Lamac Developments Pty Ltd v Devaugh Pty Ltd [2002] WASCA 245

Lamac Developments Pty Ltd v Devaugh Pty Ltd [2002] WASCA 245 - WASCA 2002 case summary — Zoe

[34]

"It seems to me that s 38 does not impinge upon the issue of finality, or otherwise, of an order on an application made under s 38(4)(b) but instead does no more than ensure that, once an award is varied on an appeal under s 38(2), the award as varied is to have effect, except for the purposes of s 38 itself (this exception being expressly provided for by subs (6)), as if it were the award of the arbitrator or umpire. Nor does it seem to me that, once leave to appeal is given under s 38(4)(b) and the appeal itself is determined by a single judge of the Supreme Court, there is anything in s 38(6) which should preclude a further appeal, from the decision of the single judge, to the Full Court of that Court.

If I am right in my conclusion that s 38 does not, in terms, provide that there is no appeal from a determination under s 38(5), then this conclusion must be looked at in the light of the fact that s 60(1)(c) of the Supreme Court Act provides that no appeal shall lie to the Full Court from a decision of a judge or Master where it is provided by any Act that such decision is to be final. It would, in the light of this latter provision, have been a relatively simple matter for the framers of the Commercial Arbitration Act to have included a provision as to finality of any decision made by a judge on an application for leave to appeal if it was in fact their wish to foreclose any such right of appeal.

Against that it is, I think, true to say that the scheme of s 38 of the Act is such as to evince an intention to limit the involvement of the Supreme Court to a minimum.

That this is so is, I think, apparent from the provisions of s 38(1), from the fact that an appeal under s 38(2) is limited to one on a question of law arising out of an award and then only by consent or with the leave of the Supreme Court and from the fact that the court's right to grant leave is circumscribed by the provisions of s 38(5).

It is apparent, in particular, from s 38(4) and (5) that, where the jurisdiction of the Supreme Court to hear the appeal is founded upon the grant of leave, that, in turn, is subject to the discretionary considerations provided for by subs (5). The discretionary nature of an order granting or refusing leave does, I think, lend support to the argument, advanced on behalf of the respondent, that a refusal of leave is intended to amount to a final closing of what would, in the absence of consent, be the only door to the appellate jurisdiction of the Supreme Court."

[45]

"... the question of leave to appeal has been entrusted, by s 38(4)(b) and (5) of the Commercial Arbitration Act, when read together with the provisions of the Supreme Court Act, to a single judge of the Supreme Court.

While it is true, as I have said, that the framers of the legislation could, very easily, have included a provision as to finality of the decision of the single judge to whom the application is made but did not do so, it seems to me that the better view is that, notwithstanding that omission, it sufficiently appears from the material provisions of s 38 of the Act, read in the context of the Act as a whole (and having regard for the emphasis of the Act to which I have earlier referred and the intention which, self-evidently, underpins the requirement to obtain leave), that the discretion so entrusted was not intended to be one from which there is any appeal. That is, I think, the 'natural understanding' of the legislation: see Electric Light and Power Corporation (at 560).

In D'Esterre v Austplat Minerals NL (In Liq) (1991) 4 WAR 549 (in which the Full Court of this Court expressed a preference for a construction of s 60(1)(f) of the Supreme Court Act which would lead to the consequence that there can be no appeal from the refusal of a Judge or Master to grant leave to appeal from an interlocutory order or judgment given by that judge or Master) Malcolm CJ, with whom Rowland and Walsh JJ were in agreement, referred with approval to the joint judgment of Fox and Forster JJ in Reid v Nairn (1985) 60 ALR 419 at 421, in which their Honours said (in the context of interlocutory matters) that 'an appeal from the grant or refusal of leave (before the substantive matter is dealt with) is a thoroughly undesirable addition to legal remedies'.

For myself I would have thought that an appeal from the grant or refusal of leave to appeal from the decision of an arbitrator, whether the substantive matter has or has not been dealt with, is likewise a thoroughly undesirable (and unintended) addition to legal remedies in the context of an Act which, as I have said, is designed to provide speedy, informal and comparatively inexpensive relief to litigants and which, as I have also said, is designed to minimise interference by the Supreme Court.

