Riverlea Corporation Pty Ltd v Bocol Constructions Pty Ltd
[2007] WASC 317
•20 December 2007
RIVERLEA CORPORATION PTY LTD -v- BOCOL CONSTRUCTIONS PTY LTD [2007] WASC 317
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2007] WASC 317 | |
| Case No: | ARB:5/2007 | 10 & 11 OCTOBER 2007 | |
| Coram: | McKECHNIE J | 19/12/07 | |
| 37 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | RIVERLEA CORPORATION PTY LTD BOCOL CONSTRUCTIONS PTY LTD KEVIN JOSEPH LUXFORD |
Catchwords: | Commercial arbitration Power to remit Mistake made by party |
Legislation: | Commercial Arbitration Act 1985 (WA), s 43, s 30, s 38 |
Case References: | Bandwith Shipping Corp v Intaari (2007) EWCA Civ 998 Bovis Lend Lease Pty Ltd v WGE Pty Ltd [2002] NSWSC 939 Commonwealth of Australia v Cockatoo Dockyard Pty Ltd (1995) 36 NSWLR 662 Imperial Leatherwear Co Pty Ltd v Macri & Marcellino Pty Ltd (1991) 22 NSWLR 653 Minister for Industrial Affairs v Civil Tech Pty Ltd [2003] SASC 40; (2003) 84 SASR 559 Minogue v Human Rights and Equal Opportunity Commission (1999) 84 FCR 438 Northbuild Construction Pty Ltd v Discovery Beach Project Pty Ltd (No 2) [2005] QSC 46; (2005) 2 Qd R 180 Sabemo Pty Ltd v Malaysia Hotel Australia Pty Ltd (Unreported, NSWSC, Library No 55007, 4 June 1992) The Marriage of F [2001] 1 Fam Ca 348; 161 FLR 189 Uszok v Henley Properties (NSW) Pty Ltd [2007] NSWCA 31 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Applicant
AND
BOCOL CONSTRUCTIONS PTY LTD
First Respondent
KEVIN JOSEPH LUXFORD
Second Respondent
Catchwords:
Commercial arbitration - Power to remit - Mistake made by party
Legislation:
Commercial Arbitration Act 1985 (WA), s 43, s 30, s 38
Result:
Application dismissed
(Page 2)
Category: B
Representation:
Counsel:
Applicant : Mr P J Hannan
First Respondent : Mr M Orlov
Second Respondent : No appearance
Solicitors:
Applicant : Hammond King Touyz
First Respondent : J D Finlay & Co
Second Respondent : No appearance
Case(s) referred to in judgment(s):
Bandwith Shipping Corp v Intaari (2007) EWCA Civ 998
Bovis Lend Lease Pty Ltd v WGE Pty Ltd [2002] NSWSC 939
Commonwealth of Australia v Cockatoo Dockyard Pty Ltd (1995) 36 NSWLR 662
Imperial Leatherwear Co Pty Ltd v Macri & Marcellino Pty Ltd (1991) 22 NSWLR 653
Minister for Industrial Affairs v Civil Tech Pty Ltd [2003] SASC 40; (2003) 84 SASR 559
Minogue v Human Rights and Equal Opportunity Commission (1999) 84 FCR 438
Northbuild Construction Pty Ltd v Discovery Beach Project Pty Ltd (No 2) [2005] QSC 46; (2005) 2 Qd R 180
Sabemo Pty Ltd v Malaysia Hotel Australia Pty Ltd (Unreported, NSWSC, Library No 55007, 4 June 1992)
The Marriage of F [2001] 1 Fam Ca 348; 161 FLR 189
Uszok v Henley Properties (NSW) Pty Ltd [2007] NSWCA 31
(Page 3)
- McKECHNIE J:
The events giving rise to the dispute
1 On 6 October 2004 Main Roads WA let a contract to Bocol Constructions Pty Ltd (Bocol) for the construction of a low level crossing over the Gascoyne River known as 'Bibbawarra'. In turn, on 17 December 2004 Bocol engaged Riverlea Corporation Pty Ltd (Riverlea) to construct earthworks and road works associated with the crossing. The project was delayed for nearly three months and Riverlea made claims for payment under their subcontract agreement with Bocol. Eventually, Mr Luxford, the second respondent, was appointed as arbitrator. He found that Riverlea had grounds for its claims. Under the contract Riverlea were required to recommence work on site in mid-April 2005 but Bocol did not make the site available to Riverlea until the first week of July 2005. Bocol was therefore in breach of its contract. However, Riverlea substantially failed in the arbitration because it did not prove that it had actually incurred any additional costs. Riverlea was successful on one claim in the sum of $2,250 for additional project management but the bulk of the claim failed.
2 Following the award, Riverlea sought to adduce further evidence on the arbitration. On 27 May 2007, the arbitrator ruled that he was functus officio and refused leave.
3 On 11 July 2007, Riverlea filed a notice of originating motion seeking that the arbitration be remitted for reconsideration to the arbitrator pursuant to the Commercial Arbitration Act 1985 (WA) s 43; alternatively, that the court correct the interim award pursuant to the Commercial Arbitration Act s 30; alternatively, that Riverlea be granted leave to appeal.
4 Riverlea failed to lodge its motion within time due to its decision to seek leave from the arbitrator to adduce further evidence. Therefore, it requires an extension of time. This extension is opposed by Bocol, in part because it has now settled its claims with Main Roads WA, and entered into a deed of release. It says it would be considerably prejudiced if leave is granted.
Evidence before the court
5 At the hearing counsel for Riverlea read, save for some minor matters of no significance, the affidavit of Andrew Peter Sarich sworn 16 August 2007 including the annexures.
(Page 4)
6 Counsel for Bocol read the affidavits of Alan Edward Swann, sworn 10 September 2007, including annexures; and of Richard Frances Boyle, sworn 8 October 2007. No party sought to cross-examine the deponents.
The issues that arise
7 Riverlea supports its application by reference to a number of powers under the Commercial Arbitration Act. Although not formally abandoning any of its argument, its principal contentions fall under s 43 which provides:
Subject to section 38(1), the Court may remit any matter referred to arbitration by an arbitration agreement together with any directions it thinks proper to the arbitrator or umpire for reconsideration or, where a new arbitrator or umpire has been appointed, to that arbitrator or umpire for consideration.
8 There has been a variety of judicial opinion on the scope of s 43. Some authorities give the widest possible scope to the section while others purport to confine its power considerably. In the course of this judgment it will be necessary to examine in more depth the power under s 43. However, as all applications depend upon findings of fact, it will be necessary to determine the true position as it was before the arbitrator. This is because Riverlea, in essence, submits that its representative at the arbitration, and indeed its guiding mind, Mr Sarich, has sworn that at the arbitration:
I thought that once we could persuade the Arbitrator that the delays were Bocol's fault then the quantification exercise of how much we were to be paid would simply happen automatically. I did not then understand (as I do now) the need to produce evidence to the Arbitrator about both the merits of the dispute and the quantum.
All of the details of the quantum of the dispute were available at the time of the arbitration but I had not realised that I needed to give them to the Arbitrator and the First Respondent. I could readily have done so had I known this was required. [10], [11]
9 The manner in which Riverlea asserts that the court's jurisdiction under the Commercial Arbitration Act s 43 becomes clear by par 12 of the affidavit:
At no stage during the arbitration did the Arbitrator say anything to the effect of whether or not the Applicant had any documents or any evidence to show the dollar amount of what we had lost arising from the delays. I had no clue about this. If even the slightest suggestion was made about the
(Page 5)
- need to show that material to the Arbitrator, I could and would have done so.
