The Party Bus Company Limited v Attorney-General HC Auckland CIV-2011-404-1319

[2011] NZHC 1176

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-1319

IN THE MATTER OF     an application to set aside award dated 7

February 2011 and leave to appeal against the decision in award dated 7 February

2011

BETWEEN  THE PARTY BUS COMPANY LIMITED Applicant

ANDTHE ATTORNEY-GENERAL Respondent

Hearing:         11 August 2011

Counsel:         R E Lawn for Applicant

R E Schmidt-McCleave for Respondent

Judgment:      30 September 2011

JUDGMENT OF MILLER J

Introduction

[1]      This judgment responds to a challenge to an arbitral award.  Before me are:

a)       An application, dated 7 February 2011, to set aside the award on the ground that the Arbitrator erred in law by answering a question not falling within his terms of reference.  That question was whether four buses had been “ordered off the road” by a “Vehicle Safety Officer”. The application further sought leave to appeal, identifying 21 material questions of law arising from the award;

b)An amended application, dated 14 April, which adds further questions of law;

THE PARTY BUS COMPANY LIMITED V THE ATTORNEY-GENERAL HC AK CIV-2011-404-1319 30

September 2011

c)       A further application, filed on 25 July, for leave to add additional questions of law.   I observe that application must be made within three months of receiving the award.[1]

[1] Arbitration Act 1996, sch 1, art 34(5) and sch 2, art 5(8).

[2]      The  dispute  concerns  a  decision  of  the  Ministry  of  Education,  taken  in January 2010, to terminate a contract with Party Bus for the provision of school bus services, citing breaches of important safety requirements in the contract between them.

[3]      The parties appointed the Hon Peter Salmon QC as Arbitrator.  He delivered an award on 7 February 2011 and a supplementary award on 14 March.  He found for the Ministry in all respects and awarded costs to it in the sum of $77,932.81.

[4]      Insofar as the applications seek to set the award aside, they are brought on the ground that the Arbitrator dealt with a dispute not contemplated by or falling within his terms of reference.[2]   Insofar as they seek leave to appeal, they are brought on the ground that the award determined questions of law which substantially affect Party Bus’s rights.[3]

[2] Schedule 1, art 34.

[3] Schedule 2, art 5.

[5]      All applications are opposed.  I observe that although this is in substance an application for leave, Mr Lawn’s submissions in support ran to 90 pages, and his submissions in reply to no fewer than 78 pages.  Also filed were 19 pages in support of his application for leave to add the final questions of law.   By contrast the Ministry’s submissions ran to 25 pages, and might have been much shorter had those for Party Bus been more concise.

[6]      I  refused  counsel  more  time  for  argument  than  that  contemplated  by  r

26.16(4) of the High Court Rules, taking the view that the time limit exists for good policy reasons, and should be applied to both applications since the application to set the award aside was in all respects encompassed by the first 18 questions of law identified in the amended leave application.  An extension is an exception rather than

the rule, and Mr Lawn’s argument was also comprehensively expounded in the

papers.   Each counsel was accordingly given 35 minutes, the additional time reflecting some questions that I asked of them.

[7]      I record that the Registrar warned counsel the day before the hearing that I might limit the oral argument to 30 minutes apiece.  While he accepted that approach when the hearing began, Mr Lawn suggested at the end of his argument that he was entitled  to  10  minutes  for  each  of  the  more  than  25  questions  of  law  he  had ultimately identified.  He was unable to point to any authority for that in the Rules. After the hearing he filed a memorandum noting that the Court had set the matter down on the agreed basis that one hour would be allowed over and above any allowance for the leave application, and half a day had been set aside for the fixture. It is one thing to allow that much time lest it be needed, another to direct that counsel are entitled to use all of it.  If there was implicit in the memorandum a request for further hearing time, it is declined.

The narrative

[8]      I must say something about the background if the reader is to make sense of the many errors of law which the Arbitrator is said to have committed.  Party Bus and the Ministry entered a contract for the supply of school bus services in north and west Auckland for six years from 1 January 2009.  The contract followed a tender in which it was made clear that vehicle safety mattered to the Ministry.  That concern was reflected in cl 87.3 of the contract, which provided that the Ministry might terminate the contract immediately where:

A Vehicle is ordered off the road by a Vehicle Safety Officer of the New Zealand Police Commercial Vehicles Inspection Unit or Vehicle Standards Advisor/Investigator of the New Zealand Transport Agency for any of the four key safety features of brakes, tyres, suspension or steering.

