Supreme Court New South Wales Medium Neutral Citation: Sapphire (SA) Pty Ltd (trading as River City Grain) v Barry Smith Grains Pty Ltd (in liq) [2011] NSWSC 1451 Hearing dates: 7 November 2011 Decision date: 28 November 2011 Jurisdiction: Equity Division - Commercial List Before: Ward J Decision: Leave granted pursuant to s 38(4)(b) of the Commercial Arbitration Act 1984 (NSW) to plaintiff to appeal from the question of law identified as the fifth ground in the plaintiff's Commercial Arbitration List Statement. Leave to appeal on the remaining questions of law identified in that List Statement refused. Catchwords: COMMERCIAL ARBITRATION - whether leave to appeal to the Supreme Court should be granted on questions of law arising out of commercial arbitration award - whether threshold requirements pursuant to s 38(5) of the Commercial Arbitration Act 1984 (NSW) satisfied - whether the determination of the relevant questions of law could substantially affect the rights of one or more parties to the arbitration agreement - whether there is either a manifest error on the face of the award or strong evidence that the Tribunal made an error of law and, if so, the determination of that question may add or be likely to add substantially to the certainty of commercial law - if threshold requirements satisfied whether discretion should be exercised to grant leave - CIVIL PROCEDURE - consideration of Home Office v Harman implied undertaking in relation to use in the subject arbitration or these proceedings of documents obtained during the course of another arbitration - HELD - leave to appeal granted in relation to one question of law Legislation Cited: Civil Procedure Act 2005 (NSW) Corporations Act 2001 (Cth) Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: AG Australia Holdings Ltd v Burton [2002] NSWSC 170; (2002) 58 NSWLR 464 Ainsworth v Hanrahan (1991) 25 NSWLR 155 Akins v Abigroup Ltd (1998) 43 NSWLR 539 Australian Beverage Distributors Pty Limited v Evans & Tate (2006) 58 ACSR 22; [2006] NSWSC 560 Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 Barry Smith Grains Pty Ltd (In liq) v Riordan Group Pty Limited [2010] NSWSC 1291 Bostik Australia Pty Limited v Liddiard (No 2) [2009] NSWCA 304 Bourns Inc v Raychem Corp [1999] 1 All ER 908 Bowen Investments Pty Limited v TAB Corp Holdings Limited (No 2) [2008] FCAFC 107 Bremner Handelsgesellschaft mbH v Westzucker GmbH (No. 2) [1981] 2 Lloyd's Rep 132-133 Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44 British and American Tobacco Services Ltd v Cowell (No 2) (2003) 8 VR 571 Central Queensland Cement Pty Ltd v Hardy [1989] 2 Qd R 509 Champsey Bhara & Co v Jivraj Balloo Spinning & Weaving Co Ltd [1923] AC 480 Commonwealth of Australia v Temwood Holdings Pty Ltd (2001) 25 WAR 31 Crest Homes plc v Marks [1987] AC 829 Cretazzo v Lombardi (1975) 13 SASR 4 Distillers Co (Biochemicals) Ltd v Times Newspapers Ltd [1975] QB 613; 1 All ER 41 Dodds Family Investments Pty Limited v Lane Industries Pty Limited (1993) 26 IPR 261 Doran Constructions Pty Ltd v Health Administration Corporation (NSW) (1994) 12 BCL 104 Elite Protective Personnel Pty Limited v Salmon [2007] NSWCA 322 Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373 Esso Australia Resources Ltd v Plowman [1995] HCA 19; (1995) 183 CLR 10 Evans v Mclean (No2) (1985) 9 ACLR 796 Federal Commerce & Navigation Co Ltd v Tradax Export SA (The 'Maratha Envoy') [1978] 1 AC 1 Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 30 ACSR 20 Forty Two International Pty Ltd v Barnes [2010] FCA 397 Gett v Tabet [2009] NSWCA 76; (2009) 254 ALR 504 Giacomo Costa Fu Andrea v British Italian Trading Co Ltd [1963] 1 QB 201 Gianfriddo v Garra Constructions Pty Ltd [1971] VR 289 Gold Coast Council v Canterbury Pipe Lines (Aust) Pty Ltd (1968) 41 ALJR 307 Gordian Runoff Ltd v Westport Insurance Corporation [2010] NSWCA 57; (2010) 267 ALR 74 Hadley v Baxendale (1854) 9 Exch 341; 156 ER 145 Hanneybel v Uniflex (Australia) Pty Ltd [2002] WASCA 349 Harbour City Real Estate v Cargill (No 3) [2009] FCA 669; (2009) 186 IR 260 Hardoon v Belilios [1901] AC 118 Hearne v Street [2008] HCA 36; (2008) 235 CLR 125 Hodge v TCN Channel 9 (No 2) [2006] NSWSC 1272 Home Office v Harman [1983] 1 AC 280 Hughes v Western Australian Cricket Association (1986) ATPR 40-748. James v Surf Road Nominees (No 2) [2005] NSWCA 296 Keynes v Rural Directions Pty Ltd [2010] FCAFC 100; (2010) 186 FCR 281 Laen Pty Ltd v At the Heads Pty Ltd & Ors [2011] VSC 315 Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 Lavender View Regency Pty Ltd v North Sydney Council (No 2) [1999] NSWSC 775 Leallee v Commissioner of the NSW Department of Corrective Services [2009] NSWSC 518 Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3; (2005) 218 ALR 283 LMI Australasia Pty Ltd v Baulderstone Hornibrook Pty Ltd (No 2) [2002] NSWSC 72 Moage Ltd v Jagelman and Others [2002] NSWSC 953; (2002) 43 ACSR 173 Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34 Natoli v Walker (1994) 217 ALR 201 Octavo Investments Pty Ltd v Knight (1979) 144 CLR 360 Ohn v Walton (1995) 36 NSWLR 77 Oil Basins Limited v BHP Billiton Limited [2007] VSCA 255; (2007) 18 VR 346 Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 Owners Strata Plan No 64970 v Austruc Constructions Ltd (in liq) (No 5) [2010] NSWSC 568 Pacific General Securities Ltd v Soliman & Sons Pty Ltd [2006] NSWSC 724 Padkohe Pty Ltd v Fletcher [2006] NSWSC 1239 Pearl Marin Shipping A/B v Pietro Cingolani SAS, The General Valdes [1982] 1 Lloyd's Rep 170 Prime Finance Pty Ltd and Ors v Randall and Ors [2009] NSWSC 361 Promenade Investments Pty Ltd v State of New South Wales (1992) 26 NSWLR 203 Re a Debtor No 21 of 1950 [1951] Ch 612 Re Addstone Pty Ltd (In liq); Ex parte Macks (1998) 30 ACSR 156 Re Chief Commissioner of Stamp Duties v Buckle [1998] HCA 4; (1998) 192 CLR 226 Re Crest Realty Pty Ltd (No 2) (In liq) [1977] 1 NSWLR 664 Riddick v Thames Board Mills Ltd [1977] QB 881 Roache v News Group Newspapers [1992] TLR 551 RP Robson Constructions Pty Ltd v Williams (1989) 6 BCL 219 Sabah Yazgi v Permanent Custodian Ltd (No 2) [2007] NSWCA 306 Sahab Holdings Pty Ltd v Registrar-General and Anor [No 3] [2010] NSWSC 403 Seaton v Burnand [1900] AC 135 Sivritas v Sivritas (No. 2) [2008] VSC 580 Standard Commodities Pty Limited v Societe Socinter Department Centragel [2005] NSWSC 493; (2005) 54 ACSR 496 Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd [2010] NSWSC 1106 Timms v Clift [1998] 2 Qd R 100 Trade Practices Commission v Nicholas Enterprises Pty Limited (No 3) (1979) 28 ALR 201; 42 FLR 213 Turner v Hancock (1882) 20 Ch D 303 Tuta Products Pty Ltd v Hutcherson Bros Pty Ltd (1972) 127 CLR 253 Uniline Australia Ltd (ACN 010 752 057) v Sbriggs Pty Ltd (ACN 007 415 518) and Another (No 2) [2009] FCA 920; (2009) 82 IPR 56 Vacuum Oil Company Pty Ltd v Wiltshire (1945) 72 CLR 319 at 324; [1946] ALR 50 Viscariello v Macks [2010] SASC 2 Wentworth v Wentworth (unreported, 21 February 1996) Westport Insurance Corporation & Ors v Gordian Runoff Ltd [2011] HCA 37; (2011) 281 ALR 593 Westport Insurance Corporation v Gordian Runoff Ltd [2009] NSWSC 245 Windsurfing International Incorporated v Petit (1987) AIPC 90-441 Texts Cited: Cross on Evidence (online edn) Groves, 'The implied undertaking restricting the use of material obtained during legal proceedings' (2003) 23 Australian Bar Review 314 Handley, Estoppel by Conduct and Election Heydon and Leeming, Jacobs' Law of Trusts in Australia (7th edn) Ritchie's Uniform Civil Procedure (online edn) Category: Principal judgment Parties: Sapphire (SA) Pty Ltd (trading as River City Grain) (Plaintiff) Barry Smith Grains Pty Ltd (in liq) (First Defendant) David John Kerr and Peter William Marsden (in their capacities as joint and several liquidators of the first defendant and as receivers and managers of the property of the Barry Smith Family Trust and Barry Smith Family Trust No 2) (Second Defendant) Representation: Counsel J A Watson with Ms F T Roughley (Plaintiff) M T McCulloch SC (Defendants) Solicitors Eastern Bridge Pty Ltd (Plaintiff) Henry Davis York (Defendants) File Number(s): 11/149286 Judgment 1HER HONOUR : Before me for hearing on 7 November 2011 was an application by the plaintiff (Sapphire (SA) Pty Limited, trading as River City Grain), for leave to appeal from a final arbitration award published in its amended form on 9 May 2011 by an arbitration committee (to which I will refer as the Tribunal) constituted under the auspices of Grain Trade Australia Ltd (formerly known as the National Agricultural Commodities Marketing Association Ltd or NACMA), to which I will refer as the Authority. The Tribunal was comprised of three arbitrators from the Authority's panel of accredited arbitrators, none of whom is a lawyer but each of whom has experience in the grain trade industry. 2Sapphire is seeking leave to appeal on certain questions of law arising out of that arbitral award, such leave being necessary pursuant to s 38 of the Commercial Arbitration Act 1984 (NSW). (I note that Sapphire already has on foot an appeal against the Amended Final Award for which it does not require leave, namely for denial of natural justice. I do not need to consider the basis of that appeal.) 3Leave to appeal on questions of law may be granted under s 38(4)(b) of the Act only if Sapphire satisfies the threshold requirements set out in s 38(5) of the Act. (Even if it does satisfy those requirements, the grant of leave remains within the discretion of the Court.) Thus, Sapphire must establish, first, that there was an error of law that substantially affects the parties' rights and, secondly, either that there has been a manifest error of law on the face of the award or both that there is strong evidence of error and that the question is one which may or is likely to add substantially to the certainty of commercial law. 4The dispute, as submitted to arbitration, involved futures contracts for the sale of grain by Sapphire to Barry Smith Grains Pty Ltd (BSG), which is now in liquidation (and to which the second defendants have been appointed as liquidators). BSG entered into the relevant contracts as trustee of the Barry Smith Family Trust (it also being trustee of the Barry Smith Family Trust No 2) and did so in each case through the services of a broker. (For the purposes of the hearing before me the respective contracts were referred to by the name of the broker through which the contract was entered.) 5In issue before the Tribunal, broadly speaking, was the identification of the terms and conditions of those contracts and the consequences that followed from the operation of those terms and conditions in light of the subsequent insolvency of BSG. In particular, what was principally in issue was whether or not the contracts were subject to what are referred to as the NACMA Trade Rules (including Rule 17.6 of the NACMA Trade Rules which dealt with the situation where there was insolvency of a party to the contract), as opposed to, or as overriding, certain other rules applicable in the industry (namely, the NACMA Limited Standard Terms and Conditions), and, if so, how Rule 17.6 operated in the particular circumstances before the Tribunal. (I will refer to the respective rules as the Trade Rules and the Standard Terms.) There were also issues raised before the Tribunal as to the standing of the claimant and the evidentiary onus borne by the claimant. 6The second defendants (to whom I will refer as the Liquidators) were appointed provisional liquidators to BSG, and receivers and managers of the said trusts, on 26 September 2007. BSG was subsequently placed in liquidation (and the Liquidators were appointed as joint and several liquidators thereto) on 11 February 2008. 7In the arbitration, orders were sought by the claimant (named in the contract for arbitration as BSG) for the payment of sums totalling $320,769.98, said to be due after what was referred to as the "close out" of three grain trading contracts (the Woodside, Mallon and Teague contracts) at the "Fair Market Price" as defined in the Trade Rules on the business day following notice was given to Sapphire of the appointment of provisional liquidators (that notice purporting to be made in accordance with the Trade Rules). 8An Interim Award was published on 16 August 2010, in which much of the Tribunal's reasoning is to be found, followed by the publication of a Final Award (on 16 March 2011) and then the Amended Final Award of 9 May 2011 (in respect of which leave to appeal is now sought) correcting an error in the quantification of the award. 9The outcome of the Amended Final Award was that Sapphire was required to pay to BSG the sum of $254,000 (plus interest and costs on a party/party basis). Since the institution of the current proceedings, agreement has been reached between the parties for a reduction in the amount payable under the Award, first, to allow for a relatively small amount conceded to have been wrongly awarded and then for a set-off, as against the amount owing under the Award, in the sum of $97,582.39 for grain that had already been delivered under the Mallon contract as at the relevant date (that set-off having been denied by the Tribunal but the Liquidators subsequently accepting that such a set-off was appropriate). Orders have been made by consent in chambers in relation to the set-off amount. 10It is submitted by Counsel for Sapphire (Mr Watson) that the result of the Award is perverse in that it requires a party who received no performance under the contracts in question, and was not in breach, to pay a substantial sum to the party who was in breach of the agreements. It is said that therefore the Award is contrary to law. The particular errors of law in respect of which leave to appeal is sought are enumerated in the Commercial Arbitration List Statement as grounds of appeal (and have been reduced in number following agreement as to the Mallon set-off and the other smaller sum conceded by the Liquidators). Issues 11The following issues arise on the present application: (i) whether the threshold requirements in s 38(5) of the Act for the grant of leave to appeal are satisfied, namely, that: (a) the determination of the relevant questions of law could substantially affect the rights of one or more parties to the arbitration agreement; and (b) there is either (i) a manifest error on the face of the award or (ii) strong evidence that the Tribunal made an error of law and, if so, that the determination of that question may add or be likely to add substantially to the certainty of commercial law; and (ii) if the answer to (i) above is in the affirmative, whether as a matter of discretion leave to appeal should be granted. Summary 12For the reasons set out below, I have concluded as follows on the above issues: (i) The threshold requirements for the grant of leave under s 38(5) of the Act are satisfied only in relation to the ground of appeal identified in the fifth ground pleaded in the Commercial List Arbitration Statement (as to the timing of the insolvency event and date for calculation of the fair market price on closing out the contracts). In relation to that ground, I am of the view that: (a) the determination of that question of law could substantially affect the rights of Sapphire, as a party to the arbitration agreement, since it could have a significant impact on the outcome of any revised award; and (b) first, there is a manifest error on the face of the award in the finding as to the date from which Fair Market Price was to be assessed and, secondly, there is strong evidence of error as to the construction of Rule 17.6 of the Trade Rules as to the consequences of what appears to have been a non-compliance by the insolvent party (BSG) with the requirement for notice of that event immediately or within two business days to the other (non-defaulting) party (Sapphire) and that the determination of that second question is one that may add or be likely to add substantially to the certainty of commercial law, having regard to the fact that the contracts are standard form contracts commonly used in the grain trade industry; and (ii) as a matter of discretion leave to appeal should be granted in relation to the fifth ground identified in the plaintiff's Commercial Arbitration List Statement. (To the extent that such an appeal is successful and results in the setting aside or variation of the award, the costs of the arbitration would fall to be dealt with at that stage.) Background Facts 13Sapphire carries on business trading in the sale and purchase of grain in Australia. It enters into contracts with growers for the purchase of the grain, which it then on-sells to larger distributors of grain, such as BSG. Since it enters into such contracts prior to the grain being available for delivery, they are futures contracts. 14In 2007, acting through different brokers, Sapphire entered into four contracts (as vendor) with BSG (as purchaser) for the sale of grain. Of those four contracts, for present purposes only two remain in issue (those being the Woodside contact and the Teague contract - so named, as noted above, after the brokers through which the contracts were entered). (The disputes as to the remaining two contracts were resolved by agreement prior to the hearing before me.) 15The Woodside contract was entered into in March 2007. A Broker Confirmation (headed Contract Confirmation) was issued by Woodside to each of BSG and Sapphire, confirming that on 7 March 2007 "the Buyer and Seller agreed to transact this Contract subject to the following Terms and Conditions". Under the header to the confirmation note were the words "NACMA TRADE RULES AND ARBITRATION RULES APPLY". The Broker Confirmation specified various terms, including as to the commodity to be supplied, price, delivery/shipment period, payment terms and the like; and then stated that: All Contract Terms and Conditions as set out above shall overrule the NACMA Standard Terms and Conditions with which they conflict to the extent of inconsistency. This Contract comprises the entire agreement between the Buyer and Seller with respect to the subject matter of this Contract. 16The confirmation further noted that "This contract has been executed and this form serves as confirmation and should be signed and a copy returned to the buyer/seller immediately". (I interpose to note that the process of contract confirmation after issue of a broker's note, as thereby envisaged, accords with the explanation appearing on the Authority's website page of the basis on which the grain trade business is executed ("Grain contracts & dispute resolution - a grain producer's Q&A"), a copy of which information was part of Exhibit A in the proceedings before me.) 17Mr Watson submits, and I accept the force of this submission, that the only meaning that can be given to the statement that conflicting Standard Terms are overruled to the extent of the inconsistency with the Contract Confirmation terms and conditions is that, absent some provision in the "Contract Terms and Conditions" inconsistent with the Standard Terms, the latter were to apply. 18A Purchase Contract Confirmation was issued by BSG (the contract date being noted as 8 March 2007), an unsigned copy of which is contained in Exhibit A, and Sapphire then issued its own Contract Confirmation of Sale (a copy signed by Sapphire of that document also appearing at Exhibit A). Neither of those documents referred to the Trade Rules or to the Standard Terms. 19The Teague contract was the subject of a Broker's note (headed 'Brokerage Contract') dated 7 September 2007 that similarly stated that the parties "Have this day entered into a contract on the following terms and conditions", again specifying details as to the commodity, price delivery period and the like, in which, relevantly, the following was stated: Other conditions: Any terms where not in conflict with the foregoing shall be in accordance with the terms and conditions of the current NACMA Contract No 2. 20The reference to NACMA Contract No 2 was said to be an incorporation of the NACMA Basis Track Contract published during the period 1 July 2007 to 30 June 2008, the terms of which expressly incorporated the Trade Rules "except to the extent the same are in conflict with the terms expressed herein" and which went on to provide that "In the event of any conflict between this contract and the Trade Rules, this contract will prevail". (In the arbitration, BSG admitted in its Response to Respondent's Reply that the reference to NACMA Contract No 2 incorporated the Trade Rules.) 21BSG again issued its own Purchase Contract Confirmation (the copy in Exhibit A having been signed by both BSG and Sapphire) bearing the contract date 7 September 2007. This referred to Special Conditions "As per NACMA Contract for Grain & Oilseeds in bulk basis track Teague: 14646/73997" and, as I understand it, a pro forma copy of the Standard Terms was printed on the back of the confirmation (including the Default provision of those terms and conditions, the text of which I set out later in these reasons). (Mr Watson submits, therefore, that the Teague contract (by incorporating the Standard Terms) was not silent in respect of Default.) 22The Liquidators were appointed as provisional liquidators to BSG on 26 September 2007. It is not disputed that, as at that date, both the Woodside and Teague contracts were wholly executory (the latter having only been entered into earlier that month). On 27 September 2007, Sapphire was served with notification of the occurrence of an "Insolvency Event" in respect of each of the Mallon, Woodside and Teague contracts, that notice being expressed to be given under Rule 17.6.2(a) of the Trade Rules. The letters stated: Our appointment as Provisional Liquidators of BSG is an "Insolvency Event" under rule 17.6 of the NACMA Trade Rules. Accordingly, this letter is BSG's notification of an Insolvency Event as it is required to provide to you under rule 17.6.2(a). 23Relevantly, in the context of the dispute between the parties as to the date of the first insolvency event for the purposes of the Rule 17.6 (assuming it to be applicable), on 25 September 2007 Mr Smith had sworn an affidavit (for use in proceedings in the Corporations List in which the appointment of a provisional liquidator was sought). In that affidavit, Mr Smith deposed to BSG's businesses having "effectively ceased trading" as at 19 September 2007 and the businesses having been in "caretaker mode" since at least June 2007 (para [54] in which he also deposed to more and more creditors emerging as the time for delivery of contracts expiries "and the contracts are closing out"). At [50], Mr Smith deposed to an immediate cash flow deficit arising on 18 September 2007 of $300,000 and, at [52]-[53], to consideration being given on and from 21 September 2007 to a proposal for a deed of company arrangement to be put to creditors or for entry into voluntary administration. 24On 2 November 2007, Sapphire was served with letters notifying details of the "close out" of the respective contracts and enclosing tax invoices in the amounts said to be payable as a result of the close out of the contracts. In all payment to "Barry Smith Family Trust (Receivers and Managers Appointed)" of sums totalling $320,769.98 was demanded. Sapphire disputed liability for that sum and did not make payment of the invoiced amounts. 25On 16 June 2008 a formal demand for that amount was issued and, when it was not met, application for arbitration of the dispute in relation to the Mallon, Woodside and Teague contracts was subsequently made by lawyers acting for the Liquidators on 26 September 2008. In that letter reference was made to industry practice that when a trader enters into liquidation or some other form of Insolvency Event under the Trade Rules the contracts that are still to be performed are "closed out" pursuant to rule 17.6 of the Trade Rules and that where the insolvent entity is "in the money" (by which I understand is meant that the prevailing market price for the grain is more favourable to the insolvent entity, as buyer or purchaser as the case may be, than that payable under the contract), then a claim is made by the insolvent entity and the counterparty must pay the amount by which the contract is in the money. The letter requesting arbitration noted that the solicitors who issued that letter (Henry Davis York) were acting for the persons who I have defined in these reasons as the Liquidators (noting their capacity as joint and several official liquidators of BSG and joint and several court appointed receivers and managers of the respective trusts). The dispute identified was a dispute between BSG and Sapphire. (This is of some relevance insofar as there was a standing issue later raised with the Tribunal.) 26The contract for arbitration (signed on 29 April 2009) identifies the claimant as BSG (in liq) as trustee for the Barry Smith Family Trust, notwithstanding that the application for arbitration had been made apparently by the individuals who, as liquidators of BSG and receivers of the trust assets, were seemingly (in one capacity or the other) in a position to pursue the recovery of sums owing either to the company in its own right or representing trust assets. The contract for arbitration identifies the dispute as the "Dispute arising on or about 26 September 2008 pursuant to [the Woodside, Teague and Mallon contracts] for the sale of barley and wheat between the Claimant [BSG] and the Respondent" and goes on to state that "The disputes relate to the financial settlement of contracts between the parties". 27Points of Claim were signed on 17 August 2009 for the "Claimant", again that entity being identified as BSG (in liquidation) though the claim as articulated therein expressly noted the appointment of the Liquidators as provisional liquidators of the company and receivers and managers of the trust. Points of Defence dated 29 January 2009 were forwarded to the claimant's solicitors on 1 February 2010. After a minor correction to the Defence, Points of Reply were served by the Claimant on 9 March 2010. The Respondent's Points of Reply were received on 6 April 2010 following which the Tribunal (referred to as the Arbitration Committee) was to consider the merits of each case. (No request for an oral hearing was apparently made.) Further replies by each of the Claimant and Respondent were then served. 28The claim made by BSG was that Rule 17.6 of the Trade Rules was incorporated into each of the contracts; that notification of the Insolvency Event was given on 27 November 2007; and that, accordingly, on the next business day the contracts were to be "closed out" at which time it was "in the money" under each of the Woodside ($262,000), Mallon ($30,769.98) and Teague ($26,000) contracts; hence the total claim was for $320,769.98. 29Sapphire concedes that it submitted to the arbitration, and that the present approach to arbitration is one of deference and finality, but contends that it only submitted to an arbitration in which questions arising in the course of the proceedings would be determined according to law, referring to s 22 of the Act, which provides as follows: Section 22 Determination to be made according to law or as amiable compositeur or ex aequo et bono (See UNCITRAL Arbitration Rules Article 33, paragraph 2) (1) Unless otherwise agreed in writing by the parties to the arbitration agreement, any question that arises for determination in the course of proceedings under the agreement shall be determined according to law. (2) If the parties to an arbitration agreement so agree in writing, the arbitrator or umpire may determine any question that arises for determination in the course of proceedings under the agreement by reference to considerations of general justice and fairness. 