Peter Schwartz (Overseas) Pty Ltd v Morton [2003] VSC 144

Supreme Court of Victoria|2003-05-16|Before: BYRNE J

ARBITRATION - application for extension of time - leave to appeal - setting aside award for misconduct - sufficiency of statement of reasons.

The trade rules governing the sale of grain between the plaintiff, Jonathon Danton Morton ("the seller") and the defendant, Peter Schwarz (Overseas) Pty Ltd ("the buyer") were those of the National Agricultural Commodities Marketing Association ("NACMA"). Pursuant to NACMA Trade rule 26, disputes between NACMA member buyers and sellers are to be submitted to and settled by arbitration in accordance with the NACMA arbitration rules.

In late 2000 disputes arose between the buyer and the seller regarding six contracts for the delivery of grain, and these disputes were referred by the buyer to arbitration pursuant to the NACMA arbitration rules. On 28 November 2002 the Arbitrators made their "Interim Final Award" dealing with the disputes submitted to them other than those with respect to costs. By the award the Arbitrators allowed the claims of the buyer with respect to three contracts only, awarding to it the sum of $385,948.80 together with interest which was determined to amount to "around $77,190" as at the date of hearing.

The award was received by the seller on 4 December 2002.

In proceeding No. 8727 of 2002 the buyer sought ex parte and, on 30 January 2003, obtained, from the Master leave pursuant to the Commercial Arbitration Act 1984 s.33 to enforce the award as an order of the Court. The Master ordered that the seller pay to the buyer $463,138.80 plus costs.

Before the Court are two applications brought by the seller:

(a) Application in proceeding No. 8727 of 2002 brought by summons filed on 12 March 2003 seeking to set aside the orders of the Master.

(b) Application in proceeding No. 4842 of 2003 brought by originating motion filed on 11 March 2003 and summons filed on 18 March 2003 under which he ultimately seeks -

(i) an extension of time for the bringing of an application pursuant to s.38 for leave to appeal against the award; and

(ii) leave to appeal pursuant to s.38(5);

(iii) an extension of time for bringing an application pursuant to s.42 for an award seeking to set aside the award for arbitral misconduct;

(iv) an order setting aside the award for arbitral misconduct pursuant to s.42.

In proceeding No. 4842 of 2003 the seller gave notice of his wish that the proceeding be transferred to the Supreme Court of New South Wales pursuant to the Jurisdiction of Courts (Cross-Vesting) Act 1987. I am not entirely sure what was intended by this. In any event, counsel for the seller announced at the outset that he was not pressing this matter and I will say nothing further about it.

In his order of 30 January 2003 the Master, pursuant to Ch. II r.9.05(a) of the Rules of Court, fixed 21 days after service as the time within which application might be made to set aside his order. Service was effected on 19 February 2003 so that the time expired on 12 March 2003. The application in proceeding 8727 of 2002 to set aside the order was therefore brought within time.

Pursuant to Ch. II r.4.06 of the Rules of Court an application pursuant to s.38 for leave to appeal against an award must be brought within 28 days after the date the award is published, that is, by 13 January 2003 in this case. The present application was not brought until 11 March 2003 - 58 days' late.

Pursuant to Ch. II r.9.08 of the Rules of Court an application pursuant to s.42 to set aside an award must be filed and served within 42 days after the award is made, that is, by 27 January 2003 in this case. In this proceeding an application to amend the originating motion in proceeding No. 4842 of 2003 to seek relief under s.42 was foreshadowed by notice given on 3 April 2003 - 66 days' late.

In each case, the application was made or foreshadowed well after the Master gave leave to enforce the award on 30 January 2003.

Since many, but not all, of the matters urged for and against the extension of time applications were common to the two applications, it is convenient to deal with them together.

