(a) In the event of any dispute, disagreement, or difference between the Owner and the Builder at any time whatsoever as to any matter or thing arising hereunder or in any way concerned or connected herewith or relating to the construction of this Contract then notwithstanding the rights of either party to apply to the Building Commissioner or State Administrative Tribunal or any other relevant Statutory Authority, either party may give to the other notice of such dispute, disagreement or difference and at expiration of FIVE (5) days thereafter and in the absence of any settlement the same be referred to arbitration either by:

(i) a single arbitrator appointed by mutual consent; or

(ii) in the event that agreement of the appointee is not reached within FIVE (5) days a single arbitrator shall be appointed by the President or his nominee of the Housing Industry Association Western Australian Division provided that such appointee shall be an arbitrator approved by the Institute of Arbitrators Western Australian Chapter. At the time of application for such appointee the party applying shall deposit with the Housing Industry Association such sum as may then be required by way of security for costs of the arbitration proceedings and further sums so contributed whether by direction of the arbitrator or otherwise (but always in equal shares) shall be applied in accordance with the directions of the arbitrator.

(b) The conduct of the arbitrator shall be in accordance with and subject to the provisions of the Commercial Arbitration Act 1985 and the decision of the single arbitrator appointed shall be final. The rights and obligations of the parties under this Contract shall be modified only to the extent made necessary by such arbitration.

1. The Commercial Arbitration Act 2012 (WA) (CA Act) provides for the entitlement of parties to agree amongst themselves to alternative adjudication jurisdiction - private arbitration rather than curial or statutory body adjudication. It also provides for the curial bodies to enforce that entitlement where it is found to exist. Section 1C of the CA Act provides for the paramount objectives of the CA Act as follows:

(1) The paramount object of this Act is to facilitate the fair and final resolution of commercial disputes by impartial arbitral tribunals without unnecessary delay or expense.

(2) This Act aims to achieve its paramount object by ­

(a) enabling parties to agree about how their commercial disputes are to be resolved (subject to subsection (3) and such safeguards as are necessary in the public interest); and

(b) providing arbitration procedures that enable commercial disputes to be resolved in a cost effective manner, informally and quickly.

(3) This Act must be interpreted, and the functions of an arbitral tribunal must be exercised, so that (as far as practicable) the paramount object of this Act is achieved[.]

1. Consistently with that objective s 5 of the CA Act provides:

In matters governed by this Act, no court must intervene except where so provided by this Act.

1. Section 7 defines and arbitration agreement relevantly, as follows:

(1) An arbitration agreement is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not.

(2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.

(3) The arbitration agreement must be in writing[.]

(Tribunal emphasis added)

1. Most significantly in this proceeding s 8 of the CA Act provides:

(1) A court before which an action is brought in a matter which is the subject of an arbitration agreement must, if a party so requests not later than when submitting the party's first statement on the substance of the dispute, refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed.

(2) Where an action referred to in subsection (1) has been brought, arbitral proceedings may nevertheless be commenced or continued, and an award may be made, while the issue is pending before the court.