30Sapphire submits that the determination did not accord with the law (in the aspects referred to in its proposed grounds of appeal considered below). Sapphire contends that the Tribunal's approach to the questions arising for determination was flawed (in that it is said to have failed to conduct any proper analysis of the contracts, or the meaning of critical terms, and failed to apply well-established principles of contract construction) and therefore that the awards were infected by error of law. 31On that point, it seems to me that the words "according to law" as used in s 22 (1) are treated as being in distinction from the concept of determination by reference to "considerations of general justice and fairness" referred to in the following sub-section and that what the former words point to is that the determination of the questions by the Tribunal will be dealt with by reference to the applicable legal principles. I do not accept that it necessarily follows that if the Tribunal incorrectly applies those principles or applies incorrect legal principles to the issues in question then the whole award is in some fashion vitiated. (In those circumstances the question will be whether leave should be granted to appeal from particular questions of law arising from the errors made by the Tribunal.) NACMA Trade Rules and Standard Terms 32Before turning to the Tribunal's published awards in relation to this dispute, I set out below the relevant terms of the respective Trade Rules and Standard Terms. I also note that the Authority's "Q&A" information to grain traders, available on its website, notes that NACMA was formed in 1991 with the aim of standardising grain standards and trade rules/contracts across the Australian grain industry and that "Over 95% of the Australian grain crop is stored in facilities operated by NACMA members, with 90% of the grain contracts executed in Australia each year referring to NACMA grain standards and/or trade rules..." 33The Authority (or NACMA as it formerly was) has in place various standard terms of contract, which it is open to participants in the industry to adopt when entering into grain contracts. When considering what terms were applicable to the contracts in question in this case, the Tribunal had before it confirmations of contract issued by the seller's broker (referred to in Mr Watson's submissions as the Broker Confirmations); documents issued (by one or other of the contracting parties) which subsequently confirmed or varied the broker's standard terms (referred to by Mr Watson as the Contract Confirmations); the Standard Terms in publication as at March 2007; and the Trade Rules (both as at September 2005 and as at May 2007). By reference to the time at which the respective contracts were entered, the relevant Trade Rules potentially applicable to the Woodside contract were the September 2005 Trade Rules and for the Teague contract were the May 2007 Trade Rules. (The Trade Rules have subsequently been amended, in 2009, but not in any relevant respect as I understand it.) * NACMA Trade Rules 34The preface or introductory note to the Trade Rules notes that they have been formulated by the NACMA Commerce Committee and are proposed as reflecting trade practice, facilitating trade between NACMA Members. It is said in the Preamble to the Trade Rules which follows (repeating what is in the preface or introductory note by the Commerce Committee) that they "shall govern all disputes of a mercantile, financial or commercial character" connected with grain and other agricultural commodities arising between members and related counter-parties "and shall be the basis of arbitration on such controversies, unless otherwise and specifically agreed to at the time of trade, or some subsequent time". The Preamble to the Rules expressly confirms that: All Members or Non Members of NACMA and related counter-parties are free to agree upon any contractual provisions that they deem appropriate. The NACMA Trade Rules apply only to the extent that the parties to a contract have not altered the terms of these Rules or the contract is silent as to a matter dealt with by the pertinent Rule. 35The Rules provide, in effect, for the parties to communicate with each other so as to confirm the "original Terms of Trade" (1.2(1)) and that, when a trade is made through a broker, it is the duty of the broker to send a written contract confirmation; for the parties to check that confirmation and notify the other party of any difference in the specifications and that "In the absence, conflict, or default of such notice of Contract Confirmation, the document shall be fulfilled in accordance with the terms of the Contract Confirmation issued by the Broker" (Rule 1.2(3)). (A specimen Contract Confirmation accompanied the Rules.) Rule 1.3 provides that the specifications of a contract cannot be altered or amended without the expressed consent of both buyer and seller and that any alteration mutually agreed upon must be immediately confirmed in writing. 36The contentious Rule in the present dispute is Rule 17. In most relevant (but not all) respects, Rule 17 of the respective versions of the Trade Rules, headed "Default", was the same. 37Rule 17.1 deals with default by the Seller and Rule 17.2 deals with default by the Buyer. In each case, those Rules provide for notification to the other party where the Seller or Buyer finds itself in a position where it is or will be in default on fulfilment of the contract. The other party then has an option to elect to exercise one of the options therein set out (in summary. extension of the delivery or shipment period; re-purchase or re-sale of all or any part of the defaulted potion of the delivery or shipments; or cancellation of all or any part of the defaulted portion of the delivery or shipments "at Fair Market Price based on the close of the market the next business day"). Pausing there, it would seem the options made available to the non defaulting party under those Rules permit it, at its option, (but not the defaulting party) to take advantage of any favourable price available in the market (if it is then "in the money"). 38Rules 17.3 (Declaration of Default) and 17.4 (Failure to Perform) deal with particular circumstances (where the buyer refused to accept any bill of exchange or to perform its contracted obligations, in which case the seller is entitled to suspend deliveries or rescind the unexecuted portion of the contract; and provide that failure to perform in keeping with the terms and conditions of a contract is to be grounds for the refusal of such delivery or shipment in default but not for rescission of the entire contract). 39Rule 17.5 (Consequences of Default) deal with the payment by the party in default to the non-defaulting party of an amount by way of liquidated damages (that being an amount equal to the undelivered contract quantity of the commodity multiplied by the difference between the contract price and the Fair Market Price of the commodity). In the 2007 Trade Rules, Rule 17.5 is expanded to include the following "For the avoidance of doubt, nothing in these Rules shall be construed as requiring a party not in default to make any payment of compensation or damages to the party in default". 40Rule 17.6 (Default Due to Insolvency) is in two parts; the first, 17.6.1 being headed "Definition of Insolvency Event" and the second, 17.6.2, headed "Consequences of Insolvency Event". The definition of Insolvency Event includes: (d) (dealing with a resolution to appoint or the appointment of a controller, provisional liquidator or other analogous person), (g) (dealing with the suspension of payment of debts or ceasing or threatening to cease to carry on all or a material part of its business [this being suggested to have been an earlier Insolvency Event in the present case] or stating that it is unable to pay its debts or becoming otherwise insolvent (or being taken by applicable law, a if a court would be entitled or required to presume that it is, unable to pay its debts or otherwise insolvent), (j) (taking any step that could result in a person becoming and insolvent under administration), (k) taking any step toward entering into a compromise or arrangement with or assignment for the benefit of its members or creditors, or (l) any analogous event. 41Rule 17.6.2 of the 2005 Trade Rules (relevant in considering the Woodside contract) is in the following terms: a) If before the fulfilment [sic] of a contract the Buyer or Seller commits an Insolvency Event, the Buyer or Seller shall immediately notify the other party within two business days of the occurrence and shall be deemed to be in Default . [the italicised words do not appear in the 2007 Trade Rules, which is of relevance when considering the Teague contract] b) In the absence of any express written agreement to the contrary, any contracts between the parties shall be closed out at Fair Market Price on the business day following the giving of the notice. If notice is not given as required, the other party, on learning of the occurrence of the Insolvency Event, shall have the option of declaring the contract closed out at either the Fair Market Price on the first business day after the date when such party first learnt of the occurrence of the act of insolvency or at Fair Market Price ruling on the first business day after the date of the Insolvency Event occurred. 42Senior Counsel for BSG (Mr McCulloch SC) submits that, insofar as the relevant contracts created an obligation for Sapphire to sell and for BSG to buy grain at the agreed price and at an agreed date in the future, from a commercial perspective what Rule 17 does is to create a regime for risk management for both parties (on the basis that locking in the price on closing out the contract removes the risk of fluctuations in the market. It is thus submitted that Rule 17.6 assisted in creating certainty upon the happening of a foreseeable event, namely insolvency. * NACMA Standard Terms and Conditions 43The Standard Terms (appended to the brokers' confirmations in relation to the respective contracts) are separate from the Trade Rules. The former are to be found in a one page pro forma document which provides, relevantly, as follows: TRADING RULES : This Contract is subject to the Trade Rules of the National Agricultural Commodity Marketing Association Ltd (NACMA) currently in effect, except to the extent the same are in conflict with the Terms and Conditions expressed herein , with such Rules forming an integral part of the Contract and of which both parties hereto shall be deemed to be cognisant. (my emphasis) TIME : All stipulations set forth in the Terms of Trade as to "TIME" are of the essence. ... DEFAULT : In the event of Default in fulfilment of Contract by either party, the other at their discretion shall have the right, after giving written notice ... to sell or purchase, as the case may be, against the Defaulter and the Defaulter shall make good the loss, if any, on such purchase or sale as set forth below: If the Buyer or Seller suspend payments of debts, or convenes or holds a meeting of creditors, or commits an act of bankruptcy, or being a company shall have a receiver appointed, or hold a meeting for the purpose of considering a resolution that the company be wound up or go into liquidation, such Buyer or Seller shall be deemed to be in Default. ... DISPUTES : Any party or parties who have entered into Terms of Trade subject to NACMA Trade Rules shall be entitled to refer any disputes arising out of such contract, and which cannot be resolved between the parties, to NACMA for Mediation or Arbitration ARBITRATION : If any dispute arises out of or relates to this Contract or the breach, termination or subject matter thereof, the dispute shall be submitted to and settled by Arbitration in accordance with NACMA Arbitration Rules in the edition current at the date of the establishment of the Terms of Trade in the Contract, such rules forming an integral part of the Contract and of which both parties shall be deemed to be cognisant. ... NOTE : The NACMA Trading Rules provide a more detailed explanation. Copies available on the NACMA website . (my emphasis) * Parties' respective positions on the contractual provisions 44It is submitted by Mr Watson that, in respect of the Woodside contract, the 2005 Trade Rules in their own terms (in the Preamble thereto) apply only to the extent that "the contract is silent as to a matter dealt with by the pertinent Rule" and that since the Woodside contract was not silent in respect of Default (since there was provision made therefor in the Standard Terms - those being incorporated by the reference in the Contract Confirmation to its terms overruling the Standard Terms to the extent of any inconsistency) Trade Rule 17 did not apply at all to the Woodside contract. Alternatively, it is said that it applied only to the extent that the parties had not altered the terms of the Trade Rules and that since the parties had altered the terms of those Rules by providing for 'Default' in the adoption of the Standard Terms then the same result follows - Rule 17 does not apply. 45A further alternative argument is put that the operation of Rule 17.6 was excluded once BSG suspended payment of its debts or had a receiver appointed to its property or went into liquidation. The basis of that submission is that, as the Standard Terms expressly provided for Insolvency Events to be Events of Default and for the consequences of Default, and as the Standard Terms did not include any provision for payment by the non-defaulting party to the defaulting party, Rule 17.6 was excluded. It is also submitted that even if the Trade Rules had some work to do, they simply expanded the circumstances set out in Rule 17.6(1) to be events of default under Rule 17.6(2)(a) (the consequences of which are said to have been contained in the earlier Rules 17.1-17.5 - those Rules only contemplating a payment by a non-defaulting party). 46Mr Watson emphasises that neither the Standard Terms nor Rule 17 expressly provides for an "innocent" party to be obliged to pay a sum of money to a party in default (whether for or because of that default, pursuant to sub-Rule 17.6, on close out of the contract, or otherwise). 47In relation to the Teague contract, again Mr Watson submits that the reference to the Standard Terms (in BSG's Purchase Contract Confirmation), which in turn made provision for Default, meant that the contract was not silent as to default and did operate to alter the Trade Rules, Rule 17.6 therefore being inapplicable to the Teague Contract. Alternatively, reliance is placed by Mr Watson on the applicable September 2007 Trade Rules under which Rule 17.5 stated: For the avoidance of doubt, nothing in these Rules shall be construed as requiring a party not in default to make any payment of compensation or damages to the party in default a provision that Mr Watson submits should have disposed of any claim for payment by Sapphire to BSG (which was then in default) under the Teague Contract. 48Thus, Sapphire contended in the arbitration that the Broker Confirmation (and, in the case of Teague, the Broker Confirmation as varied in the Contract Confirmations) contained the relevant contractual terms and excluded the provisions for "Default" contained in the respective versions of the Trade Rules (namely Rule 17). BSG, for its part, relied upon Rule 17.6 of the relevant Trade Rules as applicable and as entitling it, on the proper construction of that Rule, to the moneys claimed by way of a 'close out' of the relevant contracts. (In relation to the invocation of Rule 17.5 in the case of the Teague contract, BSG submits that payment under Rule 17.6 on close out of a contract is not "payment of compensation or damages".) Arbitration 49The dispute was referred to arbitration and, as noted, the Tribunal was comprised of three non-lawyers. Mr McCulloch notes that no challenge was made to the jurisdiction of the arbitration committee and submits that the Tribunal (having regard to the manner of its composition) represented an experienced panel of industry-based persons (with, it is said, significant background experience in the use and application of the Trade Rules such that it can be assumed that the members of the committee were best suited to reach a decision which conformed with industry expectations). 50The arbitration was conducted under the terms of the NACMA Dispute Resolution Rules, under which the rules of evidence do not apply. Nevertheless, as emphasised by Mr Watson, the arbitration was, under s 22 of the Act, to be determined in accordance with law. 51Mr McCulloch notes that Sapphire maintained before the Tribunal various defences: that Rule 17.6 of the Trade Rules had not been incorporated into the respective contracts (and hence those provisions did not apply to a defaulting party in the position of BSG); that even if Rule 17.6 did apply there had been a prior Insolvency Event which had not been notified as required under Trade Rule 17.6; that the Fair Market Price on which BSG had calculated the amount of its claim was excessive and not substantiated; that BSG did not have the legal capacity to make the claim; and that Sapphire had validly rescinded the Mallon contract on 24 September 2007 and was entitled to set off an amount of $97,582.39 in respect of a delivery of grain under that contract prior to the rescission of that contract (this last now being the subject of agreement between the parties). (What was not, seemingly, raised by Sapphire was the contention that, as a matter of construction and irrespective of what was the first insolvency event, Rule 17.6 even if applicable, and even if the notice required under sub-rule (2) had been properly given, did not operate to entitle BSG to payment of the sum claimed.) 52On 16 August 2010, the Tribunal published its interim award in which it noted that it was common in the industry for parties to create their own contract confirmation documents (at p 2) and that "Both parties appear to concede and accept (with one possible exception) that the brokers' note contracts are the prevailing contracts". It further noted that Sapphire had raised an earlier insolvency event relying upon an affidavit of a third party sworn on 11 June 2009 (in which the deponent related a conversation with Mr Smith of BSG in which the latter had said on 24 September 2007 that "I am putting myself into voluntary liquidation"). 53In summary, the Tribunal described the question at issue in the arbitration as being "the timing and consequences of insolvency of the Claimant". It found that the Claimant (BSG) had the necessary capacity to bring the claims; that the respective contracts each incorporated the Trade Rules and specifically Rule 17.6; that the Mallon contract had been properly rescinded on 24 September 2007; that the relevant insolvency event occurred on 27 September 2007 when Sapphire was given notice of insolvency, rendering 28 September 2007 as the relevant date for determining fair market price; that BSG was entitled to receive payments equivalent to the Fair Market Price as defined for the contract tonnage deliverable as at 27 September 2007 under the Woodside and Teague contracts, to be assessed for value as at 28 September 2007; and that Sapphire was not entitled to set-off against sums due to BSG those amounts invoiced by it to BSG in respect of the Mallon and one other contract. 54The Tribunal was not, however, satisfied as to the evidence that had been provided by BSG as to Fair Market Price and directed that written evidence be provided (from at least 2 sources) as to the Fair Market Price on which BSG had calculated the amounts of its claim and for submissions to be served in response to such evidence. 55Following consideration of those further submissions, the Tribunal signed a Final Award on 16 March 2011 in which it addressed the further evidence that had been produced in relation to the question of fair market price (still not being satisfied as to the supporting evidence put forward by BSG). It expressed the opinion that "clearly the grain had a fair market price" and that its task was to "discover" the Fair Market Price based on the best evidence that the parties (including Sapphire). It noted that Sapphire had adduced evidence of price as an alternate submission to its submissions that the finding should be that the grain had a nil value (in the absence of reliable evidence from BSG). 56That Final Award was subsequently corrected by the Tribunal (acceding to an application by Sapphire, opposed by BSG) by an Amended Final Award issued on 9 May 2011, recognising that there had been an error in awarding damages in respect of the Mallon contract that the Tribunal had already determined was rescinded (and correcting the award on the basis that this was an obvious oversight), though not revising its position on the set-off claimed under that contract. 57Under the terms of the Amended Final Award, subsequently reduced as agreed between the parties, the amount payable by Sapphire is $156,417.61 plus interest and costs (and there was evidence that the costs, at least on a solicitor and client basis, were not insubstantial). Errors of Law alleged to have been made 58Sapphire has identified a number of errors of law on which it seeks leave to appeal, not all of which (such as the error in relation to the Mallon contract) are now pressed. Those that are still pressed are as follows: (i) as to the identification of the applicable contract terms (it being submitted that the Tribunal erred as a matter of law in concluding that each of the Woodside and Teague contracts incorporated the Trade Rules); (ii) as to the construction of Rule 17.6 (in holding that it applied to require a non-defaulting party to pay a substantial sum of money to a defaulting party); (iii) as to the finding that 27 September 2007 was the date of insolvency (and/or that 28 September 2007 was the date on which fair market price was to be assessed); (iv) in not applying the correct onus of proof (but, rather, in finding that its task was to "discover" the Fair market Price of the contract commodity on the best evidence available before it); (v) in not holding that the proceedings were not validly constituted (the relevant party to the arbitration agreement being BSG not the Liquidators in whom any claim under the contracts had by then vested); and (vi) in awarding the costs of the whole of the arbitral proceedings to BSG (an error said to be consequential on the findings ultimately made in relation to the above errors of law). Applicable Principles 59Before turning to each of the errors of law in respect of which Sapphire seeks leave to appeal, I consider below the applicable legal principles in relation to the issues to be determined. * Substantial effect on rights of one or more of the parties 60As noted above, the first of the threshold requirements to be satisfied (before any question of discretion arises) is that there be a determination that could substantially affect the rights of one or more of the parties. The meaning of that phrase has not tended to cause any real difficulty. Where there has been more contention, at least part of which has now been resolved by the High Court, is as to the first of the two alternate limbs to the second requirement that must be satisfied - namely, that there be manifest error on the face of the award. * Manifest error 61The meaning of manifest error has recently been considered by the High Court in Westport Insurance Corporation & Ors v Gordian Runoff Ltd [2011] HCA 37; (2011) 281 ALR 593. In the Court of Appeal ( Gordian Runoff Ltd v Westport Insurance Corporation [2010] NSWCA 57 at [116]) it had been held that the proper approach to the question of "manifest error" for the purposes of s38(5)(b)(i) was that taken from the reasons of Kirby P and Mahoney JA in Natoli v Walker (1994) 217 ALR 201 at 212-215 and 233, respectively, and from the reasons of Sheller JA in Promenade Investments Pty Ltd v State of New South Wales (1992) 26 NSWLR 203 at 225-226, that being articulated as: The error must be more than arguable; it must be evident or obvious; there must be powerful reasons leaving little or no doubt on a preliminary basis, without any prolonged adversarial argument, that there is on the face of the award an error of law. 62The Court of Appeal had there distinguished between the phrase "manifest error" and the similarly worded phrase (used in a different context) with what it considered to be a quite different meaning "plainly or clearly wrong" (as those words were discussed in Gett v Tabet [2009] NSWCA 76; (2009) 254 ALR 504 at 558-567). 63In the High Court, French CJ, Gummow, Crennan and Bell JJ (Kiefel J agreeing) concluded that the phrase "a manifest error of law on the face of the award" in s 38(5)(b)(i) of the Act requires that the existence of an error of law be manifest on the face of the award, including the reasons given by the arbitrator, in the sense of an error apparent to that understanding by the reader of the award (disapproving Natoli v Walker ). 64The plurality said (at [42]): Paragraph (b)(i) of s 38(5) may be awkwardly expressed, but the words "a manifest error of law on the face of the award" comprise a phrase which is to be read and understood as expressing the one idea. An error of law either exists or does not exist; there is no twilight zone between the two possibilities. But what is required here is that the existence of error be manifest on the face of the award, including the reasons given by the arbitrator, in the sense of apparent to that understanding by the reader of the award. If that error is manifest and its determination could substantially affect the rights of at least one of the parties, as specified in para (a) of s 38(5), then the Supreme Court may go on to decide to grant or refuse leave in the exercise of the power conferred by s 38(4)(b). noting at [43] - [44] that: If there be no such manifest error on the face of the award but there is presented to the Supreme Court on the leave application "strong evidence" that an error of law was made, and its determination may add, or be likely to add, substantially to the certainty of commercial law (para (b)(ii) of s 38(5)) and also may substantially affect the rights of at least one of the parties (para (a) of s 38(5)), then leave may be granted. If either s 38(5)(b)(i) or (ii) has been engaged to enliven the power to grant leave, then, upon the grant of leave, a "question of law arising out of an award" is presented to provide the subject matter of the appeal which lies to the Supreme Court under s 38(2). 