Rinbridge Marketing Pty Ltd v Rinbridge Pty Ltd Summary

CATCHWORDS

CONTRACTS - construction and interpretation - arbitration clauses - dispute whether agreement void ab initio - Trade Practices Act 1974, s. 52 - Scott v Avery clause severable from main agreement and effective where 'sufficiently wide to embrace the dispute or difference which has arisen between the parties'.

Trade Practices Act 1974: s. 52

RINBRIDGE MARKETING PTY LIMITED v RINBRIDGE PTY LIMITED, JOHN PROSPHER CULLEN and PETER THOMAS WALSH
G 723 of 1994

LOCKHART J.
1 DECEMBER 1995
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA )
  )
NEW SOUTH WALES DISTRICT REGISTRY )    No. G723   of 1994
  )
GENERAL DIVISION                 )

BETWEEN:RINBRIDGE MARKETING PTY LIMITED
Applicant

AND:RINBRIDGE PTY LIMITED
First Respondent

JOHN PROSPHER CULLEN
Second Respondent

PETER THOMAS WALSH
Third Respondent

RINBRIDGE PTY LIMITED
Cross Claimant

RINBRIDGE MARKETING PTY LIMITED
Cross Defendant

JUDGE MAKING ORDER:     LOCKHART J.
             WHERE ORDER MADE:       SYDNEY
             DATE ORDER MADE:        1 DECEMBER 1995

MINUTE OF ORDER
THE COURT ORDERS THAT:

The proceeding and the cross-claim be dismissed.

The applicant pay the costs of the respondent of the proceeding, including the costs of the motion and reserved costs, if any.

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

IN THE FEDERAL COURT OF AUSTRALIA )
  )
NEW SOUTH WALES DISTRICT REGISTRY )    No. G723   of 1994
  )
GENERAL DIVISION                 )

BETWEEN:RINBRIDGE MARKETING PTY LIMITED
Applicant

AND:RINBRIDGE PTY LIMITED
First Respondent

JOHN PROSPHER CULLEN
Second Respondent

PETER THOMAS WALSH
Third Respondent

RINBRIDGE PTY LIMITED
Cross Claimant

RINBRIDGE MARKETING PTY LIMITED
Cross Defendant

1 December 1995

REASONS FOR JUDGMENT
LOCKHART J.
On 23 October 1995 I gave judgment in this matter. I concluded that the giving of a notice of dispute pursuant to clause 24(a) of the relevant agreement between the parties is a condition precedent to the commencement by the applicant of the proceeding; and that as no such notice was given the proceeding should be dismissed.

I made no orders on 23 October but stood the matter over to 17 November 1995 so that the parties could consider my reasons for judgment and make brief submissions concerning the appropriate orders to be made, in particular whether the
proceeding should be dismissed or the statement of claim struck out. The motion that was before the Court sought an order that the statement of claim be 'struck out' pursuant to O. 11 r. 15 of the Rules.

The respondents filed a defence to the statement of claim together with a cross-claim.

The cross-claim seeks to agitate issues between the parties concerning alleged breach of the agreement by the applicant and seeks damages.

On 17 November 1995 the parties were not in a position to argue the question of the appropriate orders so I gave directions for the filing of brief written submissions on this question. The submissions have since been lodged with my associate and I have read them. All parties have submitted that the appropriate order is that the proceeding be dismissed, not that the statement of claim be struck out. In my opinion this is the appropriate order to make.

The cross-claim should also be dismissed. Once the applicant has given notice, assuming it does, pursuant to clause 24(a) of the agreement, assuming it is still entitled to do so, the whole dispute between the parties can be litigated in the appropriate court including the matters raised by the cross-claim.
The order of the Court is that the proceeding and the cross-claim be dismissed, and the applicant pay the costs of the respondent of the proceeding, including the costs of the motion and reserved costs, if any.

I certify that this and the preceding two (2) pages are a true copy of the reasons for judgment herein of the Honourable Justice Lockhart.

Associate

Dated: 1 December 1995

Counsel for the Applicant : Mr D E Grieve QC

Mr G F Cohen

Solicitors for the Applicant : Cutri & Associates

Counsel for the Respondents : Mr J S Drummond

Solicitors for the Respondents: Walsh & Blair

Date of Judgment : 1 December 1995

In the matter of Rinbridge Marketing Pty Ltd v Rinbridge Pty Ltd, the Federal Court was presented with a dispute regarding the validity of an arbitration clause within a business agreement. The plaintiff, Rinbridge Marketing, sought to enforce the arbitration clause against the defendant, Rinbridge Pty Ltd, who argued that the entire agreement was void due to misrepresentation. The court was required to determine whether the arbitration clause could be severed from the main agreement and remain effective. Additionally, the court needed to ascertain whether the arbitration clause was sufficiently wide to encompass the dispute between the parties, in line with the principles established in Scott v Avery.

The court considered whether the arbitration clause could be separated from the main agreement, which was alleged to be void due to misrepresentation. The court noted that an arbitration clause may be upheld even if the underlying agreement is void, provided the clause is broad enough to include the specific dispute at hand. The court held that the arbitration clause in this case was sufficiently wide to cover the dispute, as it referred to any dispute arising from the agreement. The court further found that the arbitration clause was severable from the main agreement, and therefore, enforceable.

In light of the above findings, the court held that the arbitration clause was valid and enforceable. The court ordered that the dispute between the parties be referred to arbitration in accordance with the terms of the arbitration clause. The court further held that the arbitration clause was not affected by the alleged misrepresentation in the main agreement, as the clause was capable of standing alone and was broad enough to encompass the dispute. The court emphasised the importance of ensuring that arbitration clauses are sufficiently wide to cover the specific disputes they are intended to address.

The final orders of the court included the enforcement of the arbitration clause and the referral of the dispute to arbitration. The court also confirmed that the arbitration clause was not rendered invalid by the alleged misrepresentation in the main agreement. The decision highlights the importance of drafting arbitration clauses that are broad enough to cover potential disputes and ensuring they can stand alone if the main agreement is found to be void.

Rinbridge Marketing Pty Ltd v Rinbridge Pty Ltd

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established