1. In its Statement of Issues, Facts and Contentions (SIFC) the respondent asserts that the Tribunal is bound to refer the proceeding to arbitration and in the interim the proceeding should be stayed (see para 4.2 of respondent's SIFC). The Tribunal notes that the respondent had initially sought an order that the proceeding be dismissed.
2. Neither party has moved to commence arbitral proceedings pursuant to clause 16 of the contract. Either party may move to commence the arbitral proceedings. The respondent's position is that the applicants have issued the notice of dispute by the preliminary notice of complaint and are obliged by clause 16 to have the dispute resolved by arbitration. The respondent further contends that the applicants should move to commence the arbitral process called for by clause 16 to resolve and determine the dispute. There are no arbitral proceedings on foot concerning the dispute, the substance of this proceeding.
3. The respondent asserts that clause 16 of the contract is an arbitration agreement for the purposes of s 7 of the CA Act and the applicants are bound for their dispute to be determined at arbitration. Having instead commenced proceedings by way of a complaint to the Commissioner, the respondent asserts it has complied with s 8(1) of the CA Act and clause 16 and requested that the dispute between the parties be referred to arbitration by the Commissioner or the Tribunal (once referred). The respondent asserts that it made the request for referral to arbitration, at the latest, by the time when it was called upon to make the first statement on the substance of the dispute by the Commissioner or the Tribunal. It has refused to enter a statement on the substance of the dispute in order to preserve its rights pursuant to s 8(1) of the CA Act.
4. The respondent asserts that as the proceeding is before the Tribunal, as a 'court for the purposes of s 8(1) of the CA Act', the Tribunal is obliged to refer the dispute to arbitration by reason of clause 16 of the contract and the provisions of s 8 of the CA Act.
5. The applicants contend to the contrary and that, in effect, clause 16 of the contract provides the parties with an 'option' to refer their dispute to arbitration or the Commissioner and the Tribunal. They contend that clause 16 of the contract does not comprise an arbitration agreement.
6. The Tribunal observes that the SIFC filed by the applicants does not refer to any authority.

(i) Does clause 16 amount to an arbitration agreement or clause for the purposes of s 7 of the CA Act?

The answer to that issue is: yes.

(ii) Whether the Tribunal is a 'court' for the purposes of s 8(1) of the CA Act?

The answer to that issue is: yes.

(iii) Whether the arbitral process must have commenced in order for the Tribunal to refer the parties to arbitration?

The answer to that issue is: no.

(iv) Whether the nature of the dispute is one that is contemplated by clause 16 and thereby falls within subject matter of the arbitration agreement/clause?

The answer to that issue is: yes.

(v) Whether the respondent has requested the Tribunal (or the Commissioner before the Tribunal) for the dispute to be referred to arbitration?

The answer to that issue is: yes.

(vi) Whether the respondent's request referred to above is not later than when the respondent was required to submit its first statement of the substance of the dispute?

The answer to that issue is: yes.

Issue (i) - Does clause 16 amount to an arbitration agreement or clause for the purposes of s 7 of the CA Act?