65As to the expression "manifest error", their Honours said: Much difficulty in the operation of these provisions has been occasioned by the majority decision of the New South Wales Court of Appeal in Natoli v Walker (Kirby P and Mahoney JA; Meagher JA dissenting). The majority appear to have treated the use of "manifest" in para (b)(i) of s 38(5) not as directed to what is presented upon the face of the award but as requiring the error of law itself to have a particular quality or character so as to include within para (b)(i) facile errors and to exclude those of complexity. This would exclude from para (b)(i), for example, an error in the construction of a complex law such as s 18B of the Insurance Act. Yet, as para (b)(ii) indicates, the policy of the statute is not to leave entirely to the operation of the arbitration agreement questions of law the determination of which may be likely to add to the certainty of commercial law. In an age when much commercial activity is regulated by statute, such questions are likely to be matters of statutory interpretation. It would be incongruous to favour judicial determination merely of egregious error apparent on the face of the award. ... Natoli should not be accepted in this court as correctly construing s 38(5)(b)(i) of the Arbitration Act. The character or quality of the error of law falls for consideration, if relied upon, at the next stage, namely when the Supreme Court is considering under s 38(4)(b) whether to grant leave. 66Kiefel J (at [163]) said: I agree with French CJ, Gummow, Crennan and Bell JJ that manifest error of law requires that the error appear on the face of the award, which includes the reasons for it, and that the error be apparent to the understanding of the reader. Such is the case here. It does not require that the error be of a particular quality or that errors involving complex questions be disqualified. * Adequacy of reasons 67So far as the adequacy of reasons for the award is concerned, the plurality accepted that, when properly understood, the judgment of Donaldson LJ in Bremner Handelsgesellschaft mbH v Westzucker GmbH (No. 2) [1981] 2 Lloyd's Rep 132-133 at [25] correctly represented the law (as had been the view of the Court of Appeal in Gordian at [222] per Allsop P: All that is necessary is that the arbitrators should set out what, on their view of the evidence, did or did not happen and should explain succinctly why, in the light of what happened, they have reached their decision and what that decision is. That is all that is meant by a 'reasoned award'. correctly represented the law. To the extent that Oil Basins Limited v BHP Billiton Limited [2007] VSCA 255; (2007) 18VR346 at 364-365 [51] might have embodied a different and more stringent test, the plurality in Westport said that when properly understood the words "judicial standard", where they appeared in the judgment were an "unfortunate gloss", on the terms of the relevant provision in the Victorian legislation ( Westport at [63-54]). 68Mr McCulloch notes that the level and complexity of the reasons required will vary according to the type of arbitration and the nature of the determination to be made ( Westport at [53]); and that both Oil Basins and Westport concerned the construction of legislation which required the arbitrators (who included experienced former judges), to "explain succinctly why various integers in ... [the] statutory provision were satisfied" ( Westport at [55]), which it is submitted is not the case here. 69Reliance was placed by Mr McCulloch on [53] of the plurality's judgment, with which Kiefel J. expressly agreed at [170]: More to the point were observations in Oil Basins to the effect what is required to satisfy that provision will depend on the nature of the dispute and the particular circumstances of the case. Their Honours (in Oil Basins) illustrated the point by saying: "If a dispute turns on a single short issue of fact, and it is apparent that the arbitrator has been chosen for his or her expertise in the trade or calling with which the dispute is concerned, a court might well not expect anything more than a rudimentary identification of the issues, evidence and reasoning from the evidence of the facts and from the facts to the conclusion." * On the face of the award 70Their Honours in Westport were not called upon to address what was meant by "on the face of the award" beyond that it comprised both the award itself and the reasons given by the arbitrator for the award. In the present instance, this is relevant insofar as Sapphire seeks to point to other materials as evincing one or more of the errors identified by it (such as the material attached to the submissions made by it to the Tribunal). 71The question as to whether an applicant, when applying for leave to appeal on the basis of manifest error on the face of the award, is limited to the material contained in the award (and reasons for the award), or whether the Court can have regard to primary or secondary facts before the arbitration tribunal is one that has received both judicial and academic attention. 72The traditional interpretation of the phrase was that the court was restricted to reviewing the award itself (and hence no extrinsic material could be considered) in order to determine whether an error of law existed on its face. Thus, in Gold Coast Council v Canterbury Pipe Lines (1968) 41 ALJR 307, Windeyer J stated (at 314) that: an error on the face of the award is not to be discovered by looking behind its back. It is not permissible to treat the limited jurisdiction by which a court ensures that an arbitration is conducted in accordance with law as if it were the equivalent of an appeal from an arbitrator's decision. 73In Doran Constructions Pty Ltd v Health Administration Corporation (NSW) (1994) 12 BCL 104 Rolfe J (though finding that there had been a manifest error of law (by reason of a finding based on the principles of res judicata and/or issue estoppel) nevertheless found that it was not on the face of the award since it was necessary to go beyond the award to determine that issue. 74The difficulty that seems to arise in some of the cases is where there is doubt as to the intention of the arbitration tribunal as to whether particular material forms part of the award. Thus, Sellers LJ in Giacomo Costa Fu Andrea v British Italian Trading Co Ltd [1963] 1 QB 201 at 219 (later cited by Windeyer J in Tuta Products Pty Ltd v Hutcherson Bros Pty Ltd (1972) 127 CLR 253 at 258; 46 ALJR 549 at 258) noted that "The difficulty is in its application - not, I think, as to whether any particular document has been expressly incorporated in an award but whether it has, in the circumstances, to be regarded as the intention of the tribunal which made the award to include the document in question as part of its award and its reasoning". 75So, for example, in Pearl Marin Shipping A/B v Pietro Cingolani SAS, The General Valdes [1981] 1 Lloyd's Rep 170, where the arbitrator set out his findings in a document headed "Award" and set out his "Reasons for Award" in a separate document (sent without a covering letter), which was not stapled or attached to any of the other documents, Neill J held that the "reasons" document did not form part of the award. The mere fact that a document containing reasons was delivered at the same time as the formal award did not of itself have the consequence that the document containing the reasons was to be regarded as part of the award. The critical question was whether the arbitrator had intended the document with reasons to be incorporated into the award. 76In the Tuta Products case , Barwick CJ cited with approval the statement by Lord Dunedin in Champsey Bhara & Co v Jivraj Balloo Spinning & Weaving Co Ltd [1923] AC 480 at 487 that: An error in law on the face of the award means, in their Lordships' view, that you can find in the award or a document actually incorporated thereto, as for instance a note appended by the arbitrator stating the reasons for his judgment, some legal proposition which is the basis of the award and which you can then say is erroneous. 77In Gianfriddo v Garra Constructions Pty Ltd [1971] VR 289 at 290-291, Smith J summarised the principles in relation to the implied incorporation of documents into an award as follows: 1. A mere recital or narrative statement in the award that a specified contract was entered into will not be sufficient to incorporate it in the award: Blaiber & Co Ltd v Leopold Newborne (London) Ltd [1953] 2 Lloyd's Rep 427 at p 430; Nils Heime Akt v G Merel & Co Ltd [1959] 2 Lloyd's Rep 292 at p 293; James Laing, Son & Co (M/C) Ltd v Eastcheap Dried Fruit Co [1961] 2 Lloyd's Rep 277; Giancomo Costa Fu Andrea v British Italian Trading Co Ltd [1963] 1 QB 201 at p 219; [1962] 2 All ER 53. Nor will a mere recital or narrative statement that an act has been done for reasons stated in a specified document be sufficient to incorporate that document; Champsey Bhara & Co v Jivraj Balloo Spinning & Weaving Co Ltd [1923] AC 480. 2. Even if the words relied upon are in the portion of the award which expresses the decision or direction by the arbitrator on the matter referred to him, they will be insufficient to incorporate the provisions of a contract if they merely state in general terms that there has been a breach of contract, or that because of a specified act or event the contract is void or has been discharged; see the Blaiber case , supra, at p 429, and the Giacomo Costa case , supra, at (QB) pp 217 and 219. 3. If, however, the decision or direction given is expressed in terms which are to such a degree referential that, without reading a document referred to, it is not possible to understand what has been decided or directed, or not possible to give effect to the decision or direction, then the document should be treated as incorporated in the award; see the Champsey Bhara case , supra, at (AC) p 487; Hitchins v British Coal Refinery Processes Ltd [1936] 2 All ER 191, at p 194, and the Giacomo Costa case , supra, at (QB) p 210. 4. Again if the decision or direction is expressed to be based upon the wording of a specified clause of a contract the clause is incorporated; compare the Blaiber case , supra, at p 429. And the same is true if there is a finding either that an act was properly done under, or properly done having regard to the provisions of, a specified cause, or that it constituted a breach of a specified clause; see Absalom (FR) Ltd v Great Western (London) Garden Village Society Ltd [1933] AC 592, at p 612; [1933] All ER Rep 616, and cll 3 and 4 of the award in that case; Arcos Ltd v London & Northern Trading Co Ltd (1932) 44 Lloyd's Rep 6; (1933) 45 Lloyd's Rep 297, at pp 300, 301 (SC). 5. How matters stand where the decision or direction is expressed to be based, not upon the wording or effect of any specified clause, but upon the wording or effect of the contract as a whole, or of the provisions of the contract relating to a particular subject-matter, is debatable; but the weight of authority supports the view that in such circumstances the contract, or the relevant part of it, is incorporated. See, on the one hand, the Giacomo Costa case , supra, at (QB) pp 216, 217; and see, on the other hand, the test propounded in the same case at p 219, and see Landauer v Asser [1905] 2 KB 184, and the observations thereon in the Champsey Bhara case , supra. Compare also Aktiebclaget Legis v V Berg & Sons Ltd [1964] 1 Lloyd's Rep 203, at p 211. 78In RP Robson Constructions Pty Ltd v Williams (1989) 6 BCL 219 at 221 Giles J (as his Honour then was) expressed the test not in terms of incorporation into the award but as to the ascertainment of what amounted to the arbitrator's reasons for the award. There, reference to the submissions that had been made by Counsel and considered by the arbitrator in his reasons for making the award were able to be reviewed for the purpose of considering whether there was manifest error on the face of the award. 79In the present case, the Tribunal's reasons identified at the start that submissions had been received from the parties (thereby referring to and listing the quasi-pleadings - claim, defence, points of reply and responses by each of the parties). The Tribunal noted that it had considered those submissions. A statement that submissions (whether in the form of quasi-pleadings or not) have been received and considered does not, in my view, evidence an intention to incorporate them as part of the reasoning of the award or, to use Giles J's terminology, to indicate that these documents form part of the reasoning of the Tribunal. It seems to me that this is a formal recital of what has been received and reviewed. If one were conducting an appeal from a decision based on the material before the Tribunal then those documents would be relevant. However, as I understand the authorities referred to above, the mere reference to such material does not mean that it forms part of the award for the purposes of determining whether there is manifest error on the face of the award (though reference thereto, or to other primary or secondary materials before the Tribunal may otherwise be permissible in determining whether there is strong evidence of error). 80Other than in relation to the determination of the fair market price, the only reasoning of the Tribunal is to be found in the Interim Award. That contained (in sections with corresponding headings) an introduction; a recitation of the facts; a brief description of the claimant's case (described as relatively straightforward); a description of the respondent's defence (with three separate headings: the Trade Rules; Timing of the Insolvency Event; and Other matters); a section on fair market price; and then the Tribunal's findings; followed by the Interim Award (which commences with the words "Having considered the Submissions and for the reasons stated above...". 81However, insofar as the Tribunal, in its reasons, refers to the "incorporation provisions" of the Woodside and Teague Contracts as part of its reasoning, it seems to me that those parts of the contracts at least must be treated as part of the reasons of the award and hence reference may be made to those when determining whether there has been manifest error on the face of the award. 82In those circumstances, errors divined from material not referred to in the award (such as the seemingly contradictory evidence of Mr Smith in relation to the timing of the insolvency event) would not in my opinion be errors on the face of the award and hence leave to appeal therefrom could only be granted under the second of the two alternate limbs for the second requirement (the strong evidence of error/likelihood to add to the certainty of commercial law ground). 83I accept, however, that the extrinsic material was admissible, subject to relevance (and in the case of some of the material, such as the reference in the Productivity Inquiry to disputes of an unidentified nature in relation to the grain trade contracts, also subject to weight), when looking to the question whether there is strong evidence of an error of law and, if so, the likelihood that determination of that issue may add or be likely to add substantially to the certainty of commercial law. 84Finally, by way of the general principles to be applied on the present application, I note that as to the second of the two alternative limbs to the second requirement that must be satisfied (namely that there is strong evidence of an error of law) there is no requirement in s 38(5)(b)(ii) the error be "on the face of the award". Hence reference can be made to extraneous materials. However, what is required is that in such a case, the error be of a particular quality in the sense that the determination of that issue may or will be likely substantially to assist in the certainty of commercial law. 85Turning then to the particular issues on which the Tribunal is said to have erred and the manner in which it is said that any error occurred, those issues (and BSG's response to those issues) are as follows: (i) Identification of terms of contracts 86In issue before the Tribunal, as noted in the Interim Award, was the question whether Rule 17.6 of the Trade Rules was incorporated into any of the contracts. The Tribunal noted in the Interim Award that, in relation to the Woodside contract, Sapphire said that the contract incorporated the Trade Rules but also the Standard Terms and that Sapphire had contended that the latter were different in material respects. As to the Teague contract, the Tribunal noted that it incorporated the terms of the NACMA "Track" contract which in turn incorporated the Trade Rules but that Sapphire said that the parties had agreed to vary that contract by producing a subsequent contract document on "the Barry Smith form" (the Tribunal noting that that contract on its face contained as a 'Special Condition' the incorporation of the NACMA track contract). 87The Tribunal stated that it did not find compelling the arguments of Sapphire (by this, seemingly, referring to the arguments that the Woodside contract, by incorporating the Standard Terms, and the Teague contract, by the variation contained in the Barry Smith form, did not incorporate that Rule 17.6 was not incorporated into the contracts). It said: ...Both the Woodside and Teague Contracts clearly incorporate the NACMA Trade Rules (the latter by virtue of the incorporation of the Track Contract). To the extent that the Woodside contract incorporates the NACMA Standard Terms and Conditions, we note that those standard terms themselves provide that the "NACMA Trading [sic] Rules provide a more detailed explanation" which suggest to us an intention at least that the Trade Rules and Standard terms be construed consistently, to the extent possible 88(Mr Watson points out that the Tribunal did not there identify whether the intention so found (i.e. an intention "at least that the Trade Rules and Standard Terms be construed consistently, to the extent possible") was of the parties or of the drafter of the Trade Rules. That said, I would have read this as a finding that, by incorporating the Standard Terms which themselves made reference to the Trade Rules, the parties should by the terms of their contract be taken to have had such an intention.) 89It is submitted by Mr Watson that the substance of the Tribunal's reasoning in this regard is to be found in the paragraph in which the Tribunal noted that the position was "perhaps less clear" in the case of the Mallon contract (which had incorporated the "NACMA trading terms and conditions"). In that paragraph, the Tribunal said that to the extent that this (i.e. the statement to be found in the Mallon contract) was ambiguous, then found that there was an intent to incorporate the Trade Rules and went on to say (in a passage on which Mr Watson places weight): ... That is the starting point . If the parties then wished to depart from those Rules entirely or in any material respect, they would in our view need to do so clearly and unambiguously. In our opinion they have not done so and we find that the 3 contracts evidenced by the broker's notes incorporate and are governed by the NACMA Trade Rules, and relevantly Rule 17.6. (emphasis as placed on this by Mr Watson) 90Mr Watson submits that it is clear that the Tribunal approached all three contracts from the starting point that the Trade Rules should be applied and that, for the parties to depart from those rules, they must do so "clearly and unambiguously" (leading to the finding that the Trade Rules were incorporated in all three of the contracts and that the contracts were governed by the Trade Rules). He submits that this was the wrong approach, noting that the contracts were made through a broker, with Contract Confirmations that either attached or incorporated the Standard Terms. Mr Watson submits therefore that the Trade Rules should have been considered last, not first, referring to the following statement in the Standard Terms: This Contract is subject to the Trade Rules of the National Agricultural Marketing Association Ltd., (NACMA) currently in effect, except to the extent the same are in conflict with the Terms and Conditions expressed herein , with such Rules forming an integral part of the Contract and of which both parties hereto shall be deemed to be cognisant (my emphasis) and to the statements in the NACMA Trade Rules to the effect that they: ... apply only to the extent that the parties to a contract have not altered the terms of these Rules or the contract is silent as to a matter dealt with by the pertinent Rule 91It is submitted by Mr Watson that the Tribunal ought to have approached the question by first analysing the contract documents to establish whether, and to what extent, any particular NACMA Trade Rule might apply (noting that, to the extent that the contract documents incorporated the Trade Rules the latter "were the servants, not the masters, of the contractual arrangements"). (It is then submitted that this approach infected the whole of the Tribunal's analysis of the questions for determination according to law.) 92Mr Watson points to Sapphire's Reply submissions to the Tribunal of 9 April 2010 (Exhibit A at tab 7), in which there is an analysis of the respective contract documents to show the incorporation into the Woodside contract of the Standard Terms and the provision contained therein to the effect that they are to override the Trade Rules to the extent of any inconsistency and the incorporation into the Teague contract (by the Contract confirmation) again of the Standard Terms with the relevant provision. 93Mr McCulloch submits that the plaintiff's submissions do not disclose an error of law that is more than arguable on this ground. He points to the submissions that BSG made as to the incorporation of the Trade Rules in the contracts (as set out in paragraph 1 of the Points of Reply dated 9 March 2010 and paragraph 2 of the Response to the Respondent's Reply dated 18 May 2010 provided to the Tribunal). 94In summary, BSG submitted that the relevant brokers' notes contained the only terms of the contracts in issue (referring to NACMA Trade Rule 1.2.3 in this regard). Trade Rule 1.2.3 provides: When a trade is made through a Broker, it shall be the duty of the Broker to send a written Contract Confirmation to each of the principals, not later than the close of business the day following the date of the trade. Upon receipt of the Contract Confirmation, the parties there to shall carefully check the specifications and, upon finding any differences, shall immediately notify the other party to the Contract Confirmation, and confirm in writing. In the absence, conflict or default of such notice of Contract Confirmation, the document shall be fulfilled in accordance with the terms of the Contract Confirmation issued by the Broker. 95It is noted by Mr McCulloch that in NACMA Arbitration Award no. 13, the Arbitration Committee there acknowledged that "Trade Rule 1.2.3 gives effect to a common trade usage, namely that in the event of conflict, the broker's note prevails" and submitted that the award in that Arbitration was directly comparable with the present case in which there was a conflict between a provision of the contract confirmation issued by a party and the broker's note which, relevantly, incorporated the NACMA Trade Rules (the broker's incorporation of the Trade Rules there being held to prevail). Mr McCulloch notes that the Tribunal was also referred to NACMA Arbitration Appeal Award no. 32, where the broker's note was found to constitute the primary evidence of the terms of the contract between the parties. It was submitted that the decision of the Tribunal in the present case was entirely consistent with other Arbitration Committees operating in the same industry and under the same rules. 96Mr McCulloch submits that the terms of the agreement between the parties were embodied in the Broker Notes (and the contract confirmations subsequently issued by the parties constitute no more than acknowledgements or receipt documents); that all of the Broker Notes incorporated the NACMA Trade Rules as at the respective dates of the Notes, "save insofar as they conflict with the terms of the Note"; and that none of the terms printed on the Notes included provision for insolvency or default. Thus it is said that NACMA Trade Rule 17.6 formed part of the agreement between the parties. 97Alternatively, it is submitted that if either or both of the Standard Terms were incorporated into the contracts they did not operate to displace the application of Rule 17.6, which deals specifically and extensively with "Default due to Insolvency". Mr McCulloch submitted that the general "default" provisions contained within the trading terms refer to very narrow circumstances (and do not encompass the circumstances of applicable in this case where BSG had not convened or held a meeting of its creditors; committed an act of bankruptcy; had a receiver appointed to it; nor convened a meeting for the purpose of considering a resolution that the company be wound up or go into liquidation). 98Mr McCulloch thus submitted that Rule 17.6 contemplates a much broader range of "Insolvency Events" and imposes obligations and creates rights and entitlements in the event of the occurrence of those "Events"; that the "Default" provisions in the Standard Terms are not exclusive; and that NACMA Rule 17.6 remains in full force and effect. 99The Broker's note, it is said, does not incorporate "the NACMA Standard Terms and Conditions" but refers to them insofar as necessary to state that they shall be overruled by "All Contract terms and Conditions as set out above" (including the incorporation of the Trade Rules). It is submitted that this is, at best, an ambiguous reference to "the NACMA Standard Terms and Conditions" and insufficient to incorporate them into the terms of a contract evidenced by the Broker's notes. 100Mr McCulloch also contends that the identification of the contract between the parties is a question of fact, not law, that is not for this Court to scrutinise. In that regard, I do not accept that the question as to what, on the facts before the Tribunal, constituted the contract between the parties (and the identification of its terms) is a question of fact. (ii) Construction of Rule 17.6 101As to the second alleged error of law, Mr Watson submits that the Tribunal did not attempt to engage with (and that the reasons show no reasoning or analysis of) the proper meaning and construction of Rule 17.6. In that regard, I accept that there is no reasoning articulated in the Interim Award as to the basis on which, assuming Rule 17.6 was incorporated into the contracts, it led to the making of the award (other than insofar as consideration was given to the date of insolvency, considered in relation to the error of law discussed in (iii) below). 102It is submitted that the Tribunal failed to address a necessary consideration (proceeding as it did on the assumption that Rule 17.6 applied at all), namely, the meaning and effect of that rule, properly construed in its context. 103Both parties accept that, as a principle of contractual construction, if the language of a contract is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust, as stated in Australian Broadcasting Commission v Australasian Performing Right Association (1973) 129 CLR 99 at 109. Mr Watson refers to what was said by Lord Reid in Wickman Tools v Schuler A.G. [1974] AC 250 at 251, namely that "The fact that a particular construction leads to a very unreasonable result must be a relevant consideration. The more unreasonable the result the more unlikely it is that the parties can have intended it, and if they do intend it the more necessary it is that they shall make their intention abundantly clear." At p 255, Lord Morris of Borth-y-Gest similarly noted that while "business men are free to make what contracts they choose ... unless the terms of their agreement are clear a court will not be disposed to accept that they have agreed something utterly fantastic". 