Re An Arbitration Fergus Weir v Denia Lubiejewski [1988] ACTSC 16 (31 March 1988)

SUPREME COURT OF THE ACT

IN THE MATTER OF AN ARBITRATION FERGUS WEIR v. DENIA LUBIEJEWSKI
S.C. No. 56 of 1988
Arbitration

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Kelly J.(1)

CATCHWORDS

Arbitration - Application for leave to enforce award - Whether award might be remitted in respect of possible omission.

Commercial Arbitration Ordinance 1986 (A.C.T.) - ss. 33, 38(1), 43

Orion Compania Espanola de Seguras v. Belfort Maatschappij Voor Algemene Verzekgringeen (1962) 2 Lloyd's Rep. 257.

Universal Petroleum v. Handels-und Transportgesellschaft (1987) 2 All ER 737.

HEARING

CANBERRA
31:3:1988

Counsel for the Applicant: Mr P. Dodson

Solicitors for the Applicant: Crowley & Chamberlain

Counsel for the Respondent: Mr S. Walmsley

Solicitor for the Respondent: Ray Swift

ORDER

Pursuant to s. 33 of the Commercial Arbitration Ordinance 1986, Fergus Weir (the applicant) have leave to enforce against Denia Lubiejewski (the respondent) in the same manner as though it were a judgment or order of the Court an award against the respondent in favour of the applicant in the sum of $5,908.00 made on 3 November 1987 under an arbitration agreement between the applicant and the respondent dated 1 October 1987.

The application by the applicant for leave to enter judgment against the respondent pursuant to the said award in the said sum nunc pro tunc the 16th day of November 1987 or, alternatively, that any judgment entered pursuant to leave granted bear interest pursuant to s. 53A of the Supreme Court Act 1933 from 16 November 1987 be dismissed.

The respondent pay the applicant's costs of and incidental to the application made by notice of motion dated 13 January 1988.

DECISION

By notice of motion the applicant (the builder) sought leave pursuant to s. 33 of the Commercial Arbitration Ordinance 1986 (the Ordinance) to enforce an award in his favour against the respondent (the owner) in the sum of $5,908. The award was made on 3 November 1987 pursuant to an arbitration agreement dated 1 October 1987. The notice of motion also sought an order that

"the applicant have leave to enter judgment

pursuant to the said award against the
respondent in the (said) sum nunc pro tunc
the sixteenth day of November 1987 or
alternatively that the said judgment bear
interest pursuant to s. 53A of the Supreme
Court Act 1933 from the sixteenth day of
November 1987."

2. The builder agreed with the owner to build additions to the family room of her residence on land known as Block 4, Section 115, Division of Wanniassa, Canberra. It was as a result of differences between the parties that the agreement for arbitration was entered into.

3. The arbitrator found that the works were commenced about mid June 1987 and were nearing completion on 18 August 1987 when a dispute arose between the parties and work was virtually suspended. He described the work which was outstanding and requiring completion. He then referred to the claim which was made by the builder against the owner for the balance outstanding on the contract, the costs of extras and a profit margin. He noted that in addition the builder was claiming interest at the rate of 20% from the date of the claim for the outstanding money, 7 September 1987.

4. The arbitrator remarked:

"The relationship between the Parties has
reached a position of hostility and the
communication barrier which exists will
require special arrangements to complete the
Works under the said Contract. This problem
also involves the building authorities as a
permit No. 93456 has been granted to the
(builder) on 4 June 1987 to complete the
Works and this permit remains current until
4/9/88."

5. The arbitrator set out a list of "Work to be Completed". Under that heading he included 13 items some of which seem clearly to relate to work not done and some to work done but not properly done and requiring rectification. He noted the expected costs of work listed as work to be completed at $1,435.

6. Later he said:-

"It will be found that the eventual cost of
completion is likely to be higher than the
sum (of $1,435) apart from the foregoing
matters. This is due to the fact that the
additional overhead costs involved in the
cancellation of the Builder's current permit
and the fees payable to obtain another permit
by a new builder had been awarded against the
(owner). The reason for this lies in the
fact that termination of the Contract is done
by mutual consent for practical purposes to
avoid further acrimony between the parties."

