Rocci v Diploma Construction Pty Ltd
[1999] WASC 195
ROCCI & ANOR -v- DIPLOMA CONSTRUCTION PTY LTD [1999] WASC 195
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [1999] WASC 195 | |
| Case No: | ARB:16/1999 | 10 SEPTEMBER 1999 | |
| Coram: | MILLER J | 19/10/99 | |
| 18 | Judgment Part: | 1 of 1 | |
| Result: | Application and appeal dismissedLeave to cross-appeal dismissed | ||
| PDF Version |
| Parties: | DAVID ROCCI NAOLI ROCCI DIPLOMA CONSTRUCTION PTY LTD |
Catchwords: | Arbitration Appeal Misconduct of proceedings Leave to appeal Turns on own facts |
Legislation: | Commercial Arbitration Act 1985, s 38, s 42 |
Case References: | Antaios Compania Naviera SA v Salen Rederierna AB [1984] 3 WLR 592 Edwards v Bairstow [1956] AC 14 Gas & Fuel Corporation (VIC) v Wood Hall Ltd & Anor [1978] VR 385 Melbourne Harbour Trust Commissioners v Hancock (1927) 39 CLR 570 Pioneer Shipping Ltd v BTP Tioxide Ltd (The Nema) [1982] AC 724 Varley v Spatt [1955] VLR 403 Bellgrove v Eldridge (1954) 90 CLR 613 Bulk Oil (Zug) AG v Sun International Ltd (1984) 1 Lloyd's Rep 531 Minenco Pty Ltd v Abigroup Contractors Pty Ltd WA [1900-91] 4 WAR 336 Pettitt v Dunkley [1971] 1 NSWLR 376 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- ARB 17 of 1999
- NAOLI ROCCI
Applicants (Claimants & Cross Respondents)
AND
DIPLOMA CONSTRUCTION PTY LTD
Respondent (Respondent & Cross Claimant)
Catchwords:
Arbitration - Appeal - Misconduct of proceedings - Leave to appeal - Turns on own facts
Legislation:
Commercial Arbitration Act 1985, s 38, s 42
Result:
Application and appeal dismissed
Leave to cross-appeal dismissed
(Page 2)
Representation:
Counsel:
Applicants (Claimants & Cross Respondents) : Mr R Godecke
Respondent (Respondent & Cross Claimant) : Mr A Metaxas
Solicitors:
Applicants (Claimants & Cross Respondents) : Griffiths & Godecke
Respondent (Respondent & Cross Claimant) : Arthur Metaxas
Case(s) referred to in judgment(s):
Antaios Compania Naviera SA v Salen Rederierna AB [1984] 3 WLR 592
Edwards v Bairstow [1956] AC 14
Gas & Fuel Corporation (VIC) v Wood Hall Ltd & Anor [1978] VR 385
Melbourne Harbour Trust Commissioners v Hancock (1927) 39 CLR 570
Pioneer Shipping Ltd v BTP Tioxide Ltd (The Nema) [1982] AC 724
Varley v Spatt [1955] VLR 403
Case(s) also cited:
Bellgrove v Eldridge (1954) 90 CLR 613
Bulk Oil (Zug) AG v Sun International Ltd (1984) 1 Lloyd's Rep 531
Minenco Pty Ltd v Abigroup Contractors Pty Ltd WA [1900-91] 4 WAR 336
Pettitt v Dunkley [1971] 1 NSWLR 376
(Page 3)
1 MILLER J: In ARB 16 of 1999 the applicants seek leave to appeal a number of aspects of an interim award of Arbitrator A B Goold dated 31 May 1999. In the alternative, in relation to a number of aspects of that award, the applicants contend that the arbitrator misconducted the proceedings and that the award should therefore be set aside in part. The application for leave to appeal is brought pursuant to the provisions of s 38 of the Commercial Arbitration Act 1985 and the appeal on the ground the arbitrator misconducted the proceedings is brought pursuant to the provisions of s 42 of that Act. In ARB 17 of 1999 the Cross Claimant seeks leave to appeal part of the interim award of Mr Goold by reason of a number of alleged errors of law relating to the interpretation of cl 17(e) of the building contract in issue.
