[Home] [Databases] [WorldLII] [Search] [Feedback] High Court of Australia

Askew v Fields [1985] HCA 4; (1985) 156 CLR 268 (13 February 1985)

CATCHWORDS

HEARING

DECISION

2. In the Supreme Court the owner contested the builder's application for leave to enforce the award on the ground that the award was void and of no effect because it failed to deal with all the matters in dispute between the parties in the arbitration. By his cross claim the owner sought a declaration that the award was void, and in the alternative an order that the award should be set aside or remitted to the arbitrators for reconsideration. By his points of claim in the arbitration the builder had claimed that an amount of $21,390 was due and unpaid for work done under a contract for the execution of alterations and additions to premises at 19 Elizabeth Street, Paddington and also for extra work performed. In addition he claimed interest for various periods of portions of that amount. The owner's points of defence and counter claim disputed liability for some of the work, claimed sums due under a penalty clause and claimed damages for the cost of rectifying faulty work. A balance of $6,018 was claimed as due from the builder to the owner.

3. As the award provided that the owner should pay to the builder $21,366 inclusive of interest, it is apparent that the arbitrators did not both allow the whole of the builder's claim and reject the whole of the owner's claim. However, the award omits to specify what part of the builder's claim, if any, and what part of the owner's claim, if any, was rejected.

4. In this Court the owner submits that the award is invalid because it fails to make findings on the issues arising in the arbitration and fails to expose the mathematical calculations by which the arbitrators arrived at the balance due to the builder as the ultimately successful party. However, generally speaking, arbitrators are not bound to make such findings or to express their mathematical calculations in their award. Although arbitrators are bound to decide the issues submitted for their determination, they are not bound in the absence of special circumstances to expose in their award their findings on particular issues when the submission to arbitration is such that they are entitled to award a net sum. Where a claim and cross claim arise out of the same transaction and the submission entitles the arbitrators to award a net sum (as does the submission in this case), the absence of findings on particular issues furnishes no ground for supposing that there has been an error of law that invalidates the award. In Gold Coast City Council v. Canterbury Pipe Lines (Aust.) Pty. Ltd. [1968] HCA 3; (1968) 118 C.L.R. 58, Windeyer J. said (at p.76):

"What then is an award the face of which can be examined for
error of law? An award is very often a document which announces
only the arbitrator's ultimate finding on the matter submitted for
his determination. This finding may be no more than that a
specified sum of money is payable by one party or the other."

5. What is necessary to the validity of the award is that the relevant claim has been taken into consideration. In that regard the party challenging the award bears the onus of establishing that the arbitrators failed to deal with issues submitted to them for determination. As Parke B. observed in Harrison v. Creswick [1853] EngR 10; (1853) 13 C.B. 399, at p.416 (138 E.R. 1254, at p.1261):

"Where an award is made de praemissis, the presumption is, that
the arbitrator intended to dispose finally of all the matters in
difference; and his award will be held final, if by any intendment
it can be made so." In the present case the award, immediately
before the order for payment, contains a recital in these terms:
"having heard the evidence brought before us and having considered
the points of claim and points of defence and counter claim".

6. The owner submits that in the particular circumstances of this case the arbitrators were under a duty to make findings of the kind already indicated. Although the submission to arbitration contained no provision requiring the arbitrators to proceed in this way, it is argued that the conduct of the arbitration and the manner in which it was agreed that it should be conducted, gave rise to such an implied duty. In this respect emphasis is given to the agreed procedure, involving the delivery of points of claim and points of defence and particulars, discovery and inspection of documents and a formal hearing lasting some five days. In particular, reliance is placed on the further circumstance that the pleadings and particulars threw up precise and detailed issues for determination. We do not consider that it is legitimate from these circumstances to conclude that the arbitrators were under an implied duty to make particular findings or to expose the mathematical calculations by which they arrived at the final figure mentioned in the award.

7. The owner's alternative submission is that the award should be remitted by the Court to the arbitrators for reconsideration in the exercise of the supervisory jurisdiction conferred by s.12 of the Arbitration Act 1902 (N.S.W.) on the ground that it is possible that the arbitrators made an error of law in making their award. It is said that if the award contained the findings and calculations already mentioned it might have disclosed error of law on its face susceptible of relief by the Court. It is appropriate, so the argument runs, that the Court in the exercise of its supervisory jurisdiction should remit the award to the arbitrators requiring them to incorporate additional matters in their award so that the owner may seek relief for error of law, if any, on the face of the award. It may be that the Court's supervisory jurisdiction under s.12 to remit an award for reconsideration is not limited to cases in which there is an error of law, failure of duty or misconduct on the part of the arbitrator, rectification of mistake at the instance of the arbitrator, or fresh evidence. But we do not consider that the possibility, without more, that the arbitrators may have made an error of law, not appearing on the face of their award, is enough to justify an exercise of the power (see Russell on the Law of Arbitration (20th ed., 1982), p.396; GKN Centrax Gears Ltd. v. Matbro Ltd. (1976) 2 Ll.L.Rep. 555, at p.577).

8. It is submitted that it is possible that the arbitrators made errors of law in their award of interest and costs. In relation to interest it is suggested that the award was in error in that interest had apparently been awarded under cl.21.3 of the building contract upon the whole of the primary amount which the arbitrators had found that the owner was liable to pay to the builder whereas, under the terms of that clause, interest could only have properly been awarded upon part of that primary amount. It seems clear that this point was not taken by the owner before the primary judge or the Court of Appeal. In all the circumstances we have come to the view that it is not a point which should be entertained for the first time in this Court. In this respect it is to be noted that the basis on which the builder claimed interest was not made the subject of dispute in the pleadings and there is nothing before us to indicate that it was pursued at the hearing before the arbitrators.

9. In relation to costs the submission is that the builder was not entitled to an order for all his costs when he did not succeed in relation to the totality of his claim. However, as the builder was unsuccessful in relation only to a small proportion of his claim, there is no basis for concluding that the arbitrators were in error in failing to apportion costs. There is nothing in the materials before us to justify the conclusion that the pursuit of issues on which the builder failed in the arbitration occupied a significant part of the time of the hearing. Accordingly, there is no basis for remitting the matter with a direction to the arbitrators of the kind proposed.

10. It should be mentioned that the owner did not challenge in this Court the correctness of the Court of Appeal's rejection of an argument that the award was invalidated by reason of a failure by one of the arbitrators to have signed it at the time the proceedings in the Supreme Court were instituted. We would also mention that nothing we have said is intended to discourage an arbitrator from framing his award so as to disclose the findings of particular matters which have culminated in the award of a net sum.

ORDER