Clause 87 further provided that in any such case the contractor had three working days  to  make  representations  to  the  Ministry  as  to  why  cl  87.3  should  not  be invoked.

[9]      In  November  2009  Party  Bus  was  told  by  the  Commercial  Vehicles

Investigation Unit of the New Zealand Police (“CVIU”) that its buses would be

audited.   A number of buses were tested by arrangement on 30 November and 1

December.  They were not working on a road at the time.  Although Party Bus had gone to some effort to prepare the fleet for inspection, four buses identified as among those contracted to the Ministry were found to have defects in brakes, tyres, suspension or steering.   It is said that these were ordered off the road pursuant to notices signed by constables who were working with Vehicle Safety Officers.  It is not in dispute that two of the buses received “green stickers” and two received “green 2 stickers” issued under the Land Transport (Ordering a Vehicle off the Road) Notice 1999, although the precise jurisdiction employed and the effect of the notices is contested.  The green stickers required a further certificate of fitness to be obtained, while it sufficed for the green 2 stickers that the Police were advised that the defects had been remedied.

[10]     On 18 December 2009 the Ministry wrote to Party Bus under cl 87 advising that it had three working days to make representations as to why the contract should not be terminated at once.  That notice was sent on 18 December 2009, and Party Bus responded on 22 December giving assurances that the issues raised in the CVIU audit had been taken very seriously and systems changes had been implemented.  It commented on each of the four vehicles and the defects, but did not challenge the CVIU findings.   The Ministry was assured that all issues would be rectified by 1

February 2010 (presumably the date when the school year was to begin).  There is nothing in the evidence to show that the Ministry indicated to Party Bus that it would delay terminating the contract until after 1 February 2010, allowing Party Bus to rectify all the issues, or that it was aware Party Bus assumed it had until 1 February to do so.  Apart from an acknowledgement of receipt, there was no communication between the Ministry and Party Bus after 22 December 2009 until the Ministry terminated the contract on 29 January 2010.

[11]     The Arbitrator recorded that nothing further was heard from the Ministry until the end of January 2010.  The Christmas break intervened.  In the interim the Ministry apparently continued to make payments under the contract.  The Ministry also learned that the New Zealand Transport Agency was conducting its own audit of Party Bus vehicles, and it decided to await that audit.   Mr Clarke of the Ministry spoke to an NZTA employee on 29 January 2010 and was told that although the

audit was incomplete 16 defects had been recorded on 10 vehicles, including defects relating to brakes and suspension;  further, two of the vehicles ticketed in December had not had their defects remedied.

[12]     As matters turned out, not all of the information Mr Clarke had been given was accurate.  Contrary to his understanding, some of the defects had been remedied. He would not have terminated the contract had he known the true position, which emerged much later.  At the time, however, the NZTA advice led him to conclude that Party Bus had breached his trust.  He accordingly terminated the contract on 29

January 2010.  The Ministry maintained that whether or not Mr Clarke would have terminated had he known the true position, the defects that had been found on audit and proved before the Arbitrator afforded him grounds to terminate.

[13]     On termination Party Bus sought to prevent re-tendering of the services, hoping to have the dispute referred to mediation under the contract and the contract reinstated.   Interim relief was sought in this Court, but in due course Party Bus accepted that an interim declaration against the Crown was unlikely and the dispute was referred by agreement to arbitration.   Although the contract contained an arbitration clause, the reference was made by a memorandum of counsel, which read:

The parties agree to refer the Plaintiff’s claim(s) to an Arbitrator appointed

by the parties under the Arbitration Act 1996.

The parties agree to the process set out under the Arbitration Act 1996 subject to any changes the parties agree between them.

