Commercial Arbitration Act 1985 (WA), s 38, s 42

Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196

Gallo v Dawson [1990] HCA 30; (1990) 93 ALR 479

Girando v Girando (1997) 18 WAR 450

Hassell and Anor v Silent Vector Pty Ltd trading as Sizer Homes (2002) WASC 250

Jackamarra v Krakouer [1998] HCA 27; 153 ALR 276

Thiess Contractors Pty Ltd v The Water Corporation of Western Australia, unreported; SCt of WA; Library No 970561; 28 October 1997

Tomlin v Fordwich Corporation [1836] EngR 732; (1836) 111 ER 1121

Villani v Delstrat Pty Ltd (2002) WASC 112

Elspan International Ltd v Eurocopter International Pacific Ltd [1999] NSWSC 555

Esdaile v Payne [1889] 40 Ch D 520

European Grain and Shipping Ltd v Johnston [1983] QB 521

Gas and Fuel Corp of Victoria v Wood Hall Ltd and Leonard Pipeline Contractors Ltd [1978] VicRp 41; [1978] VR 385

Gascor (t/as Gas & Fuel) v Ellicott, Esso Australia Resources & BHP Petroleum (North West Shelf Pty Ltd) (1997) 1 VR 322

Johnson v Latham (16500 19 LJQB 329

Mond and Mond v Dayan Rabbi Isaac Dov Berger, unreported; SCt of Vic; Library No 8881 of 2001; 23 February 2004

Oldfield Knott Architects Pty Ltd v Ortiz Investments Pty Ltd [2000] WASCA 255

Raeside Pty Ltd v Jymcroe Valley Pty Ltd, unreported; FCt SCt of WA; Library No 7196; 18 July 1988

Re O'Conor and Whitlaw's Arbitration (1919) 88 LJKB 1242

Shirley Sloan Pty Ltd v Merril Holdings Pty Ltd (t/as Airen Constructions) [2000] WASC 99

Technical Team Projects Pty Ltd v Noble Dunn Pty Ltd (1990) 20 NSWLR 221

Vakauta v Kelly [1989] HCA 44; (1989) 167 CLR 568

Xuereb v Viola (1989) 18 NSWLR 453

1 COMMISSIONER BRADDOCK SC: This is an application for an extension of time within which to make application pursuant to s 42(1)(a) of the Commercial Arbitration Act 1985. By a notice of originating motion filed on 12 March 2004, the applicant, Silent Vector Pty Ltd, sought extensions of time for leave to appeal pursuant to s 38(4)(e) of the Commercial Arbitration Act 1985 and to make an application to set aside the award for misconduct under s 42(1)(a) of the Commercial Arbitration Act 1985. The relief sought in the originating motion is now only pursued in relation to one matter pursuant to s 42(1)(a), the balance of the originating motion having been abandoned. The relevant section of the originating motion on this application, pursuant to s 42(1)(a) of the Act, originally comprised some 10 grounds. Of these, only four were argued, namely grounds 1, 2, 7 and 8. These grounds all related to one aspect of the decisions which the parties called the "straight windows issue" and concerned designated item C01 in a Scott Schedule prepared for the purpose of the proceedings before the Arbitrator. The matter is complicated by the fact that there are two awards from which it is sought to appeal, the first delivered on 2 July 2003 and the second on 23 December 2003.

2 In about 1995, the respondents, Ian Robert Hassell and Christine Anne Hassell, decided to build a house at 50 Challenger Parade, City Beach. On 2 February 1995 they entered into a lump sum building contract with the applicant. The contract was in standard form described as "Lump Sum Contract For Simple Building Works, Edition 2 (Second Print-February 1992) SPW2". The contract provided for disputes to be referred to arbitration. Clause 13.1 provided that:

"If any dispute or difference concerning this agreement shall arise between the proprietor, or the architect on the proprietor's behalf and the builder then either party may give to the other written notice sent by certified mail."

3 The respondents engaged a firm called Saleba Adams as architects for the project, in particular a Mr Grant Adams. The role of the architect is specified in the contract, as agent of the respondents in cl 5.1 and under cl 5.2 as follows:

"The Proprietor and the Builder expressly agree that the Architect is hereby authorised:

5.2.1 to issue instructions.

5.2.2 to supply to the Builder copies of documents.

5.2.3 to act as the assessor, valuer or certifier where this Agreement so requires of provides."

4 Among the features of the residence were certain windows. There were those described as the "curved windows" and the "straight windows". There were two sets of curved windows and 28 sets of straight windows. They had aluminium frames. The contract provided for the finishes to be applied to the frames and there were other specifications in relation to their design, preparation and fastenings.

5 Various disputes arose between the applicant and the respondents and on 24 April 2001 a notice of dispute pursuant to cl 13.1 of the contract was given by the respondents, resulting in the appointment of Mr David Standon as arbitrator to determine the issues. There were numerous claims and the Arbitrator required a "Scott Schedule" to be prepared for use in the proceedings. Item C01, under the heading "Claimant's Claim" stated the following:

"Powdercoated aluminium window frames:

Powdercoated aluminium window frames, subframes are defective in that they do not meet contract specifications.

