Victorian Civil and Administrative Tribunal|2009-07-01|Before: Mr P

The Applicant issued proceedings naming the Tenant and three other Respondents and has now made application to the Tribunal relying on advice to be found on the VCAT website to that effect that it needed, and was seeking to regularise the naming of parties other than the tenant by way of joinder.
The advice on which the Applicant relied is "Retail Tenancies List - Interlocutory Steps and Standard Orders (13 July 1007)" - the "advice" - and provides:-

.....to make a claim against someone who is other than landlord or tenant, that person may only become a party to the proceeding by virtue of an order of the Tribunal under Section 60 (of the VCAT Act). A party is not validly joined simply by filing a pleading which makes a claim against that party. Following joinder, orders for pleadings relative to the claim against the joined party are made according to the same principles as govern pleadings between the original parties.

2.1 Findings - Characterisation of the Applications

When issuing proceedings naming the Respondents, the Applicant makes them persons that have no choice but to respond to the process until and if VCAT determines to the contrary.
The Applicant's application to regularise the naming to accord with the requirements of the Retail Tenancies List does not lessen that necessity.
The Applicant may have chosen to not proceed against the named Third and Fourth Respondent but as it named them as parties to the application and served them with the application, it requires leave to withdraw under s74 of the Victorian Civil and Administrative Tribunal Act 1998.
I find the Applicant's application should be properly characterised as seeking leave to withdraw against the named Third and Fourth Respondent and to regularise the naming of the Second Respondent in the issued application. For reasons discussed later, the application in relation to the Second Respondent was probably unnecessary.
The Respondents' case is to seek to have the application against the guarantor Second Respondent and the non contracting and non guaranteeing Third and Fourth Respondents struck out for lack of jurisdiction.

Mr Ehrlich of counsel for the Respondents submitted that there is no jurisdiction under the Retail Leases Act 2003 or in any of the other enabling enactments to make any order against the Second Respondent as a guarantor and that to enable an order to be made there must be a direct jurisdiction conferred on VCAT.

VCAT is divided into Lists. The Members are appointed to VCAT and then assigned to Lists. That enables VCAT to process its workload arising under various Acts in a manner that suits the nature of the general work under a particular enabling enactment.
The applications that arise in one List may be of a substantially different nature from those in another (for example compare the Residential Tenancies, Domestic Building, Planning and Environment and General Lists). Yet matters arising in one List often require consideration of Acts allocated to Lists other than the one to which the initiating proceeding has been allocated under the Rules.
This application arises in the Retail Tenancies List and that List has been allocated functions under the Retail Leases Act 2003 and the Fair Trading Act 1999 (FTA). It may well be that proceedings under the FTA relating to the same or very similar facts and circumstances may be brought directly under the FTA in the Civil Claims List with different considerations as to joinder.
It is convenient to note that bringing a claim to one List that specialises in one or more enabling enactments does not preclude the consideration of other relevant enabling enactments that confer powers on VCAT.

3.3 Findings - Members Must Consider All Enabling Enactments

A Member of VCAT must consider all relevant enabling enactments that confer jurisdiction on VCAT to resolve disputes notwithstanding any allocation under the Rules and the List in which the Member is sitting and if necessary consider a recommendation to transfer if the relevant enabling enactment is not allocated to the List.

The FTA is one of the more general enabling enactments allocated to a number of Lists in VCAT (including the Retail Tenancies List) and it affects this application.
Consideration of any jurisdiction under the FTA is required because s3 definitions and s107 of the FTA appear to apply to many of VCAT's civil jurisdictions.
However, the Tribunal, if required under any enabling enactment and otherwise for its convenience, treats each enabling enactment and the List to which it is allocated as the List to which such claims should be made (in this case the Retail Leases Act 2003 and Retail Tenancies List).

4.2 FTA Sections 3 and 107

(1) In this Part a consumer and trader dispute is a dispute or claim arising between a purchaser or possible purchaser of goods or services and a supplier or possible supplier of goods or services in relation to a supply or possible supply of goods or services.

(2) For the purposes of subsection (1), a dispute or claim includes any dispute or claim in negligence, nuisance or trespass that relates to the supply or possible supply of goods or services but (except as provided in subsection (3)) does not include a dispute or claim related to a personal injury.

(3) For the purposes of subsection (1), a dispute or claim includes a claim related to personal injury.....

