Westport Insurance Corporation & Ors v Gordian Runoff Limited [2011] HCATrans 12

[2011] HCATrans 12

[2011] HCATrans 012

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S110 of 2010
  No S219 of 2010

B e t w e e n -

WESTPORT INSURANCE CORPORATION (ABN 48 072 715 738)

First Applicant/Appellant

ASSETINSURE PTY LIMITED (ABN 65 066 463 803)

Second Applicant/Appellant

MUNICH REINSURANCE COMPANY OF AUSTRALASIA LIMITED (ABN 51 004 804 013)

Third Applicant/Appellant

XL RE LIMITED (ABN 54 094 352 048)

Fourth Applicant/Appellant

SCOR SWITZERLAND LTD (ABN 92 098 315 176)

Fifth Applicant/Appellant

and

GORDIAN RUNOFF LIMITED (ABN 11 052 179 647)

Respondent

FRENCH CJ
GUMMOW J
HEYDON J
CRENNAN J
KIEFEL J
BELL J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 3 FEBRUARY, AT 10.17 AM

Copyright in the High Court of Australia

__________________

MR B.W. WALKER, SC:   May it please the Court, I appear with my learned friend, MR T.M. MEHIGAN, for the appellants/applicants.  (instructed by Allens Arthur Robinson Lawyers)

MR I.M. JACKMAN, SC:   May it please the Court, I appear with my learned friend, MR T.M. FAULKNER, for the respondent.  (instructed by Mallesons Stephen Jaques)

MR S.J. GAGELER, SC, Solicitor‑General of the Commonwealth of Australia:  If the Court pleases, I appear with MR M.J. O’MEARA for the Attorney‑General for the Commonwealth who seeks leave to appear amicus curiae.  (instructed by Australian Government Solicitor)

MR D.F. JACKSON, QC:   May it please the Court, I appear with my learned friends, MR M.F. HOLMES, QC and MR J.A. REDWOOD, for the four bodies seeking leave to appear as amici curiae.  (instructed by Corrs Chambers Westgarth)

FRENCH CJ:   Mr Solicitor and Mr Jackson, the Court will grant leave to those you represent to intervene as amici curiae.  We have your written submissions.  If it is necessary to make brief oral submissions in elaboration before the appellants’ reply, then you will have leave to do so.  Yes, Mr Walker.

MR WALKER:   May it please the Court.  As your Honours have seen or are seeing, we wish to start with the matter upon which there has been a grant of special leave.  In order to do so and because of the obvious proposition that the adequacy of purported reasons is to be judged by consideration of the whole of the statement in the relevant context, may I take you in volume 1 of the appeal book to start with, please, to page 7.  A reinsurance treaty was expiring.  Its text plays some part in the negotiations which ensued for further reinsurance, but recognising ‑ ‑ ‑

GUMMOW J:   Where are you reading from?

MR WALKER:   I am looking at page 7 and I am not reading, I am telling your Honours.  There was a ‑ ‑ ‑

GUMMOW J:   There are four numbers on my page 7.

MR WALKER:   Yes, there are.  The appeal book numbers, or at least those I have been treating as the appeal book numbers, are the ones found at the top right‑hand corner, the larger number.  Then there is a page number and paragraph numbers and line numbers.  I am sorry, your Honours.  No, the background I was giving was this.  There were negotiations.  Because of expiring reinsurance the negotiations for the new reinsurance recognised a change of circumstances.  The change of circumstances was that one of the reinsured’s insureds was itself the subject of a takeover, FAI by HIH, names that still resonate.

There was D&O liability with respect to FAI, which the GIO, Gordian, had insured.  It wished to maintain a reinsured protection in relation to that liability, but that liability was to be transformed by the circumstances.  The change of guard, FAI being taken over, was leading to the importance in the interests of those whose position is protected by D&O cover of run‑off protection and run‑off protection for seven years.  I stress seven years because then one comes to the negotiations, quite distinct between the reinsured, the insurer of that D&O liability in their negotiations for new and somewhat altered reinsurance cover. 

The story picks up at page 7, paragraph 34 - these are the arbitrators’ factual findings - some draft wording is indicated by the proposed reinsured to its broker and asks for confirmation that they would be covered for policies that are issued in terms of excess of 12 months with, as one would expect in reinsurance, the reinsurance period being referred to as a period during which so‑called original policies incept.  See line 25 on page 7.

Now, of course, excess of 12 months could go forever.  That is not actually practical or commercial, but content was put to a limit – see paragraph 35 – the broker replies to Gordian:

reinsurers have noted and agreed to your request . . . with regard to your need to write original policy periods of 2 or 3 years –

Paragraph 36 - within the proposed reinsured, the internal memorandum:

“Treaty coverage is as expiring except that we now have protection for long term policies up to 3 years –

Paragraph 37, a similar inquiry showing the concern to get a two to three‑year period and then again reference to the new or renewed reinsurance in paragraph 38, about line 52 on the page, for policies being those to which the provision applied “which were originally written for a 3 year term”.  If one then comes to the next page, page 8 of the appeal book, one sees that there were eventually, after much toing and froing – which is not presently material – documents executed.

The wheels fell off after certain events occurred.  We do not need to concern ourselves with that.  We can jump ahead to page 13.  In paragraph 74 the arbitrator is there rejecting a deal of evidence, the admissibility of which under the rules of evidence may have been in doubt, but it does not matter, concerning what is there called the “multi year” policies and then go forward to how they evaluated the commercial likelihoods in relation to the limit of three years, that is, leaving out policies permitting notification up to seven years on page 14, paragraph 78.

Referring back to the earlier dealings with which I started, the arbitrators then, at about line 15, note that Gordian had disputed the relevant premise:

did not offer any plausible alternative.  It was effectively left with the unattractive proposition that the 1998 reinsurance treaty covered every Gordian D&O policy irrespective of the period of cover for which it provided, even policies which were for an unlimited period –

and then an important rider –

at least if such policies were within Gordian’s “established acceptance and underwriting policy –

That is important because of an article in the treaty permitting special acceptance in the case of class of business outside the class of business which fell within established acceptance in underwriting policy.