The powdercoat on the aluminium window frames, subframes and trims has lost adhesion (flaking and peeling off) and in places does not meet minimum coating thickness requirements. The aluminium window frames, subframes and trims show signs of corrosion.

Builder's past attempts to partially rectify by painting have failed."

6 In the same item C01, under the heading "Amount Claimed by Claimant", the following was stated:

"Builder to remove defective powdercoated aluminium window frames, subframes and trims and replace with new in accordance with contract specifications and make good any damage."

7 Under the heading "Respondents' Response to Claimant's Claim and Respondents' Counterclaim" the present applicant stated:

"Minor defects will be attended to by the respondent, but otherwise the respondent denies liability."

8 It is clear that the number of windows and the design and prominence of the windows rendered this aspect of the claim very significant.

9 The Arbitrator had called for submissions on specific performance prior to conducting the arbitration. The arbitration was conducted on the basis that specific performance was the appropriate remedy. This question of remedy was a matter of significance during the proceedings and subsequent to the Arbitrator handing down his awards, but is no longer an issue on this appeal.

10 As can be seen from the item C01 in the Scott Schedule quoted above, the problems alleged in relation to the windows concerned the finish to their aluminium frames, the way in which they had been coated, and whether or not those matters satisfied the standards specified in the contract.

11 The arbitration proceeded on 5 February 2002 for a number of days and for a further number of days in April of 2002. The Arbitrator had inspected the premises prior to the arbitration. During the hearing, expert evidence was called on all items on the Scott Schedule including the windows. On 17 June 2002 the Arbitrator handed down his "Interim Award".

12 The respondents appealed from this award to the Supreme Court, pursuant to s 38(4) of the Commercial Arbitration Act 1985 (WA), arguing that there had been an error of law. On 4 November 2002 Barker J granted leave to appeal and published reasons: Hassell and Anor v Silent Vector Pty Ltd trading as Sizer Homes (2002) WASC 250. The error of law concerned the Arbitrator's refusal to make any award in respect of the "straight windows" which are now the subject matter of this application. I refer to his Honour's reasons in that regard as part of the history in this matter. On 10 March 2003 Pullin J heard and allowed the appeal and ordered that the Interim Award of 17 June 2002 be set aside "as to the determination of Claims C01 (in part)" (and other items) and that the matter was remitted back to the Arbitrator to further determine the entitlements of the (now) respondents.

13 Under the Interim Award the Arbitrator had considered claims concerning all the powdercoated aluminium window frames. The problems with the "curved windows" had initially been the subject of instructions by the architect within the "defects liability period". The architect had indicated to the applicant within the defects liability period, that "powdercoat finish to 'curved window' sections was thin, blistering and flaking off. All to be removed and replaced." Remedial works were tried, but did not address the defects to the satisfaction of the architect. No similar instructions were given or defects noted within the defects liability period in relation to the straight windows. The defects liability period provided by the contract was one of 6 months, which had commenced in March of 1996.

14 Problems with the straight windows were outlined in a letter from the architect to the builder on 12 April 2000. Disputes as to the architect's instructions in this regard, the remedial works required and the replacement of the windows followed. These disputes involved a company called Com-Al, who was a subcontractor to the applicant builder. These issues were not resolved prior to the arbitration. In the Interim Award, the Arbitrator found for the respondents in relation to the curved windows, on the ground that the defect had been noted within the defects liability period. He declined the claim in relation to the straight windows because the defect fell outside that period. He did not consider the issue of liability other than pursuant to the defects liability notification procedure under the contract and it was on this basis that the original appeal was successful and the matter was remitted.

15 In the Interim Award, the Arbitrator's finding was expressed thus:

"I find that the claim is successful in respect to the curved windows (at both floor levels) but not to other windows for reasons given above. I therefore order and direct, as claimed by the owner, the builder to remove defective powdercoated aluminium curved window frames, subframes and trims and replace with new in accordance with contract specifications and make good any damage."

16 The matter having been remitted, the Arbitrator delivered his "Reconsidered Interim Award" on 2 July 2003. The Arbitrator, in relation to the windows, stated as follows:

"In the arbitration hearing there were expert witnesses testifying in a variety of ways and there were tendered in evidence expert reports and the Australian Standards AS2047-2048-1977, aluminium windows, and AS3715-1989, metal finishing - thermo set powder coatings for architectural application. I find that in spite of all the facts and opinions about film thickness pre-treatment conversion coating and the standards, none of it has any bearing on the following facts that have been clearly demonstrated to me:

(a) Before the expiration of the defects liability period, the architect listed as a defect the powdercoat finish to the curved windows, and exercising his power under the building contract, instructed the builder: 'All to be removed and replaced'.

(b) The builder has not complied with that instruction.

(c) The builder has not been relieved of the obligation under the contract to comply with the instruction.

(d) There was no similar obligation expressed in respect to the straight windows.

(e) The builder's obligations included the obligation, in cl 1.3.2 of the contract, to execute works to the reasonable satisfaction of the architect. There is no evidence that the architect's instruction was not reasonable, or that his dissatisfaction with making good was unreasonable.

The word 'all' in the instruction may be arguable, but it seems to me that it would be entirely impractical to read it as only the finish and not the windows. It also seems to me that the impasse in complying with the instruction is not due to the builder's unwillingness so much as a subcontractor's unwillingness and prolonged attempts to demonstrate that replacement was not necessary, whatever the contract or the architect might say.

