Nascon Constructions (Aust) Pty Ltd v Cordukes Ltd
[2001] VSC 148
•21 May 2001
| SUPREME COURT OF VICTORIA | |
| PRACTICE COURT | Not Restricted |
No. 4331 of 2001
| NASCON CONSTRUCTIONS (AUST.) PTY. LTD. | Plaintiff |
| v. | |
| CORDUKES LTD. | Defendant |
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JUDGE: | BEACH, J. | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 1 MAY 2001 | |
DATE OF JUDGMENT: | 21 MAY 2001 | |
CASE MAY BE CITED AS: | NASCON CONSTRUCTIONS (AUST.) PTY. LTD. v. CORDUKES LTD. | |
MEDIUM NEUTRAL CITATION: | [2001] VSC 148 | |
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CATCHWORDS: Appeal from Master's refusal to grant leave to appeal from decision of Arbitrators – No prospect of appeal from decision of Arbitrators succeeding – Appeal dismissed.
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APPEARANCES: | Counsel | Solicitors |
For the Plaintiff | Mr. S.R. Grahame | Adams Maguire Sier |
| For the Defendant | Mr. W.F. Gillies | Corrs Chambers Westgarth |
HIS HONOUR:
On 27 March 1998 the plaintiff Nascon Constructions Pty. Ltd. entered into a building contract with the defendant Cordukes Ltd. whereby Cordukes contracted to carry out certain building works at Shepparton Market Place Shopping Centre.
Disputes arose between the parties concerning the work the subject of the contract.
On 6 September 2000 and pursuant to clause 13.01 of the building contract, the defendant referred the disputes to arbitration.
When the disputes came before the arbitrators on 9 November 2000 the plaintiff challenged the jurisdiction of the arbitrators to entertain the disputes.
Following a hearing by the arbitrators, on 20 December 2000 the arbitrators determined that they had the necessary jurisdiction to hear the disputes.
Unless prevented by this Court the arbitrators now intend to proceed with their arbitration.
On 5 February 2001 the plaintiff filed an originating motion in the Court whereby it sought the following relief or remedy:
"RELIEF OR REMEDY SOUGHT
The Applicant seeks the following orders under the Victorian Civil and Administrative Tribunal Act 1998:
1.The Applicant have leave to appeal from the orders made on 21 December 2000 by Robert Thyer and John Permewan Arbitrators in an arbitration between the Applicant and the Respondent.
2. Such other orders as the Court deems appropriate.
3.The Respondent pay the Applicant's costs of the Application."
The plaintiff's application for leave to appeal came before Master Evans on 29 March 2001. Following a hearing that day the Master ordered that the proceeding be dismissed and that the plaintiff pay the defendant's costs of the proceeding.
The following paragraphs appear in the Master's order under the heading "Other Matters":
"1. The Master held that:
(i)the service of the documents in this proceeding did not comply with the service and execution of Process Act rendering that service liable to be set aside;
(ii)there was a discretion to permit the Applicant to amend the originating motion to seek Relief under the Commercial Arbitration Act and otherwise to make it conform with form 5C but because an application for leave to appeal the ruling of the arbitrators that they had jurisdiction was absolutely hopeless (see Leung v. Hungry Jacks Pty. Ltd. (1999) VSC 477) there was no point exercising the discretion by granting leave;
(iii)the proceeding should be dismissed under Rule 23.01 of Supreme Court (General Civil Procedure) Rules 1996."
The first point to note is that there is no power given to a party to seek leave to appeal from the decision of an arbitrator under the Victorian Civil and Administrative Act 1998.
A party aggrieved by the decision of an arbitration may seek leave to appeal against the determination on a question of law pursuant to s.38 of the Commercial Arbitration Act 1984 the relevant sub-sections of which read:
"38. Judicial review of awards
(1)Without prejudice to the right of appeal conferred by sub-section (2), the Court shall not have jurisdiction to set aside or remit an award on the ground of error of fact or law on the face of the award.
(2)Subject to sub-section (4), an appeal shall lie to the Supreme Court on any question of law arising out of an award.
…
(4)An appeal under sub-section (2) may be brought by any of the parties to an arbitration agreement –
(a)with the consent of all the other parties to the arbitration agreement; or
(b)subject to section 40, with the leave of the Supreme Court.