10 Bocol did not cross-examine Mr Sarich on his affidavit. However, Bocol strongly contends that these statements have no credibility when regard is had to the course of dealings between the parties culminating in the arbitration. Moreover, Bocol contends that there was no duty on the arbitrator to advise Riverlea as suggested. By reason of the documents before the arbitrator, Bocol contends it was patently obvious to everyone that Riverlea had chosen to proceed with the arbitration on the basis of the documents it had submitted and no others.
The grounds of Riverlea's application
11 The grounds of the application are as follows:
1. An arbitration agreement was the subject of an interim award made by KEVIN JOSEPH LUXFORD (as arbitrator) on 20 October 2006 in an arbitration between RIVERLEA CORPORATION PTY LTD (as claimant) and BOCOL CONSTRUCTIONS PTY LTD (as respondent).
2. At all stages of the arbitration prior to the interim award made on 20 October 2006, RIVERLEA CORPORATION PTY LTD was without the assistance of:
(1) a legal practitioner; or
(2) a consultant/ adviser.
3. On 26 June 2006 KEVIN JOSEPH LUXFORD (as arbitrator) heard evidence and submissions in respect of the arbitration. At that hearing:
(1) RIVERLEA CORPORATION PTY LTD was represented by two directors (Mr Sarich and Mr Boynes).
(2) BOCOL CONSTRUCTIONS PTY LTD was represented by two directors (Mr Richard Boyle and Mr Dermott Boyle) who were advised by Mr Alan Swann.
4. Mr Swann is a graded arbitrator who, as at the hearing on 26 June 2006:
(1) had conducted many arbitrations - ie sat as the arbitrator; and
(2) on many occasions had assisted parties to arbitrations in the same kind of capacity in which he assisted BOCOL
- CONSTRUCTIONS PTY LTD in the arbitration leading to the interim award of 20 October 2006.
- 5. Having regard to paragraphs 2 - 4 above, at the hearing held on 26 June 2006, the situation was akin to a court/arbitration proceeding at which:
(1) one party was self represented (by analogy in this case RIVERLEA CORPORATION PTY LTD); and
(2) the other party had legal representation (by analogy in this case BOCOL CONSTRUCTIONS PTY L TD).
6. RIVERLEA CORPORATION PTY LTD believed (because Mr Sarich believed) that:
(1) the hearing held on 26 June 2006 would be what lawyers would call a 'split trial' dealing only with issues of liability; and
(2) in the event the Arbitrator upheld any of the claims the subject of the arbitration, BOCOL CONSTRUCTIONS PTY LTD would either:
(a) accept the quantification RIVERLEA CORPORATION PTY LTD had put on each upheld claim; or
(b) decline to accept the quantification RIVERLEA CORPORATION PTY LTD had put on some or all of the upheld claims and require any quantification dispute to come back to the Arbitrator for further determination of that dispute.
8. At no stage:
(1) in the lead up to the hearing on 26 June 2006; or
(2) during the hearing on 26 June 2006,
did BOCOL CONSTRUCTIONS PTY LTD's representatives indicate that if any of RIVERLEA CORPORATION PTY LTD's claims was upheld, the quantification of such upheld claim(s) would nonetheless be in dispute.
9. At no stage during the hearing on 26 June 2006 did the Arbitrator say to RIVERLEA CORPORATION PTY LTD's representatives
- words to the effect: 'Do you have any evidence to support the amount of that claim?'.
- 10. Had the:
(1) BOCOL CONSTRUCTIONS PTY LTD's representatives given the indication described in paragraph 8 above; or
(2) Arbitrator said words to the effect set out in paragraph 9 above,
RIVERLEA CORPORATION PTY LTD would have sought to present evidence justifying the quantification of any claim the amount of which (as opposed to liability for which) was disputed by BOCOL CONSTRUCTIONS PTY LTD.
11. The evidence referred to in paragraph 10 above could easily have been produced by RIVERLEA CORPORATION PTY LTD.
12. The Arbitrator failed to comply with the 'unrepresented litigant guidelines' established/acknowledged in such cases as Marriage of F (2001) 161 FLR 189; Brehoi v Minister for Immigration & Multicultural Affairs [2001] FCA 931; Platcher v Joseph [2004] FCAFC 68; Tobin v Todd [2004] WASCA 288; Mentyn v Law Society of Tasmania [2004] TASSC 24; Nagy v Ryan [2003] SASC 37 and Moore-McQuillan v Police (1998) 196 LSJS 488.
13. Inthe circumstances, the interim award made on 20 October 2006 is the product of a procedural mishap or misunderstanding such that the Court should remit issues of quantum of damage in respect of Claims 1, 2, 4 & 5 to the Arbitrator for a further hearing pursuant to section 43 of the Commercial Arbitration Act 1985 (WA).
14. Inthe circumstances, the Court should exercise its power under section 30 of the Commercial Arbitration Act 1985 (WA) to correct the interim award made on 20 October 2006 in so far as that interim award did not require BOCOL CONSTRUCTIONS PTY LTD to pay damages to RIVERLEA CORPORATION PTY LTD in respect of Claims 1, 2, 4 & 5.
15. The Arbitrator's failure to comply with the 'unrepresented litigant guidelines' is an error of law in respect of which the Court should grant leave to appeal under section 38(4)(b) of the Commercial Arbitration Act 1985 (WA).
Riverlea's facts to support the grounds
12 Mr Sarich swore an affidavit dated 27 November 2006 in support of leave to adduce further evidence in proceedings before the arbitrator.
(Page 8)
- That affidavit was adopted by Mr Sarich in these proceedings. He deposed:
4. In reading the Arbitrators reasons set out in the Interim Award I realise now that Riverlea should have produced details of the costs which it had incurred to the Arbitrator during the hearing. I now make this affidavit to explain the reasons why this did not occur at the time.
5. From the period January 1993 to January 2003 I was employed by the Main Roads WA ('Main Roads') as an engineer/superintendent.
6. While employed at Main Roads I was involved in the conduct of only one arbitration claim which was dealt with on the basis that the construction company was required to only substantiate that there was liability on the part of Main Roads. That arbitration was dealt with on the assumption that if liability existed on the part of Main Roads then issue of the financial consequences of that liability would flow automatically and the quantification process if it occurred would be dealt with in a completely separate procedure between Main Roads and the construction company. I assumed that the same procedure would be adopted in this Arbitration.
7. At no time during the Arbitration hearing was Riverlea asked (or prompted in any way) about whether or not Riverlea had or intended to produce to the Arbitrator evidence regarding the actual expenses incurred. This did not surprise me at the time because I took this to be consistent with my understanding that the quantification would flow automatically from a favourable decision from the Arbitrator on the question of liability.
8. Had I known that Riverlea was required to produce this evidence this could easily have been done.
9. Prior to the hearing but after the preliminary conference, Riverlea's claims were submitted to the Respondent and while the claims were rejected by the Respondent, the Respondent did not raise any objection to those claims on the basis that no supporting evidence had been shown regarding the costs having been incurred.
10. It is on this basis that I had thought that the sole aspect of the Respondent's challenge to the claim was on the issue of liability not on the issue of the quantum of the claim. I assumed (I realise wrongly) that if liability could be established then the Respondent would automatically be obliged to pay to Riverlea the actual costs that had been incurred by reason of the breaches of contract which the Arbitrator found had occurred. I thought that if the amount of the costs incurred were not agreed by Bocol then Riverlea would have to come back to the Arbitrator for a further determination on that issue.
- 11. I have no legal qualifications and neither does Mr Mike Boynes who attended the Arbitration with me. Save for the one arbitration experience which I have mentioned above while I was at Main Roads, neither Mr Mike Boynes nor I have any previous experience in the conduct of arbitrations. I understand that Mr Swann who assisted the Respondent (even though he is not a qualified lawyer) is himself a qualified arbitrator and is a person who partly carries on the business of consulting to parties engaged in arbitrations and acts as a de facto legal representative for them for the purposes of conducting the dispute.
