Merthyr (South Wales) Ltd v Cwmbargoed Estates Ltd
| Jurisdiction | England & Wales |
| Judge | Paul Matthews |
| Judgment Date | 25 March 2019 |
| Neutral Citation | [2019] EWHC 704 (Ch) |
| Docket Number | Case No: E30BS941 |
| Court | Chancery Division |
| Date | 25 March 2019 |
[2019] EWHC 704 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN BRISTOL
BUSINESS LIST (ChD)
Bristol Civil Justice Centre
2 Redcliff Street, Bristol, BS1 6GR
HHJ Paul Matthews
(sitting as a Judge of the High Court)
Case No: E30BS941
Hugh Sims QC (instructed by Veale Wasbrough Vizards LLP) for the Claimant
Adam Deacock (instructed by Blake Morgan LLP) for the Defendants
Consideration on the papers without a hearing
Introduction
This is my judgment, after consideration on the papers, but without a hearing, of an application under s 69 of the Arbitration Act 1996 for permission to appeal against the arbitration award of Mark Banton dated 13 August 2018. That award arises out of a dispute between the parties to a lease, dated 14 March 1997 and made between the second defendant as landlord and CLH Ltd as tenant, concerning the calculation of an additional rent reserved by that lease, and known as Production Related Rent (“PRR”). This additional rent relates to the price or value of minerals mined from the demised land and subsequently sold or otherwise disposed of. In fact, the only mineral so mined has been coal.
The lease was granted, for a term of 999 years from 14 March 1997, of land forming part of Merthyr and Gelligaer Common, Mid Glamorgan, Wales. The current landlord is the first defendant. The current tenant is the claimant, CLH Ltd having assigned the lease to it in 2002 (both tenant companies at that time having a common director). That lease by clause 8 provided for the arbitration of any dispute by
“an independent chartered surveyor experienced in mineral matters to be appointed by agreement between the parties or failing agreement to be appointed by the President for the time being of the Royal Institution of Chartered Surveyors …”
Rent, including PRR, was paid under the lease without any problem from 1997 until 2016, when the tenant company was sold and its beneficial ownership changed. Thereafter a dispute arose between the parties as to the calculation of PRR. An application was made pursuant to the lease to the Royal Institution of Chartered Surveyors for the appointment of an arbitrator.
Mr Banton was appointed on 19 May 2017. He is a chartered surveyor, with particular experience in dealing with minerals and mineral extraction. The arbitration hearing was held from 25 to 29 June 2018 in Bristol, at which oral evidence was given and legal arguments were put. A curiosity of the hearing is that the landlord called evidence from witnesses on both sides of the original transaction. The tenant however called witnesses from neither. As I have said, the award is dated 13 August 2018.
Procedure
The claimant issued the claim form on 10 September 2018 seeking both (i) leave to appeal, and, if leave be granted, to appeal against the final award under section 69 of the 1996 Act, on the basis of a mistaken construction of the lease, and also (ii) for the court to set aside the award and/or remit matters to the arbitrator, pursuant to section 68 of the 1996 Act, on the basis of an alleged serious irregularity. The claim was supported by a witness statement of Nicholas Martindale, the claimant's solicitor, dated 10 September 2018. The allegations of serious irregularity relate to alleged failures by the arbitrator to address issues which it is said were before him. In this judgment I am concerned only with the first issue, leave to appeal under section 69.
The papers were first referred to me on 19 September 2018. On 24 September 2018 I told court staff that the claim should first be served and then I could consider the defendants' reaction. A certificate of service was filed, dated 10 October 2018, as it happens on the same day as the defendants' acknowledgement of service. The defendants' Respondents' Notice, skeleton argument and a witness statement of Sian Jones, the defendant's solicitor, were all filed on 23 October 2018. The claimant filed a further written argument in reply to the defendant's skeleton argument on 12 November 2018, accompanied by a second witness statement of Nicholas Martindale dated the same day.
Following an enquiry by the defendants' solicitors on 17 December 2018 the papers were referred to me again and I asked court staff to ascertain whether the parties were agreed that the matters in dispute should be determined on paper or whether they sought a hearing. In fact this question was not put to the parties until 5 January 2019. By an email dated 9 January 2019 the claimant asked for a “rolled up” hearing. This was referred to me on 14 January 2019. The next day I saw this and asked whether the defendants agreed. The court wrote to the defendant solicitors on the 26 January 2019.
