It seems that the challenges to VCAT’s jurisdiction are never-ending. Recently, in Casualife Australia Pty Ltd v ANI Commercial Storage Pty Ltd [2023] VSC 576, Tsalamandris J held that a dispute about a particular lot of goods was exclusively within VCAT’s jurisdiction, notwithstanding the prosecution in the County Court of a dispute between the same two parties about a similar lot of goods raising similar legal issues.
The provision at the centre of the question of jurisdiction is, in my experience, not often relied upon or referred to. I daresay that many practitioners just don’t know about it. You will recall from my earlier post about VCAT’s jurisdiction that the Australian Consumer Law (Vic) (ACL (Vic)) is made a law of Victoria by s 8 of the Australian Consumer Law and Fair Trading Act 2012 (ACLFTA). The ACLFTA also contains provisions regulating various aspects of commerce, including supply of goods (with references to the application of the Goods Act 1958) or services and other specific types of business, and the functions and powers of Consumer Affairs Victoria.
Chapter 7 of the ACLFTA (ss 182 to 192) is entitled “Functions of VCAT”. Section 184(1) provides that “VCAT may hear and determine a consumer and trader dispute.” That is a conferral of jurisdiction. Despite the label, the expression “consumer and trader dispute” is not defined as a dispute between someone who falls within a definition of “consumer” and someone who falls within a definition of “trader”. Rather, s 182(1) (with some nuances in sub-ss (2) and (3)) defines the expression as:
a dispute or claim arising between a purchaser or possible purchaser of goods or services and a supplier or possible supplier of goods or services in relation to a supply or possible supply of goods or services.
That is obviously a very broad jurisdiction. Many commercial disputes would fall within that definition.
In Casualife, s 187 was central to the dispute. Entitled, “Exclusion of other jurisdiction”, it provides:
(1) Once an application has been made to VCAT … in respect of a consumer and trader dispute or in respect of any other matter in respect of which VCAT has jurisdiction under this Act, the issues in dispute are not justiciable at any time by a court unless—
(a) the proceeding in that court was commenced before the application to VCAT was made and that proceeding is still pending; or
(b) the application to VCAT is withdrawn or struck out for want of jurisdiction; or
(c) VCAT refers the proceeding to that court under section 77 of the Victorian Civil and Administrative Tribunal Act 1998 [(VCAT Act)].
(2) Subsection (1) applies to all the issues in dispute, whether as shown in the application or emerging in the course of the proceeding in VCAT.
Casualife owned certain goods. ANI was storing them. Casualife wanted them returned. ANI refused to do so, asserting that it was owed money. Relevantly, the following took place:
23 December 2022: Casualife commenced a proceeding in the County Court against ANI.
28 December 2022: ANI demanded payment of certain invoices. Casualife denied liability.
17 January 2023: The County Court heard and refused an application by Casualife for an injunction in respect of one set of goods, called the “ex-Dandenong goods”. (The other set was known as the “other goods”.)
7 February 2023: Casualife filed and served an amended statement of claim.
23 March 2023: Casualife applied to VCAT for an injunction for delivery of the other goods. The application did not contain ANI’s correct address, and so VCAT did not serve the application on ANI.
3 April 2023: ANI filed and served a defence and counterclaim, by which it brought the other goods into issue.
20 April 2023: The VCAT injunction application came on for hearing in ANI’s absence, and the error with respect to ANI’s address came to the member’s attention. The hearing was adjourned.
24 April 2023: ANI applied for the dismissal or striking-out of the proceeding under s 75 of the VCAT Act.
5 May 2023: ANI filed written submissions.
9 May 2023: Casualife filed written submissions, including reliance on s 187 and asserting that the exception to VCAT’s exclusive jurisdiction in s 187(1)(a) did not apply because Casualife made its application to VCAT before ANI filed its counterclaim.