2 The applications for leave to appeal lie to this Court only on a question of law arising out an award: s 38(2) of the Act. An appeal under s 38(2) of the Act may be brought only with leave of the Court. It follows that whether or not a question of law can be said to arise out of the award, leave is still required under the provisions of s 38(4)(b). Leave will not be granted unless the Court 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."
(Page 4)
- "The motion before the Court is pursuant to s. 12(1) of the Arbitration Act 1958 which provides: 'Where an arbitrator or umpire has misconducted himself, the court may remove him.'
Thus the Court is empowered to order the removal of an arbitrator prior to his making an award where it is established that he has 'misconducted himself' within the meaning of the sub-section. Section 12(2) may be applied where an award has been made.
The Act does not contain any definition of 'misconduct'. A number of authorities cast some light on its meaning without providing any all-embracing elucidation. In general it can be said that misconduct is seen to flow from 'irregularity', and to be disassociated from any concept of moral turpitude or overtone."
4 On 20 August 1998 the respondent submitted to the applicants a progress claim certificate which was the sixth progress claim. It requested payment of a sum of $50,000, the stage of works being described as "tiling complete". The certificate noted that variations would be treated "as a separate claim" but required payment of the sum of $50,000 of the contract amount of $450,000.
5 The lump sum building contract between the parties was on a standard form contract of the Housing Industry Association Ltd. Clause 5 thereof dealt with the question of progress payments requiring the owner to pay to the builder within 10 days of the service upon the owner of a notice that any of the works described in the schedule had been completed, that portion of the contract price mentioned opposite those works in the appropriate column. The schedule of particulars annexed to the contract showed there to be seven progress payments, the second last of which was "tiling complete" and the amount nominated $50,000.
6 Under cl 5(iii) of the contract any dispute as to the value of works completed or the state of the works at any particular time was to be determined by arbitration in accordance with cl 16. The question of entitlement to payment of sixth progress claim was referred for arbitration pursuant to the provisions of this clause.
7 On 2 September 1998 the respondent submitted to the applicant's architect a list of variations said then to be due to be paid, amounting to $49,735. This list of variations was formulated and forwarded to the architect some 14 days after the sixth progress claim certificate.
(Page 5)
8 Clause 10(c) of the contract was in the following terms:
"(c) the price of 'variation' and/or any item or matter required by this Contract to be treated as a variation shall unless previously agreed in writing be calculated as follows:-
(i) if the amount is additional to the Contract Price it shall be equal to the cost of the labour and materials supplied together with other costs properly incurred as a consequence thereof plus that percentage of such additional costs as set forth in Item 11 of the Schedule and shall be added to the Contract Price, and unless previously paid, shall be added to the next progress payment due after the execution of such work."
- By reason of this provision the applicants argue that the variation payment was not due until the seventh progress claim fell due.
9 The totality of the variation claim of the respondent was formulated in final form in a document which set out some 32 items and totalled $101,021.75. It was dated 15 February 1999 and submitted more than five months after the sixth progress claim. The applicants contend that on this claim the arbitrator adjudicated, commencing his arbitration on 18 February, some three days after the variation claim of 15 February was first made. Within that variation claim there appeared as Item (26) "extra cost due to delays in contract by client" which for the first time was quantified as $24,700. The applicants argue that delay costs were properly dealt with under cl 7(c) of the contract which is in the following terms:
"(c) Upon the happening of any of the events aforesaid the Builder may notify the Owner thereof and shall be entitled to such extension or extensions of time for completion of the Works as shall in the circumstances be reasonable and if there shall be any dispute the provisions of Clause 16 shall apply. Extra costs necessarily incurred by the Builder by reason of an extension of time shall be paid for by the Owner but only if the extension of time was due to a breach of the provisions of this Contract by the Owner or an act or omission on the part of the Owner."
(Page 6)
- The applicants argue that rather than deal with delay costs pursuant to that clause the arbitrator has dealt with delay costs as variations.
10 The interim award of the arbitrator made 31 May 1999 contained the following relevant conclusions:
"The major issue covered by this Interim Award is whether or not the Respondent is entitled to Progress Claim Number 6. In order to determine this issue, the following matters have been addressed.
