CONSIDERATION
72 There is no doubt that the general principles in relation to stay applications in circumstances such as the present are well settled. Courts will generally hold the parties to the bargain in relation to dispute resolution clauses. Such clauses do not oust the discretion of the Court to hear a matter: see generally Zeke Services (at [10]-[15]). Further, there is no suggestion by either party that the DRC purports to oust the jurisdiction of the Court. However, as a general proposition, a stay would not be granted if it would be unjust to deprive an applicant of its right to have its claim judicially determined (Dirty Dancing Investments at [54]), but this will all depend very much on the nature of the dispute, the parties to the dispute, the nature of the agreement in which the dispute resolution clause is contained and the conduct of the actual clause.
73 There are examples, particularly, Dirty Dancing Investments, Zeke Services and Raskin v Mediterranean Olives Estate Ltd [2017] VSC 94 per Hargrave J, in which a stay has been declined in accordance with the interests of justice. In the current matter, in addition to the question of whether declining the stay would be in the interests of justice, there is the further question of whether the DRC applies in the relevant circumstances and, if so, whether it has been breached. While Zeke Services can be distinguished on the facts because the expert was not qualified to resolve the dispute, it still provides a helpful examination of the principles. In that decision, Chesterman J noted (at [21]) that the party opposing the stay bears a heavy onus of persuading the Court 'that there is a good ground for the exercise of the discretion to allow the action to proceed and so preclude the contractual mode of dispute resolution … [t]he court should not lightly conclude that the agreed mechanism is inappropriate'. As to the circumstances that may warrant the onus being discharged, his Honour continued (at [22]-[27]):
[22] Ordinarily I would think that that onus can be discharged only by showing that, in the particular case, the dispute is not amenable to resolution by the mechanism the parties have chosen. This consideration includes the procedure, if any, for which the parties have contracted, and the qualification of the expert or referee to embark upon the determination of the dispute. The parties are presumed not to have intended that their dispute should be resolved by someone not qualified for the task, or in some inappropriate manner. This presumption, based on legal theory, removes any violence to the agreement which refusing the stay would otherwise have done.
…
[24] It follows that if a dispute is not of a kind which can be determined in an informal way by reference to the specific technical knowledge or the learning of the expert, it may be appropriate to refuse a stay. Complicated disputes of fact or of law may be of such a character.
[25] In Cott UK Ltd v FE Barber Ltd (1997) 3 All ER 540 the court refused to stay an action on a contract which contained a clause referring disputes to the determination of an expert on the grounds that:
(a) There were no rules identified in the contract or in the expert's professional association governing the mode of his determination.
(b) The expert appointed had no experience in the areas of dispute.
(c) The contract gave no guidance as to the rules or principles pursuant to which the expert was to approach his determination.
(d) The nature of the dispute itself - a claim for damages for breach of contract - was inapt for determination by an expert.
[26] Gillard J in Badgin doubted the relevance of some of the matters relied upon by the court in Cott and I respectfully share those doubts. The second and fourth points do, with respect, appear to be of substance. Gillard J thought that:
'… the fact that there were issues concerning a number of legal questions, whether there was a breach … of the agreement and whether there was an entitlement to damages are matters which may be of some importance in deciding against the grant of a stay on the basis that it could not have been the common intention of the parties to refer disputes of mixed facts and law to an untrained and inexperienced person … [I]n the end it is a question of what the term of the contract provides and the nature of the dispute.'
[27] The evident advantage of an expert determination of a contractual dispute is that it is expeditious and economical. The second attribute is a consequence of the first: expert determinations are, at least in theory, expeditious because they are informal and because the expert applies his own store of knowledge, his expertise, to his observations of facts, which are of a kind with which he is familiar. The less amenable the dispute is to this mode of resolution, the less appropriate this paradigm will be and the more likely it will be that the court will decline to stay an action brought on the contract so as to allow the expert determination to proceed.
…
74 Zeke Services was concerned with the fictitious employment of staff and the alleged misrepresentation as to bad debts. As was noted by Chesterman J (at [30]), the alleged misrepresentations of bad debts raised a question of what the company's officers believed about the recoverability of the debts and the reasonableness of any grounds for that belief. His Honour considered that, therefore, there were questions of mixed fact and law to be resolved. Such a determination would involve some argument that was legal in nature and 'is not the paradigm of applying one's special knowledge to one's own observations'. The same considerations were also held to apply to the complaint about fictitious employees. In these circumstances his Honour held that there should not be a stay of proceedings, concluding (at [32]-[37]):
[32] It is at this point that the absence from the agreement of procedural rules to be observed by the expert becomes of importance. Their absence is unremarkable in a case where the expert relies upon his own senses and learning, but where he is obliged to investigate disputed questions of fact and/or law, and come to a conclusion about them, the lack of a methodology for the inquiry is significant. An expert, unless obliged to do so by the contract or the terms of his appointment, does not have to comply with the requirements of procedural fairness or natural justice. The agreement does not contain such a requirement.
…
[35] These three complaints are not readily amenable to expert determination. That paradigm does not accommodate these aspects of the dispute, which require an adjudication between opposing contentions. The answers cannot be found in expert observation, nor informal, one sided, fact finding. ...
