Applicant v First Respondent

1 Mr and Mrs Inglese, the respondents, owned land in Ringwood, Victoria on which they decided to have residential units constructed. In April 2015, they entered into a domestic building contract, as developers, with the applicant building company, Concrete Construction Systems Pty Ltd, for the building of 66 units on the land.

2 After the works reached practical completion, issues arose between the parties as to their entitlements under the contract. Concrete Construction filed a claim against the Ingleses in the Victorian Civil and Administrative Tribunal seeking damages for the cost of variations and other sums claimed to be due. The Ingleses filed a defence and counterclaim seeking damages for the costs of rectification of alleged defects and liquidated damages for delay in completion.

3 After procedural directions for the hearing of the proceeding had been made but not complied with by Concrete Construction, the Ingleses made an application seeking orders pursuant to s 78 of the Victorian Civil and Administrative Tribunal Act 1998 (the VCAT Act) that the proceeding be determined in their favour (s 78 Application). The Tribunal made orders under s 78 on 9 August 2021, that the 'the proceeding is determined in favour of the respondents with the quantum of the respondents' counterclaim to be assessed' (the s 78 Order). The issue raised in this appeal is whether the orders resolved the entire proceeding, or only the Ingleses' counterclaim.

4 As the appeal against the s 78 Order is made out of time, the other main issue in this appeal is whether that extension of time should be granted.

The orders the subject of the application for leave to appeal

5 Concrete Construction seeks leave to appeal two orders made by the Tribunal.

6 The first is the s 78 Order made on 9 August 2021[1] by which Senior Member Kirton[2] determined the proceeding in favour of the Ingleses, with the quantum of the counterclaim to be assessed. As that order was made over 568 days before the application for leave to appeal was filed with this Court on 30 March 2023, an extension of time is required for that application to be made.

7 The second is an order made by Senior Member Farrelly on 14 March 2023.[3] That order was made in response to an application made by Concrete Construction for orders, pursuant to s 120 of the VCAT Act, to reopen and revoke the s 78 Order, on the basis that Concrete Construction did not attend and was not represented at the hearing of the s 78 Application (s 120 Application).[4] The Senior Member ordered that the application be dismissed (s 120 Order), on the basis that there was no adequate reason for the failure of Concrete Construction to appear at the hearing. The Senior Member also stated in his reasons that he considered that the s 78 Order 'determines the whole proceeding - that is both the claim of the applicant builder in the proceeding and the counterclaim of the respondent developers in the proceeding - in favour of the respondent developers'.[5]

8 Concrete Construction seeks declaratory relief with respect to both orders. It seeks a declaration as to the meaning of the s 78 Order on the basis that, it submits, it did not become apparent until the reasons given in support of the s 120 Order that the Tribunal regarded its claim, as well as the counterclaim, as having been determined by the s 78 Order.[6] Concrete Construction also contends that the orders, properly construed, determined only the counterclaim of the Ingleses, and not Concrete Construction's claim, so that it should be permitted to continue to pursue its claim in the Tribunal.

9 The Ingleses oppose the grant of an extension of time to apply to appeal the s 78 Order, as the delay of 568 days in seeking leave to appeal the s 78 Order is inordinate and inadequately explained.[7] They also contend the extension of time and leave to appeal should be refused as the Ingleses will suffer prejudice and hardship, and the appeal has no merit as the s 78 Order, applied to the proceeding as a whole, was correctly construed by the Senior Member in the s 120 Application.[8] They also oppose the grant of leave to appeal the s 120 Order.

Procedural background to the s 78 Order and the s 120 Order

10 Concrete Construction filed the claim for damages in the Tribunal in November 2017.[9] It sought a sum of $2,208,203 which it alleged was owed for: costs relating to variation works; the release of 50% of the security deposit which had not been released by the Ingleses, and $550,000 in lieu of the transfer of one of the units as had been agreed under the contract.[10] On 30 April 2018, the Ingleses filed the defence and counterclaim.[11] The defence denied each of the claims made by Concrete Construction. The counterclaim, as later amended, sought damages of $1,933,789.02 and liquidated damages of $325,000. On 16 September 2020, orders were made by consent for the filing of documents and setting down of the hearing in relation to the counterclaim (September 2020 procedural orders).[12]

11 On 23 July 2021, the Ingleses filed the s 78 Application. They sought orders that the proceeding be determined in their favour, with the quantum of their counterclaim to be assessed.[13] The application was based on Concrete Construction having failed to comply with the September 2020 procedural orders, and failed to respond to communications from the Ingleses' solicitors after Concrete Construction's solicitors filed a Notice of Ceasing to Act. The s 78 Application contended that this was causing prejudice to the Ingleses because the proceeding was listed for hearing on 6 September 2021, and the failure to file documents as required by the orders meant that the Ingleses were not aware of the case they were to meet.[14]

12 On 9 August 2021, the s 78 application was heard before Senior Member Kirton. No person attended on behalf of Concrete Construction.[15] The Senior Member made the s 78 Order and related orders, in the following terms:

Under section 78(2)(b)(i) of the Victorian Civil and Administrative Tribunal Act 1998 the proceeding is determined in favour of the respondents with the quantum of the respondents' counterclaim to be assessed.

...

Warning:

The applicant is warned that the proceeding has been determined against it under s.78 of the VCAT Act. This means it has been found liable to the respondents. The next hearing will concern only the amount that the applicant will have to pay the respondents. The applicant is encouraged to seek legal advice.[16]

13 The s 78 Order was emailed to the parties on 13 August 2021.[17]

14 The quantum hearing took place on 27 and 30 September 2021 before Senior Member Farrelly.[18] There was no appearance from Concrete Construction when the hearing commenced. Counsel for Concrete Construction appeared on 30 September 2021 and sought an adjournment. The Senior Member refused the application, and observed in his Reasons that 'there was no evidence or suggestion that the builder was unaware of previous orders made, in particular the orders made 9 August 2021, or that the builder was unaware of the hearing commencement date, 27 September 2021'.[19] He also observed that no reason was given for the builder's non-appearance at the commencement of the hearing on 27 September, nor for the delay in making the adjournment application, and that 'all things considered I was satisfied that the builder had been given more than reasonable opportunity to present its case, the builder had been afforded natural justice, and there was no prejudice to the builder caused by the actions or inactions of the developers which might warrant an adjournment'.[20]

15 On 20 October 2021, Senior Member Farrelly ordered that Concrete Construction pay the Ingleses $1,399,135 with costs reserved, and gave reasons for that decision.[21] The amount payable involved the making of some allowances for amounts that Concrete Construction had alleged to be due in its claim against the Ingleses.[22]

16 On 30 November 2021, Concrete Construction filed the s 120 Application to reopen the s 78 Order made on 9 August 2021.[23] Section 120(1) of the VCAT Act provides for the re-opening of an order on substantive grounds where a person in respect of whom an order is made did not appear and was not represented at the hearing at which the order was made.

17 Pursuant to s 120(2), an application under s 120(1) is to be made in accordance with, and within the time limits specified by, the rules. Rule 4.24(1) of the Victorian Civil and Administrative Tribunal Rules 2018 (VCAT Rules) provides that applications under s 120 are to be made within 14 days of the applicant becoming aware of the orders, which was on 13 August 2021.[24] The application was therefore brought 108 days after Concrete Construction had become aware of the order, and also 60 days after an application for an adjournment of the quantum hearing had been made by counsel, with an affidavit of a solicitor in support.[25]

18 Concrete Construction supported the s 120 Application with an affidavit from its General Manager Zenon Eleftheriou which stated that its original solicitors had filed a notice of ceasing to act on 23 March 2021. He said that the email address provided in the notice of ceasing to act was not the correct email address of the company which should have been provided, as it was monitored by administrative staff 'who were not necessarily aware of the hearing'.[26] Mr Eleftheriou gave evidence that he was aware of the hearing of the s 78 Application on 9 August 2021, and had understood a solicitor was going to appear on the company's behalf and that communications received for the proceeding were forwarded to the solicitor, but that no response was ever received.[27] Although he was aware of the s 78 Application and the notification of the date for the hearing, he did not comprehend or properly understand what the hearing was about.[28] He received the email with s 78 Order on 13 August 2021 but did not read it before forwarding it to the solicitor.[29] He stated that on 27 September 2021 he became concerned about not having had any response from the solicitor and 'took it upon [him]self to find out the status of the proceeding'. He contacted the solicitor who advised that he did not appear at the 9 August 2021 hearing and did not have instructions to appear at the quantum hearing; he also understood by the date of his affidavit that the solicitor was not formally on the record as the company's solicitor in the proceeding.[30] A solicitor was instructed to make the adjournment application in the quantum hearing on 29 September 2021.[31]

19 The s 120 Application was heard in February 2023. On 14 March 2023, Senior Member Farrelly made the s 120 Order dismissing the application and published reasons.[32] He concluded that Concrete Construction had received proper notification of the 9 August 2021 hearing and had no reasonable excuse for not attending it. Concrete Construction's submission that no appearance was made because a solicitor was expected, but failed, to attend was unreasonable given that Concrete Construction had not given instructions for the solicitor to attend, nor put him in funds as he had required.[33] Senior Member Farrelly also found that there was an unacceptable and inexcusable delay for bringing the s 120 Application out of time, given that Concrete Construction was not only aware of the s 78 Order from 13 August 2021, shortly after it was made, but it had obtained legal representation by solicitors and counsel who made an application to adjourn the quantum hearing on 30 September 2021.[34] The primary excuse given for failing to appear and delaying in making the application was 'both dubious and inadequate'. [35]

20 Senior Member Farrelly also found that the delay in bringing the application had caused prejudice to the Ingleses. That prejudice arose by reason of the quantum hearing conducted after the s 78 Order and before the s 120 Application was made, which involved considerable costs, and from the making of concessions by the Ingleses which may not have been made had they believed that liability remained in issue.[36] The Senior Member did not accept that the prejudice could be remedied by an order for costs, noting the concessions made in the quantum hearing, with the consequence by reason of s 126(4) of the VCAT Act that he must refuse an extension of time.[37] The Senior Member also did not accept that the serious outcome for Concrete Construction in not being able to argue its case for substantial amounts (apparently attributable to a claim that the amounts for defective works included in the counterclaim should not have been allowed in the amount awarded in the quantum hearing)[38] outweighed the prejudice to the Ingleses.[39] He concluded that it would not be fair and equitable to grant an extension of time for the bringing of the s 120 Application.[40]

21 The Senior Member finally made observations about the submissions made about the s 78 Order. He held that it had determined both the claim and counterclaim:

In my view, 'the proceeding' as referenced in section 78(2)(b)(i) means the whole proceeding including, where a counterclaim is brought, the claim of one party in the proceeding and the counterclaim of the other party in the same proceeding. In my view, the order, pursuant to section 78(2)(b)(i), determines the whole proceeding - that is both the claim of the applicant builder in the proceeding and the counterclaim of the respondent developers in the proceeding - in favour of the respondent developers.[41]

22 Senior Member Farrelly also rejected Concrete Construction's alternative argument that the s 78 Order should not have been made at all. Concrete Construction submitted that because orders under s 78 are a last resort, noting that it was self-represented at the time, it would have been appropriate to make a self-executing order providing an opportunity for compliance. Senior Member Farrelly found that:

If the builder had appeared at the hearing on 9 August 2021, the Tribunal might well have declined to make orders pursuant to section 78 of the Act as requested by the developers, and instead made self-executing orders accompanied by an express warning as to the consequence of noncompliance. But the builder did not appear at the hearing. It did not appear before the Tribunal to explain why it had failed to comply with previous orders. It did not appear before the Tribunal to explain why, despite a track record of non-compliance and apparent disinterest, it was indeed interested in the proceeding and prepared to comply with further orders. The builder's non-appearance at the hearing was entirely consistent with its track record. The builder had been afforded fairness and natural justice for the life of the proceeding. In my view, in the circumstances before the Tribunal on 9 August 2021, the orders made were appropriate.[42]

23 On 30 March 2023, Concrete Construction filed the notice of appeal in this Court.

24 The notice of appeal identifies the orders subject to appeal as both the s 78 Order and the s 120 order. However, it does not seek that those orders are set aside. Instead, it seeks the following declarations:

1. A declaration that order 1 of the orders of the Tribunal on 9 August 2021 relates only to the proceeding (being the counterclaim) brought by the Respondents against the Appellant before VCAT.
2. Further or in the alternative, a declaration that order 1 of orders of the Tribunal made on 14 March 2023 relates only to the proceeding (being the counterclaim) brought by the Respondents against the Appellant before VCAT.

