Ku-ring-gai Council v. Ichor Constructions Pty Ltd

At a glance

Parties

Ku-ring-gai Council (applicant) v. Ichor Constructions Pty Ltd (respondent)

Case no.

Supreme Court of New South Wales (Court of Appeal), File No. 2018/160051; [2019] NSWCA 2

Court

New South Wales Court of Appeal: Bathurst CJ, Beazley P, Ward CJ in Eq

Forum and rules

Domestic arbitration under the Commercial Arbitration Act 2010 (NSW)

Treaty

None; Commercial Arbitration Act 2010 (NSW), ss 14 and 27D

Sector

Construction

Underlying decision

Ku-ring-gai Council v Ichor Constructions, [2018] NSWSC 610 (McDougall J, 8 May 2018)

Outcome

Application for leave to appeal dismissed as incompetent (5 February 2019). A decision under s 14(2) is final and cannot be appealed.

Amount

The Council was ordered to pay Ichor's costs of the application, including the costs of the objection to competency.

The dispute

Ku-ring-gai Council and Ichor Constructions were parties to a construction contract, and their disputes were referred to arbitration before Mr John Tyrril. On the last hearing day, 29 March 2018, the parties signed a handwritten consent under s 27D of the Commercial Arbitration Act 2010 (NSW). The consent allowed the arbitrator to act as mediator and put forward a settlement proposal. Both parties rejected the proposal, and the arbitration resumed without any fresh written consent under s 27D(4). On 6 April 2018 Ichor said the arbitrator's mandate had terminated under s 27D(6). The Council sought declarations that the mandate had not terminated, arguing that there had been no mediation, that consent had been given, and that Ichor had waived its objection or was estopped from raising it. After McDougall J dismissed the proceedings, the Council sought leave to appeal. Ichor objected that s 14(3) of the Act made the appeal incompetent.

Key holdings

1. The primary judge was exercising the power under s 14(2), not granting an interim measure under s 17J. The Council sought final relief on whether the arbitrator had become in law 'unable to perform' his functions. That falls within s 14(1)–(2). ¶¶ 65–66
2. Section 9 does not confer jurisdiction on a court, and s 17J does not widen the kinds of relief a court can grant. ¶¶ 61–64
3. 'Final' in s 14(3) means 'not subject to appeal', and this includes an appeal from a Division of the Supreme Court to the Court of Appeal. The Court relied on four further points: the limited-review wording, the aim of uniformity with the Model Law under s 2A, the UNCITRAL travaux préparatoires, and the paramount object in s 1C. The note to s 14 confirms this reading. The application was therefore incompetent. The High Court's appellate power under s 73(ii) of the Constitution is unaffected. ¶¶ 69–77
4. Even if the application had been competent, leave would have been refused. The arbitrator plainly acted as a mediator, as a 'non-arbitral intermediary' under s 27D(8). A statement by counsel in the transcript does not amount to the written consent required by s 27D(4). ¶¶ 78–81
5. There was no statutory waiver under s 4, because s 4 requires actual knowledge of the non-compliance and no party knew of s 27D(4). Neither estoppel by representation nor conventional estoppel was made out. ¶¶ 82–85

Procedural history

1. 2–29 March 2018Arbitration hearing over twelve days. On the last day the arbitrator acts as mediator with the parties' written consent, and the parties reject his proposal.
2. 6 April 2018Ichor's solicitors refuse consent to the arbitrator continuing and say his mandate has terminated under s 27D(6).
3. 8 May 2018McDougall J dismisses the Council's summons ([2018] NSWSC 610).
4. 13 September 2018Hearing before the Court of Appeal.
5. 5 February 2019The Court of Appeal dismisses the application for leave to appeal as incompetent, with costs.

Tribunal, counsel and experts

Decided by

• Bathurst CJ Judge, Supreme Court of New South Wales (Court of Appeal)
• Beazley P Judge, Supreme Court of New South Wales (Court of Appeal)
• Ward CJ in Eq Judge, Supreme Court of New South Wales (Court of Appeal)

For the claimant

HWL Ebsworth Lawyers

For the respondent

BCP Lawyers & Consultants

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Keywords

• Commercial Arbitration Act 2010 (NSW)
• arbitrator acting as mediator
• section 27D
• termination of mandate
• section 14(3) finality
• no appeal
• interim measures
• section 17J
• UNCITRAL Model Law Article 14
• waiver of right to object
• estoppel
• written consent
• arb-med
• construction dispute
• competency of appeal
• Med-Arb

Summary generated with AI from the published documents — refer to the award for the authoritative text.