Anderson v G H Michell and Sons Ltd [1941] HCA 30

65 C.L.R.] OF AUSTRALIA. 543

[HIGH COURT OF AUSTRALIA.]

ANDERSON . 2 ' f 5 ' . APPELLANT ; PLAINTIFF, AND G. H. MICHELL & SONS LTD. : é . REsPponpeENT. DEFENDANT,

ON APPEAL FROM THE SUPREME COURT OF SOUTH AUSTRALIA.

Arbitration—Classification, construction and effect of arbitration clauses—Whether H.C. or A. arbitration condition precedent to liability or action—Whether time limit for 1941.

arbitration extends also to action. ee ADELAIDE,

An agreement to refer disputes, whether existing or future, to arbitration 6 ept. 17.

can, apart from statutes which give the courts a discretion to stay an action if the claim falls within an agreement to refer, be enforced only by an action MzLBouRNe, for damages against the party who refused to carry it out. Ifacontract creates Nov. 7.

unconditional liabilities no agreement, whether contained in the same or a i : Rich A.0.J.,

subsequent contract, to refer disputes to arbitration will disable the party — Dixon and entitled from enforcing the liabilities by action or will detract from the com- oe petence of the court to entertain and determine the suit, although the party

may by suing expose himself to an action for breach of his contract to refer.

A contract so framed that it would produce no unconditional liabilities, no liabilities which did not depend on the award or determination of arbitrators, referees or other third parties gives, unless renounced, no complete cause of action until an award or determination has been obtained. On the other hand, once it appears that liabilities are meant to arise independently of arbitration, complete and absolute even though disputed, then an attempt altogether to replace the appointed legal remedies by a reference to arbitration will be regarded as repugnant and an attempt to exclude the jurisdiction of the courts as contrary to public policy. But although this is the basal distinction, an agreement which in point of expression makes arbitration a condition precedent, not to the liability or cause of action, but to the right to bring or maintain an action, is construed as affecting, not the jurisdiction or remedy, but the obligation. Where there are promises to pay money or to do any act or acts expressed without reference to arbitration an agreement in the same instrument