[14]     The dispute having been referred to arbitration, an arbitration agreement was signed by the parties.  It dealt with procedure and administrative matters, but did not further define the dispute.  Party Bus then lodged a claim containing 11 causes of action.  The first and second alleged respectively that a Vehicle Safety Officer had not ordered the buses off the road and that the vehicles were not ordered off the road for a defect in a key safety feature that rendered them unsafe.  It was said that in any event the buses were not being used to provide services at the time.   The third alleged that an alternative contractual procedure for addressing minor faults ought to have been employed.  The fourth alleged breach of an implied term to give notice of facts and circumstances giving rise to the termination right, and the fifth breach of an

implied obligation under cl 87 to give reasonable consideration to the representations of Party Bus.  It will be seen that all of these causes of action ultimately turn on the construction of the contract and the facts.

[15]     The remaining causes of action were of a secondary nature.  The sixth alleged breach of a concurrent duty of care in tort, and the seventh affirmation of the contract by failing to terminate in December 2009.  The eighth and ninth complained about publicity issued by the Ministry, alleging breaches of the Fair Trading Act 1986 and the contract respectively.   The tenth alleged breaches of the Fair Trading Act in connection with the termination, in that (inter alia) the Ministry did not disclose material information to Party Bus and made false statements.   The eleventh complained that the Ministry had without authority shared information  with the NZTA, including information supplied by the Police following the audit, and relied on that information in breach of contract.

[16]     The Arbitrator reviewed the defects noted in respect of each of the vehicles. He found as follows:

(1)In relation to vehicle AHB307, a CVIU inspector had concluded that the front brake hoses were perished and needed replacement, and the evidence supported that conclusion;

(2)In relation to vehicle EKA368, the CVIU inspector had drawn the conclusion  that  the  power  steering  pump  was  leaking,  and  the Ministry was entitled to rely on  that view in  the absence of any contemporaneous challenge by Party Bus;

(3)In relation to vehicle ELC33, one of four nuts securing a U-bolt in place was insecure, resulting in some safety risk albeit no imminent danger;

(4)In relation to vehicle WS2333 there was a brake imbalance, which was a serious issue.

[17]     The Arbitrator found that it sufficed under cl 87.3 if just one vehicle had been ordered off the road for one of the noted defects.  Those defects relating to vehicles AHB307 and WS2333 at the very least justified the orders made by the CVIU.

Scope of the reference

[18]     The first and central question, as Mr Lawn accepted, is whether the Arbitrator erred in law by addressing a dispute which was not contemplated by or did not fall within the terms of reference.  It lies at the heart of the applications for leave and to set the award aside.   It can be further divided into two questions:   what is the necessary status of a person entitled to order a vehicle off the road, and whether the action taken in this case involved ordering off the road for purposes of cl 87.3.

[19]     Mr Lawn’s submissions focused closely on the pleadings.   But the proper ambit of the reference did not turn on the pleadings, for the submission to arbitration was done earlier, under the joint memorandum of counsel which referred “the plaintiff’s claim(s)” to arbitration in general terms.  That reference notably brought to an end Party Bus’s attempts to prevent re-tendering on the ground that the contract had not been lawfully terminated, and it broadly encompassed all issues relating to the termination of the contract.

[20]     That being so, as Mr Lawn ultimately appeared to recognise, any pleading point reduces to an argument about natural justice.  The difficulty confronting that argument is that the pleadings squarely put both questions in issue.  The statement of claim pleaded in the first cause of action that the official must be a Vehicle Safety Officer of the CVIU, and that as the notices were actually signed by a constable none of the vehicles listed in the Ministry’s letter of 18 December 2009 was ordered off the road by such a person.  In the second cause of action it pleaded that none of the vehicles was ordered off the road for a key safety feature relating to brakes, tyres, suspension or steering.   In its defence the Ministry admitted that the notices in respect of the four vehicles were issued by officers of the CVIU holding the position of constable, and except as expressly admitted denied the allegations.  The Ministry pleaded that the four buses were issued with notices pursuant to s 115(1)(b) of the Land Transport Act 1998 and alleged that the buses in question were directed to be

removed from the road because they were defective and did not comply with that Act, and that the CVIU audit report reported that each of them had been issued with green non-operation notices, the details of which were particularised.

[21]     Next I observe that the Arbitrator heard evidence on both questions.  At no point was it suggested to him that they were not included in the reference.