25 The notice of appeal also seeks an order 'remitting the proceeding, insofar as it relates to claim by the Appellant against the Respondents, back to VCAT to be determined'. The notice of appeal also acknowledges that an extension of time is required for the appeal with respect to the s 78 Order.

26 No order is sought setting aside either the s 78 Order or the s 120 Order. The notice of appeal and Concrete Construction's submissions make no substantive challenge to the outcome of each application. It does not challenge the decision of Senior Member Kirton to make orders with respect to the disposition of the proceeding; it rather seeks to have the scope of those orders clarified or determined. Similarly, Concrete Construction does not challenge the decision of Senior Member Farrelly to refuse to reopen the proceeding under s 120 and his decision to refuse to grant an extension of time for that application. The notice of appeal seeks a declaration to clarify or limit the scope of that order. Whether such relief is open or appropriate is addressed below.

27 The question of law identified by the Applicant is:

Whether the Tribunal misunderstood and misapplied s.78 of the Victorian Civil and Administrative Tribunal Act 1998 ('VCAT Act') in finding that the Tribunal's order on 9 August 2021 (which was the subject of the application under s.120 of the VCAT Act) disposed of both the proceeding concerning the claim made by the Appellant in VCAT, and the proceeding concerning the counterclaim made by the Respondents.

28 The Ingleses contend that there should not be an extension of time to appeal the s 78 Order, and that the proposed appeal against the s 120 order is misconceived as it is essentially an appeal against comments made by way of obiter dicta by the Senior Member, rather than against the order.[43] The Ingleses also contend that insofar as the question of law may arise for consideration, the Tribunal did not misunderstand or misapply s 78, which is sufficiently broad to enable the entire proceeding to be determined, and this was the intended and actual effect of the s 78 Order.[44]

The statutory provisions and authority relevant to an application for an extension of time for leave to appeal

29 Section 148(1) of the VCAT Act provides, relevantly, that 'a party to a proceeding may appeal on a question of law from an order of the Tribunal in the proceeding'.

The Trial Division of the Supreme Court may grant an application for leave to appeal under this section only if it is satisfied that the appeal has a real prospect of success.

31 The application for leave must be made within 28 days after the day of the order of the Tribunal, unless the rules of the Supreme Court otherwise provide.[45] The Court may extend that time.[46]

32 The principles guiding the Court's discretion as to the grant of an extension of time are well established.

(a) The purpose of the discretion is to ensure that justice can be done between the parties.[47]

(b) Section 148 contemplates that any question of law for the purposes of an appeal generally will be speedily identified and pursued.[48]

(c) Factors relevant to the exercise of the discretion are the length of the delay in applying for leave to appeal and the reasons for delay, whether there is an arguable case and whether there is any prejudice to the respondent to the proposed appeal if time is extended.[49]

(d) The longer the period of delay, the more compelling the explanation for the delay is required to be.[50]

(e) Upon expiry of the time limited for an appeal or application for leave to appeal, there is a vested right to retain the judgment or order unless the application is granted.[51]

(f) The applicant for the extension of time has the burden of establishing that it should be granted.[52]

33 The specific outcomes in other cases dealing with extension of time applications are of limited assistance, given that each case will depend on the consideration of all the circumstances of the specific case. The approach in the authorities to what will constitute significant delay does provide some appropriate guidance as to the general standards of diligence parties can be expected to be held to. Periods of seven months,[53] 123 days,[54] and three months[55] have been identified as significant and lengthy delays.

The parties' submissions on the application for an extension of time to appeal the s 78 Order

34 Concrete Construction seeks an extension of time 'if required' and submits that the reason for the delay in seeking leave to appeal is that 'it did not become apparent until the Reasons of 14 March 2023 that the Tribunal considered the Claim had been disposed of, whether by way of dismissal or strike out'.[56] It contends that prior to the reasons being given for the s 120 Order, 'Concrete's understanding was that Order 1 of the Section 78 Orders ... only determined the Counterclaim and that Concrete's Claim remained on foot', and that this understanding was reasonable having regard to the terms of the s 78 Order which did not refer to the 'Claim being dismissed or struck out'.[57] The basis of the 'understanding' of Concrete Construction was identified as the statement in the affidavit of its solicitor as to what 'the Appellant understood', but did not identify any officer or representative of the company who held that understanding.[58] The affidavit of Rocco Italiano, the Director of Concrete Construction, which was filed in support of the application for leave to appeal did not address the question of his understanding of the orders directly. It stated only that

I understand that on 23 July 2021 the Respondents filed an application in the VCAT proceeding seeking orders pursuant to section 78 of the [VCAT Act]. I now understand that the Respondents, by the application, sought orders to determine their counterclaim on the basis that they considered the Appellant was not participating in the proceeding to the disadvantage of the Respondents.[59]

35 Mr Italiano does not identify the source of his understanding, nor when it arose, nor give any other evidence as to when the s 78 Order came to his attention or what effect he understood it to have at the time.

36 Senior counsel for Concrete Construction rejected a submission, made in the Ingleses' written submissions before the hearing, that Concrete Construction had initially accepted that the s 78 Order applied to the whole of the proceeding, but had formed its argument that the order only disposed of the counterclaim in its written and oral submissions during the application.[60] He referred in this context to a letter dated 6 December 2021 tendered in evidence by Concrete Construction, which had been sent by solicitors for Concrete Construction to the solicitors for the Ingleses after the Ingleses had issued a statutory demand for payment of the judgment debt arising from the orders made on the quantum hearing (the 6 December 2021 letter).[61] That letter referred to the s 120 Application to the Tribunal as the basis of a genuine dispute as to the sum the subject of the statutory demand. It said that Concrete Construction's application was put on the basis that, among other things, 'orders were made by the Tribunal on 9 August 2021 purporting to determine its claim in favour of your clients'. The 6 December 2021 letter stated that Concrete Construction would argue, at the hearing of the s 120 Application:

1. the Tribunal was unable to make orders pursuant to s 78(2)(b)(i) of the VCAT Act with respect to our client's claim as s 78(2)(b)(i) empowers the Tribunal to determine a claim in favour of the applicant if the party causing the disadvantage is the respondent. Our client is the applicant in the VCAT proceeding; and
2. our client's claim has neither been dismissed or struck out pursuant to s 78(2) of the VCAT Act.

37 It was submitted that the letter showed that Concrete Construction had communicated to the Ingleses that the s 78 Order had not determined Concrete Construction's claim, and the Ingleses were on notice that this was Concrete Construction's view.[62] On this basis it was contended that the Court should assess the length of the delay on the basis that 'time had stopped when the s 120 Application was made on 30 November' 2021, alternatively 'when the response was given to the statutory demand on 6 December 2021.'[63]

38 The Ingleses contend that the full delay of 568 days from the expiry of the time for making an application for leave to appeal from the s 78 Order to the filing of the Notice of Appeal should be taken into account, and that it is inordinate and has no satisfactory explanation. They contend that the only explanation given - that there was a misunderstanding as to the effect of the s 78 Order having been limited to the counterclaim - is unreasonable and contrary to the evidence. They rely on the following evidence:[64]

(a) In the affidavit filed in support of the s 120 Application, made on 30 November 2021, Zenon Eleftheriou, the General Manager of Concrete Construction, acknowledges that he received a copy of the s 78 Order shortly after it was made, on 13 August 2021. He refers in the affidavit to Senior Member Kirton having 'made orders determining the Respondents Application for Directions Hearing or Orders by summarily dismissing the Applicant's proceeding'.[65] His Affidavit refers to Concrete Construction as 'the Applicant'.

(b) The submissions filed by Concrete Construction in support of the s 120 Application, dated 10 August 2022,[66] which complain of the 'inadequate notice of the proposal [in the s 78 Application] to summarily determine the proceeding'. Read in context this indicates an understanding that the application was for the entirety of the proceeding to be determined, and not just the counterclaim.

(c) The reasons for the orders made after the quantum hearing in October 2021, in making allowances for $990,000 of claims made by Concrete Construction, demonstrated an understanding on the part of the Tribunal that the entirety of the proceeding was being dealt with in the quantum hearing.[67]

39 Counsel for the Ingeleses contended that the contemporary documents show that from no later than 6 December 2021, there was no misunderstanding on the part of Concrete Construction that the s 78 Order was limited in effect to the counterclaim. Mr Eleftheriou's affidavit and the submissions in support of the s 120 Application referred to the orders 'summarily dismissing', or having 'summarily determine[d]' Concrete Construction's claim.[68] It was submitted that this is inconsistent with an understanding that the effect of the orders was that Concrete Construction's claim remained on foot. It was put that the 6 December 2021 letter, rather than being a basis to assess delay in making the application for leave to appeal as stopping at that date, contradicts Concrete Construction's explanation for the delay.[69]

40 The Ingleses gave evidence by affidavit that the delay in bringing the application for leave to appeal had caused them serious prejudice, involving:

(a) The stress caused by the ongoing proceedings in VCAT, followed by the appeal proceedings in the Supreme Court. Mr Inglese is 85 years old, and suffers from Type 2 Diabetes, hypertension and hyperlipidaemia. Mrs Inglese is 82, and a Type A diabetic. The delay has caused them mental stress, anxiety and insomnia.[70] This evidence as to prejudice was not challenged by Concrete Construction.

(b) The financial demands of the ongoing litigation, and an inability to fund the rectification works required in the development. The Ingleses own 31 of the 66 properties in the development and are responsible for nearly 50% of any costs caused to the Owners Corporation for repairs to common property in the development. They cannot sell any of them because of defects at the property, and it is difficult to rent them.[71] They have not received the sum ordered in the quantum hearing and without that being paid they do not have the funds to finance necessary rectification works to the units. As an elderly couple with ailing health they are unable to obtain other sources of finance to undertake rectification work.[72]

(c) Mr Inglese agreed to make concessions during the quantum hearing as to $970,000 in costs, including $220,000 referable to variations, payable to Concrete Construction because he 'wanted to assist the Tribunal and illustrate the reasonableness of the Owners' claimed amount'. The concessions would not have been made had he known that Concrete Construction would continue to challenge the sum awarded to the Ingleses and to try to claim additional variations, rather than pay the judgment sum and allow the defects to be rectified.[73]

41 In response to the submissions on prejudice, senior counsel for Concrete Construction submitted that the prejudice to the Ingleses was limited, because they now had the benefit of 'a judgment on their own claims', from the quantum hearing, which Concrete Construction did not seek to challenge in this appeal.[74] He acknowledged that there was no evidence that Concrete Construction had paid the amount required by the orders but submitted that this was not relevant, as it was a matter for the Ingleses what they do with the orders.[75]

42 Concrete Construction gave affidavit evidence of the nature of the remaining claims which it wanted to bring if the Court held that the s 78 Order did not have the effect of dismissing Concrete Construction's claim, and contends that there is considerable utility to the remaining claim.[76] It seeks $1,157,819 said to be owing by the Ingleses for variation works not covered by the amounts conceded by the Ingleses in the quantum hearing, and $40,000 of unreleased security.[77] It contends that Concrete Construction has strong prospects of proving at least $24,000 of that total, because $16,746 has been admitted by the Ingleses to be owing in a joint Scott Schedule but which was not allowed for in the quantum hearing. Reliance is also made on further variations admitted by the Ingleses in the Scott Schedule, but for which the quantum was disputed. Concrete Construction assessed the value of those variations at $7,770.[78]

43 Other items in the Scott Schedule claimed by Concrete Construction as variations appear not to have been agreed by the Ingleses because they were within the scope of works, were required under the contract,[79] or for other reasons including that they involved rectification of works that were said to be non-compliant.[80] The Ingleses dispute that further amounts claimed for the variations are due.[81]

Consideration - the delay was significant, and the explanation was inadequate

44 An extension of time is, contrary to the suggestion otherwise for Concrete Construction,[82] plainly required for the proposed appeal with respect to the s 78 Order. Relief is sought with respect to that order. It was the order which had the relevant effect of determining the proceeding and giving rise to the issue now raised by Concrete Construction of whether it determined the entire proceeding or simply the counterclaim.