Then in paragraph 79 that very matter is referred to factually.  The arbitrators were -

not persuaded that the FAI D&O run‑off policy -

in question which may be in shorthand called the seven‑year policy –

was within its then “established acceptance and underwriting policy in respect of” D&O policies.  In any event, we are satisfied that the 1998 reinsurance treaty applied to D&O policies which provided cover for a period of 12 months plus odd time not exceeding 18 months in all.  That was plainly the common understanding and intention of the parties when the 1999 reinsurance treaty was arranged –

Then in paragraph 80 one sees that the claim for rectification by my clients for 36 months, that is three years, was rejected as unnecessary.  Those are factual findings concerning dealings between the reinsurers, my clients, and the reinsured, the respondent to this appeal.  They are matters which of course stand in stark contrast in terms of the sophistication of the participants in the dealings and the subject matter of the dealing from, example, householders seeking fire cover or the like.

FRENCH CJ:   Before you go on, what constitutes the 1999 reinsurance treaty?  There was, in effect, a concession referred to at 80 about its content.  We have placing slips and correspondence, but is there a single document?

MR WALKER:   No.  That would be far too easy in the insurance case, let alone a reinsurance case, your Honours.

FRENCH CJ:   Yes, I thought so.

MR WALKER:   Relevantly, what I will call the body of the terms can be seen in the expiring treating and we have been using ‑ ‑ ‑

FRENCH CJ:   They are picked up by the use of the word “expiring” in the placing slip?

MR WALKER:   Quite so.  The amendment is particularly in relation to the three years, but we have been using, for the text of those other terms, the document that you will find starting at 465 in volume 1 of the appeal book.  Perhaps while I have taken your Honours to that I will just jump ahead and give you references I will not need to come back to.  Your Honours see in Article 1 the familiar way in which a reinsurance agreement applies to claims made on policies.  Those are policies to be issued by the reinsured. 

The attachment, that is the relevant inception, is the event which must fall within the period providing for reinsurance cover.  Under Article 3 you have the terminology and concept of classes of business, “Classes Covered” and that is where you see “Professional Indemnity, Directors and Officers Liability Insurance” for example.  In Article 7, you have a familiar reinsurance form of adjustable premium.  At line 25 one sees a reference to “the business protected” that being the business written by the reinsured during the relevant period.

Then in, for example, Article 23(3) on page 476, about line 30, one sees the way in which that adjustable premium reflects, for example, upon termination, leaving the reinsurer liable, of course, with respect to business written by the insured up to that point.  Those are the terms which, by reason of the reference in the slip, are incorporated.  Alas otherwise, no, there is no single document of a kind which would be no doubt ideal.  I am sorry, I overlooked to show you the most important one.  At page 474 is Article 16 to which I had earlier referred – the agreement concerning special acceptance for business outside established practice.

Back in the reasons of the arbitrators, could I take you on page 15 of volume 1 of the appeal book to the foot of that page, paragraph 85 – apropos the possibility under Article 16 of special acceptance the arbitrators found, turning over the page:

Such direct evidence as is available is substantially to the contrary.  At best for Gordian, the matter is conjectural.

Those are, we submit, the only facts that also provide the only context, both generally in relation to the business in question and specifically in relation to these parties and their dealings, which precede or, indeed, for that matter appear anywhere in the statement of reasons by the arbitrators concerning a matter for their decision, the proviso in section 18B, which is framed negatively concerning reasonableness – that the reversal of what is called disentitlement that the text of section 18B provides as a benefit to persons in Gordian’s position has a proviso that does not happen if the word is “unless”. That would be not reasonable.

That is a statutory question that has to be determined upon a dispute between parties if there is a contract of insurance affected by section 18B. So it was a matter which the dispute between these parties, once one puts to one side as we must now, the issue whether section 18B applies to reinsurance at all, it is a matter that the arbitrators were bound to decide and not as a mere integer of some overall issue, but as a specific question statute called to be answered. It can be phrased differently leaving aside niceties of onus of onus of proof. The most natural English to ask is is it reasonable to provide cover in relation to a policy written for seven years under an obligation to reinsure for policies written after three years.

The conclusion is to be found on page 16 of volume 1 of the appeal book in paragraph 88 and I hasten to say that, of course, paragraph 88 is not to be read in isolation.  But we have taken the trouble to set out all these facts that I have told your Honours about because it is our submission, in a sense our forensic challenge to our friends, to show that there is anything other than the facts to which I have referred anywhere in the statement of reasons, let alone antecedently to the conclusion in paragraph 88.  Paragraph 88 deals with a number of issues and the one in question is rolled up in its third sentence:

In particular, we are comfortably satisfied –

the arbitrators said.  This is about line 28 on the page –

that it would be reasonable within the meaning of s18B(1), and entirely consistent with “considerations of general justice and fairness” within the meaning of the insurance treaties –

Article 20 –

for the reinsurance treaties to apply in relation to the 3‑year claims.

I need, in deference to the appropriate brevity practice by the arbitrators to point out that “3‑year claims” refers to the actual claims that had been made all, in fact, notified, well within three years for which Gordian was answerable under the FAI D&O policy, which had been written to cover up to seven years.

GUMMOW J:   Mr Walker, I am anxious to start at the beginning.  What is it that attaches the New South Wales Act of 1902 to this contract of reinsurance?

MR WALKER:   It was made in Sydney, your Honour.

GUMMOW J:   Yes.  What is the relevant connecting factor for the operation of the Insurance Act 1902 on its proper construction? It just talks about contract of insurance. That could be between Jordan and Egypt for all we know. What is it that limits it territorially in some way?

MR WALKER:   The Interpretation Act will limit it.  The connecting factors in the particular case, that is, not being exhaustive ‑ ‑ ‑

GUMMOW J:   I am talking about the Act.

MR WALKER:   Well, I start first with the connecting factors in the particular case are that the reinsurance ‑ ‑ ‑

GUMMOW J:   There is no choice of law provision in the reinsurance claim, is there?

MR WALKER:   No, there is not.

GUMMOW J:   But the situs of the arbitration is to be in Australia it says, not in ‑ ‑ ‑

MR WALKER:   Yes.  A choice of law provision in any event would not, on ordinary principles, affect the connecting factor in relation to statutory ‑ ‑ ‑

GUMMOW J:   I am not sure about that.

MR WALKER:   Parties will not pick or choose the national system of law.  It may be that the national system of law permits parties’ choice to be determinative but only because the national law says so.

GUMMOW J:   Anyhow, there is no choice of law clause.

MR WALKER:   No, there is no choice of law.

GUMMOW J:   What is the proper law of this contract of reinsurance?

