Case Reports

In what circumstances is an expert determination subject to review?

In Firedam Civil Engineering Pty Ltd v Shoalhaven City Council [2010] NSWCA 59 (19 April 2010) , the New South Wales South Court of Appeal found that an expert determination was not binding upon the parties because the Expert made inconsistent findings of fact and did not give adequate reasons for his determination.

Although not necessary to consider whether the Expert was required to give reasons to the standard with which those exercising a judicial function must comply, the Court reflected upon what standard of reasons are required to be provided by an arbitrator.  Even assuming that the standard was a lesser one, experts who are required to give reasons “should explain succinctly why, in light of what happened, they reached their decision and what the decision is (Bremer Handelsgellshcaft mbH v Westzucker GmbH ( No2) [1981] 2 Lloyd’s Rep 130 at 132-3 referring to the obligations of arbitrators: compare Oil Basins Ltd v BHP Billiton Ltd [2007]VSCA 255;(2007) 18VR 346 and Gordian Runoff Limited v Westport Insurance Corporation [2010] NSWCA 57). This standard is not complied with if the ultimate basis for a decision cannot be discerned because of inconsistency of reasons or findings.”

On this basis, the Court concluded that the contractual requirement that the Expert give reasons for his decision was not satisfied.

In a separate judgment, Campbell JA also cautioned against drawing analogies between arbitration and expert determination.