Solid Gold Jewellers Pty Ltd v Winston Holdings Pty Ltd

Case

[2014] WASC 361

30 SEPTEMBER 2014


JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CIVIL

CITATION:   SOLID GOLD JEWELLERS PTY LTD -v- WINSTON HOLDINGS PTY LTD [2014] WASC 361

CORAM:   MARTIN CJ

HEARD:   28 AUGUST 2014

DELIVERED          :   28 AUGUST 2014

PUBLISHED           :  30 SEPTEMBER 2014

FILE NO/S:   ARB 7 of 2014

BETWEEN:   SOLID GOLD JEWELLERS PTY LTD

Applicant

AND

WINSTON HOLDINGS PTY LTD
First Respondent

AYOMAN PTY LTD
Second Respondent

Catchwords:

Arbitration - Appeals - Leave to appeal - Alleged manifest error of law on the face of the award - Turns on own facts

Arbitration - Judicial review - Natural justice - Application to commence proceedings out of time - No reasonably arguable claim of misconduct

Contracts - Commercial lease - Construction of competing clauses

Legislation:

Commercial Arbitration Act 1985 (WA), s 4, s 38, s 42
Commercial Arbitration Act 2012 (WA)
Rules of the Supreme Court 1971 (WA), O 65

Result:

Application for leave to appeal dismissed
Application for leave to commence proceedings out of time dismissed

Category:    B

Representation:

Counsel:

Applicant:     Mr N D C Dillon

First Respondent           :     Mr M W Fatharly

Second Respondent      :     Mr M W Fatharly

Solicitors:

Applicant:     Murcia Pestell Hillard

First Respondent           :     Kott Gunning Lawyers

Second Respondent      :     Kott Gunning Lawyers

Case(s) referred to in judgment(s):

D & Z Constructions Pty Ltd v IHI Corporation [2013] WASC 265

MARTIN CJ:   (This judgment was delivered extemporaneously on 28 August 2014 and has been edited from the transcript.)

  1. The applicant, Solid Gold Jewellers Pty Ltd (the Tenant) and the respondents, Winston Holdings Pty Ltd and Ayoman Pty Ltd (together, the Landlord), are parties to a lease of premises in the central business district of Perth.  The lease contains an arbitration agreement.  A dispute between the parties was referred to arbitration pursuant to that agreement.  As the arbitrator was appointed before the commencement of the operation of the Commercial Arbitration Act 2012 (WA), the arbitration was, and these proceedings are, governed by the Commercial Arbitration Act 1985 (WA) (the Act).

  2. There are, in effect, two substantive applications before the court, although the procedure that has been followed in relation to those applications is irregular. The procedure which has been followed has been to lodge a notice of appeal in accordance with the form provided for appeals under O 65 of the Rules of the Supreme Court 1971 (WA) when, in fact, the substantive proceeding initiated was an application for leave to appeal from an award made by an arbitrator. The procedure specified in the rules of court applicable to proceedings under the Act was not followed, but the parties have been content to proceed on the basis that this is a defect in form rather than substance and I am content to treat the matter the same way.

  3. Some time after the proceedings were commenced, an application was made to amend the notice of appeal so as to assert that that the award delivered by the arbitrator should be set aside for misconduct pursuant to s 42 of the Act. Again, the procedure required by the rules applicable to proceedings under the Act was not followed. The application was also well outside the time specified by those rules as the period within which such proceedings must be commenced, which is the period of 21 days following delivery of the award. Nevertheless, the parties are content to treat the application as if it were an application for leave to commence proceedings seeking to set aside the award for misconduct pursuant to s 42 of the Act notwithstanding that the time for the commencement of those proceedings has expired and I am content to treat the application in the same substantive way.

The application for leave to appeal

  1. I will first address the application pursuant to s 38 of the Act to obtain leave to appeal from the award delivered by the arbitrator. The application is brought pursuant to s 38(4) ‑ (5) which provide:

    38.     Judicial review of awards

    (4)An appeal under subsection (2) may be brought by any of the parties to an arbitration agreement -

    (a)with the consent of all the other parties to the arbitration agreement; or

    (b)subject to section 40, with the leave of the Supreme Court.

    (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.

  2. I have previously set out the principles that generally govern applications of this kind in my decision in D & Z Constructions Pty Ltd v IHI Corporation [2013] WASC 265 [2]:

    1.An appeal lies on a question of law 'arising out of an award' (Act, s 38(2)).

