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Queensland Supreme Court decision on when arbitral award can give rise to issue estoppel
Practical Law UK Legal Update 6-508-9522 (Approx. 3 pages)
Queensland Supreme Court decision on when arbitral award can give rise to issue estoppel
by Practical Law
| Published on 06 Oct 2011 • Australia |
Andrew Robertson (Partner) and Ryan Kuss (Law Clerk), Piper Alderman
In a decision dated 22 June 2011, the Queensland Supreme Court has considered the circumstances in which an arbitral award can give rise to an issue estoppel in subsequent proceedings.
Facts
The applicant (Northbuild) was a building contractor and the respondent (Discovery) a developer. Northbuild and Discovery had entered into a contract to redevelop a resort. A number of disputes later arose out of this agreement, some of which were referred to expert determination. In late 2004 and early 2005, certain other disputes were referred to arbitration.
On 8 June 2009, the arbitrator made his award. However, the expert determination was still pending. Northbuild sought a declaration that Discovery was estopped from raising certain matters in the expert determination that had already been determined conclusively by the arbitrator, namely, that attachments referred to in an annexure of a "Record of Agreements Reached" between the parties were incorporated into their agreement.
Decision
The Queensland Supreme Court granted the declaration sought.
Applegarth J applied the principles arising from the judgment of Dixon J in Blair v Curran (1939) 62 CLR 464 (amongst others), where the judge stated that an issue estoppel:
"covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion … [n]othing but what is legally indispensible to the conclusion is … finally closed or precluded."
For example, the estoppel covers matters "which it was necessary to decide and which were actually decided as the groundwork of the decision itself, though not then directly the point at issue". However, estoppel does not cover "[f]indings, however deliberate and formal, which concern only evidentiary facts and not ultimate facts forming the very title to rights or [d]ecisions upon matters of law which amount to no more than steps in a process of reasoning tending to establish or support the proposition upon which the rights depend".
The decisions discussed in Blair were judicial decisions. In this case, no attempt was made to contrast the effect of a determination in a judicial decision as opposed to an arbitral award.
The court held that the arbitrator's finding regarding the attachments was essential to the resolution of at least one of the disputes the subject of the arbitral award. Accordingly, Discovery was estopped from raising these matters in the expert determination.