Oldfield Knott Architects Pty Ltd v Ortiz Investments Pty Ltd
[2000] WASCA 259
•12 SEPTEMBER 2000
OLDFIELD KNOTT ARCHITECTS PTY LTD -v- ORTIZ INVESTMENTS PTY LTD [2000] WASCA 259
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2000] WASCA 259 | |
| THE FULL COURT (WA) | 12/09/2000 | ||
| Case No: | FUL:123/2000 | 14 JULY 2000 | |
| Coram: | OWEN J HEENAN J | 14/07/00 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Leave to appeal refused | ||
| PDF Version |
| Parties: | OLDFIELD KNOTT ARCHITECTS PTY LTD ORTIZ INVESTMENTS PTY LTD |
Catchwords: | Practice and procedure Appeal against decision to grant interim injunction but not to restrain arbitration proceedings until appeal hearing Whether Judge applied wrong test in granting injunction No record of proceedings Whether appeal would be rendered nugatory if arbitration proceedings commence but do not conclude before appeal hearing |
Legislation: | Nil |
Case References: | Bridge Pump Co Pty Ltd v Fazio, unreported; SCt of WA (Murray J); Library No 980591; 2 October 1998 Wilson v Metaxas [1989] WAR 285 Decor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 Jarrett v Seymour (1993) 46 FCR 557 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : OLDFIELD KNOTT ARCHITECTS PTY LTD -v- ORTIZ INVESTMENTS PTY LTD [2000] WASCA 259 CORAM : OWEN J
- HEENAN J
- Appellant
AND
ORTIZ INVESTMENTS PTY LTD
Respondent
Catchwords:
Practice and procedure - Appeal against decision to grant interim injunction but not to restrain arbitration proceedings until appeal hearing - Whether Judge applied wrong test in granting injunction - No record of proceedings - Whether appeal would be rendered nugatory if arbitration proceedings commence but do not conclude before appeal hearing
Legislation:
Nil
(Page 2)
Result:
Leave to appeal refused
Representation:
Counsel:
Appellant : Mr M D Howard
Respondent : Mr C B Edmonds
Solicitors:
Appellant : Downings Legal
Respondent : Jackson McDonald
Case(s) referred to in judgment(s):
Bridge Pump Co Pty Ltd v Fazio, unreported; SCt of WA (Murray J); Library No 980591; 2 October 1998
Wilson v Metaxas [1989] WAR 285
Case(s) also cited:
Decor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397
Jarrett v Seymour (1993) 46 FCR 557
(Page 3)
1 OWEN J: This is an application for leave to appeal from a decision of Wallwork J made on 26 June 2000. The order that his Honour made was:
"The arbitration proceedings not commence before 21 days from the date of this order, the commencement date depend on the arbitrator's availability and that the costs of the application be reserved."
2 I should recite the history of the matter. In September 1997, the respondent entered into a building contract for the construction of a house under the supervision of the appellant as architect. In May 1998, the builder that had been engaged to construct the residence went into administration and the building contract was terminated.
3 In October 1998, the respondent initiated arbitration proceedings as between itself and the appellant, by causing a notice of dispute to be served. On 1 December 1998, the arbitrator, Mr McArdle, was appointed by the Institute of Arbitrators and Mediators Australia, to deal with the dispute between the parties.
4 In February 1999, a preliminary meeting of the arbitration was held between the parties and the arbitrator. What followed was a lengthy series of interlocutory proceedings and the arbitration commenced on 5 May 2000. At the commencement of the second day of the hearing before the arbitrator, the applicant applied to have the arbitrator dismissed, or indicated that it wished to apply to have the arbitrator dismissed. On 9 May 2000 the applicant obtained an interlocutory injunction from this Court staying the arbitration proceedings pending its application for removal of the arbitrator. The applicant then applied under s 44 of the Commercial Arbitration Act for removal of the arbitrator on grounds of misconduct. On 31 May 2000, Hasluck J handed down written reasons for decision, in which he dismissed the applicant's application. On 2 June 2000, the arbitrator relisted the arbitration, to commence on 3 July 2000.
