Woodward J’s Portier Decision Exposes VCAT’s Achilles’ Heel
The recent ruling by Justice Woodward in Portier holds profound transformative implications, particularly given his Honours concurrent position at the Victorian Supreme Court rendering this VCAT ruling an essential read for legal professionals and stakeholders alike when understanding VCATS discretion under s77 of the VCAT Act and appropriateness of VCAT as a forum.
This judgment provides invaluable insights into forum selection strategies and the practical considerations guiding legal proceedings in VCAT. Woodward’s elucidation of the factors influencing the appropriateness of commencing matters in VCAT serves as a roadmap for informed decision-making, empowering litigants to navigate the legal terrain with confidence.
Moreover, the judgment’s impact extends beyond procedural matters, offering potential benefits such as expedited case management and resolution in higher courts, while also highlighting existing challenges within VCAT and a need for reform.
In March 2024, Justice Woodward, President of the Victorian Civil and Administrative Tribunal (‘VCAT’), delivered a judgment in the case of Plunkett v Portier Pacific Pty Ltd (Civil Claims) [2024] VCAT 205 (‘Portier’) which would cause considerable implications for litigants appearing before VCAT. Portier establishes a precedent that allows for a greater number of cases to be transferred out of VCAT and to County or Supreme Courts.
Portier involved a dispute about the commencement and operation of restaurant businesses in Sydney and Melbourne and related to claims in excess of $1 million. The respondents made an application under section 77 of the VCAT Act 1998 (Vic) to have the case referred to the Supreme Court of Victoria.
Section 77(1) of the VCAT Act provides 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[1].”
The Portier decision considered essential criteria of s77 applications, aimed at addressing the uncertainty surrounding the decision in Krongold Constructions (Aust) Pty Ltd v Thurin [2023] where the Supreme Court of Victoria made judgement that VCAT lacks jurisdiction to hear building disputes involving the interpretation of federal legislation. The issue is that, VCAT holds primary jurisdiction over building disputes resulting in parties frequently questioning whether VCAT is the appropriate forum for their disputes, outlining the need for an authority which clarifies the principles guiding VCAT’s discretion under s77.
The points of contention between the Applicant and the Respondents
The Respondents provided their “Reasons for Seeking Orders” to the Tribunal being;
- “This is a complex commercial dispute involving several international parties. It is unsuited for resolution before this tribunal.” [2]
- “The protracted interlocutory steps taken to date, which have done little more than identify the correct parties, have already consumed significant resources of the tribunal and the parties.”[3]
- “The level of resources required to accommodate this proceeding is now set to escalate as the parties litigate the substance of a wide-raging commercial dispute. Part of the dispute relates exclusively to business interests outside of Victoria.”[4]
- “The litigation is not well suited to resolution in VCAT and is suited to the sort of case management that the Commercial Court of the Supreme Court of Victoria routinely offers for complex commercial disputes of this ”[5]
- The claim held the quantum of $1,365,984 plus damages and interest, stretching across jurisdictions of NSW and the Netherlands which would also be not suitable for VCAT to decide upon, as the matter may become Federal.[6]
- The respondents further contended that numerous interlocutory steps “have already consumed significant resources of the tribunal and the parties”[7], indicating a need for case management, which could be facilitated by a transfer to the Supreme Court.
Essentially the respondents contended that the difficulties encountered thus far, coupled with the anticipated complexities of the case, necessitated the transfer to the Supreme Court for effective case management and resolution.
The applicant argued that their claim belonged in VCAT[8], asserting that the dispute fell under the jurisdiction of the Tribunal, particularly under sections 8 and 182 of the Australian Consumer Law and Fair Trading Act 2012 (Vic) (“ACLFT Act”) and sections 18 and 21 of the Australian Consumer Law (“ACL”)(Victoria)) which both provide that VCAT is the appropriate forum. The applicant emphasised that this was a straight forward misleading and deceptive conduct claim and unconscionable conduct claim under the ACL which are frequently seen at VCAT[9]. Therefore the applicant was entitled to the benefit of informality and cost-effectiveness of VCAT proceedings.