104Similar statements as to the freedom of commercial parties, in their wisdom, to enter without the criticism of courts into such contracts as they please (provided the terms of those contracts and the parties' contractual intention to do so are clear) are to be found in the context of a closing out clause in a standard form produce brokers' association contract in In re Bourgeois and Wilson Holgate & Co [1920] 25 Com Cas 260 CA and, in a different context, in Federal Commerce & Navigation Co Ltd v Tradax Export SA (The 'Maratha Envoy') [1978] 1 AC 1 at 7-8. 105It is submitted by Mr Watson that to hold that a contract required a party (not in breach and not having received any of the promised consideration for its covenants under the contract) to pay a significant sum of money to the party in default would have required the most clear, unambiguous and certain statement of such an obligation and that there is no such provision, to be found (whether in the Broker Confirmations, Contract Confirmations, the Standard Terms, or the Trade Rules). (He points to the judicial disquiet as to such an operation in the context of not dissimilar commodity contract rules considered in JF Adair & Co Ltd v Birnbaum [1939] 2 KB 149 CA.) 106It is submitted that the Tribunal's approach paid no regard to the context of Rule 17.6, in particular the circumstances in which the event relied on to trigger the obligation to pay (namely, the insolvency) was a default and breach of contract under the Standard Terms, as well as the Trade Rules. 107In the absence of any reasons from the Tribunal explaining why in those circumstances Sapphire (as a non-defaulting party) was required to pay money to BSG, it is submitted by Mr Watson that the Court should treat the Award as resulting from an error of law and that this should be sufficient for the grant of leave. 108Mr Watson goes on to submit, in relation to the meaning that a court might ultimately attribute to the words contained in Rule 17.6.2(b) (i.e., that contracts shall be closed out at Fair Market Price), that whatever 'close out' was intended to mean, the Trade Rules do not say that the consequence of a close out is or may be a payment by an innocent party to the party in default (including without provision for set-off); that the Rule does not require payment out; and that the Rule can be reconciled with the obligations of an insolvent party in default (especially sub-Rules 17.1-17.5), if the provision is understood as an offer to 'wash out' the contracts (as it is suggested the defendants appear to have understood the provisions). 109A commercial construction of the Rule would, it is said, allow for the innocent party to accept the offer, and make a payment to the insolvent party as the price of being released from future obligations (perhaps because being released from the contract would allow the vendor to sell the grain more profitably elsewhere) but would not oblige it to accept such an offer. Alternatively, it is submitted that the Rule can be reconciled with the other provisions for default such that, in circumstances of insolvency, the first limb of Hadley v Baxendale ((1854) 9 Exch 341; 156 ER 145) damages are liquidated at the relevant date for the Fair Market Price (something that it is said would offer certainty to the parties and avoid grain being tied up in what is said would be an inevitably futile wait for the day for delivery and subsequent non-payment by the insolvent party). 110It is submitted by Mr Watson that it is unreasonable to treat the words 'close out' as impliedly requiring the innocent party to pay and that no such term would be implied (as it would be unnecessary to give business efficacy to the contract; no such term was identified or drafted by BSG; and no materials were placed before the Tribunal by BSG which would warrant judicial implication of such a term). 111Mr Watson acknowledges that there is a concept of 'close out' associated with the International Swaps and Derivatives Association (ISDA), but points out that the Trade Rules lack any of the necessary supporting provisions to enable such a construction (such as a definition of 'close out'; the consequence of a close out (for example a clause to pay); or any objective reference to give meaning to the words). It is noted that dictionary definitions of close out (in respect of which reference was made to Keynes v Rural Directions Pty Ltd [2010] FCAFC 100) were not proffered by BSG and were not considered by the Tribunal. (It is submitted by Mr Watson that a definition of 'close out' or market practice would have to be approached very cautiously, reference being made to the provisions of Chapter 7, Corporations Act 2001 (Cth) dealing with financial services and markets.) 112Further, it is submitted if Rule 17.6 is to be construed as importing concepts derived from the close out of futures, derivatives or swaps, then BSG lost the advantage it sought to gain as a result of its own insolvency, by reason that it did not give the required notice "immediately ... within two business days" of the occurrence of the first Insolvency Event (this being a separate ground on which complaint is made of the Tribunal's decision). 113Mr McCulloch submits that Trade Rule 17.6 is not a punitive provision but, rather, a provision to ensure that neither party to a grain contract obtains a windfall advantage by reason of the insolvency of the one of them. Mr McCulloch submits that categorising the provision, as Sapphire does, in terms of default or blameworthiness involves a misapprehension of the meaning, purpose and effect of the Trade Rule, which is explained as providing an opportunity where (as here) an "Insolvency Event" is committed by the buyer for the seller (upon receipt of the notice required by Trade Rule 17.6.2(a)) to sell any undelivered grain in the market place. It is submitted that in the event that such a sale results (or would have resulted) in the seller having to accept a price less than the price that the seller would have obtained under the terms of the contract, then the effect of the close out provision in Trade Rule 17.6 is to provide compensation for that loss; but that in the event that such a sale would have resulted in the seller obtaining a price greater than that provided in the contract (said to be the situation in this very case), the seller is obliged to account to the buyer for what is effectively a windfall profit arising from the buyer's insolvency. 114Insofar as resort is said to be had to custom or market practice in the trade, Mr Watson notes that there was no evidence of this nor was there any explanation or identification by the Tribunal of this (although it might well be thought that the appointment of arbitrators experienced in the industry was done with the intent that they should apply their experience in the construction of the contracts, and that this would not necessarily be expected to be articulated in their reasons). It is submitted that the effect of the Tribunal's construction of Rule 17.6 (requiring a payment to the defaulting party) invites "serious abuse on the arbitrage" given the volatility of the price of grain. (By way of example, it is suggested that a $2 company (or company acting as trustee where all of the assets were held on trust) could enter into the market to buy grain, secure in the knowledge that, if the price fell, the seller could only prove in the insolvency whereas in a rising market, it could determine when to bring itself within any one of the events in Rule 17.6(1) so as to "close out" the contract and make the seller pay - a result said to be absurd). 115Mr McCulloch submits that the arguments now raised as to the meaning and effect of Trade Rule 17.6 (and contained in paragraphs [40] to [47] of Sapphire's Submissions in these proceedings) were not raised before the Tribunal and should not now be allowed to be raised (as this would render the arbitration otiose). He further submits, with some force, that these are, in effect, a complaint as to the perceived unfairness of the operation of the Rule (a matter, I interpose to note, that it would be open to the Authority itself to address in future contracts if it were thought within the industry that there were uncertainty or unfairness in the operation of the current provision) and not that the Tribunal erred in interpreting or applying that provision. 116In that regard, I was taken to cases in which it has been recognised that a provision of this kind (described as an "invoicing back" clause) has been part of commodity trade contracts in the international context for some time. In particular, reference was made to Dunavent Enterprises Inc v Olympia Spinning & Weaving Mills Ltd [2011] EWHC 2028 (Comm) where Burton J sitting in the Commercial Court of the High Court in the United Kingdom acknowledged that invoicing back clauses had been a source of contention over the years, the contention arising "because they provide for a contractual method of ' closing out ' a contract, irrespective of who is to blame for its termination, based upon the market price at the date of closure" (at [2]). Reference was made to a number of cases including JF Adair , where such criticism is to be found. 117The difficulty as I see it with the submission that this Rule, if construed to have the operation that is reflected in the result reached in the present arbitration, would be so unreasonable and capricious in its operation as to warrant the conclusion that in the absence of some clear statement in the Rule that it was to have this effect there must have been a manifest error of law in its construction), is that it seems to be predicated on the effect of the clause in the instant case and to import into Rule 17.6 the notion of relative blameworthiness that may or may not reflect the commercial purpose of such a closing out provision in the industry. The English cases suggest that, however unreasonable the operation of this particular Rule might appear to someone outside the grain trade industry to be, there is some precedent for a provision of this kind to operate in this industry and that is something of which one might expect arbitrators with experience in this industry to be cognisant. 118Mr Watson submits that the difference here is that the "close out" provision was unaccompanied by an "invoicing back" provision or a provision expressly requiring the payment out of any moneys, though it is hard to see what else would be contemplated by the "closing out" of a contract in this context. In any event, what this exercise demonstrates to my mind is that suggesting that the operation of the Rule in the manner implicit in the outcome of the Award is capricious or unreasonable involves speculation as to what participants in the grain trade industry may have understood, as a matter of common practice, the Rule to mean and that if there is an arguable commercial basis for the Rule to operate in the way that it was applied by the Tribunal (as BSG contends there is), it is hard to say that it is so unreasonable or capricious in its operation as to require a finding that there has been a manifest error of law on the face of the award (or implicit in the outcome of the award). 119Mr McCulloch points to the distinction between the operation of Trade Rule 17.6 and that of Trade Rule 17.5 (the latter dealing with the Consequences of Default). It is submitted that Trade Rule 17.5 is directed to circumstances in which a party defaults at the time of delivery, as governed by Trade Rules 17.1 and 17.2, whereas Trade Rule 17.6(2) is a special provision in the Rules concerning the consequences of the insolvency of a party. It is submitted that although the heading to Rule 17 is "Default", and the heading to rule 17.6 is "Default due to Insolvency", the terms of Rule 17.6 do not themselves identify an insolvency event as a "default" for the purposes of the Rules. 120Mr McCulloch notes that headings are generally to be regarded as being "for facility of reference only" and must give way to clear terms which conflict with the heading ( Harbour City Real Estate v Cargill (No 3) [2009] FCA 669 at [40]-[42]). It is pointed out that the "insolvency events" identified in Rule 17.6 which bring about the early termination of a contract include events which cannot be considered to be events for which the party committing the "Insolvency Event" bears any blame or opprobrium (such as sub-paragraph (i) of the definition of "Insolvency Event" which includes the death of a person or that person ceasing to be of full capacity or otherwise becoming incapable of managing its own affairs for any reason. It is submitted (by way of example) that it would be a manifestly unjust, uncommercial and capricious result if the estate of a person who died during the currency of a profitable contract could not recover the difference between the contract price and fair market value. 121As to the terms of Trade Rule 17.5, which preclude the payment of "compensation or damages", Mr McCulloch submits that Trade Rule 17.6 is not a provision requiring the payment of compensation or damages; it being, rather, a provision for the orderly close out and termination of contracts in circumstances of the insolvency or incapacity of a party. It is submitted that the payment required to be made by Trade Rule 17.6.2 is the price differential payable on an "orderly close out" of a contract, not compensation or damages for default. 122Even if an "Insolvency Event" as defined in Rule 17.6 is considered to be a "default" for the purposes of Rule 17.5, Mr McCulloch submits that the general rule relating to default in Rule 17.5 must be read subject to the special provision in relation to insolvency events laid down in Rule 17.6(2) and that the general provision should not be construed as intended to override the specific provision (in accordance with the maxim generalia specialibus non derogant ). 123It is noted by Mr McCulloch that the sentence "For the avoidance of doubt, nothing in these Rules shall be construed as requiring the party not in default to make any payment of compensation or damages to the party in default" was inserted into clause 17.5 at the same time as the words "and shall be deemed to be in Default" were removed from clause 17.6(2)(a). Mr McCulloch submits that these changes strengthen the conclusion that an "Insolvency Event" for the purposes of clause 17.6 does not constitute default for the purposes of clause 17.5 (on the basis that the inclusion of the last sentence in clause 17.5 was clearly intended to overcome that consequence). It is submitted that the removal of the last eight words of clause 17.6(2)(a) was made at the same time to ensure the amendment to clause 17.5 did not have the effect contended for by [the Defendant], that is precluding two-way payments in cases of "Insolvency Events". (iii) Timing and consequences of insolvency event 124The third error of law is said to arise in relation to the finding as to the timing (and consequences) of the insolvency event. Mr Watson submits that even assuming (contrary to the above submissions) that no manifest error was made in respect of the applicability of Rule 17.6, or in construing it as an obligation to pay, such rights as could be generated by Rule 17.6 for payment to BSG were lost when BSG failed to notify Sapphire of the prior Insolvency Events (constituted by its decision put the company into voluntary liquidation and the intimation said to have been conveyed by Mr Smith to another trader that the company was unable to pay its debts). 125Insofar as the contracts were found to have incorporated the NACMA Trade Rules, it is said that Rule 3 of those Rules (in relation to time stipulations being of the essence) must also apply. Thus, it is submitted that the requirement for notice under Rule 17.6(2) of the commission of an Insolvency Event was of the essence. 126As the Tribunal's reasons make clear, Sapphire took issue with the assertion by BSG that the appointment of provisional liquidators on 26 September 2007 was the relevant Insolvency Event. Mr Watson notes that there was evidence before the Tribunal that Insolvency Events (as defined by sub-Rule 17.6(1)) had occurred before 26 September 2007. 127The Tribunal in its reasons noted the argument that had been made by Sapphire that the relevant insolvency event was the statement by Mr Smith to Mr Barlow that the former intended to put his company into voluntary liquidation and said: The sole evidence of this alleged insolvency event is the affidavit of Mr Barlow prepared for the purposes of another arbitration to which the Claimant [BSG] was party. Its disclosure in this matter would appear to depart from the general rule of confidentiality and privacy which applies to arbitral proceedings. The Claimant urges us, with some force, not to read Mr Barlow's affidavit. However, even if we accept that an insolvency event occurred on 24 September 2007 of which the Respondent was not given notice until (it says) almost 2 years later, the Respondent was clearly given notice of insolvency on 27 September 2007 rendering 28 September 2007 as the relevant date for fixing the "fair market price". The alternative construction would be that notice on 27 September 2007 was a nullity and the Respondent had the option of fixing the fair market price on either 25 September 2007 or 29 July 2009 being the day after actually becoming aware. Such a result and construction would cause great uncertainty and cannot be preferred. (my emphasis) We have no hesitation in finding therefore that the relevant date for establishing the fair market price was 28 September 2007. 128In fact what was before the Tribunal (and was tendered in these proceedings) was not an affidavit but a statutory declaration from the third party in question. That document was dated 11 June 2009 and apparently prepared for use in the course of other arbitral proceedings involving BSG as claimant. Mr McCulloch objected to the admission into evidence of that document (on which question I reserved and now rule below). 129Mr Watson submits that the statement by the Tribunal that this was the sole evidence was incorrect, as the submission to the Tribunal also included both a statutory declaration from the director of BSG, Mr Barry Smith, dated 1 July 2009 confirming Mr Barlow's evidence, as well as an affidavit sworn by Mr Smith in relation to the application for appointment of a provisional liquidator. 130Mr Watson notes that insofar as BSG responded in the arbitration the subject of these proceedings that the evidence could not be used because it was confidential to the other arbitration, two issues arise: first, whether confidentiality in fact protects the information (in circumstances where Mr Watson contends that it was an admission inconsistent with the position being put for BSG) and, secondly, whether BSG or the Liquidators were in law entitled to advance different and inconsistent cases in arbitrations concerning the same facts. (Mr Watson foreshadowed in his written submissions that a separate ruling would be sought on the question whether this evidence could be availed of for the purposes of the appeal, if necessary.) 131Mr Watson noted that Sapphire had also subpoenaed an affidavit of Mr Smith, dated 25 September 2007, sworn in support of the application for the appointment of the Liquidators and had tendered that affidavit as an annexure to Sapphire's Points of Reply in the arbitration proceedings. In that affidavit Mr Smith set out some of the history of the financial difficulties of the BSG and reference is made to paragraphs [43]-[54] of the affidavit in that regard. In particular, it is noted that in that affidavit Mr Smith swore as follows: [52] Pentarch [a potential ... investor] revised the proposal suggesting that it be put to creditors by way of the deed of company arrangement If the creditors were prepared to wait for two to three years they may receive all or most of the monies owed. The Company consulted with RSM Bird Cameron Partner to determine the best way of effecting this arrangement on and from Friday 21 September 2007. [53] Initially, it was considered that a voluntary administration would be the quickest and most cost effective way of exploring whether the creditors would accept this arrangement On Monday 24 September 2007 I was advised by RSM Bird Cameron Partners that [the Trust Deeds] did not expressly provide for a right of indemnity in favour of the Company out of the trusts' assets and that in the absence of a direction from the Court authorising payment of administrator's fees out of the trusts' assets they were not prepared to incur substantial expenses of assisting the Company enter into voluntary administration... [54] The Company's [BSG's] business effectively ceased trading as at Wednesday 19 September 2007. All wages and operational expenses (including electricity and rent) have been paid to date. The Businesses have been in 'caretaker mode' since at least June 2007. 132Mr Watson submits that at no time did Mr Smith or BSG inform Sapphire of any of the circumstances recounted in Mr Smith's affidavits (noting the provisions of Rule 17.2) and had initiated the Teague contract after those events and that those facts are material to BSG's reliance on Rule 17.6(2), having regard to the definition in Rule 17.6(1) of Insolvency Event. 133It is submitted that the evidence demonstrated overwhelmingly that BSG had committed Insolvency Events within the meaning of 17.6(1) prior to 26 September 2007 and hence that the defendants did not give notice "immediately" or within the two days required by Rule 17.6(2)(a). 134Mr Watson notes that the Tribunal did not make any decision as to the prior Insolvency Events or as to whether BSG had proven its compliance with sub-Rule 17.6.2(a) or the 'admissibility' of the alleged confidential information. 135It is submitted that the Tribunal's reasoning on this issue reflects a number of errors of law, in summary those being: first, the failure to have regard to the stipulation in Trade Rule 3 that time was of the essence as relevant to the construction of sub-Rule 17.6 or to give effect to that Rule in considering BSG's compliance with Trade Rule 17 generally (as a matter of construction); second, the conclusion that the actual date of Insolvency Event (as set out in Rule 17.6) was not relevant for fixing the 'Fair Market Price'; third, the (apparent) conclusion that it was not necessary for the defaulting party to serve notice of Insolvency Event within two days (as required by Rule 17.6.2(a)); fourth, the (wrong) assumption that Rule 17.6 requires an innocent party to pay out to a party in breach, coupled with the failure to recognise that Rule 17.6(2)(b) gives the innocent party the option (if notice of the insolvency event is not given) of declaring the contract closed out at either the Fair Market Price on the first business day after the date when such party first learnt of the occurrence of the act of insolvency or at Fair Market Price ruling on the first business day after the date of the Insolvency Event occurred. As to the last, it is said that it does not matter when the innocent party chooses between the options (if it is required to do so at all), because those dates are fixed and the Fair Market Price is entirely historic. 136Further, it is submitted that it was an error of law for the Tribunal to proceed on the basis that giving effect to the plain words of the clause would "cause great uncertainty and cannot be preferred" (having not identified what greater uncertainty results from an application of the plain words of the contract; what prejudice that might cause, and to whom; or how its concern for certainty is to be reconciled with its construction of Rule 17.6.2(a) and the indulgence therein said to be afforded to an insolvent party to choose between insolvency events). 137Mr Watson thus submits that the Tribunal erred in not concluding that the failure of BSG to inform Sapphire of the many Insolvency Events committed by it as they happened, or to give notice within two days of them happening, had the result that BSG lost any right to claim any close out payment in its favour. 138BSG's submissions on incorporation of the date of the occurrence of an Insolvency Event and the ramifications of the date of such an Event are set out in paragraph [2] of the Points of Reply dated 9 March 2010 and paragraphs [3] to [6] of the Response to the Respondent's Reply dated 18 May 2010. (Mr McCulloch notes that the defendants would seek to raise these by notice of contention in the event that leave to appeal is given.) 139Mr McCulloch submits that there are several reasons, which were raised with the Arbitrators, which establish that notice of the pleaded Insolvency Event was served within the time limited by Rule 17.6(2)(a) of the Trade Rules. 140First, it is submitted that even if it is assumed that the alleged conversation did occur on 24 September 2007 (and I note that Mr Smith seems to have acknowledged that it did) and that it evidenced an intention by BSG to cease trading, such that it was in breach of its obligations under Rule 17.6 to serve a notice one day earlier than it did, then Sapphire itself failed to comply with its obligations under Rule 17.6(2)(b) to give notice on becoming aware (albeit at a later date) of that Insolvency Event, declaring contracts closed out at a date nominated by it in accordance with the Rule. 141It is submitted that although Rule 17.6.2(b) does not specify a time within which a solvent counterparty is to exercise the option given to it by that Rule, such option as may be available to a party under the Rule must be exercised within a reasonable time. Having regard to the balance of the time limits imposed by the Rules, it is submitted that a few days ought to be considered to be a reasonable time for this purpose; seven days at most. Reference was made to page 4 of the Defence lodged with the Authority by Sapphire, in which Sapphire discloses that it became aware of the alleged conversation on 28 July 2009 (six months prior to raising this allegation in the Defence). 142Second, it is said that, notwithstanding that it raised the issue in the Defence, Sapphire did not give any written notice to BSG upon so becoming aware nor did it otherwise take any step to declare the contracts in issue closed out. It is submitted that in those circumstances, even if Sapphire's interpretation of Rule 17.6.1(g) had been accepted by the Tribunal, Sapphire must be found to have failed to comply with its obligations under Rule 17.6.2(b). 