Energy Brix Australia Corporation Pty Ltd v National Logistics Coordinators

Energy Brix Australia Corporation Pty Ltd v National Logistics Coordinators - [2002] VSCA 113 - VSCA 2002 case summary — Zoe

[7]

Both the application and appeal have been listed together so that, if the objections to the competency of the application and the appeal are unsuccessful, this Court may determine the further questions which have arisen and have been argued as to whether the appeal itself should be allowed. In turn that has raised a number of subsidiary questions. One such question is whether the learned judge erred by stating, in refusing leave to appeal from the award, that "I do not give reasons for my decision", which he said was consistent with decisions such as that of the House of Lords in Antaios Compania Naviera S.A. v. Salen Rederierna A.B.[5] and that of the Full Court in Leighton Contractors Pty. Ltd. v. Kilpatrick Green Pty. Ltd.[6] A second procedural question is whether, if this Court considers that the appeal from the judge in the Trial Division is competent or that leave to appeal from him should properly be granted, this Court should merely remit the question whether leave to appeal to the Trial Division under s.38(4) should be granted or whether in the circumstances it should resolve also the question whether the appellant had satisfied the provisions of s.38(5) so as to entitle it to an order giving leave to appeal to the Trial Division. A further question was mooted, whether in the latter circumstances, this Court should also resolve the appeal itself from the arbitrator's award, primarily because the result was so obvious or "manifest", but counsel for the parties disagreed as to whether this Court could assume jurisdiction to hear the appeal under s.38 itself and as to whether our function is confined to resolving what the Trial Division should or should not have done in considering only the question as to the granting of leave to appeal. A further subsidiary question raised by the appellant was whether the learned judge was wrong because he permitted the respondents to go behind the face of the award and to rely upon new affidavit material which, according to the appellant, "was directly contrary to the evidence presented to the arbitrator and the findings of fact made by the arbitrator". The circumstances which lay behind this, if I might say so, curious ground, will have to be mentioned later but it seems that the appellant relied upon an inference, which it said could be drawn, to the effect that the judge himself relied on that extraneous material to reach his conclusion.

[10]

For the purposes of the primary jurisdictional question the following brief outline of the circumstances giving rise to that question in this Court should suffice. The appellant, amongst various activities, manufactures for sale brown coal briquettes and other products, which business was carried out not only in the Latrobe Valley but also from various depots, including one at Yarraville called the "Footscray depot". In 1997 the appellant determined to "out-source" many of its handling, storage and distribution activities to a company, the first-named respondent, which was formed by the appellant's former distribution manager Jeffrey William Goss. The parties at first operated pursuant to heads of agreement signed on 5 October 1997 but in due course a formal long-term contract was drawn up, which was executed by the affixing and witnessing of the corporate seals of both the appellant and the first-named respondent and which was called the "National Transport, Handling and Distribution Alliance Contract" ("the Alliance contract"). As part of a "dispute resolution" clause, the parties agreed under clause 48.4 of the Alliance contract that either party might refer any question, dispute or difference between them to arbitration by giving appropriate notice of the existence thereof. It was agreed that any award of the arbitrator should be "final and binding on the parties". The Alliance contract was the deed to which I have already referred and the later informal agreement, likewise referred to, was signed by the parties[9] on 11 January 1999 but did not purport to alter the arbitration clause. A series of six issues were listed in terms of reference dated 7 February 2001, although the parties now included the three other respondents (for reasons which need not be here examined), which all parties agreed should be determined by an arbitrator. Then on 13 February 2001 the parties, including the appellant and all respondents, entered into an arbitration agreement with the arbitrator, who was an accountant, seeking that the issues be resolved. As to the terms of that agreement it is relevant to know only that (i) the issues in dispute were referred to specifically as those being contained in the terms of reference, that (ii) the parties required the arbitrator "to apply principles of general justice and fairness" in preference to making "decisions in accordance with the law", but that (iii), nevertheless, the parties explicitly stated that they did not wish "to exclude all rights of appeal against the arbitrator's decisions on any questions of law or fact ...".

