Paper Products P/L v Tomlinsons (Rochdale) Ltd

[1993] FCA 494

PAPER PRODUCTS PTY LTD v. TOMLINSONS (ROCHDALE) LIMITED; NIGEL WATTS and DAVID
MURPHY
No. WAG45 of 1993
FED No. 494
Number of pages - 10
Arbitration

(1993) 116 ALR 163
(1993) 43 FCR 439

COURT

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
French J(1)

CATCHWORDS

Arbitration - stay application - arbitration clause - dispute arising under the agreement - claims for contravention of Trade Practices Act 1974 - negligent mis-statement - breach of collateral contract - whether within clause - question of construction - general approach of courts to arbitration - no room in language for application of more liberal approach - motion for stay dismissed.

Trade Practices Act 1974 s. 75B, s.82

Commercial Arbitration Act 1985 (WA) s.53

Sharkey and Dorter, Commercial Arbitration Law Book Co. (1986)

Mustill and Boyd, The Law and Practice of Commercial Arbitration in England 2nd Ed. (1989)

Bond Corporation Pty Ltd v. Thiess Contractors (1987) 14 FCR 193

IBM Australia Ltd v. National Distribution Service Ltd (1991) 100 ALR 361

Qantas Airways Ltd v. Dillingham Corporation (1985) NSWLR 113

Park Rail Developments Pty Ltd v. R.J. Pearce and Associates (1987) 8 NSWLR 123

Main Electrical Pty Ltd v. Civil and Civic Pty Ltd (1978) 19 SASR 34

Mir Bros Development Pty Ltd v. Atlantic Constructions Pty Ltd (1985) 1 BCL 80

Allergan Pharmaceuticals Inc. v. Bausch and Lomb Inc. (1985) ATPR 40-636

Ashville Investments Ltd v. Elmer Contractors Ltd (1988) 3 WLR 867

HEARING

PERTH, 14 July 1993

#DATE 23:7:1993

Counsel for the Applicant: Mr K. Lyons

Solicitors for the Applicant: Jackson McDonald

Counsel for the Respondents: Mr B.D. Luscombe

Solicitors for the Respondents: Mallesons Stephen Jaques

ORDER

The court orders that:

1. The first respondent's motion filed 25 June 1993 is dismissed.

2. The first respondent to pay the applicant's costs of the motion.

Note: Settlement and entry of Orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

REASONS FOR JUDGMENT ON MOTION TO STAY PROCEEDINGS

Introduction

FRENCH J On 22 March 1993 Paper Products Pty Ltd (Paper Products) filed an application in this Court claiming damages under s.82 of the Trade Practices Act 1974 against Tomlinsons (Rochdale) Limited (Tomlinsons), Nigel Watts and David Murphy. Other relief sought included, in the alternative, damages for breach of contract or negligence against Tomlinsons. The application was filed with a statement of claim and a motion seeking leave to serve the proceedings on the respondent out of Australia and in the United Kingdom. This was supported by an affidavit sworn by Coomaraswamy Sivandran, the Managing Director of Paper Products. On 6 April leave was given to amend the application and statement of claim and to serve the amended application and statement of claim with supporting affidavits out of the jurisdiction. Tomlinsons was served on 21 April 1993 at Lancashire in the United Kingdom, Mr Watts was served on the same day and Mr Murphy on 26 April 1993. Tomlinsons filed a conditional appearance on 25 June 1993 together with a motion returnable on 28 June for orders that the leave to serve the originating process outside Australia and in the United Kingdom be discharged and service of the process on Tomlinsons be set aside and that pursuant to s.53 of the Commercial Arbitration Act 1985 (WA) the proceedings as against Tomlinsons be stayed. Directions were given on 28 June for the filing of submissions and the motion was adjourned to 14 July when it was argued and reserved until today.

1. No argument as to jurisdiction or forum was pursued. However the first respondent contended that by reason of an applicable arbitration clause the proceedings should be stayed under s.53 of the Commercial Arbitration Act 1985. In the event that was the sole issue to be dealt with on the return of the motion.

