1 I have contacted the Resources Management and Planning Appeal Tribunal and at this stage you have not supplied the additional information they require, so unless you do the matter will lapse. Regardless of the outcome of the Section 64 you should realise that your application is between you and the Crown and does not affect me or my request to fence our northern boundary. Further you should note that this section of fence does not interfere with any aspect of your access to your land.

2 The issue of fencing the eastern side of road is again not relevant to you as the construction of any fence is between the Crown and myself.

3 Again the identification of all the road is not relevant to this section of fencing. Should you feel that we need to establish the correct location of the boundary I am happy to have [sic] surveyed as long as you are prepared to pay for half the cost.

4 The measurements contained on the map are irrelevant except for the fact that they are included as part of the official title obtained from the Lands Department. The map is provided only for illustration purposes. If you read my letter you will see that the boundary to be fenced cease on the eastern side of the road.

5 Access to the area to be fenced is not an issue as I quite [sic] happy to allow any contractor access to the site. You just have to get them to give me a ring on 03 622503214.

I would request that you also supply me with a plan of the type of fence you propose to put up so that we can agree on the standard and quality required.

The comments I have supplied above clearly resolve all the issues you have raised. I would appreciate if you can reply by certified mail indicating that you will now agree to fence half the boundary, clear both sides and erect an agreed style of fence. Should no reply be received within 14 days I will assume that you have accepted the above and will fence the said boundary in the style indicated.

As this is the second time that I have asked you to fence this boundary should you not agree to fence or continue to delay further I will have no alternative but to seek to have the matter arbitrated."

The respondent further replied, claiming that there should be no further discussion until the conclusion of the proceedings before the Tribunal. On 29 July, the respondent advised that since the parties remained in dispute, recourse would be had to the Act, s26. The applicant did not seek to exercise rights afforded by the Act, s12, which permits the erection of a fence and recovery of one half of the cost of erection within two years after completion, since the respondent had given notice of objection.

5 The applicant gave notice by letter dated 13 October 1998, that he intended to proceed with arbitration, requesting the respondent to nominate a person to act as arbitrator, and advising:

" ... that we both have to agree on an arbitrator and should you default on nominating one then I will appoint one."

6 The Act, s26, provides:

"26 If any matter, dispute, question, or difference arises between any -

(b) between any owner and occupier of the same property -

the same shall, unless otherwise specially provided for, be referred to and decided by arbitration in accordance with the Commercial Arbitration Act 1986."

7 Although the arbitration was to be conducted in accordance with the provisions of the Commercial Arbitration Act 1986, the substantive provisions of the Act continued to govern the terms and conduct of the arbitration.

8 On 26 November 1998, the applicant, by notice, required:

"(a) You are required to exercise your power to appoint an arbitrator within 14 days of the date hereof;

(b) In default of you exercising that power, I propose that Mr G E J Smith of 58 Kellatie Road, Rosny in Tasmania be appointed as sole arbitrator.

YOU ARE FURTHER ADVISED that if you default in the exercise of your power to appoint an arbitrator then my nominee, Mr G E J Smith, shall be deemed to have been duly appointed to the office of arbitrator."

A copy of that notice was forwarded by the applicants' solicitors, addressed to "M R P Walter and Ms P Wissler" on 14 December 1998. Until that time, no reference had been made to Ms P Wissler.

9 The respondent repeated his objection to the procedure adopted until a "final hearing" of the Tribunal had been held and further stating:

"Furthermore the fence you propose uses my fencing to incorporate the excess area road reserve into Mr Ridler's property - one of the legal issues put before the Tribunal but never dealt with. Also it relates to why the original notice was not considered valid. Had a plan of Mr Ridler's intention and schedule to fence along (NOT ACROSS) the road been referred to this would have lead [sic] to our being able to provide a continuous 'sufficient' fence. The whole matter is yet to be resolved."

10 The relevant documentation was forwarded to the arbitrator on 5 January 1999, who advised the applicant, but apparently not the respondent, of his terms of appointment, in a letter dated 1 March 1999, which relevantly stated:

"I am available and willing to accept the nomination. Subject to all matters being in order upon holding an initial Direction Hearing to resolve how the Arbitration should proceed, I intend to accept the nomination.

My fee for conducting the arbitration shall be $160 per hour (including secretarial costs) plus disbursements that may include independent legal advice to myself.

At the Directions Hearing, I intend to direct that each party deposit the sum of $850 as security for my costs into the trust operated by the Institution of Engineers Australia.

I shall also seek the parties' agreement that I have the power to order from time to time that further deposits be paid.

I appoint 4 pm on Thursday 18 March as the time for the Directions Hearing in this matter, to be held in the conference room of GHD, 2nd floor 162 Macquarie Street, Hobart."

11 On 16 March 1999, the arbitrator wrote to the parties advising that on further consideration he had concluded that he had not been validly appointed and could not proceed with the arbitration. His reasoning was as follows:

1 The Act, s26, requires a dispute to be dealt with in accordance with the provision of the Commercial Arbitration Act 1986.

2 His appointment had been made in accordance with the latter Act, s8.

3 Section 8 only applies where a person with power to nominate fails to exercise that power.

4 Where parties are unable to agree on an arbitrator the available recourse is governed by s10.

12 The arbitrator obtained legal advice and, on 15 June 1999, advised the applicant that:

Under section 26 of the Boundary Fences Act 1908 disputes are to be referred to arbitration in accordance with the Commercial Arbitration Act 1986.

Under section 7 of the Commercial Arbitration Act 1986 the arbitrator is to be jointly appointed by the parties in dispute under the Boundary Fences Act 1908.