In respect of the straight windows, I find that notwithstanding (d) above there is a similar obligation, arising from common law and that therefore the claim is successful in respect to both straight and curved windows. I therefore order and direct as claimed by the owner, the builder to remove defective powdercoated aluminium window frames, subframes and trims, and replace with new in accordance with contract specifications and make good any damage."

17 Under the Reconsidered Interim Award, the Arbitrator made a number of orders for specific performance. All but items designated C24 and C25 on the Scott Schedule were framed in terms of reinstatement and replacement. The items C24 and C25 led to an award of damages as the Arbitrator found that specific performance was not practicable. He ordered that the reasonable costs of replacement in those items be shared between the applicant and the respondent equally, and, unless agreed, be subject to the architects certification.

18 In both the original Interim and the Reconsidered Interim Award, prior to considering in detail the specific items in dispute, the Arbitrator made certain general comments about specific performance and the power to award such relief under s 24 of the Commercial Arbitration Act. This aspect of the matter was not in contention in this application. The Arbitrator stated, at par 2.34:

"In claims where I have found for the claimant I have ordered specific performance except in two cases where I deemed such an order not to be practicable. Where I have ordered specific performance, inspection and certification of the making good will be necessary. For that purpose I further order that all specific performance shall be subject to the certification of the architect or a replacement architect appointed under cl 5.6 of the contract. I further order that the performance shall be completed within a time program agreed by the parties or, if no agreement is reached within 4 weeks of the date of this award, then in accordance with a program determined by the architect after consultation with the parties. I further order that the claimant shall promptly inform the respondent of the identity of the architect who it proposes to inspect the work, whether under cl 5.6 or otherwise."

19 By a letter dated 17 July 2003, the respondents advised the applicant that Mr Adams was to be the relevant architect and sought that the applicant provide a detailed program of works. There then followed, over the next month, correspondence between the parties and the Arbitrator. Apart from the fact that a program of works was not agreed, the respondents had become concerned by reason of the attendance of a representative of the company Com-Al at the respondents' home, for the apparent purpose of assessing the amount of aluminium metal required to replace some parts of the aluminium window frames. The respondents' solicitors in their correspondence asserted that the award required the replacement of whole windows in relation to both curved and flat windows in accordance with the contract specification. Further, they asserted that item C01 referred to all the aluminium window frames. During this period, both parties also filed submissions in relation to the costs of the arbitration. The applicant, in submissions, stated:

"This was a process that the respondent was always willing and able to carry out, but refused by the claimant."

20 The respondents deduced from that submission that the applicant did not read the Arbitrator's Reconsidered Interim Award to mean that all whole windows were to be replaced.

21 In a letter dated 12 August 2003 the Arbitrator, when asked to clarify this by the respondents' solicitors, said that:

"Windows

The relevant part of my reconsidered award is the penultimate paragraph on page 20, in which I say that the claim is successful in respect to both straight and curved windows.

I have also said, in the same paragraph on page 20 of my award, that in respect to the straight windows, 'there was a similar obligation, i.e., similar to the obligation in respect to the curved windows. The respondent acknowledges that the obligation in respect to the curved windows was to 'be replaced in their entirety'. The obligation applied similarly to both the curved and straight windows. The only difference was that one obligation arose from the contract whereas the other arose from the common law. Of course, if there is a window that is defect free then it would not be required to be replaced. In any event it would not be practical to read 'window frames, subframes and trims' as anything but whole windows, which is what applies to the curved windows and equally to the straight windows.

I do not see a need to correct the award (under s 30 of the Act) because I do not see that there is a defect in it."

22 Further, in a letter dated 19 August 2003 the Arbitrator, with reference to his statement in relation to defect-free windows, said this:

"There are two curved windows. There are 28 other windows. My reconsidered award had the effect of extending the builder's liability for the curved windows to apply also to the other windows and of maintaining the architect's duty of certifying the builder's performance. I do not think it would be reasonable to say that if the architect finds one of the 28 straight windows is not defective then it must, in any event, be replaced. My award should not be interpreted that a defect-free window in the opinion of the architect, if such is found, must, in any event, be replaced."

"It is clearly not for the respondent to decide which windows or which parts of the windows require replacement. The crux of my order is that defective windows, both curved and straight, are to be removed and replaced with new windows to the satisfaction of the architect."

24 There were further issues as to non-performance of the orders of specific performance and further submissions were filed, leading to a further conference between the parties and the Arbitrator on 23 October 2003. As a result of that conference, the architect was to prepare a further scope of works to be performed, which he did on 30 October 2003. That scope of works clearly specified that all windows were to be replaced.

25 The applicant took issue with the architect's scope of works, specifically objecting to the direction that all windows required replacement. In a letter of 7 November 2003 to the Arbitrator, the applicant indicated that it still disputed the fact that the powdercoating had failed and argued that the powdercoatings on the vast majority of windows were in accordance with Australian Standards in force at the time. Further submissions were made. A further hearing was convened on 16 December 2003.

