General Distributors Ltd v Casata Ltd - [2006] NZSC 8

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IN THE SUPREME COURT OF NEW ZEALAND

SC 26/2005 [2006] NZSC 8

BETWEENCASATA LIMITED Appellant

ANDGENERAL DISTRIBUTORS LIMITED Respondent

Hearing: 5 October 2005
Court: Elias CJ, Keith, Blanchard, Tipping and McGrath JJ Counsel: J E Hodder and S J Fairbrother for Appellant
R W Raymond and J K Scragg for Respondent

Judgment: 15 March 2006

JUDGMENT OF THE COURT

A. The appeal is dismissed.

B.The orders made by the Court of Appeal and High Court insofar as they concern the award of costs made by the arbitral tribunal on 28 April 2003 are vacated.

C. The Court makes:

(a) a declaration that the award on costs made by the arbitral tribunal on
28 April 2003 was validly made as an additional award under article 33(3) of the First Schedule to the Arbitration Act 1996; and

(b) an order reinstating that award.

D.All questions of costs in all Courts are reserved, to be determined if necessary following written submissions.

REASONS

Para No

Elias CJ [1] Keith J [27] Blanchard and Tipping JJ (dissenting) [55] McGrath J [90]

ELIAS CJ The appeal
[1] Does an arbitral tribunal have power to award party and party costs in an additional award when no party has claimed such costs before delivery of an apparently final award? That is the question raised by the appeal. The answer to it turns on the meaning of and intersection between two provisions in the Arbitration Act 1996: art 33 of the First Schedule; and cl 6 of the Second Schedule.

[2] The Arbitration Act 1996 was enacted to implement the UNCITRAL1 Model Law. Article 33 of the First Schedule follows the Model Law. It combines and modifies solutions earlier adopted in New Zealand domestic legislation to ameliorate the rigour of the common law, by permitting an arbitral tribunal to correct omissions and slips without necessitating court invalidation of the award. Article 33(3) authorises the arbitral tribunal on the request of a party within 30 days of the date of an award to make an additional award “as to claims presented in the arbitral proceedings but omitted from the award”.

[3] The Model Law did not seek standardisation of costs regimes, leaving them to domestic law. Clause 6 of the Second Schedule is a domestic supplement to the Model Law. It generally follows earlier New Zealand legislation and has parallels in other common law jurisdictions. It empowers an arbitral tribunal to award costs unless the parties agree otherwise. Similar provisions in earlier Arbitration Acts have been interpreted to impose a duty on the arbitral tribunal to determine costs where the parties have not agreed otherwise. Clause 6(1)(b) is however new. It provides that “in the absence of an award or additional award fixing and allocating

the costs and expenses of the arbitration,” each party is responsible for its own costs and half the costs and expenses of the arbitration. Does this provision, which operates in default of a determination…

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: [2006] NZSC 8
Decision Date: 15 March 2006

CaseChat Overview and Summary

Casata Limited appealed against a decision of the Court of Appeal which had remitted to the arbitral tribunal the question of the allocation of costs between the parties. The appeal was dismissed. The arbitral tribunal was found to have had power to make an additional award as to claims presented in the arbitral proceedings but omitted from the award, under art 33(3) of the First Schedule to the Arbitration Act 1996. The tribunal was found to have failed in its duty to exercise its discretion as to costs before delivering a final award, which was the first award. The second award, which determined the costs, provided a valid remedy for the tribunal's error. The award on costs was validly made as an additional award under art 33(3) of the First Schedule to the Arbitration Act 1996. The appeal was dismissed. The orders made by the Court of Appeal and High Court insofar as they concerned the award of costs made by the arbitral tribunal on 28 April 2003 were vacated. The Court made a declaration that the award on costs made by the arbitral tribunal on 28 April 2003 was validly made as an additional award under art 33(3) of the First Schedule to the Arbitration Act 1996 and an order reinstating that award. All questions of costs in all Courts were reserved to be determined if necessary following written submissions.

Orders