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enforcement_of_an_expert_determination_clause [2013/01/24 18:15]
steve [1994]
enforcement_of_an_expert_determination_clause [2017/07/30 18:00] (current)
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 ====== Enforcement of an expert determination clause ====== ====== Enforcement of an expert determination clause ======
-====== Related Material ​======+===== Related Material =====
   * [[enforcement_of_an_arbitration_clause|Enforcement of arbitration clause]]   * [[enforcement_of_an_arbitration_clause|Enforcement of arbitration clause]]
   * [[Anti-suit Injunction]]   * [[Anti-suit Injunction]]
   * [[appeal_of_an_expert_determination|Appeal of an expert determination]]   * [[appeal_of_an_expert_determination|Appeal of an expert determination]]
-====== Legislation ​======+===== Legislation =====
   * [[http://​www.austlii.edu.au/​au/​legis/​vic/​consol_act/​sca1986183/​s30.html|Supreme Court Act 1986 (Vic), s30 Power to stay proceedings]]   * [[http://​www.austlii.edu.au/​au/​legis/​vic/​consol_act/​sca1986183/​s30.html|Supreme Court Act 1986 (Vic), s30 Power to stay proceedings]]
   * [[http://​www.austlii.edu.au/​au/​legis/​vic/​consol_act/​vcaata1998428/​s77.html|Victorian Civil and Administrative Tribunal Act 1998 (Vic), s77 More appropriate forum]]   * [[http://​www.austlii.edu.au/​au/​legis/​vic/​consol_act/​vcaata1998428/​s77.html|Victorian Civil and Administrative Tribunal Act 1998 (Vic), s77 More appropriate forum]]
-====== Expert Determination Rules ======+===== Expert Determination Rules =====
    * [[http://​www.iama.org.au/​resources/​rules-guidelines/​expert-determination-rules|IAMA Expert Determination Rules]]    * [[http://​www.iama.org.au/​resources/​rules-guidelines/​expert-determination-rules|IAMA Expert Determination Rules]]
-====== Cases ====== +===== Cases ===== 
-===== 2012 =====+==== 2012 ====
   * [[McGrath v McGrath|McGrath v McGrath]] (([2012] NSWSC 578))   * [[McGrath v McGrath|McGrath v McGrath]] (([2012] NSWSC 578))
     * CONTRACT - expert determination clause - general principles - expert'​s discretion regarding process of valuation     * CONTRACT - expert determination clause - general principles - expert'​s discretion regarding process of valuation
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     * ARBITRATION – clause permitting resolution of extension of time dispute by arbitration – whether binding arbitration agreement - [[Manningham City Council v Dura Australia Constructions|Manningham City Council v Dura (Australia) Constructions Pty Ltd]] (( (1999) 3 VR 13)) (CA) – Commercial Arbitration Act (Vic) 1984, sub-s 53(1).     * ARBITRATION – clause permitting resolution of extension of time dispute by arbitration – whether binding arbitration agreement - [[Manningham City Council v Dura Australia Constructions|Manningham City Council v Dura (Australia) Constructions Pty Ltd]] (( (1999) 3 VR 13)) (CA) – Commercial Arbitration Act (Vic) 1984, sub-s 53(1).
     * WORDS AND PHRASES – interpretation of the word ‘may’ in dispute resolution clauses - [[Oakton Services v Tenix Solutions IMES|Oakton Services Pty Ltd v Tenix Solutions IMES Pty Ltd]] (([2010] VSC 176))     * WORDS AND PHRASES – interpretation of the word ‘may’ in dispute resolution clauses - [[Oakton Services v Tenix Solutions IMES|Oakton Services Pty Ltd v Tenix Solutions IMES Pty Ltd]] (([2010] VSC 176))
-===== 2011 =====+==== 2011 ====
   * [[Fulham Football Club (1987) v Richards|Fulham Football Club (1987) Ltd v Richards & Anor]] (([2011] EWCA Civ 855))   * [[Fulham Football Club (1987) v Richards|Fulham Football Club (1987) Ltd v Richards & Anor]] (([2011] EWCA Civ 855))
     * [[Fulham Football Club (1987) v Richards|Fulham Football Club (1987) Limited v Sir David Richards, The Football Association Premier League Limited]] Patten LJ     * [[Fulham Football Club (1987) v Richards|Fulham Football Club (1987) Limited v Sir David Richards, The Football Association Premier League Limited]] Patten LJ
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     * The provisions of Clause 26.1(B) to (D) must all be read in that context.     * The provisions of Clause 26.1(B) to (D) must all be read in that context.
