Elspan International v Eurocopter International Pacific


LIMITED [1999] NSWCA 418

NSW Court of Appeal – 1 December 1999


Markham was the arbitrator of a building dispute between Elspan and Eurocopter.

Elspan claimed that the arbitrator’s award should be set aside on the ground that the arbitrator was guilty of misconduct. The alleged misconduct by Markham included a delay in making the award and giving unsatisfactory reasons for the delay in making the award.

The other ground for an allegation that Markham was guilty of misconduct was that he had made findings on points on which the director of Elspan had not been cross-examined about or informed were at dispute between the parties.


Did the conduct of Markham amount to misconduct and if there was misconduct should the Court set aside his award?


While the conduct of Markham could arguably amount to misconduct the alleged misconduct did not justify the removal of the arbitrator or the setting aside of his award.


Sheller JA said:

“It is common enough for judges and arbitrators to prefer the evidence of one witness to the evidence of another and to conclude that evidence given is not true. It is usually unnecessary to go further. A witness may give untrue evidence for a variety of reasons, most of which have to do with the frailty of human memory. It is quite another matter to conclude that a witness, knowing the truth, has deliberately set out to mislead a tribunal of fact. If it is necessary to reach such a conclusion it should be based on the surest of ground.” – para 13 of [1999] NSWCA 418.

“Even though the claimant has an arguable case of misconduct to ground an order under s42 [of the Commercial Arbitration Act] or an appeal under s38, I do not think the appeal to this Court which the claimant seeks leave to bring has any prospect of success. In my opinion, the alleged misconduct, even if established, would not, in the circumstances, justify the removal of the arbitrator, the disturbing of his findings or the remitting of the question ofcosts to any other arbitrator. In addition to the evidence supporting [Markham’s] findings ….. [Markham’s] findings on credit were made in  circumstance where Mr Ellen’s [the director of Elspan] credit was very much an issue to which the claimant and its advisers were aware.” – para 24 of [1999] NSWCA 418.


An allegation that an Arbitrator is guilty of misconduct is not by itself a sufficient reason to justify the setting aside of the Arbitrator’s award.

There must be evidence to suggest that the decision of the Arbitrator was affected by the alleged misconduct before a Court will determine whether the Arbitrator is in fact guilty of misconduct.

Barbieri v Fairfield City Council


NSW Court of Appeal – 29 October 1999


Barbieri was injured when his leg fell into a hole under a broken manhole cover. The manhole cover gave access to the stormwater drain system. The cover by replaced by the Council on the Monday following the accident.

Barbieri sued the Council for negligence. There was no direct evidence that the Council had broken the manhole cover though a contractor engaged by the Council to complete roadworks may have damaged the cover.

Council claimed that principle of nonfeasance protected it from being liable to Barbieri. The principle of nonfeasance provides that no civil liability is incurred by an authority responsible for roads for neglect to construct or repair a road.


Was the stormwater drain system and manhole cover part of the road system?

Had the Council actually caused the danger (the broken manhole cover) and therefore not entitled to rely on the principle on nonfeasance.


The stormwater drain system was part of the road and therefore the principle of nonfeasance could apply.

There was evidence to prove that the Council had no knowledge of the broken cover and/or that it caused the damage to the cover. It was more likely that the contractor may have damaged the manhole cover while completing the road works.


Davies AJA said:

“It follows that, if the Fairfield City Council did not cause the damage to the storm water cover, it was not obliged, even if it was aware of the danger, to give a warning about it. It was, moreover, entitled to remove any barricade which had been placed over the storm water cover by a local resident without authority. The placing of the barricade by Mr Griffith did not impose upon the Council a liability either to repair the damage or to remove the danger.

The Council was entitled to remove from the footpath any barricade or warning placed there by a resident without warning.” – paragraph 17 of [1999] NSWCA 405 “Accordingly, if a Readymix truck damaged the storm water cover, it did an act which was not required by the roadworks and was not authorised by the Fairfield City Council.

The Council was liable under principles of negligence for this act which was not a natural or probable consequence of the roadworks. The damage to the storm water cover did not result from any work for which the Council had responsibility but for the negligence of the truck driver.” – paragraph 23 of [1999] NSWCA 405


In this case the Council was not liable because there was no evidence that it had broken the manhole cover.

However if the Council had engaged contractors to work in the area and had authorised the contractor to do work which may have damaged the manhole cover then Council may have been liable for the claim.

Councils should be careful when authorising contractors to complete road works and ensure that contractors do not engage in activities which may damage part of a road.

This publication is intended to be a topical report on recent cases in the construction, development and engineering industries. This publication is not intended to be a substitute for professional advice, and no liability is accepted. This publication may be reproduced with full acknowledgement.

Jim Doyle

Tel.: 1800 888 783