45 I also do not accept the submission for Concrete Construction that the delay which should be taken into account should be assessed as having stopped when the s 120 Application was made, or when the 6 December 2021 letter was sent. The affidavit and submissions made by Concrete Construction in support of the s 120 Application, read in context, acknowledge that the s 78 Order had summarily dismissed Concrete Construction's claim, or that this was how the s 78 Order was being given effect. This position was put at a time when Concrete Construction was legally represented. The acknowledgment in the submissions that the order determined Concrete Construction's claim contradicts the submission now put on appeal that, prior to the s 120 Reasons of 14 March 2023, Concrete's understanding was that the s 78 Order only determined the counterclaim and that its own claim remained on foot.[83]

46 Similarly, the effect of the 6 December 2021 letter was not to bring any delay to an end, simply because it put the Ingleses on notice that Concrete Construction now took a different view of the effect of the s 78 Order. The effect of that letter was to make it clear that Concrete Construction wished to contend for a different understanding of the s 78 Order than that held by the Ingleses that it determined the entire proceeding. The 6 December 2021 letter also demonstrated that the understanding of Concrete Construction was that the Tribunal was 'unable' to make orders determining Concrete Construction's claim under s 78(2)(b)(i), so that if the order was interpreted to have determined the entire proceeding it was beyond power (and therefore subject to a potential application for leave to appeal under s 148 of the VCAT Act).[84]

47 That there was a dispute about the effect of the s 78 Order, and potentially about whether the order was beyond the power of the Tribunal was confirmed by the Ingleses' response to the 6 December 2021 letter. The solicitors for the Ingleses advised, by letter dated 8 December 2021, that the 'assertions regarding any offsetting claim are dependent on the success of your client's current section 120 of the [VCAT] Act [application], being an application we consider to have no prospects of success.'[85]

48 Despite the onus being on Concrete Construction to establish that an extension of time should be granted, and that its explanation in submissions was that it understood the s 78 Order to be limited to the counterclaim and leave its claim on foot, it did not provide any proper evidence to support that explanation. The evidence of the solicitor for Concrete Construction stating that 'the Appellant understood' the s 78 Order to have determined only the counterclaim and that its claim remained on foot[86] was inadequate and deficient in form, in attributing an understanding to the company without identifying who on behalf of the company had that understanding, and when it was held. Although three affidavits were filed on behalf of Concrete Construction in support of the application for leave to appeal, which also exhibited affidavits filed on behalf of Concrete Construction in the Tribunal, none of the affidavit evidence identified exactly what Mr Eleftheriou, the General Manager, or Mr Italiano, the Managing Director, understood the s 78 Order to mean, at any point in time from when Mr Eleftheriou received the order on 13 August 2021. The only evidence touching on the understanding of the company officers was that of Mr Eleftheriou as expressed in his 30 November 2021 affidavit in the Tribunal, which indicated that he understood the s 78 Order to have summarily dismissed Concrete Construction's claim; and the affidavit of Mr Italiano which refers only obliquely to what his understanding was of the orders. He says that he 'now' understands that the Ingleses in the s 78 Application 'sought orders to determine their counterclaim', but says nothing about his understanding of the effect of the s 78 Order; nor what his previous understanding of the s 78 Application was.[87]

49 One final relevant matter arising from the evidence is that at the hearing of the s 120 Application on 2 February 2023, senior counsel for Concrete Construction[88] acknowledged in submissions that the effect of the s 78 Order was to determine Concrete Construction's case on liability. The transcript of that hearing was tendered by Concrete Construction.[89] Senior Member Farrelly asked whether the concessions made by the Ingleses at the quantum hearing in relation to amounts to be credited to Concrete Construction raised a prejudice to them that could not be overcome. Senior counsel for Concrete Construction submitted:

Well that cuts both ways in our submission ... it highlights the real problem with the 9 August orders. The 9 August orders of Senior Member Kirton dismissed, on their face, our case on liability ... why those concessions were even made or taken into account or form part of the orders just going to show how ambiguous and wrong the 9 August orders were because suddenly they got revived, our case on liability, by way of apparently concessions being made by owners or developers... which ... just goes to show that owners and developers here know that they got more than they asked for before Senior Member Kirton. They know those orders shouldn't have been made which is presumably why they made the concessions they did before you because they got - - those orders went much further than they should, and were taken into account in concessions that were made.[90]

50 Senior counsel also later submitted with respect to the 9 August orders, 'our claim had been dismissed' and that they involved 'complete dismissal on liability of its claims'.[91] Counsel for the Ingleses responded by saying that the Senior Member Kirton's orders 'are clear ... the Applicant's proceeding was dismissed. There's no --- there can be no other interpretation of those orders. My client's concessions that were made concerned recovery and quantum of recovery. You can't double dip ...'.[92]

51 The submission made on behalf of Concrete Construction in the s 120 hearing on 2 February 2023 is quite inconsistent with the submissions now made[93] that:

(a) Concrete Construction did not understand that the effect of the s 78 Order was to determine its claim until the s 120 Reasons were delivered in March 2023; and

(b) prior to that time it had a positive understanding that the s 78 Order only determined the counterclaim and that Concrete Construction's claim remained on foot.

52 Concrete Construction has not established that the understanding held on behalf of the company until the s 120 Reasons in March 2023 was that the s 78 Order determined only the counterclaim and left its claim on foot.

53 I find, having regard to the evidence discussed above, that:

(a) the General Manager of Concrete Construction, Mr Eleftheriou, understood that the s 78 Order either had the effect that Concrete Construction's claim was dismissed, or that it could be understood that way, by November 2021 when he swore his affidavit;

(b) Concrete Construction's legal representatives, and the representative or representatives of Concrete Construction involved in instructing them when the 6 December 2021 letter was written, were aware from 6 December 2021 that there was a dispute between the parties as to the effect of the s 78 Order. They were also aware, likely from November 2021 but undoubtedly from no later than 2 February 2023 when submissions were made at the s120 hearing, that the s 78 Order in fact determined Concrete Construction's claim;

(c) the understanding of Concrete Construction's representatives which should be attributed to it is that from November 2021, that the s 78 Order determined, or could be interpreted as determining, the entire proceeding, namely the claim and the counterclaim.

54 With the understanding that the s 78 Order was interpreted by the Ingleses and by the Tribunal as determining the entire proceeding, Concrete Construction made the decision, at a time when it was legally represented, to make the s 120 Application rather than to seek leave from this Court to appeal the s 78 Order.

55 That decision was made notwithstanding that Concrete Construction had also, as noted at paragraph [46] above, formed the view by 6 December 2021 that the Tribunal did not have the power to make an order determining its claim against it under s 78(2)(b)(i), which is a key element of the arguments it now puts on appeal. The view that Senior Member Kirton did not have power to make the order was reiterated in submissions by senior counsel at the hearing of the s 120 Application on 2 February 2023.[94] An absence of power to make the s 78 Order would plainly have provided a basis to seek leave to appeal it.

56 The decision to pursue the s 120 Application was also made notwithstanding that the Tribunal's powers under s 120 would not necessarily clarify the effect of the s 78 Order, nor whether it was within the Tribunal's power to make it, given that an applicant under s 120 must first persuade the Tribunal that it has a reasonable excuse for not attending or being represented at the hearing.[95]

57 Having made the deliberate choice to apply under s 120 to reopen the s 78 Order, it was unreasonable for Concrete Construction, in March 2023, when the s 120 Application did not produce the outcome that it had sought, to then seek the indulgence of an extension of time to appeal the s 178 Order.

58 In coming to that conclusion I have considered the decision in Brandwill Holdings Pty Ltd v Jonson & Ors.[96] In that case Brandwill had applied for leave to appeal from orders of the Tribunal after having first made an application under s 119 of the VCAT Act for an amendment of the orders on the basis that they did not reflect the Tribunal's intention as disclosed in its reasons, and so contained an error which should be corrected under s 119. That application was refused. The application for leave to appeal the original decision under s 148 was then brought some 42 days after the decision on the s 119 application.[97] Justice Emerton observed:

[E]ven if there were good grounds for the s 119 application, there was nothing to prevent the applicant from exercising its right to seek leave to appeal the Tribunal's Order at the same time. It chose not to do so. Instead, on the very last day of the 28 day period in s 148(5) of the VCAT Act, the applicant made its request of the Council and then, when the Council refused to issue a permit, it elected to make an application under s 119 in lieu of seeking leave to appeal. It is not reasonable in the circumstances of the limited period in which to launch an appeal under the VCAT Act to make a deliberate decision to pursue a different course and not to pursue an appeal, but to then seek an indulgence to pursue the appeal some seven months later when the different course turns out to be unproductive of the outcome sought.

Even if it were reasonable for the applicant to delay seeking leave to appeal the Tribunal's Order until it had exhausted the other options, there is a further period of 42 days following the refusal of the s 119 application that is either unexplained or such explanations as have been given are inadequate.[98]

59 Her Honour also concluded that the proposed question of law was not so important as to require consideration as a matter of public interest. Noting also the public interest in the finality of litigation, her Honour determined that no extension of time should be granted.[99]

60 In the present proceeding, the delay of Concrete Construction in making the application for leave to appeal, from the time at which it became aware of the s 78 Order on 13 August 2021 to filing the notice of appeal on 30 March 2023, is inordinate. The delay is also inadequately explained. I take into account the evidence that Concrete Construction had not engaged lawyers between 23 March 2021 and 29 September 2021, although it believed that there was a solicitor representing it during this time.[100] Even excluding that period of delay, the period from 29 September 2021 to the filing of the notice of appeal on 30 March 2023 is a serious and inadequately explained delay.

Prejudice to the Ingleses from the late application

61 I accept that there has been significant prejudice to the Ingleses from the delay in seeking leave to appeal the s 78 Order, and that they will suffer further prejudice of the same kind should the extension of time be granted.

62 Senior Member Farrelly concluded, in making the orders on the s 120 Application in March 2023, that there would be prejudice to the Ingleses should he extend time to bring the application to reopen the s 78 Order. He stated in the s 120 Reasons that there was prejudice in the considerable costs the Ingleses had incurred in the quantum hearing, and that although that prejudice may be met by an order as to costs, he was not satisfied that an undertaking or order as to payment of costs thrown away would be valuable. He also referred to the prejudice which could not be met by costs, of the concessions made by the Ingleses in the quantum hearing.[101]

63 In this appeal, there is no challenge to Senior Member Farrelly's refusal to extend time to bring the s 120 Application, nor to his conclusions as to the prejudice incurred by Ingleses as a result of delay. Concrete Construction seeks only a declaration that the order dismissing the s 120 Application 'relates only to the proceeding (being the counterclaim) brought by the Respondents against the Appellant before VCAT'.[102] The findings as to prejudice remain unchallenged. In any event, I agree with Senior Member Farrelly's conclusions as to prejudice, and it has been established on the evidence before me. I also conclude that the prejudice to the Ingleses arising from the delay in seeking leave to appeal the s 78 Order to this Court has only increased since Member Farrelly's findings. That has arisen through the incurring of costs by the Ingleses in funding a defence in this Court, and the continuing stress and anxiety caused to them by the proceeding. They are both in their 80s, have significant health conditions, and the evidence of Mr Inglese that this is causing serious anxiety to him and to Mrs Inglese is uncontested.

64 The only basis on which Concrete Construction resisted a finding that delay in bringing the appeal had caused prejudice to the Ingleses was a submission that the Ingleses have the benefit of an order for payment of their own claims, which Concrete Construction does not seek to challenge. This is unpersuasive. Concrete Construction has not paid the amount due under that order, and has resisted attempts to enforce payment. It refused to pay in response to the statutory demand, and instead required the Ingleses to withdraw it on the basis that the amount was the subject of a dispute which was to be heard in the s 120 Application. In the s 120 Application, Concrete Construction had contended that the quantum orders would necessarily fall as a consequence of the s 78 Order being reopened and set aside, if it was successful.[103] In this appeal, brought by Notice of Appeal filed 30 March 2023, Concrete Construction had made a decision not to appeal the quantum orders but they remained, as at the date of the hearing in April 2024, unpaid.[104]

65 The order, not having been complied with by Concrete Construction, has therefore had limited, if any, practical benefit to the Ingleses, during a period when the evidence establishes that they were in real need of funds.

66 The submission that the Ingleses have had the benefit of an order on their claims and that this limits any prejudice of Concrete Construction's past delay is, in these circumstances, one of little force. It does not alter my conclusion that the delay in seeking leave to appeal the s 78 Order has caused significant prejudice to the Ingleses.

Impact on Concrete Construction if no extension is granted

67 If no extension of time is granted, Concrete Construction will lose the opportunity to contend that its claim remains on foot and will lose the opportunity to seek payment for the remaining variations and unpaid security that it contends is payable. The evidence supports a conclusion that Concrete Construction may have a claim to approximately $24,000 in variations. Other than that amount the remaining sum appears likely to be strongly contested, and it is unclear how strong Concrete Construction's full claim would be if it was able to continue to pursue it. Further, for the reasons below, I consider that the merit of its argument that the s 78 Order is in fact limited to the counterclaim and leaves it free to continue to prosecute its claim is weak.

