O'Brien Lovrinov Crafter Pty Ltd v Corradini - [1999] SASC 159

O'BRIEN LOVRINOV CRAFTER PTY LTD v

MARIO ROBERT CORRADINI AND BARBARA CORRADINI
[1999] SASC 159
Miscellaneous Appeal

1 MARTIN J. (Ex tempore) This is an appeal pursuant to leave granted in this court on 29 January 1999 against an order of a District Court judge made on 9 December 1998, in which he dismissed the appellant's appeal against an order of a District Court master made on 29 October 1998.
2 The appellant is the plaintiff in an action in the District Court that can generally be described as a building dispute. The appellant is a builder and architect and it is agreed that the respondents approached the appellant with a view to the appellant undertaking architectural and building work at the respondents’ property. Both architectural and building work were caused to be carried out by the appellant on that property. It was agreed that the appellant was to pay the various subcontractors who carried out the work.
3 The appellant is now suing the respondents for just over $100,000, which he says is the amount owed for the work done in accordance with the terms of the engagement pursuant to which the appellant carried out certain alterations and additions to the respondents’ property.
4 The respondents deny that any amount is owing and allege that they have suffered loss and damage which is to be set off against any amount they might owe the plaintiff. A number of issues are raised in the pleadings and they can be summarised as follows.

The nature and terms of the contract between the parties.
Variations to the contract.
The legal consequences arising from the nature and terms of the contract for alleged defective work.
5 An examination of the file reveals a disturbingly familiar picture of constant wrangling over pleadings and other preliminary issues. The proceedings commenced in 1995 and an appearance was entered in June 1995. The latest version of the statement of claim appears to have been filed in November 1998. It is not difficult to conclude that the costs of this matter, should it continue on its present course, will ultimately be out of all proportion to the amounts in dispute.
6 By application dated 23 July 1998, the respondents sought a number of orders, including the following:
That the progress of this action to trial be delayed.
Not relevant.
That in accordance with s34 of the District Court Act 1991, that the court refer all questions of a technical nature arising in this action for an investigation and report by an expert, yet to be determined, in the relevant field to which this matter relates.
Alternatively, in accordance with s33 of the District Court Act 1991, that the court refer the action or any technical issue arising in the action for trial by an arbitrator.
Not relevant.
7 I have been advised that the parties have agreed that Mr Sarah should be the arbitrator and that he is not legally trained.
8 The application came on for hearing…

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.

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Details

Case: [1999] SASC 159
Decision Date: 15 April 1999

CaseChat Overview and Summary

In the matter of O'Brien Lovrinov Crafter Pty Ltd v Mario Robert Corradini and Barbara Corradini, the appeal concerns a building dispute where the appellant, a builder and architect, is suing the respondents for just over $100,000, which he claims is the amount owed for work done under the terms of their engagement. The respondents deny any liability and claim damages for alleged defective work. The legal issues encompass the nature and terms of the contract, variations to the contract, and the consequences of any defective work. The appeal is against a District Court master's decision to refer the determination of the nature and terms of the contract to an arbitrator.

The court identified that the appeal hinged on whether the master's discretion to refer certain issues to arbitration was correctly exercised. The master had ruled that the question of the nature and terms of the contract should be referred to arbitration, except for specific legal questions. The appellant argued that the determination of the existence and terms of the contract should remain with the court due to the involvement of issues of credit and the potential impact on other legal questions. The District Court judge dismissed the appeal, citing a binding precedent that required deference to the master's decision. However, the Supreme Court found that the District Court judge erred in not exercising his own discretion afresh, as permitted by the applicable rules.

The Supreme Court held that the master erred in directing the issues of contract existence and terms to an arbitrator. It was determined that these issues are more appropriately decided by a court, particularly due to the involvement of credit issues and their potential impact on other legal matters. The court acknowledged a shift towards referring disputes to arbitration but held that unless there is a compelling reason to do otherwise, parties are entitled to have the court determine such legal issues. Therefore, the appeal was allowed, and the matters concerning the existence and terms of the contract were to be heard in the District Court. The court also directed that other issues not referred to the arbitrator should be tried alongside these preliminary matters. Finally, the court ordered the respondents to pay the appellant's costs for the application, appeal, and the current proceeding.

Orders