143Third, it is submitted that even if Sapphire's allegations concerning the alleged conversation between Mr Smith and Mr B were true, those allegations do not have the effect of invalidating the notice issued in good faith by BSG and that the Tribunal was entitled to proceed on the basis that the relevant contracts were washed out as alleged by BSG. (Reference was made in this regard to another NACMA Arbitration Appeal Award, no. 32, where it was held that the failure of an insolvent party to issue a notice within the time provided in Rule 17.6.2 did not invalidate a notice subsequently issued, where the solvent party had not exercised its own rights under the Rule.) 144Fourth, Mr McCulloch notes that it was submitted to the Tribunal that the purpose of Rule 17.6, on its face, is to have contracts closed out promptly after an Insolvency Event occurs. Accordingly, if a contract is closed out reasonably promptly, whether by the application of subrule (a) or (b) of Rule 17.6.2, the purpose of the provision is achieved and there is nothing to be gained by effectively setting aside a valid close out notice more than two years after a relevant Insolvency Event has occurred and providing the solvent party with an open ended entitlement to close it out again at some undefined time in the future, (this submission seemingly being accepted by the Tribunal). In those circumstances, it is said that Rule 17.6.2(b) must be read to limit any exercise of the rights granted to a solvent party to the time before the insolvent party moves to close out the contract by service of a valid notice of an Insolvency Event under Rule 17.6.2(a). It is submitted that the alternative interpretation contended for by Sapphire would permit a solvent party to sit and wait to select a date most favourable to it (which could result in a close out a contract years after an Insolvency Event has occurred and a valid close out notice has been served). It is submitted that this is an interpretation of Rule 17.6.2 which was open to be rejected by the Tribunal as inconsistent with the commercial imperatives of the contract. 145It was further noted that even if Mr Smith's evidence were to be accepted, it does not establish that BSG was insolvent on a date prior to 26 September 2007 (referring to the definition of insolvency in s 95A of the Corporations Act ) and submitting that whether or not a party makes contracted deliveries or defaults on, or refuses to comply with, its obligations under a particular contract does not establish that a person is unable to pay all of its debts as they become due and payable and, consequently, does not and cannot, on its own, establish insolvency. (In that regard, the definition of insolvency events is one that is not restricted to the statutory definition of insolvency - including events such as threatening to cease business - hence the conversation acknowledged by Mr Smith to have occurred on its face would seem to fall within the definition. At the very least it gives rise to the prospect that there has been an error as to the date on which Fair Market Price is to be calculated.) 146The statement in paragraph [54] of Mr Smith's declaration was that "the Company's business effectively ceased trading as at Wednesday, 19 September 2007". It is submitted by Mr McCulloch that the meaning of this sentence was unclear and that further evidence would be required for Sapphire to establish that BSG in fact ceased to carry on its business on 19 September 2007. (Mr McCulloch also notes that when the Liquidators took possession of BSG and its business upon their appointment as provisional liquidators on 26 September 2007, that business continued to operate from premises that it had occupied for some time, continued to employ staff, who continued to maintain accounts and to take all other steps necessary to carry on its business.) 147Fifth, it is submitted that the arguments of Sapphire (set out in paragraphs [55] to [67] of its submissions) do not disclose an error of law that is more than arguable. I address this argument when considering below whether there is manifest error or strong evidence of error. 148Sixth, it is submitted that the statement in the Interim Award that "We have no hesitation in finding therefore that the relevant date for the establishing of fair market price was 28 September 2007" is a finding of fact and one with which this Court cannot and should not interfere. This has caused me some pause. It seems to me that whether an event has occurred that falls within the definition of an Insolvency Event is a mixed question of fact and law - a question of law as to the proper construction of the definition in the contract and a question of fact as to what happened. In other words, the finding that an Insolvency Event occurred by reason of the happening of certain events must logically involve the proper construction of the term "Insolvency Event". While I accept that a finding as to the date of the first insolvency event would be a finding of fact with which the Court ordinarily should not interfere, if the Tribunal has adopted an incorrect construction of Insolvency Event (as it seems to me it has by treating it as the date on which notice was received not the date on which the event occurred), then that is a question of law from which it is open to Sapphire to seek leave to appeal. 149The reasoning process of the Tribunal, as discerned from the face of the award, which led to the finding that 27 September 2007 was the date of the insolvency event, seems to have been that it was not necessary to determine whether (as Sapphire had contended) there were prior insolvency events since, even if the relevant insolvency date had been 24 September 2007 (and hence BSG had failed to issue the requisite notice in time), notice of the insolvency event was received on 27 September 2007. The Tribunal concluded that (this presumable being a finding as to the construction of Rule 17.6) it was permissible to treat as the date of insolvency the date on which notice of the insolvency event was first received (on the basis that this was the preferable view of Rule 17.6 and in order to avoid uncertainty in its operation). The date for assessment of the fair market price was then stated to be 28 September 2007. That conclusion (which seems to have been the manner in which the Tribunal addressed Sapphire's construction arguments in relation to the timing of insolvency event issue) is in my view a question of law from which it is open to Sapphire (with leave) to appeal. 150The determination of the relevant date for the fixing of Fair Market Price pursuant to Rule 17.6 in my opinion raises various questions of law such as the consequence of the failure (if there was an Insolvency Event prior to 25 September 2007) on the part of BSG to serve the requisite notice under Rule 17.6 and as to whether there was any corresponding obligation on the part of Sapphire to make an election of the kind contemplated by the Rule within a reasonable time or at all (and if there was such an obligation, then how in the absence of such an election a close out date should be fixed). The Tribunal reached the result it did on the basis, according to the reasons stated in the award, that this was the preferable result in order to avoid uncertainty. However, it is by no means clear that it was open to the Tribunal as a matter of contractual construction to reach such a conclusion. Moreover, insofar as no actual finding of fact seems to have been made as to the date of the insolvency event, the failure to do so would also be characterised as an error of law. (iv) Onus 151In the Interim Award, the Tribunal stated that it was not satisfied that there was adequate evidence before it of the Fair Market Price and directed the Claimant to provide written evidence from at least 2 sources of the Fair Market Price for the commodity deliverable under the Woodside and Teague contracts as at 28 September within 14 days. In the Final Award, the Tribunal noted that the supplementary material (while helpful) "does not comply with our request that the Claimant provide supporting evidence from 2 additional sources" but went on to note that "our task is to "discover" the Fair Market Price based on the best evidence that the parties have chosen to put before us", commenting that clearly the grain the subject of the contracts had a Fair Market Price. 152Mr Watson contends that the onus was on BSG as claimant to provide evidence of the Fair Market Price; that it is clear from the Tribunal's reasons that the material on which BSG had calculated its letter of demand and claim was hopeless and that it did not comply with directions to provide further proper evidence. It is submitted that the Tribunal erred in identifying its task as being "to 'discover' the Fair Market Price" based on "the best evidence that the parties have chosen to put before us". Rather, it is submitted, the Tribunal's task was to determine the questions arising according to law. It is submitted that in the absence of satisfactory evidence from BSG as to Fair Market Price, the claims should have been dismissed. 153BSG denies that it failed to provide evidence of the relevant Fair Market Price. Reference was made to a letter dated 1 February 2011 and statutory declaration of Mr Peter William Marsden (copies of which are at tab 11 of Exhibit A). In any event, it is submitted that the findings of the Arbitrators on the issue of the relevant Fair Market Price are clearly findings of fact with which the Court cannot interfere. (v) Constitution of the proceedings 154Mr Watson notes that the arbitration agreement dated 29 April 2009 was entered into between Sapphire and BSG, who thus became the parties to the agreement, whereas BSG entered into the relevant contracts it did so as trustee for the Barry Smith Trust. As already noted, the Liquidators were appointed provisional liquidators to BSG on 26 September 2007 at which time they were appointed receivers and managers of the trust assets. Mr Watson notes that, in their capacity as receivers and managers of the trust property, the Liquidators were granted all of the powers enumerated in s 420(2) of the Corporations Act 2001 (Cth) and that further orders were made on 15 December 2008 granting them authority "to exercise any or all of the powers in clauses 6(s), 6(y) and 6(aa) of the Trust Deed" (as set out in the orders contained in Exhibit A tab 3, pp 11-12 and tab 4, pp 68-69), those being: 6 The Trustee shall until the vesting day and during such further period if any that the law may allow the following additional powers:- (aa) To give any guarantee and/or indemnity or otherwise become liable for the payment of money or the performance of any contract or other obligation by any person natural or corporate including the trustee in its personal capacity ... ... (s) To compromise and settle for such consideration and upon such terms and conditions as the trustee may consider advisable all matters arising in relation to the trust hereby created or the trust fund and all such compromises and settlements shall be binding on all the beneficiaries and others who in the future acquire any interest under this deed. ... (y) To institute and defend proceedings at law and to proceed to the final end and determination or compromise of the same as the trustee shall consider advisable." 155Mr Watson submits that, as a result, BSG could no longer bring proceedings of its own volition as the Liquidators had all the relevant powers and that while the Liquidators could bring or defend any legal proceeding in the name of and on behalf of BSG, pursuant to s 477(2)(a) of the Corporations Act 2001 (Cth), BSG was no longer vested with the legal rights or title to assets which constituted the assets of the trust (those assets having been placed, as a matter of law, in the hands of the Liquidators as receivers and managers of the property). Thus it is said that any chose in action in respect of the relevant contract, the right to seek arbitration and the right to any recovery, was an asset of the trust(s), being property by then belonging to the Liquidators in their capacity as receivers and managers. It is submitted that it was in recognition of these limitations that the Liquidators sought the additional powers granted by the 15 December 2008 court order, including to 'institute and defend proceedings at law'. Thus it is submitted that the power to institute proceedings against Sapphire was not a power of the insolvent former trustee (BSG) but rather of the Liquidators in their capacity as receivers and managers of the assets of the trust and hence that the Liquidators, in their capacity as receivers and managers, were the proper and necessary claimants in the arbitration. 156Sapphire's Defence of 1 February 2010 raised this issue and BSG, in its response submissions of 9 March 2010, said that: 4.2 In the event the Arbitration Committee considers that clarification of the position of the Claimant is necessary, Messrs Peter William Marsden and David John Kerr in their capacity as receivers and managers of the Barry Smith Family Trust consent to be joined as claimants in this Arbitration. 157Although Sapphire maintained its objection (Submissions, 9 April 2009, Exhibit A, tab 7, pp 5, 20-21), it seems that no steps were taken formally to add the Liquidators as parties to the arbitration. 158In its Interim Award the Tribunal said: The Respondent has challenged the capacity of the Claimant to pursue this claim. The Claimant says that Messrs Marsden and Kerr are taking this action in their capacity as joint liquidators of the company and as receivers and managers of both trusts, Moreover, the Claimants' solicitors assert that any benefit will accrue to each of Trust 1 and Trust 2. We are satisfied that the Claimant has the necessary capacity to pursue this claim. 159It is submitted by Mr Watson that the last statement is a bare conclusion unsupported by anything in the reasons and that the proper conclusion as a matter of law was that BSG did not have the capacity to pursue the claim and that the Liquidators, in their capacity as receivers and managers, were the necessary and proper claimants. As I understand Mr Watson's submissions, Sapphire's concern raised with the Tribunal was not simply that a party seeking to benefit from an arbitration should be capable of being made liable to pay the costs, nor that there was a need for the receivers and managers to be bound by the determination (though those seem to be the only matters that were raised before the Tribunal). Rather, it is said that it goes to whether there is a proper arbitration at all. 160Mr Watson submits that the Tribunal erred in the conduct of an arbitration without a proper claimant and in proceeding without requiring the receivers and managers to resolve their position. 161BSG's submissions on the legal capacity of the "Claimant" in the arbitration are set out in the Points of Reply dated 9 March 2010 at [4], including the correspondence refer to in that paragraph. Paragraph [4] states as follows: a) The Claimant rejects the submissions made by the Respondent in Part 5 of the Defence and respectfully refers the Arbitration Committee to the submissions in the correspondence which has been copied as annexures 7 and 9 to the Defence. b) In the event that the Arbitration Committee considers that clarification of the position of the Claimant is necessary, Messrs Peter William Marsden and David John Kerr in their capacity as receivers of the Barry Smith Family Trust consent to be joined as claimants in this Arbitration. That joinder would require consequential amendments pursuant to Article 25, rules 1(a) and (h) of the GTA Dispute Resolution Rules to the Points of Claim filed in August 2009; however, those amendments would be of a formal nature and would not alter the substance of the claim. 162It is submitted by Mr McCulloch that this was not considered necessary by the Tribunal, which determined the matter in a commonsense and not unduly legalistic manner that is appropriate for arbitral proceedings. Mr McCulloch submits that the documents exchanged for the purposes of the conduct of the arbitration should not be given the same standing as formal pleadings filed in this Court, but are for the purpose identifying a dispute and putting the arbitrator in a position to determine the issues in dispute between the parties; and that the Claim lodged with the Authority by BSG clearly and unambiguously disclosed the position of the defendants in respect of the claim made against Sapphire. (In that regard, while I accept that the Claim and other 'quasi-pleading' documents served in the arbitral proceedings should not be approached with a strict pleading point of view, the issue now raised by Mr Watson goes to whether there is a binding contract of arbitration between the relevant party in which is vested the relevant chose in action. (vi) Costs 163This ground is premised on a finding that Sapphire is successful on any of the grounds raised. In those circumstances it is submitted that the result will be that BSG has not been successful, or wholly successful on its claims in the arbitration. If so, it is submitted that there is a consequential error in that the Tribunal did not have regard to the result that ought to have obtained on BSG's claims or exercised its costs power under a misapprehension as to the proper result according to law. On that basis it is submitted that if Sapphire is successful on any of the grounds raised as to errors of law, then the Court should also set aside or vary this part of the Award to make a proper provision for costs in the arbitration reflecting the actual or correct outcome according to law and for this purpose, the Court should therefore also grant leave to appeal in respect of this part of the Award. 164As to costs, Mr McCulloch submits that the orders of the Tribunal should not be disturbed, save insofar as the Court considers it necessary to record the defendants' concession that Sapphire is entitled to set off the sum of $97,582.39 against the amount which it has been ordered to pay pursuant to the Final Award. Ruling on reserved evidentiary issue 165Before turning to the issue for determination and considering whether any of those identified errors amount are errors of a sufficient quality to meet one or other of the threshold requirements of s 38(5), I address first the issue raised on the hearing before me (and raised apparently before the Tribunal) as to the admissibility or use that might be made in the present proceedings of certain documents (a defence, claimant's rebuttal and two statutory declarations apparently prepared for use in other unrelated arbitration proceedings involving BSG and a different vendor of wheat), copies of which were tendered as documents that were annexed to the Points of Defence served by Sapphire in the arbitration the subject of the present application (the Points of Defence and their attachments are found in Exhibit A at Tab 4). The defence in the other proceedings was undated but signed by a solicitor for the respondent and there was a statutory declaration signed 11 June 2009 before a solicitor was made by director and shareholder of the respondent in that arbitration (to whom I will refer as Mr B). The documents for BSG in that arbitration included a statutory declaration signed by Mr Smith on 1 July 2009. 166The Interim Award refers to an objection taken to the use of these documents at the Tribunal apparently on the basis that this infringed the obligations of confidentiality and privacy in arbitral proceedings. I understand that at the Tribunal it was submitted by BSG that, as a consequence of the above and as a matter of public policy based on the need to maintain the integrity of the Dispute Resolution Rules under which such arbitrations are conducted, the Tribunal should refuse to consider those documents as evidence in the arbitration and reference was made in that regard to Home Office v Harman [1983] 1 AC 280 and Central Queensland Cement Pty Ltd v Hardy [1989] 2 Qd R 509. 167Rule 7 of the NACMA Dispute Resolution Rules provides as follows: All proceedings and submissions relating to the Process shall be privileged and remain confidential between the parties and the Expert or Arbitrator and any documents exchanged and generated for the purposes of an expert opinion or arbitration should not be used for any other ulterior purpose. Neither party nor Expert or Arbitrator nor GTA may disclose the Opinion or information released during the Process unless provided by law ... 168Mr McCulloch submits that there was no evidence or explanation by Sapphire as to how it came into possession of those documents and that it was reasonable to infer that Sapphire's knowledge and possession of those documents and their content had come about as a direct result of a breach of that Article. In that regard, the Points of Defence to which these documents were attached in the subject arbitration itself states that Sapphire "found out about the phone call [to which reference was made in Mr B's statutory declaration] by reading a copy of a statutory declaration signed on 1 July 2009 by Mr Smith [in that other arbitration] which was forwarded to [Sapphire] by email" (and notes in footnote 6 that the documents set out at Annexure 3 to the Points of Defence were attached to that email). 169The relevance of those documents, including the statutory declaration signed by Mr Smith on 1 July 2009, is that in them Mr B deposes to a conversation on 24 September 2007 with Mr Smith in which he says that Mr Smith said "I am putting myself into voluntary liquidation" and said that he could not pay Mr B the amounts owing to him and Mr Smith referred to that statement and accepted that he had a conversation with Mr B in words to that effect. An assertion of intention to go into voluntary liquidation or an assertion as to inability to pay debts would at first blush appear to fall within the definition of an Insolvency Event for the purposes of Rule 17.6 and hence to place the relevant date of insolvency for the purposes of the subject arbitration at two days earlier than the Tribunal determined it to be. 170The Tribunal dealt with the matter as set out above. (In the present proceedings, Mr McCulloch noted that if leave to appeal were granted, the defendants would wish to contend that the Tribunal was not entitled to have regard to that evidence.) 171Mr McCulloch objected to the admission into evidence in the application before me of the same material (Sapphire seeking to rely on this material in the context of its claim that the Tribunal incorrectly determined the date of insolvency) on the basis that it was subject to the implied undertaking not to use it for a purpose "collateral or ulterior" to the arbitration in which it was produced ( Harman at p 302). 172Given the time limitations on the hearing before me I reserved that issue for further consideration and provisionally admitted the material in question subject to that ruling. I now rule on that objection. In so doing, I note that there seem to have been two separate (though interlinked) objections: the first on the basis that use of the affidavits would breach the Harman undertaking and the second that they would breach obligations of confidentiality owed in the other arbitration proceedings. 173As to the first, in Harman, the House of Lords confirmed that documents obtained by discovery are subject to an implied undertaking, which prevents their use for any purpose other than the proper conduct of the action in which the documents were obtained, except with leave of the court. A party who uses, or attempts to use, material to which the implied undertaking attaches without first obtaining the leave of the court will be guilty of contempt. An injunction may be issued to prevent the use of documents in breach of the implied undertaking (see, for example, Distillers Co (Biochemicals) Ltd v Times Newspapers Ltd [1975] QB 613; 1 All ER 41). 174The House of Lords unanimously held that the implied undertaking attaches to any document produced or received during legal proceedings, and that this undertaking operates to prevent the use of the documents for a "collateral or ulterior" purpose. Lord Keith outlined that the implied undertaking is (at 308): ... independent of any obligation existing under the general law relating to confidentiality. It affords a particular protection accorded in the interests of the proper administration of justice. It is owed not to the owner of the documents but to the court, and the function of the court in seeing that the obligation is observed is directed to the maintenance of those interests, and not to the enforcement of the law relating to confidentiality. 175It has been held that the purpose of the undertaking is to protect the privacy of the person disclosing the document and thereby encourage full and frank disclosure during litigation ( British and American Tobacco Services Ltd v Cowell (No 2) (2003) 8 VR 571 at [20]). In Riddick v Thames Board Mills Ltd [1977] QB 881, Lord Denning reasoned that the restriction on the use of documents utilised or produced during legal proceedings was due to the compulsion under which those documents were obtained. His Lordship explained (at 896): Compulsion is an invasion of a private right to keep one's documents to oneself. The public interest in privacy and confidence demands that this compulsion should not be pressed further than the course of justice requires. The court should, therefore, not allow the other party - or anyone else - to use the documents for any ulterior or alien purpose. Otherwise the courts themselves would be doing injustice. ... In order to encourage openness and fairness, the public interest requires that documents disclosed on discovery are not to be made use of except for the purposes of the action in which they are disclosed. They are not to be made a ground for comments in the newspapers, nor for bringing a libel action, or for any other alien purpose. 176The implied undertaking applies not only to the documents as utilised in legal proceedings, but also to the information contained in or derived from those documents, "whether it be embodied in a copy or stored in the mind" ( Crest Homes v Marks [1987] AC 829 at 954). It extends to any person who receives documents or information to which the undertaking applies (Distillers v Times Newspapers at 621). The undertaking has thus been held to apply to parties to proceedings, their lawyers, governments and their agencies ( Commonwealth v Temwood Holdings (2001) 25 WAR 31), court staff and transcript writers ( Bourns Inc v Raychem Corp [1999] 1 All ER 908), and expert witnesses. 177As it was articulated in Harman , the undertaking applies to documents obtained during discovery. Lords Simon of Glaisdale and Scarman said (at 313): Imposed by law the obligation is formulated as arising from an undertaking exacted by the court from the party and his solicitor to whom the documents are disclosed. It is the condition upon which discovery is ordered. 178In Riddick, Lord Denning stated (at 896): A party who seeks discovery of documents gets it on condition that he will make use of them only for the purpose of that action, and no other purpose. 179Further, in Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34, it was said (at 38) that: [the party obtaining discovery is] taken to undertake to the court that the documents obtained on discovery will not be used for any purpose other than the action in which they are produced. 