Value of work done at date of Progress Claim Number 6 was made, which includes the following:
1. Variation additions and omissions.
2. Prime cost and provisional sum adjustments.
3. Value of defective work to be made good.
4. Value of work required to complete contract.
5. Disputed matters regarding contract interpretation.
6. Extension of time claims as per contract.
7. Amount paid to Builder by way of progress payments.
I determine and award as follows:
The value of work to complete the contract and to rectify defects has been determined on the basis that Diploma Construction Pty Ltd completes the contract. If Diploma Construction Pty Ltd does not wish to completed the contract another assessment would be required to be made. The Award determinations are based on documents produced, exhibits tendered and evidence heard."
11 The arbitrator referred to the submissions made before him and stated "the Claimants prolongation claims have not been brought into account in this Interim Award, as the main issue of this interim award is whether or not Progress Claim Number 6 was due and payable". The arbitrator concluded:
"I determine that Progress Claim Number 6 made August 20, 1998 was due and payable therefore the Builder was entitled to suspend work on the project as per Contract Clause 5 (iv)."
12 At the conclusion of his award the arbitrator made a number of calculations as follows:
(Page 7)
- "Value of work in progress as at date Progress Claim Number 6 was submitted, August 20, 1998:
Omission Addition
Contract price 450,000.00
Contract variation additions
Including payments to Shelley Glass 68,289.00
Contract variation omissions 14,023.80
Work to be completed 2,101.00
Further work required to complete
Contract 46,645.00
Defect schedule 10,098.00
72,867.80 518,289.00
72,867.80
445,421.20
Deduct progress payments numbers 1-5 350,000.00
95,421.20
Deduct cash payments: Variation Orders 34,000.00
Numbers 1 & 2, and two payments paid
By Diploma to Shelley Glass received in
Cash by Diploma from Rocci.
Value of work in progress as at 61,421.20
August 20, 1998, date of Progress Claim
Number 6."
- The applicants argue that in so doing the arbitrator incorporated a number of variations including delay costs of $15,809.
13 The applicants complain that in the calculation of the value of work in progress as at date of Progress Claim Number 6 the arbitrator incorporated "contract variation additions"; "contract variation omissions"; and "work to be completed", ultimately arriving at value of work in progress as at 20 August 1998 (date of Progress Claim Number 6) at $61,421.20. However, the arbitrator did not direct this sum to be paid. It is complained that the arbitrator took into account the defect schedule and determine some 141 defects in work done plus another 25 items in the "work to be completed schedule" and thus reached the figure of $61,421.20 said to be the value of work in progress as at 20 August 1998. The applicants complain that in determining when the sixth progress claim was due the architect was unable to consider variations and delay claims, and accordingly all the arbitrator was called upon to determine was whether Progress Payment Number 6 was due. The complaint is that the arbitrator became involved in "irregular and incorrect procedure" by importing delay costs into his calculations, and yet stated in the course of his interim award that "the claimants prolongation claims have not been brought into account in this interim award".
(Page 8)
- The applicants contend that the parties and the arbitrator understood that the only question before the arbitrator was the entitlement of the respondent to the sixth progress claim, that being noted and apparently understood by the arbitrator in a letter to the applicants' solicitors dated 14 January 1999 wherein he said:
"The major item in this arbitration is whether or not the respondent is entitled to progress claim No 6. Other important matters to be settled are:
1. Date of completion of works
2. Access by proprietor
3. Whether Diploma Constructions intends to complete the works.
These matters could be dealt with by an interim award.
The other matters to be arbitrated are best left in abeyance until the building contract is complete, they then can be dealt with by a further hearing and a final award."
"(iv) If for any reason any progress payment or the final payment is not made within the times specified the Builder shall be entitled to charge interest thereon at the percentage rate per annum set forth in Item 8 of the Schedule as and from the date upon which the payment fell due until the payment and the Builder may in addition to any other remedy which he may have against the Owner suspend the Works pending payment."
