Those who apply to the Victorian Civil and Administrative Tribunal (VCAT) to resolve domestic building disputes experience a seemingly endless waiting list. In fact, the capacity issues are so significant that they were recently used as the sole example and reason for reform, in a recent decision in VCAT’s civil claims list.
Justice Woodward, who presided over a VCAT matter regarding misleading and deceptive conduct, “called out” VCAT for accepting cases in the domestic building list that are simply too complex and/or large for VCAT. This “mishandling” of VCAT cases, as perceived by His Honour, ultimately led Justice Woodward to formulate a new set of principles that derive from parliamentary interpretation, that may allow an applicant with a complex and high quantum case to utilise section 77 of the VCAT Act to transfer their domestic building dispute to another forum (such as the Supreme Court or the County Court) to have the matter heard more efficiently.
The proceeding
By way of background, this dispute concerned a claim brought by Mr Plunkett and Third King Pty Ltd (ACN 601 337 062) (the Applicants) against Portier Pacific Pty Ltd (ACN 622 365 453) and 11 other respondents (the Respondents) for misleading and deceptive conduct and unconscionable conduct pursuant to the Australian Consumer Law and Fair Trading Act 2012 (Vic). Most of the Respondents were international corporations.
The Respondents made an application pursuant to section 77 of the VCAT Act to have the matter heard elsewhere. Section 77 of the VCAT Act states that “at any time, the Tribunal may make an order striking out all, or any part, of a proceeding (other than a proceeding for review of a decision) if it considers that the subject-matter of the proceeding would be more appropriately dealt with by a tribunal (other than the Tribunal), a court or any other person or body”.
The Respondents made the application arguing the dispute was complex.1 The Respondents referenced several misunderstandings in the case management process by VCAT and that the Applicants failed to articulate a viable cause of action. The Respondents made their application on the basis that “VCAT does not have the resources or capacity to provide the necessary case management to deal with these ongoing problems and, unless transferred, the matter would continue to be a huge burden on the resources of VCAT”. 2
Held
Justice Woodward accepted the Respondents’ submissions and struck out the matter and referred it to the Supreme Court largely on the basis that the Supreme Court was the more appropriate forum and such cases impose a severe burden on VCAT.
This reasoning differs significantly from the previous stance of VCAT when deciding a section 77 application, where it prioritised the jurisdictional right the applicant had to have their matter heard at VCAT.
Such was the case in Bentley v Cash Resources Australia Pty Ltd [2002] VCAT 1399 where Kellam J found that the section 77 application was not appropriate on this basis, notwithstanding that the case had admittedly severely stretched the judicial resources of the Tribunal and required pleadings and case management processes adopted by the Supreme Court.
Similarly in Camillo Concrete Structures Pty Ltd v Baulderstone Pty Ltd [2010] VCAT 285, Justice Harbison prioritised the right of the applicant to have its case heard in whichever jurisdiction it chooses. Her honour held that “the power [of section 77] is not to be used lightly. Applicants have a right to utilise the procedures of this Tribunal. It should not be thought that an application, otherwise appropriately within the jurisdiction of the Tribunal, will be transferred just because the subject matter involves some complexity or the case involves several different parties“.3
Justice Woodward’s judgment qualifies these cases, noting that proper judicial exercise concerning section 77 is essential, however, the prioritisation of statements such as “the power is not to be used lightly” (as was stated by Justice Harbison) incorrectly imports an onus on the applicant party to establish the application. That, in his view, is not how parliament intended the legislation to function. This is particularly concerning the wording of section 77 that expressly provides for VCAT’s discretion to be mandated in such determinations.4
Accordingly, Woodward J made clear that this mandatory discretion must consider the capacity and resource issues of VCAT, as these issues supersede the intention of parliament to vest VCAT with jurisdiction to hear matters it does not have the capacity or resources to deal with.
Concerning domestic building disputes, Woodward J notably stated that “VCAT has unlimited jurisdiction in domestic building disputes, but it does not follow that Parliament intended VCAT to hear and determine claims relating to multimillion dollar residential developments, with multiple parties, several expert witnesses and hearings running for weeks”.5
Furthermore, Woodward J offered his experience as a County Court judge as a way of explaining why VCAT is less able than a Court to “grapple with complex claims“, to justify his interpretation of parliament’s intention. Some of his reasons include:
- VCAT’s registry does not have enough staff or skill levels relative to the number or types of cases they deal with (such as multi-party cases), distinct from the kinds of staffing at higher courts;
- VCAT members often double handle matters which leads to errors, delays and unnecessary adjournments.
- VCAT members do not have associates who assist with the complexities of disputes and case management of multi-party disputes much more efficiently than VCAT;
- VCAT members generally do not have the benefit of transcripts for hearings (certainly not for interlocutory hearings), and they do not have the same level of IT tools, systems and support;
- VCAT has between 70,000 and 80,000 applications each year; and
- in some lists (notably Building & Property) the earliest VCAT can presently list a multi-day hearing is not before March 2025.
His Honour stated that section 77 applications, therefore, must be “viewed on their own merits and consideration given to prevailing circumstances“, which may include where:
- the dimension of the case is likely to severely stretch the resources of the Tribunal; and
- the subject matter is complex, involves difficult issues of fact and law, and requires pleadings and case management processes which are more typical of processes adopted by a Court.6
Woodward J concluded that “the appropriate test [for the application of section 77] is not whether it is clear that VCAT is an inappropriate forum, but is a less stringent test, namely, whether the subject matter of particular proceedings would be more appropriately dealt with by another tribunal, a court or any other person or body“.7
What does this mean?
Decisions such as Impresa Construction Pty Ltd v Oxford Building Group Pty Ltd [2021] VCC 1146 and Uber Builders and Developers Pty Ltd v MIFA Pty Ltd [2021] VCC 1677 have previously attempted to achieve a similar result (being raising capacity and case management considerations as reasons why a domestic building dispute should not be heard in VCAT), under section 57(2)(a) of the Domestic Building Contracts Act 1995 (Vic) (Act). However, this decision provides a greater opportunity for applicants to utilise section 77 of the VCAT Act to displace other pieces of legislation that provide VCAT jurisdiction.
Woodward J has offered a clear and tailored approach to the application of section 77. The capacity issues of VCAT are now relevant. This will not only see large and complex cases able to be heard at Courts which have more sophisticated case management systems to adequately handle such matters but will free up VCAT’s ability to hear smaller disputes and provide greater accessibility to dispute resolution for smaller commercial and/or non-commercial parties.
This article was written by Paul Graham, Partner, Fin Neaves, Senior Associate, and Ariadne Paras, Solicitor.
1 Plunkett v Portier Pacific Pty Ltd (Civil Claims) [2024] VCAT 205, 15.
2 Ibid, 17.
3 Camillo Concrete Structures Pty Ltd v Baulderstone Pty Ltd [2010] VCAT 285, 15 – 20.
4 Plunkett v Portier Pacific Pty Ltd (Civil Claims) [2024] VCAT 205, 27.
5 Ibid, 40.
6 Ibid, 32.
7 Ibid, 41.
