JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: ROCCI & ANOR -v- DIPLOMA CONSTRUCTION PTY LTD [2004] WASC 18
CORAM: EM HEENAN J
HEARD: 15-16 JANUARY 2004
DELIVERED : 16 FEBRUARY 2004
FILE NO/S: ARB 18 of 2002
MATTER :Commercial Arbitration Act 1985
BETWEEN: DAVID ROCCI
NAOLI ROCCI
ApplicantsAND
DIPLOMA CONSTRUCTION PTY LTD (ACN 008 939 179)
Respondent
Catchwords:
Commercial arbitration - Application for leave to appeal from award - Application to set aside award for alleged misconduct - Assessment by Arbitrator of owners' claim for damages for breach of building contract - Method of assessment of builder's entitlement to remuneration under building contract terminated for breach by builder when owner claims for damages - Alleged misconduct by Arbitrator - Absence of notice of application to arbitrator - Criteria for granting leave to appeal on a question of law
Legislation:
Commercial Arbitration Act 1985
Result:
Leave to appeal refused
Award set aside in part
Category: B
Representation:
Counsel:
Applicants: Mr R Griffiths
Respondent: Mr A Metaxas
Solicitors:
Applicants: Griffiths & Godecke
Respondent: Metaxas & Vernon
Case(s) referred to in judgment(s):
Amann Aviation Pty Ltd v Commonwealth (1990) 174 CLR 64
Australasian Oil Exploration Ltd v Lachberg (1958) 101 CLR 119
Bank Mellat v GAA Development and Construction Co [1988] 2 Lloyd's Rep 44
Bellgrove v Eldridge (1954) 90 CLR 613
Chalet Homes Pty Ltd v Kelly [1978] Qd R 389
Corio Guarantee Corp v McCallum [1956] VLR 755
D S Blaiver & Co Ltd v Leopold Newborne (London) Ltd [1953] 2 Lloyds Rep 427
Dakin (H) & Co Ltd v Lee [1916] 1 KB 566
Doran Constructions Pty Ltd v Health Administration Corporation (NSW) (1994) 12 BCL 104
Emson Easlain Ltd (In Rec) v EME Developments Ltd (1991) 55 BLR 117
Forsayth NL v Australasian Gold Mines NL [No 1] (1992) 7 WAR 549
Friend & Booker Pty Ltd v Council of the Shire of Eurobodalla, unreported; SCt of NSW; 20 June 1991
Hadley v Baxendale (1854) 9 Ex Ch 341
Heaven & Kesterton Ltd v Sven Widaeus AB [1958] 1 WLR 248
Hoenig v Isaacs [1952] 2 All ER 176
Holland Stolte Pty Ltd v Murbay Pty Ltd (1991) 105 FLR 304
Kendall v Hamilton (1979) 4 App Cas 404
Leung v Hungry Jack's Pty Ltd [1999] VSC 477
London Export Corp Ltd v Jubilee Coffee Roasting Co Ltd [1958] 1 WLR 271
Masawa Australasia Pty Ltd v J‑Corp Pty Ltd & Anor [2000] WASC 5
Mertens v Home Freehold [1921] 2 KB 526
Ownit Homes Pty Ltd v Batchelor [1983] 2 Qd R 124
Phillips v Ellinson Brothers Pty Ltd (1941) 65 CLR 221
Port Sudan Cotton Co v Gavindaswamy Chettiar & Sons [1977] 1 Lloyd's Rep 166
Promenade Investments Pty Ltd v New South Wales (1992) 26 NSWLR 203
Re Sanders Constructions Pty Ltd and Eric Newham (Wallerawang) Pty Ltd [1969] Qd R 29
Re Tiki Village International Ltd [No 2] [1994] 2 Qd R 674
Robinson v Harman (1848) 1 Ex Ch…
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- Case
- [2004] WASC 18
- Decision Date
CaseChat Overview and Summary
The court considered the criteria for granting leave to appeal on a question of law and whether the alleged misconduct by the arbitrator was sufficient to set aside the award. The applicants argued that the arbitrator had made an innocent mistake about the scope of the matters before him, leading to the making of an award on grounds not advanced by the respondent. The court held that misconduct, in the context of arbitration, includes "technical" misconduct such as making a mistake as to the scope of the authority conferred or by making an error of law of a character which might amount to misconduct. The court held that such misconduct did not involve personal turpitude on the part of an arbitrator and amounted to no more than a mishandling of the arbitration of such a kind as is likely to cause a substantial miscarriage of justice.