    2.The subject matter of any appeal is confined to questions of law (Westport Insurance Corporation v Gordian Runoff Ltd [2011] HCA 37; (2011) 244 CLR 239 [27] (Westport Insurance)).

    3.The scheme of the Act is to hold parties to their agreement to accept factual findings made by arbitrators (Westport Insurance [27]).

    4.In the absence of the consent of all parties to the arbitration agreement, an appeal can only be brought with the leave of the court (Act, s 38(4)).

    5.Leave cannot be granted unless the court considers that the determination of the question of law concerned could substantially affect the rights of at least one of the parties to the arbitration agreement, and either:

    (a)there is a manifest error of law on the face of the award; or

    (b)there is 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 (Act, s 38(5)).

    6.The requirement that the error of law be manifest on the face of the award means that it must be apparent to that understanding by a reader of the award (Westport Insurance [42] (French CJ, Gummow, Crennan and Bell JJ), [163] (Kiefel J)).

    7.The requirement that the error be manifest on the face of the award does not import a requirement that the error of law have a particular quality or character, so as to include only facile errors, and exclude complex errors (Westport Insurance [45] (French CJ, Gummow, Crennan and Bell JJ), [163] (Kiefel J)).

    8.Even if the statutory requirements for the grant of leave are satisfied, the court retains a residual discretion to refuse leave (Westport Insurance [38] (French CJ, Gummow, Crennan and Bell JJ), [165] (Kiefel J)). That discretion will be exercised having regard to 'the rival merits of assured finality on the one hand and upon the other the resolution of doubts as to the accuracy of the legal reasoning followed by the arbitrator' (Pioneer Shipping Ltd v BTP Tioxide Ltd (The Nema) [1982] AC 724, 739 (Lord Diplock), cited with approval in Westport Insurance [38]). Other matters to be taken into account when deciding whether leave should be granted (assuming the statutory requirements are satisfied) include the character or quality of the error of law (Westport Insurance [47]), whether the rights of the parties will be substantially affected by the determination of the question of law (Westport Insurance [165]), and all the circumstances of the case (Westport Insurance [29], [165]; Qantas Airways Ltd v Joseland and Gilling (1986) 6 NSWLR 327, 333 (McHugh JA)).

  3. This application is brought entirely on the basis that there is said to be a manifest error of law on the face of the award.  No reliance is placed upon the alternative ground to the effect that there is 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.  It follows that the application is to be determined by reference to the face of the award.  The parties are agreed that the award includes the reasons given by the arbitrator.  The award expressly incorporates those reasons into the award.

  4. The first requirement that has to be satisfied before leave can be granted under s 38(5) is the requirement that the applicant satisfy the court that the determination of the question of law concerned could substantially affect the rights of one or more parties to the arbitration agreement. The applicant has adduced no evidence on that topic and, in particular, has not adduced any evidence as to what the consequences of determining the question of law in its favour would be upon the economic circumstances of the parties to the arbitration.

  5. The questions of law which are said to be raised by the grounds of appeal all derive from the alleged failure of the Landlord to provide a sprinkler system suitable for use in retail premises in a timely fashion.  However, no evidence has been led to establish that the delay in the provision of sprinklers that complied with the relevant standard affected the critical path relating to occupation of the premises by the Tenant or what the effects of the alleged breaches by the Landlord were.  So the first impediment to the grant of leave is a failure to adduce any evidence capable of satisfying the first requirement that has to be satisfied before leave can be granted, namely, the requirement that the determination of the question of law could substantially affect the rights of one or more parties to the arbitration agreement.

  6. Turning to the question of whether there is manifest error or errors of law on the face of the award, the grounds of appeal that go to that question are as follows:

    The arbitrator erred in law in finding that the construction of the Lease did not oblige the Landlord to deliver the Premises as suitable for the Permitted Use as defined in the Lease.