Relevant Principles to the Decision
Woodward J was tasked with considering the conflicting and inconsistent authorities in determining whether complexity of a matter and the use of VCAT resources would be relevant factors when exercising the discretion granted by section 77 of the VCAT Act. Woodward J relied on precedent derived from Kellam J’s judgment in Bentley v Cash Resources Australia Pty Ltd [2002] VCAT 1399 (‘Bentley’) provided:
“A case of this dimension is likely (as has already been demonstrated) to severely stretch the judicial resources of the Tribunal.” … “In my view, if a 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 the Supreme Court, an argument may well be advanced that such a case should be struck out and referred to the Supreme Court”[10].
Although the s77 application was ultimately dismissed, principles of what would satisfy a transfer were provided by Kellam J in Bentley such as complexity, the need for pleadings and case management and a strain on resources.
The inconsistency in precedent arose in the Harbison J, Commonwealth Bank of Australia v Slaveska [2008] VCAT 2072 (‘Slaveska’) judgement which provided that the s77 transfer requires “a high level of satisfaction”[11] noting that it would be “unfortunate if an application under s77 was used as a tactical device to delay a hearing, or to put an impediment in the way of a matter being heard on its merits in the cheapest most appropriate forum”, the Slaveska decision did not give regard to the principles of what would initiate or indicate the need for a transfer outlined in Bentley.
In the 2010 decision of Camillo Concrete Structures Pty Ltd v Baulderstone Pty Ltd [2010] VCAT 285 (‘Camillo’) Harbison J revisited her judgement with reference to Justice Kellam’s decision in Bentley noting that the “the power is not to be used lightly”[12]. Her Honour provided her interpretation on the judgement made by Kellam J in Bentley, “His Honour was not laying down rules of law or practice and his observations were just that – observations. Clearly, each application must be viewed on its merits and consideration given to prevailing circumstances”[13]. Harbison J further emphasised that there must be context given to Justice Kellam’s decision, such as the case management pressure on the Civil Claims List at the time the judgement was made.
A month after the Camillo decision, Hampel J used the same precedent in Seachange Management Pty Ltd v Bank of Western Australia Ltd [2010] VCAT 1904 (‘Seachange’);
“I do not consider the complexity of the claim or the amount of it make the County Court the more appropriate forum because Parliament has evidenced a clear intention that VCAT be given jurisdiction to hear and determine claims of this nature, complexity and amount. There is no basis for contending that VCAT is any more or less able to grapple with such claims as are made by Seachange than the County or Supreme Courts[14].”
The Decision
Justice Woodward was therefore tasked with the difficult decision of clarifying the precedent of the Bentley decision and the contradicting decisions of Camillo, Seachange and Slaveska in the interpretation of s77 applications. Woodward J referred to the dangers of judgements using verbiage such as a “high level of satisfaction required”, “the power is not to be used lightly” and precedents which prescribe an onus on the party making the s77 application, as there is a risk of inadvertently limiting the discretion in a way in which is unintended by the legislature[15].
Woodward J expressed his respectful disagreement with Harbison J and Hampel J in Camillo, Seachange and Slaveska and upheld precedent derived by Kellam J in Bentley in the that factors such as the Tribunal’s capacity and resources, and whether a dispute would strain those resources, were relevant when determining whether a transfer should be ordered under section 77. Top of Form Additionally, proceedings necessitating case management and those involving complex issues of fact and law should also be considered. His Honour stated that each proceeding should be “viewed on their own merits and consideration given to prevailing circumstances” [16].
Woodward J concurred with Bowman J in Dragon Image Pty Ltd v NP Distribution Pty Ltd [2005] VCAT 448 at [4] that:
‘the appropriate test … is not whether it is clear that this Tribunal is an inappropriate forum … but is a less stringent test, namely whether there is a more appropriate forum …’[17]
Woodward J went on to provide a clear set of instances which would “ordinarily prompt” consideration for such applications[18];
- Civil cases outside VCAT’s exclusive jurisdiction, where claims and counterclaims combined exceed the Magistrates’ Court’s $100,000 limit, especially if they surpass the County Court’s historical limit of $500,000[19];
- When the estimated duration of the proceeding, including closing submissions, is 10 days or more[20];
- In cases with multiple parties, especially those involving third-party claims, counterclaims, and apportionment claims, benefiting from centralised case management by a single judicial officer[21];
- If other factors, like a history of frequent interim applications, indicate that the case would benefit from centralised case management by a single judicial officer[22];
- where the proceeding involves novel points of law or complex facts[23].