MR WALKER:   We submit that it is the law of New South Wales.  Why?  Because the business was agreed in New South Wales.  It is not business that is solely concerned with ‑ ‑ ‑

GUMMOW J:   It deals with New Zealand as well, does it not?

MR WALKER:   Quite.  There are worldwide possibilities as well, but looking for the connecting factor on common law approach, in our submission, partly by default reasoning, the proper law would be New South Wales, and certainly so the parties have conducted themselves throughout the contest of this dispute.

FRENCH CJ:   They are operating under Article 20, is that right, at 475?

MR WALKER:   In volume 2 – and this, I think, requires correction of my earlier answer to Justice Gummow – there is the choice of law including arbitration tribunals, at 573.  That is about line 32.  You do not find it in the general terms to which I had earlier gone.  You do find it in the placing slip.

GUMMOW J:   Line 32?  This is the slip were are looking at now, is it not?

MR WALKER:   Yes, 573, about line 32 on that page, your Honours will see this expression:

Proper Law and Jurisdiction governing this reinsurance (including Arbitration Tribunals) shall be the Law and Courts of New South Wales, Australia.

GUMMOW J:   Right.

FRENCH CJ:   That is to be read with, I suppose, Article 20 and, in particular, the last sentence of the first paragraph:

The arbitration shall be held in Australia in accordance with and subject to the provisions of the relevant Commercial Arbitration -

I presume it is meant to be Commercial Arbitration Act – the word has been left off.

MR WALKER:   Act, yes, and that is obviously a reference to the almost uniform scheme.  It is for those reasons, in our submission, that there is no doubt about ‑ ‑ ‑

GUMMOW J:   Then you have to say – and there are decisions in this Court in the 1930s which would support it, I think – that the Insurance Act at least applies to insurance contracts governed by New South Wales law.

MR WALKER:   Yes.  The Interpretation Act connective factor is quite awkward linguistically to apply in such cases – what is an insurance contract in or of a territory – but for the reasons that Justice Gummow has just noted, the point has not been in doubt and is certainly not in doubt between these parties.  As I say, there is a ‑ ‑ ‑

GUMMOW J:   What was the relevant provision in the Interpretation Act?

MR WALKER:   I do not have it with me, your Honour.  I think it is section 12, your Honour, from memory.  I am so sorry, your Honours.  May I locate that for your Honours and give you a proper answer to that.  Your Honours, what can be said then about the matters to which the arbitrators turned their attention in their statement of reasons in paragraph 88 is that the position, the reasonableness of which they were considering and announcing their conclusion in paragraph 88, is the reasonableness of including within reinsurance cover a possibility which had never been raised could not possibly have been within the legitimate commercial expectation of either party, let alone that which mattered – namely, Gordian – and which had been explicitly excluded or limited, to use loaded words from the statute, by the definition of the scope of the reinsurance cover.  There was nothing incidental, and certainly there was everything deliberate about it being three years, not seven years.

KIEFEL J:   Is this by way of saying that the arbitrators’ view expressed in paragraph 88 was unreasonable in the strict sense?

MR WALKER:   I do not think the jurisprudence permits me to mount that as an argument, and we embrace the proposition that reasons do not have to be good or persuasive reasons.

KIEFEL J:   Quite.  So what is the relevance of it?

MR WALKER:   The relevance is this.  If a reason is a matter that explains why a decision has been reached, and the authorities, English and common sense, proposes that that ought to be so, everything presented by this dispute and their findings of fact in relation to it prevents those facts themselves providing their own explanation of the reasonableness that they found – so that explanation is called for.  The call for explanation is heightened in this case by the fact that all the facts combine to militate against the provision of a statutory obligation to reinsure where the contract between the parties plainly did not include it.

KIEFEL J:   Do you rely upon the fact that on one view, in paragraph 88, the arbitrators are merely reciting the words of the statute and there is no further content?

MR WALKER:   Yes, it does.  Now, there is nothing wrong, indeed, a great deal to be commended, in statements of conclusion on matters called for decision under a statute being expressed in words of, or cognate with the words of, the statute.  We do not complain about that, of course.  But if that is all that is said the obvious peril for the stater of the reasons is that there will not have been any explanation given, but rather the announcement ipse dixit of the decision, leaving the reader to wonder “Yes, we know that was the question or the issue in dispute and we see that you have decided it thus, in terms of which way, but we cannot see why”.  Paragraph 88 says thus, but does not say why.

The facts which preceded paragraph 88 – and there is nothing that follows that provides any further context – are facts which actually tend on any view against reasonableness.  This is not attacking the statement of reasons as being unreasonable or wrong, even if we may privately think as reinsurers that they plainly are.  It is rather to say viewing the whole statement of reasons, looking at the whole and understanding the setting in which they are expressed, which includes the way in which the parties fought the case and they fought the case about reasonableness if 18B applied, what is it in this statement of reasons that explains the conclusion announced in 88 and we say of course, in an appropriate case, a statement of facts – a bare statement of facts – will supply the answer to a question such as whether something has been reasonable.

Let us take another example where the word “reasonable” is most frequently used in our courts and even in arbitrations - a negligence case - has someone’s performance reached a reasonable standard of care?  The facts may be simply stated in such a hypothetical case.  The solicitor was engaged for reward to complete a conveyance, including registration of the resultant dealing.  The solicitor did not register the dealing.  The next paragraph could be “This was negligent”.  No further explanation surely would be required in a case that simple.  The facts would provide their own explanation of the conclusion and the statement of the facts, the finding of the facts, would also provide a sufficient statement of reason.

We have accepted, by dint of giving an example such as that, that in principle in this case had things been very different factually there might have been a simple statement of facts and then a paragraph 88 and we would have had no complaint about adequacy of reasons.  It might, for example, have included long intricate dealings redolent of ambiguity and confusion in which, as a matter of law, the contract turns out to have a three‑year limit.  But there is every reason to suppose why persons in Gordian’s position may well have believed it was, in fact, seven years.  That did not happen.

KIEFEL J:   On the other hand, the arbitrators set out in some detail the negotiations between Gordian’s broker and the reinsurers.

MR WALKER:   And I have taken you to its highlights.

KIEFEL J:   This could then be taken in that background as simply, “We’ve turned our mind to the question and have come to the view that it’s reasonable and this is the view”.

