Lipman Pty Ltd v Empire Facades Pty Ltd (formerly known as Empire Glass and Aluminium Pty Ltd)

Lipman Pty Ltd (the applicant) and Empire Facades Pty Ltd (the respondent) were parties to a contract containing a dispute resolution clause. The clause stipulated a tiered process commencing with senior executive negotiation, followed by expert determination, and ultimately, litigation. The final and binding nature of the expert determination was subject to a party providing notice of appeal within a specified timeframe. The contract also provided a right to litigate if "the determination of the expert does not resolve the dispute." The dispute concerned the interpretation and application of this dispute resolution clause. The matter came before the Court of Appeal of New South Wales.

The central legal issue before the Court of Appeal was whether the clause permitting litigation was contingent on an invalid expert determination, or if it could be invoked whenever an expert determination failed to resolve the dispute, irrespective of its validity. Specifically, the court had to determine if the phrase "the determination of the expert does not resolve the dispute" should be read as being subject to the pre-condition that only an invalid expert determination would fail to resolve the dispute.

The Court of Appeal reasoned that the dispute resolution clause established a clear sequence of steps. The right to litigate was expressly conditioned on the expert determination not resolving the dispute. This condition was not limited to situations where the expert determination was found to be invalid. The court interpreted the clause to mean that if the expert determination, regardless of its validity, did not achieve a resolution of the dispute, then the parties were entitled to proceed to litigation. The court granted leave to appeal, directed the applicant to file a notice of appeal, but ultimately dismissed the appeal, ordering the applicant to pay the respondent's costs.