     * I do not consider that the issue ... relates comes within the purview of clause 26.1 ...     * I do not consider that the issue ... relates comes within the purview of clause 26.1 ...
-===== 2010 =====+==== 2010 ====
     * Warren J (([[A Best Floor Sanding Party v Skyer Australia Party|A Best Floor Sanding Party Ltd v Skyer Australia Party Ltd]] [1999] VSC 170)) was, I think, right to regard the arbitration clause she had to consider as unenforceable insofar as it included within the scope of the reference the question whether the company should be wound-up. Such an order lies within the exclusive jurisdiction of the court and the discretion as to whether or not to make that order is for the court, not the arbitrator to exercise. But I part company with her if and insofar as she suggests in paragraph 18 of her judgment that there can be no resort to arbitration in respect of the dispute between shareholders or the company which forms the grounds upon which such relief may be sought.     * Warren J (([[A Best Floor Sanding Party v Skyer Australia Party|A Best Floor Sanding Party Ltd v Skyer Australia Party Ltd]] [1999] VSC 170)) was, I think, right to regard the arbitration clause she had to consider as unenforceable insofar as it included within the scope of the reference the question whether the company should be wound-up. Such an order lies within the exclusive jurisdiction of the court and the discretion as to whether or not to make that order is for the court, not the arbitrator to exercise. But I part company with her if and insofar as she suggests in paragraph 18 of her judgment that there can be no resort to arbitration in respect of the dispute between shareholders or the company which forms the grounds upon which such relief may be sought.
     * The arbitrator could, I think legitimately,​ decide whether the complaint of unfair prejudice was made out and whether it would be appropriate for winding-up proceedings to take place or whether the complainant should be limited to some lesser remedy. ​     * The arbitrator could, I think legitimately,​ decide whether the complaint of unfair prejudice was made out and whether it would be appropriate for winding-up proceedings to take place or whether the complainant should be limited to some lesser remedy. ​
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   * [[Camillo Concrete Structures v Baulderstone|Camillo Concrete Structures Pty Ltd v Baulderstone Pty Ltd (Domestic Building)]](([2010] VCAT 285))   * [[Camillo Concrete Structures v Baulderstone|Camillo Concrete Structures Pty Ltd v Baulderstone Pty Ltd (Domestic Building)]](([2010] VCAT 285))
   * [[John Nelson Developments v Focus National Developments|John Nelson Developments Limited v Focus National Developments Pty Ltd]] (([2010] NSWSC 150))   * [[John Nelson Developments v Focus National Developments|John Nelson Developments Limited v Focus National Developments Pty Ltd]] (([2010] NSWSC 150))
-===== 2009 =====+==== 2009 ====
   * [[1144 Nepean Highway v Leigh Mardon Australasia|1144 Nepean Highway Pty Ltd v Leigh Mardon Australasia Pty Ltd]](([2009] VSC 226))   * [[1144 Nepean Highway v Leigh Mardon Australasia|1144 Nepean Highway Pty Ltd v Leigh Mardon Australasia Pty Ltd]](([2009] VSC 226))
   * [[United Group Rail Services v Rail Corporation New South Wales|United Group Rail Services Ltd v Rail Corporation New South Wales]](((2009) 74 NSWLR 618))   * [[United Group Rail Services v Rail Corporation New South Wales|United Group Rail Services Ltd v Rail Corporation New South Wales]](((2009) 74 NSWLR 618))
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       * They are part of the activity of commerce itself. ​       * They are part of the activity of commerce itself. ​
       * Parties therefore often deal with the possibility of their occurrence in advance by the terms of their bargain       * Parties therefore often deal with the possibility of their occurrence in advance by the terms of their bargain
-===== 2008 =====+==== 2008 ====
