Birse Construction Ltd v. St David Ltd.
(England and Wales) Supreme Court of Judicature (Court of Appeal),
Pill, Aldous, Ward LJJ., 5th November 1999.
Application to stay proceedings
pending arbitration - whether court or arbitrator should determine
question of whether a contract concluded which contained an
arbitration agreement - s. 9 Arbitration Act 1996 - RSC Order 73 Rule
6 - whether question could be determined on affidavits.
Facts:
The Plaintiff carried out work for the Defendant at Adventure's
Quay, Cardiff Bay during 1997 and 1998. Disputes arose. The Plaintiff
left site and commenced proceedings to recover payment for work done
on a quantum meruit. The Defendant applied to stay the proceedings
pending arbitration under s. 9 of the Arbitration Act 1996, contending
that the work was done under a contract that provided for arbitration.
The Defendant denied that it had concluded a contract with the
Plaintiff, but accepted that, if it had, the contract included an
arbitration clause.
When the application for a stay came before the judge, one of the
issues was whether or not the question of whether or not an
arbitration agreement existed should, because of s. 30 of the
Arbitration Act 1996, be referred to the arbitrator. The judge
rejected this suggestion and decided that the court should determine
this question under RSC Order 73 Rule 6. In his written judgment he
concluded, having reviewed the affidavit evidence, that a contract
existed. He stated that even if the facts had not been as clear as he
found them, he would have directed that this question be determined
under RSC Order 73 Rule 6. The Plaintiff appealed on the grounds that
the judge was wrong to conclude that there was a contract and had
erred in not directing a trial of this question.
At the beginning of the appeal hearing it emerged that, contrary to
the view expressed by the judge, the parties had not agreed that the
question of whether a contract had been concluded between them should
be determined on affidavit evidence.
Held:
The appeal would be allowed.
The question of whether a binding contract was concluded as a
result of oral and written negotiations could be complex. If there was
a speedy way of deciding it, so much the better, and the parties could
often be expected to agree to have that question determined on
affidavits. But, if it was intended to confer such a power on the
court, and thereby deprive a party of its opportunity to cross-examine
witnesses and give oral evidence, basic components of a conventional
trial, this should be made clear. It was unfortunate that, in this
case, the parties failed to openly ventilate before the judge the
differences that they revealed on the appeal or to agree and express
to the judge what he was being asked to do.
Nevertheless, since there was a triable issue on the affidavits as
to whether a contract had been concluded, the case had to be remitted
to the fist instance court for determination of that question.
Order 73 Rule 6(2) enabled a court to determine the question of
whether an arbitration agreement was concluded or give directions for
its determination. This gave the court a discretion but it could not,
without the consent of the parties, be a proper exercise of this
discretion to determine a question of fact or, perhaps, mixed fact and
law, such as whether a contract had been entered into upon affidavit
evidence which showed a genuine dispute of relevant fact (Aldous LJ).
For the Plaintiff/Appellant: Mr P Darling QC (instructed by Messrs
Layton & Co).
For the Defendant/Respondent: Mr H Palmer (instructed by Messrs
Masons).
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