In this case, the parties engaged an expert to resolve a dispute according to a term of their civil works contract. When the expert found generally in favour of the appellant, the respondent sought a declaration that the expert determination was not binding. The respondent argued that the determination was affected by errors and the expert had failed to give proper reasons for his decision.
The High Court unanimously held that the expert determination was adequately explained and contained no inconsistencies. It also provided general guidelines as to whether a Court has power to review an expert determination.
- as a general rule, mistake or error in an expert's reasoning will not automatically result in the determination being not binding on the parties, unless the expert failed to do what was required by the contract between the parties;
- case law about the requirement to give reasons should be applied carefully as cases involving an expert determination are likely to be decided based on their individual facts and the specific contractual terms relating to the expert's engagement; and
- since an agreement to rely on an expert determination is a private contractual arrangement that is not governed by a statutory regime, the standard of reasoning required from an expert is generally lower than that required of an arbitrator or judicial officer.
Parties entering into a contract with an expert determination clause should consider whether reasons are required and when the expert's decision will (or won't) be binding, as an expert determination pursuant to a contract will generally be binding unless it fails to meet the requirements specified in the contract.