On 1 February 2019 the defendant solicitors emailed the court to say that the defendants did not agree with the claimant's proposal, but were concerned with the time being taken for this matter to proceed. That email was referred to me on 11 February 2019, when I was occupied with other, urgent matters. The defendants' solicitors telephoned the court again on 5 March 2019 and followed up with an email of 6 March 2019. As was explained to them, I was sitting at the Rolls building in London for 2 weeks from 25 February 2019, and then had a week's leave. I am sorry for the delay in dealing with this matter, which has been caused partly by pressure on resources in the court service and partly by unforeseen illness in October and November last year, and other work commitments of my own.
Section 69
So far as material, section 69 of the Arbitration Act 1996 provides as follows:
“69 Appeal on point of law.
(1) Unless otherwise agreed by the parties, a party to arbitral proceedings may (upon notice to the other parties and to the tribunal) appeal to the court on a question of law arising out of an award made in the proceedings.
[…]
(2) An appeal shall not be brought under this section except—
(a) with the agreement of all the other parties to the proceedings, or
(b) with the leave of the court.
The right to appeal is also subject to the restrictions in section 70(2) and (3).
(3) Leave to appeal shall be given only if the court is satisfied—
(a) that the determination of the question will substantially affect the rights of one or more of the parties,
(b) that the question is one which the tribunal was asked to determine,
(c) that, on the basis of the findings of fact in the award—
(i) the decision of the tribunal on the question is obviously wrong, or
(ii) the question is one of general public importance and the decision of the tribunal is at least open to serious doubt, and
(d) that, despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the court to determine the question.
(4) An application for leave to appeal under this section shall identify the question of law to be determined and state the grounds on which it is alleged that leave to appeal should be granted.
(5) The court shall determine an application for leave to appeal under this section without a hearing unless it appears to the court that a hearing is required.
(6) The leave of the court is required for any appeal from a decision of the court under this section to grant or refuse leave to appeal.
[…]”
What kind of procedure for determining leave?
A procedural question which arises at the outset is whether I should deal with the application for leave to appeal under section 69 on the papers, separately from the claim under section 68. In this connection, section 69(5) provides a default position that the question of leave is to be decided without a hearing, “unless it appears to the court that a hearing is required”.
In HMV Ltd v Propinvest Friar Limited Partnership [2011] EWCA Civ 1708, Arden LJ (with whom Longmore and McFarlane LJJ agreed, though Longmore LJ also added some comments of his own) said:
“39. … It is clearly part of the statutory policy that arbitration should be speedy and that, where possible, there should be a cheaper method of dispute resolution than court proceedings. This statutory policy has implications for the procedure which the court should adopt for dealing with applications for permission to appeal. I need not repeat the passage I have already set out from the judgment of Lord Diplock [in The Nema [1982] AC 724, 742–43], but it follows, it seems to me from what he held in that passage, that these applications should normally where possible be dealt with on paper.
40. … the point I wish to make is it must be rare that a court finds it necessary to call for further argument orally and also to direct a rolled up procedure as in this case. The danger of a rolled up process is that the judge does not answer the anterior statutory questions in section 69, namely whether the pre-conditions to the grant of leave to appeal in Section 69 are all satisfied. Those questions are ones which statute requires to be answered before the substantive issue on the appeal is fully argued.”
As I have already said, however, the claimant asked that I deal with both the application for leave to appeal and the serious irregularity matters together in what it called a single, “rolled up” hearing. But in using this term the claimant evidently meant to include not only the permission point and the substantive appeal (if permission be given) but also the serious irregularity points under section 68 raised in the claim form.
The claimant referred me to the much earlier decision of Colman J in Bulfracht (Cyprus Ltd v Boneset Shipping Co Ltd, “The MV Pamphilos” [2002] EWHC 2292 (Comm), where there was similarly a claim containing an application to set aside an award for serious irregularity under...
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R v K
...intellectual aberration” so as to justify refusing to make an order under s25 or giving permission to appeal (see e.g. Merthyr (South Wales) Ltd v Cwmbargoed Estates Ltd [2019] EWHC 704 (Ch)). The arbitrator had correctly exercised his discretion and if the decision had been made by a dist......