MR WALKER:   Your Honour, the short answer to that is yes, but the longer rider is that that is not a good thing, that is a bad thing and for the following reason.  May I just repeat what I have earlier said?  Of course we accept that one could have facts which provide their own explanation of the conclusion said to follow and if there had been, in the negotiations which are comprehensively referred to in the findings of fact by the arbitrator, any dealings which provided an understanding of why Gordian might have thought that seven‑year policies were within the reinsurance treaty then that might - we would have to see the whole text – but that might have provided its own explanation for the conclusion.

But why I started as I did is because in fact in this actual case, when one looks at the canvassing of those negotiations by the arbitrators with all their experience that they mustered for this exercise, they made findings of fact which positively exclude any possibility of any argument, let alone inkling of a suggestion, factually, that Gordian thought this covered seven years.

FRENCH CJ:   You are assuming, are you, for the purposes of your attack on the comfortable satisfaction found in 88, the correctness of the characterisation of the cover as involving a limitation or an exclusion for the purposes of 18B, in other words, accepting the correctness of the application of 18B?

MR WALKER:   Only for the purposes of this argument.

FRENCH CJ:   Yes.

CRENNAN J:   But if you had more ample reasons and the same result you still want to complain about the award?

MR WALKER:   That might be very difficult, your Honour, but it is the exposure of the reason ‑ ‑ ‑

CRENNAN J:   That is why you want to dovetail the complaint about the reasons with the possibilities of review in relation to errors of law?

MR WALKER:   Yes, exactly so, your Honour.  If reasons had to be written – and, by the way, the statute, section 29 says reasons do have to be written – but if reasons had to be written to explain why it was reasonable, notwithstanding the facts found about the negotiations for this reinsurance cover, for liability under a seven‑year policy to fall within that to which the reinsurance attaches, then the pen may falter.

It is not as if this is one of these exorbitant or overreaching clauses such as some judicial and extrajudicial thinkers have expressed about basis of contract clauses in ordinary insurance.  There is no suggestion of sharp dealing.  There is no suggestion of anything other than open, clear, plain dealing concerning that which their circumstances, Gordian’s circumstances, had raised as something special to be negotiated.  The thing special to be negotiated was to expand the potential reinsurance to cover policies written for notification up to three years.

Against that background, in our submission, of course it is within the realms of possibility, for all the reasons that writers about the salutary merits of requiring reasons have said for centuries, of course it is possible that when you have to write it or articulate it, that which might have been an initial response is exposed as lacking all justification.  It does not write.  In this case, there surely would have to be some other facts to reverse the overwhelming expectation between participants in a market like this that the matter should be left precisely as it is concerning the reinsurance they bargained and paid for.

It is for those reasons, in our submission, that paragraph 88 in this case – and we only have to argue this case – provides certainly a clear statement of a conclusion and proves, if this is relevant, that the arbitrators considered the issue.  We do not suggest this is not bona fide, this statement of conclusion – that would be absurd – but what we say is the statutory obligation to give reasons has been signally omitted to be supplied and the reconsideration may of course, as one hopes, as people who debated Article 31 in UNCITRAL said as to some of them, the giving of reasons is itself likely to enhance the process of reaching a conclusion.

It is for those reasons, in our submission, that none of our argument illegitimately attacks 88 as being poor or unconvincing reasons.  That is not an issue that we embrace at all.  We simply say it either is all that appears purportedly by way of reason in the context of the findings of fact we refer to or it is no reason at all, and one way or the other there is a failure to give reasons.

GUMMOW J:   One of the apparent defects with this whole structure is that there is no mechanism, other than setting aside the award, to send it back to get better reasons, which marks it off from judicial activity.

MR WALKER:   Yes, it is.

GUMMOW J:   Does that lend any weight one way or the other as to what has to be provided by way of reasons, given the finality of it, or the impossibility of remediation?

MR WALKER:   It is at least two edged, but this is my attempt to turn it more sharply in our favour.  Given that there is, if not all or nothing, there is an expectation in the Act that the arbitrators will state their reasons and then the possibility of curial intervention proceeds once and for all thereafter, there is, in our submission, all the more expectation that the reasons supplied will explain why the decision or decisions, if there are more than one, were reached.

That will not merely permit the possibility of questions of law arising under the award or errors of law therein to be considered by those minded to consider the possibility of an appeal.  It will also give rise to the possibilities of considering misconduct of a so-called technical kind and it will also enable one frequently to understand whether a conclusion was reached by reason of a decision of fact or a decision of law or a decision of fact and law, those being crucial distinctions because only the second of those three will give rise to the possibility of a curial appeal.

So that the statement of reasons, in our submission, has to cover everything appropriate to explain the decision without, of course, detailing mere steps in reasoning.  I am going to call in aid later what Mr Justice Mahoney said about that notion in relation to the judicial duty to give reasons, that which is levelled against us as being a far too high standard to have been referred to by the Victorian Court of Appeal in Oil Basins.  I will come back to that.  It is our submission that because there is no straightforward possibility of asking the arbitrators to have another go, as it were, a private law mandamus to get them to do what section 29 requires, it is important to understand all the functions reasonably to be imputed to the reasons which are simply required to be given.

FRENCH CJ:   Reasons are a part of the award, are they not?

MR WALKER:   Yes.

GUMMOW J:   What is the significance of the remitter power under section 38(3)?

MR WALKER:   The significance of the remitter power is that it involves reconsideration and reconsideration where the ground for remitter is a failure to supply reasons requires, of course, a statement of the reasons for the conclusion.  If, as the requirement for reasons has long been understood to involve, that includes the encouragement or provocation to rational articulation of why a conclusion is justified rather than an opposite one, then the reconsideration, an important word, required for reasons to be supplied may alter the conclusion. 

That is to vindicate something which from all the travaux preparatoires your Honours have seen assembled, including by both interveners, one of, not the only, but one of the merits, perhaps functions, of the obligation to give reasons as opposed to the other available choice by the international community, that is, there be no obligation to give reasons.

FRENCH CJ:   I think Justice Heydon might have a question.

MR WALKER:   I am so sorry.

HEYDON J:   If this interrupts the flow of your argument, by all means postpone the answer, but the respondent’s written submissions, paragraphs 14 to 29, make two points.  One is that the reasons are adequate because of the procedural context of the hearing and, secondly, even if they are, nothing flows from it.  I could not find any answer to those arguments in your submissions in reply.  Am I blind in failing to see any?

