge, determination, abandonment or breach of this Sub-Contract as to the construction, or as to any matter or thing whatsoever under or in connection with, of same then either party may serve on the other a written Notice of Dispute; clearly setting out the subjects and details of the dispute or difference.
At the expiration of seven (7) clear days following the date of service of the Notice of Dispute (unless it shall have been otherwise settled) such dispute or difference shall be and is hereby submitted to arbitration to be effected in the following manner;
i) by a single Arbitrator nominated by the parties in Clause 1.18 or
ii)in the event that no Arbitrator is nominated by the parties in Clause 1.18, by a single Arbitrator appointed at the written request of either party by the President for the time being of the Master Builders Association of Victoria [“MBAV”].
…
…
It is plain from the DBCA that a dispute will only be “domestic building dispute” if the dispute relates to work to which the DBCA applies:[15]
3 Definitions
…
domestic building contract means a contract to carry out, or to arrange or manage the carrying out of, domestic building work other than a contract between a builder and a sub-contractor;
…
domestic building work means any work referred to in section 5 that is not excluded from the operation of this Act by section 6;
[15]Domestic Building Contracts Act 1995.
54 What is a domestic building dispute?
(1) A domestic building dispute is a dispute or claim arising—
…
(b) between a builder and—
…
(iii) a sub-contractor…
…
in relation to a domestic building contract or the carrying out of domestic building work;
Although a contract between a builder and a sub-contractor does not fall within the definition of “domestic building contract”,[16] this is not decisive in the present circumstances by reason of the provisions of section 54 of the DBCA to which reference has been made. Nevertheless, these provisions do not operate to render a dispute a “domestic building dispute” unless the DBCA applies. The foundational question with respect to the application of this legislation is whether the relevant work the subject of the contract falls within the definition of “domestic building work”. As to this, the DBCA relevantly provides:[17]
[16]Which the Applicant concedes: Transcript (12 April 2018) (“Transcript”), 19.
[17]Domestic Building Contracts Act 1995, sections 5, 6. The legislation referred to by the parties and the arbitral tribunal is not the current legislation (see Arbitrator’s Ruling on Jurisdiction, [5]–[7]). The Domestic Building Contracts Act 1995 was amended effective 4 July 2016 so that what was once section 6(a) is now section 6(2). This has no material effect on this matter. The Domestic Building Contracts Regulations 2007 were repealed by the Domestic Building Contracts Regulations 2017 effective 22 April 2017. The only effect for present purposes is that what was Regulation 6 under the Domestic Building Contracts Regulations 2007 is now Regulation 7 under the Domestic Building Contracts Regulation 2017.
5 Building work to which this Act applies
(1) This Act applies to the following work—
(a) the erection or construction of a home, including—
(i) any associated work…
…
…
…
6 Building work to which this Act does not apply
…
(2) This Act or a provision of this Act does not apply to any work that the regulations state is not building work to which this Act or that provision (as the case requires) applies.
Regulation 7 of the Domestic Building Contracts Regulations 2017 (“DBCR”) provides:[18]
[18]See also Domestic Building Contracts Regulations 2007 regulation 6, which mirrors the current regulation except for its reference to section 6(a).
7Building work to which Act does not apply—work to be carried out under a contract for one type of work only
For the purposes of section 6(2) of the Act, any of the following types of work is not building work to which the Act applies if the work is to be carried out under a contract for only that type of work—
…
(e) insulating;
…
(g) plastering;
…
The Applicant submits that it performed works including framing, insulating and plastering under the Sub-Contracts[19] and the DBCA therefore applies to the exclusion of the jurisdiction of the arbitral tribunal. The DBCA provides:
[19]Applicant’s Outline of Submissions (28 March 2018), [13], [22]; Transcript, 4–5, 49.
14 Arbitration clauses prohibited
Any term in a domestic building contract or other agreement that requires a dispute under the contract to be referred to arbitration is void.
The Applicant submits that this matter must be heard by VCAT, either under the DBCA regime or the Australian Consumer Law and Fair Trading Act 2012 (“the ACFT Act”). The Respondent submits that due deference must be given to the agreement of the parties to arbitrate at clause 41.4(a). The DBCA, if it applies to this dispute, clearly excludes the possibility of arbitration. If the DBCA does not apply to this dispute, the parties have agreed to arbitrate at least some disputes under clause 41.4(a). If this dispute is a dispute the parties have agreed to arbitrate, the jurisdiction of the arbitral tribunal will only yield to a law with mandatory application.[20]
[20]Section 1(5) of the Commercial Arbitration Act 2011.
The central question is the applicability of the DBCA. Specifically, did the Applicant carry out “domestic building works” under the Sub-Contracts? Or are the Sub-Contracts for “one type of work only”?
That question was answered by the arbitral tribunal in its jurisdictional ruling.[21] Before addressing that question and, indeed, the power of the Court to address that question, the arguments made by both parties should be considered.
[21]Arbitrator’s Ruling on Jurisdiction, [8]–[18].
The Applicant suggests three potential bases for finding that VCAT has jurisdiction to determine the dispute. It is says first that clause 41.2 of the Sub-Contracts applies and the disputes between the parties are justiciable before VCAT,[22] secondly, that the disputes are domestic building disputes within the meaning of the DBCA with the effect that VCAT has jurisdiction,[23] and thirdly, that the dispute is a “consumer and trader dispute” within the meaning of section 184(1) of the ACFT Act.[24]
[22]Applicant’s Outline of Submissions (28 March 2018), [16].
[23]Applicant’s Outline of Submissions (28 March 2018), [17]–[22]; Transcript, 6–15.