15 In essence, the applicants' complaint is that the determination of the arbitrator is unsound and that there is therefore misconduct within the meaning of that word as used in s 42 of the Act. The complaint of the applicants is that the arbitrator arrived at a wrong conclusion by following the wrong methodology. It was not (the applicants argue) a question of the quantum of moneys due but rather whether $50,000 was due as sixth progress payment or nothing was due. The applicants complain that they have been severely prejudiced by the arbitrator's conclusion in that they
(Page 9)
- have been put to great expense and suffered prejudice by reason of being out of their house for many months and in a situation in which, if the award stands, they must pay further delay costs.
16 The applicants then contend that the award of the arbitrator delivered on 31 May 1999 was an interim award and not final. It is their contention that the award had to be final and yet it is clear from the following passage in the award that this was not so:
"The value of work to complete the contract and to rectify defects has been determined on the basis that Diploma Construction Pty Ltd completes the contract. If Diploma Construction Pty Ltd does not wish to complete the contract another assessment would be required to be made. The Award determinations are based on documents produced, exhibits tendered and evidence heard."
17 Reference was made to Varley v Spatt [1955] VLR 403 and in particular the passage of Herring CJ (at 409) as follows:
"An award must be final, so that there is no question as to the rights of the parties with regard to the matters referred, and so that these rights may be enforced in the appropriate way. But when you are told that the sum of 3,761l. 16s. 4d. is properly payable by the owner to the builder provided and when a certificate is issued by the architects, the rights of the parties are still left in the air."
18 The applicants contend that for all of these reasons the arbitrator misconducted himself and that in certain respects the award should be set aside and in others remitted to the arbitrator for reconsideration.
19 In the alternative, the applicants argue that if there was no misconduct on the part of the arbitrator then leave should be granted to appeal under the provisions of s 38 of the Act. It is said that "a question of law" arises out of the award in that the arbitrator has ignored the contractual provisions contained within the contract between the parties and leave should be granted under the provisions of s 38(5) of the Act because having regard to all the circumstances the determination of the question of law concerned could substantially affect the rights of one of the parties to the arbitration agreement and in addition there is a manifest error of law on the face of the award.
(Page 10)
20 It can be accepted that the question whether there is a sufficiency of evidence to support a determination is a question of law (Edwards v Bairstow [1956] AC 14 at 29). The true construction of a written contract between the parties is also a question of law (Pioneer Shipping Ltd v BTP Tioxide Ltd (The Nema) [1982] AC 724 at 736). Assuming that the question of the arbitrator's approach to and determination of the award constituted an error of law, it is necessary for the applicants to show that in 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". In this respect the applicants contend that they are at substantial risk in monetary terms in consequence of the arbitrator's award, and to that extent they would seem to satisfy the provisions of the sub-section. However, it is also necessary to show that there was either a manifest error of law on the face of the award or there is 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. As to the question of "manifest error" the applicants argue that there was such error here and/or there is strong evidence that the arbitrator made an error of law and that the determination of the question may be likely to add substantially to the certainty of commercial law. Reference was made to the Antaios Compania Naviera SA v Salen Rederierna AB [1984] 3 WLR 592 at 600 where Lord Diplock said:
"My Lords, I think that your Lordships should take this opportunity of affirming that the guideline given in The Nema [1982] A.C. 724, 743 that even in a case that turns on the construction of a standard term, "leave should not be given … unless the judge considered that a strong prima facie case had been made out that the arbitrator had been wrong in his construction," applies even though there may be dicta in other reported cases at first instance which suggest that upon some question of the construction of that standard term there may among commercial judges be two schools of thought. I am confining myself to conflicting dicta not decisions. If there are conflicting decisions, the judge should give leave to appeal to the High Court, and whatever judge hears the appeal should in accordance with the decision that he favours give leave to appeal from his decision to the Court of Appeal with the appropriate certificate under section 1(7) as to the general public importance of the question to which it relates; for only thus can be attained that desirable degree of certainty in English
(Page 11)
- commercial law which section 1(4) of the Act of 1979 was designed to preserve."