The Statement of Claim
3. By its amended statement of claim Paper Products alleges that in or about February 1990 the Ministry of Economic Development of the Government of Western Australia invited expressions of interest to undertake paper pulp moulding to produce egg cartons for the West Australian Egg Marketing Board. The invitation issued by the Ministry noted that the West Australian Egg Marketing Board trading as Golden Egg Farms had established a framework to enable the introduction of a new industry to produce suction moulded fibre packaging products in Western Australia. There were, it was said, no current manufacturers of suction moulded egg cartons or other suction moulded fibre products in the State. The existing agreements for the supply of egg cartons and filler flats to the Board was to expire on 30 June 1990 and the Ministry and the Board were prepared to assist in the establishment of a local industry by offering a term contract for the supply of egg cartons and filler flats produced from waste newsprint and other waste paper to a Western Australian manufacturer. This was subject to the products being priced at a level competitive with prevailing prices, quality standards and availability of carton types. Contract details and product specifications were set out in an appendix to the Ministry's invitation (para.6). The statement of claim sets out the text of the appendix.

1. A company called Paper and Pulp International Pty Ltd (PPI), of which Dr. Sivandran was a director, and another company called Recycling Technology Pty Ltd, as prospective joint venturers, had expressed interest in undertaking paper pulp moulding to produce egg cartons for the board. Paper products was incorporated on 11 April 1990 with all issued shares registered in the name of PPI (para.10). Between January and October 1990 Paper Products and alternatively the prospective joint venturers conducted negotiations with Tomlinsons, through Watts and Murphy, for the supply by Tomlinsons of paper pulping machinery (para.11). In the course of those negotiations it is said that Dr. Sivandran made known to Tomlinsons that he had responded to the Ministry's invitation with an expression of interest and that the prospective joint venturers and alternatively Paper Products were interested in acquiring from Tomlinsons machinery capable of meeting the requirements set out in the invitation (para.12).

2. In the course of the negotiations it is said that Tomlinsons stated that for the purposes of satisfying the requirements specified in the invitation a line of machinery comprising three components, being a paper pulp moulding machine, a continuous hot press and stacker machine and a printing machine, would be required. Tomlinsons said it manufactured machines producing egg boxes but not incorporating hot press facilities. Further it is alleged that Tomlinsons represented that it could supply a complete line of machinery comprising a TR4 paper pulp moulding machine which it manufactured itself, a "Peerless" hot press manufactured in the United States of America and a printing machine manufactured in the United States of America. When used together the three machines would be capable of complying with the requirements of the Board as set out in the invitation and producing 3,000 twelve pocket egg cartons per hour (para.12(b) and (c)). Paper products alleges that Tomlinsons suggested two alternative ways of acquiring a complete line of machinery necessary to satisfy the requirements in the Ministry's invitation. Separate orders could be placed with suppliers for the three components, including an order directed to Tomlinsons for a printing machine. Alternatively, all three components could be acquired through Tomlinsons. In consideration of Paper Products or the joint venturers contracting with Tomlinsons for the supply and installation of all components Tomlinsons allegedly promised to warrant that the three machines would together perform to the standards specified in the invitation and be capable of producing 3,000 twelve pocket acceptable egg cartons per hour (para.13). The representations are said to have been made with the intention and knowledge that they would be relied upon by some entity interested in acquiring the complete line and in the further knowledge that Paper Products would be incorporated specifically for the purpose of conducting the business of the joint venturers and that it would or reasonably would be expected subsequent to incorporation to rely upon the representations (para.14). Paper Products says that in reliance upon the representations it entered into a written agreement dated 9 November 1990 with Tomlinsons under which Tomlinsons agreed to supply it with the three machines for the sum of GBP931,500 (para.15).

3. The machines are said to have been delivered to Paper Products and installed in October to December 1991 (para.17). The representations made by Tomlinsons are said to have been false. The complete line of machines was not and never had been capable of meeting the Board's requirements under the invitation nor of producing 3,000 acceptable egg cartons per hour (para.18). Tomlinsons, it was said, did not have reasonable grounds for making the representations which were misleading (para.19). Further it was said that the Peerless hot press was not and never had been capable of meeting the Board's requirements under the invitation nor of producing 3,000 twelve pocket egg cartons per hour (para.20). The representation as to the hot press was allegedly made without reasonable grounds and was misleading as Tomlinsons had never before tested its capability nor installed such a machine to be used on a continuous basis with a pulp moulding manufacturing machine (para.21).

4. Tomlinsons, it is alleged, had engaged in misleading or deceptive conduct and conduct in contravention of paras.53(a) and 53(c) of the Trade Practices Act 1974 (Cth). Messrs. Watts and Murphy are said to have been persons who were involved in the contraventions pursuant to s.75B of the Trade Practices Act 1974 (para.23).

