Applicant v Respondent

LEAVE TO APPEAL FROM VCAT - Whether respondent caused 'unnecessary disadvantage' for the purposes of s 78 by failing to take an active part in proceedings - Where delay and inaction found to unnecessarily disadvantage applicant - No real prospect of success - Leave to appeal refused.

LEAVE TO APPEAL FROM VCAT - Whether Tribunal failed to consider that the applicant's documents comprising the claim were deficient - Where points of claim sufficiently identified cause of action for damages arising from breaches of implied warranties - Where documents provided basis for the assessment of damages by reference to rectification costs - No real prospect of success - Leave to appeal refused.

Victorian Civil and Administrative Tribunal Act 1998, ss 3, 75, 76, 77, 78, 80, 98, 109, 111, 120, 148.

Supreme Court (General Civil Procedure) Rules 2015, rr 21, 51, 52.

Domestic Building Contracts Act 1995, s 4(b).

Concrete Construction Systems Pty Ltd v Inglese [2024] VSC 266; Brandwill Holdings Pty Ltd v Peter Jonson [2014] VSC 356; Shire of Sherbrooke v F L Byrne Pty Ltd [1987] VicRp 29; (1986) 63 LGRA 320; Victorian Economic Development Corporation v Clovervale Pty Ltd & Ors [1992] VicRp 40; (1992) 1 VR 596, referred to.

1 This case raises a question of significant practical importance concerning the ambit of the power granted to the Victorian Civil and Administrative Tribunal (the 'Tribunal') pursuant to s 78 of the Victorian Civil and Administrative Tribunal Act 1998 (the 'Act'). Under that provision the Tribunal may, in an appropriate case, make an order if it believes that a party is conducting the proceeding in a way that unnecessarily disadvantages another party to the proceeding by conduct such as failing to comply with an order or direction of the Tribunal without reasonable excuse.

2 If the section applies, the Tribunal may, if the party causing the disadvantage is not the applicant:

determine the proceeding in favour of the applicant and make any appropriate orders;[1]

3 In the present case, the Tribunal constituted by Member R Bennett made an order in the Building and Property List of the Civil Division of the Tribunal on 30 January 2023 (the 'Determination Order') in the following terms:

Having regard to the respondent's failure to comply with previous orders in relation to filing and serving Points of Defence and expert reports, and on the application of the applicant, the proceeding is determined against the respondent in favour of the applicant pursuant to s. 78 of the Victorian Civil & Administrative Tribunal Act 1998. The proceeding will be listed for hearing for the purpose of assessing the quantum of the applicant's claim only.

4 The Determination Order further provided that the matter be listed for hearing on a specific date. When the matter came on for hearing for the purpose of assessment of quantum, the applicant (the builder) contended that the power to make a determination under s 78(2)(b) is a power to make a determination which decides the proceeding in a conclusive way by final order. Accordingly, it was submitted, the Tribunal was functus officio.

5 After hearing argument and receiving detailed written submissions, Senior Member A Vassie dismissed this contention and on 2 November 2023 made the following order (the 'Consequential Order'):

1. The Tribunal finds that it is not functus officio as a consequence of the order dated 30 January 2023.
2. Subject to any further order, the hearing listed for 21 November 2023 for assessment of damages shall proceed.

6 A party to a proceeding before the Tribunal may appeal on a question of law from an order of the Tribunal with the leave of the Court.[2]

7 The Trial Division of this Court may grant an application for leave to appeal only if it is satisfied that the appeal has a real prospect of success.[3]

8 The builder now seeks leave to appeal the Determination Order on the following grounds:

In respect of the order of Member R Bennett made on 30 January 2023, the Tribunal erred in that:

1. There was no evidence that the Builder had conducted the proceeding in a way that unnecessarily disadvantaged the Owner, in that the Builder:

(a) had not, as at the time of the Determination Order, taken any active part in the proceeding; and

(b) accordingly, to the extent that it could be said that the Builder had conducted the proceeding at all, had not done so to the disadvantage of the Owner.

1. The Tribunal did not have the power to make the Determination Order because it purported to determine only part of the proceeding, which is beyond the power under s 78(2)(b)(i) of the Act.
2. The Tribunal's discretion to make the Determination Order miscarried because it failed to take into account relevant considerations, namely:

(a) whether, as at the time of the Determination Order, the Owner had, in his points of claim and other documents filed in the proceeding, identified any cause of action against the Builder; and

(b) the consequences for the conduct of the proceeding for determining the question of the quantum of the Owner's claim for damages separately from the question of the Builder's liability for that claim.

9 The builder further seeks leave to appeal the order of Senior Member Vassie on the grounds that:

1. If the Determination Order was within the Tribunal's power, the Tribunal failed to conclude that the Tribunal:

(a) was functus officio; and

(b) accordingly, could not give the Owner further substantive relief.

1. Alternatively, the Tribunal failed:

(a) to conclude that the Determination Order was affected by jurisdictional error, being the errors identified in grounds 1-3 above; and

(b) to make directions for the further conduct of the proceeding.