13 It is this evidence, together with the evidence I have quoted earlier, that forms the factual basis for Riverlea's claims for relief under the Commercial Arbitration Act s 30, s 38 and s 43.
14 It raises two essential questions. The first: whether, in truth, Mr Sarich had overlooked the need to adduce evidence in quantification of the claim or did truly believe that the hearing would be a spilt hearing. The second: the extent to which the arbitrator owed a duty to an 'unrepresented litigant' to advise the litigant as to the conduct of its case. Riverlea's argument in this respect depends, in part, in equating an unrepresented litigant in curial proceedings with a party in an arbitration where the mode of dispute resolution is expressly non-curial.
Did Mr Sarich overlook the need to adduce evidence of quantification?
15 In order to resolve each of the issues it is necessary to study carefully the events leading up to the dispute. Riverlea made six claims against Bocol. Three claims were for additional mobilisation expenses. One claim was for additional costs for earthworks. These are the claims still in contention. The arbitrator dismissed a claim for expenses of further site inspection. The arbitrator upheld a claim for extra site management. Nothing need more be said about these last two matters because they are no longer in contention. In this judgment I shall confine my consideration of the evidence to the claims for mobilisation costs within the various contemporary documents, noting that at all times the claim for additional inspection and site management formed part of those documents. What follows is a chronological extract of the significant documents that formed the basis of the dispute between the parties.
16 On the Riverlea side, the two persons chiefly dealing with the contract and its aftermath were Mr Andrew Sarich and Mr Mike Boynes.
(Page 10)
17 On the Bocol side, the two persons chiefly dealing with the contract and its aftermath were Mr Richard Boyle and Mr Dermot Boyle. At the arbitration Bocol was represented by Mr Alan Swann.
18 Although letters, faxes and emails were of course written by a person to another person, for ease of understanding, I will simply refer to Riverlea or Bocol as sender or recipient. I do not overlook, however, that it is Mr Sarich's knowledge that is in issue. He is a driving force in Riverlea and it is obvious he took a close interest in all matters pertaining to the dispute.
30 August 2005 - Riverlea to Bocol: the initial claim
1. Once your bid was successful you requested us to review our rates and advise if we were able to do the works. We reviewed our rates based on the availability of local resources and other suppliers to meet anticipated work dates. We increased our quotation to include mobilisation for the stabilising crew and accommodation costs for supervision. You then offered a sub-contract agreement which we accepted.
2. Since the works have began substantial delays have occurred at no fault of Riverlea. This has lead to Bocol rescheduling our component of the works on at least three separate occasions. These delays have resulted in our sub-contractors and suppliers not being able to meet program dates. We note that the original date for completion was April 30, 2005. Our last construction program had a completion date of August 6, 2005. A delay of 98 days.
3. Once it become apparent that local resources were no longer available Riverlea advised Bocol that delays would occur if we waited for them or alternatively additional costs would be incurred in obtaining resources from elsewhere. You advised that the works were to proceed immediately.
4. Riverlea has since commenced works in a timely manner despite having no completion date provided, no approved plans to work to and no accurate survey information until Friday July 15, 2005.
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(Page 11)
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12 September 2005 - Bocol to Riverlea: the initial response
19 In the various responsive documents, issue is taken both as to liability and quantification of costs. Liability for the claims, as I have said, has been determined by the arbitrator adversely to Bocol and therefore I will omit any reference to Bocol's response that relates to liability. In the third paragraph:
We have since spoken to Darren and he stated that before any consideration can be given to your Claim, full evidence of costs must be submitted, which includes all invoices, and relevant correspondence with suppliers and plant hire companies and all other details to substantiate your claim.
(Page 12)
28 September 2005 - Riverlea to Bocol: reply
20 Riverlea replied as follows
1. Please find attached correspondence from RnR Contracting confirming the availability of a spray crew on May 6 and 7 2005 which met the requirements of the original programme (see Riverlea programme attached). Riverlea's original programme reflected the original programme provided by Bocol to Riverlea (see Bocol programme attached).
Costs of $12 160.00 are owing to Riverlea.
2. Please find attached plant hire rates supplied by Maver Contracting who had verbally advised (Gerald Maver) on 19 December 2005 (sic) that plant would be available as per our original programme. Purchase Order detailing hire rates and plant requirements is attached as proof of this arrangement.
It is noted that Maver Contracting provided all plant for works carried out by Riverlea in January 2005.
…
4. As at Item 2 above please find attached plant hire rates supplied by Maver Contracting who had verbally advised (Gerald Maver) on 19 December 2005 (sic) that plant would be available as per our original programme. Purchase Order detailing hire rates and plant requirements is attached as proof of this arrangement. All of Maver Contracting's employees are local residents.
It is noted that Maver Contracting provided all plant for works carried out by Riverlea in January 2005 and there were no accommodation requirements for operators as all are local residents.
Cost of $7 500.00 are owing to Riverlea.
5. Riverlea left site on 21 January 2005 as it was unable to complete the earthworks due to two (2) reasons:
a) On the northern abutment a Telstra cable that was yet to be relocated prevented Riverlea from completing the earthworks operation. Advice from Bocol to Riverlea was that a definitive time for the relocation of the cable could not be given (relocation to be arranged by Main Roads WA). This is the sole reason Riverlea could not complete the earthworks on the northern abutment and was required to carry out the earthworks upon returning after completion of abutments.
- b) On the southern abutment Dick Boyle from Bocol instructed Riverlea to leave a portion of the existing seal so as to provide for a hardstand area. This requirement prevented Riverlea from completing the earthworks on the southern abutment.
Costs of $3 146.00 are owing to Riverlea.
30 September 2005 - Bocol to Riverlea
21 After dealing with the substance of the claims:
We refer to your last paragraph. We do not agree with your interpretation of the Subcontract Agreement No. B/101.
Item 12 of the General Subcontract Conditions states that Variations to the Contract is subject to the Principals approval.
Not withstanding the above, Main Roads WA have admitted that they are responsible for the piling delays and hence the delays to starting your works.
As Andrew would well know, Main Roads are always fair in their assessments of Variations and Claims but they do require that the Claims are genuine with a full evidence of costs.
Summary
Bocol are looking to submit a Final Progress Claim at the end of October, 2005.
Please submit soonest any hard evidence of costs that are genuine and can be submitted to Main Roads, for approval. If this is done, there is no reason why Main Roads will not accept your claims.
4 October 2005 - Riverlea to Bocol
Item 1.
…
As a result of delays our sub-contractor RnR Contracting charged Riverlea mobilisation therefore causing Riverlea to incur additional costs that we believe we are entitled to.
…
Item 2
…
(Page 14)
- As a result of delays we needed to mobilise equipment from Perth and Geraldton therefore causing Riverlea to incur additional costs that we believe we are entitled to.
…
Item 4
…
As a result of delays we needed to mobilise personnel from Perth and accommodate them in Carnarvon therefore causing Riverlea to incur additional costs that we believe we are entitled to.
…
Item 5
…
As a result of these issues Riverlea incurred additional costs that we believe we are entitled to.
The beginning of arbitration
22 On 15 November 2005, Riverlea wrote to Bocol advising that they had commenced discussions with Engineers Australia to appoint an arbitrator and seeking Bocol's agreement to vary a clause in the head contract.
18 November 2005 - Bocol to Riverlea
23 After dealing with the appointment of the arbitrator, the letter continued:
2. Clause 12 of the Subcontract has not yet been fulfilled and until Riverlea Corporation submits the full details and evidence to demonstrate that the alleged items are costs incurred as a direct result of any actual delay to the subcontract works, then the whole matter is unable to proceed.
Our letters to you of 12 September and 30 September 2005 are referred again and we note the 12 September letter explained in detail the details required in support. We further draw your attention to page 3 of the 30 September letter and repeat: [previously quoted].
