Some thoughts in overview
Those of us above a certain age or who have an interest in science, particularly physics, may remember with a smile the constant refrain of Professor Julius Sumner Miller: ‘why is it so?’ Although that question by the Professor was directed to the effect of his latest experiment: for instance, “why is the egg sucked into the bottle?”; I suggest that it applies with equal force to the uncertainties inherent in all merit based determinations of legal disputes.
Those uncertainties mean that predicting the outcome of litigation is a risky business for lawyers; all the more so for clients. And it is of no practical use to a client for a lawyer to answer a query about prospects by saying “it depends” – although that will invariably be the correct answer. And I speculate that the retiring Chief Justice of the Federal Court, James Allsop, had those general uncertainties in mind when he recently described litigation as “the failure end of the law”; although he acknowledged that it was “a necessary evil because it’s the substitute for the gun and the gang”; “Stay out of court, says outgoing chief justice”.
Faint praise at best.
The profession is clearly alive to the uncertainties of litigation and to the reason for concerns such as those identified by Allsop. And one hint of that is reflected in the change of terminology used by practitioners – particularly solicitors – in their professional websites: the term “litigator” or “litigation lawyer” is often disavowed these days in favour of “dispute resolution lawyer”. And we can speculate as to why that is so; but my own view is that the former connotes from a client’s perspective – and quite rightly – too narrow a focus on an adversarial resolution to a dispute, with all of the uncertainties inherent in that approach; whereas the latter connotes a much broader approach to the resolution of a dispute, an important feature of which is to avoid or at least minimise a client’s exposure to those uncertainties. And if we were to ask our clients whether they preferred certainty over uncertainty, resolution over disputation, the answer would be obvious – a point made by Allsop (in the interview to which I refer) when he recalled the following comments by one of his clients during his former life as a barrister:
“I am a successful businessman. And, because of that, this is my first time anywhere near a courtroom in my whole life. I do not like the experience.”
We all recognise and understand that sentiment: litigation, in all of its forms, is intrusive, intensive, for a business person in particular, a distraction from the main game of running that business, and uncertain in outcome. Also, once the process is invoked, the required procedural steps are compulsory: a client cannot usually opt out of those without leave.
Having said all of that, there is no doubt that litigation is an important part of the armoury available to a lawyer to protect the interests of a client. For instance:
- it may be necessary to preserve legal rights by avoiding a time limitation point;
- a question of principle may need to be determined in an authoritative way;
- urgency may necessitate it. And an easy example is where an interim or interlocutory injunction is sought to preserve a status quo in order to prevent the ultimate issue in dispute from being rendered nugatory; or
- perhaps most obviously, a client is entitled to its day in court to have its legal rights determined if it so chooses.
I think that it is an uncontroversial proposition that practitioners should have the best interests of their clients at heart. And, as status based fiduciaries, solicitors have an obligation of undivided loyalty to their clients in any event. But, apart from that, surely acting in our clients’ best interests coincides with our own best interests – as a client who knows that it can rely upon us for frank and objective (fearless) advice, is likely to be a repeat client who will also recommend us to others: a happy coincidence of duty and self-interest.
And it seems to me that one way of acting in our clients’ best interests is to ensure that we take a broader approach to the resolution of a legal dispute by at least explaining to our clients the various options which are open. Essentially there are two:
- a merit based determination – which comes in a variety of forms accompanied by inherent uncertainties;
- a more collaborative approach to resolution where a certain outcome is within the control and power of the parties – most obviously, mediation.
So, to return to the good Professor, “why is it so” that merit based determinations are beset with uncertainty? What are those uncertainties, and what are the alternatives to court litigation? And to what extent do those alternatives suffer from the same uncertainties which are inherent in all litigation? There are a number of alternatives; but there is only one process where the outcome is wholly within the control and power of the parties.
The Uncertainties
There are 3 principal uncertainties which beset merit based determinations:
- error on the part of the judge or other decision maker;
- reasonable minds differing; and
- the law is an evolving discipline.
And I will say a little about each of those and give some illustrations.