7. Under the heading "Final Award" the arbitrator said, inter alia:-

"I direct the parties as follows:

1. that the Contract between the parties be
terminated as of the date of this Award
subject to the (builder) being paid the
Settlement Sum in full within seven (7)
days of the (builder) furnishing four
(4) copies of the amended architectural
plan to the (owner) as referred to in
H.17 hereof;

2. that (the owner) pay (the builder) the
sum of FIVE THOUSAND NINE HUNDRED &
EIGHT DOLLARS ($5,908.00) within seven
(7) days of receipt of the amended
architectural plan, correctly drawn.

3. that the Owner bear all further costs to
have the Works completed and approved by
the relevant authorities having
jurisdiction over the Works. This means
that the (owner) shall lodge and pay all
fees in connection with obtaining
approval on the amended architectural
plan referred to in H.17 hereof and bear
the cost of the completion of the Works
by the builder to be engaged including
permit fees, electricity riser, etc. as
referred to under Section B. and Item
H. 9 & 14 hereof;

4. that the Owner cause an amended sanitary
drainage plan to be prepared and shall
lodge same with the relevant authority,
pay all fees and obtain approval in
accordance with Plumbing & Sanitary
Drainage Inspection Record dated
17/6/87;

5. that the Owner shall in implementation
of the terms of this Final Award inform
the Building Section of the A.C.T.
Administration in writing making the
following statement:

'Pursuant to an Award dated 3 November
1987 under an Arbitration Agreement
between myself and Mr F. Weir, the
arbitrator has directed that the
Contract between myself and Mr Weir be
terminated by mutual consent and that
items of work outstanding including
amended plans be executed by another
licenced builder. . . .'"

8. The dispute presently before me centred upon the work done by the builder in respect of the roofing for the additions.

9. Although the builder had served amended drawings of the extension on the owner on 9 November 1987, on 25 February 1988 he caused further amended drawings to be served on her. The owner concedes that the drawings served upon her on 25 February 1988 would, if lodged in respect of a proposed alteration to her home, meet the requirements of the Building Controller under the Building Ordinance 1972.

10. The builder concedes that those drawings, so far as they relate to the roofing for the additions, do not show the work as he carried it out and effectively therefore some remedial work on the roof is necessary so that it may accord with the second set of drawings referred to above and, eventually, merit the necessary approval by the Building Controller under the Building Ordinance. I assume that the roof as presently constructed would not gain that approval.

11. The only reference to the roof which I can find in the arbitrator's award appears under the hearing "Extras" on p 10 where he said:-

"Variations to the Contract and the revised
architectural plan were made after
commencement of the Works. These fall
basically into two categories: alterations
to the construction of the floor, the
external walls, windows, doors, ceiling and
roof for reasons of technical expediency or
site constrictions, and additional work
requested by the (owner)."

12. The question then is whether upon the true construction of the award and upon the admitted facts the builder is entitled to have leave to enter judgment for the amount in question. In my opinion he is. I think the award makes it clear that the owner is to bear all further costs of having the works completed and approved by the relevant authorities. She is to lodge and pay all fees in connection with obtaining approval on the amended architectural plan which is to be provided by the builder at no cost to her and she is to bear the cost of the completion of the works by a builder to be engaged. The award uses the phrase "the builder to be engaged". What is plainly meant is some other builder yet to be engaged by the owner to finish the works in accordance with what the arbitrator called the final plan.

13. Counsel for the owner directed my attention to that part of the award which said:-

"I take here the opportunity to stress that
it will be entirely the (builder's)
responsibility to ensure that the final plan
will truly reflect the work as executed."

This cannot mean, in my opinion, that the final plan is to reflect truly the work as executed by the builder even though that work would not be passed by the Building Controller under the Building Ordinance 1972. It is plain, for example, that, under the heading "Work to be Completed", the arbitrator intended that the builder should prepare a plan for a threshhold/landing yet to be properly constructed. This appears clearly, I think, from the words which appear immediately after the words I have just quoted where the arbitrator said:-

"This means that the arrangement for the said
landing and steps will also need to be shown
correctly even though another party is
actually going to make the necessary
adjustment on site."