1. By the reasoning in paragraphs 26 and 27 of its reasons, the effect of the Tribunal's order was that the Tribunal would, in the future, exercise its power under s 78 of the Act by assessing the Owner's claim for damages on the premise in paragraph 51 of its reasons that "[t]he issue of liability has already been determined", notwithstanding that the Owner had not, in his points of claim and other documents filed in the proceeding, identified any cause of action against the Builder, or any basis on which liability for damages could be rationally assessed, and thereby failed to accord, or proposed not to accord, procedural fairness to the Builder.

10 The application for leave to appeal the Determination Order was not made within the time specified under s 148(2) of the Act. Accordingly, the builder also seeks leave to extend time to make that application.

(a) I would grant leave to extend time with respect to the application for leave to appeal relating to the Determination Order;

(b) I would refuse leave to appeal with respect to both the Determination Order and the Consequential Order.

12 The builder is a building company which completed construction of a two storey home unit in Pascoe Vale in early 2017. The respondent (the owner) purchased the home unit and remains its owner.

13 Subsequent to the purchase, one corner of the home unit has subsided and cracking and other defects in the home unit have become apparent.

14 In March 2022, the owner filed an application, together with Points of Claim, in the Tribunal seeking damages for the defects.

15 The application and Points of Claim were prepared by the owner in person and attached a report from an expert referring to the builder's obligations under warranties implied pursuant to the Domestic Building Contracts Act 1995 and identifying the building defects complained of.

16 At an initial directions hearing on 5 July 2022, the Tribunal ordered the builder to file and serve particulars of defence by 23 August 2022. The foot of the order included the following warning:

WARNING

The parties are warned that any party who fails to comply with these directions may be ordered to pay the other party/s' costs, and/or an order may be made determining the proceeding against the party who has failed to comply under s 78 of the Victorian Civil and Administrative Tribunal Act 1998.

17 The builder did not file or serve points of defence and at a second directions hearing on 11 October 2022, the Tribunal ordered the builder to file and serve by 12 December 2022 any expert reports on which it intended to rely and extended the time for the builder to file and serve points of defence. The order included the following paragraph:

1. If the respondent does not file with the Tribunal and send to the applicant Points of Defence by 12 December 2022 without reasonable excuse, an order will be made in chambers without further notice under s78 of the Victorian Civil and Administrative Tribunal Act 1998, that the proceeding is determined against the respondent in favour of the applicant, and the proceeding will be listed for hearing for the purpose of determining quantum.

18 No documents were filed on behalf of the builder by 12 December 2022. Nonetheless, the matter was not further dealt with 'in chambers'. A third directions hearing was held on 30 January 2023. Once again, the builder did not appear and the Tribunal made the Determination Order.

19 At the time of the making of the Determination Order, the Tribunal explained the effect of the order to the owner in the following terms.

at the end of the day, regardless of whether BAHL Enterprises defends this claim or not, you've got the onus of proof. So, you've got to satisfy the Tribunal with or without BAHL Enterprises that what you say is correct. And in this case, because I've made an order that the proceeding is going to be undefended in terms of liability, you don't have to prove that BAHL Enterprises caused - their workmanship caused the house movement and damage.

But what you do have to prove to the Tribunal is that the reasonable loss and damage flowing from those breaches by BAHL Enterprises, is X dollars.

20 On 30 June 2023, the owner filed amended Points of Claim including an estimate of loss and damage of $421,008.78.

21 When the matter came on before Senior Member Vassie for the purpose of assessment of quantum, the builder appeared with counsel who made the submission that the effect of the Determination Order was to conclude the proceeding and render the Tribunal functus officio. In the alternative, it was submitted that the Determination Order was invalid by reason of jurisdictional error.

22 Senior Member Vassie rejected the contention that the Tribunal was functus officio and held that he had no power to undertake a collateral review with respect to the validity of the decision made by Member Bennett. Nonetheless, in deference to the detailed oral and written submissions which he had received from the parties, the Senior Member expressed the following further conclusions:

(a) the Determination Order did not invalidly determine part of the proceeding;

(b) the Determination Order gave valid directions for the assessment of quantum;

(c) the Determination Order was not defective by reason of the failure to record jurisdictional facts;

(d) the builder had been afforded procedural fairness; and

(e) it was no longer open to the builder to contest the issue of liability.

23 Pursuant to s 148(2)(a) of the Act, an application for leave to appeal to this Court must be made no later than 28 days after the day of the order of the Tribunal.

24 Pursuant to s 148(5), a judge of the Trial Division of this Court may extend this time.

25 In Concrete Construction Systems Pty Ltd v Inglese,[4] Harris J summarised a series of general principles bearing on the Court's discretion as to the grant of an extension of time under s 148.[5]

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.[6]

(b) Section 148 contemplates that any question of law for the purposes of an appeal generally will be speedily identified and pursued.[7]

(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.[8]

(d) The longer the period of delay, the more compelling the explanation for the delay is required to be.[9]

(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.[10]

(f) The applicant for the extension of time has the burden of establishing that it should be granted.[11]

26 Harris J also observed that the approach in previous cases as to what constitutes significant delay may provide some guidance in assessing the significance of delay in a particular case.[12]

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,[13] 123 days,[14] and three months[15] have been identified as significant and lengthy delays.

