HUGHES BROS PTY LTD v MINISTER FOR PUBLIC WORKS SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KIRBY P, MEAGHER and COLE JJA 17 October 1994, 17 October 1994 [1994] NSWCA 141 PRACTICE & PROCEDURE - reference under Pt72 SCR - defective report — judge in Construction List decides to take matter under control of Supreme Court — summons for leave to appeal refused — reference referee already protracted — course available to judge — no error. Friend and Booker Pty Ltd v Council of the Shire of Eurobodalla [1993] NSWJB 123, refd to. PRACTICE & PROCEDURE — Supreme Court — reference of matters to referee under Pt72 SCR — referee's report provides inadequate reasons — primary judge (Rolfe J) decides to take control of proceedings in Supreme Court — declines to refer matter back to referee — on summons for leave to appeal — held (Kirby P; Meagher JA and Cole JA concurring): (1) Reference back to the referee was a course available to the primary judge. Friend and Booker Pty Ltd v Council of the Shire of Eurobodalla, Court of Appeal (NSW), unreported, 9 November 1993; [1993] NSWJB 123 considered; (2) However, in the circumstances of the defects in the report of the referee and an already lengthy hearing before the referee, the course taken by the judge was available to him and was not shown to have been wrong; (3) Leave to appeal refused. Kirby P The parties to this summons have been involved in a lengthy dispute. There is now before this Court a summons for leave to appeal. Reference of a building dispute to a referee and resort back The dispute arose out of the contract between the parties in relation to the construction of a government office building in Wollongong. After the construction, the dispute took the parties to the Supreme Court by proceedings commenced on 19 April 1991. Those proceedings came quickly before Staff AJ. His Honour was requested to make a reference to a referee under Pt72 of the Supreme Court Rules. It appears that even at the outset there were disputes between the parties as to whether the matter should be referred to an engineer or to an architect. Eventually Staff AJ referred the matter to an architect, a Mr P MacCallum. He was appointed to be the referee. The proceedings were formally referred to him on 19 July 1991. There were serious contested factual issues in the dispute between the parties. On 20 December 1991 the referee produced an interim report after a two day hearing. The balance of the hearing was set down to be determined by the referee. It proceeded over no fewer than 71 days. The Court has been informed that the total legal costs incurred by the claimant in the reference proceedings have been of the order of $3 million. The fees paid to the referee have also been substantial, being of the order of $300,000. The submissions of the parties concluded on 30 June 1993. By order of the Court, the referee was required to report, pursuant to the reference, on or before 6 December 1993. On that last mentioned day, the referee filed his report in the 2 UNREPORTED JUDGMENTS Court. On 17 December 1993, the claimant moved (in substance) for adoption of the report, except in respect of a number of particular paragraphs. The claimant's motion and the referee's report were considered by Rolfe J. However, in a lengthy examination of the referee's report, his Honour concluded that it was deficient in a number of respects. In particular, his Honour concluded that the report failed sufficiently to expose the referee's reasoning which led him to the conclusions at which he had arrived in particular areas in contest between the parties. The matter was then referred back to Rolfe J for the resolution of the future management of the matter. The parties are still in difference as to the matters upon which the decision of the referee might be adopted. The claimant requested that Rolfe J should refer the matter back to the referee for the purpose of securing the further reasons necessary to complete the factual findings and to supplement those which had been stated in the referee's report of 6 December 1993. The claimant supported its request by reference to such considerations as the size of the case, the investment of the parties in terms of their costs, the fact that his Honour had made no findings as to any inconsistency in the determinations of the referee but rested his decision upon the failure of the referee to provide sufficient reasons for the decisions which he had made. Primary judge finds defects in reasons and takes control of matter Rolfe J, however, determined that the matter should be taken under the control of the Supreme Court and not referred back to the referee. That course was open to his Honour. It is to be found in Pt72 r13 of the Supreme Court Rules. The relevant sub-rule states:- "13(1) Where a report is made, the Court may, of its own motion after notice to the parties, or on application by any party, on a matter of fact or law or both- (a) adopt, vary or reject the report in whole or in part; (b) require an explanation by way of report from the referee; (c) on any ground, remit for further consideration by the referee the whole or any part of the matter referred for a further report; (d) decide any matter on the evidence taken before the referee, with or without additional evidence, and shall give such judgment or make such order as the Court thinks fit." Rolfe