WMC Resources Ltd v Leighton Contractors Pty Ltd - [2000] WASCA 388

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE FULL COURT (WA)

CITATION: WMC RESOURCES LTD -v- LEIGHTON CONTRACTORS PTY LTD [2000] WASCA 388

CORAM: MALCOLM CJ
OWEN J
PARKER J

HEARD: 16 NOVEMBER 2000

DELIVERED : 16 NOVEMBER 2000

FILE NO/S: FUL 172 of 2000

BETWEEN: WMC RESOURCES LTD
Appellant (Plaintiff)
AND
LEIGHTON CONTRACTORS PTY LTD
Respondent (Defendant)

Catchwords:

Arbitration - Arbitrator - Reasonable apprehension of bias - Action to remove arbitrator for non-disclosure of past association with respondent - Whether appellant should have leave to amend motion to include failure of respondent to disclose the alleged association - Reasonably arguable that respondent's failure relevant to issue of removal

Legislation:

Commercial Arbitration Act 1985 (WA) s 44

Result:

Leave to appeal granted
Appeal allowed

Representation:

Counsel:

Appellant (Plaintiff) : Mr C L Zelestis QC & Mr G M Murphy
Respondent (Defendant) : Mr W S Martin QC & Mr A F Mizen

Solicitors:

Appellant (Plaintiff) : Clayton Utz
Respondent (Defendant) : Mallesons Stephen Jaques

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

Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170
Aussie Airlines Pty Ltd v Australian Airlines Pty Ltd & Anor (1996) 65 FCR 215
Giustiniano Nominees Pty Ltd v Minister for Works (1996) 16 WAR 87
In re the Will of F B Gilbert (Dec) (1946) 46 SR (NSW) 318
Najjar v Haines (1991) 25 NSWLR 224
Wilson & Ors v Metaxas [1989] WAR 285

Case(s) also cited:

Jones v Dunkel (1959) 101 CLR 298
S&M Motor Repairs Pty Ltd v Caltex Oil (Australia) Pty Ltd (1988) 12 NSWLR 358

MALCOLM CJ: This is an application for leave to appeal from an order made by Murray J on 26 October, 2 November 2000 by which his Honour refused an application for leave to amend the amended notice of originating motion by adding a par 15 which would allege that:
"(a)prior to the appointment of the arbitrator there had been a connection, contact or association between the arbitrator and the defendant;
(b)prior to the appointment of the arbitrator the defendant, in breach of its duty of disclosure, did not disclose to the plaintiff the nature and extent of the connection, contact or association which the arbitrator had had with the defendant;
(c)following the arbitrator's appointment the defendant continued in breach of that duty to fail to disclose that connection, contact or association and did so when it had received or been provided with correspondence in which:
(i)the arbitrator had originally failed to actively and fully disclose to the plaintiff the connection, contact or association which the arbitrator had or had had with the defendant;
(ii)the plaintiff had sought further disclosure from the arbitrator;
(iii)the arbitrator had continued not to make accurate and full disclosure to the plaintiff."
In refusing the amendment Murray J said:
"I am of the view, Mr Zelestis, that I should not make the amendment to add par 15. It seems to me that the issues relevant to…

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.

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Details

Case: [2000] WASCA 388
Decision Date: 16 NOVEMBER 2000

CaseChat Overview and Summary

The case before the court involved WMC Resources Ltd and Leighton Contractors Pty Ltd, where WMC sought to remove an arbitrator due to a perceived bias arising from the arbitrator's undisclosed past association with Leighton. The dispute revolved around the validity of the arbitration process and the potential bias of the arbitrator, which WMC argued had not been disclosed appropriately. The court was tasked with determining whether WMC should be granted leave to amend their motion to include Leighton's failure to disclose the alleged association and whether such failure was relevant to the issue of the arbitrator's removal.

The legal issues the court had to decide included whether WMC had grounds to argue that the arbitrator's past association with Leighton Contractors was a material fact that should have been disclosed and whether such non-disclosure constituted a reasonable apprehension of bias. Additionally, the court had to consider whether WMC's motion to amend its pleadings to include the alleged failure of Leighton to disclose this association was reasonably arguable and if it should be allowed. The court's decision hinged on whether the non-disclosure was significant enough to warrant the removal of the arbitrator.

In its judgment, the court found that there was a reasonably arguable case that the non-disclosure of the past association between the arbitrator and Leighton Contractors was relevant to the issue of the arbitrator's removal. The court acknowledged that the failure to disclose such information could potentially give rise to a reasonable apprehension of bias. Consequently, the court granted WMC leave to amend its motion to include this failure to disclose as a ground for removal. The court reasoned that the alleged non-disclosure, if proven, could indeed impact the perceived impartiality of the arbitrator, justifying the amendment to the motion.

The final orders of the court included granting WMC leave to amend its motion to include the failure of Leighton Contractors to disclose the past association with the arbitrator. The court emphasised that the amendment was necessary to address the potential bias issue, which could materially affect the arbitration's fairness. The case underscores the importance of full disclosure in arbitration proceedings and the court's willingness to allow amendments where there is a reasonably arguable case of bias.

Orders