In support of the time extension, counsel for the seller addressed four matters: the length of the delay, the reason for the delay, whether the applicant showed an arguable case, and whether there was any prejudice shown to have been suffered by the respondent buyer. In Doran Constructions Pty Ltd v Health Administration Corporation of New South Wales[2], the New South Wales Court of Appeal held that an applicant for extension of time for leave to appeal pursuant to s.38 must show, first, an explanation for the delay, second, a substantial point to be argued and third, a demonstration of injustice if the applicant is prevented from arguing the point. The task of the Court is to exercise its discretion having regard to these matters and any other matters placed before it to determine where the justice of the case points. These matters must be weighed against the evident purpose of the arbitral regime that there be finality to disputes at an arbitral level.[3] To my mind, this is an approach that I should adopt in considering, not only the time extension application to bring the s.38 application for leave, but also the time extension application for the s.42 application.[4]

Counsel for the seller conceded that the delay was not insubstantial but said that this should not determine the matter when the other factors are brought into account. It was put that the reason for the delay was the mistake of the solicitors for the seller who took the view that time did not commence to run until a final award on costs had been published. This is not correct, given the definition of award in s.4, but the solicitor was not aware of this. It was pointed out that the seller instructed his solicitor in mid-December to seek to have the award set aside, so that the delay was in no way due to any default on his part. I accept this to be the case.

In Technical Team Projects Pty Ltd v Noble Dunn Pty Ltd[5], Cole J summarised a number of Court of Appeal decisions which considered the circumstances relevant to the determination of an extension of time application in circumstances such as the present. Included in them is the existence of a substantial point to be argued.[6] Ordinarily, this would involve the Court forming some preliminary view of the ultimate prospect of success of the application for leave to appeal which, in turn, would involve an assessment of the allegation that there was a manifest error on the face of the award.[7] I mention this because in the Technical Team Projects case[8], Cole J appears to be saying that these matters are immaterial to the question whether to extend time except insofar as the Court must be satisfied that the grant of an extension would not be a futile exercise because the questions of law raised are of no substance. If, indeed, his Honour is saying this, it appears to fly in the face of the conclusion he reaches and in the face of the Court of Appeal authority upon which he relies. I mention in particular the passage from the judgment of Kirby P in Galea v New South Wales Egg Corporation[9]. I refer, too, to the unreported decision of our Court of Appeal in Far Eastern Shipping Co Ltd v Abramkin[10]. It would seem that, at the discretion level at least, the Court should have regard to the prospect of success of the point of law in order to weigh against it the factors which would suggest that an extension of time should be refused.

In his proposed notice of appeal the seller puts forward no less than seven questions of law, two of which have a number of sub-questions.

The principal claim which the Arbitrators upheld was that under contract 1466 dated 18 April 2000. Pursuant to this contract, the purchaser purchased 150 FCL of chick peas for shipment "October/November 20th 2000". The Arbitrators found that, by letter dated 10 November 2000, the seller intimated that he would not deliver the goods against the contract. They concluded that this amounted to a repudiation which was accepted by the buyer in "subsequent correspondence". They do not specify the date of acceptance but it must have been prior to 5 December 2000 because they concluded also that the seller's letter of that date was ineffective to terminate the contract, as the seller contended, for it had already been terminated. So much appears from the award.

The questions of law said in the draft notice of appeal to arise from this were the following:

"10. Whether the [seller's] correspondence dated 10 November 2000 constituted a repudiation of his obligations under contract 1446. 11. Whether the correspondence dated 9 and 10 November 2000 amounted to a termination of contract 1446. 12. Whether the [seller] was entitled to terminate contract 1446 on 6 December 2000 pursuant to NACMA Trade Rule 13.3. 13. Whether the correspondence from the [seller] dated 5 December 2000 but sent on 6 December 2000 had the effect of terminating contract 1446."

In accordance with orthodox contractual principles, a statement made without good cause by a seller that it will not deliver against contract is a repudiation of the contract. The contract, however, remains on foot until the purchaser accepts the repudiation. The question whether the seller's letter conveyed the meaning which the Arbitrators found is a matter of fact. Inasmuch as its characterisation as repudiatory is a question of law, this is not a matter in which an applicant for leave to appeal could have very much confidence. Inasmuch as the reference to it in the award entitles me to look at the letter, I am confident that the Arbitrators were correct in treating it as a repudiation. Inasmuch as I am not, there is nothing before me to suggest that they fell into error. The question in paragraph 10 is not a point of substance.

The question raised in paragraph 11 must inevitably be answered in the negative. It is not the repudiation of a contract but its acceptance which brings about its termination. The Arbitrators in paragraphs 2 and 3 of their findings demonstrate that they were aware of these principles and applied them. There is no point of substance here.