68 Although the refusal of an extension of time will have the result that Concrete Construction will lose any opportunity to pursue its remaining claims, I consider that when considered in the context of the absence of any reasonable explanation for the delay, and taking into account the very serious prejudice to the Ingleses of the delay, it would not be fair or appropriate to grant the extension of time sought.

69 I also consider that there is little prospect of success of the Concrete Construction's appeal against the s 78 Order. Pursuant to s 148(2A) of the VCAT Act, leave to appeal can only be granted if the Court is satisfied that the appeal has a real prospect of success. I am not so satisfied. I set out my reasons for that conclusion below, but for the purposes of the assessment of the merit of the appeal in the context of my discretion as to whether to extend time to make the application for leave to appeal the s 78 Order, I summarise them here.

70 First, I do not accept the construction of s 78(2)(b)(i) contended for by Concrete Construction. I also consider that Concrete Construction's interpretation of the s 78 Order is incorrect. Finally, even I am incorrect about the scope of s 78(2)(b)(i), I would not make the declarations sought as they do not reflect the orders that were made, properly construed. I would also decline, in the exercise of my discretion, to make the declarations as it would not in my view be appropriate to make such declarations interpreting and confining the scope of orders of the Tribunal in an appeal under s 148 of the VCAT Act, including because another mechanism exists within the statutory framework of the Tribunal which would have enabled clarification of the orders if any was required.

71 Taking into account the limited merit of the appeal, therefore, I consider that the grant of an extension of time to appeal the s 78 Order is not necessary to do justice between the parties.

72 An extension of time to appeal the first order made by Senior Member Kirton on 9 August 2021 will be refused.

73 Concrete Construction's proposed appeal from the s 78 Order is unusual in that it does not seek to set aside the order. Concrete Construction does not contend that there was any error in Senior Member Kirton's order.[105] Specifically, it does not contend that it was not open to the Tribunal to make an order under s 78, nor does it challenge Senior Member Kirton's conclusion that it had conducted the proceeding in a way that unnecessarily disadvantaged the Ingleses within the meaning of s 78(1), and that it was appropriate to make an order. Concrete Construction instead contends that the s 78 Order should be construed to have determined only the Ingleses' counterclaim, and left Concrete Construction's claim on foot. It seeks declarations that:

...order 1 of the orders of the Tribunal on 9 August 2021 relates only to the proceeding (being the counterclaim) brought by the Respondents against the Appellant before VCAT.

Further or in the alternative, a declaration that order 1 of the orders of the Tribunal made on 14 March 2023 relates only to the proceeding (being the counterclaim) brought by the Respondents against the Appellant before VCAT.

74 Concrete Construction's primary contention is that the s 78 Order must be construed to be limited to the counterclaim as:

(a) the Ingleses sought only the 'determination of the proceeding', which invokes s 78(2)(b)(i) of the VCAT Act;

(b) the order states that it was made pursuant to s 78(2)(b)(i); and

(c) s 78(2)(b)(i), when invoked by a counterclaimant, permits only the determination of the counterclaim, so that the reference to the determination of the 'proceeding' in the order must be read as the determination of the counterclaim only, rather than of the proceeding as a whole, for it to be within power.

75 With respect to the s 120 Order, the basis of the appeal against the s 120 Order is somewhat less clear. Concrete Construction did not contend that there was an error in the way that the Tribunal understood and determined the s 120 Application, other than comments made as to the effect of the s 78 Order. Concrete Construction did not seek to overturn it.[106] It sought, on a further or alternative basis, a declaration that the effect of the s 120 Order was limited to the Ingleses' counterclaim, apparently on the basis that it contended that the s 78 Order was so limited,[107] and an order remitting the proceeding to the Tribunal. That declaration was sought further to or in the alternative to the declaration in relation to the s 78 Order. In supplementary submissions filed in response to my request that the parties make further submissions as to the appropriateness or otherwise of the declaratory relief sought, Concrete Construction submitted that it was appropriate that the Court make both the declarations sought, noting that s 148(1) permits an appeal against an 'order' of the Tribunal, and the Tribunal's reasons form part of its order.[108] It accepted that it would be sufficient for the Court to make only the declaration as to the terms of the s 120 Order, or simply for the Court to make a finding that the s 78 Order had not extinguished Concrete Construction's claim and to make an order remitting the proceeding to the Tribunal.[109]

76 The Ingleses contend that the s 78 Order determined the entire proceeding in their favour, including Concrete Construction's claim against them. They contend that s 78(2)(b)(i) permits such an order being made on the application of a counterclaimant and also that even if the Court accepted the contentions of Concrete Construction as to the effect of the order, it would not be appropriate to make a declaration as an alternative method of seeking clarification of the s 78 Order by the Tribunal itself was available, pursuant to s 119 of the VCAT Act. The principles of finality in litigation also are relevant to the discretion to refuse to grant the declaration sought.[110]

77 As to the s 120 order, the Ingleses submit that there is no basis for any appeal against the s 120 Order, as it is in effect 'an appeal from obiter comments made by Senior Member Farrelly'.[111] Concrete Construction does not seek to challenge the findings of the Senior Member on either his refusal to extend time to make the s 120 Application, or his determinations as to the matters identified in ss 120(4) and 4(A) of which the Tribunal is to be satisfied before hearing and determining an application to reopen. There being no substantive challenge to the s 120 Order, the Ingleses submit that the application for leave to appeal should fail.

78 The s 78 Order stated relevantly that '[u]nder s 78(2)(b)(i) ... the proceeding is determined in favour of the respondents'. The primary basis of Concrete Construction's contention that the reference to 'proceeding' must be construed as applying only to the counterclaim is the reference in the order to s 78(2)(b)(i). Concrete Construction contends that this sub-paragraph only permits the determination of the proceeding in which the party causing disadvantage is 'not the applicant'. Here, it contends, that is the counterclaim, as 'the only proceeding where Concrete Construction "was not the applicant"'.[112] It is, therefore, necessary to consider the construction and operation of s 78(2)(b)(i) to determine whether, properly construed, its scope is limited in this way.

79 Concrete Construction submits in favour of its construction that 'the term 'proceeding' in s 78(2) is closely tied to the notion of an 'applicant' or an 'application' and that in this context 'proceeding' means 'the process commenced by application, whether that application is a claim or a counterclaim'.[113] The Ingleses submit that 'proceeding' should be construed as meaning 'all matters within the ambit of the unique proceeding number' and that 'when a proceeding is determined the entirety of the proceeding is dealt with'.[114] They emphasise that the focus of s 78 is on the party's conduct and whether it is unnecessarily disadvantageous, rather than on the merits of a proceeding.[115]

80 Section 78 of the VCAT Act provides, relevantly:

78 Conduct of proceeding causing disadvantage

(1) This section applies if the Tribunal believes that a party to a proceeding is conducting the proceeding in a way that unnecessarily disadvantages another party to the proceeding by conduct such as -

(a) failing to comply with an order or direction of the Tribunal without reasonable excuse; or

(b) failing to comply with this Act, the regulations, the rules or an enabling enactment; or

(c) asking for an adjournment as a result of (a) or (b); or

(d) causing an adjournment; or

(e) attempting to deceive another party or the Tribunal; or

(f) vexatiously conducting the proceeding; or

(g) failing to attend mediation or the hearing of the proceeding.

(2) If this section applies, the Tribunal may -

(a) order that the proceeding be dismissed or struck out, if the party causing the disadvantage is the applicant; or

(b) if the party causing the disadvantage is not the applicant -

(i) determine the proceeding in favour of the applicant and make any appropriate orders; or

(ii) order that the party causing the disadvantage be struck out of the proceeding;

81 The term 'proceeding' is defined in s 3 of the VCAT Act in a way that is not determinative of whether it must mean the entirety of a proceeding or action between the parties or a component of a proceeding:

Proceeding means a proceeding in the Tribunal, including -

(a) an inquiry conducted by the Tribunal, including an inquiry under section 141 of the Equal Opportunity Act 2010; or

(b) a compulsory conference under section 83; or

(c) a mediation under section 88; or

(d) a rehearing or reassessment under Part 7 of the Guardianship and Administration Act 2019 ...

82 A compulsory conference is a process that may occur to promote a settlement of a proceeding, prior to the hearing of the proceeding: see ss 83(1) and (2)(b). It is, therefore, capable of being a component of, or ancillary to, a proceeding, or, by reason of the definition of proceeding, a proceeding of itself. A proceeding or part of it may be referred to a mediation pursuant to s 83, but again a mediation could by reference to the definition of proceeding be 'a proceeding' of itself. The breadth and inclusive nature of the definition of proceeding, understood in context, indicates that it may mean an entire proceeding between the parties, including all claims and counterclaims between the parties, or potentially one component of a proceeding. The meaning in every usage in the VCAT Act will depend on the context of its use. This is confirmed by the understanding of 'proceeding' identified in authorities in other contexts, as considered further below.

83 The terms 'applicant' and 'application' are also defined in s 3:

application means application to the Tribunal;

applicant means -

(a) a person who makes an application; or

(b) a person who requests or requires a matter to be referred to the Tribunal; ...

84 There is, however, no definition of a counterclaim in the VCAT Act.

85 VCAT has no inherent jurisdiction, and no general or at large powers to dispose of a proceeding summarily.[116] The sole powers in the VCAT Act to bring a proceeding to an end without a full hearing on the merits are s 75 (summary dismissal of unjustified proceedings), s 76 (summary dismissal for want of prosecution), s 77 (strike out of part or all of a proceeding because of a more appropriate forum) and s 78. Unlike s 76 and s 77, which expressly recognise an ability to strike out part of a proceeding, s 78(2) does not permit the striking out of particular causes of action or points of claim.[117] This is consistent with the focus of s 78 being not on the merit or substance of particular claims made by a party, but on the conduct of a party, and whether it has been unnecessarily disadvantageous to another party. In Bell Corp Victoria Pty Ltd v Stephenson,[118] Ashley JA observed that the power in s 78(2), understood in context:

... operates in circumstances which at least do not require that the proceeding be frivolous, vexatious, misconceived, lacking in substance or otherwise an abuse of process; and which at least do not require that the circumstances demonstrate want of prosecution. Put another way, the sub-section contemplates the making of an order with very serious consequences in circumstances that very probably would not fit the templates set up by ss 75 and 76. Whilst it can rightly be said that the creation of such a remedy in the situation contemplated by s 78(1) shows that an intention that orders be made in some cases where the situation exists, it should also be firmly concluded, in statutory context, that the remedy should be of last resort and not first resort.[119]

86 There is limited authority specifically considering s 78(2) of the VCAT Act. However, it has been held that s 78(2)(b) empowers the Tribunal to determine a counterclaim in favour of the respondent or counterclaimant.[120] In ACN 115 918 959 Pty Ltd (formerly known as Pearl Hill Pty Ltd) v Moulieris, Kaye JA considered orders made by the Tribunal on an application made by a respondent, who had filed a defence and counterclaim to the applicant's claim in the Tribunal, for dismissal or striking out of the applicant's claim pursuant to ss 76 and 78 of the VCAT Act. The Tribunal had made orders dismissing the applicant's claim under ss 76 and 78 of the VCAT Act and determining the counterclaim against the applicant in favour of the respondent.[121] On the appeal under s 148 from those orders, it was contended that the Tribunal had no power to determine the counterclaim in favour of the respondent under s 78(2)(b)(i).[122] Kaye JA held that the 'plain text' of s 78(2)(b) was contrary to the conclusion that it did not confer a power to determine a counterclaim in favour of a respondent. His Honour stated:

Section 3 of the Act defined 'application' to mean 'application to the Tribunal'. The word 'applicant' is defined to mean (inter alia) 'a person who makes an application'. Accordingly, in making a claim by way of counterclaim, the respondent, in that respect, was an 'applicant' for the purposes of the Act.