[22]     The evidence showed that each of the four notices was, on its face, issued by the Police under s 115(1)(b) of the Land Transport Act.  Each stated that the issuing officer believed that the specified vehicle “is defective and does not comply with the provisions of the regulations or rules made under the Land Transport Act”.   The defects were particularised.  Next, each notice stated:

Under the provisions of section 115(1)(b) of the Land Transport Act 1998 you are directed that this vehicle is to be removed from the road and is not to be driven on a road until -

(a)       the defects have been eliminated ...

[23]     Two of the notices struck out an additional paragraph specifying that the vehicle might not be driven on a road until it had been inspected.  One struck out a paragraph specifying that the vehicle might not be driven on a road until the enforcement officer identified in the notice had been told that the defects had been remedied.  The last did not strike out either paragraph.

[24]     All of the notices specified that the driver might nonetheless proceed at not more than 70 kph to a designated place for repairs.   Two struck out a paragraph stating that

You may, however, continue to drive this vehicle until [  ] in accordance with the following conditions: [  ].

The other two did not strike out this paragraph, but neither did they specify a date or conditions.

[25]     The Arbitrator decided both questions, without objection from Party Bus. The gist of the evidence on the status point was that Vehicle Safety Officers assessed the vehicles and identified the defects, so determining for practical purposes whether

the buses were to remain in service.  Their decisions were conveyed to the constables who worked alongside the vehicle safety officers and completed the notices directing that the vehicles be removed from the road.  The Arbitrator found:

As to the [status question], the plaintiff notes that the notices in respect of the four vehicles concerned were issued by constables with the CVIU.  The evidence in respect of at least three of the four vehicles is that the inspection was undertaken by a vehicle safely officer who provided information to the constable who completed and signed the notices. The plaintiff has pointed to some errors of transcription in the notices, but in my view those errors were minor and there was no real doubt as to the nature of the defects recorded. In my view, in a practical sense, the notices which prohibited the vehicles being driven on the road until certain repairs had been undertaken and in some cases a new Certificate of Fitness issued, constituted the appropriate order for the purposes of clause 87.3.  In other words the vehicles were in fact ordered off the road by a vehicle safety officer.

[26]     With respect to the argument that the vehicles had not been “ordered off the road”, the Arbitrator found that the notices given had that effect.  Further, the defects were safety defects for purposes of the contract;   not only were there real safety concerns in respect of at least two of the vehicles, relating to one or more of the four safety features, but the Ministry must be able to rely on the findings of the CVIU in relation to those matters, particularly when Party Bus did not respond by challenging the CVIU findings in any significant way before termination.

[27]     Mr Lawn did not accept that all of this was enough to put the two questions in issue.  He argued that the contract incorporated the relevant provisions of the Land Transport Act by referring to Vehicle Safety Officers and the concept of ordering vehicles off the road.  Therefore, he submitted, the Ministry must plead and prove that the provisions of the Act and Regulations were complied with.  It did neither of these things, and the Arbitrator erred in law by failing to recognise it.  In particular, the Ministry did not prove:

(a)      The identities of the Vehicle Safety Officers who inspected each bus

(save in one case);

(b)That the Vehicle Safety Officer was in uniform and holding a warrant of authority issued by the Commissioner of Police or other evidence of their identification;

(c)       That the Vehicle Safety Officer spoke to the Constable who issued the

Notice to Driver;

(d)       That  the  Vehicle  Safety  Officer  had  attempted  to  delegate  to  a

Constable his or her power to issue a notice to driver;

(e)       That any opportunity was given to the driver to challenge the Vehicle

Safety Officer’s authority to issue the Notice;

(f)       That an opportunity was given to the driver when receiving the Notice to Driver to request that the Green stickers be altered to a Qualified Green sticker in accordance with the HMV Categorisation Defects Manual which provided for the right to request the immediate fixing of the problem so there was not a restricted driving provision included in the Notice to Driver;  and

(g)That the Constable had any discussion with a Vehicle Safety Officer or their identity [sic].

In support of this argument, Mr Lawn referred to authorities such as Duley v Police, which  involved  criminal  prosecutions  in  which  the  question  was  whether  the elements of an offence had been established.[4]

[4] Duley v Police HC Auckland CRI-2007-404-90, 6 July 2007.