(5)The Supreme Court shall not grant leave under sub-section (4)(b) unless it 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."
It is clear therefore that on its face the originating motion did not disclose a cause of action and could be dismissed by the Master on that ground pursuant to the provisions of Rule 23.01 of the Supreme Court Rules.
The Master declined to permit the plaintiff to amend the originating motion expressing the view that as any application for leave to appeal pursuant to the Commercial Arbitration Act was hopeless, there was no point in granting leave for such an amendment to be made.
In that regard the Master relied upon the decision of Hedigan, J. in Leung v. Hungry Jack's Pty. Ltd.[1]
[1](1999) VSC 477 (29 November 1999)
That too was a case in which a party to an arbitration challenged the jurisdiction of the arbitrator to hear and determine the arbitration.
The arbitrator held that he did have jurisdiction and the party to the arbitration who challenged his jurisdiction then sought leave to appeal to his Court pursuant to s.38 of the Commercial Arbitration Act.
In refusing the application Hedigan, J. said at paragraph 19:
"… Determination of the question or questions concerning jurisdiction does not to my mind fall within s.38(5)(a) because the rights of the applicant are not affected within the meaning of that sub-section by a decision that there was jurisdiction in the arbitrator to proceed to determine what the rights in the circumstances of the applicant and the respondent respectively are. Put another way, a finding of jurisdiction does not substantially affect the rights of the applicant or the respondent, notwithstanding that if there is no jurisdiction there could be no consideration of their respective rights. Nevertheless there has been no adjudication about their rights, as I would interpret the meaning of 'rights' within that sub-section to be. It would follow that if there has been no determination regarding the rights of a party to the agreement there could not be grounded any appeal against the determination of rights. These matters are yet to be determined by the arbitrator."
In my opinion the decision of Hedigan, J. is undoubtedly correct. However, it was argued by counsel for the plaintiff that the facts in this case are so different from those in Leung that this case is distinguishable. Determination of that submission requires a closer examination of the facts.
It is true that the original contract of 27 March 1998 contained an appropriate arbitration clause (see clause 13.1).
However, when disputes between the plaintiff and defendant arose, on 9 June 1999 the plaintiff, defendant, Nascon (Australia) Pty. Ltd. and Woolshep Nominees Pty. Ltd. entered into a further agreement in relation to the building works carried out by the defendant and which still were to be carried out by it. Nascon (Australia) was the architect for the project, Woolshep is the owner of the shopping centre. Neither of those parties were parties to the original contract of 4 March 1998 although at that time the plaintiff had entered into a separate agreement with Woolshep to be the project manager for the building works on behalf of Woolshep.
It was argued by counsel for the plaintiff that the effect of that later agreement was that the only part of the building contract to remain in force were the defendant's obligations concerning repair, rectification or replacement of defects during the defects period under the original contract which term was to expire on 1 December 1999.
I have carefully read the agreement of 9 June but can find no clause in it which in any way affects the arbitration clause in the 27 March 1999 contract.
In my opinion the Master correctly found that the facts in this case are on all fours with the facts in Leung and that to permit the plaintiff to amend the originating motion would be pointless. He then exercised the powers available to him and dismissed the proceeding pursuant to Rule 23.01 of the Rules. Again, in my view, the Master made no error in the matter.
Of course the appeal before me is a rehearing of the plaintiff's application for leave to appeal. I now refuse such application. In accordance with the decision of Fullagar, J. in Leighton Contractors Pty. Ltd. v. Kilpatrick Green Pty. Ltd.[2] I give no further reasons for refusing the application.
[2](1992) 2 V.R. 505
As to the plaintiff's summons filed in the Court on 30 April 2001 I simply order that it be dismissed.
The following are the formal orders of the Court in the matter:
1. The appeal from the decision of Master Evans on 29 March 2001 is dismissed.
2.The application of the plaintiff for leave to appeal from the orders of Robert Thyer and John Permewan made on 21 December 2000 in an arbitration between the plaintiff and the defendant is dismissed.
3. The plaintiff's summons filed in the Court on 30 April 2001 is dismissed.
4.I order that the plaintiff pay the defendant's costs of the appeal. and the summons, such costs to include any costs reserved. Insofar as the costs of 20 April 2001 are concerned the defendant's costs of that day are to be on an indemnity basis.
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