Nouvelle Homes Pty Ltd v G & M Smargiassi

Nouvelle Homes Pty Ltd sought to appeal an arbitration award made under the Commercial Arbitration Act 1985 (WA) against G & M Smargiassi. The dispute centred on delay damages awarded to Nouvelle Homes in the context of a building contract. The builder, G & M Smargiassi, challenged the award on several grounds, including that the arbitrator had committed a manifest error of law and that the award should be set aside due to misconduct.

The legal issues the court was required to decide included whether there was a manifest error of law on the face of the award and whether the award should be set aside for misconduct. The court had to consider the principles established in previous cases, particularly those that define manifest error of law and the circumstances in which an award may be set aside for misconduct. Additionally, the court needed to assess whether the tribunal's decision was influenced by any technical misconduct that could warrant setting aside the award.

The court, after examining the principles of manifest error of law and misconduct in arbitration awards, concluded that while the arbitrator had made an error in the calculation of delay damages, it was not a manifest error of law. The court held that the error did not render the award invalid, but it did warrant a variation in the amount of delay damages awarded. The court also found that the technical misconduct alleged by the builder did not justify setting aside the award. The court dismissed the application for leave to appeal on the basis of misconduct. The builder was granted leave to appeal on the error of law ground, and the court varied the amount of delay damages awarded by the arbitrator.

The court ordered that the builder have leave to appeal on the ground of manifest error of law, that the amount of delay damages be varied to $7,000, that leave to appeal otherwise be refused, and that the builder's application under s 42 be dismissed. The court invited the parties to provide input on the precise orders and costs.