   * [[Badgin Nominees v Oneida|Badgin Nominees Pty Ltd v Oneida Limited]] (([1998] VSC 188))  - Reference to Valuer as expert - Not an Arbitration - Court proceeding - Application to stay - Principles to apply - Discretionary considerations - Stay granted - Valuation proceeds   * [[Badgin Nominees v Oneida|Badgin Nominees Pty Ltd v Oneida Limited]] (([1998] VSC 188))  - Reference to Valuer as expert - Not an Arbitration - Court proceeding - Application to stay - Principles to apply - Discretionary considerations - Stay granted - Valuation proceeds
-===== 2006 =====+==== 2006 ====
   * [[Comandate Marine v Pan Australia Shipping|Comandate Marine Corp v Pan Australia Shipping Pty Ltd]](([2006] FCAFC 192))   * [[Comandate Marine v Pan Australia Shipping|Comandate Marine Corp v Pan Australia Shipping Pty Ltd]](([2006] FCAFC 192))
     * These commercial parties freely entered a bargain to resolve their disputes in London according to English law      * These commercial parties freely entered a bargain to resolve their disputes in London according to English law 
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   * [[Age Old Builders v Swintons|Age Old Builders Pty Ltd v Swintons Pty Ltd (Domestic Building)]] (([2006] VCAT 871))   * [[Age Old Builders v Swintons|Age Old Builders Pty Ltd v Swintons Pty Ltd (Domestic Building)]] (([2006] VCAT 871))
     * Proposed joinder of expert who delivered a determination allegedly negligently or in breach of terms of contract of engagement permitted.     * Proposed joinder of expert who delivered a determination allegedly negligently or in breach of terms of contract of engagement permitted.
-===== 2005 =====+==== 2005 ====
   * [[Zeke Services v Traffic Technologies|Zeke Services Pty Ltd & Anor v Traffic Technologies Ltd & Anor]] (([2005] QSC 135))   * [[Zeke Services v Traffic Technologies|Zeke Services Pty Ltd & Anor v Traffic Technologies Ltd & Anor]] (([2005] QSC 135))
-===== 2004 =====+==== 2004 ====
   * [[Ipoh v TPS Property No 2|Ipoh v TPS Property No 2 Pty Ltd]](([2004] NSWSC 289))   * [[Ipoh v TPS Property No 2|Ipoh v TPS Property No 2 Pty Ltd]](([2004] NSWSC 289))
   * [[Exeter City Association Football Club v Football Conference|Exeter City Association Football Club Ltd. v. Football Conference Ltd]] (([2004] 1 WLR 2910)) Weeks J   * [[Exeter City Association Football Club v Football Conference|Exeter City Association Football Club Ltd. v. Football Conference Ltd]] (([2004] 1 WLR 2910)) Weeks J
     * Declined to grant a stay of an unfair prejudice petition because the statutory rights conferred on shareholders to apply for relief at any stage are inalienable and cannot be diminished or removed by contract or otherwise     * Declined to grant a stay of an unfair prejudice petition because the statutory rights conferred on shareholders to apply for relief at any stage are inalienable and cannot be diminished or removed by contract or otherwise
-===== 2003 =====+==== 2003 ====
   * [[Strategic Publishing Group v John Fairfax Publications|Strategic Publishing Group Pty Limited and Anor v John Fairfax Publications Pty Limited]] (([2003] NSWSC 1134))   * [[Strategic Publishing Group v John Fairfax Publications|Strategic Publishing Group Pty Limited and Anor v John Fairfax Publications Pty Limited]] (([2003] NSWSC 1134))
-===== 2002 =====+==== 2002 ====
   * [[The Heart Research Institute v Psiron|The Heart Research Institute Limited v Psiron Limited]] (([2002] NSWSC 646))    * [[The Heart Research Institute v Psiron|The Heart Research Institute Limited v Psiron Limited]] (([2002] NSWSC 646)) 
   * [[Enron Australia Finance v Integral Energy Australia|Enron Australia Finance Pty Limited (in liq) v Integral Energy Australia]] (([2002] NSWSC 753))   * [[Enron Australia Finance v Integral Energy Australia|Enron Australia Finance Pty Limited (in liq) v Integral Energy Australia]] (([2002] NSWSC 753))
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     * However, where what is involved falls outside the realm of judicial or quasi-judicial determination,​ the issue is whether the principle of procedural fairness can be or should be maintained...     * However, where what is involved falls outside the realm of judicial or quasi-judicial determination,​ the issue is whether the principle of procedural fairness can be or should be maintained...
