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[2003] VSC 255
appellant. Appeal allowed; orders made by the Tribunal on 10 December 2002 set aside; plaintiffs to pay the defendant's costs of and incidental to the application made on 10 December 2002 on a party and party...
The Supreme Court allowed Bell Corp's appeal from VCAT orders that struck out Bell's claim and determined the counterclaim in the defendant's favour for non-compliance with directions. Ashley J held the Tribunal had legally erred by failing to consider a fundamental relevant factor — that parties should ordinarily be given a hearing on the merits — and by dismissing less drastic alternatives (self-executing orders) on speculative or incorrect grounds. The VCAT orders were set aside, costs awarded to the defendant for the December application, and the Tribunal is to be reconstituted on rehearing (4 July 2003).
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Bell Corp Victoria Pty Ltd (and associated individuals) commenced a VCAT proceeding in October 2001 against Christine Stephenson alleging unpaid contract sums and quantum meruit entitlements arising from the off-the-plan purchase of a penthouse. Stephenson filed a defence and, later, a counterclaim alleging defective and incomplete works and other breaches, quantified in part and otherwise unquantified. VCAT gave directions after an on-site conference on 16 August 2002, including a timetable for witness statements: plaintiffs' statements of evidence in chief by 18 November 2002, and replies by 9 December (see paras 16 and 65-66).
7 cited instruments linked from this judgment.
The plaintiffs failed to comply with the witness-statement timetable. On 10 December 2002 the deputy president of VCAT, relying on s.78 of the VCAT Act, struck out Bell Corp's claim and determined the counterclaim in favour of Stephenson (leaving quantum and costs for separate hearing), expressly declining to grant more indulgence or to make self-executing orders (see paras 12, 112, 307). The deputy president considered the plaintiffs' failure to comply constituted conduct disadvantaging the opposing party under s.78(1)(a) and exercised the s.78(2) discretion to make the drastic orders (paras 19-23, 112).
Bell Corp obtained leave to bring an appeal under s.148(1) of the VCAT Act to the Supreme Court, arguing the Tribunal’s exercise of discretion involved errors of law: manifest unreasonableness, failure to give a reasonable opportunity to be heard, misapplication of relevant principles, and taking irrelevant matters into account (paras 30, 131-137). Ashley J heard the appeal, accepted that VCAT had formed the requisite belief under s.78(1)(a) but found legal error in the manner in which the s.78(2) discretion was exercised. The Court held (1) the Tribunal failed to take into account a primary relevant consideration, that a party should ordinarily be given an opportunity to be heard on the merits, and (2) the Tribunal rejected the less-drastic alternative (self-executing orders) on a speculative and incorrect basis. The Supreme Court allowed the appeal, set aside the VCAT orders, awarded costs to the defendant for the December application, and ordered the rehearing not be before the same member (paras 298-323, 333-336).
Three linked legal themes drove the decision.
The review framework under s.148: Ashley J accepted that an appeal under s.148 is, in substance, a form of judicial review directed at questions of law rather than a general rehearing (drawing from Roy Morgan). That means the Supreme Court's function is to test whether the Tribunal made an error of law in its exercise of discretion (paras 149-160). The Court reiterated that legal error can include failure to consider a required factor, taking into account an irrelevant consideration, or manifest unreasonableness (paras 191-194).
Identification of mandatory or ordinarily required considerations under s.78(2): The Court read s.78(2) in its statutory context, particularly alongside ss.97 and 98. Section 97 requires the Tribunal to act fairly and according to substantial merits, and s.98 retains the rules of natural justice unless excluded. Ashley J held these provisions import into the s.78(2) exercise the important consideration that a party should, ordinarily, be given an opportunity to be heard on the merits (paras 250-258, 298-304). That consideration was not absolute, but it was a necessary factor to address and weigh.
Last-resort character of s.78 remedies and proper treatment of alternatives: The Court stressed that s.78(2) grants powerful, potentially merit-excluding remedies and therefore should be used as a remedy of last resort. Where less-drastic alternatives (for example self-executing orders or costs sanctions) are available, the Tribunal should properly consider them and not reject them on speculative grounds (paras 250-256, 307-313). The deputy president had declined to make self-executing orders because he 'had no belief' they would be complied with and thought they might be futile, the Supreme Court found this reliance on speculation and an incorrect test amounted to error (paras 307-323).