[28]     With respect to counsel, the argument misses the point by a wide margin. Although I am prepared to accept that the concepts of a Vehicle Safety Officer and ordering off the road are derived from the Land Transport legislation, the Ministry need not prove every element of an offence under that legislation for purposes of termination under cl 87.3.  On the contrary, Party Bus bore the onus of proving that the buses had not been ordered off the road by a Vehicle Safety Officer.     The Ministry put that in issue by its denial.

[29]     In all the circumstances, there is no room at all for an argument that the

Arbitrator has determined a question not within the scope of the reference.

[30]     Turning to the leave application, the test is that established by the Court of Appeal in Gold and Resource Developments (NZ) Ltd v Doug Hood Ltd.[5]  The Court observed that cl 5(2) is framed in the negative;  the court shall not grant leave unless the determination of the question of law concerned could substantially affect the rights of the parties to the arbitration, and such effect is but a precondition to leave. An important discretion must be exercised once the precondition is met.   When

exercising it the court must recognise that Parliament intended to encourage the use of arbitration to resolve disputes and to limit the court’s involvement in reviewing and setting aside awards.  The Court of Appeal added that the discretion should be exercised in a disciplined way, having regard to a number of considerations:   the strength of the challenge/nature of point of law, how the question arose before the arbitrator, the qualifications of the arbitrator, the importance of the dispute to the parties, the amount of money involved, the amount of delay involved in  going through the courts, whether the contract provides for the arbitral award to be final and binding, and whether the dispute is international or domestic.

[5] Gold and Resource Developments (NZ) Ltd v Doug Hood Ltd [2000] 3 NZLR 318 (CA).

[31]     The Ministry accepts that the questions of law identified have a material effect on the applicant but it resists leave on the ground that the Arbitrator did not err and invites me to exercise my discretion against leave.

[32]     The central consideration for leave purposes is whether in the circumstances I have outlined the applicant can identify any strongly arguable error of law by the Arbitrator.  I am satisfied that it cannot, and having surveyed the background above I can state my reasons briefly.

[33]     As a generalisation, there is considerable force in the Ministry’s submission that Party Bus has assumed it suffices to identify a question of law arising out of the award.  The submissions for Party Bus can fairly be characterised as a diligent search for all such questions, no matter how trifling or essentially unimportant.  The tenor of them is usefully illustrated by the examples given at paragraph [27] above.  Some might assume relevance in a criminal prosecution, but this is a contractual setting. Further, for present purposes the Arbitrator’s factual findings must be accepted.

[34]     The question whether the Arbitrator erred in law falls to be answered upon the language and purpose of the contract.  On the facts, the Arbitrator has found that the substantive decision to order the buses off the road was made by a Vehicle Safety Officer, albeit that a constable actually issued the notices as authorised under s 115 of the Land Transport Act.[6]     It is not strongly arguable that that procedure insufficiently  complied  with  cl  87.3,  which  is  concerned  with  a  question  of substance; whether a bus that was used or designated for Ministry services suffered a relevant safety defect which a Vehicle Safety Officer considered sufficiently serious

to require repair before the bus resumed service.

[6] An enforcement officer is a sworn police officer, or a non-sworn member of the police authorised by the Commissioner of Police, or a person who is appointed to that office under the Land Transport Act: s 2(1).

[35]     Further,  the  Arbitrator  has  found  that  relevant  defects  were  found  on inspection and existed in fact.   Those defects led to the issue of notices under the Land Transport (Ordering a Vehicle off the Road) Notice 1999.   The issue of the notices was not in dispute.  Mr Lawn’s principal argument was that the notices were issued under cl 4, dealing with vehicles that do not comply with regulations, while for purposes of cl 87.3 a notice must be issued under cl 5 of the notice, dealing with unsafe vehicles.   The two forms of notice correspond respectively to subsections

115(1) and (3) of the Act.  Subsection (1) applies to vehicles that do not comply with the regulations or rules, providing that an enforcement officer may fix a notice to the vehicle directing that it not be driven on a road, although there is a discretion to allow it to be driven for a given time or under limitations as to speed or route, or to a specified place of repair.[7]     Subsection (3) applies to vehicles that are unsafe for driving on a road.