(Page 15)
18 November 2005 - Riverlea to Bocol
24 Riverlea faxed Bocol indicating that it wished to proceed with arbitration.
21 November 2005 - Bocol to Riverlea
25 Bocol responded as follows:
We refer to your facsimile letter of 18 November 2005 and we feel that you are missing the point.
We are quite happy to conform with the requirements of the Subcontract and proceed to Arbitration, although we feel that this expensive step for both your Company and ours could be avoided by your production of the details supporting your claims that you have been requested to produce.
We do not object to Engineers Australia, West Australian Division appointing an Arbitrator but we seriously suggest that anyone so appointed shall also be trained and qualified as an Arbitrator by the Institute of Arbitrators and Mediators, Australia.
While we still believe this matter can be resolved quickly upon your production of the essential supporting documents for your claim, but if you still insist upon proceeding to Arbitration, we enclose your facsimile dated 15 November, 2005, duly signed, for submission to the WA President of the Engineers Australia.
10 January 2006 - Riverlea to Bocol
26 Riverlea was prepared to make an offer to accept $30,000 in lieu of the total claim of $38,956.
12 January 2006 - Bocol to Riverlea
27 Bocol responded as follows:
We acknowledge your facsimile dated 10 January 2006 and as we have previously advised we cannot consider your claims, as you have not as yet provided sufficient detail and information in support of your claims for the extra costs.
The Contract calls for full details to demonstrate that any claims for delays or any increases in costs have to be demonstrated that they are 'costs incurred'.
While we still believe this matter can be resolved upon your production of the essential supporting documents for your claim, we are not able to proceed to evaluate the claims or present them to the principal whom will
(Page 16)
- also have to see the full details in order to conform with the requirements and obligations contained in the terms of the Contract.
The arbitration
28 Mr Luxford was appointed arbitrator and held a preliminary meeting on 27 February 2006. Present for the claimant were Andrew Sarich, Mike Boynes and Darren Erikssen (directors). Present for the respondent were Richard Boyle (director) and Alan Swann, consultant to Bocol.
29 The arbitrator's minutes are in standard form in the nature of a check list. Under the heading 'Nature of Proceeding' the following is typed:
(a) General nature of the claims: Riverlea Corporation has submitted claims to Bocol Constructions for claim delay costs associated with the Subcontract Agreement B101 between Riverlea and Bocol for earthworks and road works associated with Bocol head contract No 31/04 with Main Roads WA for the construction of bridge number 6191 over the Gascoyne River.
30 The arbitrator has written in his own hand beneath that:
Bocol accept there were delays but dispute the value of claims submitted by Riverlea.
31 Under the heading '5. Matters to Expedite or Facilitate Hearing' is the following:
(b) Will parties agree quantum where liability only is in dispute?
32 The arbitrator has written: 'N/A'
8 March 2006 - Riverlea's points of claim
33 These were contained in a letter from Riverlea to Bocol. The points of claim attached various documents which were mainly copies of material previously supplied to Bocol in response to their letters of 12 and 30 September 2005.
20 March 2006 - Bocol's points of defence
34 After detailing its specific defence in relation to each claim, Bocol's points of defence continued:
SUMMARY OF DEFENCE
…
(Page 17)
- The final summary of Bocol's Document No. 4 states:
Bocol are looking to submit a Final Progress Claim at the end of October, 2005.
Please submit soonest any hard evidence of costs that are genuine and can be submitted to Main Roads, for approval. If this is done, there is no reason why Main Roads will not accept your claims.
The Respondent has asked the Claimant in writing on numerous occasions to submit claims that are genuine with full evidence of costs incurred. The last two occasions being on 18th November, 2005 (Document No. 8) and on 12th January, 2006 (Document No. 9).
The Respondent has kept Main Roads WA fully informed of the Claimant's claim and they have received all the correspondence up to 12th January, 2006.
The respondent contends that these substantive details illustrate that there is no case to answer.
35 Accompanying the points of defence was a schedule of documents which refers to the matters I have set out earlier.
36 Riverlea argues that the last paragraph of Bocol's points of defence is consistent with a 'split hearing' and is consistent with Mr Sarich's belief.
37 I am unable to accept the contention that these words give any support to a belief in Mr Sarich of a split hearing. Furthermore, it is not the fact that Riverlea went into the arbitration without any documentary evidence. The attachments to the points of claim included documents that claimed to be sufficient to prove quantum.
38 In relation to claim 1, Riverlea's letter to the arbitrator of 27 April 2006 attached 'further documentation from RnR Contracting supporting our claim for delay costs'.
5 April 2006 - points of reply
39 The points of reply in essence asserted that additional costs were incurred due to work being carried on outside the original time nominated by the head contractor.
(Page 18)
20 April 2006 - Further points of defence and response to claimant's points of reply
40 Rebutters and surrebutters have long since been abolished in legal pleadings but not, it appears, in arbitrations. In the summary to the claim Bocol asserts:
Bocol have always stated that the works were delayed due to the piling, we refer to our Document No. 3 dated 12 September 2005, but we have never agreed that Riverlea suffered any costs due to the two month delay.
The simple facts are that Riverlea had no personnel, plant (large or small), office, stores, smoko shed or any equipment of any type on site during this delay period, therefore had no recurring on site direct and, or, overhead costs.
As stated previously, the Respondent contends that there is no case to answer.
Finally, the Principal for the Contract Works, Main Roads WA will not consider any claim for delay costs unless these can be shown to be INCURRED costs and the Respondent asserts that currently the Claimant has only made unsubstantiated claims without the significant requirement of fact. The Respondent asserts that unless the Claimant can produce some facts to support its claims the Respondent shall be obliged to file and serve a Request For Further and Better Particulars in order to move the Arbitration to the next phase.
27 April 2006 - Riverlea to arbitrator
41 Riverlea wrote asking the arbitrator to arrange a hearing and said:
We have recently received further documentation from RnR Contracting supporting our claim for delay costs. Refer attached.
Directions hearing
42 On 22 May 2006, the arbitrator emailed the parties advising of a directions hearing.
43 Following the directions hearing Bocol wrote to Riverlea, 31 May 2006 (with a copy to the arbitrator), as follows:
At the directions hearing on 24 May 2006 Mr Boynes acting for the claimant stated that they had no documentation to produce other than that already included in the exchange of correspondence between the parties and copied to the arbitrator. This documentation includes the points of claim, points of defence and further documentation since that exchange. … We have both prior to, and since, the submission of this matter to
(Page 19)
- arbitration, repeatedly asked the claimant to produce sustainable details but the claimant states that all has been provided.
44 No challenge to this statement has been made by Riverlea and I accept that it correctly reflects what was said at the directions hearing.
19 June 2006 - arbitrator to the parties by email
The presentation of each party's case, including the evidence that they present to support that case, is the responsibility of the parties…
45 This email was specifically, however, directed to the attendance or otherwise of a particular witness.
The arbitration
46 At the arbitration Bocol was represented by Mr Swann who provided the arbitrator with a written opening statement in the course of which he said:
The Claimant first submitted its claims to the Respondent on 8 July 2005 and again on 30 August 2005 and since that date, Bocol have in all communications, oral and written, continually requested documentary evidence from Riverlea that the claimed costs for delay are provable costs incurred and allocable to the delay. The Claimant has completely failed to understand and to explain and provide the details in their documentation as submitted.
…
Mr Arbitrator. Bocol submits that the documentation submitted by the parties to you in the pleadings shows that the claims by Riverlea have no substance and cannot succeed.
47 The arbitration then proceeded in the normal way. Evidence was led on both sides.
48 Mr Swann made a closing submission on behalf of Bocol, also in writing dated 3 July 2006. Under the heading Summary he stated:
The Respondent, in its opening address, pointed out that contractors often fail to recognise that a delay aligned with costs is misleading and the first question to be asked is … 'what is the impact of the delay, and what is affected?'
