More jurisdiction gymnastics in the domestic building space (yes, more)

There are two recent decisions of note which shift the dial (yet again) as to VCAT’s power to refer matters within its jurisdiction to a court.

The first is Plunkett v Portier Pacific [2024] VCAT 205, a decision of Woodward J (sitting as President of VCAT). It is important to note that the decision was decided in the Civil Claims List and did not concern a building dispute, but it is very clear that His Honour intended for the decision to provide guidance for disputes being commenced in the Tribunal’s Building & Property list.

The facts of Plunkett are unimportant. It concerned an application by the Respondents under section 77 of the VCAT Act, which empowers the Tribunal to strike out a proceeding if it considers that the subject-matter of the dispute would be more appropriately dealt with by another tribunal or court. The Respondents alleged that the Applicant’s claim was a complicated commercial dispute which would take more than 10 hearing days, the damages claimed were high (above $1M), and that the Tribunal was not equipped to robustly case manage the dispute in the same manner as a judge.

Justice Woodward agreed, and in doing so overturned a long history of case law which had found that the Tribunal’s resources (i.e. its available members, and the competence and training of its registry staff) were not matters that were relevant to the discretion to make an order under section 77. His Honour also found that it was relevant to the discretion to consider what toll a complicated case might take on the stretched resources of the Tribunal.

His Honour set out criteria that, in his view, would indicate a case might be more appropriately dealt with by the Supreme or County Courts (these being particularly relevant to building disputes, which are usually the most resource intensive cases in the Tribunal). Those criteria included: that the quantum of the dispute had to be above $500,000.00 (arguably too low a figure for many domestic building disputes given the sky-high costs of construction currently), a hearing time of more than 10 days, multiple parties and complicated questions of fact and law, especially where those questions might be the subject of an appeal.

The reasons in Plunkett were handed down on 5 March 2024. Only a few days later, Kirton J (sitting as Vice President of VCAT) handed down her reasons in Koolio Pty Ltd v Owners Corporation 1 PS618397Y [2024] VCAT 273. That case concerned a number of proceedings by lot owners and an owners’ corporation making claims against a builder of a plagued apartment building in Sandringham. The builder sought contribution against third parties under the Wrongs Act 1958 and in doing so, pleaded reliance upon the Trade Practices Act 1974 (Cth).  This pleading rid the Tribunal of its jurisdiction for having raised federal subject matter (per Thurin v Krongold [2022] VSCA 226) and conflicted with the decision of Delany J in Vaughan Constructions Pty Ltd v Melbourne Water Corporation [2023] VCAT 233 regarding the Tribunal’s jurisdiction regarding contribution claims. Each of the proceedings were then struck out and referred to the County Court.

The issue with the Koolio proceeding was that it (unlike the related proceedings) concerned a claim under the Water Act 1989 (Vic), which Her Honour found, could not be heard by the County Court because of the way that Act was worded which gave the Tribunal exclusive jurisdiction.

Ultimately, Her Honour re-instated the struck-out Water Act proceeding in the Tribunal and ordered that it be heard and case managed along with the County Court proceeding (which concerned breach of warranty claims). But of note is the gap that Her Honour confirmed was left by both Plunkett and Thurin v Krongold Constructions [2023] VSCA 191 of what is to occur when the Tribunal makes a referral under section 77 of the VCAT Act which is clearly wrong, and the Court does not have jurisdiction to deal with the referred dispute.

Her Honour noted it would be absurd if a party was left to appeal the Tribunal’s erroneous referral to the Supreme Court, or for the court receiving the referral to have to open a file, only to dismiss the proceeding as being not justiciable. Instead, Her Honour found that the Koolio proceeding, the subject of an erroneous referral under section 77, remained a VCAT proceeding, albeit struck out. A struck-out proceeding is only removed from the Tribunal’s list of active cases, but has not been dismissed or adjudicated on the merits. Whilst the strike out of the proceeding was put into effect, the referral was not actioned.

Whilst decision makers are clearly trying to do their best to craft judgments that create practical solutions to complicated jurisdictional issues, the long shadow of the High Court’s decision in Burns v Corbett (2018) 265 CLR 304 and issues with the Tribunal’s resourcing continues to cause strife for litigants in the domestic building space.

Dr Richard Manly KC and Fabian Brimfield

Liability limited by a scheme approved under professional standards legislation