27 Nonetheless, the Court retains an overriding discretion to grant leave to appeal. As Emerton J[16] observed in Brandwill Holdings Pty Ltd v Peter Jonson:

There are no fixed or binding rules for the exercise of the discretion and each case depends on its facts.[17]

28 In the present case, the following factors do not favour the grant of an extension:

(a) The delay in seeking leave to appeal was extensive, amounting to approximately 9 ½ months.

(b) The delay was longer than periods which have been held to be excessive in a number of previous cases.

(c) No good reason has been given for the delay. The builder's director simply deposes that it occurred due to inadvertence on his part. More particularly, the builder's solicitor received a copy of the Determination Order by email on 1 February 2023 and sent the builder a copy on the same day. The builder's director deposes that he 'overlooked' this email and did not provide any instructions to the solicitors as a result.

(d) The delay has caused the owner ongoing prejudice. More particularly, he has been required to live in his home without final resolution of his claim in respect of the defects which have emerged and while those defects have continued to deteriorate.

(e) In my view, the builder does not have a reasonably arguable case with respect to proposed grounds 1 and 3, substantially for reasons identified by Senior Member Vassie, namely that:

(i) the builder's failures to co-operate in progressing the proceeding in any way self-evidently disadvantaged the owner by delay; and

(ii) it was open to the Tribunal to take the view that the documentation filed in support of the claim was sufficient to found a decision as to liability.

29 Conversely, proposed ground 2 of appeal raises a jurisdictional question, which is at least arguable, going to the nature of the Tribunal's power to make the order in question.

30 Because the Tribunal is a statutory tribunal, its duties and powers are strictly limited to those provided for by the Act.[18] Its powers are not 'at large'[19] and may only be exercised within the confines of the actual language of the legislation and a fair interpretation of the words used.[20]

31 These constitutional principles are of particular importance when the Tribunal is exercising powers which have the capacity to significantly affect the rights of participants in a proceeding before it. In the present case, the power exercised by the Tribunal has been invoked without an adjudication upon the merits of the claim. The power carries with it the possibility of draconian and potentially unfair outcomes.[21]

32 If it is apparent on the face of the Determination Order that it goes beyond the Tribunal's power then the interests of justice may justify this Court in extending time to enable it to exercise its supervisory jurisdiction by way of review upon an appeal with respect to questions of law.

33 It is also of relevance that the application for leave to appeal was made before the assessment of quantum. In this sense, the owner's right pursuant to the judgment had not crystallised at the time the application for leave to appeal was made.

34 In turn, if the matter proceeds before the Tribunal without resolution of the builder's complaints, then any order subsequently made for damages will almost inevitably face the prospect of potential challenge in this Court on the basis that it is basally infected by jurisdictional error.

35 In the circumstances, and despite the factors weighing against the grant of an extension of time, I would extend the time for the making of the application for leave to appeal.

(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;

(3) The Tribunal's powers under this section are exercisable by the presiding member.

37 The fundamental concept of unnecessary procedural disadvantage which is adopted in s 78 is also adopted in s 109, which governs the Tribunal's powers to award costs.[22]

38 Section 78(1) establishes a precondition to the exercise of the power under s 78(2), which is in turn discretionary.

39 The requirement for fulfilment of the relevant precondition is the focus of proposed grounds 1 and 5 of appeal. The basis of the exercise of the Tribunal's discretion is the focus of proposed grounds 3, 5 and 6 of appeal.

40 The term 'determine' is not defined under the Act. It is used in the sense both of making a decision on an issue and deciding a matter or proceeding in a conclusive way.[23]

41 The term 'proceeding' is broadly defined as follows:

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;

(e) an RDRV proceeding; [24]

42 Plainly enough the Determination Order related to the proceeding as a whole as distinct from some subsidiary proceeding in it.

43 The question however of whether it was effective to determine a proceeding is the focus of proposed grounds 2 and 5 of appeal.

44 The apparent purpose of s 78 is to enable the Tribunal to manage and determine proceedings in accordance with its procedural charter to act expeditiously subject to the requirement to accord procedural fairness. Section 98(1) of the Act provides:

(1) The Tribunal -

(a) is bound by the rules of natural justice;

(b) is not bound by the rules of evidence or any practices or procedures applicable to courts of record, except to the extent that it adopts those rules, practices or procedures;

(c) may inform itself on any matter as it sees fit;

(d) must conduct each proceeding with as little formality and technicality, and determine each proceeding with as much speed, as the requirements of this Act and the enabling enactment and a proper consideration of the matters before it permit.

45 Section 78 also potentially enables the Tribunal to give effect to the procedural objectives of other legislation granting the Tribunal jurisdiction in respect of specific types of disputes. Thus s 4(b) of the Domestic Building Contracts Act 1995 relevantly provides:

The objects of this Act are -

...

(b) to enable disputes involving domestic building work to be resolved as quickly, as efficiently and as cheaply as is possible having regard to the needs of fairness;

46 This provision may be regarded as underpinning the procedural charter pursuant to which the Tribunal dealt with the current proceeding. It is an objective of the relevant enabling enactment within the meaning of this term in s 98(1) of the Act.

