In Lipman Pty Limited v Emergency Services Superannuation Board  NSWSCA 163, the NSW Supreme Court of Appeal affirmed the trial judge’s decision, finding that the particular dispute resolution provision did not give a right of appeal to the courts. In the principal judgment, Allsop J reasoned as follows:
The applicant submitted that his Honour erred by failing to recognise and give proper weight to the words of cl 42.10 and in particular the phrase commencing with the word “unless” which operated, it was said, to make the expert determination never final and binding should a notice of appeal be filed.
6 I disagree. I find the reasons of the primary judge to be correct. His Honour approached the construction of the dispute resolution clause by reference to a liberal approach expressed in Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160 and Fiona Trust & Holding Corporation v Privalov  UKHL 40;  1 Lloyd’s Rep 254 . The approach is also reflected in the reasons of the Full Court of the Federal Court in Comandate Marine Corporation v Pan Australia Shipping Pty Ltd  FCAFC 192; 157 FCR 45 and can now as Lord Hope of Craighead said in Fiona Trust be seen as part of the law of international commerce (at 260 ). This is of course domestic commerce but the principle applies equally.
7 Further, that these cases were concerned with arbitration clauses and not expert determination clauses does not detract from their equal force to the type of dispute resolution clause that the parties agreed here.
8 To adopt the liberal approach is not to depart from the meaning of the words chosen by the parties. Rather, it is to give effect to a coherent business purpose through an assumption commercial courts around the world will make that parties are unlikely to have intended multiple venues or occasions for the resolution of their disputes unless they say so.
9 Here there occurred what the commercial parties would plainly have anticipated as likely could have been the case, that is a major dispute: the conduct of a detailed case before people experienced in the building industry and the production of a careful and detailed expert determination – all this at considerable expense. Is it to be thought likely that the mere statement by one side that they wish to seek to discuss and negotiate the result in good faith would mean that the product of the expert determination would never be binding? Far more likely is the construction favoured by the primary judge that the clause as a whole meant that the expert determination was to be fully given effect to subject to it not being final and binding if the parties were able to give substance and effect to the good faith negotiations that were anticipated and provided for by cl 42.11.
10 In my view, substantially for the reasons his Honour gave and for these additional reasons the expert report and determination is to be given effect to, not in a provisional way, but in a way the balance of the clause identifies.
The Court of Appeal affirmed the decision of the trial judge in concluding that the particular dispute resolution provision was not be interpreted to mean that, failing agreement, a party could appeal to the court. The Court of Appeal:
- affirmed the liberal approach to construction of the dispute resolution provision clause;
- place no weight on the liberal approach authorities relating to arbitration clauses rather than expert determination clauses;
- adopted the “coherent business purpose” through an assumption commercial courts around the world make that parties are unlikely to have intended multiple venues or occasions for the resolution of their disputes unless they say so;
- the better construction was that the expert determination be fully given effect, subject to it not being final and binding if the parties were able to give substance and effect to the good faith negotiations that were anticipated and provided.
The 2010 trial decision is at Empire Glass and Aluminium Pty Limited v Lipman Pty Ltd  NSWSC 710. And see also the 2017 case of Empire Glass and Aluminium Pty Limited v Lipman Pty Ltd  NSWSC 253 involving a similar dispute resolution provision where the NSW Supreme Court concluded that a right of appeal to the courts would be available.