The context and purpose of s 78 also support that conclusion. The proposition, which underlies [the relevant grounds of appeal], is that the relief, provided by way of s 78, is only available to the party which initially commenced the proceeding, and was thus described as the applicant in the proceeding. An interpretation of s 78(2)(b), in that way, would necessarily be productive of anomalous consequences which, it might be concluded, would not have been in contemplation of the legislature. The interpretation of s 78(2) that underpins [the grounds of appeal] would have the consequence that if two parties to a dispute each had a claim against the other, s 78(2) would only be available to the party who managed to first institute proceedings in respect of its claim. In such a case, that party might institute a claim, not prosecute it, persistently engage in conduct that disadvantaged the other party who had advanced a counterclaim, and yet not be amenable to relief under s 78(2). It might readily be inferred that such an interpretation, of s 78(2), would defeat the manifest purpose of the legislature.[123]

87 On appeal from the judgment of Kaye JA in Moulieris, the Court of Appeal noted that despite the issue of whether s 78 permits judgment to be given on a counterclaim having been raised before the trial judge, that question was resolved in favour of the respondent, and had not been pursued on appeal.[124] The Court of Appeal was content to proceed on the basis that s 78 did in fact permit judgment to be given in respect of a counterclaim.

88 Authorities which have considered the meaning of the terms 'proceeding' or 'proceedings' in other contexts generally recognise that it may encompass an action or a step in an action such as a claim, or a counterclaim, depending on the statutory context and the objects of the relevant legislation.[125] In a context similar to the present, dealing with Court Rules providing for the court to order a stay of a 'proceeding', in Williams v Australian Capital Territory, McWilliam AsJ observed that the applicable statutory definition of 'proceeding', meaning 'a legal or other action or proceeding' was 'capable of referring to one cause of action or the entire litigation involving multiple causes of action'.[126]

89 In the context of interpreting the concepts of 'proceeding' and 'hearing' in the VCAT Act, the Court of Appeal has observed that the concepts bear different meanings and are not interchangeable; and that proceeding is 'an action or matter or "some vehicle by which the jurisdiction of [the Tribunal] is invoked", commenced by an application or other initiating process'.[127]

90 In the present case, the statutory context suggests that 'proceeding' is used in s 78 of the VCAT Act to mean the entirety of the action between the parties, rather than an individual component.

91 The terms of s 78 itself suggest that the word 'proceeding' in s 78(2)(b) is not intended to be limited to only the claim or process brought by the party which has made the application. Section 78(2)(b) provides:

(2) If this section applies, the Tribunal may -

...

(b) if the party causing the disadvantage is not the applicant -

(i) determine the proceeding in favour of the applicant and make any appropriate orders; or

(ii) order that the party causing the disadvantage be struck out of the proceeding;

92 If the word 'proceeding' in s 78(2)(b) was limited to the claim brought by the applicant for the s 78 Order, that would not sit comfortably with the terms of s 78(2)(b)(ii) which refer to the party causing the disadvantage being 'struck out of the proceeding'. It would be unnatural to refer to a party being 'struck out' of a claim or a 'counterclaim'. Subsection 78(2)(b)(ii) would only read naturally if 'proceeding' is understood as the entirety of the matter in the Tribunal. Given that s 78(2)(b)(i) is introduced by the same language as s 78(2)(b)(ii), there is no good reason to read 'proceeding' in paragraph (b)(i) as limited to the claim of the applicant, but read paragraph (b)(ii) as referring to the proceeding generally.

93 Concrete Construction submitted that having regard to authority in the Tribunal that a counterclaim or cross claim is an application which 'but for the administrative process adopted [by the Tribunal] would otherwise have been a separate proceeding'.[128] It can be accepted that a counterclaim may constitute a proceeding, noting the breadth of the definition in s 3 of the VCAT Act.[129] However, that does not mean that a counterclaim may not also be part of a broader proceeding, understood as the entirety of the action between the parties.

94 Where the VCAT Rules deal with a counterclaim, it is in a way that treats it as a component of a broader proceeding. The VCAT Rules provide in Rule 4.14:

(1) Subject to the provisions of any Act or regulation, a counterclaim by one party against another party in a proceeding must be -

(a) in writing and contain any particulars required by these Rules; and

(b) accompanied by any documents or further information required by these Rules; and

(c) lodged in the same manner as an application.

95 Although it is not appropriate to construe the VCAT Act by reference to the subordinate legislation, it is does demonstrate an element of the broader statutory scheme against which the Senior Member made the s 78 Order.

What does it mean to 'determine the proceeding in favour of' an applicant

96 Concrete Construction submits that it is not possible to construe s 78(2)(b)(i) as empowering the Tribunal to determine a counterclaim and also to dismiss the claim against an applicant because s 78(2)(b)(i) only permits the determination of the proceeding in favour of the applicant, and if the primary claim was also to be dismissed, this could only be done under s 78(2)(a) which permits the dismissal of the applicant's claim.[130]

97 Where the Tribunal is exercising a power under ss 75, 76, 77 or 78, it must expressly state that it is doing so, as it is not open for such important powers to be exercised 'impliedly' or in a latent manner.[131] The Tribunal order referred only to s 78(2)(b)(i), so it is open to conclude that this was the only source of power on which the Senior Member relied in making the order.

98 However, I consider that the s 78(2)(b)(i) power to 'determine the proceeding in favour of an applicant' would permit the determination of the entire proceeding, both counterclaim and claim, on the application of a respondent/applicant by counterclaim.

99 Once it is accepted, as it was in Moulieris,[132] that a respondent who has brought a counterclaim may be an applicant for the purposes of s 78(2)(b)(i), and also that, as concluded above, the word 'proceeding' may encompass the entirety of the proceeding or action between the parties, the only remaining issue is what it means to 'determine the proceeding in favour of' the counterclaimant. In particular, the question is whether s 78(2)(b)(i) would empower the Tribunal to make an order, on the application of a counterclaimant, that the applicant's claim be finally determined against it by, in effect, dismissing it.

100 The word 'determine' is not defined in the VCAT Act. It is used in that Act in the sense of both making a decision on an issue, and deciding a matter or proceeding in a conclusive way. An example of the first usage is s 30(3) which provides that the President and Vice President 'may determine the places and times for sittings of the Tribunal'. An example of the second usage, denoting a more conclusive decision on, or determination of, a proceeding, is s 52 of the VCAT Act. That section provides that the Supreme Court, County Court or the Magistrates Court 'does not have jurisdiction to hear, or continue to hear, or determine any proceeding in which a person bringing the proceeding brings in issue' the exercise or failure to exercise power under planning legislation if, inter alia, the matter:

(i) has not been the subject of a proceeding in the Tribunal; or

(ii) if it has been the subject of a proceeding in the Tribunal, has not been determined by the Tribunal; or

(iii) if it has been determined by the Tribunal, the time for appeal against an order of the Tribunal in the proceeding has not expired; or

(iv) if an appeal has been brought against an order in the proceeding, the appeal has not been determined.

101 The use of 'hear, or continue to hear or determine' demonstrates that 'determine' involves a step beyond hearing the proceeding. The limitation on the various Courts' powers applying when the proceeding 'has not been determined by the Tribunal', or if it 'has been determined, the time for appeal ... has not expired' indicate a usage of 'determined' in the sense that it decides the proceeding in a way that brings it to an end in the Tribunal.

102 In the context of s 78 as a whole, it would be most natural to read the phrase 'determine the proceeding in favour of' the applicant in s 78(2)(b)(i) as meaning to make a final decision as to the outcome of the proceeding in favour of the applicant. Section 78(2)(a) refers to orders to dismiss or strike out a proceeding, orders that have a final effect (subject to a possible right of reinstatement in the case of striking out).[133] Section 78(2)(b)(ii) refers to striking out a party, again an order which will finalise the proceeding against the party.

103 The powers to make the orders in either s 78(2)(a) or s 78(2)(b) are available where a party to a proceeding is conducting the proceeding in a way that unnecessarily disadvantages another party to the proceeding, which requires a focus on the conduct of the party. It would be surprising if the respondent who is a counterclaimant and is disadvantaged with respect to both the defence of the claim against it and the conduct of its counterclaim could only have the counterclaim determined in its favour, but had to continue to defend the claim of the applicant who had been conducting the proceeding to its disadvantage.[134]

104 The effect of Concrete Construction's submissions is that if this was the outcome that the Tribunal considers appropriate, the Tribunal should determine the counterclaim in favour of the counterclaimant under s 78(2)(b)(i), and dismiss the proceeding of the applicant under s 78(2)(a).[135] This is not in my view the most harmonious or coherent reading of s 78.

(a) First, it would involve treating the 'applicant' referred to in s 78(2)(b)(i) as the counterclaimant, but the 'applicant' in s 78(2)(a) as the claimant. While this is possible, it would not be the most coherent reading of the section. It is generally appropriate to read a word as used more than once in a section the same way.[136]

(b) Secondly, as a matter of giving the terms in s 78(2)(b)(i) their natural meaning in their context,[137] the power to 'determine the proceeding in favour of' a counterclaimant in s 78(2)(b)(i) is broad enough to comfortably encompass deciding the counterclaim in their favour, and deciding the claim brought against them in their favour (and against the applicant) by dismissing it. Equally, it would give the Tribunal the discretion to decide only the counterclaim proceeding in favour of the counterclaimant, if the circumstances warranted it.

105 In coming to this conclusion I have taken into account, as urged by senior counsel for Concrete Construction, that the Tribunal's powers are strictly limited to those conferred by the VCAT Act, and that the difference in language between ss 78(2)(a) and 2(b)(i) is a deliberate difference which should be given meaning. That is important in circumstances where the effect of determining a proceeding may be different to the effect of an order to strike out the proceeding, including for example that there may be a right of reinstatement if a claim is struck out rather than dismissed or determined.[138]

106 It is clear that the concepts of dismissal and strike out in s 78(2)(a) have a different meaning to 'determined in favour of' in s 78(2)(b). However the difference in language does not in my view have the consequence that the power to determine the proceeding in favour of the applicant in s 78(2)(b)(i) does not extend to dismissing a proceeding brought against that applicant, and thus determining the proceeding in their favour. The reason for the difference in language in s 78(2)(a) and (b) is in part because s 78(2)(a) deals only with the applicant as the party causing disadvantage; s 78(2)(b) deals with disadvantageous conduct of all other parties. Proceedings in the Tribunal may involve multiple parties, including respondents and any other party joined to a proceeding, and there may be multiple different types of claim between them.[139] The Explanatory Memorandum to the Victorian Civil and Administrative Tribunal Bill is consistent with the purpose of s 78(2)(b) being a response to any party causing disadvantage, and enabling a response against that particular party:

Clause 78 gives the Tribunal powers to deal with the conduct of a proceeding by a party to the disadvantage of another party. The presiding member may make an order for costs under section 109 or, if the offending party is the applicant, dismiss or strike out the proceeding, or, if the party is not the applicant, determine the proceeding in favour of the applicant as against that particular party or strike that party out of the proceeding.[140]

107 This indicates that the key focus is the power to determine the proceeding in favour of the disadvantaged party, against the party who has been found to conduct the proceeding to their disadvantage. The claims as between the particular parties may be closely connected, with the disadvantage potentially affecting all claims as between them, rather than being quarantined to one claim. It gives s 78(2)(b)(i) a more workable operation to construe the Tribunal's power to 'determine the proceeding in favour of the applicant' to be a power to determine, if appropriate, all aspects of the proceeding as between that applicant and the party causing the disadvantage.

108 For the reasons above, s 78(2)(b)(i) should be construed as conferring on the Tribunal the power to determine either an entire proceeding as between parties, or a claim in that proceeding, in favour of an applicant (who may be an applicant by counterclaim). The determination of the proceeding in the applicant's favour may be by deciding the applicant's counterclaim in their favour, and also dismissing any claim against it, being also a determination of that component of the proceeding in favour of the applicant.

The effect of the s 78 Order made by the Tribunal

109 The s 78 Order falls first to be interpreted by reference to the specific words of the order:

Under section 78(2)(b)(i) of the Victorian Civil and Administrative Tribunal Act 1998 the proceeding is determined in favour of the respondents with the quantum of the respondents' counterclaim to be assessed.[141]

110 The meaning of a court order is to be derived from the language used, read fairly. Where the language is susceptible of more than one meaning, it is open to have recourse to extrinsic material, including the reasons for judgment.[142]

111 The s 78 Order refers to having been made under s 78(2)(b)(i). As submitted by Concrete Construction, this may have been an indication that the intention of the order was to determine the counterclaim only, given that that section permits an application by a counterclaimant. For the reasons set out above, I do not consider that this is necessarily the case, given that the terms of s 78(2)(b)(i) are such as to give VCAT the discretion to determine a 'proceeding' consisting of a particular claim in a proceeding or the entire proceeding in favour of any party who is relevantly an applicant. It is for the Tribunal member to decide whether the entire proceeding, or only a specific claim in it, should be determined. It is, falls therefore, to consider the terms of the order in their relevant context to identify the scope and effect of the order.