[24]Applicant’s Outline of Submissions (28 March 2018), [23]–[24]; Transcript, 12–3; 16–7.
The impact of clause 41.2 on jurisdiction
The Applicant submits that clause 41.2 of the Sub-Contracts applies to the exclusion of clause 41.4(a), with the effect that VCAT alone has jurisdiction.[25] The Respondent submits that, given the jurisdiction of VCAT is solely derived from statute, the parties cannot have effectively agreed under clause 41.2 to confer additional jurisdiction upon VCAT:[26]
[25]Applicant’s Outline of Submissions (28 March 2018), [11]–[16]; Transcript, 6–15.
[26]Respondent’s Outline of Submissions in Relation to the Arbitrator’s Jurisdiction (6 April 2018), [23]–[24]; see also Transcript, 44.
23.VCAT is a creature of statute, in that the tribunal was created by statute and all of its jurisdiction is conferred solely by statute.[27] As such, it is not possible for parties to agree, via contract, to refer disputes to VCAT that would not otherwise fall within VCAT’s jurisdiction. In circumstances where:
[27]Mercier Rouse Street Pty Ltd v Burness [2015] VSCA 8 [175] (Santamaria JA, with whom Warren CJ and Neave JA agreed); McLeod v Marina Operations Aust Pty Ltd (Civil Claims) [2006] VCAT 2537, [34] (Bowman VP).
(a) the DBCA does not apply to the plastering work;
(b)the DBCA does not operate and cannot otherwise refer a dispute to VCAT; and
(c)VCAT only has jurisdiction pursuant to statute and does not have jurisdiction to hear a certain dispute conferred by parties’ agreement,
the parties cannot agree to refer their disputes to VCAT.
24.Accordingly, clause 41.2 of the Sub-Contracts is ineffective to ‘deem’ disputes to be ‘domestic building disputes’, and the current matters in dispute cannot be referred to VCAT. The disputes must be referred to arbitration in accordance with the parties’ agreement under the CAA.
[Respondent’s emphasis]
While it is inescapable that parties cannot by agreement enlarge the jurisdiction of VCAT,[28] this does not foreclose the possibility that clause 41.2 could operate to limit the scope of the disputes to which the arbitration agreement in clause 41.4 applies. Indeed, it could be said that where there would otherwise be an overlap between the jurisdiction of the arbitral tribunal and VCAT, clause 41.2 of the Sub-Contracts could operate such that only disputes which may not be determined by VCAT are within the scope of the arbitration agreement. It is, however, quite clear that if the DBCA operates to confer jurisdiction on VCAT in respect of a dispute, it will also void any arbitration agreement which would otherwise be applicable. What is more, the specific reference in clause 41.2 to the DBCA forecloses any argument that it intends to limit the scope of the arbitration agreement where it overlaps with the jurisdiction of VCAT which arises from another statute, such as the ACFT Act.
[28]Indeed, the Applicant did concede this: Transcript, 20.
Thus, clause 41.2 will not affect the jurisdiction of the arbitral tribunal, because:
(a) the parties cannot by agreement refer a matter to VCAT which is not already within the jurisdiction of VCAT;
(b) if the DBCA applies, the operation of section 14 will render the arbitration agreement void and clause 41.2 otiose; and
(c) it is plain from the wording of clause 41.2 that it will not apply to disputes where the DBCA does not apply but VCAT otherwise has jurisdiction.
The jurisdiction of VCAT under the DBCA
Part 5 of the DBCA confers certain powers upon VCAT in respect of domestic building disputes. However, it is plain from the DBCA that a dispute will only be a “domestic building dispute” if it relates to work to which the DBCA applies.[29] Whether or not VCAT has jurisdiction is not of itself relevant to the question of whether or not the arbitral tribunal has jurisdiction. Generally, both an arbitral tribunal and VCAT may have jurisdiction over a particular dispute, though VCAT will be bound to refer a dispute which is subject to an effective arbitration agreement—within the meaning of section 8 of the CAA—to arbitration if a party so requests.[30]
[29]Domestic Building Contracts Act 1995, sections 3, 54.
[30]Subway Systems Australia Pty Ltd v Ireland (2014) 46 VR 49; and see Burns v Corbett [2018] HCA 15.
Both parties drew to the attention of the Court the relevant case authorities regarding the jurisdiction of VCAT over domestic building disputes, in accordance with the DBCA regime. Those cases do attest to the overwhelming policy behind and purpose of the DBCA regime, of creating a so-called “one stop shop” for the resolution of domestic building disputes.[31] This was the position set out most vehemently by the Applicant—Parliament intended for these kinds of disputes to be heard in a single jurisdiction and did so with good reason.[32]
[31]Greenhill Homes Pty Ltd v Domestic Building Tribunal (1998) 13 VAR 353, 359.
[32]Transcript, 21–2; Greenhill Homes Pty Ltd v Domestic Building Tribunal (1998) 13 VAR 353, 359; S. P. Builders Pty Ltd v Greg Salter Contract Plumbing Victoria Pty Ltd (Domestic Building) [2012] VCAT 753 [15]–[17]; Owners Corporation PS505245E v Moresi Builders Pty Ltd (Domestic Building) [2011] VCAT 1630 [18].
The Respondent cited Chartin Group Pty Ltd v LU Simon Builders Pty Ltd[33] as the most analogous of the relevant authorities.[34] The Respondent submitted that the case stands for the proposition that a contract for only one kind of work could still be excluded from the DBCA under regulation 7 of the DBCR despite that contract providing for the performance of associated works.[35] However, as noted by Applicant, that case related to a domestic building contract, and not domestic building works, as distinct from the present facts.[36]
[33][2004] VSC 531.