26 On 23 December 2003, the Arbitrator delivered his "Further Interim Award". The finish on the windows was specifically considered. (The Further Interim Award is annexed to the affidavit of Warren Francis Sizer, filed 16 March 2004 - reference page 163). The Arbitrator referred to the dispute as to the proprietary products to be used, to the evidence called by the parties, to the conference on 23 October 2003 at which the applicant apparently agreed to use a particular product. He referred to the fact that the applicant was of the opinion that not all components of the straight windows needed replacement and referred to the order made in his previous award. He went on to state (at page 164 of the Sizer affidavit):

"I made it clear in the same context that the obligation in respect to the straight windows was similar in respect to the curved windows. My direction in that award:

'To remove defective powdercoated aluminium curved windows frames, subframes and trims, and replace with new ...'

concerned whole windows inclusive of frames, subframes and trims. This was how it was interpreted by the builder and it is how it should be interpreted by the builder for the 'similar in respect' straight windows. There is no scope for interpreting the direction differently for the straight windows.

It was already the role of the administering architect to decide which windows were defective. There are two curved windows and 28 other windows. The architect has decided that all of them are defective and therefore my order quoted applies to all of them."

27 He went on to note that the applicant disputed these matters with the architect, that there was no provision in the contract to deal with a dispute between the applicant and the architect in his role as certifier rather than on the proprietor's behalf. He noted that the applicant claimed that the architect's judgment was clouded:

"The architect has, in the exercise of his professional judgment, to certify of the quality of work and workmanship, decided that all windows need replacement. I do not interfere with that. That being so, the previous issue of finish on the windows is resolved by the proposition that there is therefore no need to distinguish between the finish on the curved windows and the straight windows. I find in favour of the claimant on issues both of finish and number."

28 Subsequent to the Further Interim Award in December, there were further communications in relation to the provision of programs of works, and the timing for the provision of such programs.

29 Notice was given to the respondents that the applicant intended to appeal on or about 4 March 2004. The originating motion was filed on 12 March 2004.

30 Pursuant to O 81D r 5 of the Rules of the Supreme Court, an application to the Court under s 42 to set aside an award is to be made within 21 days after in this case, the publication of the award. The applicant alleges "technical" misconduct by the Arbitrator in relation to both the Reconsidered Interim Award and the Further Interim Award. As to the former, the application was filed almost eight months out of time. In relation to the latter, some 38 days after the expiry of the 21 day period.

31 Section 38 of the Commercial Arbitration Act 1985 (WA) provides:

"38 Judicial review of awards

(1) Without prejudice to the right of appeal conferred by subsection (2), the Court shall not have jurisdiction to set aside or remit an award on the ground of error of fact or law, on the face of the award.

(2) Subject to subsection (4), an appeal shall lie to the Supreme Court on any question of law arising out of an award.

(3) On the determination of an appeal under subsection (2), the Supreme Court may by order -

(a) confirm, vary or set aside the award; or

(b) remit the award, together with the Supreme Court's opinion on the question of law which was the subject of the appeal, to the arbitrator or umpire for reconsideration or, where a new arbitrator or umpire has been appointed, to that arbitrator or umpire for consideration,

and where the award is remitted under paragraph (b) the arbitrator or umpire shall, unless the order otherwise directs, make the award within 3 months after the date of the order.

(4) An appeal under subsection (2) may be brought by any of the parties to an arbitration agreement -

(a) with the consent of all the other parties to the arbitration agreement; or

(b) subject to section 40, with the leave of the Supreme Court.

(5) The Supreme Court shall not grant leave under subsection (4)(b) unless it considers that -

(a) Having regard to all the circumstances, the determination of the question of law concerned could substantially affect the rights of one of more of the parties to the arbitration agreement; and

(b) there is -

(i) a manifest error of law on the face of the award; or

(ii) strong evidence that the arbitrator or umpire made an error of law and that the determination of the question may add, or may be likely to add, substantially to the certainty of commercial law.

(6) The Supreme Court may make any leave which it grants under subsection (4)(b) subject to the applicant complying with conditions it considers appropriate.

(7) Where the award of an arbitrator or umpire is varied on an appeal under subsection (2), the award as varied shall have the effect (except for the purposes of this section) as if it were the award of the arbitrator or umpire."

32 Section 42 provides:

"42. Power to set aside award

(1) Where -

(a) there has been misconduct on the part of an arbitrator or umpire or an arbitrator or umpire has misconducted the proceedings; or

(b) the arbitration or award has been improperly procured,

the Court may, on the application of a party to the arbitration agreement, set the award aside either wholly or in part."

33 Rights of appeal pursuant to the Commercial Arbitration Act are constrained by the terms of s 38. The power to set aside an award contained in s 42 is clearly a distinct power.

34 The applicant in this case alleges in the grounds that:

"There has been technical misconduct by the Arbitrator or alternatively, the Arbitrator misconducted the arbitration proceedings in that:

1. By the Reconsidered Interim Award, the Arbitrator failed to determine a matter in issue in the proceedings, namely which of the windows the subject of item C01 of the Scott Schedule in the proceedings were in fact defective;

2. By his Reconsidered Interim Award, the Arbitrator delegated to the architect appointed by the respondents authority to determine which of the windows referred to in item C01 of the Scott Schedule were in fact defective.

