Practice and procedure - Application for stay of order refusing leave to appeal - Turns on own facts

Civil Judgments Enforcement Act 2004 (WA), s 15(3)

Commercial Arbitration Act 1985 (WA), s 38(2)

Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308

1 PULLIN JA: The appellant made an application for a stay of an order made by Master Sanderson on 24 October 2012. The order made by Master Sanderson was to dismiss an application by the appellant for leave to appeal against an interim award by an arbitrator. The application for leave made to the Master was made pursuant to s 38(2) of the Commercial Arbitration Act 1985 (WA). After hearing oral submissions, the application was dismissed with reasons to be published later. These are the reasons.

2 A court may only grant a stay or make a suspension if there are special circumstances that justify doing so. See s 15(3) of the Civil Judgments Enforcement Act 2004 (WA) and Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308.

3 Usually, special circumstances are shown by establishing that if a stay or suspension order is not granted by this court, the appeal will be rendered nugatory or practical difficulties will be created regarding relief that may be granted on appeal. Even if that is shown, a stay or suspension order will still be refused if there are no reasonable prospects of success. Finally, the balance of convenience has to be considered. If the balance of convenience favours the dismissal of the application for a stay or suspension order, then the court may dismiss the application.

4 In the papers provided on this application, only the bare bones of the original dispute are disclosed. However, what does appear is that the appellant and the first respondents entered into a construction contract. The appellant was the builder. A dispute arose. Eventually the second respondent was appointed as an arbitrator. The appellant raised a preliminary point, namely whether the arbitrator had jurisdiction to determine the dispute. The matter was argued and the arbitrator published an interim award. The Master in his reasons said:

The question really is whether the arbitrator fell into error in determining that he had jurisdiction to hear the matter. What was put to him was that the original cost-plus contract between the parties had fallen away, with it had fallen away the arbitration clause, he was without jurisdiction and therefore the arbitration ought be terminated.

The arbitrator, between paragraphs 46 and 53 of his reasons, deals with that issue, and he does so on the basis of an estoppel. In short, what he says is that the builder had initially participated in the arbitration and had filed pleadings which indicated an acceptance of the right to arbitrate. What was now being said was that those admissions ought be withdrawn and the jurisdiction question raised to the point where the arbitration must fall away.

A couple of points can be observed about that. First, that was the way in which it was argued on behalf of the builder, the present applicant, and so the arbitrator can hardly be criticised for approaching the matter in the way that he did. The second point is that points of claim in an arbitration are not the same as pleadings, and withdrawing admissions may or may not - and I express no concluded view - easier in an arbitration than they would be in a court proceeding.

In any event, the way in which the arbitrator approached the matter does not seem to me to be in error. In other words, given that he approached the matter in the way that was put to him by the builder, he got it right, but I think that, even leaving that to one side, the conclusion is correct even if a different approach is taken.

I think that it can be said that given there was a preliminary meeting with the arbitrator and the parties on 5 July 2005, an arbitration agreement was entered into. It may be argued that that was done pursuant to the parties' then view of the contract, but I think even if that is accepted, there is a strong argument to be made that there was an agreement to arbitrate as of 5 July 2005. That is a binding agreement, and there has been no movement between the parties which would in any way vitiate that agreement. That would mean that the present arbitration is properly on foot.

If that is not the case, then it certainly is the case that by reference to the discussions that took place on 5 July 2005, the present respondent proceeded on the basis that an arbitration was on foot and acted accordingly, and I think an estoppel could arise on that basis. All of that goes to say that, first, I think the arbitrator got it right and, second, if the reasons that the arbitrator gave are not necessarily the view that should prevail, it is nonetheless the case that an equally sound argument can be made, applying different principles.

It is also the case that this is not an instance where there is a manifest error in the decision of the arbitrator. If there is an error - and I am not satisfied there is, but if there is an error - it is a very tight lineball situation and not a case where it can be said that the error is manifest. It is certainly not a case where the decision on the point is so important to the general application of the law that leave to appeal ought be given (ts 2 - 4).

5 The appellant appeals against the Master's decision, alleging that the Master erred in law in refusing leave. Although there are two grounds of appeal, there is really only one point encompassed by them. The appellant points to the Master's reference to 'the way in which [the matter] was argued [before the arbitrator]' and to 'the way [the appellant's argument] was put' and contends that the Master did not explain what was meant by these comments and that this meant that his reasons were inadequate because they were insufficient to allow an appeal court to consider whether the judgment was in error. Although this is the only point raised by the two grounds of appeal, the appellant includes some particulars to ground 1 which are not particulars to that ground. Instead, they raise three different points. First, that '[b]y only referring to the agreement of 5 July 2005, the Master failed to take into account subsequent agreements between the parties which evidence was before him'. Second, that the Master was 'in error in not finding manifest error in the fact of the existence of other agreements between the parties'. Finally, that the Master erred 'by not considering that as a proposition of law it was arguable the arbitrator was deprived of jurisdiction'.

6 The appellant seeks a stay or suspension of the Master's order refusing leave. The appellant says that this appeal will be rendered nugatory because if the stay or suspension order is not granted then the arbitration will proceed to a full hearing. The appellant submits that if a stay is granted, the arbitration will not proceed. However, that is not correct. A stay of the Master's order will not prevent the arbitration from continuing. The refusal of a stay or suspension order will not render this appeal nugatory. If this appeal succeeds, then the Master's decision refusing leave will be reversed and leave will be granted. That will then require the determination of the appeal by the General Division. If the General Division appeal is dismissed, then the arbitrator's interim award deciding that he had jurisdiction will stand. If the appeal to the General Division succeeds, then the arbitrator's interim award will be set aside, in which case any subsequent proceedings before the arbitrator which depend on the interim award for validity could then be set aside.

7 What the appellant is trying to secure is an order adjourning the arbitration proceedings. It is not for this court to make such an order even if it had the power to do so. If the appellant wants the arbitration proceedings adjourned, then he should make an application to the arbitrator to adjourn pending the hearing of this appeal. That is not to indicate whether or not an adjournment will be granted. The arbitrator will doubtless take into account relevant factors, including the likely length of the arbitration, whether the arbitration is likely to come on for hearing before the hearing of this appeal and any prejudice that the respondent would suffer if the arbitration were adjourned.

8 No special circumstances have been shown here for the reasons set out above. For those reasons, the application for a stay was dismissed.