[7] Section 115(4).

[36]     The contract draws no such distinction.  The question is simply whether a bus was ordered off the road for one of the specified defects.  The notices each specified that the relevant bus was.   It is not plainly arguable that the Arbitrator erred by concluding that a notice issued under either subsection has that effect.   It is also immaterial whether the buses were actually on a road at the time, or were carrying students, or whether the issuing officer exercised a discretion to allow them to be

driven for a time or to a place of repair.  The contract required in cl 126 that they be

fit for use at all times.   The reason for that requirement is obvious; it facilitates policing of Party Bus’s obligations under the contract.   The argument that the Arbitrator was wrong to find that termination was available is sufficiently disposed of by his finding that at least one of the faults was serious.   I accept too that the question was whether the requirements of cl 87.3 were met, not whether there was an alternative procedure available.  Finally, it did not matter that the Ministry’s letter may not have detailed all of the defects, so long as it identified defects in at least one bus that warranted cancellation.

[37]     These conclusions dispose of the application to set the award aside and the application  for  leave  to  appeal  the  first  18  questions  of  law  in  the  amended application of 14 April.   None of those questions is strongly arguable.   On the contrary, Party Bus’s case is weak, and in what Mr Lawn identified as its central theme quite untenable.

Questions 19-25

[38]     I turn to the remaining questions of law in the 14 April amended application. (I will deal with those added in the 25 July amended application separately.)   As noted above,  these arise from  what  are fairly described  as secondary causes of action.  As a generalisation, there can be limited room for non-contractual duties that would qualify or vary the parties’ contract.

[39]   Question 19 asks whether there was a duty of care to investigate the circumstances before terminating.  It is a sufficient answer for present purposes that the Arbitrator found on the facts that even if the duty existed it was not breached.

[40]     Question 20 inquires, by reference to Jansen v Whangamata Homes Ltd, whether the Ministry affirmed the contract if none of the buses specified in its letter of 18 December and referred to in the NZTA interim report of 29 January 2010 suffered defects of brakes, steering, suspension or tyres.[8]     Like the Arbitrator, I

found Mr Lawn’s argument confused.   It relied on Mr Clarke’s evidence that he

would not have cancelled had he known the true position.   That is said to have created a new and subjective test for cancellation which was not met because, although Mr Clarke did not know it, none of the buses was defective by that time.  In these circumstances Mr Clarke’s decision to cancel is said in some way to amount to affirmation of the contract.  I can see no error in the Arbitrator’s conclusion that the termination was not invalidated simply because Mr Clarke did it while labouring under a mistake of fact, so long as grounds to cancel existed in fact at that time.

[8] Jansen v Whangamata Homes Ltd [2006] 2 NZLR 300 (CA); Jansen v Whangamata Homes Ltd

[2005] NZSC 71, (2005) 18 PRNZ 82.

[41]     Questions 21 and 22 inquire whether there was in law no valid cancellation of the contract.  Mr Lawn accepted that I need not consider these questions unless the “foundational” questions 1-20 were answered in his favour.

[42]     Question 23 asks whether the Ministry lost the right to cancel because it received and used information from the Police and New Zealand Transport Agency that was confidential to Party Bus, being information about non-Ministry buses (that is, buses that were not used by Party Bus for Ministry purposes) and allegations that one of its buses had run over a student, and incorrect information about two of the buses.  In circumstances where the Arbitrator has found, by reference to the original notices and the defects found at that time, that grounds to cancel existed, there is nothing in this point.

[43]     Question 24 inquires whether the right to cancel was lost because Mr Clarke received the information from an NZTA agent who was not a person qualified under the contract to disclose safety information to the Ministry, so breaching the contract. And question 25 inquires whether the respondent lost the right to cancel because it improperly  received  information  about  non-Ministry  buses  before  cancellation. These questions are directed to information that Mr Clarke is said to have relied upon when deciding to terminate.   But there is no strongly arguable error in the Arbitrator’s conclusion that no legal prohibition upon receiving such information in this setting and for these purposes has been identified.  He did not accept that the information was relevantly confidential, and merely to provide, as the contract did, for certain information to be received is not to preclude information from other official sources.   In any event the allegation goes to the information on which Mr Clarke mistakenly relied, seeking to exploit his concession that he would not have

cancelled but for that information.  The argument again overlooks the Arbitrator’s

finding that the Ministry retained grounds to cancel.