47 Three further aspects of the statutory scheme deserve preliminary notice before turning to the proposed grounds of appeal. Section 80(1) of the Act gives the Tribunal power to make directions:

(1) The Tribunal may give directions at any time in a proceeding and do whatever is necessary for the expeditious or fair hearing and determination of a proceeding.

(3) Subject to this Act, the regulations and the rules, the Tribunal may regulate its own procedure.

49 In some circumstances an order made under s 78(2) may be reopened under s 120 of the Act.[25]

Did the Tribunal lack power to make the Determination Order because it purported to determine only part of the proceeding which is beyond the power under s 78(2)(b)(i) of the Act? (Proposed ground 2)

50 Proposed ground 2 of appeal contends that the Tribunal purported to determine only part of the proceeding. On one view, this language does not capture the builder's case with precision.

51 As the builder's submissions make clear, the terms of proposed ground 2 reflect the analysis in Pfizer's Annotated VCAT Act.

s 78(2)(b)(i) does not appear to confer power to determine part of a proceeding in favour of the applicant. However, the VCAT has developed a practice of determining liability in favour of an applicant, while deferring the assessment of quantum. For example, in Beck v Skouras [2014] VCAT 639 the VCAT exercised this power to hold the respondents liable to the applicant, and to order them to pay the applicant's damages, the quantum of which was deferred for assessment after a further hearing. See, similarly, Mohamed v Pollara [2014] VCAT 1085 and Mohamed v Pollara [2014] VCAT 1291. Although this is, with respect, clearly a pragmatic approach, there is a real question whether s 78(2)(b)(i) - which empowers the VCAT to determine the proceeding - authorises the tribunal to determine liability only, leaving the proceeding on foot in respect of the assessment of damages.[26]

52 In my view, the Determination Order was not made with respect to 'part of the proceeding' in the sense in which that phrase is used in ss 75, 76 and 77 of the Act. These sections empower the Tribunal to dismiss or strike-out 'a proceeding or any part of a proceeding'.

53 Under s 75, the power is enlivened if the proceeding or part of the proceeding is frivolous, vexatious, misconceived or lacking in substance, or is otherwise an abuse of process.

54 Under s 76, the power is enlivened where there has been a want of prosecution.

55 Under s 77, the provision is enlivened when another tribunal or court is the more appropriate forum.

56 In each case, the Tribunal will have the power to make an order with respect to part of the proceeding when one or more of alternative claims should be struck-out but the Tribunal takes the view that a residual claim should be permitted to continue. Thus in a particular case:

(a) part of a claim may not be frivolous, vexatious, misconceived, lacking in substance or otherwise an abuse of process;

(b) a want of prosecution may cause prejudice due to the loss of evidence (eg by the destruction of documents or other physical evidence, or by the death of a witness) which bears on only one or more of alternative claims which are made in a part or parts of a proceeding; and

(c) the Tribunal may be confronted by a claim in respect of only part of which it does not have the more appropriate jurisdiction.

57 The Determination Order does not determine part of the proceeding in this sense. On the contrary, it relates to the whole of the proceeding.

58 The real issue which the builder seeks to agitate under this ground is whether the Determination Order comprised a determination of the proceeding in the relevant sense at all. The builder's case is that the Determination Order did no more than determine an issue or question in the proceeding and as a result was beyond power. The first question of law identified in the proposed notice of appeal is intended to raise this proposition.

Did the [Tribunal] have the power to make the Determination Order?

59 This question falls to be decided by reference to the text, context and purpose of the provision.[27]

60 The builder submits that the word 'determine' should be understood as meaning to finally resolve the proceeding by way of an order. The owner submits that the meaning of 'determine' extends to the making of a decision which results in an order which finalises the proceeding by deciding liability and stipulating a mechanism for the consequential determination of quantum.

61 The submissions of both parties thus accept that in context the word 'determine' involves finalisation of the proceeding.[28]

62 So to say however begs the question of the extent to which orders which determine a proceeding comprising a civil claim for damages can provide for a consequential process.

63 In the context of the review of an administrative decision there is no reason to doubt that, as a matter of ordinary meaning, the Tribunal would be said to determine a proceeding when it makes a decision which concludes the outcome of the appeal.

64 Such terminology was the subject of consideration in a series of decisions of this Court with respect to the determinations of tribunals in relation to planning appeals under predecessor legislation to the Act. In Shire of Sherbrooke v F L Byrne Pty Ltd,[29] Southwell J considered s 66 of the Planning Appeals Board Act 1980 and the meaning of the phrase 'determination of an appeal'.

A determination of an appeal involves a finding for all intents and purposes concluding the appeal. The fact that there may be some ancillary or subsidiary matters outstanding would not necessarily lead to the conclusion that the appeal had not been determined; if the board had said 'the appeal is allowed' I would hold that to be a determination, as I held in City of Springvale v Heda Nominees Pty Ltd (1982) 57 LGRA 298.[30]

65 His Honour further held that a preliminary determination on a question of law which set the matter down for further hearing was a determination in the appeal, but not a determination of the appeal.[31]

66 In the context of a proceeding comprising a civil claim for damages under the Act, the power to 'determine the proceeding ... and make any appropriate orders' is, in my view, on its face sufficiently broad, as a matter of ordinary language, to encompass a decision which results in the making of an order which determines the outcome of a proceeding by deciding liability and provides for the working out of the consequences of that determination by the assessment of quantum. The power is not expressed to be one to simply 'determine by final order'. The section does not on its face confine the mechanism by which the Tribunal may determine the proceeding. As the owner submits, the subsection contemplates both the determination of the proceeding and the making of consequential orders.