    PARTICULARS

    1.The arbitrator correctly found:

    (a)Permitted Use as defined in the Lease included retail (Item 14 Schedule 1);

    (b)the Landlord expressly acknowledged the Premises were suitable for retail (cl 23.3(b) and cl 6.1 Schedule C);

    (c)the Landlord, prior to the Premises being delivered up to the Tenant, was required to carry out works for the general refurbishment of the entire Building (the Landlord's Works) in accordance with plans and specifications approved by and other approvals given by the relevant authorities (cl 2.2(a) Annexure C);

    (d)the Landlord was required to permit the Tenant to inspect the plans, specifications and approvals on notice (cl 2.2(b) Annexure C);

    (e)for the Premises to be approved as suitable for retail it was necessary, pursuant to Australian Standard AS 2118.1-1993, that an OH3 classification fire safety sprinkler system is installed (Reasons [60]);

    (f)the Landlord's builder had installed only a light hazard (office use) fire safety sprinkler system and not an OH3 compliant system (Reasons [83]).

    2.The arbitrator erroneously found:

    (a)whether the Landlord was obliged to install an OH3 sprinkler system so the Premises could be approved as suitable for use for retail, was to be resolved by whether the Landlord's plans, specifications and approvals for the Landlord's Works required the installation of a sprinkler system to the OH3 standard (Reasons [88]);

    (b)if the scope of the Landlord's obligations was limited to the Landlord's plans, specifications and approvals (and they did not include an OH3 compliant system), then the Tenant's claim for breach of the Lease must fail (Reasons [89]);

    (c)clause 23.3(b) and cl 6.1 of Schedule C only prevent the Landlord asserting that retail use was an unsuitable use rather than imposing any liability if the Premises were not suitable or could not be used or approved suitable for retail.

    3.The arbitrator should have found:

    (a)clause 23.3(b) and cl 6.1 of Schedule C imposed an obligation on the Landlord to deliver up the Premises suitable for the Permitted Use being retail which included the installation of an OH4 fire safety sprinkler system;

    (b)the Landlord's plans, specifications and approvals in relation to the Landlord's Works were matters for the Landlord;

    (c)the Landlord was in breach of the Lease when it offered to tender up or tendered up the Premises when they were not suitable for the Permitted Use.

  7. The difficulty with these grounds of appeal is that they appear to misconstrue the approach taken by the arbitrator in the award and to confuse two quite separate and distinct issues.  Those separate and distinct issues are evident from the arbitrator's award.  The first is the allegation by the Tenant to the effect that the Landlord was in breach of cl 2.3 of annexure C to the lease, which provides:

    2.3Standard of Landlord's Works

    The Landlord's Works have been carried out in a proper and workmanlike manner.

  8. The second allegation was that the Landlord was in breach of an obligation to deliver up the premises in a condition in which they were fit for the purpose of their use as retail premises.  That was an obligation that was said to be contained within either cl 6.1 to annexure C of the lease or cl 23.3 of the lease itself.  To the extent that they are said to contain that obligation, those two provisions are in near-identical terms.  Clause 23.3 of the lease provides:

    23.3No Warranty as to Use

    (a)The Landlord gives no warranty as to the use to which the Premises may be put.

    (b)The Landlord acknowledges that the Premises are suitable for the Permitted Use, however, the Tenant acknowledges that prior to the execution of this Lease it has satisfied itself as to the suitability of:

    (i)all Facilities;

    (ii)Airconditioning Plant;

    (iii)all items of Plant and Equipment;

    (iv)Services provided by the Landlord; and

    (v)any cables, switchboards or sub-boards through which electricity is  connected to the Premises,

    and that the above are sufficient for the operation of the Tenant's Business.

  9. The arbitrator dealt with each of these allegations separately and distinctly and I can see no arguable basis for the proposition that he erred in law by doing so.

  10. In relation to the first question which he had to address, the arbitrator set out the terms of cl 2.3 of annexure C, which in effect provides a warranty by the Landlord to the effect that the Landlord's works had been carried out in a proper and workmanlike manner.  As the arbitrator noted, the clause has to be read in the context of cl 2.1 of annexure C which provides a warranty that the Landlord has completed the Landlord's works by the 'estimated completion date'.

  11. As the arbitrator noted in his award, 'estimated completion date' is a defined term.  It is defined to mean 15 September 2012.  As the arbitrator noted, this was the date upon which the Landlord's works at the premises were substantially completed so that the premises were ready for fitting out.  As the lease was not entered into until November 2012, it follows, and indeed, the arbitrator found, that the Landlord's works were completed prior to the execution of the lease.