112 My conclusion as to the breadth of s 78(2)(b)(i) also means that I reject Concrete Construction's submission that the s 78 Order must be interpreted as applying to the counterclaim only because, had the Tribunal intended to dispose of Concrete Construction's claim, the Tribunal would have had to make an order under s 78(2)(a) either to dismiss it or to strike it out. Because s 78(2)(b)(i) empowers the Tribunal generally to decide or determine the whole proceeding, or a component of a claim such as the claim or counterclaim, it was not necessary to rely on any other part of s 78(2) to determine the whole proceeding.

113 The next observation that can be made from the language of the s 78 Order is that the order refers to the determination of 'the proceeding' in favour of the respondents, with the 'counterclaim' to be assessed. The use of the two different terms suggests that they were not intended to mean the same thing. Put a different way, if the word 'proceeding' had been intended to refer only to the counterclaim, it would be surprising that 'counterclaim' was not used instead, consistent with the use of that word later in the order. The natural reading of the phrase as a whole suggests that the Senior Member is first referring to the determination of the proceeding, and then to the assessment of the quantum of a component of it, the counterclaim.

114 To understand the reference to 'the proceeding is determined in favour of the respondents' as being intended to decide the entirety of the claims identified by the single proceeding number[143] would also be consistent with the way the VCAT Rules refer to proceedings. Rule 4.29, in Order 4 dealing with the general procedure of the Tribunal, refers to 'proceeding' in a way that demonstrates that it is the entirety of a proceeding as between the parties as identified by a specific identifying number. The rule provides:

4.29 Form of register of proceedings and matters to be contained therein

The register may be kept in written or electronic form and shall contain, in respect of each proceeding commenced in the Tribunal -

(a) a number identifying the proceeding; and

(b) the names of the parties; and

...

(e) particulars of any final determination or order made by the Tribunal.

115 Looking at the s 78 Order in context, the reasons that the Senior Member set out with the order suggest that it was her intention to determine the proceeding in its entirety.

116 Generally in the reasons, the Senior Member does not focus on the counterclaim, but refers to the applicant 'conducting the proceeding in a way that unnecessarily disadvantages the respondents within the meaning of section 78(1)'.[144] That conduct is identified as the failures to file and serve a list of documents, witnesses statements and a Tribunal Book in breach of the September 2020 procedural orders, as well as failures to communicate with the Ingleses' solicitors and the Tribunal. All of those failures relate to Concrete Construction's claim, as well as the counterclaim. The reasons also refer to the hearing which is listed with an estimate of 25 days, and say that because of the failures to file documents, 'the respondents are facing preparing for and running a lengthy trial while not aware of the case they have to meet. It is in the interests of justice that the proceeding be summarily determined in those circumstances.'[145]

117 This is an observation directed to Concrete Construction's claim - it was Concrete Construction's case of which the Ingleses were not aware. This provides the rationale for the following statement that it is in the interest of justice that 'the proceeding be summarily determined'. It would be unnatural to read the reference to 'proceeding' in that context as being a reference to the counterclaim only.

118 Most relevantly, the reasons conclude by stating:

Based on those matters, I am satisfied that it is appropriate to make orders under section 78(2)(b)(i) determining the proceeding against the applicant in favour of the respondents and to make the following orders. Although the proceeding as to liability is determined I consider it appropriate to conduct a hearing to determine the quantum of the respondent's counterclaim, as it is a claim for damages.[146]

119 Three observations can be made as to this paragraph of the reasons.

(a) It refers to 'determining the proceeding against the applicant in favour of the respondents'. The term 'proceeding' is used, rather than 'counterclaim', despite referring later in that paragraph specifically to the counterclaim.

(b) The Senior Member refers to determining the proceeding 'in favour of the respondents against the applicant.' The terms 'applicant' and 'respondents' are used throughout the order to refer to the roles of the parties as they were identified in the primary proceeding. She did not use the terminology of 'applicants' by counterclaim, nor 'respondent' to the counterclaim. This is consistent with an intention to refer to the proceeding as a whole.

(c) The Senior Member states that 'the proceeding as to liability is determined'. This naturally reads as the entirety of the proceeding. There is no suggestion that there is any remaining question of liability arising from the applicant's claim which remains to be determined.

120 The determination of both the claim and the counterclaim is consistent with the nature of the conduct on the part of Concrete Construction that the Senior Member found had caused unnecessary disadvantage, which involved the failure to file evidence relating to their claims. It was also the case that the claim and counterclaim in the proceeding were factually overlapping to a significant extent, in that work alleged by the Ingleses to be defective in their counterclaim were also the subject of claims for variations by Concrete Construction.[147]

121 In similar circumstances in Moulieris the Court of Appeal recognised the relationship between the disadvantageous conduct of the claimant in that case and the practical effect on both the claim and the counterclaim_._ The Court of Appeal observed that as a practical matter in that case:

... the fates of the primary claim and the counterclaim were inextricably related. They involved overlapping factual issues involving communications between the parties and the performance of works at the property. The two claims were necessarily to be managed and heard together. The applicant's failures to comply with directions, including as to evidence, affected each of them. The prejudice to the respondent in the continued defence of the primary claim, as a result of the dilatory approach of the applicant, was of a similar character and extent as the prejudice to the respondent in its running of the counterclaim, which resulted from the same disadvantageous conduct of the applicant.

It can readily be seen that the Tribunal saw the claim and counterclaim as proceeding together or not at all. ... [148]

122 The Court of Appeal observed that the overlapping nature of the claim and counterclaim made it plain that the prejudice to which the respondent was exposed extended to his pursuit of the counterclaim as well as responding to the claim. The Court noted that if the counterclaim had not been determined with the dismissal of the claim it would have left the respondent 'to pursue the counterclaim in a hearing delayed, through no fault of its own, as a result of the intentional and inexcusable conduct of the whole case by the applicant'.[149]

123 It is also relevant to note the other orders which were made by Senior Member Kirton at the same time as the s 78 Order. The hearing listed for 6 September 2021, which had been intended to hear the applicants claim and the counterclaim, was vacated. Orders were made for the quantum hearing on 27 and 28 September 2021, with orders addressing the witness statements, expert reports and particulars of loss and damage leading up to that hearing. No orders were made for any further hearing on liability. This is consistent with the Senior Member having considered the order to have determined all issues of liability. It is also relevant to note the terms of the 'Warning' which directly followed the orders:

The applicant is warned that the proceeding has been determined against it under section 78 of the Victorian Civil and Administrative Tribunal Act 1998. This means it has been found liable to the respondents. The next hearing will concern only the amount that the applicant will have to pay to the respondents. The applicant is encouraged to seek legal advice. (emphasis added)

124 It is apparent that the warning was included in the orders to ensure that the applicant understood the effect of the orders. It was expressed in simple terms. Had the Senior Member intended only to determine the counterclaim, it would have been expected that she would have stated that 'the counterclaim has been determined against' the applicant, to be quite clear about the effect of the order. She did not, and also made the unqualified statement that the applicant 'has been found liable to the respondents'.

125 Finally, it is relevant, in confirming whether this is the correct understanding of what the Senior Member intended to do by the s 78 Order, to consider the terms of the s 78 Application, and the affidavit filed in support of it which the Order specifically refers to in paragraph (a) of the observations. The application form stated:[150]

The Respondents seeks the proceeding be determined in favour of the Respondents against the Applicant ofr [sic] damages to be assessed (pursuant to s78 of the VCAT Act).

In support of the [Application] and Orders sought, please see attached the Affidavit in Support and exhibits enclosed therein.

126 The affidavit in support of the respondent's solicitor referred to the failure of Concrete Construction to comply with the orders in the September 2020 procedural orders, which required the filing of a list of documents and witness statements, and observed:[151]

The Applicant's non-compliance with the Orders has caused the Respondents serious disadvantage and prejudice. The Respondents do not know what material and or evidence the Applicant intends to rely upon to prosecute their case, that is, the Respondent does not know the case it has to meet. (emphasis added)

127 The affidavit then set out information it relied on to establish prejudice and referred to having received a Notice of Ceasing to Act from Concrete Construction's solicitors, which stated the postal address and email addresses for Concrete Construction. It stated that no responses had been received despite having sent correspondence to the email address identified in the Notice. The Affidavit then stated the orders that the Ingleses sought by the application, which were, relevantly:[152]

In view of the above matters, the Respondents request that the Tribunal make orders in accordance with the Application for directions and orders filed herewith. The Respondents seek the orders in support of the application as follows:

(a) Pursuant to s78 of the Victorian Civil & Administrative Tribunal Act 1998 the proceeding be determined in favour of Mr & Mrs Inglese against the Applicant for [sic] damages to be assessed;

(b) Alternatively to (a):

1. The date by which the Applicants must file and serve a list of documents and witness statements is extended to 30 July 2021.
2. In the event that the Applicant fails to comply with Order (i) of these orders, then pursuant to s.78(2)(b) of the Victorian Civil & Administrative Tribunal Act 1998 orders will be made against the defaulting Applicant without further notice that the proceeding is summarily determined in favour of the Respondents as against the Applicant for damages to be assessed and interest and costs to be determined.

128 Neither the application nor the affidavit in support refer to the specific part of s 78 on which the Ingleses relied for the primary order sought, that is, that 'the proceeding be determined' in favour of the Respondents against the Applicant' (in the application) and that the 'proceeding be determined in favour of Mr & Mrs Inglese against the Applicant with damages to be assessed' (in the affidavit in support). The proceeding being 'determined' is the language of s 78(2)(b)(i) of the VCAT Act, in contrast to s 78(2)(a) which refers to the proceeding being dismissed or struck out, or 'the party' being 'struck out' which is the language of s 78(2)(b)(ii).

129 Senior counsel for Concrete Construction submitted that this was an important element of how the nature of the s 78 Application, and therefore the s 78 Order, could be understood.[153] In circumstances where the Tribunal does not have any inherent jurisdiction, and in particular no inherent power to strike out, or summarily determine or dismiss a claim, the application should be understood to be invoking only the jurisdiction under s 78(2)(b)(i) which was limited to a power to 'determine' the proceeding in favour of the applicant.[154]

130 However, the substance of the application and the affidavit in support makes it clear that it was the intention of the Ingleses in making the application to seek that the entire proceeding be determined in its favour. The primary order sought, identified in paragraph 16(a) of the affidavit in support, was that the proceeding be 'determined in favour of Mr & Mrs Inglese against the applicant for damages to be assessed'. No mention is made of the counterclaim only and the natural understanding of those words is that it encompassed the entirety of the proceeding.

131 The conduct identified in the affidavit in support of the application as the reason for seeking the s 78 Orders related primarily to Concrete Construction's failure to comply with orders requiring filing of a list of documents and witness statements with the result that the Ingleses did not know the evidence on which Concrete Construction was relying to prosecute its case, so that they did not know the case that they were required to meet. That was plainly a complaint about Concrete Construction's conduct of the application, rather than of the defence to the counterclaim.

132 The submissions made by counsel for the Ingleses at the hearing were also consistent with it being an application to determine the entire proceeding in favour of the Ingleses. It was submitted that Concrete Construction had not complied with procedural orders and 'is in a sense failing to prosecute their claim. Much to the chagrin of my client who, in turn has large claims for defective works and is seeking to run their counterclaim against the builder.'[155] This complaint expressly encompassed both the claim of Concrete Construction and the counterclaim.

133 Finally, I do not accept Concrete Construction's submission that the fact that at the quantum hearing in September 2021, the Ingleses made concessions as to amounts sought by Concrete Construction in its claim demonstrated that Concrete Construction's claim remained on foot after the s 78 Order.[156] Nor does that matter assist in any other way in interpreting the effect of the s 78 Order which was made before the quantum hearing in August 2021. The concessions were made, according to the evidence of Mr Inglese, to show the reasonableness of the amount that he and Mrs Inglese were claiming.[157] No appeal is now brought against the quantum hearing orders and it is not open to recharacterise those concessions as involving an acceptance by the Ingleses that Concrete Construction's claim was still on foot. Nor could any opinion held by the Ingleses, (nor for that matter by Senior Member Farrelly in determining the quantum taking into account those concessions) alter the meaning of the order earlier made by Senior Member Kirton.

134 The reasons given by the Senior Member for the s 78 Order, the scope of the application made by the Ingleses when applying for that order, and the submissions made in support of it all support the interpretation of the order as determining both the Ingleses' counterclaim and Concrete Construction's claim in favour of the Ingleses. The effect of the order was that Concrete Construction's claim was no longer on foot which, taking into account the unsuccessful application to reopen the order under s 120, remains the case.