67 Although s 78(2)(b) of the Act confers a novel power upon a statutory tribunal, it may also be observed that orders in the form in question with respect to legal claims of the type in question are not novel as a matter of court process.

68 The Supreme Court (General Civil Procedure) Rules 2015 contemplate that a judgment in default of appearance or defence may provide both for a judgment as to liability and the consequential assessment of damages.[32] Likewise, a judgment may require the taking of an account.[33]

69 In turn, s 98 of the Act expressly provides that the Tribunal may adopt the procedures and practices of a court of record.

70 It is thus perhaps not surprising that orders of the kind now in issue have previously come before this Court without agitation of the point now in issue.[34]

71 I also note that analogous judgments in the form of orders of this type have been regarded as final in a fundamental sense[35] since the judgment of Dixon CJ in Hall v Busst.[36] In Victorian Economic Development Corporation v Clovervale Pty Ltd, Tadgell J said:

Insofar as the judgment was for the plaintiff for damages to be assessed it was a final judgment: Hall v Busst [1960] HCA 84; (1960) 104 CLR 206, 218 (Dixon CJ). Yet insofar as the judgment related to the further proceedings by way of an assessment it was, it seems, interlocutory in the sense that it entitled the plaintiff only to obtain an assessment: Light v William West & Sons Limited [1926] 2 KB 238, 241 (Lord Hanworth MR).[37]

72 Ultimately however, the focus in the present case must be upon the language of s 78(2)(b)(i) read in context. In my view, the natural meaning of the phrase 'determine the proceeding ... and make any appropriate orders' is apt to encompass orders of the kind made in the present case, but whether it should be given this meaning must ultimately turn in part upon further consideration of its context and purpose.

73 In Concrete Constructions, Harris J observed:[38]

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).[39] Section 78(2)(b)(ii) refers to striking out a party, again an order which will finalise the proceeding against the party.

74 The issue in Concrete Constructions was whether the power under s 78(2)(b)(i) 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.

75 I accept the force of her Honour's reasoning in the passage quoted above but. in my view, it is not resolutive of the key question in this case, namely whether the Determination Order was a 'final decision' in the requisite sense.

76 There are three aspects of the broader statutory context in which the provision is found which tend to support the view that the manner in which the Tribunal may determine a proceeding under s 78 extends to the making of an order of the kind in issue in the present case.

77 First, the Tribunal is given the power to regulate its own procedures.[40] Thus, on the face of it, it is for the Tribunal to decide how it 'determines' a proceeding as a matter of procedure. This factor materially favours a broad construction of s 78(2)(b)(i).

78 Secondly, s 80(1) gives the Tribunal a general power to give directions at any time in a proceeding and, on its face, further enables the Tribunal to make consequential orders with respect to the assessment of damages upon the determination of a proceeding. This factor, in addition to the power in s 98(3), also favours a broad of construction of s 78(2)(b)(i).

79 Thirdly, if an order for costs is made under ss 78(2)(c) and 109, s 111 provides that the Tribunal may make an order for costs in a fixed sum or order that costs be assessed by the Costs Court. The Act thus contemplates a consequential assessment of loss in the nature of legal costs as being compatible with the notion of a determination under s 78(2).

80 When these contextual provisions are considered, they each lend support to the view that s 78(2)(b)(i) enables the determination of a proceeding by way of a decision as to liability coupled with an order providing for the consequential assessment of damages.

81 The obvious purpose of s 78 is to enable the Tribunal to act in accordance with its charter under s 98 and more particularly to act expeditiously subject to the rules of natural justice. Moreover, s 78 further enables the Tribunal to give effect to the intent of provisions such as s 4(b) of the Domestic Building Contracts Act 1995.

82 The explanatory memorandum to the Victorian Civil and Administrative Tribunal Bill simply stated:

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.[41]

83 The effect of the builder's submission would be to effectively preclude the fair application of s 78(2)(b)(i) to most if not all claims for unliquidated damages.

84 Given that the Tribunal has an extensive jurisdiction in respect of civil claims, this would be an anomalous outcome. As Gibbs J put it in Public Transport Commission of New South Wales v J Murray-More (NSW) Pty Ltd, 'where two meanings are open ... it is proper to adopt that meaning that will avoid consequences that appear irrational and unjust'.[42] It may be inferred that s 78(2)(b) was intended to have application to inter partes claims generally, including claims for unliquidated damages in proceedings such as those heard in the Building and Property List.

Conclusion with respect to the power to make the Determination Order

85 When the natural meaning of s 78(2)(b) is considered in context and regard is had to its purpose, I am satisfied that the legislative intention is that the Tribunal may determine a proceeding by deciding liability against a respondent and providing for the consequential assessment of damages. Accordingly, proposed ground 2 of appeal has no real prospect of success.