5 On 22 June 2000, an application was made to Hasluck J for leave to appeal against his decision. Hasluck J referred the question of leave to appeal to the Full Court to be heard together with the substantive appeal.
6 On 26 June 2000, the applicant applied to the arbitrator for an adjournment of the arbitration on two bases. First, that there was an appeal on foot and that the arbitration ought not to proceed until the disposition of that appeal. Secondly, that the applicant's counsel had
(Page 4)
- family difficulties which required him to absent himself from the jurisdiction.
7 The arbitrator refused the application for an adjournment and directed that the arbitration recommence on 3 July 2000. Later that same day (26 June 2000) the applicant applied to Wallwork J for an injunction to restrain the arbitrator from proceeding. Similar grounds were advanced, namely, that the appeal against the decision of Hasluck J was on foot and that there were the compassionate grounds relating to the unavailability of the applicant's counsel.
8 The written application which came before Wallwork J is not in complete form. In effect it was an application that the respondent be restrained from proceeding with the arbitration which had commenced on 5 May 2000, until a date to be determined.
9 In an affidavit of Elizabeth Hewton sworn 14 July 2000 and filed in support of this application for leave to appeal, the deponent says that on that day Wallwork J was moved for an injunction restraining the arbitration proceedings that were to commence on 3 July 2000 until the determination of the appeal against the decision made by Hasluck J or, alternatively, for approximately 28 days.
10 What occurred at the hearing before Wallwork J is not at all clear. The hearing extended over a period of some two hours or so. The proceedings were not monitored or recorded. There are no written reasons for decision and it appears that neither counsel for the applicant nor counsel's instructing solicitors took a note of his Honour's reasons for decision.
11 This creates a difficulty. It is a matter to which I will return in a moment. There are, in various paragraphs of the affidavit of Ms Hewton, statements which are attributed to Wallwork J. However, the affidavit does not indicate that it is, or purports to be, a complete record to the best of the deponent's recollection of what his Honour said.
12 After 26 June 2000 the arbitrator relisted the arbitration to commence on Monday, 17 July 2000. Meanwhile, the substantive appeal and application for leave to appeal to the Full Court from the decision handed down by Hasluck J on 31 May 2000 was listed for hearing on Friday, 21 July 2000. On 14 July 2000, the applicant filed an application for leave to appeal from the decision of Wallwork J and it is that application which comes before the Court today as a matter of urgency.
(Page 5)
13 The principles governing the grant of leave to appeal are well known. I need only mention Wilson v Metaxas [1989] WAR 285 at 296.
14 This Court must have regard to the grounds set out in the draft notice of appeal dated 14 July 2000. In it the applicant says that the learned Judge applied the wrong test when dismissing the appellant's application for an interim injunction. It gives two particulars. First, that the learned Judge did not expressly state the test to be applied in determining the application. Secondly, it may be inferred that the wrong test was applied to the resolution of the application because the appellants sought an order that the arbitration proceedings not proceed until the determination of the appeal, and yet the learned Judge ordered an adjournment of the arbitration proceedings for three weeks.
15 It is here that the absence of a note as to what his Honour actually said creates difficulties. This Court is being asked to conclude that a judicial officer made an error, namely that he applied the wrong test when considering and determining the appellant's application for an interim injunction. The onus lies on the applicant to satisfy this Court that the ground has been made out. It seems that there are at least three bases on which this Court is now invited to form the conclusion that the wrong test was applied. First, that there was no express statement of the test which his Honour was applying. Secondly, that his Honour seemed to concentrate on the secondary ground rather than the primary ground. Thirdly, that there was no express statement that his Honour had declined to grant a stay pending the disposition of the appeal.
16 I am not satisfied that any of those matters appear sufficiently from the materials which are before the Court. I am not at all satisfied that I should conclude that his Honour applied the wrong test. Counsel for the respondent indicated that that the decision of Murray J in Bridge Pump Co Pty Ltd v Fazio, unreported; SCt of WA (Murray J); Library No 980591; 2 October 1998 which contains a statement of the appropriate test, was put to his Honour during argument. In the light of that, it seems highly likely that his Honour would not have applied a wrong test.