135 As noted above, Concrete Construction does not challenge the decision of Senior Member Farrelly to refuse to reopen the proceeding under s 120 and his decision to refuse to grant an extension of time for that application. The appeal against the s 120 Order is limited to the contention that the Tribunal 'misunderstood and misapplied s.78 ... in finding that the Tribunal's order on 9 August 2021 (which was the subject of the application under s. 120 of the VCAT Act) disposed of both the proceeding concerning the claim made by the Appellant in VCAT, and the proceeding concerning the counterclaim made by the Respondents'. No challenge is made to the correctness of the decision not to reopen, nor is there any application to set the s 120 order aside.

136 The substantive matters for the Tribunal in determining the application under s 120 were (i) whether to grant an extension of time;[158] (ii) if so whether it was satisfied that Concrete Construction had a reasonable excuse for not attending or being represented at the hearing; and (iii) whether it was appropriate to hear and determine the application having regard to whether there was a reasonable case to argue on the subject matter of the order and to the prejudice that may be caused to the Ingleses if the application was heard and determined.[159] The Senior Member determined all of these issues adversely to Concrete Construction.[160]

137 There is no submission by Concrete Construction that Senior Member Farrelly erred in making any of those determinations.

138 The complaint that is made is with respect to Senior Member Farrelly's statement of his view that:[161]

... 'the proceeding' as referenced in section 78(2)(b)(i) means the whole proceeding including, where a counterclaim is brought, the claim of one party in the proceeding and the counterclaim of the other party in the same proceeding. In my view the order, pursuant to section 78(2)(b)(i), determines the whole proceeding - that is both the claim of the applicant builder in the proceeding and the counterclaim of the respondent developers in the proceeding - in favour of the respondent developers.

139 This observation was not dispositive of the application and was identified by the Senior Member as having been considered 'for completeness'.[162]

140 In the circumstances, as submitted by counsel for the Ingleses, the proposed appeal is in effect against views expressed by Senior Member Farrelly rather than any order of the Tribunal.[163] It is doubtful that an alleged error arising in the reasons alone, and not reflected in the orders, is a proper basis for an appeal pursuant to s 148 of the VCAT Act.[164] It is, however, unnecessary to express a definitive view on that issue. It follows from my conclusion that the effect of the s 78 Order was in fact to determine the entire proceeding, both claim and counterclaim, in favour of the Ingleses that there was no error in Senior Member Farrelly's conclusion as to the effect of the s 78 Order and no basis on which the s 120 Order could attract relief on a s 148 appeal.

Whether declaratory relief of the nature sought in the application is appropriate

141 For the reasons above, no error is established in the s 78 Order nor in the s 120 Order. The question of law, namely:

Whether the Tribunal misunderstood and misapplied s.78 of the Victorian Civil and Administrative Tribunal Act 1998 ('VCAT Act') in finding that the Tribunal's order on 9 August 2021 (which was the subject of the application under s.120 of the VCAT Act) disposed of both the proceeding concerning the claim made by the Appellant in VCAT, and the proceeding concerning the counterclaim made by the Respondents.

142 It is finally appropriate to make some brief observations as to why, even had I not declined to grant an extension of time, and not come to the above conclusion as to the question of law, I would not have made the declarations sought.

Orders declaring the meaning of Tribunal orders

143 The primary relief sought in this appeal was declarations as to the meaning of the s 78 Order and the s 120 Order. An order remitting the proceeding to the Tribunal 'insofar as it relates to the claim by the Appellant against the Respondents' was also sought.

... order 1 of the orders of the Tribunal on 9 August 2021 relates only to the proceeding (being the counterclaim) brought by the Respondents against the Appellant before VCAT.

145 The most obvious issue with making this declaration is that I have concluded that the order does not relate only to the counterclaim, but to the proceeding generally. However, even if I had not been of that view, a significant difficulty with a declaration in these terms is that Concrete Construction contends that this declaration describes the order which it says the Tribunal did make, and was lawfully open to the Tribunal to make. It does not challenge any other aspect of the order, nor the basis on which it was made. In other words, the premise of the declaration sought is that there was no error of law in the s 78 Order. There would be, in these circumstances, no error of law and thus no question of law, in the sense in which a question of law is understood for the purposes of s 148 of the VCAT Act.[165] The Court's power to give relief under s 148(7) would therefore not be enlivened.

146 Although the power of the Court to grant a declaration, arising under s 85 of the Constitution Act 1975 (Vic) and s 36 of the Supreme Court Act 1986 (Vic), is very wide, it is not appropriate to circumvent the requirement of a question of law applicable to a s 148 appeal by relying on those broad powers to grant declarations in an appeal from the Tribunal.

Alternative more appropriate mechanisms for clarifying the meaning of an order

147 It would also, in my view, be a rare case in which it would be appropriate to make a declaration as to the meaning of an order of the Tribunal in circumstances where there is no challenge to the order itself. In Civil Service Association WA v Minister for Justice,[166] a declaration was sought that a report by the Public Service Appeal Board regarding remuneration was a final decision and should be given effect by the Government. Justice Draper in the Supreme Court of Western Australia declined to grant the declaration:

The [Board] is a special tribunal with limited statutory powers. If the board had intended to decide in a particular way, and this court by declaration were to adjudge that the decision meant something else, the result would be mischievous and embarrassing, and I cannot see what useful purpose would be served. The board has power to make its decisions clear and express its real meaning if erroneously drawn up ...

... It is difficult to conceive circumstances which would justify this court in the exercise of a judicial discretion in making declarations of right with respect to the effect of the decisions of the board, and on the facts before me this action must be dismissed.[167]

148 Similar considerations apply with respect to the Tribunal. It would be highly undesirable to encourage any practice where the method of resolving any uncertainty as to the effect of orders made by the Tribunal, in its specialist jurisdictions, was to institute proceedings in the Supreme Court seeking declaratory relief. Such a practice, if used in cases where there was no error of law identified, would be productive of delay and significant expense. It would also be contrary to the objectives of the Tribunal as being a forum for the efficient and cost-effective resolution of disputes,[168] and contrary to the overarching purpose in s 7 of the Civil Procedure Act 2010 (Vic) for this Court to facilitate the just, efficient timely and cost-effective management of disputes.

149 Further, I consider that there are mechanisms where any uncertainty as to the meaning of an order made by the Tribunal could be resolved. Section 119 of the VCAT Act provides a power for the Tribunal to correct an order made by it if the order contains a mistake. That power may be exercised either on the Tribunal's own initiative, or on the application of a party in accordance with the VCAT Rules. The mistakes which may be corrected include a clerical mistake, an error arising from an accidental slip or omission, or a defect of form.[169] While subject to the limitations in s 119 itself, the power has been recognised to be a broad one.

150 In Brandwill, Emerton J was required to consider whether an extension of time should be granted to appeal a Tribunal order. One reason given for the delay is that the applicant had first made an application under s 119 of the VCAT Act to amend the orders, on the basis that the applicant considered the orders contained a slip in setting aside the entirety of a Council decision rather than only part of the decision.[170] The Tribunal did not make the order sought under s 119 as it considered the orders were made deliberately. However, it heard the application and in its reasons for decision, it referred to a previous Tribunal decision which had observed:

As a general rule, once an order has issued, in a form which correctly expresses the intention with which it was made, the court or tribunal that made the order has no jurisdiction to review, vary or set it aside. It can only be varied or set aside on appeal. This rule rests on the obvious principle that it is desirable that there be an end to litigation ... . On the other hand, the need for finality in litigation is balanced with a recognition that mistakes are made from time to time by judges and the parties or their advisers which can and should be corrected without resort to appeal so that justice may be done. See Bailey v Marinoff [1971] HCA 49; (1971) 125 CLR 529 at 539 per Gibbs J; Caboolture Park Shopping Centre Pty Ltd (in liq) v White Industries (Qld) Pty Ltd (1993) 45 FCR 224 at 235-6.

Section 119 effectively enacts the 'slip rule'. The scope of the slip rule is not unlimited. The slip rule ... permits to be corrected an error in a judgment or order arising from an accidental slip or omission. ...

However, within the scope of the rule there is surprising breadth. Its primary purpose is akin to rectification, namely to allow the court to amend a formal order which by accident or error does not reflect the actual decision of the judge. But it also authorises the court to make an order which it fails to make as a result of the accidental omission of counsel to ask for it. It even authorises the court to vary an order which accurately reflects the oral decision of the court, if it is clear that the court inadvertently failed to express the decision which it intended. The slip rule applies to an accidental omission of the court to provide for something which ought to have been provided for, and which would have been provided for if the attention of the court had been directed to it at the time. See R v Cripps; ex parte Muldoon (1984) QB 686 at 695; L Shaddock and Associates Pty Ltd v Parramatta City Council (No 2) [1982] HCA 59; (1982) 151 CLR 590 at 594-5. [171]

151 In the application for leave to appeal in Brandwill, Emerton J, although considering that the Tribunal's reasons and order did not disclose any indication of error, did not suggest that it had not been open to make an application under s 119 for the purpose of seeking to clarify the scope of orders already made.[172]

152 If Concrete Construction held the view that the s 78 order must be interpreted so that the reference to 'proceeding' meant only the counterclaim, it would have been significantly more efficient and cost effective to make an application under s 119 to the Tribunal for clarification of any error in using that term in the order. The Tribunal, and potentially Senior Member Kirton herself who made the order, could have made orders correcting or clarifying the order if there was in fact any slip or error.

153 The extension of time to bring the application for leave to appeal against the s 78 order will not be granted. I will not grant leave to appeal the s 120 order. The applications will be dismissed and I will hear the parties as to costs.

[1] Affidavit of Marijana Rados sworn 30 March 2023 (Rados Affidavit), [11]; Exhibit MR-1, 39-41.

[2] As her Honour, now Judge Kirton of the County Court of Victoria, then was.

[3] Rados Affidavit, [17]-[18]; Exhibit MR-1, 156-181.

[4] Rados Affidavit, [15]; Exhibit MR-1, 77-155 at 78; See also Concrete Construction Systems Pty Ltd v Inglese (Building and Property) [2023] VCAT 271 (VCAT s 120 Reasons), [6].

[6] Applicant's Submissions dated 2 August 2023, [25]-[26]; Rados Affidavit, [20]-[21].

[7] Respondents' Submissions dated 29 August 2023, [6]-[13].

[8] Respondents' Submissions dated 29 August 2023, [16], [19]-[28].

[9] Rados Affidavit, [4]; Exhibit MR-1, 7-12.

[10] Rados Affidavit, [4]; Exhibit MR-1, 7-12.

[11] Rados Affidavit, [6]; Exhibit MR-1, 13-22.

[12] Rados Affidavit, Exhibit MR-1, 35-36.

[13] Rados Affidavit, [8]; Exhibit MR-1, 23-38.

[14] Rados Affidavit, Exhibit MR-1, 29-291 (Affidavit of Donna Abu-Elias affirmed 23 July 2021) (Abu-Elias Affidavit), [7]-[8].

[16] Rados Affidavit, Exhibit MR-1, 39-41; Affidavit of Justin Cotton sworn 5 July 2023 (Cotton Affidavit), [4].

[17] Rados Affidavit, [10]; See also VCAT s 120 Reasons, [41].

[18] Rados Affidavit, Exhibit MR-1, 58-76 (Orders and Reasons of Senior Member Farrelly, Concrete Construction Systems Pty Ltd v Inglese (Building and Property) [2021] VCAT 1216) (VCAT Quantum Reasons).

[21] Rados Affidavit, [12]-[13]; Exhibit MR-1, 58-76; Cotton Affidavit, [5].

[22] VCAT Quantum Reasons, [79], [94].

[23] Rados Affidavit, [15]; Exhibit MR-1, 77-155.

[24] VCAT s 120 Reasons, [10], [41]-[42].

[26] Rados Affidavit, Exhibit MR-1, 81-105 (Affidavit of Zenon Eleftheriou sworn 30 November 2021) (Eleftheriou Affidavit), [12].

[27] Eleftheriou Affidavit, [14]-[15], [26]-[29].

[30] Eleftheriou Affidavit, [32]-[34], [39].

[31] VCAT s 120 Reasons, [44]-[47].

[32] VCAT s 120 Reasons, Rados Affidavit, [17]; Exhibit MR-1, 156-181; Cotton Affidavit, [6].

[33] VCAT s 120 Reasons, [31]-[39].

[34] VCAT s 120 Reasons, [40]-[49], [67]-[68].

[36] VCAT s 120 Reasons, [50]-[51], [57]-[66].