I should perhaps add that it does not seem to me to be open to the appellant to renew its application for leave to appeal from the award in the manner in which the Full Court of this Court has said, in SCM Chemicals Ltd v Saipem Australia Pty Ltd (1991) 4 WAR 569, might be done in the case of a refusal, by a Master, for leave to appeal against an interlocutory order made by that Master.

Once it is accepted, as I do accept, that the intention underlying s 38(4) of the Act is that the decision of a single judge of the Supreme Court on an application under that section should be final then it seems to me to matter little whether the contemplated further approach to the Supreme Court is one by way of a right of appeal or one by way of the renewal of an application for leave to appeal. Either approach (and that of renewal has not been pursued in these proceedings) is in my view intended to be excluded, regardless of whether the order refusing leave to appeal is regarded as interlocutory or final.

In any event, so far as this last point is concerned, the decision in SCM Chemicals dealt only with the renewal of an application for leave to appeal which had been made ex parte under the provisions of s 60(3) of the Supreme Court Act. The court there referred to and relied in part upon the provisions of O 63, rr 7(2) and 8 of the Rules of the Supreme Court which address only the situation in which an ex parte application has been refused by a judge or Master. Those rules have no application to the situation which prevails in this case in which, by virtue of the provisions of O 81D, r 10, a motion for leave is required, in effect, to be brought inter partes, involving the issue and service of a summons for directions addressing inter alia, such matters as the filing and serving of written submissions."

[74]

"A final judgment is one which finally disposes of the rights of the parties: Hall v Nominal Defendant [(1966) [1966] HCA 36; 117 CLR 423, at 439-440, 443]; Licul v Corney[(1976) [1976] HCA 6; 50 ALJR 439 at 444]; Port of Melbourne Authority v Anshun Pty Ltd [No 1] [(1980) 147 CLR 35 at 38]; Carr v Finance Corporation of Australia Ltd [No 1] [(1981) 147 clr 247 AT 248, 253-254]. It was not suggested that the order of the Federal Court in the present case finally disposed of the rights of the parties under s 90 of the Patents Act: obviously it did not. What was contended by Mr Lyons on behalf of Sanofi was that the order of the Federal Court finally determined that Parke Davis had a right to appeal to the Federal Court. The order proceeded on the basis that Parke Davis had a right to apply for leave to appeal, and that it was competent to the Federal Court to grant it leave to appeal. However, it was submitted that Parke Davis had no right to seek or obtain leave to appeal, since it had not been a party to the proceedings in the Supreme Court. It was submitted that a power of appealing is a right, and not a matter of mere procedure, and that the order of the Federal Court finally disposed of that right in the present case.

There is, as Mr Handley for Parke Davis submitted, a short and conclusive answer to that contention. The Federal Court did no more than grant leave to file and serve a notice of appeal. It is always open to a court which has granted leave to appeal or special leave to appeal to rescind that grant if it later appears to the court, in the light of further information or argument, that the leave or special leave should not have been granted. That course has been taken by this Court in appropriate cases. The order of the Federal Court therefore did not finally dispose of the right of Parke Davis to appeal, or of the right of Sanofi to hold its judgment free of any possibility of appeal, because the Federal Court might, on reconsideration, rescind the grant of leave. It is irrelevant whether or not it is likely that the Federal Court would make an order rescinding the grant of leave, since it is the legal force of the judgment in question, and not its practical effect, that has to be considered in determining whether or not the judgment is a final one: see Hall v Nominal Defendant [(1966) 117 CLR at 440-441, 444-445]; Carr v Finance Corporation of Australia Ltd [No 1] [(1981) 147 CLR at 248, 256-257]. For those reasons the order of the Federal Court was interlocutory and there was no right of appeal from it to this Court. The objection to competency was accordingly upheld."