Further, the legal principle is that delay costs have to be properly and reasonable (sic) incurred.
(Page 20)
- The Respondent asserts that the Claimant has not substantiated that any costs were incurred due to the delay in the starting of Stage Two of the Subcontract Works.
49 Riverlea provided a written closing submission. Under Item 4 Riverlea stated:
Had the works progressed as per the original programme and the equipment been unavailable for some other reason then it is recognised by Riverlea that Riverlea would have had to incur the additional costs with no avenue to claim, but the fact of the matter is that the works were delayed and this is the sole reason that additional costs were incurred.
The arbitrator's award - Claim 1
50 The arbitrator found it was clear that Riverlea had not included mobilisation for the RnR sealing crew. However, Riverlea did not provide any documentary proof that they had incurred mobilisation charges. He found that Bocol were in breach of the contract and said this in relation to a heading entitled Finding:
As a general rule, the burden of proof lies upon Riverlea to prove their claims. This means that Riverlea must:
1. persuade the arbitrator, that on the balance of probabilities, the material facts entitling Riverlea to the claim exist or occurred; and
2. provide evidence in support of their claims (the evidentiary burden of proof).
I am satisfied that Riverlea, on the balance of probabilities, has established that the grounds exist for a claim. Having established the grounds for a claim, Riverlea had then to prove that they had suffered a detriment, ie incurred additional costs. This they did not do.
In the absence of any actual documentary evidence to prove that additional costs were incurred to mobilise the RnR sealing crew to site, I find that Riverlea did not incur additional costs to mobilise and demobilise the seal crew and that no money is owed by Bocol to Riverlea for this claim.
51 The same reasoning applied in respect of Claims 2, 4 and 5 which were also dismissed.
The application before the arbitrator for leave to adduce evidence
52 The interim award was published on 20 October 2006. On 30 October 2006, Riverlea asked the arbitrator to adjourn the arbitration prior to issuing a final award in order to present further evidence.
(Page 21)
53 On 19 January 2007, there was a hearing as to whether the arbitrator could or should grant the application.
54 On 27 May 2007, the arbitrator ruled that he was functus officio on the issue of damages in respect of the claims. He denied leave to adduce further evidence limited to the issue of damages or to make further submissions.
The application for extension of time
55 Bocol argued that there is prejudice in now granting leave because it has entered into a deed of settlement with Main Roads WA. On 29 May 2006, the parties entered into a settlement deed settling all claims by Bocol under the head contract and in turn Bocol released Main Roads WA from any legal liability arising out of the circumstances of the claim whether or not the facts or law giving rise to such actual or potential liability are known to either party.
56 On 18 August 2006, Bocol wrote to Main Roads WA in respect of the Riverlea claim indicating that it had no alternative except to issue a notice of dispute to protect its contractual rights. Unsurprisingly, Main Roads WA responded on 4 September 2006 pointing out the deed of settlement and release.
57 Bocol entered into the deed of settlement at a time when the arbitration was very much on foot. It took a commercial decision that it would run the risk of an adverse claim by Riverlea when it entered into the settlement.
58 It is true that the time between the arbitrator's final award and the application to this court is very substantial. Much of the delay was due to the attempt to have the arbitrator re-open the arbitration. A considerable amount of that time occurred while the arbitrator was considering that application between January and May 2007. While, legally, the application to the arbitrator would have to be regarded as courageous and bold, a successful application would have foreclosed these proceedings. There is a further unexplained delay of 10 weeks following the arbitrator's decision to refuse to re-open and the lodgement of the application. However, in the circumstances, that delay is not wholly unreasonable. I have decided that the prejudice suffered by Bocol was a conscious commercial risk it ran at a time when the arbitration was on foot and delay in these proceedings does not add to the prejudice. It might be different if the deed had been signed between May and July 2007 but it was not. Leaving aside the merits of the application, with which I will shortly deal,
(Page 22)
- the other matters raised by Bocol would not justify a refusal to extend time.
Conclusion on the factual material
59 This aspect of Riverlea's application for remitter rests largely on the statements by Mr Sarich that I have set out as to his understanding of what it was he had to prove in the arbitration. However, upon detailed examination of all the contemporary documents, I can give no credence to it. Right from the beginning of the dispute, Bocol made it perfectly clear that in addition to arguments as to the liability in respect of each claim, it was necessary for Riverlea to support the quantification of its claim by evidence. The message could not have been clearer. I point particularly to the letter of 30 September 2005 (indicating a willingness to approach Main Roads WA once details had been given to support the claims). There is no rational basis for ever thinking that the arguments on the claims would be split. The substantial probabilities are that, notwithstanding what he has now sworn, at all times Mr Sarich knew that Riverlea would be required to produce evidence of the actual costs incurred before it could succeed in its claims. Every contemporaneous utterance and document is against the proposition to which he deposes. The minutes of the preliminary hearing are testament to this.
60 The essence of Riverlea's case on this aspect, as set out in written submissions and developed by counsel at the hearing, is that Bocol effectively did not challenge or raised no dispute about the quantum of claims, except claim 6. Riverlea simply responded to Bocol's 'case theory' that there was no link between the delay in commencement of the second phase of the sub-contract works and costs incurred by Riverlea.
61 While that was part of Bocol's case theory, it is clear from all the documents I have set out that the other part of Bocol's 'case theory' was that there is no evidence actual costs had been incurred.
62 Specifically I reject the factual assertion in ground 6. I do not regard the belief is in any way a reasonable belief as asserted in ground 7.
63 I reject the factual assertion in ground 8. At all times, commencing with its response to the claims, Bocol put the quantification of the claims in issue. Moreover, Mr Swann did so at the hearing in both his opening and his closing.
64 Riverlea argues that it is a nonsense for Mr Sarich to go to arbitration except to recover money and this indicates that he made a mistake about
(Page 23)
- what had to be proved and how. I am unable to speculate about that. I cannot draw such an inference because I reject the factual basis underpinning it.
The interim award
65 Support for this conclusion also comes from the interim award. The interim award indicates that far from thinking that liability and quantum would be split, Riverlea attempted to prove its loss. The arbitrator found:
Claim 1
…
However, Riverlea did not provide any documentary proof that they had incurred mobilisation charges.
They provided a fax from RnR that said in part: 'You contacted me in October 2004 to determine if the mobilisation charge shown on our quotation dated 24th September 2004 would be incurred if work was to occur in April-May 2005 or if works were performed in conjunction with other works in the Carnarvon area.'
This appears to conflict with Riverlea's earlier statement in their fax to Bocol on 22.10.05 (made at about the same time that RnR claim that Riverlea contacted them about mobilisation charges if the work was undertaken in April-May 2005) saying 'We confirm a December 9 2004 start for earthworks to be completed before Christmas and a mid January 2005 start for pavements.'
Even if the inconsistency is put to one side, the RnR fax of 24.04.06 is not proof that mobilisation charges were incurred, only a statement implying that they were. The third item in RnR's fax stated 'We consider that it is only fair that costs be paid for mobilisation of a crew from outside the area and well after the initial expected period of works.'
Claim 2
However, as in the case of Claim 1, Riverlea did not submit any documentary evidence of the costs they claimed to have incurred as a result of the delays. Riverlea made statements about the equipment they had to hire and what it had cost, but produced no invoices proof of payment or other correspondence with the suppliers that may have proven the additional costs they were claiming.
Finding
In the absence of any actual documentary evidence to prove that additional costs were incurred to mobilise plant and equipment to site, I find that Riverlea did not incur additional costs to mobilise and demobilise the seal crew and that no money is owed by Bocol to Riverlea for this claim.
(Page 24)
Claim 4
However, as with Claim 1, Riverlea have not provided any documentary proof of the additional costs they claim to have incurred; only assertions in their written submissions and testimony at the hearing.