The 25 July application

[44]     To the extent that it adds any question of law to the 14 April application, the

25 July application is out of time.   Mr Lawn was unable to point to any express jurisdiction to enlarge time.   The better view is that there is no such jurisdiction. Rule 26.15 does not specify a time limit, but cl 5(8) of sch 2 to the Arbitratin Act

1996 imports the three-month limit from art 34(3) of sch 1.   Article 34 admits recourse  against  an  award  only  by  an  application  made  in  accordance  with paragraphs (2) and (3), and art 34(3) admits an exception to the time limit only in the case of fraud or corruption.[9]    There is no power to extend time.  Both this Court and the Court of Appeal may extend time, under the Rules of the court concerned, for a second appeal to the Court of Appeal,[10]  but there is nothing in those rules which confers an express power to extend the three-month limit for an application to this Court.  Express words would be required having regard to the language of art 34(3). The general power to enlarge time in the High Court Rules does not apply to appeals under the Arbitration Act, and in any event would not assist where particular rules limit  time  in  this  way.[11]    I observe  that  the  question  of  time  arose  in  Opotiki Packaging  &  Coolstorage  Ltd  v  Opotiki  Fruitgrowers  Co-operative  Ltd  (in

Receivership).[12]      The High  Court  and  Court  of  Appeal  there  adopted  counsels’

agreement that time could not be extended under art 34(3).   The point mattered because it meant that the Courts had to decide which of a series of decisions by the arbitrator in that case amounted to an award so as to trigger the time limit for a leave

application.

[9] Schedule 1, art 34(3).

[10] Leave in the High Court is governed by r 26.14, and time can be extended under r 1.9(2).  Leave in the Court of Appeal is governed by r 14.2(6) of the Court of Appeal (Civil) Rules 2005, and time may be extended under r 5(2) of those Rules.   See also Nixon v Walker HC Auckland CIV 2007-404-1372, 8 May 2009;  Hi-Tech Investment Ltd v World Aviation Systems (Australia) Pty Ltd [2009] NZCA 427.

[11] Rules 20.1(1)(b) and 20.4(3).

[12] Opotiki Packaging & Coolstorage Ltd v Opotiki Fruitgrowers Co-operative Ltd (in Receivership) [2003] 1 NZLR 205 (HC) at [12] and (CA).

[45]     In any event there is nothing of substance in these questions.   Mr Lawn characterised the added questions (in substance there were three although he presented them as one) as a variant upon those already posed about affirmation. They inquire whether the Ministry affirmed by paying Party Bus for the period 24

December to 31 December 2009 and by requiring Party Bus to ready its buses for the school year and not immediately cancelling.  These arguments do not appear to have been presented to the arbitrator in just this form, but they do confront his factual findings that the Christmas close-down intervened and there were no acts on the Ministry’s part from which it could be concluded that it had committed irrevocably to a course of action inconsistent with termination.  Further, the facts on which the three questions are based are not inconsistent with termination in circumstances where, as noted at paragraph [10] above, the Ministry had been assured by Party Bus that the defects would be remedied by 1 February 2010.

Other considerations relevant to discretion

[46]   Although I have not rested my decision upon them, I note that other considerations  tend  to  confirm  that  leave  ought  to  be  refused.    Although  the reference does not specify that the award is to be final, the policy of the Arbitration Act is that recourse to the Court is not encouraged.   The Arbitrator is a very experienced former Judge of this Court.

Decision

[47]     All applications are dismissed.

[48]     The respondent will have costs on a 2B basis, with provision for counsel’s reasonable travelling and accommodation expenses and disbursements otherwise as fixed by the Registrar.  Counsel should be able to agree costs, and must make the attempt.  Memoranda may be filed if they cannot agree.

Miller J

Solicitors:

Kumeu-Huapai Law Centre, Kumeu for Applicant

Crown Law Office, Wellington for Respondent