The Implications of the Portier Decision
The implications of Justice Woodward’s decision in Portier are profound and far-reaching, by virtue of his concurrent position at the Victorian Supreme Court and the judicial authority his Honour brings, Woodward J’s decision carries substantial persuasive weight.
His Honours elucidation of the factors guiding the appropriateness of commencing matters in VCAT serves as a practical roadmap, offering a checklist of considerations and providing clarity on the application of s77 to cases initiated in VCAT, thereby empowering litigants to make informed and strategic choices regarding forum selection.
The ramifications of this decision extend beyond mere procedural considerations. With VCAT facing challenges such as delays and resource constraints, litigants stand to benefit from the prospect of expedited case management and resolution in the County or Supreme Courts. This shift in jurisdictional preference may not only alleviate the burden on VCAT but also enhance access to justice for parties involved in smaller disputes.
However, the decision indicates a potential influx of complex cases into the County Court, thereby posing challenges to its existing caseload and resources. While this may signify a redirection of large and intricate disputes to courts equipped with more robust case management systems, it also underscores the need for ongoing assessment of judicial resources and capacities.
Woodward J’s exhaustive and respectful critique of VCAT’s operational deficiencies underscores the need for institutional reform and resource allocation within the tribunal. His Honours observations regarding staffing levels, procedural inefficiencies (including lack of associates, double handling of matters, lack of the use of transcripts and a lack of advanced technology and systems support) [24] as well as the current prevailing circumstances of the sheer initiation of 70,000 to 80,000 applications in VCAT each year, highlight areas ready for improvement to enhance the efficacy of VCAT as a dispute resolution forum.
In conclusion, the decision in Portier emphasises the critical need for a nuanced and balanced approach to dispute resolution, recognising the strengths and limitations of each adjudicatory forum. Woodward J’s provision of a precise and tailored framework for interpreting s77 applications, coupled with the spotlight on VCAT’s capacity constraints, signifies a significant shift in the legal landscape. Moving forward, these guiding principles will undoubtedly shape considerations and judicial practices, ensuring a more effective and equitable resolution of disputes for years to come.
[1] Victorian Civil and Administrative Tribunal Act 1998 (Vic) s77(1).
[2] Plunkett v Portier Pacific Pty Ltd [2024] VCAT 205 [5]
[3] Ibid
[4] Ibid
[5] Ibid
[6] Ibid
[7] Plunkett v Portier Pacific Pty Ltd [2024] VCAT 205 [5]
[8] Plunkett v Portier Pacific Pty Ltd [2024] VCAT 205 [12].
[9] Plunkett v Portier Pacific Pty Ltd [2024] VCAT 205 [10]
[10] Plunkett v Portier Pacific Pty Ltd [2024] VCAT 205 [23].
[11] Commonwealth Bank of Australia v Slaveska [2008] VCAT 2072 (‘Slaveska’) [35].
[12] Camillo Concrete Structures Pty Ltd v Baulderstone Pty Ltd [2010] VCAT 285 (‘Camillo’).
[13] Plunkett v Portier Pacific Pty Ltd [2024] VCAT 205 [23].
[14] Seachange Management Pty Ltd v Bank of Western Australia Ltd [2010] VCAT 1904 [24] – [25].
[15] Plunkett v Portier Pacific Pty Ltd [2024] VCAT 205 [26].
[16] Plunkett v Portier Pacific Pty Ltd [2024] VCAT 205 [32]
[17] Ibid [24](c)
[18] Ibid[42]
[19] Ibid[42](a)
[20] Ibid [42](b)
[21] Ibid [42](c)
[22] Ibid [42](d)
[23] Ibid[42](e)
[24] Plunkett v Portier Pacific Pty Ltd [2024] VCAT 205 [40](a-e).