Supercall Pty Limited v Vodafone Pty Limited - [2005] NSWSC 541

No judgment structure available for this case.

CITATION:
Supercall Pty Limited & Anor v Vodafone Pty Limited [2005] NSWSC 541

HEARING DATE(S): 3/06/05

JUDGMENT DATE :

8 June 2005

JURISDICTION:
Equity Division
Commercial List

JUDGMENT OF:
Einstein J

DECISION:
No estoppel made out.

CATCHWORDS:
Estoppel - Arbitral awards - Proper construction of ambit of arbitral provision - Issue estoppel - Anshun estoppel - Seeking to litigate anew a case already disposed of in an arbitration may amount to abuse of process if approach taken would be unjustifiably vexatious and oppressive - Practice and procedure - Application to strike out sections of defence

CASES CITED:
Ashville Investments Ltd v Elmer Contractors Ltd [1989] QB 488
Blair & Perpetual Trustee Co Ltd v Curran (Adam's Will) (1939) 62 CLR 464
Cockatoo Dockyard Pty Ltd v Commonwealth of Australia [2004] NSWSC 841
Dowell Australia Ltd v Triden Contractors Pty Ltd [1982] 1 NSWLR 508
Fidelitas Shipping Company Ltd v V/O Exportchleb [1966] 1 QB 630
Fountain v Alexander (1982) 150 CLR 615
Hunter v Chief Constable of the West Midlands Police [1982] AC 529
IBM Australia Ltd v National Distribution Services Ltd (1991) 22 NSWLR 466
Mackay v Dick (1881) 6 App Cas 251
McNair v Press Offshore Ltd (1997) 17 WAR 191
Papua New Guinea, Administration of the Territory of v Daera Guba (1973) 130 CLR 353
Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589
R v Inhabitants of the Township of Hartington Middle Quarter (1855) 119 ER 288
Thoday v Thoday [1964] P 181
Walton v Gardiner (1993) 177 CLR 378

PARTIES:
Supercall Pty Limited ACN 071 257 522 (First Plaintiff)
Advanced Communications Pty Limited ACN 057 263 822 (Second Plaintiff)
Vodafone Pty Limited ACN 056 161 043 (Defendant)

FILE NUMBER(S):
SC 50047/04

COUNSEL:
Mr JC Kelly SC, Mr GM McGrath (Plaintiffs)
Mr S Finch SC, Mr A McGrath (Defendant)

SOLICITORS:
David Legal (Plaintiffs)
Henry Davis York (Defendant)

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

Einstein J

Wednesday 8 June 2005

50047/04 Supercall Pty Limited & Anor v Vodafone Pty Limited

JUDGMENT

The notices of motion

1 There are before the Court three notices of motion being heard together:

· a motion brought by the defendant, Vodafone Australia Ltd ["Vodafone"] filed on 22 April 2005 seeking discovery from the plaintiffs Supercall Pty Ltd ["Supercall"] and Advanced Communications Pty Ltd ["Advanced Communications"] [together called "the Supercall parties"] of categories of documents set out in a schedule "A" to that motion ["motion 1"];

· a motion brought by the Supercall parties filed on 11 May 2005 seeking discovery from Vodafone of categories of documents set out in schedule "A" to that motion ["motion 2"];

· a motion brought by the Supercall parties filed on 27 May 2005 seeking to strike out paragraphs 15 and 19 to 24 of the defence to the amended summons.

The proceedings

2 The disputes between these parties have a regrettable history which does not speak well in terms of the efficiency of either the parties or of the mechanisms which they chose to seek to have the disputes determined. The commencement of the present proceedings by summons, filed in early 2004 was the culmination of a long drawn out arbitration process commencing in October 1998 which travelled through the making of no less than eight awards. This history is carefully tracked in a judgment given by White J on 29 November 2004 which dealt with discovery category issues.

3 The defendants outline submissions of 16 May 2005 provide a convenient and unexceptional short overview of the background to the dispute and of the arbitration:

· there are two relevant agreements in relation to the dispute;

· first, there is the GSM Service Provider Agreement dated 22 March 1996 between Vodafone and Supercall [“Service Provider Agreement”] pursuant to which Vodafone appointed Supercall to act as a reseller to the public of mobile telecommunications services supplied by Vodafone at specified charges to be paid by Supercall for a term of five years from 1 December 1995 to 1 December 2000, with a possibility of an extension of that term for a further five years to 1 December 2005 (clauses 4, 5 and 10);

· secondly, there is the Asset Sale Agreement dated 30 September 1997 between Supercall, Advanced, Vodafone, Vodacall Pty Limited, Supercall Mobile Digital Pty Limited and Advanced Holdings Pty Limited [“Asset Sale Agreement”] which relevantly provides:

· The plaintiffs are collectively and singularly defined as the "Vendor", "as the context requires" (clause 1.1).

· Subject to clause 10.2, the Service Provider Agreement is suspended on and from 30 September 1997 (clause 10.1).

· The suspension of the Service Provider Agreement will not result in an extension of the term of the Service Provider Agreement (clause 10.2(a)).

· Subject to clauses 10.3(b) and 10.6, the Service Provider Agreement will cease to be suspended on and from the date on which Vodafone notifies the Vendor in writing that Vodafone considers that the Vendor has satisfied each of the following criteria (whose numbering is corrected in the references below):

(i) the Vendor has established and implemented a fully functional and error free billing system for use in the business carried on by the Vendor as a Vodafone service provider which has been tested by the Vendor for a continuous period of at least three months and which is substantially similar in function and effect to Vodafone's billing system (clause 10.3(a)(i));

(ii) the Vendor has established and implemented a suitable and complete accounting system for use in the business carried on by the Vendor as a Vodafone service provider, together with suitable procedures for critical business controls (clause 10.3(a)(ii)); and

· Notwithstanding any other provision, the Service Provider Agreement will remain suspended until at least 30 March 1998 (clause 10.3(b)).

· Any dispute, difference or question which may arise between the Vendor and Vodafone as to whether the Vendor has satisfied the criteria set out in clause 10.3(a) must be resolved in accordance with the arbitration procedure set out in the Dealer Agreement (clause 10.4).

· If the Service Provider Agreement is not reactivated by 30 March 1999, it will automatically terminate and cease to have any force or effect (clause 10.6).

4 In essence, therefore, the Service Provider Agreement only operated from 1 December 1995 until 30 September 1997, at which time it was suspended until at least 30 March 1998, and if not reactivated by 30 March 1999 [“the window of opportunity”], it automatically terminated;

5 It is common ground that Vodafone did not provide any written notice under clause 10.3(a) of the Asset Sale Agreement to the effect that it considered that the Vendor had satisfied any of the three criteria.