Given these principles Ashley J concluded that, although the Tribunal was entitled to find non-compliance under s.78(1)(a), the subsequent discretion was exercised unlawfully because essential balancing and proper consideration of alternatives were absent (paras 286-296, 298-323). As the legal error was established, the Court set aside the orders and remitted with directions concerning costs and reconstitution (paras 333-336).
Before this decision:
What Ashley J clarifies and emphasises:
After this decision:
"In my opinion the Tribunal erred in law by failing to take into account... that a party should ordinarily be heard upon the merits..." (para 298).
"That remedy should be of last resort and not first resort." (para 250).
The Tribunal's original reasoning that "The section does not require the giving of a 'second chance'..." (para 112).
The Court's description of permissible legal error in discretionary decisions: failing to take into account relevant matters, taking into account irrelevant matters, or manifest unreasonableness (paras 191-194).
In these fact patterns Ashley J’s reasoning will support overturning the tribunal's orders where the reviewing court can identify the failure to consider the right to be heard or a speculative rejection of alternatives.
(As required, do not invent later cases. The judgment itself outlines the legal landscape and references prior authority which the Court used to situate its ruling.)
The precise content and weight of the “ordinarily be heard” consideration in every factual matrix. Ashley J states it is an important factor but not absolute (paras 250-258, 298-304). How will future tribunals weigh it against strong case-management pressures in high-delay contexts?
The threshold for rejecting self-executing or other alternative orders: Ashley J condemns speculative refusals, but does not prescribe a fixed evidential standard for when a tribunal may regard an alternative as likely futile (paras 307-323). What level of evidential substratum should tribunals require before concluding futility?
Interaction with s.78 where non-compliance is more egregious or where a party has a history of repeated defaults. Ashley J accepted the tribunal could form the requisite belief under s.78(1)(a) (paras 286-296) yet still required balancing. How severe or repeated must default be to render a strike-out first resort rather than last?
Implications for tribunal drafting of reasons. Ashley J noted the Tribunal substantially revised its reasons after oral delivery (para 109). What degree of specificity should tribunals include in reasons when exercising s.78 sanctions to avoid successful s.148 challenges?
Re-litigation and interlocutory consequences. Ashley J observed uncertainty about evidence and the practical effects of the VCAT orders (paras 265-271). How should tribunals frame orders when determining liability but reserving quantum so as to avoid procedural uncertainty upon appeal?
These questions identify practical points of application where subsequent cases or legislative clarification may be required. Practitioners should ensure that when an application under s.78 is pursued, the tribunal is given (and records) explicit consideration of the right to be heard, evidence supporting any claim of futility regarding alternatives, and a clear, balanced reasoning demonstrating that s.78 is a last resort.
[2003] VSC 255
Appeal - decision of Victorian Civil and Administrative Tribunal in exercise of discretion - question of law - whether Tribunal in exercise of discretion committed an error of law justiciable on appeal under s. 148(1), Victorian Civil and Administrative Tribunal Act 1998.
"1. The claim is struck out. 2. The amended counterclaim is determined in favour of the respondent (Stephenson) as against all and each of the respondents (Bell) to the Counterclaim. 3. The hearing date of 24 February 2003 is cancelled. 4. I make no determination as to quantum or as to costs. 5. I set aside for separate hearing the question of quantum on the amended counterclaim and the question of costs of this day and otherwise in respect of the proceeding to a date to be fixed after 31 January 2003 to be notified to the parties."
Section 78 of the Act and the grounds of appeal shortly described
"(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;"
"(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; "
The circumstances of the claim and counterclaim as revealed by formal documents
* The plaintiffs initiated proceedings between it and Mrs Stephenson (the defendant). They did so by application filed 12 October 2001. The application alleged that the 1998 contract amount of $1.1M had been varied in about May 2000 by an increase to $1.23M in order to account for variations. It alleged that a certificate of occupancy had issued on 15 June 2000, but that the parties agreed soon thereafter that works were incomplete; and further agreed that the works must be completed and that in the interim the defendant would retain $78,208.97 from the contract price. It alleged that the works were now complete but that $71,948.97 was still retained. It claimed an additional $55,541 on a quantum meruit.