[34]Respondent’s Outline of Submissions in Relation to the Arbitrator’s Jurisdiction (6 April 2018) [13]; Transcript, 33–4.
[35]Transcript, 33–4.
[36]Transcript, 9–10.
The Applicant submitted that a very clear legislative purpose of the DBCA is to ensure that all disputes regarding domestic building are dealt with in a single jurisdiction.[37] This has been referred to as a “one stop shop” approach to the resolution of all disputes regarding domestic building.[38] And Justice Byrne warned in Greenhill Homes Pty Ltd v Domestic Building Tribunal that deviation from the broad application of the DBCA could lead to a jurisdictional mess.[39] However, these authorities simply do not go to the relevant regulation of the DBCR and the issue of “building work to which the Act does not apply”.[40] If the Act does not apply no further argument can be made.
[37]Transcript, 18–9.
[38]Greenhill Homes Pty Ltd v Domestic Building Tribunal (1998) 13 VAR 353, 359. See also Owners Corporation PS505245E v Moresi Builders Pty Ltd (Domestic Building) [2011] VCAT 1630; S. P. Builders Pty Ltd v Greg Salter Contract Plumbing Victoria Pty Ltd (Domestic Building) [2012] VCAT 753 [7], [15]–[16]. See also Applicant’s Outline of Submissions (28 March 2018) [24].
[39][1998] VSC 34 [16]–[17].
[40]Domestic Building Contracts Act 1995, sections 5–6; Domestic Building Contracts Regulations 2017, regulations 7–9.
Interpretive gymnastics undertaken by both parties—that section 54(1)(b) of the DBCA does not specify that the sub-contractor must be party to a domestic building works contract on the one hand,[41] or that section 57 of the DBCA does not provide for a stay of court proceedings commenced under the ACFT Act on the other[42]—are not relevant. As the Respondent pointed out, while the Applicant emphasised the legislative intention to bring disputes regarding domestic building to VCAT, that legislative intention cannot be of greater weight than the clear intention to exclude contracts for one type of work only from that jurisdiction by virtue of the DBCR.[43] That is the determinative issue in the present proceedings.
[41]Transcript, 51–3.
[42]Transcript, 37–8.
[43]Transcript, 36–7.
VCAT jurisdiction under the ACFT Act
Section 182 of the ACFT Act defines “consumer and trader disputes”:
182 What is a consumer and trader dispute?
(1)In this Chapter a consumer and trader dispute is a dispute or claim arising between a purchaser or possible purchaser of goods or services and a supplier or possible supplier of goods or services in relation to a supply or possible supply of goods or services.
…
While section 184(1) of the ACFT Act does grant VCAT jurisdiction to hear and determine “consumer and trader disputes”, the parties agree that jurisdiction is not exclusive.[44] In respect of VCAT’s jurisdiction to hear disputes that are “consumer and trader disputes”, the Applicant makes reference to VCAT decisions which support the proposition that VCAT jurisdiction can accrue concurrently under the DBCA and the ACFT Act.[45] However, none of the cases relied upon by the Applicant to demonstrate VCAT jurisdiction accruing under the ACFT Act involved an intervening arbitration clause.
[44]Transcript, 16, 44.
[45]Transcript, 10; Owners Corporation PS505245E v Moresi Builders Pty Ltd (Domestic Building) [2011] VCAT 1630; S. P. Builders Pty Ltd v Greg Salter Contract Plumbing Victoria Pty Ltd (Domestic Building) [2012] VCAT 753; Cataldo v Tardio (Building and Property) [2017] VCAT 14.
The Respondent notes that it is only in the circumstances of clause 41.2 that the parties have agreed to VCAT jurisdiction, to the extent that they can. That clause makes no mention of referring the matter under the ACFT Act.[46]
[46]Transcript, 43.
The jurisdiction of the arbitral tribunal will only yield to mandatory VCAT jurisdiction. Mandatory VCAT jurisdiction will only accrue if the dispute is subject to the DBCA. Submissions made by the Applicant on the basis of any other kind of VCAT jurisdiction are not determinative of the present dispute. There remain two determinative matters to be addressed: what is the power of the court under section 16(9) of the CAA, and did the Applicant carry out “domestic building works” under the Sub-Contracts.
The power of the court under section 16(9) of the CAA
Is an appeal under section 16(9) a hearing de novo or a review of the ruling of the arbitral tribunal on jurisdiction? The parties did not focus their submissions on this question and did not bring to the attention of the Court any case law authorities for the application of section 16(9) of the CAA. The Applicant submitted that there was no reason why there should not be a de novo hearing under section 16(9) of the CAA.[47] The Respondent submitted that there was no manifest error of law to be overturned in the jurisdictional ruling of the arbitral tribunal.[48] Otherwise, the parties made scant submissions on the threshold question of the standard of review to be applied under this application.
[47]Transcript, 3. The Applicant, however, still made submissions regarding errors it alleged in the jurisdictional ruling of the arbitral tribunal: Transcript, 16–7, 21.
[48]Transcript, 47. However, it was not absolutely clear whether the Respondent was submitting that this should be a judicial review rather than a hearing de novo: see Transcript, 45–6.
The Applicant assisted the Court by stating it had been unable to find any reported Victorian decision on the matter.[49] Indeed, there is no reported case to be found under the equivalent legislation of the other States and the Territories or the International Arbitration Act 1974 (Cth) (“the IAA”) either.
[49]Transcript, 3.