21 Counsel for the respondent contended that the applicants had clearly misunderstood what the arbitrator had done in the course of delivering his award. Counsel contended that it was unrealistic to think that the arbitrator would provide "elegant reasons" for his decision in the matter and argued that the applicants were completely misconceived in their submissions to the court. He pointed out that in the course of his interim award the arbitrator made it clear that "the major issue covered by this interim award is whether or not the respondent is entitled to Progress Claim Number 6" and pointed out that "in order to determine this issue (a number of matters) had been addressed". Arguments put to the arbitrator were set out and the determination was that the value of work to complete the contract and rectify defects had been arrived at on the basis that the respondent completed the contract, but if it did not wish to complete the contract, another assessment would be required. It was argued that the arbitrator had not taken into account the claimants' prolongation claim (as specifically stated by him in the course of his award) and the main issue remained at all times the question of the sixth progress claim, the determination of the arbitrator being "I determine that Progress Claim Number 6 made August 20, 1998 was due and payable…".
22 Counsel for the respondent argued that the arbitrator's calculations of "value of work in progress as at date Progress Claim Number 6 was submitted" simply involved the calculation of all issues before the arbitrator which showed that the $50,000 due under the sixth progress payment was in fact due. Counsel for the respondent pointed out that at the hearing before the arbitrator the claimants submitted that the respondent was not entitled to payment of the sixth progress payment because a number of items at work remained to be completed, a schedule of which showed the total claim in that regard to be only $2101. Counsel's submission was that the process of reasoning entered into by the arbitrator was simply that taking into account everything contended for by the parties he calculated the value of work in progress as at 20 August 1998 at $61,421.20 but did not order payment of that sum, rather directing only that the sixth progress payment was due. In order words, he found "tiling complete" and an entitlement in the respondent to payment. In this respect it is argued that there was no misconduct at all, the arbitrator simply setting out for the benefit of the parties what he considered to be the value of work which had been done. It was stressed by counsel that the award was not for $61,421.20 and therefore it cannot be argued that the award went wrong. The respondent had argued before the arbitrator
(Page 12)
- that it would fix any small matters by way of "work to be completed" during the defects period. It was said that the arbitrator had the benefit of seeing the parties and had looked for a resolution of the issue in a practical way.
23 Counsel for the respondent contended for a different interpretation of the provisions of cl 10(c) of the contract than that propounded by the applicants, pointing out that the price of a variation was to be "added to" the contract price and unless previously paid added to the next progress payment due after the execution of the work. In relation to the variations which were taken into account by the arbitrator it was contended that much work had been done before July 1998 as the list of variations ran between 18 April and 2 September 1998 with approximately of one half of the number of variations prior to the month of July 1998. It was submitted that if the respondent billed the applicants in relation to variations they became payable when the next progress payment was due after the work had been done, that is, when the next progress payment after the work done was payable. I find it unnecessary to resolve this question of interpretation.
24 The first question to determine is whether the arbitrator misconducted himself in the manner in which the applicants have contended. In that respect the question is whether there was irregularity on the part of the arbitrator in the conduct of the proceedings. This has been interpreted to include a mistaken procedure which has or may have unjustly prejudiced a party: Melbourne Harbour Trust Commissioners v Hancock (1927) 39 CLR 570 per Isaacs J at 587. It is, however, clear that not every irregularity and procedure will constitute misconduct for the purpose of the section: Gas & Fuel Corporation (VIC) (supra) at 392.
25 In my view, the arbitrator answered the question which was before him in the arbitration. That was whether the sixth progress payment was due. The determination was "I determine that Progress Claim Number 6 made August 20, 1998 was due and payable …". I accept the submission of the respondent that the arbitrator in the course of determining this question pointed out for the benefit of the parties the value of work done at the date Progress Claim Number 6 was made, and in so doing took into account a number of factors, all of which are the subject of complaint by the complainant, but which, in my view, do not constitute irregularity or misconduct on the part of the arbitrator in the conduct of the proceedings. An award of an arbitrator is, in my view, intended to be a practical guide to the parties in the resolution of the dispute between them, and I see the arbitrator's award in this instance as nothing more nor less than that.
(Page 13)
26 Further, I would not be prepared in the alternative to grant leave to appeal under s 38 of the Act on a question or questions of law which have risen in consequence of the arbitrator's determination. Assuming there to have been determination of questions of law which substantially affected the rights of the applicants, I am not satisfied that there is manifest error of law on the face of the award or that there is any strong evidence that the arbitrator 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. To the contrary, I find no "manifest error of law" on the face of the award at all and I most certainly do not consider that there is "strong evidence" that the arbitrator made any error of law the determination of which might add or might be likely to add "substantially to the certainty of commercial law". The dispute in this instance involved only the question whether the sixth progress payment was due and payable given the facts of the case in question, and there could be no question of the resolution of this matter adding substantially to the certainty of commercial law in this State.