5. Alternatively it is alleged that Tomlinsons was in breach of the collateral warranty which it had offered. A plea of negligent misrepresentation is also raised. The damages claimed are pleaded under the same heads for the contraventions of the Trade Practices Act, the breach of warranty and the negligent mis-statement. It is also alleged that by notice dated 30 November 1992 the Board has terminated its agreement with Paper Products and is seeking to recover loss and damages as a result of the failure of the machine to produce acceptable egg cartons. The best estimate of Paper Products' possible liability to the Board is said to exceed $500,000.

The Agreement
9. The agreement of 9 November 1990 between Paper Products and Tomlinsons was before the Court as an exhibit to an affidavit sworn by Dr. Sivandran. In the agreement Paper Products is designated as Purchaser and Tomlinsons as Supplier. Article 14 of the agreement, which is relied upon by Tomlinsons in support of its claim for a stay of these proceedings, provides:

"14.0 ARBITRATION

14.1 Any dispute between the parties hereto arising under this agreement which is not settled in a friendly manner shall be finally settled under the rules of Conciliation and Arbitration of the International Chamber of Commerce, Paris, by three arbitrators appointed in accordance with the said Rules.

14.2 Both parties shall continue to fulfil their respective obligations under the Contract during the arbitration

proceedings. The venue of arbitration shall be in Perth, Western Australia. 14.3 This agreement shall be governed, interpreted and arbitrated in terms of the law of the State of Western Australia."

To appreciate the application of this clause to the present dispute it is necessary to consider some other provisions of the agreement. Article 4.0 provides that the purchaser will pay to the supplier GBP931,500:

"4.1 For the design, manufacture and supply of Equipment as required herein, and special tools FOB in terms of Annexure 1."

Annexure 1 referred to in article 4.1 sets out the Scope of Supply which provides, inter alia:

"1. General

The scope of supply shall include all items of machinery and equipment necessary to manufacture pulp moulded products including without limiting the generality herein egg cartons and fruit trays.

2. The equipment shall include:

2.1 ONE TOMLINSON MODEL TR4 PAPER PULP MOULDING MACHINE having a maximum production rate of 3,000 30-pack Egg Trays, 12 pocket Egg Cartons, or similar products per hour...

2.2 ONE AUTOMATIC CONTINUOUS HOT PRESS MACHINE AND STACKER TYPE AP100AH30 2 DIES WIDE. The Hot Press would be fully linked by a connecting conveyor to the end of the TR4 Drying Machine, to enable the moulded dried cartons to be transferred

automatically to the Hot Press Machine..."

Reference is also made to a continuous automatic printing machine.

1. Article 6 relating to guarantees and liabilities provides, inter alia:
   

" 6.1.1

Guarantee

Supplier guarantees that the equipment will be commissioned to manufacture 12 pocket egg packaging cartons to a standard acceptable to the Purchaser and in particular as specified in Annexure IV."

Annexure IV relates specifically to the qualities of the egg cartons to be produced by the machine. There is provision also for the commissioning of the equipment and for an acceptance test to be carried out by the purchaser's engineer. Following acceptance by the purchaser the performance guarantees are deemed to have been demonstrated and the purchaser is obliged to promptly issue to the supplier a letter of acceptance (Article 6.2.3). Article 6.3 relates to warranties and provides, inter alia:

"6.3.1 Supplier shall liability only in respect of the fitness of the goods for the use and purpose specified herein."

Article 6.3.2 provides for repair or replacement by the supplier of the whole or part of the goods said to be defective in workmanship or materials within a period of twelve months after the date of the letter of acceptance. Article 6.3.6 provides:

"6.3.6 The foregoing guarantees are in lieu of all other guarantees whether express or implied. The remedies provided herein are the sole and exclusive remedies for Supplier's breach of Contract. Supplier shall not be liable for any special or general damages, loss of profits, or any consequential loss of any nature whatsoever."

Limitation of liability is covered by Article 6.4.1:

"6.4.1 Notwithstanding anything to the contrary contained in the Contract, Supplier liability shall be limited to the specific remedies prescribed in this Contract. In particular Supplier shall have no responsibility whatsoever for any consequential, special or general damages arising from Supplier's performance of the Contract."

Reference should also be made in this connection to Article 16.4:

"16.4 This Contract and its Annexures, Amendments and Schedules shall be the only Contract between the parties. Any oral or written statements, brochures or inducements or discussions made by either Purchaser or Supplier prior to this Contract coming into full force and effect are considered null and void."

