Case Reports

Expert Determination - Enforceability

In Hardesty & Hanover International Llc & Ors v Abigroup Contractors Pty Ltd [2010] SASC 44 (26 February 2010), the Full Court (Sulan, Vanstone and Layton JJ) of the Supreme Court of South Australia heard an appeal by Hardesty & Hanover International LLC (Hardesty) against two separate decisions of Justice Anderson that the determinations of an expert, purportedly made in accordance with the dispute resolution provisions of a contract between Hardesty and the respondent, Abigroup Contractors Pty Ltd (Abigroup), were not binding.

Anderson J refused to enforce the Expert's determinations, by which Abigroup was ordered to pay the professional fees of Hardesty for its design and construction support services for the Port River Expressway bridges on grounds that:

• there was a cross-referencing error in the expert determination clause in the contract that Abigroup had drafted, which permitted Abigroup to treat the clause as void for uncertainty; and
• the way in which the disputes were re-formulated by Hardesty and referred to the Expert with a view to ensuring that any amount awarded would not exceed the $500,000 ceiling amounted to a “contrivance” which was not contemplated by the agreement.

Anderson J gave comprehensive reasons for his decision that the Expert’s determinations were not binding due to lack of jurisdiction.

The Full Court reviewed the differences between the dispute resolution regimes created by the contract. There were two materially distinct regimes, general condition 8 (GC8) and special condition 12 (SC12), which would not operate to lead to a binding determination; although in each case, awards in excess of $500,000 were expressed not to be binding.

In relation to Hardesty’s appeal against Anderson J's decision [2009] SASC 95 that the determinations of the Expert were unenforceable, the Full Court dismissed the appeal, finding that there was no compliance with either regime (GC8 and SC12), and therefore the Expert had acted without jurisdiction and the determination was not binding. No right of appeal existed pursuant to s 50(1)(a) of the Supreme Court Act 1935.

In relation to Anderson J's decision [2009] SASC 132 (and consequential orders), the Full Court allowed the appeal and set aside the orders.