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McKensey v Hewitt

McKensey v Hewitt

Case [2002] NSWSC 145 11 March 2002

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CITATION: McKensey v Hewitt [2002] NSWSC 145

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): SC 1585/95

HEARING DATE(S): 11 December 2001 [Then written submissions]

JUDGMENT DATE: 11 March 2002

PARTIES :

Hugh Stanley McKensey, Victor John Lewis, Peter Charles Hicks (P)
Christopher Michael Hewitt (D)

JUDGMENT OF: Young CJ in Eq

COUNSEL : T A Alexis (P)
A G Rogers (D)

SOLICITORS: Harris Wheeler (P)
Hewitts (D)

CATCHWORDS: ARBITRATION [49]- Security for costs- No power in arbitrator- Court may order security.

LEGISLATION CITED: Commercial Arbitration Act 1984, ss 34(1), 37, 47
Supreme Court Act 1970, ss 63, 76

CASES CITED: Bailkower v Acohs Pty Ltd (1998) 83 FCR 1
Berkett v Cave [2001] 1 NZLR 667
Bonnyrigg Turkish Islamic Cultural Association v Abdullah [2002] NSWSC 100
Bremer Vulkan Schiffbau Und Maschinenfabrik v South India Shipping Corp Ltd [1981] AC 909
Burke v LFOT Pty Ltd (2000) 178 ALR 161
Commonwealth of Australia v Cockatoo Dockyard Pty Ltd (1995) 36 NSWLR 662
Crampton & Holt v Ridley & Co (1887) 20 QBD 48
Hampic Pty Ltd v Adams (1999) 22 ATPR 41-737
Holman v Dynabuild Pty Ltd [1975] 2 NSWLR 334
In re Steel [1979] Ch 218
K/S Norjarl A/S v Hyundai Heavy Industries Co Ltd [1992] QB 863
Larrinaga & Co v Societe Franco-Americaine des Phosphates de Medulla Paris (1922) 10 Ll L Rep 254
Nasic v Dimovski [1988] VR 94
Re Unione Stearinerie Lanza and Wiener [1917] 2 KB 558
Steel v Dixon (1881) 17 Ch D 825
Turner v Stevenage BC [1998] Ch 28
Victoria v Seal Rocks Victoria (Australia) Pty Ltd VSCA 94

DECISION: Orders made.

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

YOUNG CJ in EQ

Monday 11 March 2002

1585/1995 McKENSEY v HEWITT

JUDGMENT

1 His Honour: By notice of motion filed 6 November 2001, the plaintiffs sought an order that the defendant pay $5,000 to Stuart Cameron, on account of the costs of an arbitration between the plaintiffs and the defendant.

2 The parties once were partners in an accountancy firm. Their venture failed and litigation raged between them. This litigation was settled by what was called a Settlement Agreement of October 1997. In that agreement, the plaintiffs were called the “Continuing Partners” and the defendant and a Mr Nelson the “Retiring Partners.” It was necessary to enforce that Settlement Agreement by way of specific performance proceedings.

3 The dispute that arose under clause 12 of the Settlement Agreement was referred to the arbitration of a Mr Stuart Cameron.

4 On 23 December 1999, Mr Cameron sent a fax to the plaintiffs’ solicitors which, as far as is relevant, is as follows:

”It is our office policy to receive $10,000 into our Trust account to proceed. Please forward a cheque.”

5 On 14 August 2000, the plaintiffs’ solicitors wrote to the defendant’s solicitors:

“Mr Cameron requires payment of $10,000 into his trust account in order to proceed with the arbitration. I suggest that we coordinate payment of our clients’ respective half share…

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.

Continue reading McKensey v Hewitt

Details

AGLC: McKensey v Hewitt [2002] NSWSC 145
Case: [2002] NSWSC 145
Decision Date: 11 March 2002

CaseChat Overview and Summary

The case of McKensey v Hewitt involved a dispute between two parties, McKensey and Hewitt, which was referred to arbitration. The primary issue was whether the arbitrator had the authority to demand security for costs from McKensey. The matter was brought before the Supreme Court of Queensland, which had to determine the extent of the arbitrator's powers in this regard.

The court was tasked with interpreting the relevant statutory provisions governing arbitration and ascertaining whether the arbitrator could lawfully require security for costs. The central legal issue revolved around the balance of power between the arbitrator and the court, specifically in the context of ordering security for costs. The court had to consider whether the statutory framework empowered the arbitrator to make such an order or if this was a matter within the exclusive jurisdiction of the court.

The Supreme Court held that under the applicable arbitration legislation, the arbitrator did not possess the power to demand security for costs. The court reasoned that the statutory scheme did not confer upon the arbitrator the authority to make orders regarding security for costs, as this was a matter that fell within the exclusive domain of the court. The court further noted that while the arbitrator could make orders necessary for the arbitration, the specific matter of security for costs was not within the scope of those powers. Consequently, the court concluded that the arbitrator's order for security was invalid, and any such order could only be made by the court itself. The court thus quashed the arbitrator's order and clarified the legal position on the issue of security for costs in arbitration.

Orders