Paragraphs 12 and 13 raise the question of the entitlement of the seller to terminate the contract pursuant to clause 13.3 of the NACMA Rules, as it purported to do by letter dated 5 December 2000. Clearly this cannot be the case if the contract has already been terminated, as the Arbitrators found. This paragraph raises no substantial point.

The question of law in paragraph 14 of the proposed notice of appeal is that the Arbitrators insufficiently set out the reasons for their conclusions on eight matters. I was referred to authority which stated that a failure to state sufficient reasons may be an appellable question of law arising out of an award within the meaning of s.38(2)[11], leading to the conclusion that the Court might uphold an appeal based on this matter. I see difficulties with this conclusion. The right of appeal, otherwise than by consent, is severely circumscribed by s.38(5). The would-be appellant must satisfy both of the two criteria:

"(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."

In the present case, the complaint is not that the Arbitrators fell into error of law, but that they failed sufficiently to provide reasons to enable a party to determine whether some error of law was made. In such a case, the applicant must show that a determination of the review court that the reasons for the award were deficient "could substantially affect the rights of [a party]" within the meaning of paragraph (a). The likely consequence of such determination is that the matter would be remitted to the Arbitrators for them to provide sufficient reasons. The rights of the arbitrating parties under the award are not thereby affected except insofar as the right to enforce it might be stayed at the same time. Furthermore, in the case where the award lacks reasons entirely, there is a real difficulty in pointing to a substantive error of law which is "on the face of the award"[12], which is a further precondition to the granting of leave to appeal. A further practical problem is that, historically, the review court sets its face against looking at material which was not part of the award itself. This attitude is found in the modern requirements of s.38(5)(b)(i) that there be "a manifest error of law on the face of the award". Where reasons are wholly absent, it may be possible to characterise this silence as itself an error on the face of the award. Where, on the other hand, it is put that the reasons given are inadequate or where they fail to deal with the specific contention in issue in the arbitration, the resort to the terms of the award alone will often not advance matters.

In the present case I was pressed with much material showing what issues were argued before the Arbitrators in support of a submission that these issues were not dealt with by the Arbitrators in their award or reasons. Indeed, in RP Robson Constructions Pty Ltd v D & M Williams[13], Giles J expressed the view that it was appropriate for the Court to look at this material.

In Sydney Water Corporation Ltd v Aqua Clear Technology Pty Ltd[14], Rolfe J addressed the question as to the proper remedy where the Arbitrator has given insufficient reasons. Accepting authority which would approach the question as an appellable question of law, his Honour concluded that the proper course is for the Court to remit the matter to the Arbitrator for reconsideration with a direction that full reasons be provided. This was also the view taken by Giles J in Sabemo Pty Ltd v Malaysia Hotel (Aust) Pty Ltd[15]. With respect, it is the view which I, too, would prefer to adopt. I should remark, however, that the point was not argued before me and I will not therefore express a concluded view on the matter. It is not necessary to do so since the seller would raise the same complaints as misconduct in its s.42 application and I shall deal with these in my consideration of its application to extend time to bring that application.

Paragraph 15 of the proposed notice of appeal returns to contract 1446:

"15. Whether it was open to the Arbitrators to assess damages in respect of contract 1446 in the sum of $372,600 based upon a market price of $530 per tonne for Desi Chick peas."

There is no substantial point here. It seems that what the seller really wants to say here is that the Arbitrators should not have acted upon the evidence as to market price which was before them because the evidence related to a different type of chick pea. This is a matter of fact; not a question of law.

The final so-called question of law is that set out in paragraph 16:

"16. Whether the Arbitrators were required to consider in assessing damages in respect of contract 1446: (a) that the appellant was entitled to withhold shipment of the goods and terminate the contract three days after the commencement of the shipping period pursuant to NACMA Trade Rule 13.3; (b) that the appellant purported to terminate the contract pursuant to NACMA Trade Rule 13.3 on 5 December 2000; (c) that the respondent's position was unchanged by any breach of the contract by the appellant because the appellant would have withheld the goods and terminated the contract pursuant to NACMA Trade Rule 13.3 in any case; and (d) the contract between Premium Grain Handlers and TLC Exports Pty Ltd dated 10 November 2000."