The arbitration

6 The Supercall parties and Vodafone fell into dispute over whether or not Advanced Communications had satisfied the criteria set out in clause 10.3(a) of the Asset Sale Agreement.

7 Pursuant to clause 10.4 of the Asset Sale Agreement and clause 24.1 of the Dealer Agreement, an arbitration of that dispute occurred over five years from 26 October 1998 before the arbitrator, Mr Graham Molloy, who was assisted by two independent referees appointed by him in turn, first Mr Carl Millington and subsequently Mr A D Kelly, both of Greenwood Challenor (as the firm was then called).

8 The judgment of White J also conveniently summarised the arbitration of that dispute.

The strike out application

9 The parties have agreed that the convenient course is to deal with the strike out application only. Thereafter the competing discovery issues may be argued and will be determined.

The principles

Anshun Estoppel

10 In Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589 at 602 – 603 Gibbs CJ, Mason and Aickin JJ said:

Issue Estoppel

11 The pleading of the Issue Estoppel requires the application of what was said by Dixon J in Blair v Curran (1939) 62 CLR 464 at 531 – 532, which was:

“A judicial determination directly involving an issue of fact or of law disposes once and for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion, whether that conclusion is that a money sum be recovered or that the doing of an act be commanded or be restrained or that rights be declared. The distinction between res judicata and issue-estoppel is that in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order.

actual ground

existence of the right was negatived

R v Inhabitants of the Township of Hartington Middle Quarter

12 In Thoday v Thoday [1964] P 181 Diplock LJ put the principle as follows:

13 In Cockatoo Dockyard Pty Ltd v Commonwealth of Australia [2004] NSWSC 841 McDougal J summarised the position in the following terms:

Blair

Spencer Bower, Turner & Handley, The Doctrine of Res Judicata

14 Owen J in McNair v Press Offshore Ltd (1997) 17 WAR 191 and Papua New Guinea, Administration of the Territory of v Daera Guba (1973) 130 CLR 353 noted that the test of whether there has been a judicial determination is not simply whether the tribunal is administrative or judicial. Rather, it is whether the tribunal has jurisdiction to decide finally a question arising between the parties, even if the tribunal is not a ‘court’ in the conventional sense and it derives its authority from statute (at 453). [cf Fidelitas Shipping Company Ltd v V/O Exportchleb [1966] 1 QB 630 at 643 holding that an arbitral award may give rise to an issue estoppel].

Abuse of process falling short of raising an estoppel

15 The Supercall parties also invoke the principle that "proceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings": Walton v Gardiner (1993) 177 CLR 378 at 393 per Mason CJ, Deane and Dawson JJ. Their Honours in this regard cited Lord Diplock in Hunter v Chief Constable of the West Midlands Police [1982] AC 529 at 536 who had described the jurisdiction of a superior court in the following terms:

The stance taken by the Supercall parties

16 The Supercall parties strike out motion contends that for better or worse the parties have had their arbitration and have resultant issue estoppels which together with the abuse of process principle enunciated in Walton and the extended estoppel provided by Anshun, prevents the re-litigation of any issues which were or should have been addressed in the arbitration.

17 The gravamen of the application is the contention that four particular issues [termed “arguments”] said to be pleaded in Vodafone's defence are not open to Vodafone. Three bases are put forward by the Supercall parties contentions:

· the first is that 10.4 of the Asset Sale Agreement requires each of these arguments to be decided by arbitration and not by this Court;

· the second is that to the extent that these arguments were not raised at the arbitration, an extended or Anshun estoppel now exists. This embraces the wider abuse of process concept identified in Walton v Gardiner (1993) 177 CLR 378;

· the third is that to the extent that these arguments were raised at the arbitration, each argument is subject to an issue estoppel. Each of these arguments is said to be either an impermissible direct attack on the awards (e.g. paragraph 15(c) et seq. of the defence) or an impermissible collateral attack thereon.

18 It is next convenient to set out a section of the written submissions of the Supercall parties:

The term is pleaded in paragraph 12 of the Amended Summons.

The particulars of request given in paragraph 13 of the Amended Summons date from 29 December 1997 and continue up to and including March 1998.

Vodafone’s Defence

Admission as to Obligation to Supply Test Data

Vodafone admits that it was an express or alternatively an implied term of the Asset Sale Agreement that that Vodafone would provide test call data.

“says that as a matter of construction of clause 10.3(a) of the Asset Sale Agreement it was an express term, or alternatively an implied term, of the Asset Sale Agreement that Vodafone would provide test data within a reasonable time after all of the matters pleaded in sub-paragraph (b) (of paragraph 12) had occurred“

Admissions as to Requests being made and Data not provided

Vodafone also admits that requests were made for such data and, notwithstanding those requests, Vodafone did not provide that data.

“In answer to paragraph 13- (a) admits that Vodafone has not provided test call data to Supercall; (b) admits that Supercall made oral requests for test call data from Vodafone”... .

Defences

and that not all these matters had occurred (see paragraph 10(b) of the Defence to Amended Summons and paragraphs 31 - 33 of the Defendant’s Contentions) (the “Sequence Argument”).

b. Supercall did not install its billing system until after 13 February 1998 and accordingly it would not have been possible to complete 3 months continuous testing by 13 May 1998 (see paragraph 34 of the Defendant’s Contentions) (the “Timing Argument”).

c. Supercall was required to supply information to Vodafone to allow Vodafone to assess Supercall’s compliance and did not (see paragraphs 35 and 36 of the Defendant’s Contentions) (the “Obligation to Inform Argument”).

d. Only Vodafone’s subjective opinion as to compliance with clause 10, as distinct from objective compliance with the clause as determined by the arbitrator, was relevant as a matter of construction of clause 10 (see paragraph 34 of the Defendant’s Contentions) (the “Subjective Opinion Argument”).

e. The loss arose from the failure of the arbitration to conclude by the deadline of 30 March 1999 rather than from any breach by Vodafone (see paragraph 36 of the Defendant’s Contentions) (the “Cause Argument”).

19 Hence the Supercall parties contend that each of the first four arguments are not open to the defendant.

20 The Supercall parties put their respective propositions as follows:

Sequence Argument

· Vodafone says that, as a matter of construction of the Asset Sale Agreement, the time and circumstances in which Vodafone was obliged to provide the test call data had not arisen, hence any failure to provide the data did not amount to a breach.