Error
I am not speaking here of reasonable minds differing – a possibility to which I will return. I am speaking of judges getting their homework wrong – perhaps because they misunderstand or misapply the relevant legal principles, or make factual errors in their determinations. And the point can be made by reference to four decisions of the High Court correcting errors made by courts below across a broad range of jurisprudence.
Baden-Clay [2016] HCA 35
Baden-Clay was a notorious case – at least in Queensland; so I will avoid the detail. He was convicted of the murder of his wife; but, on appeal, the COA substituted a manslaughter conviction. And it did so by speculating that, contrary to his own testimony that he had not killed his wife and disposed of her body, perhaps he had done so, but without the relevant intention. Hence, manslaughter rather than murder. Or at least the Crown had not excluded that possibility. The difficulty with that hypothesis adopted by the COA is that it involved reasoning which was entirely speculative, without any evidential foundation and excluded by the accused’s own testimony. And the High Court was having none of that. Instead, it repeated its criticisms and emphasised the correct approach at [52], [54], [55] and [57]:
“[52] … The respondent’s evidence was that he had nothing to do with the circumstances in which his wife was killed. On his evidence he simply was not present when her death occurred; and he could not have been the unintentional cause of her death.
…
[54] … Not only did the respondent not give evidence which might have raised the hypothesis on which the Court of Appeal acted, the evidence he gave was capable of excluding that hypothesis.
[55] The Court of Appeal’s conclusion to the contrary was not based on evidence. It was mere speculation or conjecture rather than acknowledgement of a hypothesis available on the evidence. In this case, there was no evidence led at trial that suggested that the respondent killed his wife in a physical confrontation without intending to kill her.
…
[57] … it was open to the jury to consider that the hypothesis identified by the Court of Appeal was not a reasonable inference from the evidence when the only witness who could have given evidence to support the hypothesis gave evidence which necessarily excluded it as a possibility.”
The approach of the COA also appears to involve using Baden-Clay’s untruthful testimony – his perjury – as a basis for drawing an inference in his favour – that he killed his wife, but without the requisite intent. Surely, a very questionable approach.
The High Court reinstated the murder conviction.
Charisteas [2021] HCA 29
Charisteas is a particularly egregious case of error. Notwithstanding the existence of circumstances clearly giving rise to a reasonable apprehension of bias on the part of the trial judge, his Honour refused to stand aside. And his refusal was affirmed by a majority of the Full Court of the Family Court. A unanimous High Court identified the errors in principle below – “particularly troubling” and “difficult to comprehend” – and allowed the appeal.
The essential complaint was about undisclosed and private communications between the wife’s barrister and the trial judge during the course of the trial – and which came to the attention of the other side inadvertently. And the approach of the High Court is reflected in paragraphs [14], [15] and [19] of the reasons:
“[14] In this matter, what is said might have led the trial judge to decide the case other than on its legal and factual merits was identified. It comprised the various communications between the trial judge and the wife’s barrister “otherwise than in the presence of or with the previous knowledge and consent of” the other parties to the litigation. Indeed, given the timing and frequency of the communications between the trial judge and the wife’s barrister, it cannot be imagined that the other parties to the litigation would have given informed consent to the communications even if consent had been sought, and it was not. The communications should not have taken place. There were no exceptional circumstances.
[15] A fair‑minded lay observer, understanding that ordinary and most basic of judicial practice, would reasonably apprehend that the trial judge might not bring an impartial mind to the resolution of the questions his Honour was required to decide.
…
[19] The lack of disclosure in this case is particularly troubling. It is difficult to comprehend how the trial judge could have failed to appreciate the need to disclose the communications, particularly when he was dealing with the application to recuse himself on other grounds.” (the emphasis is mine)
WorkPac [2021] HCA 23
A unanimous High Court allowed an appeal from a Full Court of the Federal Court in a case about the meaning of “casual employee”. The High Court described the approach of the Full Court as a “departure from orthodox legal analysis”: at [64]. The High Court also delivered somewhat of a reprimand when identifying the proper approach by a court to the determination of a case:
“[62] … it is the function of the courts to enforce legal obligations, not to act as an industrial arbiter whose function is to synthesise a new concord out of industrial differences. That it is no part of the judicial function to reshape or recast a contractual relationship in order to reflect a quasi-legislative judgment as to the just settlement of an industrial dispute has been emphatically the case in Australia at the federal level since the Boilermakers Case.