27 The applicants contend for misconduct on the part of the arbitrator and/or seek leave to appeal in relation to a number of other aspects of the award. The first relates to valley boards and roof tiles in relation to which the arbitrator concluded as follows:
"I determine that the valley boards causing a bellcast effect be reduced to suit by housing out the top of the creeper rafter. The cost of this work to be shared between the Builder and the Architect/owner. I further determine that every second roof tile be fixed in lieu of every tile. The roof guarantee provided by Monier shall then be in order."
28 The applicants contend that the arbitrator was never required to determine either of these issues, as in an earlier arbitration it had been determined that valley cuts would be redone and roof tiles were to be the subject of an indemnity from the roofing company if not properly nailed, with the result that Mr Goold was only called upon to determine whether or not these matters had in fact been completed. It is complained that there was either misconduct or leave for appeal ought to be given because of the error of law made by the arbitrator in effectively "redetermining" matters which had already been determined by the first arbitrator.
29 However, counsel for the respondent pointed out that in the applicants' points of claim before Mr Goold the applicants made complaint about the respondent's failure to comply with the interim award
(Page 14)
- or final award of the earlier arbitrator, contending that they had suffered loss and damage as a result. Paragraph 26 of the points of claim was in these terms:
"The Respondent has wilfully and/or negligently failed to comply with either the interim award or the final award of the Arbitrator the latter having been achieved by the consent of the parties in reliance upon one anothers (sic) good faith, and has further by his groundless objection to the re-appointment of Mr Swann as arbitrator ensured that he was not re-appointed and by so doing has rendered the Complainant's expenditure of and incidental to such original arbitration to have been wasted thereby causing the Claimant's loss and damage."
| "172 | Provide and nail missing roof tiles and replace cracked and broken roof tile, valley cuts above Bed 1 to be redone. | NO | 667.00 |
| 173 | The owner states that all roof tiles have not been nailed as stated by the Specification. | NO | Award requires further indemnity" |
31 Much the same argument is raised in relation to the next contention of the applicants, namely that in relation to airconditioning duct omissions the second arbitrator erred in rejecting a variation claim by the applicants for one of the airconditioning duct penetrations actually cut by the applicants and not cut by the respondent. It is complained that the arbitrator found that the design fault was responsible for the defect. This was said to be misconduct in the proceedings by making an award which in effect overturned a prior award, or alternatively a misdirection in law by in effect overturning a prior award.
(Page 15)
32 However, counsel for the respondent pointed out that in the particulars of Defects and Incomplete Work items 73(a) and (b) made a claim in one instance for compensation in respect of that issue. Items 73(a) and (b) were in the following terms:
| "*73 | a) Cut holes in first floor for A/C ducts - pantry. | YES | 0.00 |
| b) Cut holes in first floor for A/C ducts - hall. | NO | 541.00" |
33 These items were dealt with by the arbitrator in his defect schedule where in relation to item 73(b) the arbitrator said:
"Builder stated dining room door, D5 was widened as a trade off. No penetrations for ducts are shown on structural drawings. Penetrations to concrete floors require engineer to provide re-entrant bars in design. Fault of designer."
34 The respondent's argument is that it is inappropriate to now criticise the second arbitrator for determining these matters when they were the subject of issues raised by the applicants with the arbitrator. It is contended that the applicants waived any rights they had in relation to the first award in bringing the matter before the second arbitrator, and with that I agree. In his award the arbitrator said:
"Normal roof construction which is item (ii) 'Stick Roof', valley boards are 150x25 sawn which can vary in width and depth by 5mm, which were installed in the roof frame. Specification H2 roof material specifies Monier shingle roof tiles with all tiles fixed.
Exhibit C-20 - Monier Quote February 13, 1997 to supply and install Monier Cambridge roof tiles with cyclone clips every second tile - no mention of special requirement of 150x19 valley boards.