The Arbitrators were, of course, obliged to consider and have regard to all the relevant evidence before them and to the submissions based on that evidence. As expressed, this point is of no substance. In any event, it does not appear from the award that the Arbitrators failed to have regard to these matters or that the award is infected with error in any of the suggested respects.

Under s.42, an aggrieved party may seek to have an award set aside wholly or in part for misconduct. The matters which the seller would raise as amounting to misconduct in this case fall into two broad categories. First, that he was denied legal representation and, second, that in their reasons the Arbitrators did not deal with the seller's contentions or that they failed in their award to set out the facts which they found or the reasons which they employed to arrive at their award.

As to legal representation, the Arbitrators denied to the seller the right to be represented upon his application pursuant to s.20 for leave to be represented and, having been denied leave, he was not represented at the hearing. The reasons for so deciding are set out in the award. I should mention that the scheme of the NACMA arbitration rules shows that, to a very large extent, these arbitrations are presented in written submissions, with no constraint upon the involvement of lawyers in the preparation of these papers.[16] Furthermore, r.8.7 of the NACMA arbitration rules prevents a legal practitioner from attending the oral hearing without the leave of the Arbitrators. I should add that the buyer also was not represented at the hearing of this arbitration.

The fact of the denial to a party of leave to be represented cannot, without more, amount to a denial of natural justice. Nor is it misconduct for the Arbitrators, having considered the matters relevant to their discretion and to no impermissible matters, to have exercised their discretion adversely to the seller.[17] The Commercial Arbitration Act s.20 contemplates that representation is the exception rather than the rule. In this case, there is nothing further alleged, no inequality in the opportunity of the seller to present his case. It is not suggested that the Arbitrators had regard to impermissible material or that they failed to have regard to what was put before them. There is no substantial point here.

The second category takes the argument back to the reasons for the award. Again, a want of adequate reasons in an award may amount to misconduct but s.42 does not appear to be the appropriate vehicle. As I have mentioned, I would prefer resort to s.43. Since the point was not taken and argued, I will, nevertheless, consider the matters of complaint, reserving to myself the possibility that if the complaints are made out, I should remit the matter rather than set aside the award.

The matters of complaint are listed over five pages of the seller's draft points of claim. They are confused, confusing and repetitious. In his helpful outline of submissions, counsel for the seller narrowed these down to eight or perhaps 11 matters which he contended were submissions seriously put to the Arbitrators and which in their reasons they either ignored or rejected.

It is the duty of an Arbitrator to consider and deal with all matters the subject of the reference.[18] Commonly, the arbitrating parties will present contentions of fact and law in support of their own case in opposition to that of the opponent. Often there will be multiple contentions put forward, sometimes in the alternative to those which have preceded them. The Arbitrators must have regard to them all. When it comes to preparing the award pursuant to s.29(1), and to "a statement of reasons for making the award", the obligation is not identical. The statutory requirement that the reasons be "reasons for making the award", means that the Arbitrators are not required to provide reasons which did not lead to the determination of the disputes referred to arbitration. Accordingly, it is not necessary for them to deal with an alternative basis of claim or defence when the primary claim or defence has been accepted.

The requirement for reasons in s.29 means that the Arbitrators must set out the facts which they have found and the legal principles which they have relied upon as the foundation for the award and that this should be in terms sufficient for the parties to understand why they have won and lost and for them to decide whether to make and for the Court to determine an application for leave to appeal or enforcement.[19]

I have mentioned the purposes which the statement of reasons is to serve. The statement of reasons, at a minimum, must be sufficient to achieve these purposes. I say "at a minimum", because I am concerned with the point at which the Court will take an active interest in the insufficiency of reasons; the prudent Arbitrator will not be tempted to stray close to this cliff edge. The question may arise whether a particular contention must be dealt with in the statement of reasons. Judges, mindful of their own judgment-writing experience, have been careful not to impose upon Arbitrators a burden greater than their own. And so, there is no need to deal with contentions which are frivolous, irrelevant or even peripheral to the matters in issue.

