CH Ltd v F

• Jurisdiction: Cayman Islands
• Judge: (Collett, C.J.)
• Judgment Date: 11 March 1988
• Court: Grand Court (Cayman Islands)
• Date: 11 March 1988

Grand Court

(Collett, C.J.)

CH LIMITED

and

F

P. Lamontagne, Q.C. and T. Shea for the applicant;

N.W. Hill, Q.C. and R. Neilson for the respondent.

Cases cited:

(1) Att.-Gen. (Manitoba) v. Kelly, [1922] 1 A.C. 268; [1922] All E.R. Rep. 69.

(2) Cassir, Moore & Co. Ltd. v. Eastcheap Dried Fruit Co., [1962] 1 Lloyd”s Rep. 400, considered.

(3) Champsey Bhara & Co. v. Jivraj Balloo Spinning & Weaving Co., [1923] A.C. 480; [1923] All E.R. Rep. 235, dictum of Lord Dunedin applied.

(4) Cooper v. Anon.(1634), 3 Chan. Rep. 76; 21 E.R. 733, considered.

(5) Eastcheap Dried Fruit Co. v. N.V. Gebroeder”s Catz” Handelsvereeniging, [1962] 1 Lloyd”s Rep. 283.

(6) Fox v. Wellfair (P. G.) Ltd., [1981] 2 Lloyd”s Rep. 514, distinguished.

(7) Gillespie Bros. & Co. v. Thompson Bros. & Co.UNK(1922), 13 Ll. L. Rep 519.

(8) G.K.N. Centrax Gears Ltd. v. Matbro Ltd., [1976] 2 Lloyd”s Rep. 555.

(9) Intercontinental Natural Resources Ltd., In re, Court of Appeal (Bermuda), 1982, unreported.

(10) Knapman v. Servain, [1978] 1 W.L.R. 50; [1978] 2 All E.R. 1.

(11) Lacoste v. Cedars Rapids Mfg. & Power Co., [1928] 2 D.L.R. 1, considered.

(12) McKay v. Essex Area Health Auth., [1982] Q.B. 1166; [1982] 2 All E.R. 771, observations of Stephenson, L.J. applied.

(13) Moran v. Lloyd”s, [1983] Q.B. 542; [1983] 2 All E.R. 200.

(14) Oleificio Zucchi S.p.A. v. Northern Sales Ltd., [1965] 2 Lloyd”s Rep. 496, followed.

(15) R. v. Northumberland Compensation Appeal Tribunal, [1951] 1 K.B. 711; [1951] 1 All E.R. 268.

(16) Top Shop Estates Ltd. v. Danino (C.)UNK(1984), 1 EGLR 9, distinguished.

(17) Turner v. RoseENR(1756), 1 Keny. 393; 96 E.R. 1032, considered.

(18) Vancouver (City) and Brandram & Henderson of B.C. Ltd., ReUNK(1960), 26 D.L.R. (2d) 655.

(19) Walford, Baker & Co. v. Macfie & SonsUNK(1915), 84 L.J.K.B. 2221; 113 L.T. 180.

Civil Procedure-notice of motion-striking out-on application to strike out notice of motion or statement of claim in action begun by writ, court to determine allegations of fact by looking at those documents only and not at affidavit evidence

Civil Procedure-notice of motion-striking out-allegations in notice of motion challenging arbitrator”s award to be factual not conclusionary-no reasonable cause of action if court asked to infer misconduct from applicant”s conclusions based on contents of award

The applicant company applied by notice of motion to set aside or remit an arbitration award made in proceedings involving the parties.

It submitted as evidence, together with the notice of motion, the award and supplement containing the figures, the pleadings filed with the arbitrator and supporting affidavits. The arbitrator had disclosed no reasons for making the award and the award therefore was not a ‘speaking document.’ The applicant claimed in its notice of motion that various parts of the award were ‘excessively erroneous’ and that ‘there must have been some misconduct or some error of a type that justifies further enquiry.’

The respondent applied to strike out the notice of motion on the ground that it disclosed no cause of action, submitting that (a) the court could not refer to supporting affidavits on an application to strike out a notice of motion; (b) no errors were apparent on the face of the award, and (c) the notice of motion made no allegations of error in relation to primary facts but only those of a conclusionary nature which improperly invited the court to draw inferences as to misconduct from the context and contents of the award.

