Grangeford Structures Ltd ((in Liquidation)) v S.H. Ltd

• Jurisdiction: Ireland
• Judgment Date: 01 January 1990
• Date: 01 January 1990
• Docket Number: [1987 No. 20 Sp.; 1987 No. 152 Sp.]
• Court: Supreme Court

Supreme Court

[1987 No. 20 Sp.; 1987 No. 152 Sp.]

Grangeford Structures Ltd. (In liquidation) v. S.H. Ltd.

Grangeford Structures Limited (In Liquidation)

Plaintiff

and

S.H. Limited

Defendant

Cases mentioned in this report:—

Bremer Vulkan v. South India ShippingELRWLRUNKUNKUNK [1981] A.C. 909; [1981] 2 W.L.R. 141; [1981] 1 All E.R. 289; [1981] 1 Lloyd's Rep. 253; (1981) 125 S.J. 114.

Re Crighton and Law Car and General Insurance Corporation Ltd.ELRUNKUNK [1910] 2 K.B. 738; (1910) 80 L.J.K.B. 49; 103 L.T. 62.

Grangeford Structures Ltd. (In vol. liq.)DLRM [1988] I.L.R.M. 129 (H.C.).

Stillorgan Orchard v. McLoughlin (Unreported, High Court, Hamilton J., 10th July, 1978).

Re Unione Stearinerie Lanza and WienerELRUNKUNKUNK [1917] 2 K.B. 558; [1916-17] All E.R. Rep. 1079; (1916) 117 L.T. 337; 86 L.J.K.B. 1236; 61 S.J. 526.

Arbitration - Award - Application to set aside - Misconduct - Heating - Directions - Time limits - Counterclaim out of time - Counterclaimant seeking adjournment at hearing - Refusal - Walk out in protest - Hearing continued - Arbitrator - Powers - Exercise - Reasonableness - Whether misconduct - Arbitration Act, 1954 (No. 26), ss. 19 and 38.

Special Summonses.

The facts are summarised in the headnote and set out in the judgment of Griffin J., post.

On the 10th February, 1987, the plaintiff issued a special summons seeking leave to enforce the arbitrator's award of the 4th April, 1986, pursuant to s. 41 of the Arbitration Act, 1954. On the 11th February, 1987, the defendant issued a special summons claiming that the arbitrator's award was the result of misconduct by the arbitrator of himself and of the proceedings and that the award was a nullity and should be set aside. On the 16th February, 1987, the High Court (Costello J.) by order consolidated the two proceedings and the matter came on for hearing on affidavit on the 25th and 26th March, 1987.

In his judgment delivered on the 26th March, 1987 ([1988] I.L.R.M. 129) Costello J. gave liberty to the plaintiff to enforce the award and ordered the defendant to pay to the plaintiff a total sum of £23,382.11 in respect of the amount of the award and the arbitrator's and plaintiff's costs of the arbitration, together with further interest.

The defendant appealed from the judgment and order of the High Court to the Supreme Court by notice of appeal dated the 22nd June, 1987, which appeal was heard by the Supreme Court on the 25th May, 1989.

Paul McDermott for the defendant: When the defendant was not ready to proceed on the date fixed for the hearing, the arbitrator purported to proceed to determine the matter in the defendant's absence. The defendant did have a counterclaim but this was not before the arbitrator. If his determination purports to determine also the issue of the counterclaim, then it is unfair. An arbitrator is prohibited from proceeding with an arbitration hearing by the non-attendance of either party: Bremer Vulkan v. South India Shipping; Re Unione Stearinerie Lanza and Wiener and Debtors (Ireland) Act, 1840, section 63.

Eoin McCullough for the plaintiff. An arbitrator has power to order pleadings to be exchanged and to limit the time in which this may be done. All issues (including those to be raised in any counterclaim) were on the face of the pleadings before the arbitrator: Bremer Vulkan v. South India Shipping; Re Crighton and Law Car and General Insurance Corporation Ltd. and Stillorgan Orchard v. McLoughlin.

The plaintiff and defendant were main contractor and sub-contractor respectively to a shopping centre development by agreement in writing containing an arbitration clause. A dispute was referred to arbitration and a preliminary hearing held by the arbitrator on the 16th May, 1985. Under his directions points of claim and defence were filed by the 24th September, 1985. On the 6th November, 1985, the defendant's solicitor wrote to the arbitrator to say that he was "formulating a substantial counterclaim … to be something in the region of £55,000 or thereabouts . . ." The arbitrator replied on the 7th January, 1986, that he was agreeable to allowing the defendant amend its defence to make a counterclaim and allowed it a further 21 days and a further period of 14 days"for filing the list of documents" and wrote "no extension to these periods will be allowed except for grave reasons and if no amended defence and counterclaim is received within the period stated then I will proceed." On the 4th February, 1986, he wrote to the parties that as he had not received any amended claim or other communication from the defendant's solicitor, he proposed to proceed to a hearing on the 7th March, 1986, at 10.30 a.m. On the 5th March, 1986, the defendant's solicitor wrote to the arbitrator that he was not yet in a position to file the counterclaim and would be seeking an adjournment of the arbitration hearing. At the commencement of the hearing he applied for the adjournment which was objected to by the solicitor for the plaintiff and the arbitrator peremptorily adjourned the hearing to 2.15 p.m. on the same day to allow the defendant's solicitor consult his client. At the resumed bearing at 2.15 p.m. the defendant's solicitor walked out in protest when his application for an adjournment was refused. The hearing then continued and by his award of the 4th April, 1986, the arbitrator directed payment to the plaintiff of £18,330.53.

The plaintiff sought leave of the High Court to enforce the award by special summons pursuant to s. 41 of the Arbitration Act, 1954, and the defendant issued a special summons claiming that the arbitrator had misconducted himself and that the award was a nullity and should be set aside.

Costello J. held that the arbitrator had acted reasonably and without misconduct in refusing to adjourn the arbitration hearing and that he had jurisdiction to proceed with the arbitration having given reasonable notice to the parties as to time limits for the presentation of claims and counterclaims and notwithstanding that the defendant had walked out.

The defendant appealed to the Supreme Court from the judgment and order of the High Court and argued that the arbitrator's refusal to adjourn the proceedings was unreasonable and arbitrary and constituted an unfair procedure, and that the arbitrator had no power to proceed with the bearing ex parte in the absence of the defendant.

Held by the Supreme Court (Finlay C.J., Griffin and McCarthy JJ.), in dismissing the appeal and affirming the order of the High Court, that the arbitrator had not misconducted himself and had jurisdiction to continue the bearing in the absence of the defendant and make an award on the evidence presented to him.

Bremer Vulkan v. South India...