MR WALKER:   I think your Honour is right and the answer to it is what I have supplied in answer to Justice Gummow that is found in our outline for address, paragraph 13.

HEYDON J:   That is a statement of what happens if your arguments about there being no reasons are correct.

MR WALKER:   No, quite.

HEYDON J:   What is your answer ‑ ‑ ‑

MR WALKER:   It is only useful if we are correct, yes.

HEYDON J:   But what is the answer to the contention in paragraphs 14 to 25 that actually there are reasons if you place yourself in the position of the parties?

MR WALKER:   We rely upon what we have said in‑chief and certainly what we have said in ‑ ‑ ‑

HEYDON J:   Very well, that is all right.  I am just trying to get the structure.  What is your answer to paragraphs 26 to 29?

MR WALKER:   Your Honour, the issues before this Court include whether or not the Court of Appeal was correct to dispose of the adequacy of reasons argument, as they did.  That, in our submission, encompasses every element of what is necessary for overturning the conclusion by the Court of Appeal that this was an adequate statement of reasons; findings or holdings, to which I will be coming in due course.

HEYDON J:   I understand your attack on the arbitrators and, therefore, your attack on the Court of Appeal’s conclusion that the arbitrators did give reasons, but what is the answer to the different point made in 26 to 29 that even if the arbitrators’ reasons were unsatisfactory nothing flows from them?

GUMMOW J:   In other words, what is it that makes an inadequacy under 29(1)(c) as to statement of reasons?  What is it that makes a complaint about that a question of law arising out of the award for 38(2)?

MR WALKER:   The answer to that question and I think, therefore, an answer to Justice Heydon’s question, is as follows.  As to adequacy or compliance with the reasons obligation the question of law arising from the award is whether ‑ ‑ ‑

GUMMOW J:   Arising out of an award and the ‑ ‑ ‑

MR WALKER:   Arising out of an award, which includes its reasons ‑ ‑ ‑

GUMMOW J:   The award includes the very statement of reasons.

MR WALKER:   Yes, which arises out of it and we may interpolate, for example, upon reading it is whether it contains, within the meaning of section 29, reasons.  In this case it is reasons for only one of the conclusions, which is the conclusion under the proviso to subsection 18B(1).

KIEFEL J:   But is that more accurately an error or law, as distinct from a question of law which the court is supposed to addressed under section 38 and provide an answer for the purpose of reconsideration?

MR WALKER:   No, your Honour, but the concepts are not opposed, but related as section 38 quite plainly says.  The commencing point is a question, as your Honour points out, but there must be, before leave be granted, attention to alleged or asserted error.  There can only be, of course, relief if there be demonstrated error.  So the concepts are involved in the same exercise of possible or eventual curial appellate review.

In our submission here, the link between the question, “Is this a reason for the reasonableness conclusion for the proviso under section 18B(1) and the error?” is for it to be propounded as a reason. It is not a reason. It is a statement of the conclusion. Nothing else in its context, including the circumstances legitimate to be availed of such as the circumstances of the hearing, even including the nature of the tribunal or the parties or their sophistication, nothing supplies any answer to the necessary question, how do you explain or why did they reach the conclusion this was reasonable or why did they not reach the conclusion it was not reasonable? There is the question of law and the error of law for section 38 purposes of which, in our submission, the Court of Appeal was seized and of which this Court is now seized.

HEYDON J:   Is one answer to these arguments of the respondent this?  They seems to select as a foundation that there never has been leave to appeal granted on the question of whether the arbitrators’ reasons satisfy section 29(1)(c) and you do not get anywhere until there is leave to appeal.  Is the answer that this Court could grant leave to appeal?

MR WALKER:   Yes, your Honour.

HEYDON J:   I do think you ought to consider carefully paragraphs 26 to 29, Mr Walker.  They do not seem to have been in the forefront of your mind this morning.  If you have anything further to say about it, it would be nice to hear it.

MR WALKER:   With respect, your comment is right.

KIEFEL J:   Mr Walker, section 38 presupposes that there is a valid award.  If the absence of reasons renders it not an award which can be reviewed for the purposes of section 38, do you say that there is some other remedy outside section 38?

MR WALKER:   Your Honour raises, with great respect, a very vexed question.  In considering before the argument the matters that Justice Gummow raised with me which might be summarised as, in policy terms, the defective state of a statute that does not more readily permit reasons to be extracted from arbitrators when they have not been supplied, consideration, of course, can be given to what might be called the Samson in the temple approach.  If you fail to comply with the statutory obligation can it be said that the elaborate structure that nonetheless can be seen does not answer the statutory description and you can just thumb your nose at it and fire the sheriff, et cetera.

KIEFEL J:   I suppose you have to deal with that proposition whilst at the same time dealing with section 38(1), the error of law question?

MR WALKER:   Yes.  In our submission, the whole underlying premise of section 38 is first of all and uncontroversially that an award is nonetheless a good award notwithstanding its full or flawed reasons.  The second is, and this is if I am correct concerning the question of law and error where there has been an omission to supply reasons, the second, of course, is that it is therefore equally pregnant with the proposition that an award is a good award even if the purported reasons are purported rather than in full compliance with the statutory provision.

That, in our submission, ought to be so, bearing in mind a practical and commercial reading of a commercial arbitration Act.  The notion of destruction of the whole by reason of a flaw which can otherwise be remedied upon, for example, subsection (3) reconsideration, is, in our submission, a striking balance of convenience between competing interpretations of a statute, striking in this case because it is all in favour of the notion that it is not deprived of the quality of being an award.  It is one about which a remedy may be sought and perhaps ought to be given under section 38.

KIEFEL J:   Section 38 is intended comprehensively to provide for all forms of review of awards, so that you would not have this discrete question about what is an award.  Is that what you accept?

MR WALKER:   No, quite.  I have to, in deference to a point well and properly made by our learned friends in their paragraph 28, and which your Honours will have seen by reason of Oil Basins in any event, there is one other form of review – using that word in its most general sense – and that is, of course, an application in relation to misconduct.  Otherwise, yes, section 38, on what I might call the result of the arbitration, that is intended to be the means by which courts may become involved and the means by which remedy may be given for defect, from which it follows that if it is capable of being remedied it cannot possibly be fatal to the identity of the award as an award that falls within the remedy provisions, otherwise the remedy provisions would never be engaged, and that would be an absurd way to read the statute.  Misconduct, of course, as my friends point out, is section 42.