...

7. By the Further Interim Award the Arbitrator failed to determine an issue in the proceedings, namely which of the windows the subject of item C01 in the Scott Schedule were defective and needed to be replaced;

8. By the Further Interim Award the Arbitrator delegated to the architect appointed by the respondents the authority to determine which of the windows the subject of item C01 were defective and needed to be replaced."

35 In support of the application two affidavits were filed by Mr Warren Francis Sizer, exhibiting numerous documents. The respondents also filed extensive materials attached to an affidavit of the first named respondent. As a result the full text of all the Awards of the Arbitrator were before the Court, as was the building contract, the correspondence between the parties, the Arbitrator and the parties and the architect, and the parties submissions to the Arbitrator.

36 This is an application for an extension of time. There are always a number of factors to be considered upon such applications. The Full Court of the Supreme Court of Western Australia, in Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196 held that there were usually four major factors to be considered in exercising the Court's discretion to extend time, those being the length of the delay, the reason for the delay, whether there is an arguable case, and the extent of any prejudice suffered by the respondent. Extensions of time are not automatic. The discretion to extend time has been said to be given for the sole purpose of enabling the Court to do justice between the parties: Gallo v Dawson [1990] HCA 30; (1990) 93 ALR 479 per McHugh J. The merits of an appeal are a relevant consideration in an application for an extension of time: Jackamarra v Krakouer [1998] HCA 27; 153 ALR 276. The longer the delay in making an application, the more cogent the reasons for the delay must be before a court will grant an extension of time to make the application: Girando v Girando (1997) 18 WAR 450.

37 Each of these four issues was strongly contested upon this application.

38 The applicant's appeal, so far as the Reconsidered Interim Award is concerned, should have been filed on 23 July 2003. It was in fact filed on 12 March 2004. A delay of nearly eight months can only be described as gross delay, in ordinary circumstances. In relation to the Further Interim Award, the application should have been filed on 4 February 2004. It was filed on 12 March 2004, a delay of 38 days, which is a not insignificant period. The applicant has argued that because of the events that occurred after 2 July 2003, and what was described as a "necessity to clarify" that award, plus the making of further submissions, the further meetings and hearings, that, in effect, the only period to be considered is that from the Further Interim Award. The respondents argued that the issue as it now comes before the Court was apparent from the award itself on 2 July 2003 and that whilst continuing to dispute the various matters the applicant had full knowledge from the outset of the point it now seeks to pursue. The respondents further say that not only did the applicant not appeal the Reconsidered Interim Award within time, but continued to give assurances that specific performance was the correct remedy and that the works would be carried out.

39 In my view, it is apparent from the history of events and communications between the parties that the issues were patent from July 2003 and that the full period of eight months in relation to the Reconsidered Interim Award is a relevant gross delay. I come to that conclusion due to the fact that at the heart of the dispute was always the complete replacement of all the windows, which the applicant strenuously resisted and the architect's ongoing role in certifying compliance. Thus, in considering whether an extension of time should be granted over such a period, the reasons for the delay are thrown into high relief. Whilst the delay in relation to the Further Interim Award is a period of less than two months, this is not an insignificant period and the focus falls similarly on the reasons why an application or appeal was not lodged in time.

40 Warren Frances Sizer, a director of the applicant, swore two affidavits for the purposes of the application, one filed on 16 March 2004 and the second on 6 April 2004. In the latter affidavit he addressed the question of delay in the institution of the application. Firstly, he sets out the events following the Reconsidered Interim Award on 2 July 2003 which have been referred to above. These comprise the correspondence in August between the parties and the Arbitrator, which Mr Sizer, at par 9, describes as: "Resolution of these ambiguities in the terms of the award." He stated that following the handing down of the Further Interim Award, the applicant sought counsel's advice in relation to an appeal, specifically against the quantification of damages for Scott Schedule items C24 and 25 (par 14 of the affidavit of 6 April 2004). He deposed of the fact that having received counsel's advice, which was to the effect that there were meritorious grounds of appeal "concerning the Arbitrator's ability to delegate his decision-making to the architect", (par 14 again), it appears that a decision was taken in relation to items C24 and 25 that it was not commercially viable to lodge an appeal. Whilst it might be argued that this was a separate factual issue, the question of delegation is the same essential issue as arises upon this application.

41 Mr Sizer also deposed, [par 37 of the earlier affidavit filed on 16 March 2004], that subsequent to the Reconsidered Interim Award, the window subcontractors who had undertaken the initial works did not agree that removal and replacement of entire windows was required. Further, Mr Sizer says (at par 39 of the same affidavit) that the subcontractors indicated they would not undertake the remedial works ordered by the Arbitrator. In his second affidavit, Mr Sizer expands on this to say that there were meetings on 6 and 18 February 2004 with this subcontractor. Mr Sizer goes on, [par 17 of the second affidavit], that it was not until after the "clarification of the Reconsidered Interim Award", and the architect's "purported certification that all windows were defective on 30 October 2003" and the subsequent further hearing and award, and the meetings on 6 and 18 February that "the extent of the financial detriment to the applicant became apparent and became of sufficient magnitude to warrant bringing an appeal in this Honourable Court".

