Background
Pastoral Property Admin and the executor of Thomas Strachan’s estate were involved in proceedings in the Federal Circuit and Family Court of Australia (Division 2). Pastoral’s principal claim concerned the unfair-contract regime under the Australian Consumer Law. Burgoyne Capital brought a cross-claim concerning a 2022 Introduction Deed, which required disputes relating to that deed to be arbitrated in London.
Burgoyne had invoked the arbitration clause in May 2023. Pastoral commenced the Australian proceedings in December 2023, and Pastoral and the estate later pleaded that Burgoyne’s cross-claim should be stayed under s 7(2) of the International Arbitration Act 1974 (Cth). But they then pursued discovery and exchanged all trial evidence before seeking a stay in May 2026, when the matter was ready to be listed for a final hearing. The primary judge held that this conduct amounted to waiver, abandonment or repudiation of the arbitration clause and refused the stay.
The Court’s Holding
Jackman J dismissed the applicants’ application for leave to appeal, with costs. The Court held that the primary judge had made findings that the applicants had waived, abandoned or repudiated their right to rely on the arbitration clause; the references to a “strong waiver” and a “point of no return” were not merely inconclusive observations.
The proposed appeal was not sufficiently doubtful to warrant reconsideration. By knowingly pursuing the court proceedings for 14 months—including obtaining discovery and filing all evidence—without applying for a stay, the applicants unequivocally conveyed an intention not to insist on arbitration. The Court also found no substantial injustice in refusing leave: the applicants would receive a final hearing in the Australian court Pastoral had chosen, without London arbitration fees or associated travel inconvenience.
Key Takeaways
- A party may lose the right to invoke an arbitration clause through intentional and unequivocal litigation conduct.
- Seeking discovery and completing trial preparation before seeking a stay can demonstrate strong waiver or abandonment of arbitration rights.
- Leave to appeal requires both an arguable error warranting reconsideration and substantial injustice if leave is refused.
Why It Matters
The decision underscores that arbitration rights must be asserted promptly. Parties cannot generally reserve arbitration in pleadings while substantially advancing court litigation to the point where the case is ready for trial.
For cross-claims governed by arbitration agreements, the case illustrates the procedural risk of delaying a stay application while using the court’s pre-trial processes.