  12. The term 'Landlord's works', which is used in cl 2.3 of annexure C, is also a defined term.  It is defined by cl 1 of annexure C to mean:

    (a)in respect of the Building, the Landlord's current Building Works to redevelop, reconstruct, refurbish and renovate the Building, which are in the process of being undertaken at the time of the execution of this Lease; and

    (b)in respect of the Premises includes:

    (i)the installation of lighting; and

    (ii)completed ceilings.

  13. It follows from the observations which I have just made that as a matter of fact, the building works were not being undertaken at the time of execution of the lease, but had by then been completed.

  14. The arbitrator also drew attention to cl 2.2 of annexure C, which he considered provided context for the proper construction and interpretation of cl 2.3.  That clause provides a warranty on the part of the Landlord to the effect that the Landlord's works had been carried out in accordance with the plans and specifications approved by and any other approvals given by the relevant authorities and contains an obligation to permit the Tenant and its authorised representatives to inspect those plans, specifications and approvals after giving reasonable prior notice.

  15. The arbitrator found (in par 80 of his award) that the sprinklers were designed and fitted by at least 24 August 2012, because there was a preliminary report tendered in evidence before him which referred to an 'as built' drawing of the sprinkler system as at that date.  The arbitrator also relied upon evidence to the effect that as at 21 September 2012, all the fire services in the buildings were operating, although a final certificate for the fire services had still to be issued.

  16. The arbitrator also noted (in par 81 of his award) that there was no suggestion that the builder had departed from the contractual design of the fire sprinkler system and wrongfully built the fire system to some different standard to that contained in the drawings and specifications.  The arbitrator particularly noted that the Tenant did not argue that the drawings and specifications showed that there should have been a fire sprinkler system to the standard requirement for retail premises, namely, the standard known as OH3.

  17. The arbitrator also found (in par 82 of his award) that it was contemplated by the parties that the Tenant would carry out modification work on the fire sprinkler system in any event.  That was because the details of the design of the sprinkler system were dependent upon the details of the design of the fit out.  As the arbitrator noted, the rules relating to sprinkler systems require that the sprinkler head be a minimum distance from an internal partition.  At the time the sprinkler system was installed the location of the internal partitions to be installed by the Tenant were not known.  It necessarily followed that there would need to be some modification to any pre-existing sprinkler system during fit out by the Tenant.  For these reasons, the arbitrator found as a fact that it was not in the contemplation of the parties that the fire sprinkler system installed by the Landlord could, without more, be used by the Tenant because the lease was entered into on the basis that the Tenant was to carry out the work of fitting out the premises for its use, including the installation of partitions throughout the building.

  18. The arbitrator also noted that after the lease was entered into in November 2012, the relevant authority required that the sprinkler system be upgraded from its then condition to OH3.  At a meeting in February 2013, the parties agreed that the Landlord would carry out and pay for the works necessary to upgrade that system and that work commenced in March 2013.  Although it was not clear exactly when the work finished, the arbitrator found that it was perhaps some time in April 2013.

  19. Having made those findings of fact, the arbitrator then addressed the Tenant's claim for breach of cl 2.3 of annexure C.  He held, consistently with the natural and ordinary meaning of that provision, that a breach of cl 2.3 of annexure C could only be established if the Landlord's works had not been carried out in a proper and workmanlike manner.  He proceeded to reason, correctly, in my view, that this required attention to be directed to the identification of precisely what works were comprised within the expression 'Landlord's works' under the lease.  He noted that 'Landlord's works' was a defined term which referred to the works which were being carried out by the Landlord.  He further noted that amplification was given to that meaning by the warranty in cl 2.2 of annexure C to the effect that the Landlord's works had been carried out in accordance with the plans and specifications approved by the relevant authority.

  1. The arbitrator held, in my view, entirely correctly, that the precise content of the meaning of 'Landlord's works' was to be ascertained by reference to the plans and specifications approved by the relevant local authority, there being no suggestion, as the arbitrator noted, by any party, to the effect that the work had not been carried out by the Landlord in accordance with those approved plans.

  2. It was in that context that the arbitrator noted that the Tenant had not tendered in evidence the approved plans and specifications for the works to be performed by the Landlord (par 76 of the award) from which it followed that the Tenant had not established that the Landlord had failed to carry out the Landlord's works in a proper and workmanlike manner (par 89 of the award).

  3. That process appears to me to be an entirely conventional and correct approach to the proper construction of the lease and does not demonstrate, in my view, any arguable error, let alone any error that is manifest on the face of the award.