42 What Mr Sizer is therefore putting forward is that the applicant had made a decision not to lodge an appeal within the time permitted, having received counsel's advice on the point in issue, then the applicant changed its mind when subsequently the applicant realised the extent of the financial detriment involved in complying with the award in relation to the windows. Mr Sizer has disclosed what actually occurred with admirable frankness. But, in my view, the reasoning provides very little by way of proper explanation for the failure to file an application within the prescribed time limits. As between the parties to the arbitration, it is irrelevant that the applicant erroneously thought that it would be able to shift the expense of complying with the Arbitrator's award to a third party. The applicant's actual obligation under the award was to replace the windows. Whether it had recourse to any third party was a matter exclusively between the applicant and the subcontractor. As between the applicant and the respondents the magnitude of the window issue was at all times unchanged.

43 Whilst the applicant describes, in Mr Sizer's affidavit, the process of correspondence as being "the resolution of ambiguities", consideration of that correspondence referred to in detail above, shows a clear desire on the applicant's part to continue to argue the issue over the windows, which had been determined by the Arbitrator in his Reconsidered Interim Award. As noted by the Arbitrator, it does appear that much of this argument may have been at the instigation of the subcontractor. As Mr Sizer stated [par 37 of his affidavit of 16 March], it was the subcontractor that considered the remedial works should have involved replacement of parts of the powdercoated aluminium window frames only. All of that highlights the likelihood that the applicant may have been over optimistic in any expectation that the subcontractor would accept an obligation requiring it to replace all the windows.

44 The applicant argues that all other work having been done or issues otherwise resolved, the outstanding issue of windows remains a cosmetic problem and that if all windows were replaced, the respondent would obtain new windows 8 or 9 years after the original installation. The applicant argued that this was in the context where it was some 4 years after completion that notice was given in relation to the straight windows and 5 years before the matter came on for arbitration and that this time might be compared to the delay in lodging the appeal. The applicant argued that if leave were not granted it would lose the right to have the issue determined on the merits. However, in this situation, it is apparent that the prejudice to the respondents is not only any delay in finalising the works to the windows, but also the uncertainty of continued litigation, the inconvenience of not knowing when significant works to a domestic residence might be completed and the significant detriment of not being able to rely upon not one but two awards of the Arbitrator and pursue the recovery of the costs and expenses incurred in the litigation. I am not persuaded that, in relation to the extension of time for filing an application to appeal from the Arbitrator's award, prejudice should be judged in the context of the length of time for the matter to be brought to arbitration. I consider that there would be a significant prejudice to the respondents if time were to be extended.

45 The relevant grounds of appeal now seek to argue, in relation to both the awards, that the Arbitrator:

(a) failed to decide a matter in issue in the proceedings, namely which of the windows were in fact defective;

(b) delegated to the architect authority to determine which of the windows were in fact defective.

46 In relation to each ground, it is said that this amounts to technical misconduct by the Arbitrator or alternatively that the Arbitrator thereby misconducted the arbitration proceedings. Misconduct is defined in s 4(1) of the Commercial Arbitration Act 1985 as follows:

""misconduct" includes corruption, fraud, partiality, bias and a breach of the rules of natural justice."

47 It is well-established that an arbitrator cannot delegate his decision-making power to another: Tomlin v Fordwich Corporation [1836] EngR 732; (1836) 111 ER 1121 and see "Russell on Arbitration", 21st ed, at 6-057, 6-077, 6-081. This proposition was not the subject of dispute on this application. Similarly, an arbitrator must determine the matters that are before him and failure to do so may amount to misconduct: Villani v Delstrat Pty Ltd (2002) WASC 112 per McKechnie J, and Thiess Contractors Pty Ltd v The Water Corporation of Western Australia, unreported; SCt of WA; Library No 970561; 28 October 1997. There was no argument as to the correct law on this point.

48 The question on this application involves an interpretation of the awards. The applicant argued that they should be construed to the effect that the Arbitrator had not decided the issue in relation to the straight windows but had left this aspect to be determined by the architect. Therefore, the focus is upon what the Arbitrator did decide in relation to the straight windows and what his orders concerning the role of the architect in relation to those windows signify.

49 The Reconsidered Interim Award is exhibited to the first affidavit of Mr Sizer [as WFS6, commencing at page 113]. The Arbitrator's findings in relation to the windows has been set out above in this judgment, at par 16. The Arbitrator corrected his previous reasons in the light of the decisions of Barker and Pullin JJ. The Arbitrator refers to having heard evidence in relation to the powdercoatings and finish to the windows. The history of the dispute over the windows was clearly the subject of the arbitration. The Arbitrator clearly decided the issue on the merits and stated that the respondent succeeded in respect of both the straight and curved windows. He said as much, in terms. The claim that the respondents made, for item C01, has been quoted above at par 5 [page 41 of Mr Sizer's affidavit]. This included the claim that the windows did not meet contract specifications, the powdercoating on the window frames was defective. In terms of the Reconsidered Interim Award, it is clear that the respondents won the point. Being successful "as claimed by the owner", could not therefore reasonably be interpreted to mean that some windows or some parts of the frames as might be found in subsequent examinations to have corrosion were to be replaced. This had been a long-standing problem with the windows, in relation to which various attempts to remedy the problem had been made and had not been successful. The issue was the efficacy of the coatings, the Australian Standards, and the type of coating to be applied. The Arbitrator ordered that they were all to be replaced thus:

"I therefore order and direct, as claimed by the owner, the builder to remove defective powdercoated aluminium window frames, etcetera, and replace with new ..."