180However, the material to which the implied undertaking applies has been recognised as extending beyond documents produced by discovery. In his article, 'The implied undertaking restricting the use of material obtained during legal proceedings' ((2003) 23 Australian Bar Review 314), Matthew Groves of Counsel examines how the scope of material to which the undertaking applies has changed: While the implied undertaking originated as a form of protection against the misuse of documents obtained during discovery, it now extends to a much greater range of material. The implied undertaking has been held to apply to witness statements, pleadings, answers to interrogatories, documents produced for the purposes of taxation of costs, material provided in the course of an application for an Anton Pillar order, material obtained by a liquidator as a result of directions issued in the course of winding up a company, material provided in accordance with the direction of a private arbitrator, and material produced by a non-party in response to a subpoena to produce. In each of these cases courts have accepted that the compulsory process by which the documents were produced or obtained provided a sufficient reason to attract protection of the implied undertaking. The range of documents to which the implied undertaking has been applied suggests that there is now a general rule that material provided or obtained by compulsory means during legal proceedings is prima facie subject to the implied undertaking (my emphasis) 181It is suggested that the requirement of compulsion also explains those cases in which the implied undertaking has been held not to apply (by reference to Hanneybel v Uniflex (Australia) Pty Ltd [2002] WASCA 349, where documents provided voluntarily in the course of proceedings for a Mareva injunction were not treated as subject to such an undertaking. Mr Groves does, however, refer to the decision of the English Court of Appeal in Bourns Inc v Raychem Corp where the documents were held to be subject to the implied undertaking even though they had not been produced according to any formal order (Aldous LJ accepting that the documents would have been subject to the implied undertaking if the taxing master had made an order for their production and reasoning that the documents ought to be subject to the implied undertaking because "disclosure was made in circumstances where the documents were requested, they were directly relevant to an issue and natural justice meant that an order for production was necessary"). 182In Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3; (2005) 218 ALR 283, the Full Court of the Federal Court (Branson, Sundberg and Allsop JJ) heard an appeal from the decision of a trial judge in an application for leave to use an affidavit from one legal proceeding, in another, unrelated proceeding. The trial judge had held that the affidavit was subject to legal professional privilege and could not be used in the subsequent proceedings, and therefore had no need to consider the principles in Harman . The Full Court held that the affidavit was no longer confidential because it had been filed and served ([22] - [23]) and then went on to consider the Harman principles and whether or not the affidavit was subject to an implied undertaking and was of the view that, because the affidavit had been ordered to be made by the judge in the prior proceedings and because it was made for a specific 'discovery-like' purpose, an implied undertaking applied to the document, saying (at [6]): A number of relevant things can be said about the above exchanges at the directions hearing. First, the affidavit was to take the place, and fulfil the function, of an affidavit of discovery and of inspection of discovered documents. Second, the affidavit was intended to be informative in a way that an affidavit of discovery would not be. .... Third, the ordering of the affidavit suggested by North J was embraced, and then urged, as a procedural course by Bluestone. That is, it was not in reality a course which Bluestone followed only by reason of legal compulsion. Fourth, it was intended that the appellants rely on the affidavit's contents, in particular, but not limited to, in approaching and conducting the mediation. Fifth, while the proposed affidavit concerned issues that would be canvassed at any trial, it was not specifically intended to be an affidavit that would form part of the evidence should there be a hearing. The affidavit was intended to be informative about an issue in the proceeding that was central to the proposed mediation. It was intended to be used and relied upon by the appellants for the purposes of the mediation. and at [20]-[22]: The Jeffery affidavit was intended to fulfil the role (albeit somewhat extended) of an affidavit of discovery. It was intended to be read and relied upon by the other side in the litigation. Without dispensation of the court, it could not be used otherwise than for the purposes of the first proceeding. That could be seen to give a measure of practical confidentiality to Bluestone, but it was not a limitation based on confidence. The applicants in the first proceeding were at liberty to use the Jeffery affidavit and its contents as they saw fit for the proper purposes of that litigation. Such purposes might well involve disclosing all or part of the contents of the Jeffery affidavit to third parties without obtaining confidentiality undertakings. The restraint on use after service is derived from an implied undertaking to the court (in its terms contemplating discharge in some circumstances) the purpose of which is to prevent any abuse of the court's procedures. It is not a limitation based on the existence of confidentiality or privilege. The role intended to be fulfilled by the Jeffery affidavit was inconsistent with the maintenance of the confidentiality of the communications recorded in, and any advice apparent from, the contents of the Jeffery affidavit. The affidavit was not brought into existence as part of the anticipated evidence for a hearing, whether final or interlocutory. It was intended to be a convenient procedural device in the nature of, but in lieu of, a usual affidavit of discovery. That is sufficient, we think, to distinguish Smoothdale, Akins and Sevic. Those cases dealt with the status of proposed evidence served in advance of the trial. Also, the fact that the subject of debate here is an affidavit sworn under relevant legislation attending the making of an oath further distinguishes the position from those cases. (my emphasis) 183In Laen Pty Ltd v At the Heads Pty Ltd & Ors [2011] VSC 315, Davies J in the Supreme Court of Victoria considered the question of whether affidavits made in response to a freezing order application were subject to the implied undertaking and whether that undertaking should be released. His Honour said (at [7] - [8]): In the present case, Laen wants to use affidavits, subpoenaed documents and the transcript of an oral examination of the directors of Hill Family Investments that it obtained in the first proceeding in the course of attempting to enforce its judgment ... The three affidavits in question were filed on behalf of Avid and At the Heads in opposition to freezing orders that Laen sought against them in the first proceeding. The submission that they were in the public domain was based upon their reference in submissions read by a judge before court. It is apparent from the transcript of those applications however, that they were resolved by consent orders provided to the judge in the form of minutes of orders. There was no adjudication on the merits of the freezing order and no argument in open court on the content of those affidavits. I reject the submission that these affidavits are in the public domain. Laen argued alternatively that these affidavits were not subject to the implied undertaking because Avid and At the Heads were not "compelled" to file the affidavits in the first proceeding, in opposition to the freezing order applications, as there was no court order requiring those defendants to file affidavits in opposition. This submission cannot be accepted. Avid and At the Heads were made subject to the court's processes because an application for freezing orders was made against them. The court's processes required any evidence that they may have wished to put before the court, in response to that application, to be furnished in the form of an affidavit by a specified date. Those affidavits were served pursuant to a judicial direction that any affidavits on which they sought to rely be filed by a particular time. This was sufficient in my view to meet the requirement of compulsion. The implied undertaking attached to those affidavits . (my emphasis) 184In Re Addstone Pty Ltd (In liq); Ex parte Macks (1998) 30 ACSR 156, Mansfield J in the Federal Court reasoned (at 160) that: The order to produce the information in issue will be the equivalent of an order for discovery. The normal implied undertaking that the documents will not be used other than in respect of any application exercising further the liberty to apply reserved to the creditors when orders were made on 9 June 1998, and not to use those documents for a collateral purpose, will therefore apply: Esso Australia Resources Ltd v Plowman (Minister for Energy and Minerals) (1995) 183 CLR 10; 128 ALR 391; Harman v Secretary of State for the Home Dept [1983] 1 AC 280; Holpitt Pty Ltd v Varimu Pty Ltd (1991) 29 FCR 576 ; 103 ALR 684. That implied undertaking has been held to apply in respect of documents produced under subpoena by a non-party: Telnet Pty Ltd v Takapana Investments Pty Ltd (1994) 51 FCR 520, and to documents produced to the Administrative Appeals Tribunal under summons: Otter Gold Mines Ltd v McDonald (1997) 76 FCR 467 ; 147 ALR 322. I see no reason why it should not apply in respect of material directed to be disclosed by the court. In Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217 ; 110 ALR 685, Wilcox J applied that undertaking to a statement exchanged between parties as proposed evidence, but which was not in fact adduced in evidence. His Honour noted that Central Queensland Cement Pty Ltd v Hardy [1989] 2 Qd R 509 was to the same effect, as was Ainsworth v Hanrahan (1991) 25 NSWLR 155 in relation to answers to interrogatories. (my emphasis) 185In Hearne v Street [2008] HCA 36; (2008) 235 CLR 125, Hayne, Heydon and Crennan JJ said at [96] that: Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence. The types of material disclosed to which this principle applies include documents inspected after discovery, answers to interrogatories, documents produced on subpoena, documents produced for the purposes of taxation of costs, documents produced pursuant to a direction from an arbitrator, documents seized pursuant to an Anton Pillar order, witness statements served pursuant to a judicial direction and affidavits (Medway v Doublock Ltd [1978] 1 WLR 710; [1978] 1 All ER 1261; Re Addstone Pty Ltd (In liq); Ex parte Macks (1998) 30 ACSR 156). (my emphasis) 186Hearne v Street has been cited as authority for the proposition that the implied undertaking can apply to affidavits and witness statements served under compulsion or pursuant to court orders. In Prime Finance Pty Ltd and Ors v Randall and Ors [2009] NSWSC 361 Johnson J said at [17]: Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence: Hearne v Street [2008] 235 CLR 125 at 154-155 [96]. The types of material disclosed to which this principle applies include witness statements served pursuant to a judicial direction and affidavits: Hearne v Street . 187The implied undertaking has been extended to proceedings other than civil litigation. The High Court in Esso Australia Resources Ltd v Plowman [1995] HCA 19; (1995) 183 CLR 10 accepted that the implied undertaking could extend to material produced in the course of private arbitrations. Mason CJ (with whom Dawson and McHugh JJ agreed) held (at 403-404): In relation to documents produced by one party to another in the course of discovery in proceedings in a court, there is an implied undertaking, springing from the nature of discovery, by each party not to use any document disclosed for any purpose otherwise than in relation to the litigation in which it is disclosed.37 Over a century ago, Bray on Discovery stated (1st ed (1885), p 238) A party who has obtained access to his adversary's documents under an order for production has no right to make their contents public or communicate them to any stranger to the suit ... nor to use them or copies of them for any collateral object ... If necessary an undertaking to that effect will be made a condition of granting an order. Because an undertaking is implied, it has not been the practice to condition the making of orders in that way. The implied undertaking is subject to the qualification that once material is adduced in evidence in court proceedings it becomes part of the public domain, unless the court restrains publication of it. It would be inequitable if a party were compelled by court process to produce private documents for the purposes of the litigation yet be exposed to publication of them for other purposes. No doubt the implied obligation must yield to inconsistent statutory provisions and to the requirements of curial process in other litigation, eg discovery and inspection, but that circumstance is not a reason for denying the existence of the implied obligation. The next step is to say that a similar obligation arises in an arbitration. In England it has been held that, because the parties to an English law arbitration submit to the possibility that the English discovery procedure will apply to their arbitration, by implication they must be mutually obliged to accord to documents disclosed for the purposes of the arbitration the same confidentiality which would attach to those documents if they were litigating their disputes as distinct from arbitrating them. I see no reason to disagree with this statement. But, consistently with the principle as it applies in court proceedings, the obligation of confidentiality attaches only in relation to documents which are produced by a party compulsorily pursuant to a direction by the arbitrator. And the obligation is necessarily subject to the public's legitimate interest in obtaining information about the affairs of public authorities. The existence of this obligation does not provide a basis for the wide-ranging obligation of confidentiality which the appellants seek to apply to all documents and information provided in and for the purposes of an arbitration. If the judgments in Dolling-Baker and Hassneh Insurance are to be taken as expressing a contrary view, I do not accept them. (my emphasis) 188The finding in Esso suggests that process for the production and creation of documents and their use in private arbitrations is sufficiently similar to that in legal proceedings so as to warrant an extension of the implied undertaking to arbitrations. On the above principles, an implied undertaking would therefore be likely to apply to the material put before the Tribunal from the other arbitration proceedings at least if the statutory declaration had been made under some form of compulsory process or in an equivalent situation (such as by reason of a direction of the tribunal in that other arbitration) (see also Cross on Evidence (online edn) at [25055]). A statutory declaration or affidavit made simply for the purposes of evidence in a hearing without such compulsion would not necessarily attract the undertaking. 189There is, however, no evidence from which I can determine whether the statutory declaration in question was served pursuant to any form of direction or order by the relevant tribunal in the course of that other arbitration. Nor does this address the effect of the NACMA Dispute Resolution Rules to which the parties to that other arbitration were presumably bound. Although Mr Watson submits that his client was not bound by any such contractual obligation of confidence that the production of that material (both before the Tribunal and now in these proceedings) might cause to be breached, there are circumstances in which a party in receipt of confidential information can be restrained from using the said information (whether or not it was bound by the obligation of confidence in the first place). 190In Harman, it was accepted that the implied undertaking becomes unenforceable once the documents enter the "public domain". What constitutes the "public domain", has been the subject of divergent judicial opinion. In Harman there was unanimous agreement that the implied undertaking becomes unenforceable when documents are received into evidence, but remains in force if the documents are neither read nor received into evidence. Their Lordships were, however, divided on the status of documents that are read in open court (and therefore brought into the "public domain") but not received into evidence. (The majority concluded that in this situation, the undertaking would continue to apply.) 191In Esso, Mason CJ said that the undertaking is (at 32 - 33): ...subject to the qualification that once material is adduced in court proceedings it becomes part of the public domain, unless the court restrains publication of it. and in Moage Ltd v Jagelman and Others [2002] NSWSC 953, Gzell J stated (at [12]): Once a document has been read in open court, however, it loses its confidentiality and loses the protection of the undertaking ( Harman at 306, 307-308, 319-326, Ainsworth at 168, Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 at 32-33). 192In Ainsworth v Hanrahan (1991) 25 NSWLR 155, Kirby P, as his Honour then was, when considering whether the use of interrogatories would amount to contempt in the circumstances, held (at 168) that: It is always open to a party wishing to secure the use of such answers for other purposes to seek the permission of the court in whose process the answers have been given under compulsion. Once the answers are tendered or read in open court, pace Harman, the liability in contempt for their later use will evaporate : cf Gardner v Moult (1839) 10 Ad & El 464; 113 ER 176; Richards v Morgan (1863) 4 B & S 641; 122 ER 600 and Fleet, Administratrix of Mary Anne Ross v Perrins (1868) LR 3 QB 536 at 540. (my emphasis) 193In Liberty Funding, the Full Court took the view (albeit in considering whether a claim for legal professional privilege could still be maintained) held that an affidavit loses its confidential nature when it is filed and served, even if it has not been read into evidence, noting (at [22] - [23]) that: We are prepared to assume for the purposes of these reasons (without deciding) that the Jeffery affidavit was privileged after it had been sworn, but before it was filed and served. However, in the circumstances outlined in [6] and [7] above, once it was filed and served, a step was taken entirely antithetical to the confidentiality that might be said to have previously existed in the content of the document, the communications stated therein and any advice which might be inferred therefrom. Such confidentiality is at the heart of legal professional privilege: Mann v Carnell (1999) 201 CLR 1 ; 168 ALR 86 ; [1999] HCA 66 at [29] and [34]. The essence of waiver is not general fairness - it is the inconsistency of the posited act with the confidentiality protected by the privilege (in which analysis fairness may play a part): Mann v Carnell at [29] and [34]. Here, whatever confidentiality had existed was destroyed by the service of the Jeffery affidavit. The Jeffery affidavit was given to the applicants so that they would place immediate reliance upon it, including for the purpose of the mediation. Nonetheless, the implied undertaking restricted the use of the affidavit and the information therein, subject to a judicial discretion to release the applicants from the implied undertaking wholly or in part. The Jeffery affidavit was not the subject of any other restriction based on its contents, on any asserted confidentiality or upon any asserted privilege. On this basis, privilege in the communications recorded in, or in any advice which could be inferred from the contents of, the Jeffery affidavit was waived upon its service. (my emphasis) 194(Mason P, however, noted in Akins v Abigroup Ltd (1998) 43 NSWLR 439, that legal professional privilege and the implied undertaking lay in "different realms" and that each should be considered separately.) 195While I do not know whether Mr B's statutory declaration was formally read or treated as evidence in that other arbitration, it seems difficult to conclude that it has come into the public domain if the arbitration was conducted in accordance with the NACMA Dispute Resolution Rules which provide for confidentiality. 196However, even assuming the declaration remains confidential, it is by no means clear that the implied Harman undertaking would apply to preclude the use of Mr B's statutory declaration in the present proceedings since I am unable to determine whether it was produced in circumstances attended by an element of compulsion. Had it been, I think it unlikely in the context of a private arbitration that it could be said that any confidentiality in the document had been lost by it having been read in the arbitration for which it was prepared (and even if it did it is unlikely to have occurred in open proceedings). Nor is it necessarily the case that Sapphire should be enjoined from using material that a party to another arbitration may have breached its contractual obligations to provide (although if the document retained its quality of confidence an injunction to restrain its use might have been able to be sought). 197It seems to me that it is not ultimately necessary to make any final determination on this issue - first, because even if the implied undertaking applied, it would be open for Sapphire to seek a release from that undertaking and, secondly, because the material so produced suggests that it would be unfair for Mr Smith (and BSG) to be able to complain as to the use of material in circumstances where (at least on one view) it appears to contradict evidence put by him to the Tribunal. 198Once it was established that the affidavit was subject to the implied undertaking, the Full Court in Liberty Funding went on to consider whether or not it should release the party from its implied undertaking and summarised the applicable law as to when there are "special circumstances" to warrant such a release (referred to in other cases such as Viscariello v Macks [2010] SASC 2; Forty Two International Pty Ltd v Barnes [2010] FCA 397): In order to be released from the implied undertaking it has been said that a party in the position of the appellants must show "special circumstances": see, for example, Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217; 110 ALR 685. It is unnecessary to examine the authorities in this area in any detail. The parties were not in disagreement as to the legal principles. The notion of "special circumstances" does not require that some extraordinary factors must bear on the question before the discretion will be exercised. It is sufficient to say that, in all the circumstances, good reason must be shown why, contrary to the usual position, documents produced or information obtained in one piece of litigation should be used for the advantage of a party in another piece of litigation or for other non-litigious purposes. The discretion is a broad one and all the circumstances of the case must be examined. In Springfield Nominees , Wilcox J identified a number of considerations which may, depending upon the circumstances, be relevant to the exercise of the discretion. These were: · the nature of the document; · the circumstances under which the document came into existence; · the attitude of the author of the document and any prejudice the author may sustain; · whether the document pre-existed litigation or was created for that purpose and therefore expected to enter the public domain; · the nature of the information in the document (in particular whether it contains personal data or commercially sensitive information): · the circumstances in which the document came in to the hands of the applicant; and · most importantly of all, the likely contribution of the document to achieving justice in the other proceeding. 199Furthermore, in circumstances where the Tribunal's reasons on this issue cannot be fully understood without reference to the materials before it, I would have thought there was an obvious relevance to this material and leave for its use should be given. 200Mr Watson also invoked the principle in Gartside v Outram (1856) 26 LJ Ch (NS) 113 at 114, considered by Campbell J (as his Honour then was) in AG Australia Holdings Ltd v Burton (2002) 58 NSWLR 464 at 512-3, namely that there is no confidence in an iniquity. at 512-3 that there is no confidence in an iniquity. Campbell J there said: An alternative basis upon which ... the grant of an injunction [is opposed] is that the court will not confer the cloak of confidentiality on information which discloses an iniquity. As Gummow J has demonstrated in Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434, the famous epigram of Wood V-C in Gartside v Outram (1856) 26 LJ Ch (NS) 113 at 114, that "there is no confidence as to the disclosure of iniquity" was made in the context of deciding the scope of an implied obligation of good faith in an employment contract. That being the proper sphere of operation in the decision in Gartside v Outram , it is not directly applicable to the present case, where there is an express obligation of confidentiality. In case another court takes a different view concerning this matter, however, I shall make some observations about how the "no confidence in iniquity" principle might apply in the present circumstances. In Corrs Pavey Whiting & Byrne v Collector of Customs , Gummow J, (at 451ff) considered the supposed "public interest" defence to breach of confidence, and what could be drawn from Gartside v Outram . His Honour concluded (at 454): "From this consideration of Gartside v Outram I conclude that that case provides insufficient basis for any 'public interest defence' of the kind that, in its name, has been developed in the recent English authorities. The truth as to what Gartside v Outram decided is less striking and more readily understood in terms of basic principle. It is that any court of law or equity would have been extremely unlikely to imply in a contract between master and servant an obligation that the servant's good faith to his master required him to keep secret details of his master's gross bad faith to his customers." and (at 455-456): "Finally, if there be some other principle of general application inspired by Gartside v Outram , it is in my view of narrower application than the 'public interest defence' expressed in the English cases. Such a narrow principle would not be concerned with contractual protection of confidence. Where the plaintiff asserts a contractual right, the law of contract, supplemented by equitable defences where equitable relief is sought, sufficiently deals with the situation. Any principle of the kind I am now considering will be applied in equity where there is no reliance on contractual confidence. That principle, in my view, is no wider than one that information will lack the necessary attribute of confidence if the subject matter is the existence or real likelihood of the existence of an iniquity in the sense of a crime, civil wrong or serious misdeed of public importance, and the confidence is relied upon to prevent disclosure to a third party with a real and direct interest in redressing such crime, wrong or misdeed." 201I consider that reliance upon the confidentiality of the material in question would have had the result of arguably putting before the Tribunal a misleading picture as to the events that had occurred (and on an issue that might well have an impact on the claim being put by BSG to the Tribunal) and that being the case the interests of justice would have required the admission of this material. The same reasoning applies to the admission of this evidence in the present proceeding, to which must be added the fact that it is necessary in order to consider what was before the Tribunal and whether there is strong evidence of an error by it in the determination of one or more of the questions of law it determined. 