     * It is of assistance to address this issue by first asking whether the ... task is to be seen as that of an arbitrator, ie a quasi-judicial determination which will automatically invoke the principles of impartiality,​ or whether the task is merely that of an expert, valuer or appraiser. (my emphasis)     * It is of assistance to address this issue by first asking whether the ... task is to be seen as that of an arbitrator, ie a quasi-judicial determination which will automatically invoke the principles of impartiality,​ or whether the task is merely that of an expert, valuer or appraiser. (my emphasis)
-===== 2001 =====+==== 2001 ====
   * [[Savcor v State of NSW|Savcor v State of NSW]] (([2001] NSWSC 596))   * [[Savcor v State of NSW|Savcor v State of NSW]] (([2001] NSWSC 596))
   * [[Kanivah Holdings v Holdsworth Properties|Kanivah Holdings P/L v Holdsworth Properties P/L and Ors]] (([2001] NSWSC 405)) Palmer J   * [[Kanivah Holdings v Holdsworth Properties|Kanivah Holdings P/L v Holdsworth Properties P/L and Ors]] (([2001] NSWSC 405)) Palmer J
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     * That question is not for the valuer to determine in effect, by exercising a discretion not to disclose reasons, thus depriving the parties of a means of ascertaining the matter for themselves. ​     * That question is not for the valuer to determine in effect, by exercising a discretion not to disclose reasons, thus depriving the parties of a means of ascertaining the matter for themselves. ​
     * The contract may entitle the valuer to give only a non-speaking valuation, but that is not the same thing as prohibiting the parties from eliciting, by legal process or otherwise, what the valuer has actually done.     * The contract may entitle the valuer to give only a non-speaking valuation, but that is not the same thing as prohibiting the parties from eliciting, by legal process or otherwise, what the valuer has actually done.
-===== 1999 =====+==== 1999 ====
   * [[Badgin Nominees v Oneida|Badgin Nominees Pty Ltd v Oneida Limited]](([1998] VSC 188))   * [[Badgin Nominees v Oneida|Badgin Nominees Pty Ltd v Oneida Limited]](([1998] VSC 188))
     * the court clearly has jurisdiction to stay a court proceeding on the simple basis that ‘a contract is a contract’ and the parties should abide by it     * the court clearly has jurisdiction to stay a court proceeding on the simple basis that ‘a contract is a contract’ and the parties should abide by it
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     * The right of a contributory to apply to the court for a winding up order could not be limited by agreement.     * The right of a contributory to apply to the court for a winding up order could not be limited by agreement.
     * Refused to stay a winding up petition because it did not fall within the scope of the discretionary provisions of section 53 of the Commercial Arbitrations Act 1984.     * Refused to stay a winding up petition because it did not fall within the scope of the discretionary provisions of section 53 of the Commercial Arbitrations Act 1984.