11 May 2023: Member Buchanan heard the applications. (ANI had submitted that VCAT could, in the alternative to exercising its powers under s 75 of the VCAT Act, “refer” the matter to the County Court under s 77. However, because Member Buchanan was not a judicial member, he could not exercise that power. Parliament is in the process of amending s 77 to loosen that restriction.) He granted the s 75 application. In ex tempore reasons, he said:
while there may be two classes of goods held by the Defendant in the County Court proceeding, the problem is that the defendant refuses the Plaintiff, Casualife, access to all of them, and it’s inherently logical and plausible that Casualife would, when preparing this amended defence, have intended to (inaudible) a deal with all of its (inaudible) to the one proceeding. To not do so, would be unwise, a waste of resources of either the County Court or this Tribunal, and a waste of people’s time and energy. Many of the rules about these sorts of things, including the rules set out in Section 75 of the VCAT Act, are aimed at precisely avoiding that kind of waste of energy and resources. These things would be known to an experienced practitioner like Mr Guss through the amended Statement of Claim, and, quite reasonably, were understood by the Defendant in the County Court proceeding to place the whole kit and caboodle in issue, which is where it should have been, and the Defendant in the County Court proceeding was quite entitled, in my view, to see that there was, clearly stated, a dispute in relation to what we might call a second class of goods, the new goods.
There then followed a series of orders and later written reasons that had some issues, but are not presently relevant.
Tslamandris J commenced the analysis at [68] stating:
Section 75(1) enables a VCAT proceeding to be dismissed if it is frivolous, vexatious, misconceived or lacking in substance or is otherwise an abuse of process. Pursuant to s 75(5), this is a question of law. Relevant to this application, the member was required to consider whether, on the relevant date, the County Court was already seized of matters concerning the other goods which were intended to be the subject of the VCAT proceeding.
Her Honour proceeded to construe the amended statement of claim as being confined to the ex-Dandenong goods. At [77], her Honour held that Member Buchanan erred in finding that it covered the other goods, and at [79] said:
ANI’s counterclaim and defence was filed after the relevant date and was therefore irrelevant to the member’s decision as to whether the County Court was seized of the other goods at the time the VCAT proceeding was issued.
With respect, this analysis is unsatisfactory.
The starting point must be the words of s 187(1) of the ACLFTA. The trigger for that provision is the making of an application to VCAT (not it in issue here). That application needs to be “in respect of a consumer and trader dispute”. Casualife’s claim concerned the supply or possible supply of storage services – well within the definition. Accordingly, s 187(1) applies.
The next step is to consider the effect of s 187(1) applying. The effect is that “the issues in dispute are not justiciable at any time by a court”. Sub-section (2) expands on this, providing that it “applies to all the issues in dispute, whether as shown in the application or emerging in the course of the proceeding in VCAT”. The critical word here is “all”. Note that the word “matter” is not used. As was seen in Thurin, that word has constitutional significance and is the subject of decades of High Court jurisprudence. Here, Parliament has chosen the language of “dispute” and “issues”.
The final clause in sub-s (2) is curious. It could have said “whether as shown in the application or otherwise”. Instead of “otherwise”, it says “emerging in the course of the proceeding in VCAT”. I seriously doubt that Parliament should be taken to have confined the meaning of “all the issues in dispute” by reference to this forward-looking concept. It seems to me that, like a constitutional “matter”, the “consumer and trader dispute” is not confined by the terms of the application (or any pleading), and would extend to the substratum of facts giving rise to the issues in dispute.
The question that arises in Casualife is whether the disputes about the two groups of goods, arising from years of dealings between the same two parties, is, properly understood, a single dispute. Reasoning by analogy with the jurisprudence on the concept of a “matter”, in my opinion, there must be a single “consumer and trader dispute” with various “issues in dispute”, those issues being, in part, split between different group of goods.
It seems that Tsalamandris J concluded that there were two different disputes, because her Honour held, in effect, that the issues in dispute in the VCAT application were not justiciable before a court, and the exception in sub-s (1)(a) did not apply. That exception is:
the proceeding in that court was commenced before the application to VCAT was made and that proceeding is still pending.
In her Honour’s judgment, without discussion, the counterclaim filed in the County Court was equated with a “proceeding”. Bear in mind that, given that the Victorian parliament cannot legislate for the jurisdiction of the courts outside Victoria, the word “court” in s 187 can only be concerned with a Victorian court. (Different issues arise if a proceeding is commenced in a federal court, an interstate court or, potentially, an overseas court.) In the County and Supreme Courts in Victoria, there are two kinds of originating process: the writ, which is ordinarily endorsed with a statement of claim, and the originating motion. In the Magistrates’ Court, the originating process is called a complaint. Upon filing of an originating process, a “proceeding” is commenced. (In New South Wales, it appears that the filing of an originating process commences “proceedings”, which are contained in in a single file or matter.) In a proceeding, the defendant may file a counterclaim against the plaintiff. In the County and Supreme Courts, that is to be contained in the same pleading as the defence (ie in a “defence and counterclaim”). In the Magistrates’ Court, a counterclaim is filed separately from the defence, but still in the same proceeding. Reference can be made to the County Court Civil Procedure Rules 2018 (emphasis added):
When counterclaim allowed
(1) A defendant who has a claim against the plaintiff may counterclaim in the proceeding.