202Accordingly, I have proceeded on the basis that this material is now admitted without the provision I had formerly placed on its admission into evidence. (As for the position to be taken on the hearing of any appeal from the Tribunal's decision, if this evidence is again sought to be relied upon, I consider that to be a matter to be raised with the Court on that occasion.) Issues for determination (i) Threshold requirements for a grant of leave (a) Could determination substantially affect the rights of one or more parties 203The first threshold requirement is that the court be satisfied that the determination of the relevant question of law, having regard to all the circumstances, "could substantially affect the rights of one or more parties to the arbitration agreement". Factors relevant to the determination of this question include the quantum of the amount in issue and the relationship between the costs of the appeal and the significance of the question of law to be determined ( Gordian at [15]; Natoli v Walker at [9]). 204Mr Watson submits that this first threshold requirement is met in that Sapphire faces very significant financial consequences, in the order of around $535,403 (less the now conceded $97,583), comprised of the amount of $254,000 awarded for the Woodside and Teague contracts; approximately $83,820 in interest claimed from 28 October 2007; and $100,000 in legal costs (as demanded as at 18 April 2011). 205Further, it is submitted that the determination could substantially affect Sapphire's rights in that it is in the business of trading grain and has entered into other (extant) contracts in the same manner (namely by way of the issue of Contract Confirmations and the incorporation of the Standard Terms. It is submitted that it now faces considerable uncertainty as to whether the bargains into which it has entered are governed by the Standard Terms (and, if so, whether there is some overriding application of the Trade Rules. Mr Watson submits that Sapphire faces considerable uncertainty as to the true meaning and effect of Rule 17.6; how it is intended to apply in the context of default on insolvency; and how its ordinary rights to damages are now affected. 206Mr Nunan gave evidence of his belief that Sapphire has no practicable alternative but to conduct its business in membership and subject to the Authority's rules and procedures and with those who are members. Thus it is submitted that the determination of the questions of law the subject of the application for leave to appeal is of relevance not only to the present case but also in respect of the ongoing operation of Sapphire's business. 207As to the first matter, I accept that the obligation to pay a not insubstantial sum (including interest and costs), arising from the making of the Award is one that substantially affects Sapphire's rights. Relevantly, the timing date of insolvency has the potential to be of significant import given to the volatility of barley prices, to evidence of which I was taken by Mr Watson. 208As to the second matter, while I accept that determination of the questions before the Tribunal may potentially create an issue estoppel and hence affect Sapphire's rights in future disputes with BSG (the likelihood of which is presumably small as the latter is now in liquidation), I do not accept that the present determination affects its "rights" as such in other future contractual arrangements. True it is that there may be uncertainty for it when entering into future contracts based on the Trade Rules or the Authority's standard form documents but that could be addressed by negotiating amendments to contractual documents in future (or in other ways, such as lobbying the Authority to address this issue by amendment to its standard form documents). I do not consider that it satisfies the threshold requirement of a determination that substantially affects Sapphire's rights in this respect. 209That said, for the first of the reasons advocated by Mr Watson I accept that this requirement is satisfied. (b)(i) Requirement that there be manifest error of law on the face of the record (b)(ii) Strong evidence of error of law and effect of determination on certainty of commercial law 210In considering both limbs of the second threshold requirement (i.e. manifest error and whether there is a strong likelihood that there was an error of law) it is necessary to focus in some detail on how it is said that the Tribunal in question has erred in its award, hence the analysis set out earlier. 211There has been recognised to be a high hurdle confronting a party seeking to establish manifest error of law on the face of an award for the purposes of s 38(5) of the Act. In Promenade Investments , Sheller JA said (at 225): The expression "error of law on the face of the award" is one of a type well-known to courts. The award having been examined the question is whether there is apparent (and such is the denotation of the word "manifest") an error of law. "Manifest error" is an expression sometimes used in reference to reasons given by judges or the approach taken by juries: see, eg, s 107(c)(iii) of the Supreme Court Act 1970 and the judgments of Kirby P in Azzopardi v Tasman UEB Industries Ltd (at 151) and Otis Elevators Pty Ltd v Zitis (1986) 5 NSWLR 171 at 181. It is used to indicate something evident or obvious rather than arguable : see generally per McHugh JA in Larkin v Parole Board (1987) 10 NSWLR 57 at 70-71. (my emphasis) 212While it is submitted by Mr Watson that there is nothing in s 38 of the Act which prevents the Court from looking at relevant material necessary to understand the award and reasons, including material referred to in the reasons and including (in particular in the case of omissions) the parties' contentions, the position in relation to appeals for manifest error on the face of the award, as considered earlier, seem to me to be less expansive. 213The test on this second threshold requirement is not who is ultimately right or wrong as a matter of law on the disputed question(s) of construction, but the strength of the claim that there has been an error of law on the construction issues. In the absence of a finding that there has been a manifest error of law, what is necessary is that there be "strong evidence" that the Arbitrator made an error of law and that the determination of that question is one which may add or be likely to add substantially to the certainty of commercial law (the latter consideration being one I will address after considering the nature of the errors identified). 214In Promenade Investments, at 226, Sheller JA said: Assuming that there is not a manifest error of law on the face of the award it may be argued that there is strong evidence that the arbitrator made an error of law and that the determination of the question may add, or may be likely to add, substantially to the certainty of commercial law. The requirement that the question be one the determination of which may add substantially to the certainty of commercial law indicates that it should be one of wider and greater importance than, for example, the construction of a one-off clause in the context of a particular agreement between the parties. One can discern here the sort of limitation which Lord Diplock had in mind. The expression "commercial law" should be given no narrow construction. The expression "strong evidence that the arbitrator ... made an error of law" suggests first what might otherwise be called on the leave application a strong prima facie case and second an error of law not manifest on the face of the award and demonstrable by evidence . (my emphasis) 215The words "strong evidence that the arbitrator made an error of law" for the purposes of section 38(5)(b)(ii) of the Act mean a strong prima facie case of error in law. Only once that has been found does the Court turn to consider whether the determination of the question of law may or may be likely to add substantially to the certainty of commercial law ( Gordian in the Court of Appeal at [127]). 216Turning to the respective errors: * Identification of relevant contract terms 217The Tribunal did not accept the argument of Sapphire that the incorporation of the Standard Terms into the respective contracts (through the Broker's note or the subsequent contract confirmations) had the effect that the Trade Rules did not apply. As to the finding that both the contracts clearly incorporated the Trade Rules, that does not seem to me to be disputed (at least it is not disputed that they did so at some point even if later overridden by the Contract Confirmations). What is disputed is whether Rule 17.6 was incorporated into the contracts or had any application in light of the other provisions of the contracts. 218The error identified by Mr Watson in this regard is that the Tribunal approached the question from the "starting point" that the Trade Rules were so incorporated and then looked to see whether it had been excluded. 219The Tribunal did not accept the argument of Sapphire that the incorporation of the Standard Terms into the respective contracts (through the Broker's note or the subsequent contract confirmations) had the effect that the Trade Rules did not apply. As to the finding that both the contracts clearly incorporated the Trade Rules, that does not seem to me to be disputed (at least it is not disputed that they did so at some point even if later overridden by the Contract Confirmations). What is disputed is whether Rule 17.6 was incorporated into the contracts or had any application in light of the other provisions of the contracts. 220The error identified by Mr Watson in this regard is that the Tribunal approached the question from the "starting point" that the Trade Rules were so incorporated and then looked to see whether there was a clear and unambiguous departure from those Rules. I interpose to note that it is of course not inconceivable that the Tribunal could have approached the question from an incorrect starting point or applying an incorrect test but nevertheless have reached the correct result as a matter of law. The error of law must surely be an error as to the finding in question not the manner in which it was arrived at (at least unless that finding was based, for example, on inadmissible evidence - and here the Tribunal was not bound by the rules of evidence; leaving aside the question whether in the course of determining the issue there was some denial of natural justice or other procedural unfairness that might give rise to a separate challenge to the Award). 221Insofar as the Tribunal seems to have looked to see if there was a clear and unambiguous statement that Rule 17.6 did not apply, I accept that there is some force to the criticism that it misconceived the effect of the Preamble to the Trade Rules - since they state that the Trade Rules only apply to the extent that they are not altered by the parties or where the contract is silent as to a matter dealt with by the pertinent Rule. There is no clear finding in the Award or the reasons for the Award to the effect that the Trade Rules had not relevantly been altered in relation to Rule 17.6 or that the contract was otherwise silent as to the subject matter dealt with in Rule 17.6 (so as to lead to the conclusion that Rule 17.6 did apply). Rather, the Tribunal seems to have had the view that unless there was an express statement that this Rule did not apply, then it should be taken to have done so. 222If (as the Tribunal found and as seems from the contract documentation before me to be the case), the Trade Rules were in general incorporated into the relevant contracts (in the case of the Woodside contract there being an apparent acceptance by Sapphire that the Trade Rules were incorporated albeit along with the Standard Rules; in the case of the Teague contract by reason of the express incorporation of the Rack contract which in turn incorporated those rules), then the relevant question for the Tribunal would have been to what extent did those Rules apply (and, in particular, did Rule 17.6 apply). That question would fall to be determined by reference to whether there was anything in the contract, outside of the Trade Rules, that altered the operation of Rule 17.6 and as to whether the contract was silent as to the matter covered by Rule 17.6. 223I am not satisfied that there was an error (let alone a manifest error) in the conclusion that the Trade Rules applied to the respective contracts, subject only to the questions whether (as alleged in the case of the Teague contract) the incorporation of those Rules had subsequently been varied by the parties' contract confirmations and whether the operation of those Rules or any of them was excluded by reference to the remaining contract provisions. 224In this regard, the Tribunal's finding was that there was no clear and unambiguous "departure" from the Trade Rules "entirely or in any material respect". This suggests that the Tribunal gave consideration to the balance of the provisions of the contract documents and must have concluded at least that the Standard Terms did not put in place an altered regime for default on insolvency (since the Trade Rules would not to the extent that this were not to be the case). Logically, does that mean that the Tribunal must have concluded that the contract (including the Standard Terms) was otherwise silent on that topic (that being the other limitation on the extent to which the Trade Rules were to operate in accordance with the Preamble thereto)? It does not seem to me that this is the logical conclusion from the reasoning insofar as that can be discerned from the Award itself. The Tribunal might simply not have turned its mind to the question if (as Mr Watson submits is the case) it commenced from the wrong starting point. 225I am not satisfied that the conclusion (whether reached by a process of impeccable reasoning or otherwise) that the Trade Rules, including Rule 17.6, applied to the relevant contracts is manifestly wrong (as a matter of contract construction) on the face of the award. True it is that the Standard Terms include a provision for Default that does not appear to contemplate the close out arrangement provided for in Rule 17.6 and that, in the second paragraph, appears to address insolvency events in different terms to Rule 17.6. However, the Standard Terms also expressly refer to the "NACMA Trading Rules" for a "more detailed explanation". Hence there seems to be an argument based on those provisions alone that would permit a conclusion that Rule 17.6 did apply as part of the relevant contracts. 226Was there strong evidence of an error in that regard? The fact that there were to my mind clearly available opposing arguments as to the construction of the default provisions and as to whether the insolvency provisions are to be construed as part of the overall default provisions or separately leads me to conclude against Sapphire on this point. 227Had I concluded otherwise, namely that there was strong evidence of an error in construction of the contractual provisions leading to an incorrect conclusion that Rule 17.6 was incorporated in and did have room for operation under these contracts, then I would have found for Sapphire on the second part of this alternate limb - namely that the determination of this question was likely to add to the certainty of commercial law (having regard to the fact that the terms appear in standard form contracts used regularly in commercial trade in the grain trade industry). As it is, the question does not arise. * Construction of Rule 17.6 228I accept that there is nothing contained in the reasoning of the Tribunal (at least so far as that appears in the Interim Award) as to the basis on which it construed Rule 17.6 in its application to the facts before it (other than the inference to be drawn from the fact of the award itself). The Tribunal appears to have proceeded on the basis that the Trade Rules (and Rule 17.6) were incorporated in the respective contracts and therefore (once the date of insolvency was determined) this had the result that a payment was due under the contracts. Mr Watson submits that in failing to give reasons for that conclusion, the Tribunal fell into error and this is manifest on the face of the award. 229As to error of law, Mr Watson submits (and I agree) that the interpretation of a written agreement between private parties is a question of law. In Westport , Heydon J at [82] said: If the issue whether leave to appeal would have been granted to debate the construction point is material, it should be noted that the construction point involves questions of law. It involves a question of law in the mundane sense that the interpretation of a, written agreement between private parties is a question of law. But beyond that mundane question of law there may be two specific but important errors of law. The arbitrators may have erred in their use of the phrase "common understanding and intention of the parties". That suggests that they erred in searching for the subjective intentions of the parties. That is an extremely important matter, not always well understood. It is very well established in this Court, and indeed in other ultimate appellate courts, that the question is not what contracting parties subjectively intended, believed or understood. The question is, subject to special common law or equitable rules usually based on error or disadvantage, what each party by words or conduct would have led a reasonable person in the position of the other party to believe. A departure from these principles by arbitrators is a serious matter. They are not principles merely reflective of some quaint minor guide to construction. They go to central substantive conceptions of the law of contract in the Anglo-Australian common law. A second respect in which the arbitrators may have erred is their seeming reliance on post-contractual events as a guide to contractual interpretation. Some see that as more controversial, but it is a very important question of law. 230Before me, it was contended, in effect, that on the proper interpretation of Rule 17.6 (read with the provisions in the balance of Rule 17), it operated to deem parties in default (on insolvency or in the other circumstances or events defined as insolvency events) but there was no obligation to make a payment under Rule 17.6 on insolvency and that there was therefore a manifest error by the Tribunal in the construction of the contracts. 231Mr McCulloch says that those issues were not raised before the Tribunal and should not be permitted now to be raised. In response to this, Mr Watson refers to Martin v Hogan [1917] 24 CLR 234 at p 256 where Isaacs and Rich JJ, dissenting in the overall result, addressed the question whether a point of law not taken below could be raised on appeal and referred with apparent approval to the Privy Council authority in Connecticut Fire Insurance Co v Kavanagh [1892] AC 473 where Lord Watson said "When a question of law is raised for the first time in a Court of last resort, upon the construction of a document, or upon facts either admitted or proved beyond controversy, it is not only competent but expedient, in the interests of justice, to entertain the plea". Reference was also made to Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 438, where the High Court noted that the circumstances in which an appellate court will entertain a point not raised in the court below were well established and cited Kavanagh , noting that where a point is not taken in the court below and evidence could there have been given which by any possibility could have prevented the point from succeeding, it cannot be taken afterwards. Mr Watson submits that there is no evidence that could have been raised on the construction issue that is now sought to be put. (However, it seems to me that there is every possibility that had this construction point been raised with the Tribunal there could have been evidence as to common practice in the industry to counteract the arguments sought to be placed by Sapphire on the unreasonableness of the Rule.) I am not satisfied that this is a case in which such a principle arises, particularly where it would have the effect of operating contrary to the policy of finality of arbitral awards. 232In the Points of Defence that were served in the arbitration the section dealing with the effect of "default" pursuant to the terms of the notices of contract confirmation was dealt with and Sapphire submitted that statements contained in the notices of contract confirmation as to the consequences of insolvency were inconsistent with Rules 17.6(1) and (2) ("which in some circumstances may be interpreted as entitling a defaulting party to make a claim on a non-defaulting party"). (The significance of inconsistency being that in accordance with the Preamble, Rule 17.6 did not apply as the contracts were not silent on the consequences of insolvency.) In Sapphire's Reply, it then address the proper interpretation of Rule 17.6 by reference to the submission that it did not operate at all unless the insolvent party had given notice of the first insolvency event or alternatively provides the non-insolvent party (on learning of an earlier insolvency event than that notified) at its election to opt to close out the contract at the date flowing the earlier insolvency event. 233The submissions now made as to the construction of Rule 17.6 according to law, as outlined earlier, seem to me to go beyond the matters put before the Tribunal. Hence it seems to me that it cannot be suggested that the failure to address those matters in the Tribunal's reasons amounted to a manifest error of law (the timing of insolvency issue being dealt with not as a question of construction in the manner contended for in (ii) but, rather, as the ground in (iii) below). 234Therefore, while that failure to provide a statement of the reasons for the making of the award, as required by s 29(1)(c) may itself in some circumstances amount to a manifest error of law on the face of the award within the meaning of s38(5)(b)(i) (see Westport at [36] per French CJ, Gummow, Crennan & Bell JJ), I am not satisfied that in this instance a failure by the Tribunal to explain why it was that it considered Rule 17.6 led to the conclusion it reached would amount to an error of law. 235I find that there was not a manifest error of law on the face of the award as to the construction of Rule 17.6. 236As to the question of whether there is strong evidence of an error of law in the construction of Rule 17.6 going to the manner in which it was to operate if it formed part of the relevant contracts (other than as to the timing of insolvency which I consider below), the strongest argument it seems to me is that in relation to the Teague contract - namely, that payment of an amount on close out of the contract due to the insolvency of BSG is contrary to the proviso to Rule 17.5 in the 2007 version of the Rules which provided that "nothing in these Rules shall be construed as requiring the party not in default to make any payment of compensation or damages to the party in default". (I note the submission by Mr McCulloch that a close out payment is not a payment of compensation or damages per se but it seems to me that there is a reasonable argument that this proviso (not limited in its content to rule 17.5, since it refers to "nothing in these Rules) would operate to preclude a payment of the kind the subject of the award being ordered against a party not in breach and not deemed by insolvency to be in breach.) Nevertheless, again, if not taken to the argument in this regard, there is an issue as to whether the Tribunal can be said to have erred as a matter of law in determining the claim as it did. 237Whether there is strong evidence of error depends upon what view is taken of construction of Rule 17.6 in the context of Rule 17.5. It seems to me that it is open to conclude that there was an error in not having regard to the interaction between the respective provisions but if alternative constructions are available (as seems to me to be the case) then I am not satisfied that there is strong evidence of error. Had I been of that view then I would have considered that it is an issue the determination of which would be likely to add to the certainty of commercial law (again on the basis that this relates to the construction of a standard form grain contract in common use in the grain trade industry). However, as a matter of discretion I would not have granted leave in circumstances where the quantum of the award referable to this contract was relatively small (Woodside being the contract comprising the bulk of the award) and having regard to the fact that this issue does not appear to have been drawn (at least directly) to the attention of the Tribunal. * Timing of date of insolvency/date for determination of fair market price 238This was the issue on which much focus was placed in the reply submissions by Sapphire before the Tribunal. 239In relation to this issue, the Tribunal noted that Sapphire relied upon a statement made by Mr Smith to a third party to the effect that he intended to put his business into voluntary liquidation and that Sapphire said that this amounted to a statement that BSG was "threatening to cease to carry on all or a material part of its business, stating that it is unable to pay its debts" (for the purposes of Rule 17.6(g)(i)). In its award the Tribunal said that the sole evidence of this alleged insolvency event was the affidavit evidence of the third party (which, it said, BSG "urges us, with some force, not to read"). The force which the Tribunal saw in this submission seemed to be that to disclose this affidavit in this manner would depart from the general rule of confidentiality and privacy which applies to arbitral proceedings. 240Having regard to the evidence before the Tribunal it was clearly incorrect to assert that this was the sole evidence of an earlier insolvency event. Moreover, having regard to the material to which I was taken it seems to me that there is strong evidence that there was an error of law inherent in the finding that the first (or the relevant) insolvency event was on 27 September 2007 (and hence the conclusion by the Tribunal that the relevant date for establishing the fair market price was the following day). It seems to me that there is a manifest error in the construction of Rule 17.6 the contracts as permitting the date of receipt of notice by the non-defaulting party of the insolvency event to be treated as the date of that insolvency event (for the purposes of Rule 17.6(1). (I do not accept that this is a question of fact since the relevant finding is whether, for the purposes of the construction of Rule 17.6, the facts as established before the Tribunal fell within the definition of Insolvency Event within the contracts and then the subsequent finding is as to what is the contractual consequence of a failure to give notice of the Insolvency Event within the time specified for the giving of such a notice.) 