Each of the parties having this power to join in the appointment of an arbitrator has a power to appoint an arbitrator by virtue of section 4 of the Commercial Arbitration Act 1986.

Under section 8 of the Commercial Arbitration Act 1986 where either party defaults in the exercise of that party's power to appoint by failing to join in the appointment of an arbitrator, the other party may by notice require the defaulting party to exercise the power, which if not exercised within the specified period, shall result [sic] the default nominee proposed in the notice being appointed.

The requirements of section 8 of the Commercial Arbitration Act 1986 having been complied with, I now consider that I have been validly appointed and so am able to proceed with the arbitration.

A new date for the Directions Hearing shall be set shortly."

There is no evidence which shows that the respondent was advised of this change of opinion or status, although a letter written by the respondent on 12 July 1999 suggests that he was aware of the development.

13 The arbitrator conducted a directions hearing on 13 July 1999, attended by the applicant. There is no direct evidence placed before this Court that the respondent was advised as to the date or place of the directions hearing, although reference is made to such a letter in the award and to a letter dated 12 July 1999 from the respondent refusing to attend such a hearing. For the purpose of this determination it is accepted that notice of hearing was properly served.

14 The applicant delivered his claim and relevant documentation by letter dated 16 July 1999. It is not clear from the material placed before this Court whether the arbitrator conducted a hearing, or whether he relied upon the written documentation of the applicant. In any event, the respondent neither supplied additional documentation, or attended any hearing. In his award, the arbitrator noted:

" ... that Mr Walter refused to respond to the notice to fence or to present himself at the Hearings to this dispute."

15 On 30 August, the arbitrator made his award in the following terms:

"I make the following award in accordance with Part 11 - Erection of Fences contained in the Boundary Fences Act 1908.

Mr R Walter shall share equally with Mr G Ridler the cost of constructing a sufficient fence on the adjoining boundary at the Northern end of Mr Ridler's property running West from the Coastal Reserve on the Eastern side of Deer Point to the existing fence at the top of the hill, that being the Eastern side of the Reserved Road and referred to in attachment No 1; and that a sufficient fence shall be of the kind described herewith (see attachment No 2):

b) With Treated Pine Posts (3" to 4") at 5 Metre Intervals

Mr R Walter shall pay 100% of the costs of the Arbitration."

16 The documentation placed before the Court does not indicate whether or not the land in question is solely owned by the respondent or whether Ms Wissler is also a registered proprietor. Some of the correspondence from the applicant's solicitors is addressed to both parties. If the land is owned jointly, then it may well be that the service of the notice was defective (Russell v Watson [1917] VicLawRp 60; [1917] VLR 368). However, since some of the correspondence is jointly signed by Mr Walter and Ms Wissler, it will be assumed that no unfairness has been caused, and that the award is protected by the Act, ss41 and 47. It will be assumed for the purpose of this determination that the respondent is the sole owner of the relevant land. Likewise, it will be assumed that the fence does not in any way interfere with any right of way possessed by the respondent (Hose v Cobden [1921] VicLawRp 110; [1921] VLR 617) since on the plan attached to the notice it does not appear (despite some reference in the confusing correspondence from the respondent) that it does other than traverse the boundary.

17 The arbitrator had power to make an award determining the proportion of the cost to be borne by each party (s35(f)) and of the costs to be borne with respect to the arbitration (s39). However, he has given no reasoning as to why the respondent should pay the whole of the arbitration fee of $1,796. His statement of account includes a claim for 11.1 hours for meetings, correspondence, conferences and the preparation of the award, at a rate of $160 per hour. Accepting that he might not have responded favourably to the refusal of the respondent to co-operate in the proceedings, it remains unclear as to why all of the costs of the arbitration were ordered against the respondent. Failure to disclose the reasons for the making of the order vitiates this portion of the award. But there is a more significant error in its making. The Act, s36, requires:

"36 In estimating the proportion of the cost to be borne and paid by each adjoining owner for or in respect of -

(b) the conversion of any existing fence into a rabbit-proof fence -

under the provisions of this Act, the arbitrators or umpire shall take into consideration the benefit that is likely to accrue to each of such owners by reason of the construction or conversion of such fence."

18 The applicant had sought the erection and repair of a rabbit proof fence, a construction recognised by the legislation as different from an ordinary one (ss8, 9 and 22). The Act, s4, distinguishes between a sufficient fence as between one "ordinarily capable of resisting the trespass of cattle and sheep" from one which is "rabbit-proof". Power afforded an arbitrator includes that to determine:

"(b) The conversion of any fence into a rabbit-proof fence;

(d) The necessity or otherwise for the erection of any fence, or for the conversion of any existing fence into a rabbit-proof fence ...".

19 Assuming that the arbitrator accepted the applicant's need to have any fence to be "rabbit proof", then it was mandatory that he consider the respective benefits to each party of the construction of such a fence. Had he turned his mind to the question, he might have concluded that greater benefit would accrue to the applicant and adjusted his award accordingly. The arbitrator is required to furnish reasons for the making of an award (Commercial Arbitration Act 1986, s29(1)(c)). The award does not disclose that the arbitrator gave consideration to the matter required by the Act, s36. Accordingly, this Court ought conclude that no such consideration was given to the issue. The error in failing to take into account a mandatory requirement would be sufficient to ground an appeal against the award in circumstances where statute restricts review (Promenade Investments Pty Ltd v State of New South Wales (1992) 26 NSWLR 203, UDR Equipment Pty Ltd v Afkos Industries Pty Ltd (2000) WAR 221).

20 The omission either to disclose the reasoning process (Seablest Pty Ltd v Smith & Ors [1997] TASSC 36; (1996) 6 Tas R 350) or to avert to a statutory requirement vitiates the award.