  4. The second question which the arbitrator addressed was the question of whether there had been a breach of cl 6.1 of annexure C, or the equivalent provision in cl 23.3 of the lease because, as the Tenant asserted, the Landlord had delivered up premises that were not fit for use as retail premises, there being an obligation on the Landlord to ensure that the premises were fit for that purpose at the time of delivery.

  5. Again, the arbitrator initially approached that question as a question of contractual construction.  He referred to the relevant provisions, including cl 6.1 of annexure C and cl 23.3 and cl 23.1.  Clause 23.1 of the lease provides that:

    The Tenant must not use any part of the Retail Premises for any purpose other than retail.

  6. As the arbitrator noted, item 14 of the schedule to the lease was also relevant.  It provides that the permitted use of the premises was:

    (a)Manufacture, wholesale and retail sale of jewellery and precious gems and all associated functions; and

    (b)Offices.

  7. Significantly, as the arbitrator noted, cl 23.3 is headed 'No Warranty as to Use'.  Clause 23.3(a) provides, as the arbitrator noted:

    The Landlord gives no warranty as to the use to which the Premises may be put.

  8. It is in that context that cl 6.1 of annexure C provides, in near‑identical terms to par (b) of cl 23.3, that:

    The Landlord acknowledges that the Premises are suitable for the Permitted Use, however, subject to Provision 6.2 below, the Tenant acknowledges that prior to the execution of this Lease it has satisfied itself as to the suitability of:

    (a)all Facilities;

    (b)Airconditioning Plant;

    (c)all items of Plant and Equipment;

    (d)Services provided by the Landlord; and

    (e)any cables, switchboards or sub-boards through which electricity is  connected to the Premises,

    and that the above are sufficient for the operation of the Tenant's Business.

  9. The arbitrator noted the curiosity of the language used in cl 23.3(b) and cl 6.1 of annexure C.  He drew attention to the distinction between an acknowledgement on the one hand and a warranty on the other.  That distinction, as the arbitrator noted, is highlighted by the fact that, in cl 23.3, the acknowledgement follows immediately upon the express denial of any warranty that the premises were fit for any particular use.

  10. The arbitrator approached the resolution of possibly competing contentions arising from the differing terminology used by concluding that cl 23.3(b), and therefore cl 6.1 of annexure C, cannot have been intended to have an effect which overrode cl 23.3(a) of the lease.  He took the view that the effect of cl 6.1 of annexure C and cl 23.3(b) was to prevent the Landlord asserting that retail use was an unsuitable use rather than by imposing a liability upon the Landlord if the premises were unsuitable for that use.

  11. There does not appear to me to be any error evident in this process of reasoning.  The express provisions of cl 23.3(a) are clear and unequivocal.  Consistently with the heading to that clause, the clause provides that:

    The Landlord gives no warranty as to the use to which the Premises may be put.

  12. The subsequent provision in which there is an acknowledgement that the premises are suitable for retail use is qualified by an acknowledgement by the Tenant to the effect that, prior to executing the lease, it had satisfied itself as to the suitability of effectively all those parts of the premises that were relevant to the use to which the Tenant proposed to put the premises, and that the Tenant had satisfied itself that those parts of the premises were sufficient for the operation of its business.  A clause in which both parties give acknowledgements cannot override the clear and unequivocal effect of cl 23.3(a), which expressly and unequivocally excludes any warranty on the part of the Landlord to the effect that the premises were fit for any particular purpose.

  13. In support of the application for leave to appeal, on behalf of the Tenant it is argued that cl 23.3(a) should be read down so as to exclude only warranties as to future uses that might be permitted by the Landlord under cl 23.2 of the lease, and so as to not exclude a warranty as to fitness for a use permitted by the lease itself.  It is not clear whether or not this argument was put to the arbitrator.  It is, I think, clear that he does not deal with this argument in his award.  It does not appear to me to matter whether or not the matter was put to the arbitrator because the proposition is, in my view, untenable.  The terms of cl 23.3(a) are clear and unequivocal.  They expressly provide that there is no warranty given by the Landlord as to the use to which the premises might be put.  I can see no basis for reading down the clear and unequivocal language of that clause to extend only to a warranty in relation to some future unidentified use.  Such a construction of the clause would not appear to me to accord with commercial common sense because, of course, in the event that the Landlord does decide to approve another use at some time in the future, it is quite within the Landlord's capacity to qualify that approval by terms which make it clear that there is no warranty to the effect that the premises are fit for that purpose.  So there is no need to exclude any warranty of fitness for purpose in anticipation of some future approval of a different use.