This has led the Court to stipulate that Arbitrators must deal with every "submission worthy of serious consideration"[20]. In Fletcher Construction Australia Ltd v Lines MacFarlane and Marshall Pty Ltd[21] the Court of Appeal in this State said that a reasoned judgment of a court must "deal with the central contentions advanced by the parties". However the test is expressed, the minimum requirement is not that the Arbitrators deal with every contention. Precisely where the line is to be drawn in a given case will depend upon the circumstances, including the relevance of the contention to the Arbitrators' conclusions. The decision to deal in the reasons with a particular rejected submission may also depend upon an assessment of its weight, particularly in a case where the arbitrating parties are not legally represented. Putting it bluntly, some points are so obviously bad that no good purpose is served by dealing with them in any detail. I need hardly add that the prudent Arbitrator will prefer to err on the side of comprehensiveness in order that the award should be of benefit to the parties.

A further matter bearing upon the application of this principle is that the Arbitrators will commonly not have had the benefit of legal training. Accordingly, Smart J in a much quoted passage has said this:

"Elaborate reasons finely expressed are not to be expected of an arbitrator. Further, the court should not construe his reasons in an overly critical way."[22]

In what are often called trade arbitrations, the parties and the Arbitrators are all engaged in a particular trade. In such an arbitration the reasons may be expressed in the jargon of the trade or they may ignore matters which will be well known to the participants. Such an award which may appear deficient to an outsider, may nonetheless satisfy the fundamental purpose of the statement of reasons. It cannot be the case that an award should be drafted only with an eye to informing an appeal court which may be unfamiliar with the trade and its practices.

I turn now to the contentions advanced on behalf of the seller with which, it is said, the statement of reasons does not deal. I remind myself that the submission here under consideration is not that the Arbitrators fell into error in rejecting the contentions before them; it was that they did not in their award give reasons or sufficient reasons for their rejection.

Before I turn to these contentions in any detail, it is necessary to note that this was the third arbitration which the parties had conducted with respect to these claims. The first two awards were set aside by consent and I have no regard to them for present purposes other than to note that the issues between the parties had previously been well worked over. The present arbitration was conducted pursuant to terms of settlement dated 14 June 2002 under which the second award dated 14 February 2002 was agreed to be void and unenforceable. The subject matter of the dispute was referred to arbitration before a new arbitral panel under the NACMA arbitration rules. The terms also provided for the parties to file written supplementary submissions and written submissions in reply. There was provision for an oral hearing and agreement that the Arbitrators may have regard to the "existing arbitration file". I have for the purposes of this application, examined the written submissions prepared by the solicitors for the parties and presented to the Arbitrators.

The contentions in question were the following:

(1) That there was an implied term of each of the contracts that, if the seller failed to make delivery, the purchaser would accept "a nominal wash-out amount" in full and final satisfaction under the contract.

It was contended that this was a term to be implied in each of the contracts by established practice in the commodities trade industry. This was denied by the buyer who contended that in any event there was no evidence of such trade custom and that such a term was inconsistent with the NACMA rules which provided for a measure of compensation in the event of non-delivery. The existence or not of trade practice is a question of fact. It is correct that this conclusion which was evidently rejected is not addressed in the statement of reasons of the Arbitrators.

(2) That there was an implied term of each of the contracts that if the appellant is unable to make delivery due to factors outside his control, the respondent would release him from his obligation under the contract.

It was contended that this term arose from the course of dealing between the parties over the years. It was denied by the buyer. It was put in response, further, that the evidence was against the existence of the term and that the term was inconsistent with the force majeure provision in r.23 of the NACMA rules. The Arbitrators in their reasons rejected such an implied term in contract 1446. Their reason for this is to my mind a sufficient reason in the circumstances. In any event, they expressly found as a fact that the chick peas referred to in this contract were being traded and were available for purchase during the relevant period. Accordingly, the impact of such an implied term, if it existed, did not fall for consideration as leading to their award. The Arbitrators do not deal in terms with this contention with respect to contracts 1488 and 1490, the other two contracts for which the claimant was successful. It is, however, implicit in the award which they made that the implied term was rejected with respect to these contracts also.

(3) That certain correspondence to which the Arbitrators had regard was written without prejudice.

This contention is not adverted to in the reasons of the Arbitrators. This is not surprising and certainly provides no ground of complaint. The correspondence in question was included in the existing arbitration file which the parties by agreement placed before the Arbitrators under the terms of settlement. It appears, too, that both parties relied upon these letters.