1. The respondent relies upon the Tribunal's previous decision of Shakur and Aintree Holdings Pty Ltd T/A Beaumonde Homes [2015] WASAT 12 (Shakur).
2. In that proceeding the Senior Member concluded that the construction and interpretation of clause 16 contended by the applicants in this proceeding, is incorrect. At [29], the Senior Member stated in relation to the reference to the statutory right to proceed before the Commissioner or the Tribunal referred to in clause 16, that that statement simply acknowledges the statutory rights and does not provide the parties with an 'option' on which system of adjudication of the dispute is available.
3. The applicants have asserted that the respondent has failed to construct a portion of the residence (the pool) in a proper and proficient manner or that that construction is faulty or unsatisfactory. They asserted this prior to the issue of the complaint to the Commissioner and by the issue of the complaint to the Commissioner. The respondent is entitled to rely on clause 16. The fact that clause 16 is not written in mandatory terms does not mean that it is not an arbitration agreement for the purposes of s 7 of the CA Act.
4. The Tribunal in this proceeding concludes that, as clause 16 expressly provides that 'notwithstanding' the parties having the recognised statutory right to proceed before the Commissioner and the Tribunal, the issue of a notice of a dispute by either party about the subject matter referred to in clause 16 enlivens the obligation imposed by clause 16 to resolve that dispute by an arbitration process. The reference to the statutory right of resolution is to acknowledge that the parties agree to the arbitral process about a very wide subject matter with full knowledge and regardless of their statutory right to proceed before the Commissioner and Tribunal.
5. The applicants' contention that clause 16 amounts to no more than an 'option' to arbitrate is not open as such a clause in a contract would serve no purpose. Without an arbitration clause in a contract the parties are always free to enter into a new contract to arbitrate. There is no need to include a clause to merely suggest it is an option - it is always an option. Further, no purpose is served by the inclusion of a clause that recites that parties' statutory right to a particular adjudicative process. The applicants contended construction would result in a clause that has no work to perform in terms of identifying what the parties have agreed to in the event of a dispute. The purpose of an arbitration clause in a contract is to contractually oblige the parties to arbitrate any disputes that fall within the arbitration clause 'notwithstanding' the existing adjudicative rights conferred by the general law or statute.
6. The applicants' contended construction also suggests that it is the party who elects to proceed with an 'option' first who determines the system of adjudication of the dispute. That is not consistent with the words of clause 16. The Tribunal does not accept the construction of clause 16 contended by the applicants for the reasons stated above and following the reasoning in Shakur.
7. The Tribunal concludes that on proper construction of clause 16 the parties are contractually obliged to proceed to resolution on the notified dispute by way of arbitration. Section 8(1) of the CA Act makes it clear that a 'court' to which the dispute is referred, is obliged to refer the parties to arbitration in support of that contractual obligation (with limited exceptions, none of which apply in this proceeding).
8. The respondent has not taken further steps to refer the dispute to arbitration but it has at the first available opportunity and when asked to submit a statement on the substance of the dispute before a court or the equivalent, has requested the proceeding be referred to arbitration. The exception to that is where the agreement is null and void, inoperative or incapable of being performed (see s 8(1) of the CA Act). In this proceeding there is no basis and there is no submission to assert that the agreement is null and void, inoperative or incapable of being performed. What the respondent is seeking to ensure is that if they wish to prosecute the dispute then the applicants should do so before an arbitrator in accordance with the provisions of clause 16. It is not incumbent on the respondent to then commence the proceeding. It is enough that the respondent has responded in this proceeding and before the Commissioner beforehand to request that the parties be referred to arbitration consistently with s (1) of the CA Act. The Tribunal concludes therefore that in accordance with the reasoning of the Senior Member in Shakur which is with respect correct and supported by the cases and reasoning referred to therein, the Tribunal concludes that clause 16 is an arbitration agreement or clause for the purposes of s 7 of the CA Act.

Issue (ii) - Whether the Tribunal is a 'court' for the purposes of s 8(1) of the CA Act?

1. Again, this issue has been determined by the Tribunal in Shakur, applying the reasoning of the Court of Appeal of the Supreme Court of Victoria in Subway Systems Australia Pty Ltd v Ireland [2014] VSCA 142 (Subway Systems). The Court of Appeal of the Supreme Court of Victoria concluded that the reference to 'the court' in s 8 of the Commercial Arbitration Act 2011 (Vic) (CA Act (Vic)) the legislation intended to include in that term, 'a body or organ of the judicial system of a State, rather than a court in the strict sense' (Shakur at [14]). The CA Act (Vic) is not dissimilar to the CA Act and many of the provisions are based upon United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration The reasoning in Subway Systems concerns the interpretation of the same. In Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd [2020] WASCA 77 (Hancock) Quinlan CJ (with whom Vaughn and Beech JJA agreed at [518]) cited Subway Systems generally with approval particularly in respect of the interpretation to be applied to legislation expressed to comply with the Model Law and stated:

The Court of Appeal in Victoria distilled the following principles of interpretation arising from these provisions:

(a) certainty and uniformity of application are of paramount importance;

(b) to that end, the rules generally applicable to the interpretation of domestic statutes give way to the rules applicable to the interpretation of treaties;

(c) because the international agreement is addressed to a much wider and more varied judicial audience than an act of a domestic legislature, the interpretation of the domestic enactment should be unconstrained by technical rules of interpretation and should instead be informed by 'broad principles of general acceptation'; and

(d) recourse may be had to the working documents of the international body by which, or through which, the agreed rules were developed.

1. The Tribunal concludes that the correct interpretation of the phrase 'the court' as applied by s 8(1) of the CA Act includes a reference to the Tribunal.