Could I take your Honours now to passages in Justice Allsop’s judgment, which are the reasons of the Court of Appeal, from which may be gathered the way in which his Honour approached the issue of whether there was ‑ ‑ ‑

GUMMOW J:   Just before you get into that, would the Supreme Court have power to make a - assuming that the appeal structure is not enlivened by inadequate reasons, assume 38 does not bite, so there is no judicial review by reason of inadequacy of its statement of reasons, would the Supreme Court have power to make a declaration that there had been no award ‑ ‑ ‑

MR WALKER:   Your Honour, that might depend ‑ ‑ ‑

GUMMOW J:   And that, therefore, the contractual obligation to refer to arbitration was still unfulfilled, undischarged?

MR WALKER:   In most cases probably not.

GUMMOW J:   Why not?

MR WALKER:   Because this would arise only when there was an award, if it matters – call it a purported award, but ‑ ‑ ‑

GUMMOW J:   A purported award.  That is what I am putting to you.

MR WALKER:   Your Honour, for the reasons ‑ ‑ ‑

GUMMOW J:   This piece of writing does not include a statement of reasons within the terms of section 29, so there is no award.

MR WALKER:   What your Honour puts to me perhaps can be ‑ ‑ ‑

CRENNAN J:   It could arise in the context of an allegation that the arbitrators had reached the terms of their engagement by failing to provide reasons.

MR WALKER:   Yes.  The example I was about to give is an instance of that, not unknown, and usually – entirely innocently, I should say, where the arbitrators have failed to determine an issue which has been referred to them.  Your Honours are aware that sometimes arbitrators have to grapple with rather complex cascading possibilities.  Sometimes, and by no means always because of deficiency on the part of the arbitrators, something has been missed in the final determination. 

In practice, in my experience, that is dealt with by joint requests and supplementary award, but if for some reason that practical and courteous approach was not available or could not avail, could not work, then expedients such as Justice Gummow has asked me to consider do arise.  One of the problems is, and in terms of principles as to the exercise – I stress, the exercise – of a declaratory jurisdiction, probably not its existence, is that the risk appears of the court making a declaration which would not have any practical effect either between the parties or ‑ ‑ ‑

GUMMOW J:   It will be saying that the contractual obligations to arbitrate are still current and undischarged.

MR WALKER:   If the declaration went on to say that what purports to be an award is not an award, then, of course, it would have great practical effect because it would deprive the winner of anything which could be the subject of court enforcement proceedings.  I accept that and there may be other circumstances which gives that practical commercial effect.

But the argument I have put in answer to Justice Kiefel’s question I call in aid, also in pursuing what Justice Gummow has raised with me, as follows, that there is a defect in an award - for example, it lacks determination of interest for a certain period or an argument about costs or the like, it has therefore been inappropriately called a final rather than interim award - should not - that is my first step - as a matter of expediency be treated as invalidating what is there, but rather demonstrating that what is there does not completely satisfy between the parties, the contractual obligation and by incorporation as a matter of public law what the Commercial Arbitration Act requires.

Now, against what I have just put, of course, is that the Commercial Arbitration Act signally lacks provisions in the nature of what I will call an arbitral mandamus; a general supervision to make sure that that which has to be done, not only dotting i’s and crossing t’s but more substantial things like get on with it where there is long delay, that is against me, I concede.

GUMMOW J:   It also lacks a privative clause excluding the jurisdiction of the Supreme Court in its declaratory function.

MR WALKER:   I am not going to suggest for a moment that either by code, character or anything like that for any reason the Supreme Court ‑ ‑ ‑

GUMMOW J:   Talking about cutting down the jurisdiction of the Supreme Court, he would have to be pretty clear when he said that – time beyond measure.

MR WALKER:   Absolutely.  For example, the contractual obligation or agreement that an arbitration be heard in a certain place, threatened by domineering arbitrators to be breached for their convenience may well be not only the subject of misconduct, depending upon how it is done, but might also lend itself obviously to an injunction.

In our submission, it is for those reasons that a declaratory route by which proceedings are taken outside the aegis of the Commercial Arbitration Act to examine whether that which purports to be reasons are reasons, which would mean in a case like this are complete reasons because we do not dispute the obvious compliance with the obligation as to the other issues, that, in our submission, would be a surprising way to proceed, bearing in mind what I put about section 38, namely section 38 embraces what I will call awards defective in one sense.  Why should the matter not proceed so that something is an award, notwithstanding it is not completely compliant - I stress not completely compliant - with that which awards are stipulated to have, in this case reasons.

GUMMOW J:   Your opponent harkens to a Holy Grail of speed and finality.

MR WALKER:   Even worse, your Honour.

GUMMOW J:   Is not very vocal about justice though.

MR WALKER:   I am sure he will supply that in person, your Honours.  Perhaps it could be said his person does supply that.  But much more seriously there is this.  Yes, of course, speed and finality are attributes of the administration of justice.  They are not alternatives to it.  Secondly, and this applies in particular to the argument – I am jumping ahead now – concerning the supposed error of the Victorian Court of Appeal in, what we submit, were their Honours’ proper references to judicial reason giving, it proceeds as if speed and efficiency are either alien to or really not much to be regarded when one considers the nature of judicial process, which is not only flying in the face of what might be called the latest wave of litigation reform manifest in rules, but much more to the point it flies in the face of the policy of the law long, long pronounced and in exactly similar terms before the latest iterations of court rules contain statements about the administration of justice, which of course embrace speed and finality.

Finality, of course, is naturally as qualified in this arbitral context as it is in a truly curial context.  There is the possibility of appeal, limited sometimes by requirements for leave in curial context, as well as in arbitral context.  It is a balance of speed, finality and justice, by which we mean the quality of the decision making that is obviously as important and no more important in arbitral proceedings as in judicial proceedings. 

BELL J:   Why is that so?  One can see differing considerations in relation to courts in terms of the quality of reasons and considerations of justice but if parties bargain for a process of determination, placing an emphasis on speed and finality, what are the policy reasons that introduce the broad justice consideration?

MR WALKER:   The first thing is that no one has doubted, and we would submit this Court would never utter any suggestion that arbitrators are at liberty even with, one might even say, especially with ex aequo et bono adjudication, to proceed otherwise than in good faith and to the extent it applies according to law.  The dispute is to be determined according to law.  Many disputes are stated in terms which preternaturally require that.  Is there a breach of contract?  Are damages due under a contract?  Should there be statutory relief, et cetera.  That is the first part of the answer.  In other words, the activity in question is on all fours.  

