Transit Australia P/L v Crewford Australia P/L - [1997] QSC 141

IN THE SUPREME COURT

OF QUEENSLAND
No. 4410 of 1997

[Transit Australia P/L v Crewford Australia P/L]

BETWEEN:

TRANSIT AUSTRALIA PTY LTD
Appellant

AND:
CREWFORD AUSTRALIA PTY LTD
Respondent

REASONS FOR JUDGMENT - THOMAS J.

Delivered:12 August 1997

CATCHWORDS: COSTS - Offers to settle - Appeal from costs award of arbitrator - Whether arbitrator erred in law by refusing to consider verbal offers to settle.

Counsel:Mr L. Boccabella for the Appellant.
Mr M. Amerena for the Respondent

Solicitors:MacGillivrays for the Appellant.
MacDonnells for the Respondent.

Hearing date: 1 August 1997

IN THE SUPREME COURT

OF QUEENSLAND
No. 4410 of 1997
[Transit Australia P/L v Crewford Australia P/L]

BETWEEN:

TRANSIT AUSTRALIA PTY LTD
Appellant

AND:
CREWFORD AUSTRALIA PTY LTD
Respondent

REASONS FOR JUDGMENT - THOMAS J

Judgment delivered 12 August 1997

This is an appeal against an order for costs made by an arbitrator. The appellant may conveniently be referred to as Transit, and the respondent at Crewford. The arbitration determined claims for compensation by Crewford in respect of the grant of a bus franchise to Transit. An interim award of 9 October 1996 resulted in an award of compensation to Crewford of a little over $1.7 million. The award now in issue was made on 17 January 1997, dealing with the questions of interest and costs.
Both Transit and Crewford appealed against the costs order. The matter was dealt with in part by Derrington J on 3 March 1997 who ordered that that part of the costs order which deprived Crewford of the “domestic” costs of the arbitration should be set aside and the matter remitted to the arbitrator. The parties were not able to deal fully with the issue raised by Transit in its appeal, but Derrington J granted leave to appeal on the question that is now before me. Shortly stated it is whether the arbitrator erred in law in ruling that a verbal offer of settlement made by Transit to Crewford before the hearing of the arbitration should not be considered by him in his determination of the question of costs.
Section 34(1) of the Commercial Arbitration Act 1990 gives a very wide discretion to the arbitrator concerning the costs of the arbitration. Subsection (5) specifically requires the arbitrator to take into account the fact of payment into court if that has happened. Subsection (6) provides
“Where in accordance with rules of court an offer of compromise has been made in relation to a claim to which an arbitration agreement applies, the arbitrator or umpire shall, in exercising the discretion as to costs conferred on the arbitrator or umpire by subsection (1), take into account both the fact that the offer was made and the terms of the offer.”

In my view that subsection requires an arbitrator to take into account offers that comply with the rules of court, but it does not necessarily limit the wider general discretion which permits the taking into account of offers that do not comply with those…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Transit Australia P/L v Crewford Australia P/L

Details

AGLC: Transit Australia P/L v Crewford Australia P/L [1997] QSC 141
Case: [1997] QSC 141
Decision Date: 12 August 1997

CaseChat Overview and Summary

Transit Australia P/L appealed against an arbitration award of costs made by an arbitrator in a case concerning claims for compensation by Crewford Australia P/L in respect of the grant of a bus franchise to Transit. The appeal specifically questioned whether the arbitrator had erred in law by refusing to consider a verbal offer to settle made by Transit to Crewford before the hearing of the arbitration. The Supreme Court of Queensland reviewed the matter, with Thomas J delivering the judgment on August 12, 1997.

The primary legal issue was whether the arbitrator had the authority to disregard the verbal offer to settle and whether such an offer should have been considered in determining the costs. The Commercial Arbitration Act 1990 provided a broad discretion to the arbitrator concerning the costs of the arbitration. The court examined whether the requirement to consider written offers under the rules of court necessarily excluded the consideration of verbal offers, especially in light of the policy encouraging settlement and discouraging obstinacy in litigation.

The court held that while the rules of court mandated the consideration of written offers, the general discretion of the arbitrator to consider costs did not necessarily exclude verbal offers. The refusal to consider the oral offer constituted an error of law. The court emphasised that the whole question of costs was now open for the arbitrator's redetermination according to the law as stated and would need to be reconsidered in light of this judgment. The court allowed the appeal, set aside the entire costs award, and remitted the matter back to the arbitrator for reconsideration.

The final orders included setting aside the interim award concerning costs and remitting the question of costs to the arbitrator for decision in accordance with the law. The costs of the appeal were to be paid by the respondent, Crewford Australia P/L.

Orders