J in his second and shorter judgment detained that the proper course was to retain the matter in the Supreme Court. His Honour's essential reasons were as follows:- ".. In my opinion the extent of these failures is such as to have made it appropriate to reject the report but for the considerations to which 1 have referred. It also makes it inappropriate to remit the matter to the Referee, who concluded the hearing in June 1993, now some fourteen months ago, and reserved his decision until December 1993. The shortcomings I have perceived in the report give me no satisfaction [that] he will be able, after this time and having regard to the numerous matters necessitating attention, to determine those matters. In my opinion, in the absence of any agreement by the parties as to what, if any parts, of the report can be adopted, and the setting in place of procedures to conclude the proceedings based on such agreement, the only alternative is for the Court to decide the proceedings. I propose to reject the report in its entirety. The proceedings will go forward in this Court." URJ HUGHES BROS PTY LTD v MINISTER FOR PUBLIC WORKS (Kirby P) 3 Successful party seeks leave to anneal - seeks reference back to referee The claimant seeks leave to appeal from this decision. It points again to the considerations advanced before his Honour. It has drawn to our notice the course which this Court took in the case of Friend and Booker Pty Ltd v Council of the Shire of Eurobodalla, Court of Appeal (NSW), unreported, 9 November 1993; [1993] NSWJB 123. That was a case involving the Commercial Arbitration Act 1984. In that case the Court, having found error on the part of the primary judge, determined that, in the exercise of its discretion, it would remit those parts of the award which evidenced the error found, to the arbitrator for reconsideration in the light of the Court's decision on a question of law. The claimant also referred to a decision of Giles J in the Construction List of the Supreme Court in Stuart Brothers Pty Ltd v Posei Pty Ltd, Supreme Court (NSW), unreported, 9 November 1993. Giles J was there persuaded to cure a perceived inadequacy of reasons by returning the matter to the referee for the provision of further reasons. There is no doubt that the course of returning a matter to the referee was available to Rolfe J. That was made plain by the terms of the Rule. It was certainly a course which his Honour could have taken in this case. So much was indeed acknowledged. However, his Honour had a discretion as to what he should do. It is fairly clear from his Honour's reasons that he felt that at least some of the findings contained in the report of the referee were so inadequate, in material respects, that the most efficient way in which the matter should proceed to conclusion was before the Court. His Honour had a proper basis for coming to that conclusion. It was accepted for the purpose of these proceedings that the report was in material respects inadequate. A good example of the inadequacy of the report is that the referee dismissed, in the space of two paragraphs without adequate reasons, a cross-claim amounting to some $3,000,000. There were other defects in the report which were of the same order. No error on the part of primary judge - leave refused When therefore I look at the reasons which Rolfe J gave for the course which he took, conceding that there were other courses that were available to his Honour, I cannot see any error on the part of his Honour which would authorise this Court to allow leave to appeal so that an appeal to review his Honour's order should proceed before it. leave to appeal is required precisely out of deference to the decisions of primary judges in matters such as this. The principles which control and restrain appellative appearance in decisions of practice and procedure are well known. They need no repetition. The decision which Rolfe J took was one which was open to him in the circumstances. I do not accept that his Honour failed adequately to explain his reasons for the course which he adopted. It is not necessary in a case of this kind for such reasons to be protracted or elaborate. See eg Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 (CA), 272, 280. Mere convenience and overall expedition, after a long reference out, would be more than enough. Nor do I accept that, in the passage quoted from his Honour's reasons, a "lack of a rational basis" for the course taken was exposed. Against the background of delay, if I can say so with respect, the decision taken by Rolfe J appears to have been the correct one. However, that second finding is not necessary to dispose of his summons. It must never be forgotten that the reference procedure is in aid of the Court. It is not a substitution for the Court's own responsibilities. 4 UNREPORTED JUDGMENTS I see no sufficient error to bring the matter up. I would propose that the summons be dismissed. The claimant must pay the opponent's costs. Meagher JA I agree. 5 Cole JA I also agree. Kirby P: The order of the Court is the summons is dismissed. The claimant to pay the opponent's costs. Summons dismissed with costs. Counsel for the claimant: P G Hely QC/C R Robilliard Solicitor for the claimant: Clayton Utz 15 Counsel for the opponent: J M Stowe QC/L M Jackman Solicitor for the opponent: H K Roberts (State Crown Solicitor)