The second matter is in fact there is not to be seen a preponderance of concern for speed and finality so far as the institutional framework of arbitration is compared to the institutional framework of judging.  Both place great value on the obvious social merit, all other things being equal, of decisions being sooner rather than later, for example.

The third thing is, Justice Bell’s question uses a word which evokes in fact what I will call a market or social response to those attributes of arbitration which I have just noted, attributes which are the same as what happens in a court, not opposite to let alone different from, because parties have devised as a matter of contract, just private dealings - if your Honour has read textbooks about it may I assure you that they are still just matters of private contract.  Expert determination they are normally called.  Sometimes they are called valuations. 

They are governed by provisions in contracts which in my experience very often advert to matters of reasons, matters of speed and matters of finality and very often show that there are participants in the market who say, “I don’t want a hearing.  I don’t want reasons”.  I can still remember myself entering a contract where I was obliged not to say anything about why I have reached a decision.  Just tick a box.  That was the promise to get my fee.  These are not unknown.

Those are people who have chosen against that which the Commercial Arbitration Act requires.  The Commercial Arbitration Act Appeal is audi alteram partem.  Some expert determination restricts that to, “You may each send the valuer a three‑page letter, no more, nothing else.”  The valuer then must give a decision within a week, no later.  They must do nothing other than tick one of the two available boxes.  No reasons are to be given.

Now, that is the answer.  People who value those qualities – and they are valuable qualities – are perfectly at liberty to chose it.  Neither in a court nor in an arbitration may one party, rather than both, insist upon that as being an adequate discharge of either the judges or the arbitrators’ duty to give reasons.  That is not to say the way parties conduct themselves at a hearing, both in court and in an arbitration, may not affect a later reading of reasons, either judicial or arbitral.  Counsel can and in appropriate cases should, of course, do their utmost to dispense judges giving detailed or any reasons for a conclusion which it has been determined will not be the subject of any dispute thereafter.  That is an entirely different consideration.  So far as the institutional framework is concerned, arbitrators have to give reasons.  Arbitrators are bound by audi alteram partem.

BELL J:   There is no issue about that.  The matter that I am taking up with you is the policy considerations that inform the quality of judicial decision making because it is that from the requirements of reasons for the purposes of the Commercial Arbitration Act and it seems to me at least open to consider there are very different policy reasons.

MR WALKER:   Yes.  The most obvious difference is that within hierarchical limits, and for most judges only in theory perhaps, it could be said, decisions contribute to the body of doctrine – decisions of a judge.  That will never be so in relation to arbitrators.  That is the most obvious difference.  In terms of the function of explaining why a conclusion has been reached, even in terms of a desirable or permissible quality of succinctness, who is to say that judges ought be more prolix than arbitrators or that arbitrators must be more succinct than judges?  It will depend upon the case and also the person.  Your Honours, the way in which Justice Allsop dealt with it starts in volume 4 of the appeal book, 1982, paragraph 187.

KIEFEL J:   Just before you commence that section, just so I am clear about it, Mr Walker, do you embrace the prospect of declaratory relief for non‑compliance with section 29, or do you reject it?

MR WALKER:   Your Honours, I would like to consider further before finally answering the question of jurisdiction, maybe only intuitively.  I shrink from saying no jurisdiction, which is why when I answered Justice Gummow earlier I said at least as to the exercise of declaratory jurisdiction if there is remedy under section 38 which will produce a remedy, and 38 can be read so – and that is critical to my answer – then the occasion to consider declaratory relief ought not arise.  Or, to put it another way, the proposition that might have been embodied in a declaration, at least the first step, rather than Justice Gummow’s suggested last step, would simply be a step in the reasoning to a section 38 remedy.

KIEFEL J:   In any event you will come back to it at an appropriate point.

MR WALKER:   May I ponder the question whether either the Commercial Arbitration Act or any other consideration, in or out of that Act, precludes a declaration?  I must say I suspect it cannot or, at least, should not.

HEYDON J:   Section 38(3) says the “Court may by order”.  That implies that it may make other orders that are appropriate to its status.

MR WALKER:   Perhaps that would not be under section 38 though, but quite so.  It is not language ‑ ‑ ‑

HEYDON J:   It would not be under it, but it ‑ ‑ ‑

MR WALKER:   ‑ ‑ ‑which is redolent of precluding other kinds of judicial intervention, no.  It is simply that section 38 provides a form of remedy if - a big “if” - it provides a remedy for what we are presently complaining about then it does not seem obvious why there should be resort to any other means, but one ‑ ‑ ‑

FRENCH CJ:   That might be discretionary consideration in relation to declaratory relief.

MR WALKER:   It may only be discretionary, a very powerful discretionary one.  It might be jurisdictional.  Why I am hesitating is this.  It might be jurisdictional because section 38 provides for gateway requirements and it would be perhaps odd to have a remedy available if you pass through gateways, but in parallel a remedy that really is, as it were, at large in a discretionary sense.  That might be fully dealt with by the well‑known discretion to refuse certain forms of relief, not only declarations, but in public law prerogative writs by reference to what else is available.  It might that is the answer, but it may also be there is a jurisdictional bar on doing it, other than under section 38.  I would like to ponder that further.

KIEFEL J:   On another view, of course, what follows from non‑compliance with a statutory provision such as section 29 may affect the question of how you approach the requirement of reasons.  On the other hand that might not be the correct approach.  Maybe you should determine what reasons are and then determine whether relief was ever intended.

MR WALKER:   I hope this does not sound too simplistic.  In our submission, the proper way to proceed with a statutory requirement is to ascertain in the usual way what the words imposing it mean and then to ask whether the facts ‑ ‑ ‑

KIEFEL J:   Yes, that might be right.

MR WALKER:   ‑ ‑ ‑show compliance.

KIEFEL J:   Look at the requirement first.

MR WALKER:   The requirement is to give reasons and these are not pseudo reasons or fake reasons.  These are reasons.  I will come to that matter in a moment.  Could we come to the way Justice Allsop seems to have determined this question – page 1982 in volume 4, paragraph 187 ‑ ‑ ‑

GUMMOW J:   Having regard to what Justice Heydon was putting to you, how did the Court of Appeal get into this question?