I find that in the absence of any actual documentary evidence to prove that additional costs were incurred to mobilise, demobilise and accommodate operators, Riverlea did not incur additional costs to mobilise, demobilise or accommodate operators and that no money is owed by Bocol to Riverlea for this claim.
Claim 5
However, as with the previous claims, Riverlea has not provided any documentary proof in the way of invoices or timesheets to prove that they actually incurred any additional costs.
I find that in the absence of any actual documentary evidence to prove that additional costs were incurred to complete the earthworks upon their return to site in July 2005, Riverlea did not incur additional costs to complete the earthworks upon their return to site in July 2005 and that no money is owed by Bocol to Riverlea for this claim.
66 The award strongly suggests that both liability and quantum were in issue. Riverlea failed to prove its case; nothing more, nothing less. The probabilities are that the failure was not due to any misunderstanding on the part of Mr Sarich as to what the subject matter of the arbitration was all about but Riverlea's failure to produce what Mr Sarich knew had clearly been sought from the very beginning, namely invoices and accounts.
Should the arbitrator have said something?
67 This is a different question. But again the factual basis must be made out. The parties had submitted all the documentation to the arbitrator, and included in that documentation, together with what was said at the preliminary hearing, and what was said by Bocol's advocate at the hearing of the arbitration, were Bocol's repeated requests for justification of the expenses and Riverlea's repeated responses.
68 Riverlea argues that Mr Sarich was in the position of an unrepresented litigant and cites, by analogy, various decisions, especially of the Family Court (which has great experience with unrepresented litigants), and the Federal Court, setting out the duties of judges in such cases.
(Page 25)
69 The analogies are only partly applicable. In the case of an arbitration, the parties agree to submit their claim; in this case to a non-lawyer (although an experienced arbitrator). Arbitrations are a common form of dispute resolution in commercial matters, including building and roadworks. Arbitrations often turn on technical points of construction and engineering practice rather than on points of law. This was such a case. As the matters progressed from the preliminary hearing to the arbitration it became clear that there were no particular issues of law to be resolved. The arbitration took place over a day. Witnesses were called and cross-examined.
70 Both parties were unrepresented. Although Mr Sarich paints Mr Swann as an experienced arbitral advocate (which no doubt he is), and Mr Sarich as inexperienced (which may well be true), nevertheless neither are lawyers. Nor was the issue at hand a subtle one which an arbitrator might think necessary to point out to a litigant. This is especially so in view of the correspondence which made manifest what a major point at issue was, namely, the quantification of the claims. There was, in short, nothing whatever in the proceedings that would give the arbitrator any clue that perhaps Mr Sarich was labouring under a misapprehension or had not perceived that he should prove his case. He never communicated, at any stage, to anyone, his private view that the issue of liability and quantum would be split.
71 It is significant in this respect that Riverlea do not claim that the arbitrator was in breach of the rules of natural justice. Clearly, the parties were entitled to a fair opportunity to be heard and present their case. A breach of the rules of natural justice gives rise to a separate ground for intervention by the court under Commercial Arbitration Act s 42.
72 A case which has some slight similarity to the present is Bandwith Shipping Corp v Intaari (2007) EWCA Civ 998.
73 The appellant sought to have an arbitration award in favour of the respondents remitted to the arbitrators. The arbitration concerned the ice breaking capabilities of a charter vessel in the Antarctic. The issue before the judge, and on appeal, was whether the arbitral tribunal acted contrary to its duty under s 33 of the 1996 Act to act fairly. The owners allege that the critical point on which they lost the arbitration was a point with which they were not given a reasonable opportunity to deal or on which they were not given a reasonable opportunity of putting their case:
(Page 26)
- 32. Section 33(1) of the 1996 Act provides as follows:
'The tribunal shall -
(a) act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting his case and dealing with that of his opponent, and
(b) adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters falling to be determined.'
37. When pressed as to whether he criticised the conduct of the tribunal, he suggested that they must have been aware that he had not dealt with the 17 hour point, and that they owed an obligation to ask him whether he had anything further to say on that point in addition to the points already taken as to why the Charterers could not succeed.
38. In my view the authorities have been right to place a high hurdle in the way of a party to an arbitration seeking to set aside an award or its remission by reference to section 68 and in particular by reference to section 33. Losers often think that injustice has been perpetrated when their factual case has not been accepted. It could be said to be 'unjust' if arbitrators get the law wrong but if there is no appeal to the court because the parties have agreed to exclude the court, the decision is one they must accept. It would be a retrograde step to allow appeals on fact or law from the decisions of arbitrators to come in by the side door of an application under section 33 and section 68.
(Page 27)
- 40. Can it be said that they acted unfairly in not saying something to Mr Young about the way Mr Parsons was now putting his case? In my view it would be placing an unfair burden on any tribunal where (I stress) they do not appreciate that a point is being missed, to check whether leading counsel understands what is being said.
41. Mr Young relied on what Ackner LJ said in The Vimeira [1984] 2 Lloyd's Rep 66 (CA) when he put the matter this way:
'The essential function of an arbitrator or, indeed, a Judge is to resolve the issues raised by the parties. The pleadings record what those issues are thought to be and, at the conclusion of the evidence, it should be apparent what issues still remain live issues. If an arbitrator considers that the parties or their experts have missed the real point -- a dangerous assumption to make, particularly where, as in this case, the parties were represented by very experienced Counsel and solicitors -- then it is not only a matter of obvious prudence, but the arbitrator is obliged, in common fairness or, as it is sometimes described, as a matter of natural justice, to put the point to them so that they have an opportunity of dealing with it.'
42. That supports the view I am seeking to express. If an arbitrator appreciates that a party has missed a point then fairness requires the arbitrator to raise it so that the party can deal with it. But where there is no such appreciation it is not unfair to leave it to counsel particularly highly experienced counsel who shows a detailed knowledge of the case to take such points as he wishes.
74 To an extent the observations in respect of different legislation nevertheless provide valuable guidance in the approach to the present application. I am not persuaded that the arbitrator had any duty to intervene, as suggested in the circumstances of this case, to make a comment and assist the applicant in the presentation of its case before him. I reach this conclusion mindful of the fact that, of course, as has been pointed out by Riverlea's counsel, in a real sense quantification was what the arbitration was all about. Riverlea was not going along to establish a principle of liability but to get money. I am conscious of the force of this argument and have taken it into account. Nevertheless, in judging the arbitrator's conduct in failing to make any comment, it is still necessary to have regard to all the correspondence between the parties (which was before him) when it was made abundantly clear that an issue was the quantification and that Riverlea would have to prove it.
75 In the circumstances, had the arbitrator intervened he would have come perilously close to abandoning the role of arbitrator and assuming
(Page 28)
- the role of lead counsel for Riverlea. To the extent that the analogy applies with unrepresented litigants, a judicial officer always must tread carefully and with discretion in advising parties who are unversed in the practice and procedure of a court lest in doing so one party is handed an unfair advantage.
76 In the present case, Bocol had not engaged in any act of concealment of the issue; on the contrary. It had conducted itself throughout on the basis that one of its items of challenge to Riverlea was the fact that Riverlea could not and had not quantified its loss. It went into the arbitration with this as a major issue. It was entitled to do so. In respect of each claim, it would win if it established either that there was no liability or that there was no loss proved. It lost on one but won on the other. In the face of the way in which the issues had been so crisply articulated over the lengthy period before the arbitration, an intervention by the arbitrator at a late stage may well have deprived Bocol of its legitimate forensic advantage.
Application for remitter under s 43
77 The factual conclusions I have reached make it unnecessary to finally resolve the apparently vexed question of the scope of the Commercial Arbitration Act s 43. Nevertheless, there are some considerations that are necessary to resolve.