· The first problem with that pleading is that clause 10.4 of the Asset Sales Agreement provides that “Any dispute, difference or question which may arise between the Vendor and Vodafone as to whether the Vendor has satisfied the criteria set out in clause 10.3(a), must be resolved in accordance with the arbitration procedure set out in the Dealer Agreement”.

· The defence is pleaded in a number of places including paragraph 12(b), where Vodafone asserts that “as a matter of construction of the express term, or alternatively the implied term of the Asset Sale Agreement pleaded in paragraph 10(b) above, Vodafone’s obligation to provide test call data did not arise unless and until each of the following matters had occurred:

(i) the steps pleaded in paragraphs 10(b)(i) and (ii) above had been successfully completed by Supercall;

(ii) Supercall had provided Vodafone with information evidencing the successful completion of (those steps); and
(iii) Supercall had requested that Vodafone provide test call data to it for the purpose of Supercall testing its fully functional and error free billing system for use in the Business” (underlining added).

· The steps pleaded in paragraphs 10(b)(i) appear to be “testing of the installed billing system by Supercall (consisting of) the following steps

(i) Supercall establishing that the installed billing system was fully functional and error free for use in the Business;

(ii) Supercall establishing that the said billing system would and could communicate with Vodafone’s systems; and

· It is clear that the term being construed is clause 10.3(a) of the Asset Sale Agreement. This is the only provision of that agreement which discusses any of these matters. It is submitted that the existence or otherwise of any implied term as to the sequence in which the obligations under clause 10.3(a) must be fulfilled is a clause 10.4 “dispute, difference or question which may arise between the Vendor and Vodafone as to whether the Vendor has satisfied the criteria set out in clause 10.3(a) ...”. It follows that the Sequence Argument could be made, if at all, only at the arbitration under clause 10.4.

· As no such argument was made at the arbitration, there is also an Anshun estoppel.

Timing Argument

· Vodafone argues that Supercall did not install its billing system until after 13 February 1998 and accordingly it would not have been possible to complete 3 months continuous testing by 13 May 1998

· This argument is also a dispute, difference or question within clause 10.4 of the Asset Sale Agreement. If the defendant required a determination of the status of the billing system under clause 10.3 as at 13 February 1998, or any other date than 13 May 1998, it was obliged by clause 10.4 to pursue this by arbitration and, by Anshun, at the arbitration. It is submitted that it is wholly unreasonable to ask the plaintiffs to run the arguments over the billing system all over again at a different date.

· Further it is submitted that there is clearly an issue estoppel between the parties that the only relevant date for determination of the status of the billing system was 13 May 1998 rather than another date (see arbitrator’s finding at pages 200-201 of exhibit JM1 to affidavit of Jason Munstermann sworn 26 April 2005).

Obligation to Inform

· Vodafone argues that Supercall was required to supply information to Vodafone to allow Vodafone to assess Supercall’s compliance and did not.

· This too is clearly directed at compliance by the plaintiffs with clause 10.3(a). The Anshun principle prevents this issue being raised now.

Subjective Opinion

· Vodafone argues that only Vodafone’s subjective opinion as to compliance with clause 10.3(a), as distinct from objective compliance with the clause as determined by the arbitrator, was relevant as a matter of construction of clause 10.

· This issue is, and is pleaded as, a matter of construction, of the words “... that Vodafone considers that the Vendor has satisfied ...” in clause 10.3(a). See paragraph 18(d) of the defence. Accordingly it is submitted that this issue is within the clause 10.4 commitment of such matters to the arbitrator.

· In addition this argument was advanced by the defendant at the arbitration. It appears that it was made and later abandoned and is accordingly subject to issue estoppel or Anshun estoppel.

· It is submitted that the proper construction of clause 10.4 is that the parties chose to submit to arbitration all issues as to compliance with clause 10.3(a).

Supercall’s overview approach

21 The Supercall parties contend that they are concerned that the striking out of particular paragraphs in the defence may not constitute a sufficient resolution of the issue.

22 In these circumstances the Supercall parties seek orders to the effect that by reason of what has occurred in and in relation to the proceedings before the arbitrator, it is not open to Vodafone to raise the first four of the six defences identified in paragraph 12 above.

23 The Supercall parties submit that the future course of the matter should then be addressed. This can best be done once the parties are aware of the Court’s reasoning and determinations on the strike out motion.

Dealing with the strike out motion

The proper construction of the arbitral provision

24 It is convenient to commence with the proper construction of the arbitral provision.

25 Clause 10.4 of the Asset Sale Agreement is in the following terms:

whether the Vendor has satisfied the criteria set out in clause 10.3(a)

Vodafone's submission

26 The submission put by Vodafone is that:

· on its plain and ordinary meaning this clause is narrow;

· at its heart is the question “whether the Vendor has satisfied the criteria set out clause 10.3(a)” of the Asset Sale Agreement;

·

in relation to

in connection with

arising from

· on its proper construction clause 10.4 is simply directed at the resolution of the objective question of whether the Vendor has satisfied the criteria;

· clause 10.4 does not authorise the resolution of any wider questions such as whether Vodafone should have considered that the Vendor satisfied the criteria, what material Vodafone had before it to consider whether the Vendor satisfied the criteria, whether Vodafone acted honestly or unreasonably in considering that the Vendor had not satisfied the criteria, what caused the Vendor not to satisfy the criteria, whose fault was it that the criteria were not satisfied;

· in short, clause 10.4 did not empower the arbitration of any dispute, difference or question about whether Vodafone acted in breach of contract and, if so, whether any damages were suffered by the plaintiffs, which is the essence of what is pleaded against Vodafone in the amended summons.

Resolving the construction issue

27 In my view the correct construction of clause 10.4 must comprehend the fact that the words " [a]ny dispute, difference or question which may arise", albeit directed to the subject matter which follows, are words of real width. In IBM Australia Ltd v National Distribution Services Ltd (1991) 22 NSWLR 466, the Court of Appeal considered a clause which provided "[a]ny controversy or claim arising out of or related to [the relevant] Agreement or the breach thereof will be settled by arbitration." Kirby P regarded the words "or related to" as extending the meaning of "arising out of" (at 477). Clarke JA said (at 483), with whom Handley JA agreed generally:

Fountain v Alexander

Dowell Australia Ltd v Triden Contractors Pty Ltd

Ashville Investments Ltd v Elmer Contractors Ltd

28 Without presently being concerned with the exact ambit of the matters which were in fact referred to arbitration by the parties, it seems clear that to take but one example, it would have been possible for the parties to have submitted for the determination of the arbitrator the question of whether a party may have been estopped from denying that Vodafone had satisfied one or more of the criteria set out in clause 10.3 (a). Likewise the parties could have posed questions of implied terms for determination.