Held, striking out the notice of motion:

(1) It was appropriate to treat the striking out of a notice of motion in the same way as the striking out of a statement of claim in an action commenced by writ, as both documents had to set out all the relevant allegations of fact, and it was well settled that resort could not be had to affidavits in actions commenced by writ. For the purpose of determining what were the material allegations of fact put forward by the applicant in its notice of motion, it was proper that the court look only at that document, the award, its supplement and the pleadings filed with the arbitrator (in so far as such reference was necessary to explain the figures given in the supplement) without regard to the affidavits submitted (page 520, lines 8–26; page 520, line 37 – page 521, line 13).

(2) The notice of motion contained no allegations of primary fact which were capable of being proved at the trial. The allegations were in fact conclusions based on the contents of the award, amounting in large part to no more than claims that the arbitrator had made gross errors of law and fact from which the court could not infer misconduct. Even if the applicant had been able to bring evidence to show that the arbitrator had made such errors, he would still not have had a reasonable cause of action unless the errors appeared on the face of the award. In particular, since the award revealed none of the procedures adopted by the arbitrator, the court would not be able to go behind the award to examine the adequacy of the evidence which had led the arbitrator to his findings of fact. Accordingly, no reasonable cause of action had been shown and the notice of motion would be struck out (page 521, line 38 – page 522, line 7; page 522, lines 21–32; page 523, lines 7–25; page 523, line 33 – page 524, line 14; page 526, line 6 – page 527, line 28).

COLLETT, C.J.: This was an application by the respondent
pursuant to O.18, r.19(1)(a) of the Rules of the Supreme Court to
strike out, on the ground that it discloses no reasonable cause of
action, a notice of motion filed on July 23rd, 1987 by the applicant
10	which seeks to invoke the jurisdiction of this court to set aside or
remit an award given in arbitration proceedings between the
parties. That arbitration concerned a building dispute out of
which a revised claim by the present applicant and a counterclaim
by the present respondent were referred to a single arbitrator
15	who, after hearing evidence and counsel”s submissions, rendered
a final award on June 5th, 1987. By the terms of that award a
balance of US$536,868.92 was adjudged to be due from the
applicant to the respondent and the incidence of the taxed costs
was apportioned to be due as to 80% from the applicant, and
20	20% from the respondent respectively.
The notice of motion sought to challenge the award upon a
number of grounds which it will be necessary to examine closely.
They are as follows:
‘1. An order that the award made between the parties to
25	the above-mentioned arbitration by Maurice J. Stoppi, the
arbitrator therein, dated June 5th, 1987 may be set aside
and/or remitted on the following grounds:
(a) the sums awarded in relation to paras. 7(i), (ii), (iii),
(iv), (v), (vi) are clearly so excessively erroneous that
30	there must either have been some misconduct or
some error of a type that justifies further enquiry
either by remission or by setting aside having regard
to the uncontradicted testimony as to the costs of
remedying these items put before the arbitration by
35	the applicant”s witnesses;
(b) the failure to make an award in respect of claims
under paras. 7(i), (ii), (iii), (v), 8 (i), 9 (iv) is clearly
so excessively erroneous that there must either have
been some misconduct or some error of law as to
40	justify further enquiry either by remission or by
setting aside having regard to the uncontradicted

testimony of the applicant”s witnesses and the docu-
mentary evidence placed before the arbitration;
(c) the reliance by the arbitrator on the re-re-amended
defence and counterclaim dated April 27th, 1987 is
5	so clearly erroneous and unjust that there must have
either been some misconduct or some error of law to
justify further enquiry either by remission or by
setting aside;
(d) the failure by the arbitrator to set off the sums of
10	US$58,000 and US$100,000 in terms of paras. 18 and
21 of the amended reply and defence to the re-
amended defence and counterclaim is clearly so
excessively erroneous that there must either have
been some misconduct or some error of law as to
15	justify further enquiry either by remission or by
setting aside having regard to-
(i) the uncontradicted evidence of the applicant”s
witnesses with regard to the transaction in-
volving the Caterpillar tractor.
20	(ii) the terms of the agreement between the
parties as amended in November 1980.
(iii) the admission by the respondent”s attorneys
contained in a letter dated October 20th,
1983;
25	(e) the sum awarded under para. 18(a)(3) of the counter-
claim is clearly so excessively erroneous having
regard to the uncontradicted evidence of the appli-
cant”s expert witness;
(f) the sum awarded under para. 18(a)(4) of the counter-
30	claim is clearly so excessively erroneous that there
must have been either some misconduct or some
error of law as to justify further enquiry either by
remission or by setting aside having regard to the
findings under para. 7 of the claim, the uncontradicted
35	evidence of the applicant”s witnesses, the admission
by the respondent”s

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