Issues arising in the present context must be viewed having regard to the strong line of authorities which reaffirm and emphasise that the legislative regime in Australia, whether under the IAA or the CAA and other State and Territory equivalent legislation, mandates minimal court “interference” with arbitral proceedings and decisions—and on the more positive side, maximum court support and assistance for arbitral processes.[50] In this context, section 16(9) of the CAA is to be read, primarily, as a provision to facilitate court assistance for the process. The provisions of section 16(9) are as follows:
(9)If the arbitral tribunal rules as a preliminary question that it has jurisdiction, any party may request, within 30 days after having received notice of that ruling, the Court to decide the matter.
[50]Larkden Pty Ltd v Lloyd Energy Systems Pty Ltd (2011) 279 ALR 772, 783 and the authorities there cited; Comandate Marine Corp v Pan Australia Shipping Pty Ltd (2006) 157 FCR 45 [190]–[196] per Allsop J; TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 533; Subway Systems Australia Pty Ltd v Ireland (2014) 46 VR 49.
The section is based on a part of article 16(3) of the Model Law, which is expressed in the same terms:
… If the arbitral tribunal rules as a preliminary question that it has jurisdiction, any party may request, within thirty days after having received notice of that ruling, the court … to decide the matter…
The Model Law also forms part of Australian legislation, enacted as the Second Schedule to the IAA and is, in any event, legislated domestically in the provisions of the CAA and its State and Territory equivalents.
As Professor Gary Born notes, the Model Law neither prescribes nor expressly resolves the question of the standard of judicial review of jurisdictional awards.[51] Many leading commentaries do not hazard to state whether the standard of review under article 16(3) of the Model Law and its domestic enactments is a full rehearing de novo or a mere judicial review of the ruling of the arbitrator.[52]
[51]Gary B Born, International Commercial Arbitration, Volume I: International Arbitration Agreements (Kluwer Law International, 2nd ed, 2014) 1108. For the purposes of the Model Law, and public and private international law generally, both case law (“judicial decisions”) and commentary (“the teachings of the most highly qualified publicists”) are both equal and “subsidiary means for the determination of rules of law”: article 38(1)(d) of the Statute of the International Court of Justice, entered into force on 25 October 1945.
[52]See Howard M Holtzmann and Joseph E Neuhaus, A Guide to the UNCITRAL Model Law on International Commercial Arbitration: Legislative History and Commentary (Kluwer Law and Taxation Publishers, 1989) 484-6; Gary B Born, International Commercial Arbitration, Volume I: International Arbitration Agreements (Kluwer Law International, 2nd ed, 2014) 1100, 1107 – 1110; David Joseph and David Foxton (eds), Singapore International Arbitration: Law & Practice (LexisNexis, 2014); David A R Williams and Amokura Kawharu, Williams & Kawharu on Arbitration (LexisNexis, 2nd edition, 2017), 216-8; see also UNCITRAL 2012 Digest of Case Law on the Model Law on International Commercial Arbitration (United Nations, 2012) 80-1.
Professor Born does observe that, “[i]n the absence of statutory guidance, courts in Model Law jurisdictions have generally adopted a de novo standard of review in proceedings”.[53] For example, the Singapore High Court applied the rehearing de novo standard in a 2003 decision.[54] The view that the provisions of article 16(3) of the Model Law or section 16(9) of the CAA would contemplate a complete rehearing seems at first sight to run contrary to the general policy of minimum curial interference under the Model Law and its emanations. The position may also appear to be in tension with the competence-competence principle, which Holtzmann and Neuhaus note is:[55]
…important in practice because without it a party could stall the arbitration at any time merely by raising a jurisdictional objection that could only then be resolved in possibly lengthy court proceedings.
[53]Gary B Born, International Commercial Arbitration, Volume I: International Arbitration Agreements (Kluwer Law International, 2nd ed, 2014) 1108, and see cases cited there.
[54]PT Tugu Pratama Indonesia v Magma Nusantara Ltd [2003] SGHC 204.
[55]Howard M Holtzmann and Joseph E Neuhaus, A Guide to the UNCITRAL Model Law on International Commercial Arbitration: Legislative History and Commentary (Kluwer Law and Taxation Publishers, 1989) 479.
This tension is reflected in the ongoing debate regarding the appropriate standard of review under article 16(3) of the Model Law and its domestic iterations, as is often noted.[56] In Canada, for example, rehearing applies in Ontario, while review applies in Alberta.[57] In light of these considerations, Justice Prakash of the High Court of Singapore explains why a rehearing de novo is the appropriate course:[58]
[56]For example, see Peter Binder, International Commercial Arbitration and Conciliation in UNCITRAL Model Law Jurisdictions (Sweet & Maxwell, 3rd ed, 2010) 219-31; UNCITRAL 2012 Digest of Case Law on the Model Law on International Commercial Arbitration (United Nations, 2012) 80-1.
[57]While the English rehearing standard was applied by the Ontario Court of Appeal in The United Mexican States v Cargill Inc [2001] 107 OR (3d) 528 [43], the Queen’s Bench of Alberta has held that it could not substitute its own view of jurisdiction for the view of the tribunal on jurisdiction: Ace Bermuda Insurance Ltd v Allianz Insurance Company of Canada [2005] ABQB 975 [53].
[58]Insigma Technology Co Ltd v Alstom Technology Ltd [2008] SGHC 134 [21]–[22], upheld on appeal in Insigma Technology Co Ltd v Alstom Technology Ltd [2009] SGCA 24.