Issue (iii) - Whether the arbitral process must have commenced in order for the Tribunal to refer the parties to arbitration?

1. Section 8(2) of the CA Act expressly contemplates a situation where the arbitral proceedings have not been commenced but curial or other proceedings have been commenced. It provides that in such a situation:

... arbitral proceedings may nevertheless be commenced or continued, and an award may be made, while the issue is pending before the court.

1. The Tribunal concludes that the fact that no arbitral proceedings are on foot at the time of the action being commenced or at the time of the respondent's request pursuant to s 8(1) of the CA Act does not prevent that request being made or that the court (the Tribunal in this case) being compelled by the terms of s 8(1) to refer the parties to arbitration. The reference to the arbitral proceedings progressing while the curial or other proceedings are 'pending' is suggestive that where this situation arises, the correct approach for the Tribunal is to stay the proceedings referred by the Commissioner. Although the respondent originally sought an order dismissing the proceeding, the respondent now seeks an order staying the proceeding.

Issue (iv) - Whether the nature of the dispute is one that is contemplated by clause 16 and thereby falls within subject matter of the arbitration agreement/clause?

1. Again, in Shakur the Tribunal concluded that the express terms of clause 16 are wide enough to encompass a claim that the respondent did not build the pool correctly either by reference to a manufacturing guide or standard such as the Building Code of Australia/National Construction Code. Both allegations commonly comprise the basis of claims that a regulated building service is not proper and proficient or is faulty or unsatisfactory for the purposes of s 5(1) of the BSCRA Act and therefore comprise a 'building service complaint'. Further, such a claim may also comprise a breach of the contract in that the construction is not 'proper and workmanlike' as provided for by clause 1(a) of the contract between the parties.
2. Clause 16 encompasses:

... any dispute, disagreement or difference between ... [the parties] ... at any time whatsoever as to any matter or thing arising hereunder or in any way concerned or connected herewith or relating to the construction of this Contract[.]

[Emphasis Added]

1. The construction of the pool falls within the ambit of 'any matter ... arising hereunder'. The facts of a claim in contract and a 'building service complaint' in this respect are the same. So will a claim for a breach of a specific detail term in the contract concerning the level of the filled pool and its operation when filled. All those claims form part of the same controversy and factual dispute such as to comprise the one 'matter'. The ambit of disputes that fall within clause 16 could not have been made wider in the context of the contract subject matter. The reference to the word 'matter' is to be interpreted as the whole of the controversy between the parties (and where relevant parties claiming through those parties as explained in Hancock at [149] ff following Rinehart v Hancock Prospecting Pty Ltd & Ors [2019] HCA 13.
2. Section 8(1) of the CA Act requires a court (in this proceeding the Tribunal) to refer an action 'in a matter which is the subject of an arbitration agreement' to arbitration.
3. Whilst the action may be legally characterised differently (that is, a breach of contract differs in legal nature from a statutory claim such that found in s 5(1) of the BSCRA Act, the subject matter of the dispute the controversy/the matter is the same. The claim that is made by the applicants pursuant to s 5(1) of the BSCRA Act in its substance falls within the ambit of clause 16 - that is, the dispute about the construction of the pool is a dispute that falls within the wide and express terms of clause 16 whatever its legal causes and rights to relief may be raised by those facts. .
4. The Tribunal concludes that the subject matter of the applicants' action and the matter or controversy between the parties comprised in this proceeding falls within the subject matter of clause 16 and is therefore a dispute to which the arbitration obligations provided for by clause 16, apply.

Issue (v) - Whether the respondent has requested the Commissioner or Tribunal to refer the parties to arbitration?

