McKensey v Hewitt

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.