Whilst I am not aware of any authority on the point in connection with the Model Law, it is my view that, under this legislation too, the court’s jurisdiction to decide on the jurisdiction of an arbitral tribunal is an original jurisdiction and not an appellate one. This is clear from the wording of Art 16(3) of the Model Law. It simply provides for the court ‘to decide the matter’ of jurisdiction after the tribunal has made a ruling that it has jurisdiction. This is not language implying that the court’s powers to act are of an appellate nature. Although the word ‘appeal’ does appear within the article, the context in which it is found is the specification that there should be no appeal against the decision of the court on jurisdiction.
There are also good reasons why the court should have the power to hear the matter afresh rather than to take the position of an appellate body. These are enumerated in the same paragraph of Jurisdiction and Arbitration Agreements and are as follows. First, if the court was limited to a process of review, it might be reviewing the decision of a tribunal that itself had no jurisdiction to make such a finding. Second, the procedure to determine jurisdiction is available to a party that took no part in the arbitral proceedings; if the court was confined to a review of the tribunal’s decision this would greatly undermine the ability of the challenging party to make its case. Third, if there is to be a challenge on an issue of fact, the court should not be in a worse position to make an assessment than the tribunal, and should therefore be able to examine witnesses in the usual way. Accordingly, therefore, a party is entitled to raise an objection to jurisdiction before the judge that it had not raised and argued before the arbitrator. However, ‘a failure to raise a specific point before the arbitrator is likely to be relevant as to weight’ (Jurisdiction and Arbitration Agreements at para 13.35).
However, as Her Honour notes, there has been a paucity of authority on the standard in connection with the Model Law itself. Other Model Law and neighbouring countries have dealt with this paucity differently. The High Court of New Zealand for example, presiding over an application under article 16 of the First Schedule to the Arbitration Act 1996 of New Zealand, simply stated:[59]
An application to the Court under Article 16 is not by way of appeal from the Arbitrator's ruling on jurisdiction under Article 16(1). Article 16(3) characterises the application as a request to the High Court to decide the matter.
Counsel could not refer me to any authority where the approach of the Court to an application under Article 16(3) has been discussed. In my view the proper approach is to reconsider the issue of jurisdiction de novo since the proceeding is not by way of appeal, and since the issue before me is the threshold issue of jurisdiction. Counsel were in agreement that this is the correct approach.
[59]Downer Construction (New Zealand) Limited v Silverfield Developments Limited HC AK CIV 2004-404-4488 (26 October 2004) [55]–[56].
Having cited that case, the leading commentary, Williams & Kawharu on Arbitration, notes:[60]
The rehearing approach recognises that a tribunal’s decision on jurisdiction is only preliminary in effect, with the final decision-making role conferred on the courts in relation to jurisdiction matters. A tribunal’s decision on any matter of fact or law is a nullity if the tribunal had no jurisdiction to make it in the first place.[61] That said, where both parties participate in the tribunal’s inquiry into its jurisdiction under art 16(3), it is suggested that the rehearing should generally take place on the evidence before the tribunal.
…
The rehearing standard has been questioned by some, given the ‘considerable waste of resources’ when all issues, including issues of fact, must be reheard by a court.[62] Therefore, there is tension between the long-standing and accepted limitations of the tribunal’s competence to decide jurisdiction matters, and efficiency. The United Kingdom Supreme Court’s decision in Dallah offers a compromise, accepting that the tribunal’s reasons will be before the court and will be read ‘carefully and with interest’.[63]
[60]David A R Williams and Amokura Kawharu, Williams & Kawharu on Arbitration (LexisNexis, 2nd edition, 2017), 217-8.
[61]Thus, having to defer to the tribunal under a review standard is problematic when a judge is required to decide whether jurisdiction exists, as it would give the tribunal’s decision a status which the proceedings themselves call into question. See Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs, Government of Pakistan [2009] EWCA Civ 755 at [21] (Lord Justice Moore-Bick); upheld on appeal: Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs of the Government of Pakistan [2010] UKSC 46, [2011] AC 763, [2010] 3 WLR 1472 at [26]–[28] per Lord Mance; [96] and [104] per Lord Collins; and [160] per Lord Saville.
[62]Fiona Trust & Holding Corp v Privalov [2006] EWHC 2583 (Comm); [2007] 1 All ER (Comm) 81 at [26] per Morison J. A 2006 survey reviewing the English Act found that a majority of those surveyed favoured the courts having a more limited right of intervention in a challenge to a tribunal’s rulings on jurisdiction than a full rehearing, with approximately 40 percent agreeing that jurisdiction decisions should at least be final as to the facts (B Harris ‘Report on the Arbitration Act 1996’ (November 2006) at [36]). The United States Supreme Court held in First Options of Chicago, Inc v Kaplan 514 US 938 1995 at 943-4 per Breyer J that if the parties submitted the jurisdiction question itself to arbitration, then the court should afford greater leeway to the tribunal, but if the parties did not submit that question to the tribunal then the court should decide the question independently.
[63]Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs of the Government of Pakistan [2010] UKSC 46, [2011] AC 763, [2010] 3 WLR 1472 at [31] per Lord Mance; and see [160] per Lord Saville. See also Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs, Government of Pakistan [2009] EWCA Civ 755 at [21] (the tribunal’s reasons ‘will almost invariably be before the court and will carry as much persuasive weight as their cogency gives them’) per Lord Justice Moore-Bick; Broda Agro Trade (Cyprus) Ltd v Alfred C Toepfer International GmbH [2010] EWCA Civ 1110 at [40]; The United Mexican States v Cargill Inc [2011] ONCA 622.