The term "consumer and trader dispute" is a misnomer. It changed from a "fair trading dispute" (in itself a misnomer) when the Small Claims Tribunal Act 1973 was repealed and appears to be an attempt to preserve (as in the definition of small claim in s107A) the nomenclature of the former Tribunal.
At first blush one might be excused for considering that the FTA is primarily one of market place regulation and only grants jurisdiction to the Tribunal for those matters contained in the Act relating to actions in relation to and damages for contravention of the proscribed behaviour. That is reinforced by the terminology used in s107.
It is a notion of consumers in the domestic sense taking traders in the commercial sense to the VCAT for resolution of disputes as was the limited jurisdiction of the Small Claims Tribunal for many years.

When considered more fully it is apparent that the FTA is remedial legalisation that includes a quite separate and distinct form of dispute resolution that does not rely on any contravention of the Act to enliven jurisdiction.
Using the definitions and s107 of the FTA, the jurisdiction of the Tribunal is really one of a dispute between "purchaser and supplier" and those words mean that any purchaser or supplier (or possible purchaser or supplier) whether in a domestic or commercial sense may bring an application to the Tribunal to resolve a dispute for the supply or possible supply of goods or services for an unlimited value.
It is designed to give rights to parties to bring matters of a wide compass and unlimited value to an alternative dispute resolution system under the jurisdiction conferred in section 107(1) and following.
It allows the general body of law, written and unwritten, that exists in relation to purchaser and supplier disputes to be resolved by the Tribunal as an alternative to the Courts. VCAT's jurisdiction under the FTA is not confined to a contravention of the FTA or other enabling enactments (although they may exist and directly confer power).
If a dispute falls within the definitions under the FTA there are wide powers to resolve that dispute (including some that are not usually available such as exemplary damages - s108 (2) and unjust terms in contracts - s109).
Submissions are often made to the Tribunal that notwithstanding the simple words in the definition it was never intended that VCAT should cover the entirety of the supply of services (as inclusively defined) in trade or commerce or supply of goods (as inclusively defined) whether supplied in trade or commerce or not.

On the plain reading of the definitions, the FTA gives powers to resolve virtually all of the activities of Victorians in their dealing with goods and services except for services not provided in trade or commerce.
Counsel for the Respondents contends that the Tribunal should not take a wide view of coverage and specifically that a guarantee is one of the exceptions to any view of the coverage of the FTA.
Mr Ehrlich suggested that although he put his case in relation to guarantees not being services, the same would apply to claims relating to insurances and the provision of banking as never having been intended and actually not under the FTA jurisdiction in VCAT.
In part he based his submission on the fact that nothing was mentioned in relation to those items in any of the parliamentary documents when the Act was introduced and passed.
I am not aware of any reason why the failure to mention some or any of the myriad possible disputes that appear to be covered by the definition of services should result in the three which he raised not falling within the definition of services. Indeed why just those three matters?
In its simplest terms a guarantee is a promise by a third party (often as in this case an interested third party as director of the Tenant company) to meet some obligations (usually payment of money) on the happening of some future event that may in fact never eventuate.
A guarantee must be a service to fall within the FTA definition. Services are defined in s3:-

services includes any rights (including rights in relation to, and interests in real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce, including the rights, benefits, privileges or facilities that are, or are to be provided, granted or conferred under a contract for or in relation to -

(a) the performance of work (including work of a professional nature) whether with or without the supply of goods; or

(b) the provision of, or the use or enjoyment of facilities for, amusement, entertainment, recreation or instruction; or

(c) the conferring of rights or benefits or privileges for which remuneration is payable in the form of a royalty, tribute, levy or similar payment -

but does not include rights or benefits being the supply of goods or the performance of work under a contract of service;

It is a convoluted definition but one which is inclusive and wide in concept.

4.5 Findings - Guarantee is a Service under the FTA

There is no readily discernable limitation to the simple meanings of the words used in the definition of services as they apply to the facts in this case (and I add here that I am mindful of Gillard J's comments mentioned in the addendum below).
A guarantee confers a right and a benefit on the person to whom the guarantee is given. It is a right and benefit to recover in the event of the default of the primary obligator under a contract and falls within the definition of services under the FTA.
The guarantee was given by the Second Respondent as director of the tenant under a retail lease.
I find that the Second Respondent as the director of the Tenant provided his guarantee in trade or commerce and that guarantee is a service as defined and is subject to the jurisdiction of VCAT under the FTA.