Was there evidence that the builder had conducted the proceeding in a way that unnecessarily disadvantaged the owner? (Proposed ground 1)

86 Under this proposed ground, the builder advances two key arguments. First, it is contended that a failure to participate in a proceeding cannot be characterised as 'conduct'. Secondly, it is submitted that if the builder's failure to participate can be regarded as conduct, it was not open to the Tribunal to conclude that it unnecessarily disadvantaged the owner.

87 As the owner submits, the first proposition cannot be correct. Section 78(1) itself exemplifies the conduct which may meet the precondition stipulated within it by specifically referring, amongst other things, to failure to comply with an order or direction of the Tribunal and failure to attend mediation or the hearing of the proceeding.

88 When regard is had to these specific provisions and to the purpose of s 78 as a whole, it must be concluded that the 'conduct' to which s 78(1) refers may comprise inaction.

89 The second proposition must also fail. The Tribunal is an expert tribunal which is not bound by the rules of evidence.[43] It was open for the Tribunal to conclude that the builder's failure to comply with directions without excuse and its failure to appear at directions hearings without explanation had unnecessarily delayed the resolution of the proceeding.[44] It was further open to conclude that this delay placed the owner at a procedural disadvantage if the matter did proceed to a hearing because it resulted in a continuing failure to identify what matters would be in issue.

90 The word 'disadvantage' is an ordinary English word and its natural meaning also extends to consequential disadvantage. It was open to the Tribunal to conclude that the delay in resolution of the proceeding which could be attributed to the builder also disadvantaged the owner because it delayed finalisation of the dispute and required the owner to live in a home unit undergoing continuing and substantial deterioration and damage pending such resolution. The continuing nature of this last disadvantage was identified in the Points of Claim and successive expert's reports filed on behalf of the owner.

91 In my view, proposed ground 1 has no real prospect of success.

Did the Tribunal fail to take into account that the owner's Points of Claim documentation was so deficient that it did not identify any cause of action against the builder and did not enable the proper assessment of quantum of the owner's claim for damages? (Proposed ground 3)

92 The Points of Claim filed by the owner were supported by a cumulative series of expert reports from an architect and a quotation from a builder for rectification works. The architect's report also quoted from a geotechnical engineer's report. This stated in part:

5.0 CONCLUSION

5.1 It is our opinion that the northwest corner of the house has dropped due to soil subsidence. The footing probe illustrates that the footing is non-compliance [sic] with angle of repose. In addition, all service connections in that corner should be reviewed and fixed.

5.2 It should be noted that this report is based on BCA Vol 2 Parts 2.1 & 3.11 & Australian Standards: AS1684, AS1720, AS4100, AS2870, AS1170, AS3600, AS3700.

93 Read together, the documents filed at the date of the Determination Order:

(b) identified the relationship between the owner and the builder. The owner had purchased his home unit from a developer off-the-plan and the builder constructed the home unit for the developer;

(c) identified liability under warranties implied pursuant to s 8 of the Domestic Building Contracts Act 1995 as the basis of the owner's claim. Such warranties were alleged to inure for the owner's benefit under s 9 of that Act despite the fact that there was no contractual privity between the owner and the builder. The expert's report set out the relevant terms of both s 8 and s 9;

(d) identified the defects complained of by way of detailed photographs of cracking between, through and adjacent to brickwork, and of water damage;

(f) set out estimates of the cost of rectification for the defects identified; and

(g) made clear that the owner's claim was for the estimated cost of such rectification.

94 Practice Note PNBP-1 issued by the Tribunal sets out the usual practice of the Tribunal with respect to points of claim.

How do I commence a proceeding?

1. A party wishing to make application to the Tribunal must lodge with the Tribunal two (2) copies of an application in the form available on the Tribunal's website and pay the prescribed application fee.

2. The application should be accompanied by Points of Claim (or a document setting out details of the claim). Any counterclaim should be lodged promptly with the prescribed application fee.

3. Where the claim relates to incomplete and/or defective building works a copy of any available expert report, which must comply with Practice Note VCATPN2 - Expert Evidence, should accompany the application or counterclaim.

Points of Claim, Points of Counterclaim and Points of Defence

1. Although the Tribunal is not a court of pleadings, Points of Claim or Points of Counterclaim should include:

(a) details of the contract (if any) including the full names of the parties as set out in the contract;

(b) fully itemised particulars of the claim and the relief or remedy sought;

(c) clearly identify any incomplete and defective works (which may be by reference to an attached expert's report providing such report is clearly itemised);

(d) where the claim arises under a standard form contract it is sufficient to refer to a particular clause of the specified contract. It is not necessary to recite that clause in full unless the words are of particular significance.

...

1. In the interests of avoiding requests for further particulars, all necessary particulars should be provided in the Points of Claim, the Points of Counterclaim or the Points of Defence.
2. A request for further particulars may be made at any time without leave of the Tribunal. A copy of any request should be filed when it is served. However, if a request is contested and subsequently disallowed costs may be ordered. A request:

(a) must not contain a request for 'the usual particulars' or 'the usual details' - the particulars sought must be clearly specified;

(b) must not be in the form of interrogatories.