(4) That the evidence of the market price for Desi chick peas was irrelevant to the question as to the market price of Tyson chick peas for the purpose of quantifying the buyer's claim under contract 1446.

In paragraph 6 of their findings in the award the Arbitrators said that they acted upon the market price for Desi chick peas as evidence of the market price for Tyson chick peas. This is a sufficient indication that they rejected the contention that the two prices were not comparable.

(5) That if the goods are identified with precision in the contract and the goods are substantially unavailable or incapable of supply, the contract is frustrated.

The seller contended that the commodity referred to in contract 1446 was substantially unavailable or incapable of supply. The Arbitrators in paragraph 5 of their findings of fact rejected the factual basis for this contention.

(6) That the seller terminated contract 1446 pursuant to r.13.3 on 5 December 2000.

(7) That the seller was entitled pursuant to r.13.3 of the NACMA rules to withhold shipment on contracts 1488 and 1490.

Under r.13.3 of the NACMA rules the seller is given certain rights where the buyer is "during the time fixed for Delivery or Shipment... indebted and delinquent in payment to the Seller" in respect of any transaction. These rights are to withhold delivery until the indebtedness is satisfied and "if that does not occur within three [3] business days from the beginning of the established delivery or shipment period" the seller might cancel the contract.

Before the Arbitrators the seller contended, and the Arbitrators accepted, that the buyer was indebted and delinquent on 7 December 2000. Indeed, they found that contracts 1458, 1480 and 1481 were cancelled by the seller under this rule.

With respect to contract 1446, however, the cancellation was said to have taken place on 5 December 2000. Before that date, the buyer had terminated the contract for anticipatory breach, so that there was nothing on foot upon which the cancellation could operate. So much appears from paragraphs 2, 3 and 4 of the Arbitrators' findings of fact. This is a sufficient statement of reasons for rejecting the seller's contention.

With respect to contracts 1488 and 1490, the Arbitrators say in paragraph 7 of their findings of fact that r.13.3 did not operate because the shipment period had not commenced. This shipment period is shown in the contracts to be 15 and 16 December 2000 respectively. They must have found, therefore, that on 6 December 2000, when the purchaser purported to invoke the clause, it was equally not open to the seller to take any step under clause 13.3. It is implicit in the later part of the award that the Arbitrators treated this ineffective cancellation as an indication that the seller would not deliver the commodities referred to in these two contracts.

(8) The buyer's claim for the cost of replacing the goods the subject of contract 1488 was excluded pursuant to r.21.1(f) of the NACMA rules.

(9) That the buyer's claim for the cost of replacing the goods the subject of contract 1488 was invalid.

(10) That the buyer's claim for the cost of replacing the goods the subject of contract 1488 was excessive.

The issue here appears to be the basis for the buyer's claim for loss under contract 1488. The seller says that this should be calculated under the liquidated damages provision in r.21.1(f) of the NACMA rules. It appears from the written contentions of the parties that the seller recognised that this rule was difficult to apply to a case of rescission for anticipatory breach, as was the case with this contract. He sought therefore to construe the expression "fair market value for the commodity at the date of termination of the Contract" in r.21.1(f), so that it read "fair market value for the commodity at the date of default". It appears that the Arbitrators rejected this brave submission and assessed damages on the basis proposed by the buyer. This was the cost of purchasing and processing the undelivered commodity less the agreed contract price. This appears from the fact that the claim as presented was accepted. The reasons are sufficiently stated in the award.

(11) That the cost of the SGS Report claimed by the buyer in respect of contract 1490 is invalid.

Much the same contentions were presented as to the measure of loss under contract 1490. For the same reason the award speaks for itself when the positions of the contending parties are understood.

The seller cannot use s.42 [23] or s.43 [24] to bypass the obstacles placed in his way by s.38. Likewise he cannot use s.42 to appeal against adverse determinations of fact by asserting those determinations were not dealt with in the reasons.[25] I have concluded that most, but not all, of the matters pressed on this application were sufficiently dealt with by the Arbitrators in their award. Those that were not were peripheral to the principal areas of dispute. To my mind, seen individually or collectively, these complaints do not give rise to a substantial issue of misconduct as would warrant the Court acting under s.42 or to remit the matter for the Arbitrators to supplement their reasons.