When I had completed these reasons my attention was drawn to a decision of Gillard J in Cash Resources Australia Pty Ltd v Bentley [2002] VSC 271.
Relying on a decision of the Full Court of the Federal Court under the Trade Practices Act in Queensland Aggregates Pty Ltd v T.P.C [1981] FLR 314, His Honour said that despite the width and generality (of the definition of services) the term should not be given an expansive construction.
His Honour found that the execution of the mortgage and guarantee in the case before him, resulted in giving rights to the applicant in that case and the registration of the mortgage granted an interest in the land.
The definition has now been changed from fair trading dispute to consumer and trader dispute due to the incorporation of the jurisdiction previously found under the Small Claims Tribunal Act 1973, but otherwise is similar.
Neither party brought the decision to my attention - nor did I to theirs. It provides an answer to the application made by the Second Respondent, but in the event there is some argument about distinguishing the case, I have let my reasons stand.

4.7 Further Findings - Definition of services - paragraph (b)

Counsel for the Respondents submitted that although this particular retail lease was for the purposes of letting premises for Tennis and Volley Ball Courts, paragraph (b) of the definition of services was not of relevance to the guarantee. He submitted that to find otherwise would result in the overwhelming majority of guarantees of retail leases not being subject to the Act whereas this guarantee would.
In my view, paragraph (b) of the definition is merely an inclusive example and in no way detracts from the generality of the definition ending with the words "trade or commerce" and that the rights and benefits conferred under the guarantee fall within the words expressed prior to the inclusive examples.

Originally the Respondents submitted there was no jurisdiction to determine tortious disputes arising in relation to consumer and trader disputes under the FTA.
The Small Claims Tribunal was established in 1974. There were a number of challenges to the scope of its jurisdiction, but one area not confined was the Tribunal's jurisdiction to deal with causes of action that arose in relation to a contract between a consumer and trader as defined. Thus the Tribunal had power to deal with a tort arising under a contract - Walsh (A Referee of the Small Claims Tribunal) v Palladium Car Park Pty Ltd [1975] VicRp 91; (1975) V.R. 949.
The FTA was amended to take over the functions of the Small Claims Tribunal with minimal change to the jurisdiction previously to be found under that Act (see s107A of the FTA and Schedule 1 restriction on costs, representation, reasons and appeals Victorian Civil and Administrative Tribunal Act). Section 107(2) was not materially altered for the purposes of this discussion. It has always confirmed the position that the earlier Tribunal took in relation to such tortious disputes.

5.2 Findings - FTA Allows Claims for Negligence, Detinue and Conversion

If a purchaser/supplier dispute arises and includes allegations of conversion and actions in detinue nothing in the definition in s107 excludes same from the Tribunal's jurisdiction under the FTA.
The Tribunal has the direct jurisdiction under Part 9 of the FTA (if not the Retail Leases Act Part 10 Division 4) to hear claims concerning negligence conversion and detinue that relate to the supply or possible supply of goods or services by the Second Respondent.

Having found jurisdiction under the FTA, how may a matter be brought to VCAT, and is there any necessity for a joinder application with respect to the Second or other Respondents?
Where there is direct jurisdiction under an enabling enactment, there is no need for a joinder application. However, this application was brought under the Retail Leases Act, not the FTA.

6.2 Joinder Under the Retail Leases Act

In summary form (limiting discussion to facts in this case) the Retail Leases Act 2003 makes proceedings in VCAT subject to an initial hurdle to be found in s87 that requires an alternative dispute resolution process take place prior to bringing a retail tenancies dispute to the Tribunal. That does not apply to applications that seek injunctive relief.
A retail tenancy dispute in Part 10 of the Act has the meaning given by section 81 and is a dispute between and a landlord and tenant arising under or in relation to a retail premises lease but does not include a dispute solely relating to the payment of rent.
As the Respondents point out, the claim against the guarantor is not a dispute between the landlord and tenant. It appears therefore that there is no pre-requisite to comply with mediation process before the Small Business Commissioner under s87 for that part of the claim (or any claim against the Third and Fourth Respondents).
Section 89 (1) of the Retail Leases Act 2003 provides that:

The Tribunal has jurisdiction to hear and determine an application by a landlord or tenant under a retail premises lease, or by a specialist retail valuer, seeking resolution of a retail tenancy dispute.