[63] … It is no part of the judicial function in relation to the construction of contracts to strain language and legal concepts in order to moderate a perceived unfairness resulting from a disparity in bargaining power between the parties so as to adjust their bargain.”
And, by way of an aside, The Australian, in an opinion piece by Janet Albrechtsen, described the decision of the Full Court in this headline: “When judges go off on a legal frolic of their own”.
Robinson Helicopter Company [2016] HCA 22
A unanimous High Court allowed an appeal from the Queensland COA which had (by majority) overturned carefully reasoned factual findings of the trial judge who had presided over a lengthy trial. The High Court put it this way at [43]:
“… a court of appeal should not interfere with a judge’s findings of fact unless they are demonstrated to be wrong by “incontrovertible facts or uncontested testimony”, or they are “glaringly improbable” or “contrary to compelling inferences”. In this case, they were not. The judge’s findings of fact accorded to the weight of lay and expert evidence and to the range of permissible inferences. The majority of the Court of Appeal should not have overturned them.”
Reasonable Judicial minds can differ
The second uncertainty is that reasonable judicial minds can differ about the outcome.
Vairy v Wyong Shire Council [2005] HCA 62 is an excellent illustration of the point. The Council was sued in negligence as a result of the plaintiff hitting his head on the sea bed. And the trial judge, Bell J, found in favour of the plaintiff. However, the COA, in a 2/1 split decision, allowed the Council’s appeal. And the High Court, in a 4/3 split decision, dismissed the plaintiff’s appeal.
So, 11 judges were involved in Vairy: the trial judge, 3 members of the COA and 7 members of the High Court. And, in the final result, 6 judges found for the Council; 5 judges found for the plaintiff.
Imagine the difficulty which we would have as practitioners in such a case giving an advice on prospects which was in any way useful for the client.
The Seqwater litigation in NSW: [2021] NSWSC 467; [2021] NSWCA 206
This case had its genesis in the catastrophic floods of 2011. And, at first instance, the plaintiffs succeeded against all of the defendants. Some defendants decided to appeal; but the other defendants reached a compromise, and an application was brought before Adamson J (who was not the trial judge) to sanction that compromise.
In her reasons for granting the application, her Honour shared some prescient thoughts at [23] and [24]:
“[23] … The vicissitudes of litigation are stressful and expensive for litigants and may lead to uncertain outcomes. Cases involving the law of torts may be particularly susceptible to different judicial minds taking different views on the same facts.
[24] The calibre of the trial judge and his Honour’s careful and detailed reasons for decision provide no guarantee against his judgment being overturned on appeal.”
I say “prescient” because, a short time later, the COA allowed the appeal brought by the other defendants against his Honour’s decision. And the High Court has since declined special leave. And it is interesting to note the flattering references by the COA to the efforts of the trial judge:
“6 … the judgment meticulously cross-referenced both later and earlier findings, so that the trail of the reasoning was readily ascertainable. That was as true of the complex technical evidence and the computer simulations relied upon by the plaintiff as it was of the factual circumstances as they occurred in January 2011. The tasks to be undertaken by this Court have been immeasurably assisted by the care and ultimately the clarity of the primary judgment.”
A judgment which the COA then proceeded to overturn.
Hospital Products (1984) 156 CLR 41
Hospital Products is a seminal decision of the High Court on fiduciary duties. And the issue was whether the relationship between the parties was fiduciary in nature or not? Three judges said it was not; 2 judges said it was. And, as an aside, it is interesting to note that the reasons to which reference is invariably made in subsequent cases on the topic, are the reasons of Mason J. Why is that worthy of note? His Honour was in dissent on the facts in the ultimate outcome, but in the majority on matters of principle.
The confusion for the profession is ongoing.