Addressing the interrelated questions

29 The following questions then arise:

· What was referred to the arbitrator for arbitration?

· What were the stances of the parties before the arbitrator?

· What were the issues, if any, in respect of which the decision of the arbitrator is shown to have been determinative as matters cardinal [or fundamental] to the decision hence foreclosing either party from re-litigating such issues?

The relevant chronology

30 The relevant chronology has been set out in the submissions put forward by Vodafone together with the material references. The following were the material events:

· on 3 March 1999 Mr Millington (then the appointed referee) provided an update on the progress of his review and sought clarification from the Mr Molloy in relation to certain issues. In the course of doing so (paras 4.1 – 5), he set out a number of “initial impressions” on matters relevant to the establishment and implementation of the component parts of a billing system and an accounting system by the Plaintiffs, being part of the first two criteria in clause 10.3(a) of the Asset Sale Agreement;

· in his first interim award dated 25 March 1999 (First Interim Award), Mr Molloy recited the background to and history of the arbitration (pp1 – 13) and found that the question of whether the three criteria in clause 10.3(a) of the Asset Sale Agreement had been satisfied should be determined as at 13 May 1998 (pp21 - 22). In doing so, Mr Molloy emphasised precisely what he was to determine as follows:

“Having held that the relevant date is 13 May 1998 then it is plain that it is my job to determine whether or not Advanced met the contractual criteria in clause 10.3 as at that date. That is the dispute that has been brought before me and in order to resolve that dispute the parties have agreed that I should appoint an expert as an independent Referee.” (p22)

· following this finding, in the First Interim Award Mr Molloy also made some minor amendments to clause 6 of the timetable he had ordered on 16 December 1998 (pp24 – 25);

· following the First Interim Award, Mr Molloy wrote to MMB and Maclarens on 31 March 1999 and to Mr Millington on 1 April 1999 attaching the reissued directions to Mr Millington dated 31 March 1999;

· on 19 July 1999 Mr Kelly (who had taken over as referee from Mr Millington) wrote to Mr Molloy seeking further direction or clarification from Mr Molly on a number of issues;

· Mr Kelly’s letter of 19 July 1999 gave rise to argument between the parties and the making of Mr Molloy’s second interim award dated 7 October 1999 (Second Interim Award). In the course of the Second Interim Award, Mr Molloy said:

“This arbitration needs to determine a factual situation within the terms of the contract between the parties as at 13 May 1998 and at no other date. What happens as a consequence of that determination is a matter outside the terms of this arbitration …” (p10)

· again, by this statement, Mr Molloy was drawing attention to his view as to the narrow question he was required to decide;

· on 9 December 1999 Mr Kelly provided his first report to Mr Molloy, in which Mr Kelly, relying in part on Mr Millington’s report of 3 March 1999, found that by the end of April 1998 the plaintiffs’ billing system was established and implemented (3rd page, paras 1 and 2) and was fully functional by the end of April 1998, error free and substantially similar in function and effect to Vodafone’s billing system, but had not been continuously tested for three months (3rd – 7th pages, paras 3 - 6). He concluded that the criteria in clause 10.3(a)(i) was not satisfied for the single reason that as at 13 May 1998 the billing system had not been tested by the Plaintiffs for a continuous period of at least three months and that the criteria in clause 10.3(a)(ii) was not satisfied for the reason that as at 13 May 1998 suitable procedures for all critical business controls had not been established and implemented (last two pages under heading “Conclusion”);

· Mr Molloy made his third interim award on 21 September 2000 (Third Interim Award). In the Third Interim Award, Mr Molloy only adopted that part of Mr Kelly's first report which made findings in relation to the criteria in clause 10.3(a)(i) (p10). Mr Molloy further declined to adopt the other conclusion in Mr Kelly’s first report in relation to the establishment and implementation of suitable procedures for all critical business controls (pp14 – 15), a question which was subsequently referred back to Mr Kelly as determined in Mr Molloy’s fifth interim award dated 9 April 2001. At the outset of the Third Interim Award, Mr Molloy emphasised his view as to the confined questions that he was required to answer, as the following excerpt from pages 1 – 3 illustrates:

“On 25 March 1999 I handed down an Interim Award and on 7 October 1999 I handed down a Second Interim Award. In that Second Interim Award I made it plain that the relevant date for Advanced to have complied with the terms of the Agreement was 13 May 1998. I also made it plain that it was the job of the Independent Referee to report on whether Advanced met the criteria in Clause 10.3 of the Agreement as at that date and I observed that the Independent Referee, being an expert in the particular field and being appointed by me with the consent of the parties, ought to be able to prepare a report using his expertise dealing with the various matters set out in my Directions 31 March 1999 and consistent with the agreement of the parties as identified in the Preliminary Conference 16 December 1998.

"Resolution of Disputes:

Any dispute, difference or question which may arise between the Vendor and Vodafone as to whether the Vendor has satisfied the criteria set out in clause 10.3(a), must be resolved in accordance with the arbitration procedure set out in the Dealer Agreement".

It is important to set all this out again because it seems to me my only job is to decide whether or not Advanced has satisfied that criteria . Of course I must give reasons for my conclusion and those reasons may or may not venture into the area of why Advanced has or has not satisfied the criteria but such could only be by way of (in my view) a route in reaching the conclusion and would not otherwise be necessary for my determination.

I am not required nor obliged to venture into other areas of dispute between the parties which have clearly agitated their respective minds

· in the Third Interim Award, Mr Molloy then turned to consider and reject arguments that had been put to him by the Plaintiffs that he should embark on some wider investigation concerning Vodafone’s obligations under clause 10.3 of the Asset Sale Agreement and why the billing system had not been tested. He did so in emphatic terms at pages 8 - 10:

“It is important to observe by way of aside that Advanced had an obligation to satisfy each of the criteria in clause 10.3. There is no need for me to enter upon a dissertation whether or not Vodafone had some unrestricted right not to notify Advanced or some unrestricted right to form a conclusion at variance with the facts (two of such submissions having been made to me at one time or another during the course of this arbitration arising out of the opening words to clause 10.3(a)). It is plain, however, that the billing system had not been tested in accordance with clause 10.3(a)(i).