[16]

"38. Judicial review of awards (1) Without prejudice to the right of appeal conferred by sub-section (2), the Court shall not have jurisdiction to set aside or remit an award on the ground of error of fact or law on the face of the award. (2) Subject to sub-section (4), an appeal shall lie to the Supreme Court[11] on any question of law arising out of an award. (3) On the determination of an appeal under sub-section (2) the Supreme Court may by order - (a) confirm, vary or set aside the award; or (b) remit the award, together with the Supreme Court's opinion on the question of law which was the subject of the appeal, to the arbitrator or umpire for reconsideration or, where a new arbitrator or umpire has been appointed, to that arbitrator or umpire for consideration - and where the award is remitted under paragraph (b) the arbitrator or umpire shall, unless the order otherwise directs, make the award within three months after the date of the order. (4) An appeal under sub-section (2) may be brought by any of the parties to an arbitration agreement - (a) with the consent of all the other parties to the arbitration agreement; or (b) subject to section 40, with the leave of the Supreme Court. (5) The Supreme Court shall not grant leave under sub-section (4)(b) unless it considers that - (a) having regard to all the circumstances, the determination of the question of law concerned could substantially affect the rights of one or more parties to the arbitration agreement; and (b) there is - (i) a manifest error of law on the face of the award; or (ii) strong evidence that the arbitrator or umpire made an error of law and that the determination of the question may add, or may be likely to add, substantially to the certainty of commercial law. (6) The Supreme Court may make any leave which it grants under sub-section (4)(b) subject to the applicant complying with any conditions it considers appropriate. * * * * * (7) Where the award of an arbitrator or umpire is varied on an appeal under sub-section (2), the award as varied shall have effect (except for the purposes of this section) as if it were the award of the arbitrator or umpire."

[19]

Various arguments were put to the Court to support the conclusion that by implication the legislature intended that there should be no further appeal beyond the application made to a judge of the Trial Division. Those should be looked at briefly later but essentially the question here is whether there is express provision to the contrary and it has been said by a majority of the High Court in Roy Morgan Research Centre that it is doubtful whether one can ever look "beyond express words of exclusion"[15]. Whether or not one can in certain cases discern that it has been "otherwise expressly provided"[16], perhaps by the emphatic use of positive words in another provision, no such conclusion can here be drawn. The language used here is, in most relevant respects, not dissimilar to that used by the legislature in s.148(2) of the Victorian Civil and Administrative Tribunal Act 1998 (as considered by the High Court), at least to the extent that the right of appeal to the Trial Division given in both Acts is subject to the requirement of leave. The absence of any express denial of the Court of Appeal's jurisdiction "may very well be reason enough to reach the conclusion" that s.38 is not an express provision of the kind contemplated by s.17(2).[17] More importantly the majority of the High Court in Roy Morgan Research Centre said that s.17(2) is "to be given no narrow construction. Rather, it is to be construed with all the amplitude that the ordinary meaning of its words admits."[18] As I have said, s.38 says nothing about any right of appeal to the Court of Appeal, whatever was formerly provided, and the width or narrowness of the right given to challenge an award under s.38 is in no way affected by the right given under s.17(2) of the Supreme Court Act. The review conducted on an appeal to the Court of Appeal can in no way expand the nature of the right of appeal from an arbitrator's award given under that section. All that the Court of Appeal can do is to ensure that the provisions of that section are applied correctly which means, as is obviously the case, that we can consider not only erroneous refusals to grant leave but also, and just as importantly, erroneous grants of leave which would wrongly expand the rights given under s.38, if those grants were incapable of review by an appellate court.

[42]

Although the Alliance contract continued to be implemented, discussions took place between the parties particularly in relation to the unresolved question as to the lease of the Footscray depot. It seems that by 11 January 1999 the issues had clarified themselves sufficiently for the parties to agree that it would be impractical to sublease or "assign" the appellant's lease to the first respondent. To make allowance for this the parties then appear to have reached agreement on a number of matters which were reflected in the document described as an agreement and dated 11 January 1999. In essence, as the arbitrator held, this latter agreement made the first-named respondent "responsible for lease payments and outgoings" on the Footscray depot from the second quarter of the 1998-1999 year "in return for any income" which the first-named respondent might earn from the property after 1 December 1998.[39] There were eight other clauses in the contract, each somewhat informally expressed, though most were clear in their operation. For example the first-named respondent was thereafter obliged to pay all outgoings associated with the Footscray depot and was free to use assets found in the depot. Clause 10, however, was referred to by the arbitrator as one upon which the respondents heavily relied in that it said: "NLC[40] will negotiate with EBAC's Manager Marketing for future services associated with the distribution of briquettes and/or other services [utilising] Footscray." Undoubtedly this clause foreshadowed a possible agreement in the future relating to services for which the Footscray depot might be used. It is unnecessary to examine the extent to which an agreement to "negotiate" might, in certain circumstances, be treated as enforceable. Suffice it to say that apparently the respondents contended that the insertion of this clause showed that no agreement had been reached on 11 January, whereas the appellant contended that at least the matters agreed in the other clauses could be treated as enforceable.

At a glance

Court

Decision date

Before

Source

Judgment (118 paragraphs)

Parties