Kobelt [2019] HCA 18
In Kobelt, the question for the High Court was whether certain conduct was unconscionable, i.e. against good conscience. And the judges split on the issue: it was held, by a majority, that it was. But the evaluative/moral judgment aspect of the case resulted in the following sentiment from Gageler J:
“[95] … it is unsatisfactory but unsurprising to me that the Court should find itself closely divided on the resolution of the appeal.”
Where evaluative/moral judgments are involved, reasonable minds will often reach different conclusions. And, as practitioners, we need to recognise this reality.
Legione v Hateley (1983) 152 CLR 406
In Legione v Hateley from 1983, the High Court split 3/2 on whether the relevant communication – “I think that’ll be all right, but I’ll have to get instructions” – gave rise to an estoppel against the vendor in a real property transaction. It was held, by majority, that it did not. And it is interesting to read the starkness of the opposing conclusions. Gibbs CJ and Murphy J comprised the minority; and their conclusion was put in the following way:
“12. The statement by Miss Williams was in our opinion both intended and likely to induce a belief in the mind of the purchasers’ solicitors that the vendors would not enforce their strict legal rights until they indicated their intention to do so.”
Mason and Deane JJ (together with Brennan J) comprised the majority view:
“18. It follows that Miss Williams did not, either by her words or her conduct, make … any clear and unequivocal representation to the effect of that suggested as the basis for a promissory estoppel. … It is, in our view, impossible properly to read into [her] statement any representation to the effect that, unless they were advised to the contrary, the purchasers could, with impunity, disregard the expiry of the time fixed by the written notice of rescission which had been served upon them.”
So, pausing here, it appears fair to say that the conclusion which Gibbs CJ and Murphy J regarded as “both intended and likely” was regarded by Mason and Deane JJ as “impossible”.
And Brennan J reached the same conclusion as Mason and Deane JJ:
“7. … This case turns on the … question … whether it is to be inferred that Miss Williams … promised or represented on behalf of the vendors that the time for compliance with the notice was to be extended and the contract was to be kept on foot … no such promise or representation can be inferred.”
And, much more recently, in the Crown Melbourne case from 2016, the High Court also split on whether, in the context of a lease negotiation, telling the tenant that it would be “looked after at renewal time” gave rise to an estoppel against the landlord. The High Court held, once again by majority, that it did not.
And native title jurisprudence has had an equally uncertain development: the Wik case from 1996 – on whether or not pastoral leases necessarily extinguished native title – was determined by a 4/3 majority in the High Court.
Stanley [2023] HCA 3
Finally, on this aspect of uncertainty, it is useful to mention the perennially thorny topic of jurisdictional error – or not – considered by the High Court in its recently published reasons in Stanley [2023] HCA 3.
The question for the High Court was whether an asserted error by a District Court Judge was jurisdictional in nature, or merely an error of law within the jurisdiction of the District Court. And the distinction had real consequences: if the error was jurisdictional, it was reviewable by the Supreme Court as an exercise of its supervisory jurisdiction; whereas if the error was within jurisdiction, there was no right of appeal. And what did the High Court determine?
By a 4/3 split (with Kiefel CJ, Gageler J and Jagot J dissenting) it determined that the asserted error was jurisdictional.
Stanley is a very telling example of a reality with which practitioners need to deal: reasonable judicial minds differing about the outcome.
The Law: an evolving discipline
The third uncertainty involves recognising that the Law is an evolving discipline, not set in stone. And it must be able to adapt to circumstances.
Brennan J, when a member of the High Court, put it this way in O’Toole (1991) 171 CLR 232 at 267:
“Nowadays (1991) nobody accepts that judges simply declare the law; everybody knows that, within their area of competence and subject to the legislature, judges make law. Within the proper limits, judges seek to make the law an effective instrument of doing justice according to contemporary standards in contemporary conditions. And so the law is changed by judicial decision, especially by decision of the higher appellate courts.”