[224]

At the times for payment claims stated in the Annexure and upon issue of a Certificate of Substantial Completion and within the time prescribed by Clause 42.7, the Subcontractor shall deliver to the Main Contractor's Representative claims for payment supported by evidence of the amount due to the Subcontractor and such information as the Main Contractor's Representative may reasonably require. Claims for payment shall include the value of work carried out by the Subcontractor in the performance of the Subcontract to that time together with all amounts then due to the Subcontractor arising out of or in connection with the Subcontract or for any alleged breach thereof.

Within 21 days after receipt of a claim for payment, the Main Contractor's Representative shall issue to the Main Contractor and to the Subcontractor a payment certificate stating the payment which, in the opinion of the Main Contractor's Representative, is to be made by the Main Contractor to the Subcontractor or by the Subcontractor to the Main Contractor.

...

If the Subcontractor fails to make a claim for payment under Clause 42.1, the Main Contractor's Representative may nevertheless issue a payment certificate.

Subject to the provisions of the Subcontract, within 35 days after receipt by the Main Contractor's Representative of a claim for payment or within 14 days of issue by the Main Contractor's Representative of the Main Contractor's Representative's payment certificate, whichever is the earlier, the Main Contractor shall pay to the Subcontractor or the Subcontractor shall pay to the Main Contractor, as the case may be, an amount not less than the amount shown in the Certificate as due to the Subcontractor or to the Main Contractor as the case may be, or if no payment certificate has been issued, the Main Contractor shall pay the amount of the Subcontractor's claim. A payment made pursuant to this Clause shall not prejudice the right of either party to dispute under Clause 47 whether the amount so paid is the amount properly due and payable and on determination (whether under Clause 47 (or as otherwise agreed) of the amount so properly due and payable, the Main Contractor or Subcontractor, as the case may be, shall be liable to pay the difference between the amount of such payment and the amount so properly due and payable.

Payment of moneys shall not be evidence of the value of work or an admission of liability or evidence that work has been executed satisfactorily but shall be a payment on account only, except as provided by Clause 42.8."

[238]

"The claim was in fact in error because the Claimant was not entitled to all the money claimed so Lamac were in fact in default.

To attempt to keep interest on monies that were not due is not contractually correct.

The Claimant was not kept out of all their money, because they were not owed all of it.

I have read the judgement of the Supreme Court 1999 WASCA 280, which deals with the appeal by Devaugh against the judgement by Master Bredmeyer on 25th June, 1999, in which Devaugh were ordered to pay Lamac the sum of $675147.14 plus interest of $62609.99.

The decision of the appeal was delivered on 8th December, 1999, by which time the interest had amounted to $85031.43, calculated at the rate of 18% per annum, compounded at 6 monthly intervals.

The claimant has repaid the sum of $179218.46 on 4th July, 2000 as a result of the agreements reached at mediation. The Claimant also repaid a further sum of $145,987.32 on 15th August, 2000 as a result of a reduction of claims made in Folder F and an amount of $400.40 as a result of back charges. This makes a total repayment of $325606.18.

At 57 on page 22 of the Supreme Court Judgement, Malcolm CJ says in the last sentence, 'In the event the claims were found to be excessive Lamac would be obliged to refund any excess to Devaugh.'

In my view, if Lamac are obliged to refund part of the principal they must also be obliged to refund part of the interest.

As the original interest was calculated at 18% per annum as set in Cl.42.9. I see no reason to alter that percentage figure for the purpose of calculating refund amounts of interest and under Cl. 47.3 I consider the amount of 18% per annum compounded at 6 monthly intervals to be reasonable in this instance.

I do not agree with counsel for the Claimants submission, that the Arbitrator is being asked to overturn a decision on interest, of the Full Court. Rather my understanding of the judgement is that the interest was calculated on the amount claimed for the time outstanding. If the amount claimed was excessive then the interest would also be excessive.

The total amount of the over payment is $431501.78 as shown in the following calculations."

[279]

"Which party was successful?

Both parties in their written submissions made much of the settled practice that costs will always be awarded to the successful party unless there are special circumstances that indicate grounds to decide otherwise.

The Claimant submits categorically that it is the successful party and should receive all its cost.

The Respondent also categorically submits that it was the successful party and should receive all its costs.