  14. In all events, it seems to me to be clear that the process of reasoning adopted by the arbitrator was open to him, and reveals no manifest error of law on the face of the award.  There does not appear to me to be any arguable basis for the proposition that the award is affected by manifest error.  That is another reason why the application for leave to appeal must be dismissed.

Motion to set aside the award for misconduct

  1. I turn now to what is in substance an application for leave to commence out of time proceedings to set aside the award on the basis of misconduct. The misconduct alleged is a failure to comply with the rules of natural justice. It is clear from s 4 of the Act that such a failure can constitute misconduct and thereby enliven the power conferred by s 42 of the Act. However, the problem with this application is, again, that it misconceives the award and the process of reasoning adopted by the arbitrator, and, in particular, misstates the significance of the arbitrator's reference to the Tenant's right to inspect the approved plans and specifications.

  2. It is clear from the award as a whole that that reference by the arbitrator to that right was not a critical step on the path of his process of reasoning.  Rather, as I have indicated, he approached the Tenant's case on the basis that there was a claim for damages for breach of cl 2.3 of annexure C by reason of the Landlord's failure to carry out the Landlord's works in a proper and workmanlike manner, and, separately and alternatively, a claim for breach of a clause in the lease which was said to have obliged the Landlord to deliver up the premises in a condition in which they were suitable for use as retail premises.

  3. In that context, it was the Tenant's obligation to establish that the Landlord was in breach of cl 2.3 of annexure C by failing to carry out the Landlord's works in a proper and workmanlike manner.  Because it was the Tenant who advanced that argument, it was for the Tenant to tender the evidence necessary to establish that alleged cause of action.  Plainly and obviously, that required attention to be directed to the precise scope of the works that constituted Landlord's works as defined by the lease, because the obligation imposed by cl 2.3 of annexure C applied to those works.

  4. The arbitrator found that the Tenant had failed to discharge that obligation because, inter alia, the Tenant had failed to tender into evidence the plans and specifications approved by the local authority which would have provided content to the definition in the lease and that, without those plans and specifications, there was no evidence that would enable the arbitrator to conclude that the Landlord had not carried out the Landlord's works in a proper and workmanlike manner.

  5. That was, in my view, entirely conventional reasoning.  It gives rise to no issue with respect to natural justice.  Because it was the Tenant who raised the claim for breach of cl 2.3 of annexure C, it was the Tenant who carried the obligation of adducing all the evidence necessary to satisfy that cause of action.  The fact that the arbitrator found that the Tenant had failed to discharge this obligation gives rise to no question of departure from the rules of natural justice.  It should have been quite apparent to the Tenant and its legal advisors that an allegation of breach of cl 2.3 of annexure C required content to given to the meaning of the expression 'Landlord's works'.  It should also have been quite apparent that the warranty in cl 2.2 of annexure C required attention to be directed to the approved plans and specifications so as to ascertain whether the works had been carried out in accordance with those approved plans and specifications.

  6. If the breach of cl 2.3 of annexure C was said to be made out by reference to departure from the approved plans and specifications, it was the Tenant who carried the obligation of adducing evidence to that effect.  The arbitrator observed that there was no evidence to that effect and that therefore the Tenant's claim could not be made out.  This was a process of reasoning that was entirely open to the arbitrator arising clearly and obviously from the terms of the lease itself.  The fact that the Tenant or its legal advisors may have not apprehended that process of reasoning does not involve any departure from the rules of natural justice.  The arbitrator's process of reasoning was clearly open on the way in which the Tenant enunciated its own case.

  7. The application for leave to extend time to set aside the award on the basis of misconduct should be dismissed, because there is no reasonably arguable claim of misconduct.  In addition, I note that there is no evidence to justify or explain the delay in the commencement of proceedings for misconduct.  That is another reason why, in my view, leave to extend time to make such an application should not be granted.

  8. For these reasons, approaching these proceedings as an application for leave to appeal under s 38 of the Act and as an application for leave to commence proceedings under s 42 of the Act out of time, each of those applications should be dismissed.

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