It is therefore an application by, and under that section limited to, landlords and tenants as parties. That is so unless the use of the words "seeking resolution of a retail tenancy dispute" is limited to an application by a specialist retail valuer which I do not consider to be the case.
There has long been argument about the reason for which in some enabling enactments the parties that are initially required for an application are limited, yet the power to join and then make any order to resolve issues in dispute are apparently very wide.
Section 90(1) of the Retail Leases Act 2003 provides:

The parties to a proceeding before the Tribunal on an application under section 89(1) are -

Even though the initial application is limited to matters as between landlord and tenant there is wide power to join any person who is considered appropriate. In my view that includes a guarantor of obligations under a Retail Tenancies Lease.
Other sources of joinder or initial application may be available under other enabling enactments in VCAT.
In this case there is a dispute between landlord and guarantor as supplier. There is power to the purchaser as the person to whom the goods or services (guarantee) have been or are to be supplied to apply to the Tribunal for resolution of the dispute (s110 of the FTA).
Whilst it might be argued that as an Act later in time the Retail Leases Act 2003 should prevail over the FTA in claims as between landlord and tenant, that does not apply to other relationships such as landlord and guarantor.
Indeed a landlord may seek a remedy against the guarantor independently of any landlord and tenant proceeding in VCAT.

6.4 Findings - A Guarantor Can be Joined Under Retail Leases Act And Be A Direct Party Under the Fair Trading Act

A landlord may bring an action against a guarantor as a claim in the Civil Claims List of VCAT independently of any proceeding under the Retail Leases Act 2003 and in so doing is not required to make a joinder application under s90 of the Retail Leases Act 2003 (or as suggested in the advice on the VCAT Web Site under s60 of the Victorian Civil and Administrative Tribunal Act 1998).
To avoid multiple proceedings, a Landlord might wish to include a claim against a guarantor in a claim under the Retail Leases Act 2003 s90(1)(c) as in this case. As previously discussed applying the jurisdiction of VCAT rather than the limited enabling enactments in a List, the Applicant could "plead" a claim under the FTA in an application to the Retail Tenancies List. If such a claim is made there is a direct jurisdiction in the List and no need to make an application to join under s90.
I find that the Second Respondent as the director of the Tenant should remain a party under the application to the Retail Tenancies List as he is subject to the jurisdiction of VCAT as a direct party to a consumer and trader dispute under the FTA.
Even if that were not the case he could and should be joined under the Retail Leases Act 2003.

Mr Ehrlich submitted that whilst procedurally the Second Respondent could be joined, Balmford J held in Roads Corporation v Maclaw No 469 Pty Ltd [2001] VSC 435; (2001) 19 VAR 169, that it is necessary to determine, that even if there is a power of joinder, whether the Tribunal have jurisdiction to make an order against the proposed joined party.
In her judgment Balmford J referred to the decision of Byrne J in Greenhill Homes Pty Ltd v Domestic Building Tribunal [1998] VSC 34; (1998) 13 VAR 353 and pointed out that case dealt with the Domestic Contracts and Building Tribunal Act 1995.

which was an unusual and distinctive piece of legislation, designed to ensure that as far as possible all issues relating to domestic building contracts could be litigated in the Tribunal established by that Act

and that s56 of that Act was in very different terms to s60 of the Victorian Civil and Administrative Tribunal Act 1998.

I might indicate that to the extent that the Domestic Contracts and Building Tribunal Act 1995 sought to ensure that all Domestic Building issues be resolved in the Tribunal it could be argued that the Retail Leases Act 2003 is intended to do the same for Retail Leases.
If joined under the Retail Leases Act 2003 what orders may be made affecting joined parties?
Orders that may be made under s91 affecting a party (note not limited to landlords or tenants) are:-

(a) requiring a party to do, or not to do, anything including to provide specified facilities, services, fixtures or fittings under a retail premises lease or to return specified fixtures or fittings to another party; or

(b) requiring a party to pay money, by way of restitution or compensation or otherwise, to a specified person; or

(d) granting recovery of possession of the retail premises to the landlord; or

(i) is empowered to require to be done under this Act or the Victorian Civil and Administrative Tribunal Act 1998; or

(ii) considers necessary or desirable to resolve the matter concerned.