Monier estimate number 140638, September 12, 1997 is not included in file. Document dossier number 288 CSR to Diploma December 8, 1998 states estimate number 140638 states valley boards should be 150x9. Document 92 May 27,
(Page 16)
- 1998 CSR to G McCann verifies that every second tile where possible has been done.
The Architect has specified all tiles to be fixed which is contrary to Monier standard practice of tile clips to every second tile where possible, to comply with their specifications and recommendations for Terrain Category 2, whereas, the Architect failed to specify 150x19 valley boards.
I determine that the valley boards causing a bellcast effect be reduced to suit by housing out the top of the creeper rafter. The cost of this work to be shared between the Builder and the Architect/owner. I further determine that every second roof tile be fixed in lieu of every tile. The roof guarantee supplied by Monier shall then be in order."
35 In my view, the issue of airconditioning duct emissions was clearly put before the second arbitrator and no complaint can now be made in relation to it. There was therefore no misconduct nor was there an error of law in relation to which leave should be granted in relation thereto.
36 The respondent seeks to cross-appeal in relation to the arbitrator's conclusions in relation to cl 17(e) of the contract. In this regard the respondent sought at the hearing of the arbitration to amend its pleadings so that the arbitrator could decide under s 17(e) of the contract whether the builder was entitled to be discharged. The determination of the arbitrator in relation to the matter was in the following terms:
"I determine that the respondent is not entitled to discharge the contract as claimed in the pleadings by reason of clause 17(e) of the building contract."
37 No reasons were given by the arbitrator for coming to this decision and counsel for the respondent argues that this part of the award should be set aside and remitted to the arbitrator to be determined according to law.
38 However, counsel for the applicants argues that the issue was not really before the arbitrator at all. He points out that the question of the relevance of cl 17(e) of the contract in the arbitration was on an entirely different basis as indicated by par 17.5 of the respondent's re-amended counterclaim which was in these terms:
"17.5if the claimants took possession of the site or delivered goods or chattels to the site without the prior written
(Page 17)
- consent of the respondent before practical completion or before paying all moneys due under the Building Contract such conduct would be a release to the respondent and discharge the respondent absolutely from any and every claim which the claimants had or might otherwise have had against the respondent and all moneys due under the Contract would be immediately due and payable together with interest thereon at 12% pa [Clause 17(e)];"
39 This issue was, however, never pursued before the arbitrator, the respondent's outline of submissions to the arbitrator contending the following cl 32:
"By its points of defence and proposed re-amended counterclaim the respondent sought to raise a further issue the matter of the claimants conduct in making separate arrangements with contractors of the respondent for further work to be carried out at the site which entitled the respondent under clause 17 (e) to discharge the contract. Leave to amend in these terms was refused but it is respectfully submitted that all of the evidence that could have been called has been called and it would be inappropriate not to determine the issue."
- The opposing submission of the applicants before the arbitrator contended that leave to amend was appropriately refused and that was an end of the matter.
40 Having regard to all the circumstances I am satisfied that the respondent had for all practical purposes abandoned the contention that the builder was entitled to be discharged under cl 17(e) of the contract and in those circumstances the matter was in truth not before the arbitrator at all. Notwithstanding the arbitrator's determination that the respondent was not entitled to discharge the contract as claimed in the pleadings by reason of cl 17(e) of the building contract, I do not consider that there was any error of law on the part of the arbitrator, or if there was, that leave should be granted to appeal pursuant to the provisions of s 38 of the Act. It was not in my view a case in which there was any manifest error of law on the face of the award or any strong evidence that the arbitrator had made an error of law and the determination of the question might add or might be likely to add substantially to the certainty of commercial law in this State. The arbitrator simply made a determination which was not required of him, the matter never truly having been the subject of the pleadings. The conclusion was in the negative from the respondent's point
(Page 18)
- of view, the respondent in any event having effectively abandoned the point in the course of final submissions to the arbitrator.
41 For these reasons I:
1. refuse the applicants leave to appeal from the award of the arbitrator;
2. find there to have been no misconduct on the part of the arbitrator in the conduct of the proceedings;
3. refuse the respondent leave to appeal from the award of the arbitrator.
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