The Stay Question
11. Although made between two parties, one of whom is located in Australia and the other in the United Kingdom, the agreement of 9 November is to be "governed, interpreted and arbitrated in terms of the laws of the State of Western Australia". The applicable arbitration statute is the Commercial Arbitration Act 1985 (WA). Where proceedings are commenced between two parties to an arbitration agreement governed by that Act then the Court in which the proceedings are commenced is empowered by s.53 of the Act to make an order staying the proceedings. That power is conferred on this Court by way of s.79 of the Judiciary Act 1903 (Cth) - Bond Corporation Pty Ltd v. Thiess Contractors (1987) 14 FCR 193 at 205-207. Its exercise involves discretionary considerations which were discussed in Bond Corporation (supra). In this case, however, there is a threshold question whether the dispute falls within the scope of the arbitration clause.

1. The class of dispute subject to arbitration under the agreement is described as "(a)ny dispute between the parties hereto arising under this agreement". In a recent decision of the New South Wales Court of Appeal in IBM Australia Ltd v. National Distribution Service Ltd (1991) 100 ALR 361, Kirby P said that there has been a change in attitude on the part of the Courts to arbitration clauses, which now tend to be widely construed. That change has been expressly adverted to in other judicial statements and textbook commentary. In Qantas Airways Ltd v. Dillingham Corporation (1985) 4 NSWLR 113 at 118 Rogers J said:
   

"It is now more fully appreciated than used to be the case that arbitration is an important and useful tool in dispute resolution. The former judicial hostility to arbitration needs to be discarded and a hospitable climate for arbitral resolution of disputes created."

Smart J of the New South Wales Court recognised "a change in the attitude of the courts as to the value of arbitration and reference..." - Park Rail Developments Pty Ltd v. R.J. Pearce and Associates (1987) 8 NSWLR 123. See also Sharkey and Dorter, Commercial Arbitration Law Book Co. (1986) at p 17 and following. In England the introduction of the Arbitration Act 1979 "marked the occasion of a profound psychological change in the relationship between the Courts and the arbitral process" - Mustill and Boyd, The Law and Practice of Commercial Arbitration in England 2nd Ed. (1989) at p 28.

1. Accepting that there has been a significant change of attitude, manifested in a variety of ways by the courts, the range of disputes covered by an arbitration clause must depend upon the language of the clause. In IBM Australia Ltd v. National Distribution Services Ltd (supra) there was as a matter of construction no difficulty in finding that the phrase "related to this agreement or breach thereof", which defined the range of disputes referrable to arbitration in that case, encompassed claims based upon the Trade Practices Act 1974. As Clarke JA observed at 377:
   

"The phrases "in relation to" or "related to" are of the widest import and should not, in the absence of compelling reasons to the contrary, be read down."

His Honour said that in context, and in the absence of contrary indications in the contract, the clause would be sufficiently wide to encompass claims that pre-contractual misrepresentations induced the complaining party to enter into the contract. He referred to the improbability of an intention on the part of the parties that the arbitration clause in that case would leave causes of action based on breaches of the contract with the arbitrator while those in which reliance were placed on ss.52, 82 and 87 of the Trade Practices Act would be determined in a court of law:

"The parties could hardly be thought to have contemplated that the arbitration clause would work in that way. It is far more likely that they intended that all disputes between them concerning the terms of the contract, the performance of it and the matters connected, in a real sense, with the contract should be referred to the one tribunal for determination. For my part I would find it difficult to ascribe to the parties to a contract an intention to submit only part of a dispute to an arbitral tribunal reserving the remainder for consideration by the court as this would, on any view, be inefficient and costly."

See also Handley JA who said at 381:

"The arbitration clause in this case covered "any controversy or claim arising out of or related to this Agreement or the breach thereof". That part of the submission which contained an agreement to refer controversies or claims "arising out of the Agreement or the breach thereof" appears to cover every conceivable claim which either party might have against the other in contract. In a particular context the same words may also cover other claims as well. However that may be, this clause contains, in addition, an agreement to refer controversies and claims "related to this Agreement or the breach thereof". These are wide words which should not be read down in the absence of some compelling reason for doing so... These words can only have been added to include within the submission claims other than in contract such as claims in tort, in restitution, or in equity. I can see no basis for excluding claims arising under statutes which grant remedies enforceable in or confer powers on courts of general jurisdiction; for example, the Contracts Review Act 1980 (NSW), the Frustrated Contracts Act 1978 (NSW) or the Insurance Contracts Act 1984 (NSW). Once this position is reached there is no basis, in my opinion, for excluding claims arising under the Trade Practices Act 1974 (Cth). An arbitrator who is authorised by the submission to determine controversies or claims under that Act must be able to exercise the powers which are conferred by that Act on courts of general jurisdiction, provided those powers are appropriate." (emphasis added)

