Proportionate liability and arbitrations

A Clayton Utz ‘Project Insight’ is worth a look.  It considers whether the proportionate liability schemes around the country have operation in arbitrations. The answer, according to Tasmania’s Supreme Court in Aquagenics Pty Ltd v Break O’Day Council (No 2) [2009] TASSC 89 is — Yes. The reason is that there is an implied term in the arbitration contract that the arbitrator will grant the relief which would be available in a court.  As the authors Owen Hayford and Audrey Echevarria point out, the implication of an implied term may be prevented by an inconsistent express term.  I am aware of a passing consideration of the matter in Victoria.  In Wealthcare Financial Planningn Pty Ltd v Financial Industry Complaints Service Ltd [2009] VSC 7, Justice Cavanough noted:

‘Writing extra-judicially, Byrne J has said that the regime of Part IVAA “does not appear to apply to arbitrations …”[46]. I think that his Honour was referring there to commercial arbitrations, as distinct from industrial arbitration and like processes. I need not and do not decide the very important question whether Part IVAA applies to formal commercial arbitrations,[47] but his Honour’s comment is entirely consistent with the proposition that Part IVAA is inapplicable to a matter before a FICS panel.

[46] The Hon. Justice David Byrne, “Proportionate Liability: Some Creaking in the Superstructure”, A paper presented to the Judicial College of Victoria, Friday 19 May 2006, p 7, para [20].

[47] Counsel for FICS disclaimed any suggestion that FICS was covered by the Commercial Arbitration Act 1984: transcript 185-186.’

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