It follows from what I have written that the refusal of an extension of time with the consequence that the seller will be denied the right to approach the Court to set aside or remit the award will not cause an injustice to him.

I turn finally to the question whether the extension of time would cause prejudice to the buyer other than that which might be cured by an award of costs. I will state briefly my reasons for concluding that such prejudice does in fact exist in this case.

(1) The buyer has a judgment or an entitlement to enter judgment for a sum in excess of $400,000. The granting of an extension of time would remove the benefit of that judgment, at least temporarily.

(2) The buyer would be obliged to incur the costs of resisting the application for leave to appeal and the s.42 application. Even if successful, some part of those costs would fall upon the buyer.

(3) The principal of the buyer, Peter Lawrence Schwarz, is a man of 74 years who has looked forward to retirement in a reasonable degree of comfort. This has not been possible due to the lack of funds due to this long standing dispute. He says that his health has suffered and that this too is a reason for his wish to retire. In these circumstances, the grant of an extension of time would impose further hardship upon him.

Conclusion

An extension of time is an indulgence which may, as a matter of discretion, be granted where the justice of the case demands it. In the context of a challenge to an arbitral award, the Court will normally scrutinise such an application with particular care, if only because the right of challenge is one which is limited and because of the policy which demands speedy finality to arbitral awards.

In the present case, I accept that the delays were not the fault of the seller nor, for that matter, of the buyer. The matters which the seller would seek to bring before the Court, however, are not matters of substance. The seller must abide the decision of the umpire of his choice.

The applications for extension of time will be refused.

[1] Arbitration rule 2.1.

[3] Doran Constructions Pty Ltd v Health Administration Corporation of New South Wales (1994) 12 BCL 104 at 126, per Rolfe J.

[4] Doran Constructions Pty Ltd v Health Administration Corporation of New South Wales (1994) 12 BCL 104 at 124, per Rolfe J.

[6] In the passage from his Honour's judgment, quoted in Doran Constructions Pty Ltd v Health Administration Corporation of New South Wales (1994) 12 BCL 59 at 61, there is an evident misprint where the point is described as a "specific point" rather than a "substantial point".

[7] The alternative basis for leave to appeal, s.38(5)(b)(ii), is not appropriate in this case.

[9] Unreported, Court of Appeal (NSW), 21 November 1989.

[11] Warley Pty Ltd v Adco Constructions Pty Ltd, unreported, CA (NSW), 30 November 1988, BC8801273, at p.22, per Kirby P dissenting; Menna v H D Building Pty Ltd, unreported, SC (NSW), Smart J, 1 December 1986); RP Robson Constructions Pty Ltd v D & M Williams (1989) 6 BCL 219 (Giles J).

[12] Sydney Water Corporation Ltd v Aqua Clear Technology Pty Ltd, unreported, SC (NSW), Rolfe J, 17 December 1996. It may be supposed that a want of reasons could not fall within paragraph (ii) of s.38(5)(b).

[14] Unreported, SC (NSW), Rolfe J, 17 December 1996, BC9606091.

[15] Unreported, SC (NSW), 4 June 1992, BC9201836. See also Jacobs, Commercial Arbitration Law and Practice, para 28.130.

[16] See for example NACMA arbitration rule 8.7.

[17] Minister for Public Works v Renard Constructions (ME) Pty Ltd, unreported, SC (NSW), Cole J, 26 Oct 1989, BC 8901540 at p4.

[18] Askew v Fields [1985] HCA 4; (1985) 156 CLR 268 at 270.

[19] Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378 at 381, per Hutley JA, at 385, per Mahoney JA.

[20] Sydney Water Corporation Ltd v Aqua Clear Technology Pty Ltd, unreported, SC (NSW), Rolfe J, 17 December 1996, BC9606091 at p.51

[22] Menna v H D Building Pty Ltd, unreported, SC (NSW), 1 December 1986 at p.5.

[23] Boncorp Pty Ltd v Thames Water Asia/Pacific Pty Ltd (1995) 12 BCL 139 at 141.

[24] Weir v Lubiejewski (1988) 90 FLR 171 at 175, per Kelly J.

[25] See Roads Corporation v Dacakis [1995] VicRp 70; [1995] 2 VR 508 at 517, per Batt J.

At a glance

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