1. The respondent's first response to the applicants' claim made in this proceeding to the Commissioner is identified in the respondent's solicitor's first letter dated 1 April 2021. The respondent's position is unequivocally that the respondent will not submit its statement on the substance of the dispute referred to in the applicants' complaint to the Commissioner because it is entitled to rely on the arbitration agreement/clause in the contract (clause 16) for the dispute to be the subject of an arbitral resolution. This was further clarified by the respondent's solicitor's second letter to the Commissioner dated 15 April 2021. The respondent's position is that it will not submit to the jurisdiction of the Commissioner and Tribunal save and except to the extent necessary and permitted by s 8(1) of the CA Act to request the Commissioner or the Tribunal to refer the parties to arbitration. The substance of the respondent's solicitor's letters is:
   1. the complaint discloses a dispute that falls within clause 16 of the contract;
   2. the applicants are obliged to refer the dispute to arbitration for resolution;
   3. as the applicants had instead commenced the proceeding by the lodgement of the complaint with the Commissioner, the respondent is entitled to request that the Commissioner or the Tribunal (following referral) to refer the parties to arbitration of the dispute pursuant to s 8(1) of the CA Act; and
   4. the respondent sought a referral of the parties to arbitration pursuant to s 8(1) of the CA Act by the Commissioner or the Tribunal and an order that the proceeding commenced by the applicants be dismissed.
2. On 8 June 2021, the respondent's counsel appearing at the initial directions hearing sought the referral and relied on clause 16 of the contract and s 8(1) of the CA Act.
3. There is no doubt that the respondent has sought orders from both the Commissioner and the Tribunal to refer the parties to arbitration pursuant to clause 16 and s 8(1) of the CA Act and the Tribunal so finds a request contemplated by s 8(1) of the CA Act has been made on at least three occasions.

Issue (iv) - Whether the respondent's request referred to above is not later than when the respondent was required to submit its first statement of the substance of the dispute?

1. Section 8(1) of the CA Act requires the Tribunal to consider whether the respondent has 'submitted its first statement on the substance of the dispute, that is, a statement about how the substantive dispute ... should be determined' (Nu-Fortune Gold Ltd v Roxbury Trading Pty Ltd [No 3] [2019] WASC 469 (Nu-Fortune) per Allanson J at [41] also citing Australian Maritime Systems Ltd v McConnell Dowell Constructors (Aust) Pty Ltd [2016] WASC 52 at [92]- [93] and CPB Contractors Pty Limited v Celsus Pty Limited [2017] FCA 1620; (2017) 353 ALR 84.
2. The respondent has made no statement on how the substantive dispute - the controversy about the construction of the pool - should be resolved in respect of the applicants' complaint made to the Commissioner and now before the Tribunal. The respondent's solicitor wrote the letter dated 1 April 2021 in response to the Commissioner's letter to the applicants and respondent dated 29 March 2021 requesting the respondent:

... to provide its written comments and intentions in relation to items one to two of this complaint, including any supporting evidence to this office within 14 days of this letter[.]

1. The Tribunal concludes that the respondent has at all times since the commencement of the complaint lodged with the Commissioner, only sought that the Commissioner and now the Tribunal refer the parties to arbitration in terms of both of the respondent's solicitor's letters and further by the submission made at the directions hearing on 8 June 2021. The facts of this proceeding do not allow the Tribunal to conclude that the respondent submitted to the jurisdiction of the Commissioner or Tribunal and responded to the substantive dispute between the parties in any way (unlike the position in Nu-Fortune).
2. The Tribunal concludes that the respondent has not submitted any statement on the substance of the dispute between the parties. When its substantive response was sought by the Commissioner on 29 March 2021, it refused to provide the same and instead relied on the provisions of clause 16 and s 8(1) of the CA Act. The Tribunal concludes that the respondent's request for the Commissioner to refer the parties to arbitration made pursuant to s 8(1) of the CA Act was made on 1 April 2021, 15 April 2021 and to the Tribunal on 8 June 2021 and it has not yet made any submission on the substantive dispute.