78 Section 43 is found within pt V 'Powers of the court'. It is read subject to s 38(2) which relevantly provides that an appeal should lie to the Supreme Court on any question of law arising out of an award; but the court shall not have jurisdiction to set aside or remit an award on the ground of error of fact or law, on the face of the award - s 38(1). Subject to that, under s 43:
[T]he Court may remit any matter referred to arbitration … to the arbitrator or umpire for reconsideration …
79 The power to remit is subject to important qualification in the lack of jurisdiction to remit on the ground of error of fact or law on the face of the award.
80 There is no error of fact or law on the face of this award and so an ordinary meaning of the Commercial Arbitration Act s 40 and s 43 would deny jurisdiction to the court to remit in these circumstances. However, Riverlea argues that s 43 is indeed a third gateway through which the Supreme Court can interfere with an award.
(Page 29)
81 The third gateway to which Riverlea refer is taken from an expression of Rogers CJ in Imperial Leatherwear Co Pty Ltd v Macri & Marcellino Pty Ltd (1991) 22 NSWLR 653 However, I do not think that the case is authority for so wide a proposition as Riverlea contends. What his Honour said was:
The Act relevantly provides three gateways for court participation, to use a neutral phrase, in arbitrations. The principal one, subject to exclusion by agreement of the parties, is the highly circumscribed provision for appeal on questions of law provided by s 38. The second is the opportunity to remit matters under s 43 where it is necessary to correct some injustice in the sense explained by Lord Donaldson in MF King. The third is the removal of an arbitrator for misconduct. What the Act does not permit is what the plaintiff seeks to do in the present case. Instead of confronting the heavy burden cast upon an applicant for leave to appeal on a question of law, it seeks to outflank that burden by resort to s 43. The court will not allow the finality called for by the Act to be infringed by this device: cf Bulk Oil (Zug) AG v Sun International Ltd [1984] 1 Lloyd's Rep 431 at 533. (669 - 670)
82 Riverlea does draw some support though from Minister for Industrial Affairs v Civil Tech Pty Ltd [2003] SASC 40; (2003) 84 SASR 559:
I would prefer to construe the power to remit under s 43 as a power at large which may be invoked whenever it seems desirable and appropriate to do so provided that the power is not used so as to circumvent the restrictions on the right of appeal under s 38. If, for example, there is an assertion of error of law this could not be pursuant to a remittal under s 43. If it is to be pursued at all it could only be dealt with under s 38. [22]
83 Support is also drawn from Hashman v Downie (1996) 39 NSWLR 169 per Rolf J:
The present claim for a remitter does not arise from any assertion of error. It seems to me that such an assertion is necessary to bring into play the opening words of s 43 because they deny jurisdiction to the Court to remit an award on the ground of error of fact or law on the face of the award, but without prejudice to the right of appeal conferred by subs (2). In the absence of any suggestion of error, but to avoid injustice, it seems to me that the Court may remit. As I have said the present is not a case where there is an allegation of error and, accordingly, there is a discretion, depending on whether there is fresh or new evidence, to remit. (181)
84 In Sabemo Pty Ltd v Malaysia Hotel Australia Pty Ltd (Unreported, NSWSC, Library No 55007, 4 June 1992) Giles J at 15 referred to remission under s 43 as the ultimate safety net.
(Page 30)
85 This wide view of the power under s 43 may be contrasted with a more restrictive view (which I favour) expressed by Kirby P (Priestley JA agreeing on this point) in Commonwealth of Australia v Cockatoo Dockyard Pty Ltd (1995) 36 NSWLR 662:
Secondly, the Commonwealth relied on s 43. That section provides:
'Subject to section 38(1), the Court may remit any matter referred to arbitration by an arbitration agreement together with any directions it thinks proper to the arbitrator or umpire for reconsideration or, where a new arbitrator or umpire has been appointed, to that arbitrator or umpire for consideration.'
The reference to s 38(1) is not present in the equivalent English provision. It ties s 43 back to a section which is designed strictly to limit judicial review of arbitral awards. It makes the provision of the relief envisaged by s 43 subject to the limitations contained in s 38. Reading the two sections together as the opening words of s 43 require, it is plain that the purpose of s 43 is to enlarge the powers which the Court may exercise when, in conformity to s 38, it decides to intervene. But that limits the intervention, relevantly, to correction of arbitral awards.
…
In order to have a 'matter' to remit, the Supreme Court must have that 'matter' properly before it. It is not necessary in this case to determine the scope of such a 'matter': cf South Australian Superannuation Fund Investment Trust v Leighton Contractors Pty Ltd (1990) 55 SASR 327 at 343, per Bollen J. It is enough to say that, in this case, because s 43 effectively incorporates s 38, and because that section refers only to process following an award, there was no 'matter' of that character before the Court which could occasion the exercise of the s 43 power. Certainly, s 43 of the Act is not a power at large to remit to the arbitrator, with directions or otherwise, a proceeding which is brought in the Supreme Court. Such a proceeding is only given its legitimacy by the proper invocation of the jurisdiction of the Supreme Court. The opening words of s 43 make it plain that it is an adjunct to the disposal of proceedings in the Supreme Court concerning an award. (672 - 673)
86 In Bovis Lend Lease Pty Ltd v WGE Pty Ltd [2002] NSWSC 939, Einstein J conducted a review of the authorities in relation to s 43 before saying:
As I read the authorities to which I have referred, the interests of justice are untrammelled in the exercise of the Court’s discretion insofar as s 43 is sought to be relied upon as the foundation for a remitter order. However of crucial significance, even where s 43 only is in focus, is the obvious necessity that a s 43 remitter be grounded upon some fundamental
(Page 31)
- injustice generally in the sense explained and already referred to by Lord Donaldson. [31]
87 There are a number of English authorities and Irish authorities cited by Riverlea in support of the contention that there is a general power to remit. It is clear that in those jurisdictions the power is interpreted widely. However, there is a significant difference between statutes. The Commercial Arbitration Act (which is common to Australian jurisdictions), contains the important limiting words 'subject to s 38(1)'. In my opinion, this differentiates the Australian Act to such a degree that the English and Irish decisions are of relatively slight precedential or persuasive value.
88 In any event, United Kingdom legislation has since altered and is now to be found in the Arbitration Act 1996 (UK). The two means of challenging an award now are by s 69 'Appeal on point of law' or by s 68 'Challenging the award: serious irregularity' which is defined in s 68(2). If there is shown to be serious irregularities the court may remit the award to the tribunal.
89 In the present case, having regard to my findings of fact, no injustice is demonstrated.
The other proposed claims for intervention
90 Although most of Riverlea's argument has focused on s 43, it also seeks judicial intervention under the slip rule and by leave to appeal.
Intervention under the Commercial Arbitration Act s 30
91 Section 30 provides:
Power to correct award
1. Where an award made under an arbitration agreement contains-
(a) a clerical mistake;
(b) an error arising from an accidental slip or omission;
(c) a material miscalculation of figures or a material mistake in the description of any person, thing or matter referred to in the award; or
(d) a defect of form,
- the arbitrator or umpire may correct the award or the Court, on the application of a party to the agreement, may make an order correcting the award.
92 This application is the subject of ground 14. The power given to an arbitrator or umpire or the court is analogous to power under the slip rule.
93 The provisions of s 30 were examined recently by Muir J in Northbuild Construction Pty Ltd v Discovery Beach Project Pty Ltd (No 2) [2005] QSC 46; (2005) 2 Qd R 180. Muir J set out the relevant law at [14] - [18].
94 The fundamental difficulty in the way of the applicant is that there is no evidence of an accidental slip, omission, or inadvertence. The arbitrator certainly made no such error that requires correction. The arbitrator's award expresses what he intended, unlike the position in Northbuild Construction. I reject the evidence that Mr Sarich inadvertently or accidentally did not lead evidence of quantum in respect of the claims for reasons more fully set out under discussion of the application pursuant to s 43. There is no basis for intervention under s 30.
