Fox v PG Wellfair Ltd
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE DUNN,LORD JUSTICE O'CONNOR |
| Judgment Date | 06 May 1981 |
| Judgment citation (vLex) | [1981] EWCA Civ J0506-2 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 81/0187 |
| Date | 06 May 1981 |
[1981] EWCA Civ J0506-2
The Master of the Rolls
(Lord Denning)
Lord Justice Dunn and
Lord Justice O'Connor
81/0187
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(MR. JUSTICE ACKNER)
Royal Courts of Justice.
MR. DEREK WOOD, Q.C. and MISS JOANNE MOSS (instructed by Messrs. S. Rutter & Co.) appeared on behalf of the Applicants (Respondents).
MR. GERALD BUTLER, Q.C. and MR. ALASTAIR MacGREGOR (instructed by Messrs. Stafford Clark & Co.) appeared on behalf of the Respondents (Appellants).
Lord Justice Dunn, in the course of his valuable judgment, has set out the facts in detail. I will only state sufficient to illustrate the point of law that arises.
In 1969 a block of flats was built in London. Seven storeys high. Thirty flats all told. There were many defects in construction. The flat-dwellers claimed damages against the builders. The dispute was submitted to arbitration. An arbitrator was appointed. He was of acknowledged competence and skill. He conducted the proceedings before him with the utmost diligence and the utmost good faith. The hearings spread over ten days. Experts of high repute gave evidence. The arbitrator knocked down the amount from £93,000 to only £13,000. The flat-dwellers were so aggrieved that they made complaint against the arbitrator. The judge upheld their complaint. He has removed the arbitrator for misconduct. The judge has set aside his award: and has ordered some other person to be appointed in his place. It is a serious matter for the parties because of all the time and money that have been wasted. It is a serious matter for the arbitrator. That goes without saying.
The most extraordinary feature of the whole case is, however, that only the flat-dwellers were represented at the hearings before the arbitrator. The builders were unrepresented. Yet the flat-dwellers lost and the builders won. The arbitrator knocked down the claim by 86 per cent.
THE BUILDING AGREEMENT
The block of flats was called Dophin Court, Woodlands, London, N.W.11. The developers sold the flats to purchasers on long leases for 125 years at prices ranging from £7,000 to £10,000 a flat. The building agreement was made by each purchaser with the builders, P.G. Wellfair Limited. They were registered with the National House-Builders Registration Council (now known as the National House-Building Council). That is the equivalent of an insurance company which guarantees the due performance by the builders of their obligations under the agreement. P.G. Wellfair Limited is now in compulsory liquidation. So the only remedy is against the National House-Building Council. They agreed "to honour any award made by an Arbitrator…as a consequence of the failure of the Builder to make good defects in the dwelling notified in writing within two years from the date of the Certificate and consequent upon non-compliance with the Council's Requirements if for any reason the Builder shall fail to honour such award or judgment".
THE ARBITRATOR
The flat-dwellers complained of many defects within the two years. They formed a Residents' Association to protect their interests. In 1973 they applied for the appointment of an arbitrator. The Presidents of the Royal Institutes appointed Mr. Spencer Carlton Rodgers. He is a chartered architect and a chartered surveyor and a member of the Bar.
Points of Claim were delivered on the 15th March, 1974. Points of Defence on the 12th July, 1974. The principal hearings took place before the arbitrator in October and November 1977. The flat-dwellers were represented by leading counsel. The builders were not represented at all. Nor was the National House-Building Council. They decided of their own free will to let the proceedings go undefended.
THE ARBITRATOR'S POINT OF VIEW
The arbitrator has set down in an affidavit his view of his duty:
"In a case where one party is unrepresented, I had always understood that it was the duty of the tribunal to see to it that the interests of the unrepresented party were protected and that no Award was made against that party unless the claim was properly proved. I was therefore careful to handle the case, and did to the best of my ability handle the case, with this in mind.