And in saying so, his Honour noted the need to “… preserve an appropriate balance between the desirability of certainty in law and the exigencies of change …” (at 267)
The great American jurist, Benjamin Cardozo – when he was Chief Judge of the Court of Appeals of New York – made the point in his “Law and Literature” compilation as long ago as 1931 when he said that the “development of law is conceived of, more and more, as a process of adaptation and adjustment”: p15. And he quoted with evident approval a dissenting opinion of Mr Justice Brandeis:
“… limitations of principles previously announced and such express disapproval of dicta are often necessary. It is an unavoidable incident of the search by courts of last resort for the true rule. The process of inclusion and exclusion, so often applied in developing a rule, cannot end with its first enunciation. The rule as announced must be deemed tentative. For the many and varying facts to which it will be applied cannot be foreseen. Modification implies growth. It is the life of the law.”: p15.
Modification of the law may imply its growth; but it makes predicting the outcome of litigation a very difficult gig for practitioners.
And speaking of dissenting opinions: the dissentient often speaks to the future of jurisprudence. And a good example of that is to be found in the powerful (but dissenting) reasons of Evatt J when a member of the High Court in Chester v The Council of the Municipality of Waverley (1939) 62 CLR 1 – a tragic case. His dissent in that case on the principles governing the determination of nervous shock cases has long been regarded as reflecting the correct approach. However, in 1939, his Honour was a minority of one.
Donoghue and Stevenson [1932] AC 562
As we all appreciate, this authority – from 1932 – must be one of the most important – and enduring – to the law of negligence; and, in particular, to the identification of our “neighbour” and the duty of care which is owed as a consequence of that relationship. This authority is a great example of evolution in the law; but it should be remembered that it was determined by the barest of margins: a 3/2 split in the House of Lords on the question of whether there was even an arguable cause of action.
LibertyWorks [2021] HCA 18
In 1992, the High Court recognised for the first time the implied constitutional freedom of communication on matters political and governmental: Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106; Nationwide News Pty Ltd v Wills (1992) 177 CLR 1. And a convenient historical analysis is to be found in LibertyWorks.
The issue which usually arises for determination is no longer whether that implied constitutional freedom exists. As I said, that issue was decided some 30 years ago. The issue is usually whether particular legislation offends the freedom in such a way as to render that legislation unenforceable. However, in LibertyWorks, Steward J brought the issue of its existence to the forefront – even though its existence was not in issue in the case. His Honour made the following observations:
“[298] The divergence of views in this Court concerning the test for the application of the implied freedom perhaps may illustrate the tenuous nature of that implication. If the content of the implied freedom cannot even now be agreed upon, then, for my part, that may demonstrate that it was never justified.
…
[300] … The daunting search for a unifying principle of limitation is yet to uncover a principle that has been agreed upon by the Justices of this Court. It may not clearly be found in the text and structure of the Constitution;nor, as Dawson J observed, can it be found outside the Constitution. If that is so, then it may be that it cannot be found at all.
…
[302] On one view, the implication has, since its birth, been a source of uncertainty. …
[303] I am not the only Justice of this Court who has been concerned about the implied freedom. Callinan J was critical of its existence … as was Heydon J …”
[304] The current division of opinion in this Court may, in my view, justify a reconsideration, with leave if necessary, of the existence of the implied freedom. Nonetheless, as already mentioned, neither party challenged the existence of the implied freedom in this special case. For the disposition of this proceeding, it is therefore not appropriate to deny its application here. It should, if required, be a matter for full argument to be considered on another occasion.”
His Honour’s scepticism about the existence of the implied freedom is self-evident; however, whether the High Court will change its opinion on the existence of a freedom which has been recognised for the last 30 years is a matter for speculation. And whether any such overruling would reflect a proper evolution in the law or be a retrograde step will be a matter for debate on which reasonable minds will no doubt differ. Having said that, to use the words of Brennan J which I identified earlier, it would be difficult to imagine “the exigencies of change” which would require its overruling – although the absence of that circumstance did not prevent the overruling of Roe v Wade in Dobbs in 2022.
Other general uncertainties
I will mention only three:
- a witness might perform badly when giving evidence – and a judge might (unfairly) mistake nerves for shiftiness;
- late disclosure may put a different complexion on a case;
- for every expert retained in a case, there will probably be an equal and opposite expert to confuse the issue.