-===== 1996 =====+==== 1996 ====
   * [[Francis|Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd]] (((1996) 39 NSWLR 160))   * [[Francis|Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd]] (((1996) 39 NSWLR 160))
-===== 1994 =====+==== 1994 ====
   * [[Holt v Cox]] (first instance)(((1994) 15 ACSR 313))    * [[Holt v Cox]] (first instance)(((1994) 15 ACSR 313)) 
-===== 1993 ===== +==== 1993 ==== 
-  * Channel Tunnel Group Ltd v. Balfour Beatty Construction Ltd (( (1993) AC 334)) Lord Mustill+  * [[Channel Tunnel Group v Balfour Beatty Construction|Channel Tunnel Group Ltd v. Balfour Beatty Construction Ltd]] (((1993) AC 334)) Lord Mustill
     * // Having made this choice (to have a dispute resolution clause) I believe that it is in accordance, not only with the presumption exemplified in the English cases cited above that those who make agreements for the resolution of disputes must show good reasons for departing from them, but also with the interests of the orderly regulation of international commerce, that having promised to take their complaints to the experts and if necessary to the arbitrators,​ that is where the appellant should go. //     * // Having made this choice (to have a dispute resolution clause) I believe that it is in accordance, not only with the presumption exemplified in the English cases cited above that those who make agreements for the resolution of disputes must show good reasons for departing from them, but also with the interests of the orderly regulation of international commerce, that having promised to take their complaints to the experts and if necessary to the arbitrators,​ that is where the appellant should go. //
-===== 1985 ===== +==== 1985 ==== 
-  * Legal & General Life of Australia Ltd v A Hudson Pty Ltd(((1985) 1 NSWLR 314 Followed Palmer J in [[http://​www.austlii.edu.au/​au/​cases/​nsw/​NSWSC/​2001/​405.html|Kanivah Holdings Pty Limited v Holdsworth Properties Pty Limited]] [2001] NSWSC 405, [at 48]); [[http://​www.austlii.edu.au/​au/​cases/​vic/​VSCA/​2006/​173.html|AGL Victoria Pty Limited v SPI Networks (Gas) Pty Limited]] [2006] VSCA 173))+  * [[Legal & General Life of Australia v A Hudson|Legal & General Life of Australia Ltd v A Hudson Pty Ltd]](((1985) 1 NSWLR 314 Followed Palmer J in [[Kanivah Holdings v Holdsworth Properties|Kanivah Holdings Pty Limited v Holdsworth Properties Pty Limited]] [2001] NSWSC 405, [at 48]); [[AGL Victoria v SPI Networks Gas|AGL Victoria Pty Limited v SPI Networks (Gas) Pty Limited]] [2006] VSCA 173))
     * the question whether an expert determination is binding depends in the first instance on the terms of the contract, express or implied;     * the question whether an expert determination is binding depends in the first instance on the terms of the contract, express or implied;
     * a determination obtained by fraud or collusion can usually be disregarded (for almost certainly it would be the case that in such a case there had been no valuation in accordance with the terms of the contract; it being easy to imply a term that the determination must be made honestly and impartially);​     * a determination obtained by fraud or collusion can usually be disregarded (for almost certainly it would be the case that in such a case there had been no valuation in accordance with the terms of the contract; it being easy to imply a term that the determination must be made honestly and impartially);​
     * it will be difficult, and usually impossible, to imply a term that the determination can be set aside on the basis of mistake or because it is unreasonable,​ since, by referring the decision to an expert on the basis that the decision will be final and binding, the parties will be said to have agreed to accept the expert’s honest and impartial decision, relying on the expert’s skill and judgment, and have agreed to be bound thereby;     * it will be difficult, and usually impossible, to imply a term that the determination can be set aside on the basis of mistake or because it is unreasonable,​ since, by referring the decision to an expert on the basis that the decision will be final and binding, the parties will be said to have agreed to accept the expert’s honest and impartial decision, relying on the expert’s skill and judgment, and have agreed to be bound thereby;