Mr Harris [for the plaintiffs] made a strong submission to me that I should in my Award give reasons as to why the system had not been tested, alternatively, the Referee should consider the reasons why, alternatively I should hear the evidence that may impinge upon this issue and that without so doing I have not "completed the picture" because although it is plain from paragraph 5, point 5, that the call record data for test purposes had not been passed from Vodafone to Advanced as at 13 May 1998. He submitted that my job as arbitrator was to make findings as to the reasons why Vodafone had not passed on that data, submitting by clear inference that was the reason why Advanced had not been able to test the billing system.

However, and after considerable thought, I have formed the view, consistent with the strong submissions made to me by Mr Davis [for Vodafone], that any additional evidence would not change the Referee's ultimate conclusions. In the submission of Mr Davis it would be irrelevant and a waste of time and money to embark upon an enquiry as to the reasons for Vodafone not passing on the call record data for test purposes, any enquiry would be lengthy and costly and unnecessary for the adoption of the Referee's report by me having regard to my obligations under clause 10.4, consistent with my observations to like effect in my Second Interim Award to which I have made reference above.

There may well be good and sufficient reasons for Vodafone not to have supplied the test data. There may be other arguments that may be raised by Vodafone which would either disentitle Advanced to the test data or alternatively perhaps some argument in mitigation or an argument that Advanced actually had sufficient test data from other sources that would have complied and enabled it to carry out the testing for the continuous period as specified. It seems to me that such an enquiry would be outside the terms of this arbitration and would be only usefully and cost-effectively conducted in relation to any argument for breach of contract/damages if such were conducted at some future time.

To make this aspect plain: there is no argument that Vodafone had not passed on to Advanced the relevant call record data for test purposed as at 13 May 1998 but I make no other finding with respect to paragraph 5, point 4, because I do not believe that it is relevant to the discharge of my function under clause 10.4 of the Agreement.

· at pages 15 – 18 of the Third Interim Award, Mr Molloy again explicitly gave definition to matters he regarded as outside the terms of the arbitration when he stated:

Mackay -v- Dick

"(where) it appears that both parties have agreed that something shall be done, which cannot effectively be done unless both concur in doing it, the construction of the contract is that each agrees to do all that is necessary to be done on his part for the carrying out of that thing, although there may be no expressed words to that effect. What is the part of each must depend on (the) circumstances".

It is submitted that Vodafone, despite requests, did not make available data for testing and for that reason Advanced could not "for a continuous period for at least three months" test its system as was required under clause 10.3(a)(i) of the agreement.

It was further submitted that where the establishment and testing of the billing system is a condition for the benefit of Vodafone, its conduct is not making test data available equally amounts to a waiver. It is submitted in the circumstances of this case, where the system in question, namely the "Intysas" [sic] billing system, is a proprietary system which is well established and had been long accepted for use by Vodafone and used by other Vodafone service providers in Australia and overseas, therefore the testing as required by clause 10.3(a)(i) was academic.

The difficulty that I have as the appointed arbitrator is that, although these arguments are of interest from a legal point of view and would no doubt be of interest to a Court or a Court-appointed arbitrator hearing a claim for breach of contract and damages, having regard to the quite specific and limited terms of clause 10.4 (ie "as to whether (Advanced) has satisfied the criteria set out in clause 10.3(a)", it seems to me that to embark upon the enquiry as suggested by Advanced is not only outside the terms of this arbitration but is relevant to questions of breach of contract and damages only.

I can understand why Advanced may have wished to agitate these various points before me. Vodafone has suggested, that there may well be substantial argument as to why Vodafone did not or should not have supplied the relevant test data, there may be questions of mitigation of loss and so on. I simply record these as issues raised during the course of argument but I have formed the very clear view that further embarkation on this proposed course is outside the terms of this arbitration.”

· by way of conclusion on the question to be determined by him, Mr Molloy said at page 21 of the Third Interim Award:

“It seems to me that my job as the arbitrator is to make a determination under clause 10.4 in relation to each of the disputed criteria in clause 10.3(a) and it matters not whether I have made a finding that one only of the criteria has not been satisfied because it is my job to determine all of the disputed criteria and what follows from that determination will then be a matter for each of the parties to pursue in a different forum if they wish.”

· on 5 October 2001 Mr Kelly provided his second report in which he found that as at 13 May 1998 the Plaintiffs had established a suitable and complete accounting system, together with suitable procedures for critical business controls. Mr Kelly was unable to form an opinion as to the date of implementation of the Plaintiffs’ accounting system and procedures as he had seen no evidence of authorisation for their implementation or a specific date for commencement of use and there was no continuous testing of the billing system (p8).

· in his sixth interim award dated 28 March 2001 Mr Molloy adopted Mr Kelly’s second report (p16), finding that the plaintiffs had not, as at 13 May 1998, established and implemented a suitable and complete accounting system for use in the Business together with suitable procedures for all critical business controls, for the single reason that, as at 13 May 1998, the billing system had not been tested by the plaintiffs for a continuous period of at least three months. In the course of the Sixth Interim Award, in several instances Mr Molloy again returned to his (by now familiar) theme, being the limits of the matters he was to determine in the arbitration. At pages 3 - 4 he said:

“The issue to be determined by me pursuant to Clause 10.4 and in accordance with this Interim Award is whether Advanced "has established and implemented a suitable and complete accounting system for use in the Business, together with suitable procedures for all critical business controls" within the terms of Clause 10.3(a)(i) (where secondly appearing) of the Asset Sale Agreement.”

“Firstly, it is important to remember that in my First Interim Award dated 25 May 1999 I determined that the relevant date for Advanced to have satisfied the various criteria prescribed in Clause 10.3(a) was 13 May 1998. That was a threshold question because without a determination of the relevant date then it would have been almost impossible to have formulated any sort of opinion as to whether Advanced had satisfied any of the criteria. However, once a date certain had been fixed then the simple question in each case is: had Advanced satisfied the particular criteria as at 13 May 1998?”

At pages 16 - 17 he said:

Returning to the submissions put by the Supercall parties

The "why" question was never determined

31 At least one clear concession came forward from the Supercall parties namely that one matter in respect of which there is clearly no form of estoppel concerned why it was that the Supercall parties did not have access to the relevant supply of call data [transcript 33.30-33.44, 33,19].

32 It seems quite clear that the one thing which the arbitrator clearly did not do was to make a finding as to the "why" question. In relation to the billing system criterion [clause 10.3 (a) (i)] the clear finding was that as at 13 May 1998 the criterion had not been satisfied for the reason only that the relevant system had not been continuously tested by Advanced for a three-month period. There was no finding at all as to why that integer of the criterion had not been satisfied.