The flow of money has been from the Claimant to the Respondent and my award states that the Respondent is the successful party.

The Claimant asserts it was successful based upon the assertion by Devaugh that no money was due to Lamac and it was necessary for Lamac to proceed with Arbitration in order to recover monies due.

As a result of the mediation the parties agreed on the value of all claims by the claimant as set out in the first interim award at $343,935, which resulted in the Claimant paying to the Respondent an amount of $179,218.46

The Claimant also repaid an amount of $145,987.32 on 15th August, 2000, as a result of revaluation of Folder F.

As a result of the second interim award the Respondent has been successful in being entitled to recover a further $121,182 not including interest.

It would then seem that as a result of the arbitration process, which was initiated by Devaugh Pty. Ltd., even though they are referred to as the Respondent (the order was changed during the Arbitration process by agreement.) They have managed to recover or are entitled to recover an amount of $446,451.

I agree with the Claimants submission that they have been found to be entitled to the sum of $366,011. However, the respondent has already paid $675,147. to the Claimant by order of the Supreme Court of W.A. for claims, that from the result of the Arbitration, were found to be approximately 50% in excess of what was due, plus together with counter claims have resulted in the Respondent being due the amount of $446,451 plus interest. If Devaugh had not instigated Arbitration proceedings I consider that they would not have recovered or been found to be entitled to recover the amount of $446,451 plus interest.

As was pointed by counsel for the Claimant in Schere v Counting Instruments Ltd (1986) 1 WLR 621 in the Court of Appeal (Eng.)

'------the normal rule is that costs follow the event. That the party who turns out to have unjustifiably given another party cause to have recourse to the courts to obtain his rights is required to recompense that other party in costs.'

For the reasons above I consider that Devaugh Pty. Ltd. must be considered the successful party."

[285]

"The arbitrator began with an accurate statement of principle that the general rule is that the successful party shall receive its costs unless there are special circumstances to indicate otherwise (Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [66], [67] - [68], [134]). He also applied the common rule that a successful party is to be identified as that to whom there is a final flow of money (Badge Constructions Pty Ltd v Penbury Coast Pty Ltd [1999] SASC 6; Keywest Construction Group Pty Ltd v Footscray Holdings Pty Ltd, unreported; SCt of WA (Anderson J); Library No 930078; 23 February 1993).

His appended reasons were directed to the question of identifying which party was successful. He correctly recognised there had been numerous claims and counterclaims.

Lamac's argument that it was necessary for it to proceed with arbitration originally because of Devaugh's claim that no further money was payable to Lamac so that Lamac had to proceed in order to recover moneys due, is true, but is only one of a range of relevant considerations, and it is one to which the arbitrator expressly had regard. It therefore cannot be said that the exercise of his discretion miscarried because he failed to take it into account.

It was likewise open to the arbitrator to conclude that if Devaugh had not instituted arbitration proceedings, it would not have been found entitled to receive $446,451 plus interest. There were various factors and considerations which had to be taken into account; the arbitrator seems to have considered them. Beyond that point, it becomes a question of relative weighting. I accept Devaugh's submission that a failure to give sufficient weight to the success of one party on issues on which the party was successful in the context of a determination of costs, will not amount to a manifest error of law (Crewford Pty Ltd v Transit Australia Pty Ltd, unreported; SCt of Qld; 5600/98; 23 March 1999 [13]).

What the applicant seeks to complain of here is not the arbitrator's failure to recognise the proper legal principles, but rather the manner of his application of those principles to the circumstances of the case. In short, the complaint is about the exercise of his discretion. That would not normally give rise to a question of law (Miles v Palm Bridge Pty Ltd [2001] WASC 42 (under appeal)).

I do not discern in the award, nor the arbitrator's reasons, an incorrect statement of legal principle. In my view, no error of law is apparent. That being so, leave to appeal must be refused."

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (287 paragraphs)

Lamac Developments Pty Ltd v Devaugh Pty Ltd [2002] WASCA 245 (4 September 2002)

The Rate of Interest Awarded by the Arbitrator

Parties

Legislation Cited (12)

Cases Cited (29)