1. Particulars should be provided within 14 days of any request or as otherwise ordered by the Tribunal.[45]

95 The builder submits that the owner's documentation was defective in the following respects:

(a) it did not identify the relevant contract and its terms;

(b) it did not specify the owner's alleged cause of action; and

(c) it did not sufficiently detail the nature of the owner's claim to enable quantum to be assessed pursuant to the Determination Order.

96 The owner submits that the documents he filed were sufficient to enable the Tribunal, as an expert tribunal, to comprehend the nature of his claim and moreover that the Tribunal is intended to accommodate claims made by persons who are not legally qualified in cases of this kind.

97 The first criticism made on behalf of the builder is misplaced. The owner was not a party to the relevant building contract and the Points of Claim do not contain a claim for breach of contract. Further and in any event, the terms of the relevant contract were peculiarly within the knowledge of the builder.

98 The second criticism must also fail. Read together the documentation filed by the owner fairly conveys that the owner's claim is that the defects clearly identified in the expert's report were caused by a breach of one or more of the warranties identified in the expert's report.

99 As the builder submits, before identifying the warranties relied on and describing the defects in issue, the expert's report recommended further investigation by way of checking with the relevant authorities to ensure that the sewer pipes in the walkway beside the home unit were not leaking. Material produced by counsel for the owner appears to indicate that these checks were carried out prior to the Determination Order but this fact was not evidenced by the documents before the Tribunal at the time of the making of the Determination Order.

100 In my view, despite the recommendation for further investigation, a fair reading of the owner's documents as a whole made clear the nature of the claim.

101 The builder further submits that it was not enough for the owner to make a generalised allegation of breach of warranty. I do not accept this submission. The Points of Claim were not required to take the form of pleadings. If further particulars were required, the practice note makes clear that they could have been requested.[46]

102 Next, the builder submits that the fact that the home unit suffers from obvious and substantial defects may not be the fault of the builder. More particularly, it may be the consequence of inadequate site investigation or design rather than a failure to construct a home unit in accordance with the relevant specification and in a proper and workmanlike manner.

103 I accept this submission as far as it goes. The attribution of fault for defective building work may be a complex question.[47]

104 Nonetheless, the owner's claim is not brought in tort. The Points of Claim and associated documents do not articulate a claim in negligence against the builder. Whether or not there was the potential for such a claim, it has not been made.

105 Conversely, the claim which has been made has a limited but rational basis. It is a claim for breach of implied warranties which is not dependent upon proof of fault in the tortious sense.

106 In my view, the owner's documentation did adequately identify a cause of action.

107 It is further submitted that the owner's documentation could not found a proper assessment of damages. I do not accept this submission either.

108 The owner's documentation identified the defects complained of and provided an estimated cost of rectification. The assessment of damages was, and remains, capable of being undertaken by reference to the cost of rectification of the defects identified.

109 For the above reasons, proposed ground 3 has no real prospect of success. Further, the order for the assessment of quantum was not, in my view, severable from the Determination Order. Either the order as a whole was valid or it was invalid.

Was the Tribunal functus officio when the matter came before Senior Member Vassie? (Proposed ground 4)

110 It follows from my conclusion that the Determination Order was within power that the Tribunal was not functus officio with respect to the consequential assessment of quantum.

Was the proceeding before Senior Member Vassie affected by jurisdictional error? (Proposed ground 5)

111 It follows from my conclusions with respect to proposed grounds 1, 2 and 3 that the proceeding before Senior Member Vassie was not affected by jurisdictional error on the basis of the matters alleged in these grounds.

Was the proceeding before Senior Member Vassie able to proceed fairly on the basis of the Points of Claim and other documents filed on behalf of the owner? (Proposed ground 6)

112 It follows from my conclusions with respect to the proposed ground 3 that this ground must also fail.

113 For the above reasons, the proposed grounds of appeal have no real prospect of success.

114 Accordingly, I would extend time for the making of the application for leave to appeal but refuse the application.

[4] [2024] VSC 266 ('Concrete Constructions').

[5] Ibid [32] (citations in original).

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

[7] 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]).

[8] 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).

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

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

[11] 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).

[12] Concrete Constructions [2024] VSC 266, [33] (citations in original).

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

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

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

[17] [2014] VSC 356, [12].

[18] Martin v Fasham Johnson Pty Ltd [2008] VSC 289, [27]-[30] (Kyrou J); Victoria v Turner [2007] VSC 362; (2007) 17 VR 217; 220 [10] (Warren CJ); [2007] VSC 362; Director of Housing v Sudi [2011] VSCA 266; (2011) 33 VR 559, 607 [284] (Weinberg JA); [2011] VSCA 266; Kelly v Department of Treasury & Finance (No 2) [2002] VCAT 1019; (2002) 19 VAR 330, [46]-[48] (Kellam J); [2002] VCAT 1019; Velardo v Andonov [2010] VSCA 38; (2010) 24 VR 240, 250 [51] (Ashley JA, Mandie JA and Habersberger AJA agreeing); [2010] VSC 838.

[19] Krocka [2003] VCAT 1526, [10] (Coghlan D-P).

[20] Rimanic v Business Licensing Authority [2010] VCAT 1997, [28] (Ross P).