33 In relation to the accounting system criterion [clause 10.3 (a) (i)] the clear finding was that the criterion had not been satisfied for the reason only that as at the material date the billing system had not been tested by Advanced for a continuous period for at least three months. There was no finding at all as to why that integer of the criterion had not been satisfied.

The point in time when relevant testing by Vodafone had to take place

34 Mr Kelly SC appearing for the Supercall parties first contended that a significant matter in respect of which findings had been given by the arbitrator [which could be seen to raise an issue estoppel] concerned the point in time by which Vodafone had to be satisfied of the particular criteria having been achieved.

35 I found the submission extraordinarily difficult to grasp which I readily confess. Ultimately it seems that the contention concerned the proposition that the formation by Vodafone of its relevant decision [that the subject criteria had not been satisfied] took place on 13 May 1998, exhausting what was described as a contractual power of Vodafone and giving rise to the dispute before the arbitrator.

36 I can certainly see that there was a dispute before the arbitrator as to what was the appropriate point in time when, upon the proper construction of Clause 10.3 and in the events which had happened, it was necessary for the arbitrator to determine whether or not the subject criteria had been satisfied. And the arbitrator clearly determined that point in time as being 13 May 1998. If it be that Vodafone in its defence seeks to contend that this was not determined between the parties then I would agree that the matter is one in respect of which the arbitrator's determination binds the parties to an issue estoppel. My problem is that I do not see where in the Vodafone defence there is any such contention. Further Mr Finch SC appearing for Vodafone made quite plain that Vodafone does not challenge the date finding nor seek to go behind it [transcript 38.26].

Testing

37 The next contention put by Mr Kelly SC concerned the subject matter of the arbitrators suggested finding as to testing. This seems to be a submission that the arbitrator could not have found ‘that the elements of the criteria referable to the billing system had all been satisfied with the sole exception of testing for a continuous period of at least three months’, without necessarily making a foundational finding as to what constituted the necessary relevant testing. Possibly the submission continues: “without necessarily making a finding as to what constituted the necessary relevant testing already carried out by Supercall parties”. The submission contends as follows:

· the finding of fact did identify what form of testing would be necessary [transcript 31.24];

· the finding of fact was that the only testing which required to still be carried out in respect of the billing system was the testing of call data to be supplied by Vodafone [transcript 29.10-29.20].

· the finding referable to the accounting system was effectively one in identical terms, namely that the accounting system was not shown to be in compliance with the criteria for the simple reason that the billing system had not been tested by Advanced for a continuous period of at least three months [transcript 29.10-29.20].

38 Mr Kelly SC seemed to be putting that it was not presently open to Vodafone to mount a defence to the effect that the reason Advanced had not established and implemented &C… , a fully functional &C... was any reason other than that Vodafone had not supplied Advanced with any call record data for test purposes. [Transcript 33.10].

39 The Court was taken to the report of Mr Kelly of 9 December 1999 at page 212 where the following appears:

· it is normal practice when installing software to conduct both flow-through testing and load-testing prior to commissioning of the software. The purpose of these tests is to confirm that the settings of the software are producing results which are desired by the user, and that there is sufficient power in the equipment to achieve acceptable response times, with reliability;

· for packaged software, such as the Intasys billing system, the level and nature of testing would be limited to confirming that the business processes and their interaction to the business systems are producing consistent results that are appropriate for the business. The usual practice is to run new software in parallel with the product it replaces for about one month. However this can and does vary depending upon the complexity of the software being installed;

· in order to achieve such testing, it would have been necessary for Advanced Communications to have access to a supplier of "core data". Such data would have to have been supplied by Vodafone;

· Mr Crane was advised by Mr Charles Demian of Advanced Communications that his company had made a verbal request to Vodafone for test data prior to 13 May 1998. I am unable to confirm this. Mr Demian has also recently advised Mr Crane that he would provide evidence that Advanced Communications had requested Vodafone to provide test data prior to 13 May 1998. We have not received any such evidence from Mr Demian at the date of this letter;

· Mr Crane was advised by Ms Blake and Ms Stacey Turner of Vodafone during his visit on 29 October 1999, that Vodafone had not passed to Advanced Communications any call record data for test purposes as at 13 May 1998;

· based on the information available to me, I am of the view that the billing system had not been tested by Advanced Communications for a continuous period of at least three months at 13 May 1998.”

40 The proposition put by Mr Kelly SC was that certainly the arbitrator eschewed going into the question of why the system had not been tested but that he did determine in respect of the testing issue, that the only missing parameter of necessary testing was such testing as needed to be carried out with Vodafone's supplied call data. This finding it was said, limits the ambit of what can still be litigated because the arbitrator is said to have made a finding as to normal practice testing and isolated only one parameter in that regard remaining to occur, that being practice in using Vodafone's call record data.

41 I should say immediately that the above excerpt from referee Kelly's 9 December 1999 report does not seem to me to carry the Supercall parties the distance which their senior counsel has suggested. The problem is that the third bullet point of the excerpt commences with the words "[i]n order to achieve such testing…" apparently being a reference, certainly to the subject matter of the second bullet point, and quite likely [or at least quite arguably] also being a reference to the first bullet point. In short it is extremely difficult to attempt to extract anything in particular by way of a factual finding here concerning the type of testing which the Supercall Parties contend to be the subject of an issue estoppel [because of an arbitral acceptance that that form of testing had taken place].

42 The excerpt upon which the Supercall parties so heavily rely does not, it seems to me, do more than to show that testing certainly of the type referred to in the second bullet point of the extract and arguably also of the type referred to in the first bullet point, could not have been carried out without access to a supply of call data from Vodafone. To suggest however that [beyond the finding of normal practice when installing software, being to conduct both flow-through testing and load testing prior to commissioning of the software], the extract closes down [in issue estoppel terms], the forms of testing to be conducted beyond testing which uses such call data is misconceived. Indeed contrary to what Mr Kelly SC submitted, the material finding of the arbitrator in his third interim award of 21 September 2000 includes [at Exhibit AB 2 page 225] the sentence already set out above: "Mr Harris made a strong submission to me that I should in my Award give reasons as to why the system had not been tested…". Very importantly in so summarising the submission made to him by Mr Harris, the arbitrator did not say that the submission was that in his Award he should give reasons as to why call data had not been provided.