Williams and Kawharu, despite case authority supporting the rehearing de novo standard, still consider the question of the nature of the hearing under article 16(3) of the Model Law to be unsettled in New Zealand.[64] A line of authority in favour of the rehearing de novo standard has developed in Singapore.[65] There continues in Singapore, however, debate as to the admissibility of evidence not heard by the arbitral tribunal.[66]
[64]David A R Williams and Amokura Kawharu, Williams & Kawharu on Arbitration (LexisNexis, 2nd edition, 2017), 216-8.
[65]In addition to the cases extracted already, the rehearing standard was applied again in AQZ v ARA [2015] SGHC 49. The standard has also been applied in Singapore in relation to an investor-state arbitration: Government of the Lao People’s Democratic Republic v Sanum Investments Ltd [2015] SGHC 15 [32]–[36], upheld on appeal in Sanum Investments Ltd v Government of the Lao People’s Democratic Republic [2016] SGCA 57 [40]–[44].
[66]See AQZ v ARA [2015] SGHC 49, per Justice Prakash at [37]–[60]; see also David A R Williams and Amokura Kawharu, Williams & Kawharu on Arbitration (LexisNexis, 2nd edition, 2017), 216-7; Amokura Kawharu, ‘Rehearings of jurisdictional issues: a fresh look at the judicial task’ (2016) 32(4) Arbitration International 687.
In England the question of the applicable standard appears to be settled.[67] The decisions in the English case of Dallah Real Estate and Tourism Holding Company v The Ministry off Religious Affairs, Government of Pakistan[68] (“Dallah”) constitute the most extensive judicial examination of the question of what standard the Court ought to apply to the ruling of an arbitral tribunal on jurisdiction. This examination is instructive because it addresses directly how the policy of minimum curial interference in the decision making of arbitral tribunals should be effected in the context of jurisdictional challenges before the courts. Indeed, it is for this reason that leading commentaries on Australian arbitration have referred to Dallah in relation to section 16(9) of the CAA specifically.[69] Now that this question has at last come before an Australian Court it should be given due consideration now.
[67]David Joseph, Jurisdiction and Arbitration Agreements and their Enforcement (Sweet & Maxwell, 3rd ed, 2015) 495.
[68][2010] 1 All ER (Comm) 917, upheld on appeal in Dallah Real Estate and Tourism Holding Company v The Ministry of Religious Affairs of the Government of Pakistan [2010] 3 WLR 1472.
[69]John Hockley, Clyde Croft, Kieran Hickie and William KQ Ho, Australian Commercial Arbitration (LexisNexis Butterworths, 2015) 100; see also Doug Jones, Commercial Arbitration in Australia (Thomson Reuters, 2nd edition, 2013) 183.
The facts in Dallah are distinct from the present facts. That case involved a challenge to enforcement in England of an award made by the International Chamber of Commerce in Paris on jurisdictional grounds: the Government of Pakistan submitted that it was not party to the arbitration agreement at all.
It should be noted that England is not a Model Law jurisdiction. The Arbitration Act 1996 (England) (“the English Arbitration Act”) provides for the power of the arbitral tribunal and the court to rule on arbitral jurisdiction differently from article 16 of the Model Law. The most relevant provisions for the present purposes are sections 32 and 67 of the English Arbitration Act. Neither provision quite embodies article 16 of the Model Law, nor the specific procedure, circumstances and grounds for an application similar to that under article 16(3).[70] It is sufficient to note that the English Arbitration Act does provide for competence-competence,[71] and it does not state the standard of review the court should apply.[72]
[70]See Bruce Harris, Rowan Planterose and Jonathan Tecks, The Arbitration Act 1996 – A Commentary (Wiley Blackwell, 5th edition, 2014) 160-75; 325-33.
[71]Arbitration Act 1996 (England), section 30.
[72]When deciding or determining a preliminary point of jurisdiction, in the language of section 32, or when the court confirms, varies or sets aside the award in response to a challenge to substantive jurisdiction, in the language of section 67: Arbitration Act 1996 (England).
Lord Collins, considering the question in relation to section 67 of the English Arbitration Act in the Dallah appeal, summed up the position thus:[73]
[73]Dallah Real Estate and Tourism Holding Company v The Ministry of Religious Affairs of the Government of Pakistan [2010] 3 WLR 1472, 1508, per Lord Collins at [96].
The consistent practice of the courts in England has been that they will examine or re-examine for themselves the jurisdiction of arbitrators. This can arise in a variety of contexts, including a challenge to the tribunal’s jurisdiction under section 67 of the 1996 Act, or in an application to stay judicial proceedings on the ground that the parties have agreed to arbitrate. Thus in Azov Shipping Co v Baltic Shipping Co [1999] 1 All ER 476 Rix J decided that where there was a substantial issue of fact as to whether a party had entered into an arbitration agreement, then even if there had already been a full hearing before the arbitrator the court, on a challenge under section 67, should not be in a worse position than the arbitrator for the purpose of determining the challenge. This decision has been consistently applied at first instance …
Lord Saville warned that any argument that the arbitral tribunal is the final arbiter of its own jurisdiction is a “classic case of pulling oneself up by one’s own bootstraps”.[74] His Lordship goes on:[75]
In my judgment therefore, the starting point cannot be a review of the decision of the arbitrators that there was an arbitration agreement between the parties. Indeed no question of a review arises at any stage. The starting point in this case must be an independent investigation by the court of the question whether the person challenging the enforcement of the award can prove that he was not a party to the arbitration agreement under which the award was made. The findings of fact made by the arbitrators and their view of the law can in no sense bind the court, though of course the court may find it useful to see how the arbitrators dealt with the question.