The alternatives to court litigation
There are 4 principal alternatives:
- case appraisal – which I personally think should be used more often – which has its genesis in the Rules (UCPR 334) and statute (s.45, CPA 2011);
- expert determination – which has its genesis in contract;
- the appointment of a referee – which is governed by the Rules (UCPR 501): see the decision of Bradley J in Santos to which I will return: [2020] QSC 373; and
- arbitration – which is governed by contract and statute.
Case appraisal
This is governed by Division 4 of Chapter 9 of the UCPR, commencing at UCPR 334; and s.45 of the Civil Proceedings Act 2011 deals with procedural matters, including the procedure to be adopted by the case appraiser.
Essentially, the court may refer a dispute – as identified – to a case appraiser to “decide the issues”: 335(1); although the case appraiser may only give a decision that could have been given in the dispute if it had been decided by the court: 335(2)(a). And, although the Order referring the dispute to a case appraiser must “include enough information about pleadings, statements of issues or other documents to inform the case appraiser of the dispute …”: 334(1)(c); a case appraiser “may ask anyone for information and may obtain, and act on, information obtained from anyone on any aspect of the dispute”: 337(1). And there is a hint of procedural fairness in that the case appraiser “must disclose the substance of the information to the parties” – presumably to permit those parties the opportunity to respond: 337(4).
The case appraiser’s decision “must be in writing”; but there is no need to give reasons for the decision: 339(1).
Importantly, there is a potential limit on the effect of the case appraiser’s decision in that a party who is dissatisfied with that decision may elect to have the dispute go to trial or to be heard in the ordinary way: 343(1); and that election is made by the filing of a document within the time identified in 343(2): 28 days. If such an election is not made, the case appraiser’s decision “becomes final and binding”: 341(2).
What are the advantages? Well, there are at least four advantages: (1) the parties have the benefit of a considered and prompt decision by someone entirely objective; (2) although not binding, the determination should at least give the losing party pause for thought; (3) the potential for efficiency, with a consequential reduction in costs; (4) the decision of the case appraiser remains confidential – subject to its use on the question of costs in the event that a party elected to proceed with the litigation: 342(2), (3); 344.
Expert Determination
Unlike case appraisal, which is entirely a creature of the UCPR and statute, expert determination has its genesis in and is governed by the contract between the parties. Consequently, although courts “endeavour, wherever possible, to give effect to parties’ agreements not to frustrate them”: Bounty Systems [2007] QSC 230 at [61] per Muir J; the foibles of contract law intrude, including enforceability, severability and the consequences of breach. And that sounds like a recipe for litigation – which it is.
Nonetheless, expert determination is an important alternative dispute resolution option; but we should be aware of potential pitfalls. First, the contract needs to be certain in all material respects; so, it is essential to ensure that the appointment mechanism will not fail, including for want of certainty. What if the professional body nominated to make the appointment is unwilling or unable to do so – perhaps because its Charter does not permit it? Or, for that matter, what if the nominee is unwilling or unable to act? The contract needs to cater for such potential problems – usually by including alternatives in the event of the failure of the preferred option; and also by the inclusion of a deadlock breaking mechanism, a point to which Jackson J alluded in Redpath [2016] QSC 313 at [41]. So, the drafting of the contract is important.
Secondly, if the parties intend the determination to be final and binding, they need to say so in the contract. However, there is a consequence: an error in the determination will not necessarily result in its invalidity. And the point was made by Holmes CJ in the recent decision of the Queensland COA in Middlemount [2020] QCA 132 at [35]:
“Where the parties to a contract have agreed … that an expert determination shall be final and binding, mistake or error on the part of the expert will not invalidate the decision unless it is of a kind which shows that the expert determination has not been made in accordance with the contract.”
And her Honour made reference to Legal & General Life, a decision of the Supreme Court of New South Wales, in support of that proposition: (1985) 1 NSWLR 314 at 335.
The COA, by a majority – Morrison JA dissenting – concluded that the primary judge – Jackson J – had erred when he failed to find that the expert had not performed its contractual task. And the case is useful for at least 2 reasons: first, it shows that an expert determination is amenable to legal challenge in the usual way; but, secondly, it is a good illustration of the uncertainty inherent in all litigation: 2 judges – Jackson J as the primary judge and Morrison JA in dissent in the COA – would have determined the matter in favour of the expert determination; however, Holmes CJ and Lyons SJA (the majority in the COA) determined the outcome differently and adversely to the expert determination – because, as they saw it, the expert had not performed its task in accordance with the contract.