43 Additionally it may be noted that the statement of normal practice being to carry on flow-through testing and load-testing prior to commissioning of the software does not go on to reach a finding as to whether or not this normal practice was observed and if so by when.

44 In the result the decision of principle here is that what I have described as the "why" question remains completely unrestrained by the arbitral decisions. [transcript 39.40]. What was determined was that the call data had not been provided. What was not determined was why that call data had not been provided. Hence nothing in the arbitral awards precludes either party from now litigating before the Court any parameter which contributed to the reason why the requisite testing had not occurred over a continuous period of at least three months.

The pleadings

45 It is convenient to commence by examining some of the earlier paragraphs of the respective pleadings. The Supercall parties have pleaded:

[C 9] "To comply with clause 10.3 of the Asset Sale Agreement Supercall and/or Advanced was required to test its billing system for a continuous period of at least three months.”

[C10] "To undertake such testing Supercall and/or Advanced needed access to a supply of call data from Vodafone."

[C11] “In relation to the two immediately preceding paragraphs Supercall and/or Advanced relies upon the issue estoppel arising from the finding of Referee, Mr AD Kelly… 9 December 1999 report to the arbitrator, adopted by the arbitrator at page 10 of the Third Interim Award."

46 The Amended defence includes the following paragraphs:

(a) repeats paragraphs 8 above;

(b) says that amongst a number of the criteria in clause 10.3(a) of the Asset Sale Agreement is the requirement that Supercall test a fully functional and error free billing system for use in the Business for a continuous period of at least 3 months;

(c) will rely upon the terms of the Asset Sale Agreement when produced for their full force and effect; and

(a) repeats paragraphs 8(a), 8(b) and 9(b) above;

Particulars

To the extent the term is implied, it is implied by reason of common telecommunications industry practice in relation to the testing of billing systems and/or the meaning of “testing” of billing systems in the telecommunications industry.

(a) says that in the Third Interim Award made on 21 September 2000 (“Third Interim Award”), the arbitrator (Mr Graham Molloy) only adopted that part of the Referee’s Report dated 9 December 1999 that stated that Supercall and Advanced had not, as at 13 May 1998, established and implemented a fully functional and error free billing system for use in the Business which had been tested by Supercall and Advanced for a continuous period for at least three months and was substantially similar in function and effect to the Vodafone billing system, for the single reason that as at 13 May 1998 the billing system had not been tested by Supercall and Advanced for a continuous period of at least 3 months;

(b) says that in the Third Interim Award the arbitrator found that it was outside the terms of the arbitration for him to determine why Supercall had not tested its billing system; and

(a) repeats paragraphs 8 and 10 above;

Particulars

To the extent the term is implied, it is implied because it is necessary to give business efficacy to the Asset Sale Agreement.

47 As the above defence paragraphs are cross referenced in the later paragraphs the subject of the strike out application [and hence said to be tarnished by the same brush], I make plain that in my view none of these paragraphs answering paragraph 9, 10 or 12 of the contentions can be seen to be the subject of a matter which is issue estopped in terms of an arbitral finding which can be seen to have been legally indispensable to the arbitral conclusion.

48 Nor is there any Anshun estoppel raised to prevent the defendants from so pleading. It cannot be said that the matter relied upon as defences were so relevant to the subject matter of the arbitration that it would have been unreasonable not to rely on them. There being a range of circumstances why a party may justifiably refrain from litigating an issue in arbitral proceedings, the position here is simply that bearing in mind the submissions put to the arbitrator and his clear decision not to permit litigation before him of what I have called "the why question", no question can arise by way of a suggestion that Vodafone acted unreasonably in the arbitration. Once the adjudicator takes a particular view of what is before him, that view becomes a critical integer in any attack upon the approach by either of the parties in which it is said that such party acted unreasonably in not litigating that which the arbitrator determined was not before him. Leave could have been sought to appeal from the arbitration determination of the ambit of the issues permissible to be litigated in the arbitration.

49 Turning to the particular paragraphs of the amended defence which are expressly made the subject of the strike out application, these plead:

(a) repeats paragraphs 8, 10, 12 and 13 above;

(b) says that Supercall had not established and implemented a fully functional and error free billing system for use in the Business which had been tested by Supercall for a continuous period of at least 3 months and which was substantially similar in function and effect to Vodafone’s billing system within the meaning of clause 10.3(a)(i) of the Asset Sale Agreement on or prior to 13 May 1998;

(c) says that Supercall had not established and implemented a suitable and complete accounting system for use in the Business, together with suitable procedures for all critical business controls within the meaning of clause 10.3(a)(ii) of the Asset Sale Agreement on or prior to 13 May 1998;

(d) in the circumstances set out in sub-paragraphs (a) to (c) above, says that Supercall had not satisfied each of the criteria in clause 10.3(a)(i) or (ii) of the Asset Sale Agreement;

(f) otherwise denies the paragraph….

(a) repeats paragraphs 8, 10 to 15 and 18 above;

(b) admits that Vodafone did not notify Supercall pursuant to clause 10.3(a) of the Asset Sale Agreement on 13 May 1998 or thereafter;

Particulars

In the period from Vodafone's first request for information made by letter dated 26 March 1998 to the automatic termination of the GSM Service Provider Agreement on 30 March 1999, Supercall failed to provide Vodafone with the following information:

(d) says that as at 13 May 1998 and at all times thereafter Vodafone considered that Supercall had not satisfied the criteria in clause 10.3(a)(i), (ii) and (iii) of the Asset Sale Agreement;

(f) by reason of the matters pleaded above, and in answer to the whole of the Summons, says that Vodafone was not obliged to notify Supercall on 13 May 1998 or thereafter as Vodafone considered that Supercall had not satisfied each of the criteria in clause 10.3(a)(i), (ii) and (iii) of the Asset Sale Agreement; and

(g) otherwise denies the paragraph.