Again at p 13 of his award the arbitrator said:-

"Note that the amended plan will also need to
show clearly the arrangement of a landing and
steps to the side entry door in a manner that
would comply with building regulations as
referred to in Item B.6."

14. While one may suspect that the arbitrator did not notice the defect in the pitch of the roofing, I do not think the fact that he may have omitted reference to it or failed to notice it can in the circumstances mean that there has been such a mistake made that the matter should be remitted to the arbitrator for further consideration of this one aspect.

15. I have given consideration to Orion Compania Espanola de Seguras v. Belfort Maatschappij Voor Algemene Verzekgringeen (1962) 2 Lloyd's Rep 257. In that case an umpire dealt with the first issue in an arbitration by saying first that both arbitrators agreed that the respondent's case on the first issue failed and by leaving the matter at that. He did not himself enter upon consideration of the respondent's case on that issue. This was held by Megaw J to be a failure by the umpire to carry out his duty to include in his award his own decision on the first issue. The matter was therefore remitted to the umpire so that he might make his finding on it.

16. I do not think, however, that I have any power to remit even if it were appropriate. I think the better view is that the omission, if there has been one, is not in respect of an issue but in respect of one item of evidence. But it seems to me that the position is totally governed by s. 43 of the Commercial Arbitration Ordinance 1986 which says:-

"Subject to sub-section 38(1), the Court may
remit any matter referred to arbitration by
an arbitration agreement together with any
directions it thinks proper to the arbitrator
or umpire for reconsideration or, where a new
arbitrator or umpire has been appointed, to
that arbitrator or umpire for consideration."

Section 38(1) says:-

"Without prejudice to the right of appeal
conferred by sub-section (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."

17. Because the owner's application for leave to appeal against the award has been dismissed and because it follows that the owner therefore now has no right of appeal, it seems to me that the Court now has no jurisdiction to remit the award to the arbitrator on the ground of error of fact. Of course no error of fact appears, in my opinion, on the face of the award.

18. This view would appear to accord with that expressed by the Court of Appeal in Universal Petroleum v. Handels-und Transportgesellschaft (1987) 2 All ER 737, a decision which turned upon the provisions of s. 1 of the Arbitration Act 1979 (United Kingdom). The relevant provisions of that section are sufficiently like those in the Ordinance to enable guidance to be sought from decisions on the Act.

19. Counsel for the builder submitted that the owner had elected to seek one remedy, that of leave to appeal. Having failed in that she was not entitled to seek to have the matter remitted to the arbitrator on the ground that there was an omission. He relied on Port of Melbourne Authority v. Ansun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589. I think the submission succeeds, the more so since, as it seems to me, the parties gave themselves a breathing space of 10 days by their arbitration agreement within which any such omission as may have occurred could be dealt with. That clause said:-

"Subject to Clause 8(v) hereof and unless
otherwise stated in the Award, the award made
by the Arbitrator shall, subject to this
Agreement become final and binding on the
Parties to the Agreement on the tenth day
following the date of publication unless
otherwise stated in the Award."

Paragraph 8(v) states:-

"Where an award contains -

(a) a clerical mistake;

(b) an error or omission;

(c) a material miscalculation of figures or
a material mistake in the description of
any person, thing or matter referred to
in the award;

or

(d) a defect of form,

the Arbitrator may correct and vary the award
upon application by the Parties or upon his
own initiative."

20. The presence of those provisions in the arbitration agreement, coupled with the fact that the owner chose to proceed by way of application for leave to appeal from the award, makes it plain I think that she has elected to pursue one remedy, might possibly have elected to pursue another but now cannot be heard to say that the award should be remitted to the arbitrator.

21. The builder should have leave to enforce the award against the owner in respect of the sum of $5,908.00.

22. No submissions were addressed to me on the question of interest. In my opinion the arbitrator quite deliberately omitted to make any award of interest in the arbitration. This appears from paragraph H. 13 of his award where he said:-

"As the question of breach of contract does
not arise and the payment on Practical
Completion not having fallen due prior to the
arbitration no interest on the amount of the
settlement figure is allowed."

23. He chose not to exercise his power to award interest up to the making of the award, nor did he choose to award interest on the amount ordered to be paid. (See ss. 31(1) and 32 of the Ordinance.)

24. Accordingly I refuse the application for interest.