50 In that context, the use of the word "defective" is not to be construed as meaning "those windows as may be found to be defective" but as those windows being the windows claimed by the owner and found by the Arbitrator to be defective: i.e., the word "defective" is used as a description of the windows having the characteristics attributed to them by the owners in their claim.

51 The applicant has not alleged any error of law by the Arbitrator in the manner in which he dealt with the contractual claim after the prior appeal. Any claim of that kind would properly have had to be made under s38 of the Commercial Arbitration Act.

52 The architect previously had a well-understood role under the contract as the certifier, as well as being the owner's architect and agent. The Arbitrator, in his Reconsidered Interim Award at par 2.34, dealt with the circumstances in which he ordered specific performance, and indicated that he would be making certain orders which can be summarised as:

(1) Specific performance;

(2) Such specific performance to be subject to certification of the architect (or his replacement);

(3) Specific performance to be completed within a time program agreed by the parties or, if not agreed within 4 weeks, in accordance with a program determined by the architect;

(4) The claimant to promptly inform the respondent of the identity of the architect.

53 These were specific orders to be applicable in each case where the Arbitrator ordered specific performance.

54 In the light of those reasons, the applicant knew exactly the role assigned to the architect from 2 July 2003. The applicant took no steps to challenge the decision concerning the architect's role, as described in par 2.34, within the appeal period following the publication of the Reconsidered Interim Award. In the context of this dispute, the applicant must have known the architect's views in relation to the windows, as the Arbitrator noted in his Reconsidered Interim Award (page 134 of the Sizer affidavit): "The architect never expressed satisfaction with the original work in the windows or any of the remedial work in them."

55 Further issues were raised subsequent to the Reconsidered Interim Award, about the scope of the works to be done, out of which emerged further arguments about the finish on the windows. The matter then proceeded to the further hearing and Further Interim Award. The Arbitrator considered the issue of the finish on the windows and the number of windows to be replaced and confirmed that his order related to whole windows, making no distinction between the curved and straight windows. He heard further evidence in December 2003. The applicant maintained at this stage that not all the components of the straight windows needed replacement.

56 The Arbitrator found in favour of the respondents on the issues of both finish and number:

"The architect has, in the exercise of his professional judgment, to certify of the quality of work and the workmanship, decided that all windows need replacement. I do not interfere with that. That being so, the previous issue of finish on the windows is resolved by the proposition that there is therefore no need to distinguish between the finish on the curved windows and the straight windows."

57 As can be seen from the correspondence, the architect clearly thought that he was making findings as to the defectiveness or otherwise of the windows, as evidenced by a fax from him to the applicant and the respondent, dated 30 October 2003 (exhibit WFS11, page 171 to the first Sizer affidavit). In my view, it is irrelevant to the proper reading of the Awards to consider the terms in which the architect described his work following upon the Reconsidered Interim Award. The comments by the Arbitrator, in the correspondence following the Reconsidered Interim Award in August, do not form part of the award. But his letter of 12 August 2003, to my mind shows him addressing the commonsense of a situation in which he had ordered the windows to be replaced in their entirety, but stating that a defect-free window, if found, might not require to be replaced. Not only would that be practical and a proposition with which one would not expect the applicant to have argued, but it is also consistent with the role of the certifying architect in the implementation of the Arbitrator's ruling. It does not detract from the terms of the award itself.

58 The applicant continued to maintain a different view of the coatings on the windows to that held by the architect, which was the very issue that had been argued in the arbitration, and upon which the applicant had been unsuccessful.

59 Thus, on reviewing the whole saga of the windows, the arbitration and the awards, I am not persuaded that there is a case to support the applicant's contention that the Arbitrator failed to determine the issue of the straight windows at all. This was a hotly disputed issue throughout upon which extensive evidence was taken and an issue which the respondents won at each stage of the proceedings. That major consideration cannot be overlooked in reading the wording of the awards of the Arbitrator, or in the reactions and correspondence which followed. Neither am I persuaded that the Arbitrator delegated the decision in relation to the straight windows to the architect. This is, in effect, the same issue. The Arbitrator, by his orders outlined in par 2.34 of the Reconsidered Interim Award accorded to the architect the supervision of the specific performance in execution of the decision. There is perhaps something to be desired in the manner in which this was expressed in the Further Interim Award. The architect had been a witness in the original arbitration, resulting in his schedule of works being provided on 30 October 2003, which, in part, led to the further hearing before the Arbitrator. The applicant continued its dispute with the architect about finishes, extent of replacement and corrosion, from the period immediately after the Reconsidered Interim Award up to and including the hearing on 16 December 2003. It was in that context that the Arbitrator determined the question in relation to the finishes and the product to be used and the replacement of all the windows in their entirety.

60 I take the view that the architect was ordered in effect to continue his "contractual" role to ensure implementation of the award. In the context of the finding that the respondents had succeeded in their claim, the role assigned to the architect cannot be characterised as "misconduct" in the sense defined in s 4(1) of the Commercial Arbitration Act 1985.

