Mowby Pty Ltd v Moose Property Services Pty Ltd - [2007] VSC 111

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 7799 of 2006

MOWBY PTY LTD	Plaintiff
v
MOOSE PROPERTY SERVICES PTY LTD (subject to deed of company arrangement) (in liquidation)	Defendant

---

JUDGE:	HANSEN J
WHERE HELD:	Melbourne
DATE OF HEARING:	11 and 12 April 2007
DATE OF JUDGMENT:	26 April 2007
CASE MAY BE CITED AS:	Mowby Pty Ltd v Moose Property Services Pty Ltd
MEDIUM NEUTRAL CITATION:	[2007] VSC 111

---

Arbitration – Construction contract – Disputes - Agreement to refer “certain disputes that have arisen” to arbitration – Whether such disputes included a claim for consequential loss – Ruling by arbitrator that such claim was a dispute referred - Application for leave to appeal – Commercial Arbitration Act 1984 (Vic) s 38(5)(a) and (b)(i) and (ii) – Whether substantial effect on rights – Whether manifest area of law – Whether error of law the determination of which may add substantially to the certainty of commercial law – Discretion to refuse leave – Leave refused.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M D G Heaton QC and Mr B Guzzo	Leem Lawyers
For the Defendant	Mr J A H Foxcroft SC and Mr E Riegler	Lovegrove & Lord

HIS HONOUR:

By an originating motion filed on 31 July 2006 the plaintiff, Mowby Pty Ltd (“Mowby”), seeks leave to appeal against a ruling made by an arbitrator in an arbitration between Mowby and Moose Property Services Pty Ltd (“Moose”). The ruling was published on 17 July 2006. The aspect of the ruling which Mowby seeks leave to appeal against is the holding that a claim by Moose for consequential damages in paras 43 and 43A of its points of claim was a dispute referred for determination in the arbitration. Mowby submits that it was not so referred and, accordingly, that it is not justiciable in the arbitration.

The application is made pursuant to s 38 of the Commercial Arbitration Act 1984 (Vic) (“the Act”), sub-s (2) and (4) of which provide that a party to an arbitration agreement may, by leave of the Supreme Court, appeal to the Supreme Court on any question of law arising out of an award of an arbitrator. Section 38(5) provides that leave is not to be granted unless the Court considers that:

“(a)having regard to all the circumstances, the determination of the question of law concerned could substantially affect the rights of one or more parties to the arbitration agreement; and

(b) there is –
(i)a manifest error of law on the face of the award; or
(ii)strong evidence that the arbitrator or umpire made an error of law and that the determination of the question may add, or may be likely to add, substantially to the certainty of commercial law.”

If these requirements are satisfied, the Court retains a discretion whether to grant leave to appeal or set aside the award[1].

[1]Promenade Investments Pty Ltd v State of New South Wales (1992) 26…

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.

Keep reading for free

Create a free CaseChat account to read Mowby Pty Ltd v Moose Property Services Pty Ltd and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2007] VSC 111
Decision Date: 26 April 2007

CaseChat Overview and Summary

Mowby Pty Ltd, the plaintiff, filed a case against Moose Property Services Pty Ltd, the defendant, in the Supreme Court of Victoria. The case revolved around a construction contract dispute, specifically whether a claim for consequential loss was included in the agreement to refer certain disputes to arbitration. The court was tasked with determining the scope of the arbitration clause in the contract, and whether the arbitrator's decision to include the consequential loss claim in the arbitration was correct. The matter further escalated to an application for leave to appeal under sections 38(5)(a) and (b)(i) and (ii) of the Commercial Arbitration Act 1984 (Vic), where the plaintiff sought to challenge the arbitrator's ruling. The court had to consider whether the appeal had a substantial effect on the rights of the parties, whether it involved a manifest area of law, and whether the error of law, if any, could add significantly to the certainty of commercial law.

The legal issues before the court encompassed the interpretation of the arbitration clause in the contract and the scope of the disputes that were subject to arbitration. The court had to determine whether the claim for consequential loss fell within the purview of the arbitration agreement. Additionally, the court needed to assess the criteria for granting leave to appeal under the Commercial Arbitration Act 1984 (Vic). The plaintiff argued that the arbitrator's decision had a substantial effect on their rights and involved a manifest area of law, warranting an appeal. However, the court had to consider whether the error of law, if any, could substantially add to the certainty of commercial law and whether the discretion to refuse leave should be exercised.

In its reasoning, the court held that the claim for consequential loss did indeed fall within the scope of the arbitration clause. The court found that the arbitrator's determination was consistent with the terms of the contract and did not involve an error of law that could add substantially to the certainty of commercial law. The court further noted that the appeal did not have a substantial effect on the rights of the parties and did not involve a manifest area of law. Consequently, the court exercised its discretion to refuse the application for leave to appeal. The court's decision underscored the importance of adhering to the terms of arbitration agreements and the limited grounds on which leave to appeal can be granted.

The court's final orders were to refuse the plaintiff's application for leave to appeal the arbitrator's decision. The ruling affirmed the arbitrator's authority to include the claim for consequential loss within the scope of the arbitration and reinforced the principle that parties must abide by the terms of their agreements. This decision highlights the importance of clear and precise language in arbitration clauses to avoid future disputes over the scope of arbitration.

Orders