1. It is to be noted that Handley JA would have limited the application of the words "arising out of ... this agreement or the breach thereof" to claims in contract. A construction of those words which would extend to pre-contractual conduct does not seem open either on the authorities or on an otherwise uninstructed consideration of the clause. There are observations of Mitchell J in the Supreme Court of South Australia which seem to proceed from a wider construction of that form of words but they have to be read in the light of comments by Bray CJ in the Full Court subsequently. In Main Electrical Pty Ltd v. Civil and Civic Pty Ltd (1978) 19 SASR 34 a sub-contractor sued a builder for damages for misrepresentation under the Misrepresentation Act 1971-1972 (SA) and for breach of collateral contract. The relevant arbitration clause (cl. 16) referred to a dispute or difference as to moneys payable "or in respect of anything done or purporting to be done or omitted to be done or arising in any other manner whatsoever under or by reason of any of the terms and provisions of this order,...". Another clause, cl.17, provided that the terms and conditions of the relevant purchase order constituted the entire agreement between the parties and was to supersede all previous communications, oral or written. In this respect the latter clause was analogous to cl.16.4 of the agreement of 9 November 1990. A special case was stated for the Supreme Court on the issue whether the arbitrator was entitled to inquire into the existence and terms of an alleged collateral contract and whether or not the builder, or some other person acting for or on behalf of the builder, made a pre-contractual representation alleged in the amended points of claim. Mitchell J held that both these questions could be determined by an arbitrator, saying at 40:
   

"The first question raised in the special case inquires whether upon the proper construction of the agreement the arbitrator is entitled to inquire into the existence and terms of the alleged collateral agreement. This question seems to me clearly to arise under the terms and provisions of the agreement and to be one for the arbitrator. See Thorburn v. Barnes

((1867) LR 2 CP 384, at p 400). The consequential question whether there has been a breach of any collateral agreement found to have been entered into must also fall for determination by him. It is so closely connected with the first question that it must be within the scope of the arbitration (cf. Astro Vencedor SA v. Mabanaft (1971) 2 QB 588, at p 595). The next question is whether, if the arbitrator finds that the builder was in breach of the alleged collateral contract, he can award damages. This power is clearly recognized in the cases of Woolf v. Collis Removal Service ((1948) 1 KB 11) and Astro Vencedor SA v. Mabanaft. As to the question of alleged misrepresentation this seems to me to be a question arising under the terms and provisions of the agreement and to be one covered by the arbitration clause. It follows that the arbitrator may inquire and determine whether the sub-contractor was induced to enter into the building contract by the representation and, if he finds it an appropriate case in which damages should be awarded under s.7 of the Misrepresentation Act, he may award damages."

The case went on appeal to the Full Court which held that no appeal lay from a consultative opinion given by a single judge on a special case stated. However Bray CJ went on to say, obiter, that the decision of Mitchell J was correct. His Honour however placed emphasis on the width of the words "by reason of any of the terms and conditions of this order" appearing in the arbitration clause. The importance of the precise language of the clause was emphasised in his remarks at p 49:

"Arbitration clauses and agreements can, of course, be framed in a variety of ways, some wide, some narrow. Some clauses may be too narrow to cover disputes arising in whole or in part outside the four corners of the instrument or the performance of its express provisions, such as claims in respect of collateral contracts (Hackendorf v. West (1929) 46 WN (NSW) 145) or misrepresentation (Monro v. Bognor Urban District Council (1915) 3 KB 167), or rectification (Printing Machinery Co. Ltd. v. Linotype and Machinery Ltd

(1912) 1 Ch 566). Other clauses have been held wide enough to cover disputes about claims on a quantum meruit for the work done or for frustration (Government of Gibraltar v. Kenney (1956) 2 QB 410), damages for the wrongful arrest of a ship in consequence of an alleged breach of the contract (Astro Vencedor SA v. Mabanaft), or the existence of an alleged subsequent variation of the contract (Graham v. Seagoe (1964) 2 Lloyd's Rep 564, at p 567). It all depends on the wording."