[74]Dallah Real Estate and Tourism Holding Company v The Ministry of Religious Affairs of the Government of Pakistan [2010] 3 WLR 1472, 1524, per Lord Saville at [159] citing the Departmental Advisory Committee on Arbitration Law at paragraph 1.38 of its 1996 Report on the Arbitration Bill.
[75]Dallah Real Estate and Tourism Holding Company v The Ministry of Religious Affairs of the Government of Pakistan [2010] 3 WLR 1472, 1524, per Lord Saville at [160].
Lord Justice Moore-Bick, at first instance, noted that the Court, in reaching its own conclusion on jurisdiction, should have regard to the reasons of the tribunal, which “will carry as much persuasive weight as their cogency gives them”.[76] His Lordship goes on:
[76]Dallah Real Estate and Tourism Holding Company v The Ministry off Religious Affairs, Government of Pakistan [2010] 1 All ER (Comm) 917, 927 [21].
… [A]s became clear in the course of argument, it is impossible to formulate any satisfactory principle that falls somewhere between a limited review akin to that which the court undertakes when reviewing the exercise of a judicial discretion and a full re-hearing, not to mention one that is also capable of flexibility in its application. Moreover, for the court to defer to the tribunal’s conclusions in the manner suggested by Miss Heilbron when it is required to decide whether a particular state of affairs has been proved would be to give the award a status which the proceedings themselves call into question.
Similarly, Lord Mance, on appeal, employed a tennis metaphor to illustrate the onus borne by the party seeking to prove the arbitral tribunal decided its jurisdiction incorrectly. On the facts in that case, His Lordship said, “Dallah starts with advantage of service, it does not also start 15 or 30 love up.”[77] Lord Mance goes on to quote with approval the written submissions of the Government of Pakistan:[78]
‘[T]he court must determine for itself whether or not the objecting party actually consented. The objecting party has the burden of proof, which it may seek to discharge as it sees fit. In making its determination, the court may have regard to the reasoning and findings of the alleged arbitral tribunal, if they are helpful, but it is neither bound nor restricted by them.’
[77]Dallah Real Estate and Tourism Holding Company v The Ministry of Religious Affairs of the Government of Pakistan [2010] 3 WLR 1472, 1487, per Lord Mance at [30].
[78]Dallah Real Estate and Tourism Holding Company v The Ministry of Religious Affairs of the Government of Pakistan [2010] 3 WLR 1472, 1487, per Lord Mance at [31].
The English position in relation to section 67 of the English Arbitration Act is now recognised as settled: the standard is one of judicial rehearing with evidence.[79] Mr David Joseph QC provides an excellent summary of the position, including arguments for and against:[80]
The concept of two evidential bites at the cherry does not appear to have much to be said in its favour. It is also suggested that it is not a conclusion demanded by the Arbitration Act or the similar concepts underlying the Model Law. Nevertheless, these arguments will probably need to be developed in courts other than in England.
…
If the court were limited to a process of review, then by definition it might be reviewing the decision of a tribunal that itself had no jurisdiction to make the findings in question.
…
[I]f there is to be a challenge on an issue of fact, then it would not be satisfactory if the court was in a worse position to make an assessment than the tribunal.
[79]See David Joseph, Jurisdiction and Arbitration Agreements and their Enforcement (Sweet & Maxwell, 3rd ed, 2015) 495 (see particularly the cases cited at footnote 123).
[80]David Joseph, Jurisdiction and Arbitration Agreements and their Enforcement (Sweet & Maxwell, 3rd ed, 2015) 495-6.
Dallah has proven persuasive in other Model Law jurisdictions. The High Court of Hong Kong, for example, has said so expressly:[81]
I respectfully agree with the detailed analyses set out in the judgments of their lordships in Dallah, and that of Prakash J in Insigma. Although the question in issue before the court in Dallah was whether the defendant was a party to the arbitration agreement, such that the arbitrators had no power to make the award against it (under section 103 (2) (b) of the 1996 Act), the observations made by the English Supreme Court are in my view just as relevant and applicable to a case where the court is asked to consider the general question of whether the arbitrators had jurisdiction and power to make the award, by reason of the fact that there is no valid arbitration agreement, or that the award deals with a dispute not falling within the terms of the submission to arbitration. Arbitration is based on consensus and the parties’ agreement to submit their dispute to the arbitral tribunal. When the jurisdiction of the tribunal is challenged, the issue in dispute is whether there was initial consent to the submission of the dispute to arbitration and to the tribunal’s determination. Since Article 16 provides for the court to decide the matter of the tribunal’s jurisdiction, the court must independently determine for itself whether or not the parties had consented to the submission of the dispute to the tribunal, and should not be bound or restricted by the tribunal’s preliminary decision on its own jurisdiction. The court should not be in a worse position than the arbitrator in its determination of the challenge. Natural justice also requires such independent review, as otherwise the tribunal would be the final judge of its own powers and cause.
[81]S Co v B Co [2014] HKCFI 1440 [35], per Justice Chan.
On the basis of these authorities and commentaries, the position is, in my view, that a hearing de novo is the correct standard of review to be applied under section 16(9) of the CAA. Deference should duly be given to the cogent reasoning of the arbitral tribunal but the Court is the final “arbiter” on the question of jurisdiction. As has been observed, this is an aspect of court assistance and support of arbitral processes and is not at odds with the policy of minimal court intervention or “interference”.
Was the Applicant carrying out one or more than one type of work within the meaning of regulation 7 of the DBCR?