(2) Rule 9.01 applies to a counterclaim as if the plaintiff were the defendant and the defendant were the plaintiff.
(3) A defendant who counterclaims shall plead the defendant’s defence and the counterclaim in one document called a defence and counterclaim.
Rule 10.02
Counterclaim against plaintiff and another person
A defendant may join with the plaintiff as defendant to the counterclaim any other person, whether a party to the proceeding or not, who, if the defendant were to bring a separate proceeding, could be properly joined with the plaintiff as a party in accordance with Rule 9.02.
Rule 10.03
Rule 10.04 provides for the machinery of bringing counterclaims into a proceeding. Rule 10.05 requires the claim and counterclaim to be tried together unless the Court otherwise orders.
In the absence of a definition to the contrary in the ACLFTA, it is difficult to identify any basis on which the word “proceeding” in s 187 should be understood any differently from the meaning attributed to it in court rules. If “proceeding” is understood in the same way as it in the rules, this would be consistent with the jurisprudence of “matter” in the Constitution (and other legislation that adopts that term for jurisdictional purposes) and would achieve the usual policy objectives of confining the hearing and determination of issues in dispute between parties to once-and-for-all litigation in a single forum.
Accordingly, Tsalamandris J ought to have held that the issues in dispute in the VCAT application were justiciable by the County Court because the proceeding in that court had been commenced before the application to VCAT was made and that proceeding was still pending. It would have followed, then, that Member Buchanan was justified in striking out the application under s 75 of the VCAT Act.
In the future, following commencement of the Justice Legislation Amendment Act 2023 on 11 October 2023, the power to “refer” matters to a court will be exercisable by a presidential member or a senior member who has been an Australian lawyer for not less than 5 year: s 67(5). Recently, in Krongold Constructions (Aust) Pty Ltd v Thurin [2023] VSCA 191 (Beach, McLeish and Niall JJA), the Court of Appeal held that the effect of a referral under s 77 of the VCAT Act to a court (or, at least, a Victorian court) was to engage the court’s jurisdiction without the need to issue any further originating process (thus obviating any issue around limitation periods that might have expired between commencement in VCAT and the referral). It appears that ANI recognised that that form of order would have provided a sound footing for compelling the parties’ dispute to be litigated in the County Court.
While discussing VCAT’s jurisdiction under the ACLFTA, it is also worth noting s 188. It substantially mirrors s 57 of the Domestic Building Contracts Act 1995, save that instead of “domestic building dispute” it refers to “consumer and trader dispute” and, in sub-s (3), it requires consideration of the costs, duration and any reasonably likely advantages and disadvantages of “proceedings” being “dealt with by VCAT”. Given the notorious backlog in VCAT’s Building and Property List, Judge Burchell’s decisions in Impresa Construction Pty Ltd v Oxford Building Group Pty Ltd [2021] VCC 1146, [45]-[60] and Uber Builders and Developers Pty Ltd v MIFA Pty Ltd [2021] VCC 1677, [23]-[45] are, I think, apt to apply to any application under s 188 of the ACLFTA.
In light of the increasing challenges of conducting litigation in VCAT, one must seriously wonder whether it is worth the resources and legal complexity having this non-judicial creature of statute having such a significant position in Victoria’s dispute-resolution landscape. Litigation in the courts is not what is was in 1998. Since Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 and, not long after that, the commencement of the Civil Procedure Act 2010, the culture of litigation in the courts has changed. Courts have also streamlined their processes: see eg the County Court’s Commercial Division Omnibus Practice Note PNCO 2-2022, which contains a plethora of standard orders and requires the parties to obtain directions early in the proceeding to cover all interlocutory steps, including fixing the trial date. Anecdotally, it does not seem that the cost of litigation is any less in less in VCAT than in the courts, and it is no quicker. In short, it does not seem that VCAT is achieving justice any more quickly, fairly or inexpensively than would be achieved in the courts, and the courts are not burdened with so many questions over the scope of their jurisdictions or powers. Perhaps the time has come to return the “civil” dispute-resolution (ie non-administrative merits review) functions of VCAT to the courts.
This post originally appeared on https://lionelwirth.com.au/2023/10/11/vcat-jurisdiction-yet-another-dimension/