"The applicants during the main hearing called two witnesses to fact and four experts, to all of whose evidence I listened carefully. Where clarification was required, I intervened, so that the effect of their evidence was clear to me. However, I did not feel that it was part of my duty to indicate at the hearing that I did or did not accept any particular evidence. That is in my submission a matter for subsequent consideration and decision and for the Award".
On his understanding of his duty the arbitrator rejected a large part of the evidence of Mr. Thomas Akroyd who was a structural engineer of the highest qualifications. He had been a Vice-President of the Institution of Structural Engineers. The arbitrator rejected a large part of the evidence of Mr. Ramsay Wilson, a Fellow of the Royal Institution of Chartered Surveyors, who made a schedule of defects and estimated the cost of remedy. He rejected a large part of the evidence of Mr. Jonathan Steer who was a chartered quantity surveyor and an examiner for the Quantity Surveying Division of the Royal Institution. He rejected a large part of the evidence of Mr. Eric Shapiro who gave evidence of consequential damage.
In rejecting their evidence, the arbitrator did so without giving any indication to the witnesses or to counsel for the flat-dwellers that he was rejecting it. If he had given them any indication of his views, they might well have been able to correct them. That is the principal point in the case.
THE LAW
There are some arbitrations in which the arbitrator is expected to form his own opinion and act on his own knowledge without recourse to evidence given by witnesses on either side: such as an arbitrator who is to decide as to whether goods are up to sample, see Mediterranean & Eastern Export Ltd. v. Fortress Films (1948) 64 Times Law Reports 337. But there are other arbitrations in which the arbitrator is expected to receive the evidence of witnesses and the submissions of advocates and to be guided by them in reaching his conclusion: such as arbitrations on shipping contracts or on building contracts. In such cases the arbitrator is often selected because of his knowledge of the trade—so that he can follow the evidence and the submissions. But he must act judicially. He must not receive evidence in the absence of the other party, and so forth. In the present case if the defendants had been represented I have no doubt that the plaintiffs' experts would have been cross-examined so as to throw doubt on their findings and on their opinions: and the defendants would have called experts to support the line of cross-examination. The arbitrator would then have been able to form a judgment—based on evidence other than his own.
I cannot think it right that the defendants should be in a better position by failing to turn up. Nor is it right that the arbitrator should do for the defendants what they could and should have done for themselves. His function is not to supply evidence for the defendants but to adjudicate upon the evidence given before him. He can and should use his special knowledge so as to understand the evidence that is given—the letters that have passed—the usage of the trade—the dealings in the market—and to appreciate the worth of all that he sees upon a view. But he cannot use his special knowledge—or at any rate he should not use it—so as to provide evidence on behalf of the defendants which they have not chosen to provide for themselves. For then he would be discarding the role of an impartial arbitrator and assuming the role of advocate for the defaulting side. At any rate he should not use his own knowledge to derogate from the evidence of the plaintiffs' experts—without putting his own knowledge to them and giving them a chance of answering it and showing that his own view is wrong. Such is the way in which we dealt in the pensions cases when a medical expert was himself a member of the tribunal, see Moxon v. Minister of Pensions (1945) King's Bench 490 and Starr v. Minister of Pensions (1946) King's Bench at pages 353–4.
I am afraid that the arbitrator fell into error here. He felt that it was his duty to protect the interests of the unrepresented party—in much the same way as a judge protects a litigant in person. But in a case like this I do not think it is the duty of the arbitrator to protect the interests of the unrepresented party. If the defendants do not choose to turn up to protect themselves, it is no part of the arbitrator's duty to do it for them. In particular he must not throw his own evidence into the scale on behalf of the unrepresented party—or use his own special knowledge for the benefit of the unrepresented party—at any rate he must not do so without giving the plaintiffs' experts a chance of dealing with it—for they may be able to persuade him that his own view is erroneous.
The arbitrator in an affidavit uses an illuminating sentence. He says:
"I formed the view that the claim was grossly exaggerated and, if I may say so, I thought a large part of it was a 'try on'".
If that were a correct view of the claim, it was for the defendants to come before the arbitrator and show it to be so. By not...
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