On this determinative question the arbitral tribunal ruled that the Applicant undertook only one type of work—plastering.[82] Under that analysis, the Sub-Contracts are excluded from the mandatory jurisdiction of VCAT under the provisions of the DBCA and thus the arbitration agreement at clause 41.4(a) gives the arbitral tribunal jurisdiction. For the preceding reasons, under section 16(9) of the CAA, the Court must make its own determination on the question of jurisdiction, although the reasons of the arbitral tribunal may be taken into account to the extent of their cogency.[83]
[82]The Arbitrator’s Ruling on Jurisdiction, [8]–[18].
[83]Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs, Government of Pakistan [2010] 1 All ER (Comm) 917, 927 at [21]. Given that this is a de novo hearing this Court is not obliged to address the defects in the ruling of the arbitral tribunal alleged by the Applicant: Transcript, 16–7.
The evidence comprises the Scope of Works to both Sub-Contracts, and affidavit evidence adduced by both parties.[84] The Scope of Works to both Sub-Contracts is headed “Scope of Works: Plastering”[85] and the name of the Applicant is Lin Tiger Plastering Pty Ltd. Of course neither of these facts are determinative of whether plastering alone, or plastering, insulation and more, were undertaken by the Applicant under the Sub-Contracts. The argument that the Sub-Contracts are, as the Applicant described, “multi-trade” contracts[86] was framed by the Applicant as a fact agreed between the parties that plastering, insulation and more were undertaken by the Applicant.[87] This is, however, to oversimplify the matter.
[84]The South Melbourne Sub-Contract, Schedule 2, Scope of Works; the Hawthorn East Sub-Contract Schedule 2, Scope of Works; Affidavit of Bo Lin (9 March 2018) [9]; Affidavit of Elliot Verblun (21 March 2018) [6]–[15].
[85]The South Melbourne Sub-Contract, Schedule 2, Scope of Works; the Hawthorn East Sub-Contract Schedule 2, Scope of Works.
[86]Transcript, 6.
[87]Transcript, 5, 18, 49.
The Scope of Works includes the installation of: metal stud wall systems; metal door jambs and door frames; acoustic and thermal insulation; under slab insulation; framing; furring channels; suspended and dropdown ceilings; bulkheads; internal ceiling and wall systems; fire rating plasterboard; beading, trims and caulking.[88] It is on this basis that the Applicant submits that it undertook more than one type of work exempted under regulation 7; with the result, it is contended, that the DBCA applies to the Sub-Contracts.[89]
[88]The South Melbourne Sub-Contract, Schedule 2, Scope of Works; the Hawthorn East Sub-Contract Schedule 2, Scope of Works.
[89]Transcript, 18, 49.
The mention of insulation and other works in the course of plastering in a schedule of works is not necessarily a matter which would prevent those works together from being characterised as “single-trade”, hence within the exemption under regulation 7. Proper characterisation of the works must be undertaken on the basis of the relevant contractual provisions in the context of the provisions, properly construed, of the applicable legislative and regulatory regime and, of course, relevant factual matters.
The affidavit of Mr Elliot Verblun, the director of the Respondent and a person with over 40 years’ experience in the construction industry, details carefully the works undertaken by a plasterer in the context of the entire process of building.[90] His evidence comprehensively addresses the schedule of works[91] and explains why each item was a work properly undertaken by a plasterer and is therefore properly to be regarded as plastering works only.[92] There is no evidence provided by the Applicant which, in my view, detracts from the evidence of Mr Verblun. The Applicant relies on the affidavit evidence of Mr Bo Lin,[93] a person who does not claim, at least specifically, any expertise in the building industry. In any event, it is a reasonable inference that he has far less relevant experience—or experience generally—in that industry and it follows that anything in the nature of opinion evidence as to the nature of plastering work which might be inferred from his affidavit should not be preferred over that of the far more experienced Mr Verblun. In any event, Mr Bo Lin does not, in my view, address this issue beyond, what amounts to, a reiteration of the agreed scope of works, which does not assist in resolution of the issue.
[90]Affidavit of Elliot Verblun (21 March 2018), [13].
[91]Affidavit of Elliot Verblun (21 March 2018), [12].
[92]Affidavit of Elliot Verblun (21 March 2018), [14].
[93]Affidavit of Bo Lin (9 March 2018).
At this point, it is useful to observe that, in my view, provisions such as regulation 7 of the DBCR must be interpreted in the context of legislation and subordinate legislation directed to matters in respect of the building industry and, consequently, it would not only be absurd, but contrary to the legislative purpose to interpret words and expressions other than in accordance with, or at least, consistently with their accepted meaning and usage in that industry.[94] It follows that the opinions of those with relevant expertise and experience in the building industry are relevant in this respect. Generally, as to the admission of evidence based on specialised knowledge, see Matthews v SPI Electricity Pty Ltd.[95]
[94]And see Interpretation of Legislation Act 1984, section 35.
[95][2012] VSC 340 (J Forrest J).
For these reasons, I accept that on a proper characterisation, the only works being undertaken by the Applicant under the Sub-Contracts were plastering works. It follows that the excepting provisions of regulation 7 of the DBCR apply, with the result that the DBCA does not apply. The consequence of this is that the mandatory and exclusive jurisdiction of VCAT is not enlivened.
Conclusion
On the basis of the Court’s finding that the DBCA does not apply in the present circumstances, the decision of the Court for the purposes of section 16(9) of the CAA is that the arbitral tribunal has correctly determined in favour of its own jurisdiction and should therefore proceed to discharge its arbitral mandate.
The parties are to bring in Orders to give effect to these reasons. I otherwise reserve the question of costs and will hear the parties on this issue.
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