     * the critical question in cases where it is alleged that the expert has made a mistake is whether the determination was made in accordance with the terms of the contract – if the mistake is of a kind which shows that the determination is not in accordance with the contract (such as where a valuer values the wrong premises), then the determination may be rendered ineffective;​ if the mistake is as to the application of the expert’s judgment or as to what the expert has or has not taken into account, this is not a matter which affects the binding nature of the determination. ​     * the critical question in cases where it is alleged that the expert has made a mistake is whether the determination was made in accordance with the terms of the contract – if the mistake is of a kind which shows that the determination is not in accordance with the contract (such as where a valuer values the wrong premises), then the determination may be rendered ineffective;​ if the mistake is as to the application of the expert’s judgment or as to what the expert has or has not taken into account, this is not a matter which affects the binding nature of the determination. ​
-===== 1980 ===== +==== 1980 ==== 
-  * Mayne Nickless Ltd v. Solomon (([1980] Qd. R. 171)) Sheenan J+  * [[Mayne Nickless v Solomon|Mayne Nickless Ltd v. Solomon]] (([1980] Qd. R. 171)) Sheenan J
     * In the instant case the valuation of Mr Wolfs is, I consider, a `speaking valuation'​ in the sense that it is one which, on its face, discloses the method of valuation used, namely replacement costs less depreciation. ​     * In the instant case the valuation of Mr Wolfs is, I consider, a `speaking valuation'​ in the sense that it is one which, on its face, discloses the method of valuation used, namely replacement costs less depreciation. ​
     * For the purpose of this appeal I am prepared to assume that it is open to be impeached and set aside for mistake. ​     * For the purpose of this appeal I am prepared to assume that it is open to be impeached and set aside for mistake. ​
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     * On this point I would reject all those grounds of appeal which assign error in the valuation other than such ground or grounds as asserts that the basis or method of valuation namely replacement costs less depreciation is erroneous or mistaken. ​     * On this point I would reject all those grounds of appeal which assign error in the valuation other than such ground or grounds as asserts that the basis or method of valuation namely replacement costs less depreciation is erroneous or mistaken. ​
     * I would do so for the reason that the grounds I reject are not matters which could be said to appear on the face of the valuation. ​     * I would do so for the reason that the grounds I reject are not matters which could be said to appear on the face of the valuation. ​
-    * If a `speaking valuation'​ can be impeached for mistake then I would regard it as sensible to hold that the mistake must appear from a reading of the valuation and not from cross-examination of the valuer and answers elicited therein, which the appellant in part has attempt here.((See [[http://​www.austlii.edu.au/​au/​cases/​cth/​HCA/​1968/​3.html|Gold Coast City Council v. Canterbury Pipelines (Aust) Pty Ltd]] [1968] HCA 3; [1968] 118 CLR 58; Evans v. National Pool Equipment Pty Ltd [1972] 2 NSWLR 410)) +    * If a `speaking valuation'​ can be impeached for mistake then I would regard it as sensible to hold that the mistake must appear from a reading of the valuation and not from cross-examination of the valuer and answers elicited therein, which the appellant in part has attempt here.((See [[Gold Coast City Council v Canterbury Pipelines|Gold Coast City Council v. Canterbury Pipelines (Aust) Pty Ltd]] [1968] HCA 3; [1968] 118 CLR 58; [[Evans v National Pool Equipment|Evans v. National Pool Equipment Pty Ltd]] [1972] 2 NSWLR 410)) 
-===== 1976 ===== +==== 1976 ==== 
-  * Campbell vEdwards (([1976] 1 All ER 785)) Lord Denning MR +  * [[Campbell v Edwards]] (([1976] 1 All ER 785)) Lord Denning MR 
-===== 1953 ===== +==== 1953 ==== 
-  * Dean vPrince (([1953] 1 Ch 590)), Harman J held ((at 594))+  * [[Dean v Prince]] (([1953] 1 Ch 590)), Harman J held ((at 594))
     * that "if (the auditors) had chosen to keep silent I do not think that any Court would have obliged them to explain their reasons; but they have not been strong minded enough to do that. It is therefore open to the plaintiff to question them"     * that "if (the auditors) had chosen to keep silent I do not think that any Court would have obliged them to explain their reasons; but they have not been strong minded enough to do that. It is therefore open to the plaintiff to question them"
     * (when) trustees and directors exercis(e) a discretion: the Court will not oblige them to give reasons but, if they do, those reasons may be impeached in Court((at 593))     * (when) trustees and directors exercis(e) a discretion: the Court will not oblige them to give reasons but, if they do, those reasons may be impeached in Court((at 593))

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