Leave to appeal
95 The Commercial Arbitration Act s 38 provides:
Judicial review of awards
(1) Without prejudice to the right of appeal conferred by subsection (2), the Court shall not have jurisdiction to set aside or remit an award on the ground of error of fact or law, on the face of the award.
(2) Subject to subsection (4), an appeal shall lie to the Supreme Court on any question of law arising out of an award.
…
(4) An appeal under subsection (2) may be brought by any of the parties to an arbitration agreement-
…
(5) The Supreme Court shall not grant leave under subsection (4)(b) unless it considers that-
(a) having regard to all the circumstances, the determination of the question of law concerned could substantially affect
- the rights of one or more parties to the arbitration agreement; and
- (b) there is-
(i) a manifest error of law on the face of the award; or
(ii) strong evidence that the arbitrator or umpire made an error of law and that the determination of the question may add, or may be likely to add, substantially to the certainty of commercial law.
The arbitrator's failure to comply with the unrepresented litigant guidelines is an error of law in respect of which the court should grant leave to appeal under s 38(4)(b) of the Commercial Arbitration Act 1985 (WA).
97 The ground is slightly reformulated in the applicant's written submissions par 101 as follows:
[T]he Arbitrator did not disabuse Riverlea's representatives of the belief … that:
(1) The hearing held on 26 June 2006 would be what lawyers would call a 'split trial' dealing only with issues of liability; and
(2) in the event the Arbitrator upheld any of the claims the subject of the arbitration, Bocol would either: (a) accept Riverlea's quantification on each upheld claim; or (b) decline to accept that quantification and require any quantification dispute to come back to the Arbitrator for further determination of that dispute
and thereby breached the 'unrepresented litigant guidelines'.
The significance of the applicant being unrepresented
98 In essence, Riverlea seeks to import unrepresented litigant guidelines into arbitrations and then rely on the breach of those guidelines as a possible error of law by the arbitrator. The Commercial Arbitration Act s 20 provides:
Representation
(1) A party to an arbitration agreement may be represented in proceedings before the arbitrator or umpire by a legal practitioner, but only in the following cases-
- (a) where a party to the proceedings is, or is represented by, a legally qualified person;
(b) where all the parties agree;
(c) where the amount or value of the claim subject to the proceedings exceeds $20 000 or such other amount as is prescribed instead by regulation; or
(d) where the arbitrator or umpire gives leave for such representation.
- …
(3) If a party applies for leave permitting representation by a legal practitioner or other representative, it shall be granted if the arbitrator or umpire is satisfied-
(a) that the granting of leave is likely to shorten the proceedings or reduce costs; or
(b) that the applicant would, if leave were not granted, be unfairly disadvantaged.
100 Riverlea draws support from guidelines set out in the Family Court in The Marriage of F [2001] 1 Fam Ca 348; 161 FLR 189. The only guideline of possible present relevance is guideline 9 as follows:
Where the interests of justice in the circumstances of the case require it, a judge may:
• draw attention to the law applied by the Court in determining issues before it;
• question witnesses;
• identify applications or submissions which ought to be put to the Court;
• suggest procedural steps that may be taken by a party;
• clarify the particulars of the orders sought by a litigant in person or the basis for such orders.
(Page 35)
101 Two things may be noted immediately. The first of these are but guidelines and the second is that they are discretionary.
102 In Uszok v Henley Properties (NSW) Pty Ltd [2007] NSWCA 31, a question arose whether the appellant had adequately proved his damage. The majority (Beazley and Basten JJA agreeing) set out the cases dealing with unrepresented litigants in both civil and criminal proceedings. After quoting Minogue v Human Rights and Equal Opportunity Commission (1999) 84 FCR 438 Beazley JA continued:
The passage from the transcript extracted above failed to provide an explanation to the appellant of the problems with the evidence he sought to tender and the means that might be available for rectification of the problems. The objection by counsel and the response of the trial judge reflected obscurantism rather than elucidation. [155]
103 At [156]:
[T]he conduct of the trial revealed sufficient unfairness to demonstrate a miscarriage which would justify allowing an opportunity for the appellant to correct any absence of evidence with respect to the assessment of damages, in circumstances where defective work had been adequately established.
104 Bryson JA in dissent said:
I respectfully say that I see no substance in the view that the appellant’s difficulty arose from any shortcoming or failure in the conduct of the trial by the Trial Judge. The Trial Judge had a full opportunity to observe the appellant and the appellant’s forensic capacity, and was in a position which the Court of Appeal cannot attain to judge the need for and the utility of giving the appellant explanations of what he should do and how he should present his case. The choice whether to intervene, in what way to intervene and in how much detail is largely discretionary and decisions of this kind can rarely be open to appellate review. It would in my view have been an inappropriate intervention and an error for the Trial Judge to embark on explaining the nature of the evidence which the appellant needed to call and how he should go about obtaining it, or to confer on him any opportunity by way of adjournment of a long hearing to do something which Mr Uszok should already have done in his own interest. It is wrong and unjust to turn self-representation into a procedural advantage. [163]
105 The case provides an example rather than a precedent. However, Baston JA's point about judging the applicant's forensic ability is merit worthy. I have had no opportunity to see Mr Sarich or even to read a transcript of proceedings in order to make any assessment of his ability to conduct and understand what seems at first sight to have been a
(Page 36)
- straightforward dispute about the need for extra mobilisation or earthworks and the cost of them.
106 From the guidelines Riverlea argues at par 103:
To comply with the unrepresented litigant guidelines the arbitrator need only have said to Mr Sarich and/or Mr Boyle words to the effect 'Do you have any evidence to support the amount of that claim?'
107 At first blush this seems a simple enough proposition. On examination, however, it does not stand scrutiny. The arbitrator had explicitly advised the parties that the responsibility for the preparation of the case was a matter for them. That was a reasonable position to take. In the light of that position, it is not clear why an arbitrator would have thought it necessary to further intervene to remind a party of its requirements. Moreover, the arbitrator would have to have some clue that Mr Sarich was labouring under a misapprehension, even though such misapprehension had not ever been stated aloud. There is power to set aside an award where there has been misconduct on the part of an arbitrator, or the arbitrator has misconducted the proceedings. Misconduct here relevantly means a breach of the rules of natural justice. No such allegation is made against the arbitrator in this case. The applicant is therefore inviting the court to pronounce for a further duty on an arbitrator (who may also not be legally qualified) to comply with guidelines which I will refer to as 'unrepresented litigant guidelines' laid down by specialist courts to deal with specific issues in addition to compliance with the rules of natural justice.
108 In the end, the arbitrator might have asked the question posed by Riverlea but his failure to do so in no way suggests a failure to follow guidelines, even if such guidelines are binding.
109 If I am wrong about all that, I nevertheless do not consider that a determination of the question may or may be likely to add substantially to the certainty of commercial law. The most I could hold would be what would probably be an obiter dicta opinion in any event that unrepresented litigant guidelines are capable of applying in arbitrations. The precise answer to the particular guideline that might apply in this case and the breach of that guideline is of no general commercial law significance.
110 Leave to appeal is refused. For the reasons I have expressed, in my discussion of the claim for remitter under s 43, the factual basis of the proposed ground of appeal has not been made out and that is sufficient to dismiss the claim.
(Page 37)
111 However, I also consider that even if the factual basis was accepted, there has been no error of law disclosed.
112 Finally, even if there is strong evidence that the arbitrator made an error of law, the determination of the question is not likely to add substantially to the certainty of commercial law. It is a matter entirely confined to this arbitration.
Conclusion and orders
1. The application for an extension of time is granted.
2. The application for correction of the award under the Commercial Arbitration Act s 30 is dismissed.
3. The application for leave to appeal on a question of law under the Commercial Arbitration Act s 38 is refused.
4. The application to remit the matter pursuant to the Commercial Arbitration Act s 43 is dismissed.
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