[21] See the observations of Ashley J in Bell Corp Victoria v Stephenson [2003] VSC 255; [2003] 20 VAR 280 ('Bell Corp').

[22] Act, s 109(1), (2) and (3) provide:

(1) Subject to this Division, each party is to bear their own costs in the proceeding.

(2) At any time, the Tribunal may order that a party pay all or a specified part of the costs of another party in a proceeding.

(3) The Tribunal may make an order under subsection (2) only if satisfied that it is fair to do so, having regard to -

(a) whether a party has conducted the proceeding in a way that unnecessarily disadvantaged another party to the proceeding by conduct such as -

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

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

(iii) asking for an adjournment as a result of (i) or (ii);

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

(b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceeding;

(c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law;

(e) any other matter the Tribunal considers relevant.

[23] See Concrete Constructions [2024] VSC 266, [100] (Harris J).

(1) A person in respect of whom an order is made may apply to the Tribunal for a review of the order if the person did not appear and was not represented at the hearing at which the order was made.

(2) An application under subsection (1) is to be made in accordance with, and within the time limits specified by, the rules.

(3) The rules may limit the number of times a person may apply under this section in respect of the same matter without obtaining the leave of the Tribunal.

(a) hear and determine the application if it is satisfied that -

(i) the applicant had a reasonable excuse for not attending or being represented at the hearing; and

(ii) it is appropriate to hear and determine the application having regard to the matters specified in subsection (4A); and

(b) if it thinks fit, order that the order be revoked or varied.

(4A) For the purposes of subsection (4)(a)(ii), the matters are -

(a) whether the applicant has a reasonable case to argue in relation to the subject-matter of the order; and

(b) any prejudice that may be caused to another party if the application is heard and determined.

(4B) The Tribunal may hear and determine an application under this section despite subsection (4A)(b) if the Tribunal is satisfied that any prejudice that may be caused to a party may be addressed by an order for costs under section 109 or an order for reimbursement of fees under section 115B or both.

(4C) In deciding to hear and determine an application under this section the Tribunal may require the applicant to give any undertaking as to costs or damages that the Tribunal considers appropriate.

(5) Nothing in Division 3 of Part 3 applies to a review under this section.

[26] E Nekvapil SC, Pfizer's Annotated VCAT Act (Thomson Reuters, 7th ed, 2022), 427.

[27] Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 35; (1998) 194 CLR 355, 381 [69] (McHugh, Gummow, Kirby and Hayne JJ); [1998] HCA 28; SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 262 CLR 362, 368 [14] ((Kiefel CJ, Nettle and Gordon JJ); [2017] HCA 34; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27, 46-7 [47] (Hayne, Heydon, Crennan and Kiefel JJ); [2009] HCA 41.

[28] The Macquarie Dictionary relevantly defines 'determine' as follows:

1. to settle or decide (a dispute, question, etc.) by an authoritative decision.

[29] [1987] VicRp 29; [1987] VR 353; (1986) 63 LGRA 320.

[30] Ibid 356. See also Minister for Planning and Environment v Braybridge Pty Ltd (1988) 2 AATR 82, 88 (Southwell J).

[31] Shire of Sherbrooke v F L Byrne Pty Ltd [1987] VicRp 29; [1987] VR 353, 356; [1987] VicRp 29; (1986) 63 LGRA 320.

[32] See Supreme Court (General Civil Procedure) Rules 2015, rr 21, 51.

[34] Pearl Hill Pty Ltd v Moulieris [2022] VSC 555; ACN 115 918 959 Pty td (formerly known as Pearl Hill Pty Ltd) v Moulieris [2024] VSCA 71.

[35] This is despite the fact that they may potentially be set aside pursuant to r 21.07 of the Supreme Court (General Civil Procedure) Rules 2015.

[36] [1960] HCA 84; (1960) 104 CLR 206.

[37] [1992] VicRp 40; (1992) 1 VR 596, 598.

[38] [2024] VSC 266, [102] (citation in original).

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

[41] Explanatory Memorandum, Victorian Civil and Administrative Tribunal Bill 1998, 14 (emphasis added).

[42] [1975] HCA 28; (1975) 132 CLR 336, 350; [1975] HCA 28. See also Re Media, Entertainment and Arts Alliance; ex parte Hoyts Corp Pty Ltd [1993] HCA 40; (1993) 178 CLR 379, 396 (Mason CJ, Brennan, Dawson, Toohey, Gaudron and McHugh JJ); [1993] HCA 40; Danhoa v The Queen [2003] HCA 40; (2003) 217 CLR 1, 9 [22] (Gleeson CJ and Hayne J)' [2003] HCA 40; Shahi v Minister for Immigration and Citizenship [2011] HCA 52; (2011) 246 CLR 163, 177 [38] (French CJ, Gummow, Hayne and Bell JJ); [2011] HCA 52.

[45] Victorian Civil & Administrative Tribunal, Practice Note PNBP1: Building and Property List (building disputes) - General procedures, 13 December 2018, [5]-[12].

[47] See eg Tanah Merah Vic Pty Ltd v Owners Corporation No 1 of PS613436T (2021) 75 VR 1; [2021] VSCA 72.