• A determination will not be binding if it has been obtained by fraud or collusion, or was not made in accordance with the contract. • A determination may be binding, but not final until expiry of a period for issuing a "notice of appeal" or "notice of dissatisfaction". • If a "notice of appeal" or "notice of dissatisfaction" is issued within the prescribed time period, then the dispute may be pursued in another prescribed forum or the courts. The recent case of Lipman Pty Ltd v Empire Facades [2017] NSWCA 217 provides a good illustration of the importance of considering the terms of the contract. Lipman concerned a contract which provided for the giving a notice of appeal. Lipman (as principal) and Empire (as contractor) were parties to a contract for the refurbishment of premises in the Sydney CBD. The Contract contained the following provisions: "42.11 Determination of expert The determination of the expert:... (b) will be:… (ii) final and binding, unless a party gives notice of appeal to the other party within 15 Business Days of the determination; and (c) is to be given effect by the parties unless and until it is reversed, overturned or otherwise changed under the procedure in the following subclauses. 42.12 Litigation If the determination of the expert does not resolve the dispute then, subject to clause 42.11, either party may commence proceedings in relation to the dispute." Disputes arose about the performance and termination of their contract. As required by the contract, the disputes were referred to senior executive negotiation, then expert determination. The appointed expert made a finding in favour of Lipman. Empire gave Lipman a "notice of appeal" under clause 42.11 within 15 business days. On the same day, it commenced court proceedings about the very same issues that had been considered by the expert. Lipman applied to stay the proceedings. Lipman argued that a party could only commence proceedings if the expert did not "resolve the dispute", and the party gave a notice of appeal within 15 Business Days. As there was no suggestion that the expert determination was void or invalid, Lipman argued that the expert had "resolved the dispute", so there was no right to give a notice of appeal. Both the trial judge and NSW Court of Appeal rejected Lipman's argument. The Court interpreted clause 42.12 as providing a right to commence court proceedings on issuance of a notice of appeal. To interpret clause 42.11 as preventing court proceedings in these circumstances would "not really provide for a right of appeal at all". In making this decision the Court rejected Lipman's argument that the expert determination had "resolved the dispute" because the expert had carried out the task required by contract and expert agreement, and the determination itself was in accordance with the requirements of the contract. The fact that the determination was "valid" did not mean that it had "resolved the dispute".
**Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.