(a) repeats paragraph 19 above;

(b) says that by reason of the matters pleaded in paragraph 19 above, pursuant to the operation of clauses 10.1, 10.3(b) and 10.6 of the Asset Sale Agreement, on and from 30 September 1997 until 30 March 1999 the rights and obligations of Vodafone and Supercall under the GSM Service Provider Agreement were suspended;

(c) says that by reason of the matters pleaded in sub-paragraph (b) above, Vodafone had no obligations with which to comply under clause 10.5 of the Asset Sale Agreement; and

(a) repeats paragraph 19 above;

(b) says that by reason of the matters pleaded in paragraph 19 above, pursuant to the operation of clauses 10.1, 10.3(b) and 10.6 of the Asset Sale Agreement, on and from 30 September 1997 until 30 March 1999 the rights and obligations of Vodafone and Supercall under the GSM Service Provider Agreement were suspended;

(c) says that pursuant to the operation of clause 10.6 of the Asset Sale Agreement, on 30 March 1999 the GSM Service Provider Agreement automatically terminated and ceased to have any force and effect;

(d) by reason of the matters pleaded in sub-paragraphs (b) and (c) above, says that on and from 30 September 1997 Vodafone had no obligations under the GSM Service Provider Agreement; and

(a) repeats paragraph 19 above;

(b) admits that pursuant to the operation of clause 10.6 of the Asset Sale Agreement, on 30 March 1999 the GSM Service Provider Agreement automatically terminated and ceased to have any force and effect; and

(a) repeats paragraph 19 above; and

50 Before going further it should be noted that Mr Finch SC conceded [transcript 88.25] that Vodafone was content to include the words "for the single reason that" into paragraphs 15 and 19 of the amended defence. What follows assumes such an amendment is unexceptional.

51 Here again in my view none of these paragraphs can be seen to be the subject of a matter which is issue estopped in terms of an arbitral finding which can be seen to have been legally indispensable to the arbitral conclusion.

52 Nor is there any Anshun estoppel raised to prevent the defendants from so pleading. It cannot be said that the matter relied upon as defences were so relevant to the subject matter of the arbitration that it would have been unreasonable not to rely on them. There being a range of circumstances why a party may justifiably refrain from litigating an issue in arbitral proceedings, the position here is simply that bearing in mind the submissions put to the arbitrator and his clear decision not to permit litigation before him of what I have called "the why question", no question can arise by way of a suggestion that Vodafone acted unreasonably in the arbitration. Once the adjudicator takes a particular view of what is before him, that view becomes a critical integer in any attack upon the approach by either of the parties in which it is said that such party acted unreasonably in not litigating that which the arbitrator determined was not before him. Leave to appeal could have been sought.

General summation

53 I have had and continue to have the greatest of reservations as to the manner in which the arbitration went forward and as to the failure really of both parties to seek leave to extend the ambit of the arbitration or to seek leave to appeal in order to test the arbitrator's decision as to the ambit of what was before him and/or as to the proper construction of the arbitral provision. Most particularly it has seemed to me that the strike out application has required a minute examination, generally along the lines of the principle propounded in Walton (supra), of whether or not the continuance by Vodafone of its endeavours to press its defences may be properly regarded as unjustifiably vexatious and oppressive. I should have thought that the history of the manner in which the parties disputes have been sought to be litigated should bring the administration of justice into disrepute among right-thinking people. However ultimately the problems which have arisen can only be laid at the feet of both parties to the arbitration. This is simply not a circumstance in which it is appropriate to tar only Vodafone for what occurred before the arbitrator and was never tested on appeal. These Supercall parties are tarred in exactly the same way. Their apparent outrage at the forensic tactics of Vodafone is misplaced for the reason that they also had the forensic tools with which to press for the arbitration to be definitive on matters which they now contend for. They did not use those tools. The tools cannot be mobilised on the present strike out application.

Concessions

54 During the hearing of the strike out motion Mr Finch SC made a number of concessions as to how Vodafone put and more importantly did not put its case. The full transcript taken records these concessions which should be reflected in amendments to the defence if and when appropriate.

Short minutes of order

55 The parties are required to bring in short minutes of order when costs may be argued. At the same time directions will be given for a completion of the discovery segments of the motions.

I certify that paragraphs 1 - 55
are a true copy of the reasons
for judgment herein of
the Hon. Justice Einstein
given on 8 June 2005

___________________
Susan Piggott
Associate

8 June 2005

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Citations

Supercall Pty Limited v Vodafone Pty Limited [2005] NSWSC 541

Cases Citing This Decision

0

Cases Cited

10

Statutory Material Cited

0

Cockatoo Dockyard v Commonwealth of Australia [2004] NSWSC 841

R v Trade Practices Tribunal; ex parte Tasmanian Breweries Pty Ltd [1970] HCA 8

Fountain v Alexander [1982] HCA 16

CITATION:	Supercall Pty Limited & Anor v Vodafone Pty Limited [2005] NSWSC 541
HEARING DATE(S):	3/06/05
JUDGMENT DATE :	8 June 2005
JURISDICTION:	Equity Division Commercial List
JUDGMENT OF:	Einstein J
DECISION:	No estoppel made out.

CATCHWORDS:	Estoppel - Arbitral awards - Proper construction of ambit of arbitral provision - Issue estoppel - Anshun estoppel - Seeking to litigate anew a case already disposed of in an arbitration may amount to abuse of process if approach taken would be unjustifiably vexatious and oppressive - Practice and procedure - Application to strike out sections of defence
CASES CITED:	Ashville Investments Ltd v Elmer Contractors Ltd [1989] QB 488 Blair & Perpetual Trustee Co Ltd v Curran (Adam's Will) (1939) 62 CLR 464 Cockatoo Dockyard Pty Ltd v Commonwealth of Australia [2004] NSWSC 841 Dowell Australia Ltd v Triden Contractors Pty Ltd [1982] 1 NSWLR 508 Fidelitas Shipping Company Ltd v V/O Exportchleb [1966] 1 QB 630 Fountain v Alexander (1982) 150 CLR 615 Hunter v Chief Constable of the West Midlands Police [1982] AC 529 IBM Australia Ltd v National Distribution Services Ltd (1991) 22 NSWLR 466 Mackay v Dick (1881) 6 App Cas 251 McNair v Press Offshore Ltd (1997) 17 WAR 191 Papua New Guinea, Administration of the Territory of v Daera Guba (1973) 130 CLR 353 Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589 R v Inhabitants of the Township of Hartington Middle Quarter (1855) 119 ER 288 Thoday v Thoday [1964] P 181 Walton v Gardiner (1993) 177 CLR 378
PARTIES:	Supercall Pty Limited ACN 071 257 522 (First Plaintiff) Advanced Communications Pty Limited ACN 057 263 822 (Second Plaintiff) Vodafone Pty Limited ACN 056 161 043 (Defendant)
FILE NUMBER(S):	SC 50047/04
COUNSEL:	Mr JC Kelly SC, Mr GM McGrath (Plaintiffs) Mr S Finch SC, Mr A McGrath (Defendant)
SOLICITORS:	David Legal (Plaintiffs) Henry Davis York (Defendant)