[37] VCAT s 120 Reasons, [52]-[54], [67].

[39] VCAT s 120 Reasons, [64]-[66].

[43] Transcript 11/04/24, T62.05-.11, T81.21-.29.

[44] Respondents' Submissions dated 29 August 2023, [23]-[24].

[47] Jackamarra v Krakouer (1998) 195 CLR 516, 539-540 (Kirby J); Brandwill Holdings Pty Ltd v Jonson & Ors [2014] VSC 356, [12(b)].

[48] Derring Lane Pty Ltd v Fitzgibbon [2007] VSCA 79; (2007) 16 VR 563, 585, [119] (Ashley JA; Buchanan JA and Kellam AJA agreeing at 565 [1] and 586 [125]).

[49] Cooma Clothing Pty Ltd v Create Invest Develop Pty Ltd [2013] VSCA 106, [15] (Nettle and Neave JJA); Muto v Secretary to the Department of Planning and Community Development [2013] VSCA 85; (2013) 38 VR 293, 296 [13]; Jackamarra v Krakouer (1998) 195 CLR 516, 520-21 (Brennan CJ and McHugh J).

[50] Brandwill [2014] VSC 356, [13].

[51] Edwards v Transport Accident Commission [2013] VSC 557, [36] (Derham AsJ).

[52] Jackamarra v Krakouer (1998) 195 CLR 516, 540 (Kirby J); Brandwill [2014] VSC 356, [12](f); Edwards v Transport Accident Commission [2013] VSC 557, [37] (Derham AsJ).

[53] Brandwill [2014] VSC 356, [13].

[54] Barter v Bushett [2022] VSC 172, [35], [44] (Ginnane J).

[55] Giurina v Owners Corporation [2013] VSC 39, [19] (McMillan J).

[56] Applicant's Submissions dated 2 August 2023, [24]-[26].

[57] Applicant's Submissions dated 2 August 2023, [26].

[59] Affidavit of Rocco Italiano sworn 21 July 2023 (Italiano Affidavit), [22].

[60] Respondents' Submissions dated 29 August 2023, [8(g)]; Transcript 11/04/24, T51.05-.10.

[61] Rados Affidavit, Exhibit MR-1, 292-295.

[64] Respondents' Submissions dated 29 August 2023, [8].

[66] Applicant's Submissions dated 10 August 2022 regarding s 120 Application, [23]; Affidavit of Kristina Michaelides affirmed 20 July 2023, Exhibit KCM-1, 603-619 at 609.

[69] Transcript 11/04/24, T66.17-67.07, T85.20-.27.

[70] Affidavit of Guiseppe Inglese sworn 4 July 2023 (Inglese Affidavit), [4], [8], [9].

[71] Inglese Affidavit, [7]; [13]-[17].

[72] Inglese Affidavit, [5]-[7], [11].

[73] Inglese Affidavit, [23]-[25]. See also Affidavit of Guiseppe Inglese sworn 12 August 2022 in opposition to the s 120 Application, (exhibited to Cotton Affidavit, [21]-[22], Exhibit JC-1, 37-44) where Mr Inglese gave evidence to the same effect as to why he made concessions, that he would not have made them had the s 78 Order not been made, and would have contested more issues had he known that Concrete Construction would take this course.

[75] Transcript 11/04/24, T60.28-61.04.

[76] Italiano Affidavit, [31]; Applicant's Submissions dated 2 August 2023, [31].

[77] Applicant's Submissions dated 2 August 2023, [28]-[30].

[78] Applicant's Submissions dated 2 August 2023, [30], referring to Italiano Affidavit, [31], [34], [36]; Exhibit RI-1, 485-526.

[79] Italiano Affidavit, [40(a)], [41(a)], [43(a)], [46(a)], [47(a)]; Exhibit RI-1, 485-526.

[80] Italiano Affidavit, Exhibit RI-1, items 19, 21, 61, 65.

[81] Inglese Affidavit, [19]-[22]; Respondents' Submissions dated 29 August 2023, [31]-[32].

[82] Applicant's Submissions dated 2 August 2023, [24].

[83] Applicant's Submissions dated 2 August 2023, [26].

[85] Rados Affidavit; Exhibit MR-1, 296.

[88] Different senior counsel appeared for Concrete Construction at that hearing to the senior counsel who appeared at the appeal hearing in this Court.

[89] Rados Affidavit, Exhibit MR-1, 182-261 (Transcript 02/02/23).

[90] Transcript 02/02/23, T10.18-11.08. Emphasis added.

[91] Transcript 02/02/23, T28.09-.10, T28.24-.25.

[93] Applicant's Submissions dated 2 August 2023, [25]-[26], referring to the Rados affidavit, [20].

[96] [2014] VSC 356.

[97] Brandwill [2014] VSC 356, [9], [24].

[98] [2014] VSC 356, [23]-[24].

[99] Brandwill [2014] VSC 356, [29], [32]-[33].

[101] VCAT s 120 Reasons, [50]-[63].

[102] Notice of Appeal filed 30 March 2023, Orders Sought, No 2.

[103] Transcript 02/02/23, T7.12-.21, T9.09-.21.

[104] The distinction between the utility of undertakings or orders to pay sums, and actual payment was made clear to Concrete Construction by Senior Member Farrelly in the VCAT s 120 Reasons, [53], where he noted that to meet prejudice, it would 'be necessary in my view to make the granting of relief under section 120 of the Act conditional, not just upon an undertaking as to costs, but upon the actual payment of costs'.

[105] Applicant's Supplementary Submissions dated 26 April 2024, [7].

[106] Transcript 11/04/24, T103.07-.16, T105.02-.09.

[107] Transcript 11/04/24, T106.26-.31. The Applicant's original written submissions did not address the basis for the appeal against the s 120 Order or of the declaratory relief.

[109] Applicant's Supplementary Submissions dated 26 April 2024, [3]-[5].

[110] Respondents' Further Submissions dated 26 April 2024, [5]-[12].

[111] Transcript 11/04/24, T62.04-.07.

[112] Applicant's Submissions dated 2 August 2023, [18].

[113] Applicant's Submissions dated 2 August 2023, [19](b).

[114] Respondents' Submissions dated 29 August 2023, [21].

[115] Citing Pizza Fellas Pty Ltd v Eat Now Pty Ltd [2017] VSC 226, [16].

[116] Martin v Fasham Johnson Pty Ltd [2008] VSC 289, [27] (Kyrou J).

[117] Martin v Fasham Johnson Pty Ltd [2008] VSC 289, [30] (Kyrou J).

[118] [2003] VSC 255.

[119] [2003] VSC 255, [51].

[120] ACN 115 918 959 Pty td (formerly known as Pearl Hill Pty Ltd) v Moulieris [2022] VSC 555 (Kaye JA).

[121] Moulieris [2022] VSC 555, [4].

[122] Moulieris [2022] VSC 555, [21] at (11)-(12).

[123] Moulieris [2022] VSC 555, [106]-[107].

[124] ACN 115 918 959 Pty td (formerly known as Pearl Hill Pty Ltd) v Moulieris [2024] VSCA 71 (Moulieris Court of Appeal), [28] (McLeish, Walker and Macaulay JJA).

[125] Blake v Norris (1990) 20 NSWLR 300, 306 (Smart J); Lew v Priester [2012] VSC 57, [17]-[18]; Slaveski v Attorney-General for Victoria [2015] VSCA 31, [38] (Warren CJ, Ashley and Tate JJA).

[126] Williams v Australian Capital Territory [2023] ACTSC 18, [66] (McWilliam AsJ).

[127] Lillas and Loel Lawyers Pty Ltd v Celona [2014] VSCA 19; (2014) 43 VR 1, 8 [32] (Priest JA, Neave JA agreeing at 2 [1]), referencing Braeside Bearings Pty Ltd v HJ Brignell and Associates (Boronia) [1996] 1 VR, 20 (Tadgell JA).

[128] Applicant's Submissions dated 2 August 2023, [19(b)], citing Clements v Barlow & Anor (Domestic Building) [2010] VCAT 1113, [17]; Peck v Eade (Building and Property) [2023] VCAT 80, [64].

[129] In the present case, the Ingleses' counterclaim was made by way of a Defence and Counterclaim and not as a separate application or document. I do not consider that fact is in any way decisive in this case.

[130] Applicant's Submissions dated 2 August 2023, [19(a)]-[19(c)].

[131] Martin v Fasham Johnson Pty Ltd [2008] VSC 289, [34] (Kyrou J).

[132] Moulieris [2022] VSC 555, [106]; Moulieris Court of Appeal [2024] VSCA 71, [28].

[133] Bell Corp [2003] VSC 255, [54] (Ashley J).

[134] As observed by Kaye JA in Moulieris [2022] VSC 555, [107].

[135] Applicant's Submissions dated 2 August 2023, [19(c)].

[136] Craig Williamson Pty Ltd v Barrowcliff [1915] VicLawRp 66; [1915] VLR 450, 452 (Hodges J); Bauer Media Pty Ltd & Anor v Wilson (No 2) [2018] VSCA 154; (2018) 56 VR 674, 730 [241] (Tate, Beach and Ashley JJA).

[137] Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (Engineers' Case) [1920] HCA 54; (1920) 28 CLR 129, 161-2; SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 262 CLR 362 (Kiefel CJ; Nettle and Gordon JJ).

[138] Transcript 11/04/24, T29.08-.17.

[141] Rados Affidavit, Exhibit MR-1, 39-41; Cotton Affidavit, [4].

[142] Laming v Jennings [2018] VSCA 335, [123] (Kyrou, McLeish and Niall JJA), [123].

[143] The proceeding, both claim and counterclaim, was identified by VCAT number 1513/2017.

[144] Orders dated 9 August 2021, par (b).

[145] Orders dated 9 August 2021, par (c). Emphasis added.

[146] Orders dated 9 August 2021, par (d).

[147] The work the subject of claims for variations 1, 3, 17, 19, 21, 26, 27, 28, 29, 31, 40, 61 and 65 made by Concrete Construction were also the subject of claims of defective work made by the Ingleses. Items 10, 18, 24, 32, 37, 38, and 63 were accepted as variations under the Contract but the Ingleses disputed the quantum. See Scott Schedule filed in the VCAT proceeding: Italiano Affidavit, [31]-[38]; Exhibit RI-1, 485-526.

[148] Moulieris Court of Appeal [2024] VSCA 71, [84]-[85] (McLeish, Walker and Macaulay JJA).

[149] Moulieris Court of Appeal [2024] VSCA 71, [92]-[93] (McLeish, Walker and Macaulay JJA).

[150] Rados Affidavit, Exhibit MR-1, 102.

[151] Abu-Elias Affidavit, [7]-[8] (emphasis added).

[153] Transcript 11/04/24, T29.08-.17.

[154] Transcript 11/04/24, T31.04-.09, T32.07-.19, T34.01-.19.

[155] Transcript of hearing in the Tribunal before Senior Member Kirton, 09/08/21, T5.09-.16.

[156] Applicant's submissions dated 2 August 2023, [22].

[157] Inglese Affidavit, [23]-[25]; See par [40(c)] above.

[158] See par [19] above, and VCAT Act, s 120(2).

[160] VCAT s 120 Reasons [46] and [50] (no extension of time as no adequate explanation for delay, and the delay bringing the s 120 Application caused prejudice to the Ingleses); [39] (no reasonable excuse for not attending the hearing); and [62] (there would be prejudice in granting the s 120 Application which could not be remedied by an order for costs or damages).

[163] Transcript 11/04/24, T62.05-.07.

[164] Wright v Victorian Civil and Administrative Tribunal [2001] VSV 35 [9] (Gillard J).

[165] McSteen v Architects Registration Board of Victoria [2018] VSCA 96, [8]; Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (2001) 207 CLR 72, [15]; Osland v Secretary to the Department of Justice (No 2) [2010] HCA 24; (2010) 241 CLR 320, [18], [71].

[166] [1925] WALawRp 12; (1925) 27 WALR 143.

[167] [1925] WALawRp 12; (1925) 27 WALR 143, 148-149.

[168] Director of Housing v Sudi [2011] VSCA 266; (2011) 33 VR 559, [19] (Warren CJ).

[169] VCAT Act, ss 119(1)(a)(b) and (d).

[170] Brandwill [2014] VSC 356, [9].

[171] Jonson v Mornington Peninsula Shire Council [2014] VCAT 400, [17] (Deputy President Gibson and Member Bennett) citing Stahle v Camberlea Properties Pty Ltd [2010] VCAT 1883, [23]-[25].

[172] Brandwill [2014] VSC 356, [21]-[23].