61 The applicant raised a third argument not specifically encompassed in any of the remaining grounds of appeal. The argument itself was totally dependent upon the delegation proposition and sought to allege that there was a "reasonable apprehension of bias" on behalf of the architect, given his role as a witness for the respondents, and also alleging that he had a personal interest in the outcome of the arbitration. I have already said that I am not persuaded that there was delegation such as to amount to misconduct on the part of the Arbitrator in all the circumstances. The proposition that the actual referee or arbitrator must be impartial and perceived to be so is axiomatic. The submission as put by the applicant in its written submissions was that, "A reasonable person in the position of the Arbitrator would hold a reasonable apprehension that Adams would not bring a fair and unprejudiced mind to the resolution of the questions arising before him". This appears unrelated to the matters in issue in this application. The factual issue was whether on a true construction of the awards there had been delegation or not. That the architect was intimately involved in the issues concerning the straight windows, and no doubt the other aspects of the arbitration, is obvious. The applicant took a strongly differing view of various matters the subject of the arbitration to that taken by the architect. All of which might have been sufficient motivation for the applicant to seek leave to appeal the order of the Arbitrator, in the Reconsidered Interim Award, that the architect should be the supervisor and certifier of the specific performance orders. The identity of the architect was confirmed to the applicant on 17 July 2003 by a letter of that date. If, therefore, it was the position of the applicant that the architect could not be trusted to act in a certification role, or that the relationship had broken down to such an extent that the order was unworkable, the applicant had its remedy then by way of seeking leave to appeal. Whether such leave would have been granted under s38 is another issue.

62 The applicant further argued that by the delegation to the architect of matters requiring quasi-judicial determination, the architect became part of the decision-making tribunal, and thus considerations of natural justice and apprehension of bias should apply to the architect as if he were the Arbitrator.

63 This submission did not relate to any of the remaining grounds of appeal. Neither is it persuasive in circumstances where there was no delegation of the type alleged by the applicant.

64 There was an extended delay in filing the application in relation to the Reconsidered Interim Award. It was immediately clear that the architect would have a significant role as certifier in the implementation of the orders made by the Arbitrator where they required specific performance. No appeal was lodged at that stage.

65 In my view the so-called "clarification" of the Reconsidered Interim Award, does not excuse the delay. It was the respondents who initiated correspondence, in the face of inactivity by the applicant on an agreed schedule of works, and the attendance of the subcontractor at the respondents' premises. Thereafter applicant continued to assert the appropriateness of the remedy of specific performance in relation to various items including the straight windows, in the face of the respondents' argument that, due to the difficulties that had arisen, it was not the appropriate remedy. The reasons given for the failure to take any action from July 2003 prior to 12 March 2004 are not of the character as might overcome such an extended period, such as events outside the control of the applicant, failures by their representatives or extraordinary events.

66 The only explanation for the considerable delay following the publication of the Further Interim Award, is the time it took for the applicant to appreciate the full extent of its financial implications. The actual implications of the award were plain. The facts do not disclose any satisfactory reason to overlook the delay. This is a situation in which the applicant took a deliberate decision not to appeal, based upon the amounts involved in relation to items C24 and C25. The point canvassed in relation to the straight windows was the same. The erroneous belief that the subcontractor would meet the applicant's obligations in relation to replacement of the straight windows apparently caused the applicant to determine to do nothing. Mr Sizer does not depose to any fact or circumstance which would indicate that he had a reasonable foundation for a belief that the subcontractor would necessarily meet the applicant's obligations in relation to the Arbitrator's award. There is sufficient indication of the subcontractor's view of the appropriate remedial works to be gleaned from Mr Sizer's affidavit and the conclusions of the Arbitrator to suggest that there were grounds strongly to suspect otherwise. Even if the applicant had been mislead on this score, it is doubtful whether that could outweigh a deliberate decision not to appeal in these circumstances. Whether or not the subcontractor would indemnify the applicant is not a matter of weight in assessing fairness as between the applicant and the respondent upon the question of an extension of time. There was no error or oversight.

67 The view I have taken in relation to the lack of merit of the now remaining grounds of appeal is set out above. The length of the delay, especially in relation to the Reconsidered Interim Award, is not one that could be easily overcome. There is an absence of cogent explanation in regard to that period. The explanation in relation to the last award does not have weight compared to the other factors which have to be considered, such as prejudice and the long history of the proceedings. The reality of the situation is, in my view, that the applicant was prepared to persist in argument about the issue of the replacement of the windows for as long as possible, probably with the significant encouragement of the subcontractor. The prejudice to the respondents has already been considerable, given the protracted nature of the disputes between the parties, their interest in the finality of the proceedings and the ability to rely upon the award of the Arbitrator to determine that dispute is a significant factor. Ultimately, I take the view that the delay has not been adequately explained, and given that there is a long and litigious history, any continuation is significantly prejudicial. I have considered the merits of the grounds of the application and whether the refusal of an application for an extension of time will work an injustice on the applicant. In my view it will not.

68 The application for an extension of time within which to the appeal pursuant to s 42 of the Commercial Arbitration Act is accordingly dismissed.