The court held that the omission to give notice to the arbitrator was a difficulty which was more formal than real in its significance and that the court could and should proceed to determine the application. The court held that the alleged misconduct was not such as to warrant setting aside the award as the errors made by the arbitrator did not reflect upon him in any pejorative way and both parties had submitted that, in the event that misconduct in this sense is established, they would prefer this Court to deal with the matter if it can rather than remit it to the arbitrator for yet a further hearing. The court dismissed the application to set aside the award.
The court dismissed the application for leave to appeal from the award and the application to set aside the award for alleged misconduct. The court held that the alleged misconduct by the arbitrator was not such as to warrant setting aside the award.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
In those cases where the court is required to consider whether or not an application to set aside an award on the grounds of alleged misconduct by an arbitrator may proceed in the absence of notice to the arbitrator it will be important to consider whether or not it is possible to determine the issues or questions in dispute, so far as they affect the rights and interests of the persons who are parties to the cause of the matter, without affecting the rights of the arbitrator or reflecting upon him in any material way. In the present case where, as will emerge later in these reasons, the only real scope for allegations of misconduct relate to instances where the arbitrator made findings in respect of claims not raised by the respondent, which the respondent by its counsel has frankly and commendably conceded, there is no need for any further evidence about the course which the arbitration took, nor for further explanation from the arbitrator. As these errors cannot in any way reflect upon the arbitrator in any pejorative way and because both parties have submitted that, in the event that misconduct in this sense is established, they would prefer this Court to deal with the matter if it can rather than remit it to the arbitrator for yet a further hearing, I consider that the omission to give notice to the arbitrator in the present circumstances is a difficulty which is more formal than real in its significance – compare Australasian Oil Exploration Ltd v Lachberg (1958) 101 CLR 119 per Dixon CJ, McTiernan and Taylor JJ at 124 - and that the court can and should proceed to determine this application. "Misconduct" is defined by s 4(1) of the Act in a non‑comprehensive way to include corruption, fraud, partiality, bias and a breach of the rules of natural justice. This jurisdiction is part of the court's function to ensure that the power of the court to enforce an award is not abused by it being required, ultimately, to enforce an award made in breach of, or in a departure from, the contractual, statutory or common law requirements for arbitration – Stannard v Sperway Construction Pty Ltd (supra) per Brooking J. It is well‑established that "misconduct", in this sense, is not confined to serious misconduct but includes "technical" misconduct such as making a mistake as to the scope of the authority conferred or by making an error of law of a character which might amount to misconduct: London Export Corp Ltd v Jubilee Coffee Roasting Co Ltd [1958] 1 WLR 271. It has been held that misconduct in this sense does not involve personal turpitude on the part of an arbitrator and amounts to not much more than a mishandling of the arbitration of such a kind as is likely to cause a substantial miscarriage of justice: Williams v Wallis and Cox [1914] 2 KB 478 per Atkin J at 485 and Doran Constructions Pty Ltd v Health Administration Corporation (NSW) (1994) 12 BCL 104 (CA‑NSW). Here, the applicants submitted that an innocent mistake had been made by the arbitrator about the scope of the matters before him, leading to the making of an award on grounds not advanced by the respondent. As earlier noted, it was conduct of this kind, a mistake by the arbitrator that a particular issue was before him when it was not, which resulted in Templeman J setting aside in part the third interim award in Rocci & Anor v Diploma Construction Pty Ltd [2001] WASC 256 at [41].