Counsel for the Respondents submitted that VCAT's jurisdiction does not extend to non-jurisdictional claims even if they are inseparably connected. That does not satisfactorily explain the reasons for which the varying and often wide joinder and order making powers against all parties (directly subject to jurisdiction or joined) are found in the enabling enactments and the Victorian Civil and Administrative Tribunal Act 1998.

In summary, provided there is a dispute capable of being brought under an enabling enactment, the Tribunal should be able to join anyone under the relevant enabling enactment or s60 of the Victorian Civil and Administrative Tribunal 1998 to effectively avoid a multiplicity of fact finding in different forums.
That is especially important where the Applicant has no choice in the forum to which the claim must be brought because it (VCAT) has exclusive jurisdiction to resolve the initiating dispute in most disputes that arise under the enabling enactment.
Such a view is consistent with the second reading speech for the Victorian Civil and Administrative Tribunal Act 1998 (Parliamentary Debates (LA): 1998 Autumn Sessions [972])

VCAT will be a judicially assisted tribunal in order to provide litigants with a "one stop shop" ....

(1) The Tribunal may order that a person be joined as a party to a proceeding if the Tribunal considers that -

(a) the person ought to be bound by, or have the benefit of, an order of the Tribunal in the proceeding; or

(b) the person's interests are affected by the proceeding; or

(2) The Tribunal may make an order under subsection (1) on its own initiative or on the application of any person.

Joinder should ensure that a fact finding exercise is not subject to challenge and possible re-examination with a different outcome or require orders to be made in respect of the findings in another forum to give force to the finding in VCAT.
It seems an unlikely intention that the wide powers of joinder and extensive order making powers should be limited to force litigation in another forum arising out of the same dispute with parties other than just the landlord and tenant or in the absence of either one of the landlord or tenant.

7.3 Original Application As An Example Of Difficulties

Keeping in mind the exclusive jurisdiction of VCAT, the original points of claim in this case provide a clear example of the problems that may occur.
The Applicant claimed in the alternative that either the tenant and guarantor or the Third and Fourth Respondents wrongfully detained or converted some chattels to their own use.
If the Tribunal determines on the evidence that the Second Respondent and the Tenant were not responsible for wrongfully detaining or converting some chattels it may inevitably find directly or by inference that the Third and Fourth Respondents were so responsible (excluding for this example a finding that there was no wrongful detention or conversion by any of those parties or at all).
Is it appropriate that the Third and Fourth Respondents should have been joined as parties whose interests are affected by the proceedings, or to be bound or have the benefit of the orders under s60 of the Victorian Civil and Administrative Tribunal Act 1998 or be persons that for any other reason are necessary or desirable to be joined as a party under s90 of the Retail Leases Act 2003 (and indeed to present evidence and cross examine as a party)?
Otherwise based on findings in VCAT is the Applicant obliged to litigate elsewhere to obtain a remedy? Can it reasonably be said that another jurisdiction would find itself bound by the findings made in VCAT especially if other parties are involved? What if on the evidence in another Court there is a finding that the Second Respondent was the party responsible? In defence of any claim in another Court can the Third and Fourth Respondents join the Second Respondent to those proceedings?
Perhaps it is as simple as once having assumed a tortious jurisdiction in relation to purchase and supply under s107 of the FTA, the categorisation of that part of the dispute changes to one of tort with consequential powers of joinder and orders notwithstanding any limitations on parties to the purchase and supply in a consumer and trader dispute (or landlord and tenant in a retail tenancies dispute).

7.4 Findings - Unnecessary To Decide In This Application

However, it is not a necessary to take this matter further, as in this case there is a direct jurisdiction under the FTA in relation to the Second Respondent as guarantor and the claims against the Third and Fourth Respondents have been abandoned.

Civil and Administrative Tribunal Act 1998

Athedium (Vic) Pty Ltd v Matchpoint Pty Ltd and Ors (Retail Tenancies) [2009] VCAT 1124 (1 July 2009)

Athedium (Vic) Pty Ltd v Matchpoint Pty Ltd and Ors

At a glance

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Judgment (65 paragraphs)

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Legislation Cited (1)

Cases Cited (1)

Athedium (Vic) Pty Ltd v Matchpoint Pty Ltd and Ors (Retail Tenancies) [2009] VCAT 1124 (1 July 2009)