17 It is also said in par 3 of the draft notice of appeal that had his Honour applied the correct test he would have come to the conclusion that a stay was appropriate because there were special circumstances which would justify the granting of an injunction. It is said to be a special circumstance that, without the injunction, the appeal against the decision of Hasluck J could be rendered nugatory in that the arbitration proceedings could conclude before the Full Court determined the appeal.
(Page 6)
18 This ground could not be made out. If, as I am now advised, the Full Court is to hear the application for leave to appeal and substantive appeal against the decision of Hasluck J on 21 July 2000, it is clear that the arbitration proceedings will not conclude before that matter comes before the Full Court.
19 It will be open to the parties to make an application at the conclusion of the argument before the Full Court for a stay, should the parties consider that appropriate. The Full Court, having heard full argument on the merits of the appeal, will be in a position to determine that matter.
20 For this reason, I am not persuaded that a failure of this Court today to intervene would render the appeal nugatory.
21 It is then said in paragraph (b) that the appeal has prospects of success. I doubt whether that constitutes special circumstances. The question of the merits, and chances of success of the appeal, are relevant in an application of this nature but not because they form special circumstances. They are part of the proper exercise of the supervisory powers in which a court, in an application of this nature, must engage so as to do justice.
22 I am prepared to assume, without deciding, that the appeal to be mounted against the decision of Hasluck J is not without merit.
23 In par (c) of the draft notice of appeal it is said that if the injunction is not granted and the appellant is successful in the appeal against the judgment of Hasluck J, the appellant will have suffered irreversible prejudice. One element of prejudice is that the appellant will have incurred half the costs of the arbitration proceedings before the present arbitrator and will be unable to recover them.
24 There are two things to be said about that. The first is that there is an argument, which this Court is not in a position to decide, as to whether that is the case, bearing in mind the terms of the arbitration agreement and the proper construction of s 34 of the Commercial Arbitration Act. But even if that is correct, there is no material before the Court which attempts to quantify the potential costs. In the context of a commercial dispute of this nature, I am not satisfied that the prejudice, if it be prejudice in relation to the costs of the arbitration proceedings, is a sufficient basis upon which this Court should intervene.
25 The second of the subgrounds is that if the appeal is successful, the arbitration proceedings will start again before another arbitrator. That is
(Page 7)
- obviously correct. But I cannot see how that amounts to irreversible prejudice because what occurs during the short period of the arbitration proceedings next week will presumably be of some assistance to the parties in the overall resolution of their problems.
26 The third subground is that the appellant will have incurred significant legal costs in respect of the arbitration proceedings before the present arbitrator which it cannot fully recover. Again, there is no attempt to quantify what that might be. In any event, there could be awards of costs made by various tribunals which would mitigate the prejudice that would be thereby suffered.
27 The fourth subground is that the appellant and its witnesses will have been required to meet, on oath, a set of allegations which go to their integrity and competence without those allegations being properly defined in accordance with the requirements of procedural fairness.
28 In the circumstances as they have been outlined in argument, it seems that that goes more to relevance than procedural fairness. In any event, it seems that if the proceedings are to go ahead next week, most of the time will be taken up by the case to be presented by the respondent. That being so, the appellant will become fully aware of the case which it is called upon to meet in relation to the impugned areas of inquiry.
29 It is then said, in par 4 of the draft notice of appeal, that a further special circumstance is that the appeal is listed to be heard on 21 July 2000. As I have already indicated, I would have thought that that is a matter which militates against, rather than in favour of, urgent interim relief of the sort which is now being sought.
30 On the materials that are before the Court, the applicant has not made out a case that the decision of Wallwork J is clearly wrong or attended by sufficient doubt to justify the grant of leave to appeal, and nor has the applicant made out a case of serious prejudice if the decision is left to stand. For those reasons, I would refuse leave to appeal.
31 HEENAN J: I also would refuse leave to appeal and for the reasons just delivered by my brother Owen J.
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