241As to the submission made to the Tribunal that it should not read Mr B's statutory declaration, it does not seem that there was any ruling on this (and the Tribunal was not bound by the rules of evidence in any event). I have considered earlier (in the ruling on the admission of that evidence in the proceedings before me) that there was a reasonable basis on which Sapphire should now be permitted to read that evidence (notwithstanding the general rule of confidentiality and privacy to which the Tribunal referred) in circumstances where it would seem to suggest that Mr Smith (and BSG through Mr Smith) was taking inconsistent positions before this Court and in the arbitration as to the date of the occurrence of events that would seem to fall within the definition of Insolvency Event. However, since the Tribunal seems not to have rejected this material in any event, it seems unnecessary to consider that issue further. 242The Tribunal reached its conclusion as to the date for establishing the fair market price for the purposes of Rule 17.6, so far as that is apparent from the reasons in its award, not on the basis of the construction of the contracts (as was put to it in the written submissions) or on the basis of any market practice in this regard (as to which it appear there was no evidence before it), but on the basis of the perceived uncertainty that such a result would cause, leading it to prefer a construction that set the relevant date for the assessment of fair market price as the day after the actual notice was given (irrespective of whether it accepted that there was an earlier Insolvency Event or not). It stated: However, even if we accept that an insolvency event occurred on 24 September 2007 of which the Respondent [Sapphire] was not given notice until (it says) almost 2 years later, the Respondent was clearly given notice of insolvency on 27 September 2007 rendering 28 September 2007 as the relevant date for fixing the "fair market price". The alternative construction would be that notice on 27 September 2007 was a nullity and the Respondent had the option of fixing the fair market price on either 25 September 2008 or 29 July 2009 being the day after actually becoming aware. Such a result and construction would cause great uncertainty and cannot be preferred. 243It seems to me that the construction adopted by the Tribunal of Rule 17.6(2)(b) ignores the obligation in Rule 17.6(1) on the part of the party in BSG's position to give notice within two business days of the occurrence of an Insolvency Event and the clear words of Rule 17.6(2)(b) as to what was the consequence of there being no notice within that time: In the absence of any express written agreement to the contrary, any contracts between the parties shall be closed out at Fair Market Price on the business day following the giving of the notice. If notice is not given as required, the other party, on learning of the occurrence of the Insolvency Event, shall have the option of declaring the contract closed out at either the Fair Market Price on the first business day after the date when such party first learnt of the occurrence of the act of insolvency or at Fair Market Price ruling on the first business say after the date of the Insolvency Event occurred . (my emphasis) 244I am satisfied that this is a manifest error on the face of the award (by reference to no more than the reasons in the award and the wording of Rule 17.6(2)(b). Had it amounted to no more than strong evidence of error for the purposes of s 38(5)(b)(ii), then the question would be whether the determination of this issue was likely to add "substantially" to the certainty of commercial law. In my view, a determination as to the contractual consequences of a failure to give the notice as required by clause 17.6 would be clarified by such a determination and having regard to the common usage of the standard form contract within the grain trade industry, I would have concluded that this requirement was satisfied. * Onus 245I am not satisfied that there was a manifest error of law in the application of the onus of proof by the Tribunal. Rather, I think the statements relied upon in the award seem likely to be a product of the informality or non-legal description of what was being done by the Tribunal. True it is that a party in the position of the claimant would bear the onus of proof on issues such as the establishment of what was the fair market price. However, the Tribunal in reaching a decision on that issue was able to take into account the whole of the evidence put before it (including that put by Sapphire in support of its alternative submission on this issue). Nor am I satisfied that there is strong evidence of error. * Standing 246As to the question of standing, the position of BSG (as put to the Tribunal) was that on the office of the corporate trustee (BSG) being determined by liquidation, the trustee will continue to hold the trust assets as a constructive trustee (citing Re Crest Realty Pty Ltd (No 2) (In liq) [1977] 1 NSWLR 664). I accept that the reasons of the Tribunal display some confusion as to the party with standing to bring the claim the subject of the arbitration. I have noted above the two paragraphs in which the Tribunal dealt with this issue. 247If by the statement that "we are satisfied that the Claimant has the necessary capacity to pursue this claim", it was being suggested that BSG (an insolvent company) had capacity itself (by its directors, for example) to bring the claim then this must be incorrect. If that statement was intended to convey that although the named claimant was a company in liquidation (BSG), the party bringing the proceedings was in truth the persons who had been appointed not only as liquidators of the company but receivers and managers of the trust assets, then it might suggest that the Tribunal was accepting that there was a degree of imprecision in this regard but that it did not affect the arbitral proceedings. The application for arbitration itself indicated that the application was being made by those two individuals in their capacity as liquidators and receivers whereas the Points of Claim are in the name of BSG but plead that the claim is brought by BSG as trustee of the trusts. 248By letter dated 18 January 2010 from Henry Davis York, acting for the individual liquidators/receivers and being the solicitors on the record for the claimant in the arbitration, it was asserted that the arbitration had been commenced by BSG "in its trustee capacity, upon instruction from Peter Marsden and David Kerr as receivers and managers of Trust 1 and Trust 2 (Receivers), in order to recover the amount owed to the Trusts by the Respondent" and confirmed that any benefit would accrue as claimed to each of the trusts and any liability for costs of the arbitration would be incurred by BSG in its capacity as trustee of those trusts. (I interpose to note that if those costs were reasonably and properly incurred then BSG would have a right of reimbursement or indemnity out of the trust assets for those costs). Sapphire's position is that it was exposed to arbitration proceedings in which the claimant had no assets to satisfy any adverse orders and the persons who stood to benefit from the proceedings were not bound in the proceedings. 249It is alleged in the summons that the Tribunal failed to give proper consideration to the concerns of Sapphire that it was being pursued by a corporate shell for benefits to accrue to others and not to the creditors in the liquidation. Certainly, the manner in which this issue was addressed in the reasons suggests that the Tribunal considered the claimant to be an entity other than Messrs Marsden and Kerr (the receivers of the trusts and liquidators of the company). That is consistent with its acceptance of the explanation by the solicitors acting for the claimant. 250I am not persuaded that there is a manifest error on the face of the record nor am I persuaded that there is strong evidence of error in this regard. Had I been persuaded of the latter I would not have held that this was an issue the determination of which was likely substantially to assist in the certainty of commercial law. Nor would I have considered that any discretion should be exercised to permit an appeal on this point. The costs position of Sapphire is protected by the confirmation given by the 18 January 2010 letter; the arbitration when commenced put on record the status of BSG and the position of the individuals in question; and nothing turns on who might obtain the ultimate benefit of the award (i.e. the creditors of BSG or, as is said to be the case, the beneficiaries of the relevant trust(s)). * Costs 251Finally, in relation to costs, those orders fall within the discretion of the Tribunal and I am not persuaded that there was any error of law in relation to the manner in which that discretion was exercised. Insofar as this issue is raised in order to deal with the prospect that on appeal the award may be set aside or revised, I consider that costs of the arbitration would fall to be dealt with by the Court on appeal without the need for any leave to be granted on this application. Import of determination of issues on the certainty of commercial law 252As to the question whether determination of the various issues may add substantially to the certainty of commercial law, it is noted by Mr Watson that this application concerns, amongst other things, the proper relationship between the Standard Terms, the Trade Rules, Broker Confirmations and parties' Contract Confirmations; the proper approach to be taken to the construction of contracts utilising those Standard Terms and Trade Rules; and the proper approach to and construction of Rule 17 (and, in particular, Rule 17.6 of the Trade Rules). 253Mr Watson notes that the Standard Terms applicable today (reissued in April 2009) are relevantly in the same terms as those applicable to the contracts the subject of the Tribunal's award and that the Trade Rules (reissued in March 2009) also remain in the same terms as to matters such as when those Trade Rules are intended to apply, how they operate in respect of the Standard Terms, Broker Confirmations and Contract Confirmations, and in relation to Rule 17 generally. The 2009 NACMA Trade Rules are said to be in the same terms as the 2007 Trade Rules in respect of the full wording of Rules 17.5 and 17.6. 254Thirdly, Mr Watson points to the fact that the Authority's reach in the industry is large, noting that the Authority has described itself in the following terms: Grain Trade Australia Ltd, formerly the National Agricultural Commodities Marketing Association (NACMA) was formed in 1991 with the aim to standardize grain trade standards and/or trade rules/contracts across the Australian grain industry. Over 95% of the Australian grain crop is stored in facilities operated by GTA members, with 90% of grain contracts executed in Australia each year referring to GTA grain standards and/or trade rules. GTA has over 300 member organisations from farming organisations to large national and international storage/trading companies. 255It is submitted that, insofar as the approach of the Tribunal was to treat the Trade Rules as standard terms, it is an important function of a court to provide participants in the industry with legal certainty at the negotiation stage as to what it is that they are agreeing to do (Mr Watson referring to the Tradax case at p 8 per Lord Diplock). 256It is further submitted that since the Trade Rules require (by default) that parties refer their disputes to arbitration applying the NACMA Dispute Resolution Rules, and that (by reference to the Authority's panel of arbitrators) the arbitrators are generally not legally qualified, a determination of the questions of law raised in the proposed appeal is very likely to add to commercial certainty by providing a guide or assistance to tribunal members in present and future disputes. 257It is also submitted (though the evidence on which this was based was challenged by Mr McCulloch) that the operation of the contractual terms relating to parties' insolvency is recognised as being controversial within the industry, and that disputes relating to the consequences of insolvency of traders have been identified as being prevalent within the industry (reference being made to the evidence of Mr Geoff Farnsworth (director of the Authority, member of the Commerce Committee, and solicitor retained by the Authority in respect of arbitrations) given to the Productivity Commission Inquiry. 258Mr McCulloch submits that the questions of law raised by the proposed appeal are not ones whose determination "may add, or be likely to add, substantially to the certainty of commercial law" on the basis that those questions of law are unique to the issues between the parties. Insofar as reference is made to the principles relating to the construction of contracts, he submits that these are not in doubt and there is thus no question of general importance which arises for determination. He submits (and I agree) that even if the Court were of the view that the arbitrators were in error, that is not sufficient to satisfy s 38(5)(d); what is necessary is that there be a question relating to commercial law generally, not just to the rights of the parties inter se . 259Where there is strong evidence of error on an issue of construction of clauses in a standard form agreement (not a one-off determination on the facts of the particular case), the construction of such a clause, even if its use is not as wide as suggested, would in my view have potential significance beyond that of the present case and, depending on the particular issue, is one which would be likely substantially to add to the certainty of commercial law. (ii) Discretionary issues 260I approach the question of discretion cognisant of the weight, evident from the legislation, placed on the exercise of judicial restraint in interference with or intervention in arbitral decisions which otherwise would be final and binding. I accept that there should be only limited curial intervention. 261In Promenade Investments , after considering the language used in the expression "manifest error", Sheller JA went on to say, at 225: Nothing more is to be learnt from the language used but of course the discretion of the court as to whether or not it will grant leave remains and regard must be had to the requirement of subs (5)(a). The matters referred to by Lord Diplock in The Nema remain important factors in determining whether leave should be given. [His Lordship there having raised the reluctance to grant leave for a one-off question] 262As to the discretion, in Promenade Investments, at 221, Sheller JA said: In his second reading speech the then Attorney-General said that one of the major objectives of this uniform legislation was to minimise judicial supervision and review ( New South Wales Parliamentary Debates, 22 November 1990, 10376 at 10378): "If arbitration is to be encouraged as a settlement procedure and not as a dry run before litigation, a more restrictive criterion for the granting of leave is desirable and the parties should be left to accept the decision of the arbitrator whom they have chosen to decide the matter in the first place." The added requirements of manifest error of law on the face of the award or strong evidence that the arbitrator made an error of law and that the determination of the question may add substantially to the certainty of commercial law suggest that the draftsman was seeking to constrain the exercise of court control over arbitral awards in the manner described by the House of Lords in The Nema . A manifest error of law on the face of the award may be an error which would be apparent to the judge upon a mere perusal of the reasoned award itself without the benefit of adversarial argument. A determination which adds substantially to the certainty of commercial law may be a determination of a question of the construction of a contract in standard terms rather than the construction of a one-off clause. In such a situation, strong evidence that the arbitrator made an error of law may equate with a strong prima facie case that the arbitrator had been wrong in his construction. 263The role of arbitrations in dispute resolution, which informs the purpose and intent of the Act, was articulated by Allsop P in Gordian Runoff at [216]: The underlying difference between arbitration and court litigation should be borne in mind at alt times: see in particular the article by Lord Bingham "Reasons and Reasons for Reasons: Differences Between a Court Judgment and an Arbitration Award" op cit. Though courts and arbitration panels both resolve disputes, they represent fundamentally different mechanisms of doing so. The court is an arm of the state; its judgment is an act of state authority, subject generally in a common law context to the right of appeal available to parties. The arbitration award is the result of a private consensual mechanism intended to be shorn of the costs, complexities and technicalities often cited (rightly or wrongly, it matters not) as the indicia and disadvantages of curial decision making. 264It is submitted by Mr Watson that the questions arising in this arbitration were ones to be determined according to law and that, in circumstances where the arbitrators comprising the Tribunal were not highly qualified lawyers it could not fairly be said that Sapphire had treated the arbitration as some 'dry run' for litigation (that being the real vice and mischief to which it is submitted that s 38 is directed). That said, the suggestion that Sapphire should be permitted now to raise construction arguments and points of law not raised at the arbitration (though open to have been so raised) is redolent of an attempt to re-litigate the issues that were before the Tribunal. 265Mr McCulloch submits that to the extent that Sapphire has relied on a large amount of evidence that, apart from the contract itself, is said to be irrelevant and indicative of why arbitrations should be the subject of leave in only the most exceptional of cases. It was submitted that much of the material before the Tribunal was well known in the industry and therefore did not require detailed explanation and reference. Mr McCulloch noted that the Trade Rules and the application of them by the Authority and its predecessor, NACMA, have been considered on previous occasions by the Court. Reference was made to Barry Smith Grains Pty Ltd (In liq) v Riordan Group Pty Limited [2010] NSWSC 1291 at [40] where Hammerschlag J said: ... arbitration awards are frequently, as here, made by non-lawyers. They should not be scrutinized with an overcritical or pedantic eye and should be read with common sense and without undue legality: JH Rayner (Mincing Lane) Ltd v Shaer Trading Co . [1982] 1 Lloyd's Rep 632 at 636; Industriebeteiligungs & Handefsgesellschaft v Malaysian International Shipping Corporation Bemad (The "Bunga Melawis") [1991] 2 Lloyd's Rep 271 at 277; D Rhidian Thomas, The Law and Practice Relating top Appeals from Arbitration Awards (1994) Lloyd's of London Press Ltd. It is also to be borne in minds that the arbitrators were by reason of Art 25 of the NACMA Dispute Resolution Rules not bound to apply the strict rules of evidence. 266Mr McCulloch notes that the importance of the leave process as a filter for appropriate cases and the level of abstraction to which the Court entertaining the leave application may descend were emphasised in the following passages in Gordian (in the Court of Appeal) at [127]-[128]: What therefore has to be shown, as a first step, is that there was strong evidence, in the sense of a strong prima facie case, that the arbitrators were wrong in law. Only if this exists does one move on to the additional consideration as to whether the determination of the question (of law) may or may be likely to add substantially to the certainty of commercial law. The Court needs to be careful not to downgrade the statutory requirement of "strong evidence", that is a strong prima facie case of legal error, because of the "interesting" or important legal question involved. The remit of arbitrators includes the making of errors; that is an inevitable part of any process of dispute resolution. Arbitrators may deal with "interesting" or important questions. How and what errors are to be corrected depends on the statute in question. Here, it must be shown that there is a strong prima facie case that the arbitrators were wrong on a question of law. An assessment of this question at the procedural level of a leave application requires the demonstration by arguments appropriate to a leave application of a strong prima facie case of legal error. The restriction of argument to a form appropriate to a leave application is not restricted to "manifest error". It might be obvious that in that context argument would necessarily be short. It might also be that a strong prima facie case of error requires the display of something more than obvious error. Nevertheless, it is the evidence of a prima facie case of error that is required to be strong. The longer the debate that is required to demonstrate the asserted error, the likely more contestable is the argument. The procedural context is again important. The strength of any argument and the strength of the prima facie case of error is not assessed after full concurrent argument on appeal. It is to be assessed by reference to argument suitable to a leave application in which the task is to assess the strength of the case for error, not decide the case for error. 267Sapphire points to what was said in Westport at [19] per French CJ, Gummow, Crennan & Bell JJ: ... the making of an award in arbitration proceedings is more than the performance of private contractual arrangements between the parties which yields an outcome which rests purely in contract. They also suggest the importance which the provision of reasons by arbitrators has for the operation of the statutory regime. That statutory regime involves the exercise of public authority, whether by force of the statute itself or by enlistment of the jurisdiction of the Supreme Court. It also, as explained later in these reasons, displays a legislative concern that the jurisdiction of the courts to develop commercial law not be restricted by the complete insulation of private commercial arbitration. and that ss 38(4)(a) and 38(4)(b) were said by the plurality at [27] to: ... create a new head of justiciable subject matter and confer jurisdiction on the Supreme Court to determine whether to grant leave, and, if this is given, to entertain the 'appeal'. The subject matter of this 'appeal' is confined to questions of law; the scheme of the legislation is to hold the parties to their agreement to accept factual findings by the arbitrators. 268Mr Watson submits that any contention that the court should defer to arbitrators with "purported" expertise, or that the court should stay its hand on the grounds that the arbitrators were intended to rely on their own knowledge and expertise should be treated cautiously, (noting that such proposition was rejected by Heydon J in Westport (that being a case where the arbitrators were to make their award on grounds of "general justice and fairness" pursuant to s 22(2) of the Act (Heydon J, [87]-[91]) whereas in the present case, the arbitrators were required to make their award under s22(1) "according to law". Sapphire submits that there is no basis on the true construction of the Act for deferring to arbitrators on questions of law. 269I am conscious of the exhortation in the authorities for judicial restraint in this kind of application having regard to the principles underlying the legislative recognition of the finality of arbitral awards. It seems to me likely that the arbitrators with experience in this area, while not having legal qualifications, would be likely to have a good understanding of how contracts with close out provisions of this kind are generally taken to operate in the grain trade industry. Further, at least in relation to the onus and standing points, these issues seem more technical than of substantive effect on the outcome of the Tribunal's decision and I would have had little hesitation in exercising the discretion against the grant of leave had the cause for exercising that discretion arisen in relation to those points. 270Where there is more at stake in a financial context for the parties and the issue is of potential significance as a matter of interpretation of a standard form contract used generally in the industry I think those are factors weighing towards the exercise of discretion in favour of leave being granted. Moreover, although conscious of the undesirability of arbitration awards being subjected to layer upon layer of judicial review, I note that to some extent such a process may be inevitable in any event having regard to the appeal already on foot for which no leave is necessary. 271I have considered that, balancing those matters, leave should be given in relation to the error of law identified in (iii), namely the fifth ground in the Commercial Arbitration List Statement. In those circumstances, if it be necessary for such leave in order to do so, leave should also be granted to BSG, as it foreshadowed it would wish to do, to raise the matters it seeks to raise by way of a notice of contention in the appeal. Conclusion 272For the reasons set out above I am of the view that there was a manifest error of law on the face of the award in relation to the conclusion that the relevant insolvency event occurred on 27 September 2007 (that being the date on which notice of the appointment of the provisional liquidators was given, not the date of their actual appointment nor the earlier dates on which other events that seem to fall within the definition of Insolvency Event appear to have occurred) and the conclusion that 28 September 2007 was therefore the application date for the assessment of Fair Market Price for the purposes of the close out of the Woodside and Teague contracts. The import of such a finding is one that substantially affects the rights of Sapphire, since it determines the price at which the contracts are to be closed out, if at all, and the volatility of the prices over the period means that this was likely to have had a significant financial effect on the outcome of the award. I am satisfied that it is an appropriate case in which to exercise discussion to grant leave to appeal on that issue. I will so order. Insofar as BSG requires leave to raise by way of contention the arguments it seeks to advance on that issue, then such leave should also be granted. Orders 273I make the following orders: 1. That leave to appeal be granted pursuant to s 38(4)(b) of the Commercial Arbitration Act 1984 (NSW) on the question of law more particularly described as the "fifth ground" in the plaintiff's Commercial Arbitration List Statement arising out of arbitration award GTA Arbitration No 89 published as an Interim Award on 16 August 2010 and as a Final Award on 16 March 2011. 2. That the defendants have leave to raise by way of notice of contention in the appeal matters by which it is contended that the Tribunal's conclusion on the ground the subject of Sapphire's appeal was correct. 274I will hear Counsel on the question of costs. ********** Amendments 19 June 2012 - Typographical error Amended paragraphs: 272 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 19 June 2012