MR WALKER:   It was dealt with ‑ ‑ ‑

GUMMOW J:   It could only have got into it by taking some view of what was open to the trial judge under section 38, could it not?

MR WALKER:   It starts at 1979, paragraph 175 and follows, and paragraphs 175 to 178 is the Court of Appeal’s answer to that question and the issue at hand, the reasons issue, is one of those categories of matter.

GUMMOW J:   And in the end they were refused leave, is that ‑ ‑ ‑

MR WALKER:   Yes.  That starts at ‑ ‑ ‑

GUMMOW J:   They held that the primary judge had correctly refused leave.

MR WALKER:   That is right.  At 1982, paragraph 187, the way his Honour introduces this matter is to say:

the arbitrators expressed their view as to the reasonableness and fairness of their approach.

That comes perilously close to saying that is – [88] is where you find the explanation.  That is the expression of their view.  That might be a bit unfair and obviously the whole has to be read in the context – that whole supplies the context.  Paragraph 188, his Honour turns to that which is probably, with respect, to be seen as the principal factor in his Honour’s conclusion.  He says:

This question is one of evaluation and fact . . . this was not an error of law.

Now, leave that aside at the moment concerning whether it is reasonable or not, I am not concerned with that, but the fact that it is one of evaluation and fact surely does not affect the requirement, the existence of the requirement, to explain why you reach your conclusion as to it.  No one has ever suggested that and though it was clearly a possibility, almost explicit in the debates that led up to Article 31 and therefore to provisions such as section 29 to distinguish between matters of fact and matters of law, the controversy if it be one, certainly the debate which happened, involved reference to different national traditions. 

That is not found in the unitary obligation to give reasons and the fact that one suffers failure because of the matter involving evaluation and fact provides no explanation why it is not important to you as a loser to be told why you lost on that critical issue.  However, looking forward to a Soulemezis approach, to which I will come, unquestionably it means that there are certain things that, as it were, either defy explanation or do not require much more than succinct statement, and we do not ask for much more than succinct statement.

Paragraph 193 on page 1983 is the next one I wish to take you to.  You see the second sentence there:

The arbitrators had all the facts before them and made an evaluative judgment as to reasonableness. The assessment is one which encompasses an understanding of the policy and the purpose of s 18B.

All that, with great respect, is true, but tritely so.  Having all the facts and understanding policy and purpose might in a certain case, quite opposite to this case, provide its own explanation, res ipsa loquitur, as to why something is or is not reasonable.  With respect, nothing in this statement of reasons does so for this issue.  To the contrary.  To say in the last sentence of paragraph 193, as his Honour does that, “The arbitrators dealt with these matters throughout their reasons.” is of course to inspire search for the relevant references.  We have carried that out and the highlights, all of those that matter, with respect, according to our submission, have been drawn to attention.  It is not merely that they do not ultimately provide explanation, it is that they all tend in an opposite direction, heightening the need to explain, however succinctly, why notwithstanding all those issues it was reasonable for a seven‑year policy to be treated as if it were that which it had never been, namely, caught by the reinsurance treaty.

The next reference by his Honour, continuing really the theme, is to be found in the passage starting at the foot of 1983 in paragraph 196 and continuing over to 1984 in paragraph 198.  They are, with respect, exactly the same proposition.  Paragraph 197 touches on a sensitive point for my clients.  Detailed submissions were made of a kind that I have summarised by my various references to the material all tending against reasonableness and when detailed submissions have been made – I do not mean lengthy, I mean they themselves extend far beyond a mere assertion this is not reasonable.  This is not reasonable because was the intellectual form our client’s submission took.  Back at 197 therefore touches upon something between the parties, namely, this was an argued issue which calls for explanation of the outcome.

I do not mean that there has to be a submission on something in order for a reason to be given but I do mean that if there has not been much of a submission on the point then the reasons both in a court and in an arbitration are likely to be more rather than less succinct.  Paragraph 198 adds nothing further to the approach.  Then one jumps forward to what his Honour would have done, had the issue been one appropriate for leave, to page 1994 following the discussion concerning what I will call the content of the duty to give reasons in paragraph 223 to say that the arbitrators did give “adequate reasons”.

HEYDON J:   I might say these reasons themselves are not adequate reasons for the conclusions propounded.  How can a mere restatement of the problem coupled with the answer yes possibly be a reason for the answer yes?  Justice Allsop does not say why.

MR WALKER:   No.  There is that curious mirror, yes.  The last point I wish to make about the particular setting of this case, of which the arbitrators were seized, is that it is never to be forgotten that the statutory issue upon which decision was called on any view – however much we may rail against the result in this case - on any view we accept that 18B, once it is accepted it applies to reinsurance at all, is a mandate for the disturbance by statutory force, the disruption, dislocation, distortion – depending upon your view – of what parties have agreed.

That, in our submission, when one comes to consider therefore the nature of the issue before the arbitrators, calls for explanation bearing in mind that as your Honours know from the travaux concerning 18B, that the proviso was added because the legislators saw the merit of the industry’s protest that, as it were, this may be going too far and it needs a safeguard and if there is to be a safeguard the impartial adjudicator of this issue, judge or arbitrator, is to make a decision as to reasonableness.  In our submission, all of that combines to say upon the notional occasion of reading the arbitrators’ reasons, if you are the loser, but why was this reasonable?  Nothing is supplied to answer that question.  Now, can I move to the questions which ‑ ‑ ‑

MR JACKMAN:   Well, no.  What this Court can do is what emerged at the special leave application.  It can resolve ‑ ‑ ‑

GUMMOW J:   Special leave orders are interlocutory.

MR JACKMAN:   Can I say two things about that.  One is that where special leave is dismissed, that is final in nature, but even if it is interlocutory, it is the kind of matter where, in our respectful submission,

the Court should not as a matter of principle, having regard to the finality of litigation, revisit its decision.

FRENCH CJ:   The question is whether the dismissal of a very broad brush ground in terms of 2 and 3 excludes argument through the gateway of 38 in relation to more specific matters, I suppose.

MR JACKMAN:   The question is whether there is a ground of appeal that the Court of Appeal erred in refusing leave to appeal on an inadequacy in any reasons, and there is not.

FRENCH CJ:   I think we can consider that overnight and come back at 10 o’clock tomorrow morning.

MR JACKMAN:   May it please the Court.

AT 4.16 PM THE MATTER WAS ADJOURNED
UNTIL FRIDAY, 4 FEBRUARY 2011