His Honour placed no reliance on the words "or otherwise" in the arbitration clause. He did not think the disputes with which the Court was concerned were disputes which arose under the terms and provisions of the contract or in respect of anything done, purported to be done, or omitted to be done under them. In this respect what his Honour said differed from the basis upon which Mitchell J had arrived at her conclusion. Bray CJ considered that the phrase "by reason of" implied a relationship of cause and effect between the terms and provisions of the contract and the claim in question. This was a relationship which could be indirect:

"In my opinion the claims in respect of the alleged representation and the alleged collateral contract are claims in respect of something done by reason of the terms and provisions of the order and arise by reason of one or more of those terms and provisions."(emphasis added)

So far as they can be applied to the present case, these observations would not warrant a construction of the arbitration clause which extends to breaches of collateral contract and claims for negligent mis-statement and under the Trade Practices Act.

1. In Mir Bros. Development Pty Ltd v. Atlantic Constructions Pty Ltd (1985) 1 BCL 80, the arbitration clause in issue referred to "(a)ll disputes and differences arising out of the contract or concerning the performance or the non-performance by either party of his obligations...". One of the questions was whether the arbitrator had jurisdiction in respect of a collateral contract. Samuels JA, with whom Mahoney JA agreed, could see no ground for concluding that a dispute about the existence of an agreement, independent of and separate from the contract, could satisfy either limb of the submission to arbitration:
   

"It neither arises out of the contract nor concerns the performance or non-performance of the parties' contractual obligations." (p 84)

And in Allergan Pharmaceuticals Inc. v. Bausch and Lomb Inc. (1985) ATPR 40-636 which involved claims of contravention of the Trade Practices Act 1974, the arbitration clause covering "(a)ny controversy or claims arising out of or relating to this Agreement", Beaumont J said at 47,173:

"In my opinion, it is not enough ... to point to the contract as part of the background to these alleged contraventions. As has been said, the statutory causes of action now sued upon exist independently of contract. They are consumer protection provisions which in no way depend upon any private agreement for their source. Conduct of the kind proscribed by Pt V of the Trade Practices Act will be established, if at all, irrespective of the contractual relations of the immediate parties. Nor could any contract inter partes constitute a defence to any alleged contravention of such legislation. In short, an alleged contravention of Pt V of the Trade Practices Act is not, as a matter of characterisation, a "controversy or claim arising out of or relating to

(the) Agreement" for the purposes of sec XIX of that contract."

It is to be noted that the arbitration clause in that case was plainly wider than the clause presently under consideration. The Court of Appeal in England considered a clause referring disputes "as to the construction of this contract or as to any matter or thing of whatsoever nature arising thereunder or in connection therewith" in Ashville Investments Ltd v. Elmer Contractors Ltd (1988) 3 WLR 867. Claims for misrepresentation and negligent mis-statement were held to be disputes which arose "in connection with" the contract. It is notable that in passing Balcombe LJ at 881 said:

"... a dispute between the parties as to whether an innocent misrepresentation or negligent mis-statement, which led Elmer to enter into the contract, gives a right to damages, is neither a dispute as to the construction of the contract, nor a dispute as to any matter arising under the contract."

See also Bingham LJ at 886-887.

1. Case citations and examples could be multiplied but there is little point. When the language of the arbitration clause in question is sufficiently elastic, then the more liberal approach of the courts to which Kirby P and others have referred can have some purchase. A wide construction of such clauses can be supported on the basis advanced by Clarke JA that it is unlikely to have been the intention of the parties to artificially divide their disputes into contractual matters which could be dealt with by an arbitrator and non-contractual matters which would fall to be dealt with in the courts. When, as here, the parties have agreed upon a restricted form of words which in their terms, and as construed in the courts, limit the reference to matters arising ex contractu, there is little room for movement. I am satisfied that neither the trade practices claim, nor the claims for breach of warranty and negligent mis-statement can be said to arise out of the agreement. They all arise out of matters which are antecedent to the contract even though they may involve questions which also go to its performance. No authority has been cited to me which would support the wide construction of the clause contended for by Tomlinsons and certainly the natural meaning of the words does not support their extension to disputes arising out of matters antecedent to the agreement. I come to this conclusion with some regret because I have no doubt, having regard to the various provisions of the agreement which have been set out, that much of the evidence in this case would go to the actual performance of the machines and would be evidence of the kind that one would expect to hear in an action for breach of contract. It may be that the resort to the Trade Practices Act 1974, negligent mis-statement and breach of collateral warranty is made necessary because of the limiting provisions of the agreement. It is of course possible that the parties may consent to have their dispute referred to arbitration. However, there is nothing in the language of the agreement which would justify an order for the stay of these proceedings. In the circumstances, the motion will be dismissed.