…
[37] Accordingly, I conclude that some only of the complaints may be appropriately determined by an expert. There should be no stay with respect to those matters. To order a stay of the proceedings to allow the expert to determine some only of the complaints would be unsatisfactory. The same decision-maker should determine all questions in dispute. As the court must determine some, it should determine all.
(emphasis added)
75 As to the matter before me, there is no doubt that the experts nominated by Onslow Salt would have the personal technical ability to resolve any of the disputes which are raised in the statement of claim. But it is equally clear, in my view, that the clause does not contemplate, having regard to the time constraints and very limited content of the procedural aspects of the clause, that there be resolution by an expert of the extremely complex factual matters raised in the lengthy pleading. More importantly, there is no facility within the clause for compelling witnesses to give evidence and permitting cross-examination. The only flexibility in the clause is for the expert to determine whether the submission itself to the expert will be written or oral. That falls entirely short of a facility for resolving complex factual and credit issues, especially when a third party is brought into the proceeding on claims which, for their most part, are well outside the parameters of matters addressed by the Deed.
76 The inadequacy of the procedures agreed by the parties is not a deficiency in the DRC. Rather, is an indicator that the DRC is limited to simpler, more specific issues arising under the Deed, or in connection with the Deed, in contrast to the wide ranging matters raised in the statement of claim. The inadequacy of the procedures was a specific matter to which Hammerschlag J pointed to in Dirty Dancing Investments (at [54]) in drawing upon Savcor, Badgin Nominees and Zeke Services, and is certainly a relevant matter in these circumstances given the content of the challenges in the statement of claim.
77 In Raskin, Hargrave J upheld an argument that an expert determination clause was uncertain and therefore unenforceable. However, his Honour went on to consider whether or not the inherent power of the Court to stay the proceeding would have been exercised and concluded that it would not have been. After referring to many of the cases discussed above, his Honour said (at [54]-[57]:
54 Of particular relevance to this case is the reference in the decision of Hammerschlag J in Dance with Mr D Ltd v Dirty Dancing Investments Pty Ltd to the prospect of a multiplicity of proceedings as a relevant factor in the exercise of the Court's discretion as to whether or not to grant a stay. In this case, even if the expert determination clause permitted a single expert to determine the various disputes (which it does not), the claims in this proceeding against Mr May and, if leave is granted, against the project landowner as a proposed third defendant, would continue. There would be a multiplicity of proceedings and the prospect of conflicting findings of fact and law. Further, the parties would be required to fund and conduct two substantial proceedings, namely, this proceeding and an expert determination process expert accountant.
55 I do not accept the defendants' submission that the allegations against Mr May, or the proposed allegations against the project landowner, involve the plaintiff endeavouring to 'circumvent' the expert determination clause. The plaintiff is entitled to frame her case as she sees fit without constraint by the clause. The clause does not bind her to agree to claims against non-parties to the contract being determined under the expert determination clause.
56 The fact that Mr May and the project landowner are prepared to participate in and abide the result of an expert determination process is not to the point. The plaintiff is not bound to agree to that course and would be foolish to do so in circumstances where there is no guarantee of procedural fairness.
57 In all the circumstances, it would in my opinion, be unjust to the plaintiff, indeed all parties, to stay the proceeding so that the expert determination process proposed by the defendants can proceed. The proposed process before a single Independent Expert would not, in the absence of agreement by the plaintiff, accord with the expert determination clause as the dispute involves more than the mere management of the project and legal interpretation issues, but includes accounting and horticultural issues raised by the pleadings. If such a process were undertaken, it would likely lead to further multiplicity of proceedings, based on the ground that the process was not contractually authorised by the expert determination clause.
78 Many of the points raised by his Honour are directly applicable to this present situation. If a part of these proceedings which relates to the Deed is stayed, the result would be that the balance of the proceedings would be continued against both respondents, but with a separate procedure under the DRC being conducted in tandem with respect to those parts of the proceedings relating to the Deed. After this, BTAC, if the matters were not resolved, would be able to proceed in this Court with its claims relating to the Deed. As BTAC submits, even if all of the proceedings against Onslow Salt were stayed, the proceedings would still continue against the State, with the DRC operating in relation to Onslow Salt only. If the matter was not resolved as a result of that process, BTAC would then continue in this Court with its claims against Onslow Salt.
79 Further, as observed by Hargrave J in Raskin, a solution to this is not for BTAC to consent to the State taking part in the DRC procedure, even assuming it agreed to do so, which it does not.
80 Significantly in all of this is that the DRC, seen in its context, is meant to provide a quick possible resolution to problems arising under the tasks identified in the Deed or matters which have arisen relating to the Deed.
81 It is fundamentally important to note that the DRC does not produce a determination or any binding outcome at all. It only produces an opinion. I accept that it does so in relative privacy, which is a factor I most certainly take into account in favour of Onslow Salt. Most of the cases (including Mineral Resources) on which Onslow Salt relies, however, are clauses from which a determination by, not an opinion of, an expert is the outcome. Nothing in cl 15.3 makes the independent expert's opinion binding on the parties to the Deed, let alone the State. It does not, in fact, provide an alternative method for the binding determination of any dispute between the parties, but simply spells out a private step that needs to be undertaken before the parties may refer a relevant matter to the Court. It is an entirely commendable process which has been recognised and respected by the Courts on many occasions, except where there are exceptional circumstances. The nature of this case falls into that exceptional category.