And, on the assumption that an expert has conducted the determination in accordance with the contract, there is only one basis for challenge – a point made by Chesterman J in Zeke Services [2005] QSC 135 at [34]:
“If an expert has conducted his examination in accordance with the contract, that is he has determined or valued that which he was to do, the only basis on which the determination can be set aside is dishonesty.”
Thirdly, if the parties intend for the expert to comply with the requirements of procedural fairness, they had better say so – a point also made by Chesterman J Zeke Services at [32]:
“An expert, unless obliged to do so by the contract or the terms of his appointment, does not have to comply with the requirements of procedural fairness or natural justice. The agreement does not contain such a requirement.”
The appointment of a referee
In Santos [2020] QSC 373, Bradley J delivered detailed reasons for acceding to an application for such an appointment – in that case, of 3 referees given its enormity: see UCPR 501 et al. And, in summary, the court may refer any or all of the questions in issue to a referee (or referees) to conduct an inquiry and report back to the judge – who remains in ultimate control. For instance, the judge may adopt or reject the report in part or in whole; might determine to hear further evidence and submissions. And ultimately will deliver a judgment which might reflect the report – or not. And in the Santos case, the referees are in the process of preparing their report for Bradley J.
Arbitration
Arbitration is governed by contract and the various arbitration statutes; and there are some suggested advantages over court litigation:
- the parties can choose the appointees – so, presumably, they will appoint people of reputation in whom they have faith;
- the hearings and determinations are confidential – which is often a very important consideration for those involved – unless court challenges ensue and information becomes public to a degree; however,
- there are very limited rights of appeal – which may be an advantage or a disadvantage depending on your side of the record.
It has also been suggested that an arbitration can be conducted with far less delay than court proceedings – with a consequential saving in costs. That may be the case in some instances; but it would be a mistake, in my experience, to regard that suggestion as invariably correct.
Arbitration is subject to the same inherent uncertainties as court litigation. And we saw that quite recently in the somewhat controversial decision of a Full Court of the Federal Court in Hub Street [2021] FCAFC 110, where the Full Court allowed an appeal from a judgment enforcing an arbitration award. Stewart J – with whom the other members of the court agreed – put it this way at [13] of his reasons:
“… I have come to the conclusion that the appeal should be allowed. In essence, the award should not be enforced … because the arbitral tribunal was not composed in accordance with the agreement of the parties and that is a proper basis to resist enforcement … Also, because a failure to compose the arbitral tribunal in accordance with the agreement of the parties is fundamental to the jurisdiction of the arbitrators, there is little if any scope to exercise the discretion to enforce in this case and it should not be so exercised.”
An arbitration, if challenged, is unlikely to survive jurisdictional error.
Mediation
I mentioned earlier that there is one process where the power and control rest with the parties. And that is the case with mediation – which can be the subject of a court or a contractual appointment. Mediation has some distinct advantages over merit based determinations of disputes:
- it has the luxury of immediacy, i.e. it can be convened on very short notice;
- it has the luxury of flexibility or innovation in the terms of any agreement reached – unlike a court, or other merit based forum, which is bound by the prayer for relief in the pleadings;
- the power and control rests with the parties to take the dispute out of the hands of a judge, and to reach certainty in outcome – a power which should not be underestimated;
- it is a private and confidential process; and
- the costs are de minimus by comparison with merit based determinations.
We as practitioners should also recognise that it is undoubtedly the predisposition of the courts to enforce ADR clauses in contracts if at all possible. And three authorities will suffice: Downer EDI [2012] QSC 290; Santos [2016] QSC 129; and Mineralogy Pty Ltd [2022] QSC 154.
And, by way of conclusion, it is helpful – or perhaps a little troubling – to remember the words of Jackson J of the US Supreme Court in Brown v Allen from 1953:
“We are not final (in the hierarchy) because we are infallible. We are infallible only because we are final.”