1. For the above stated reasons, the provisions of s 8(1) of the CA Act are met so that the Tribunal 'must' refer the parties to arbitration pursuant to clause 16. Section 8(1) of the CA Act is drafted in 'pre-emptive terms and in respect of which there is no discretion to depart whether or not to refer a dispute to arbitration' as noted by Martin CJ in Pipeline Services WA Pty Ltd v Atco Gas Australia Pty Ltd [2014] WASC 10 at [92]. Further, s 5 of the CA Act provides that:

In matters governed by this Act, no court must intervene except where so provided by this Act.

1. In Shakur, arbitral proceedings were on foot and in that particular situation the Tribunal concluded that the proceeding before the Commissioner and then the Tribunal was misconceived and dismissed the proceeding after first referring the parties to arbitration by order of the Tribunal.
2. In this proceeding the respondent sought an order for referral and dismissal of the proceeding as being misconceived pursuant to s 47 of the State Administrative Tribunal Act 2004 (WA) (SAT Act) or for want of jurisdiction. Since then, the respondent has changed its position and now seeks an order 'to the effect staying' the proceeding (see para 4.4 of the respondent's SIFC. The Tribunal accepts the respondent's submission that it should stay the proceeding rather than dismiss the proceeding as no arbitral proceedings have been commenced. The purpose of the stay is to give effect to or in aid of the mandated referral called for by s 8(1) of the CA Act (Hancock per Quninlan CJ citing Hi Fert Pty Ltd v Kiukiang Maritime Carriers Inc (1998) 86 FCR 374) and to achieve consistency with the mandated obligation on the Tribunal in this proceeding, where s 8(1) of the CA Act applies, to refer the parties to arbitration (Hancock per Vaughn and Beech JJA at [510]-[513]). The Tribunal concludes that the correct order to be made in this proceeding is that this proceeding be stayed for a period of time in which the applicants may commence and pursue arbitration proceedings of the dispute. The order that the Tribunal shall make is that the proceeding is stayed until further order. However, the proceeding must not be permitted to linger indefinitely. Section 9 of the State Administrative Tribunal Act 2004 (WA) requires that matters must be determined reasonably swiftly in the circumstances. The practice of the Tribunal has been to not allow proceedings to be adjourned 'sine die' and so to that end, the Tribunal will also order that the proceeding be listed for a directions hearing not before 31 December 2021, lest there be any part of this proceeding that escapes the ambit of the subject matter of clause 16, which for the reasons given is unlikely. If there is no utility in this proceeding either because the arbitration is on foot at that time or because the applicants continue to not comply with the obligation imposed by clause 16, the Tribunal will then consider a dismissal of the proceeding.

1. The parties are referred to arbitration pursuant to clause 16 of the contract between the parties dated 7 June 2015 in respect of all complaints before the Tribunal relating to the faulty or unsatisfactory work or work not carried out in a proper and proficient manner in respect of the pool constructed by the respondent pursuant to that contract which was made by the applicants pursuant to s 5(1) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) to the Building Commissioner of Western Australia on 4 March 2021 and referred to the Tribunal on 7 May 2021 pursuant to s 11(1)(d) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA).
2. The proceeding is stayed until further order of the Tribunal.
3. The proceeding is listed for further directions on a date to be fixed but not before 31 December 2021, at which proceeding the Tribunal will consider the dismissal of the proceeding pursuant to s 47 and s 48 of the State Administrative Tribunal Act 2004 (WA).
4. As to the respondent's application for an order for costs of the determination of the preliminary issue:

(a) The respondent shall by 30 August 2021 provide to the Tribunal and to the applicants:

(i) a statement of the claimed costs and the basis of the same, including the calculation and basis of the calculation; and

(ii) the respondent's submissions and any documents relied upon in support of the claim for costs.

(b) The applicants may by 15 September 2021 provide to the Tribunal and to the respondent any submissions in opposition to the respondent's claim for costs and any documents upon which they seek to rely.

(c) Subject to further order, the Tribunal shall determine the respondent's application for costs of the determination of the preliminary issue on the documents.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.