* The defendant delivered a defence dated 6 February 2002 - that is, about three and a half months after service of the application[2]. By the defence the contract was admitted, retention of moneys was admitted, completion of works was denied, the plaintiff's entitlement to any moneys was denied, and an allegation was made that there was a "good set off and/or counterclaim", details of which would be provided when reports were to hand.
* On 4 March the Tribunal granted an interim injunction against Bell Corp, restraining disposition by it of certain of its assets. The order was continued, in more limited form, from 12 March.
* A counterclaim was filed, against Bell Corp only, on 8 March - that is, about a month after the defence had been delivered, and about four and a half months after service of Bell Corp's application. The counterclaim alleged that works had been carried out defectively and incompletely. Reliance was placed on two reports which the defendant's lawyers had obtained.
The counterclaim further alleged that the 1998 contract had been varied in 2000 so as to require grant of an easement over another lot in the development in favour of the defendant, or alternatively to secure her ample access from the car spaces to the lift lobby. A breach of that contractual variation was alleged. The same subject matter was relied upon, in the alternative, as a representation rather than a contractual term.
The counterclaim alleged, next, that there had been an agreement or representation as to the height of the apartment and the roof top. There had been breach thereof.
The counterclaim alleged, further again, that there had been an agreement or representation as to the nature of the lift that would be installed. This had been breached.
In consequence of all these matters the counterclaim alleged the following entitlements by way of set off or counterclaim.
"A. Damages. B. A Declaration that the Respondent is entitled to an easement from the Car Spaces to the lift lobby and an order that the Applicant register such easement on title. C. Costs of rectifications and/or completion of the Works $290,725.00. D. Diminution in value of the Property $110,000.00. E. Damages for inconvenience, nuisance and diminution in value in such sum as the Tribunal deems fair and reasonable. F. Costs of alternative accommodation and storage. G. Interest. H. Costs."
* On 8 March 2002 the plaintiff gave discovery. So did the defendant.
* The defendant gave amended discovery on 30 April. She now identified 645 documents.
* Bell Corp delivered points of defence to the counterclaim dated 21 May - that is, about two and a half months after the date on which the counterclaim had been filed. It put in issue the allegation that works had been defectively and incompletely performed. Reading between the lines, it did not really dispute that there had been some agreement or representation about an easement; but it alleged that the same had been impossible of performance. It denied an agreement or representation as to height and view; likewise any agreement or representation about a lift. It put the allegations of loss and damage into dispute.
* On 7 June a summons was filed on behalf of the defendant seeking leave, inter alia, to join the messrs Bell to the counterclaim, for leave to file and serve a fresh counterclaim, and for leave to file and serve a request for further and better particulars of Bell Corp's application. An affidavit sworn 7 June 2002 by Eleftheria Carageorgos, solicitor for the defendant, exhibited experts reports obtained by the defendant and by Bell Corp. They showed, inter alia, that Mr Hegarty, one of the defendant's experts, estimated the cost of rectification of works and the obtaining of interim alternative accommodation at $290,725; and that Mr Lorich, Bell Corp's expert, estimated rectification costs, not requiring the owner to temporarily vacate, at $34,314.
* On 13 June the leave sought was granted. The Tribunal referred the matter to an on-site compulsory conference on 16 August.
* On or about 13 June - that is, about eight months after Bell Corp's application had been served - the defendant's solicitors delivered a request for further and better particulars.[3]
* On or about 11 July - that is, within a month of the request - further and better particulars were provided.
* Amended points of set-off and counterclaim were delivered on or about 14 June - that is, approximately eight months after service of Bell Corp application, and more than four months after the defence had first flagged a set-off and/or counterclaim. The document, of 44 paragraphs and 28 pages, and raising claims not only against Bell Corp but the messrs Bell, may be compared with the counterclaim of 8 March, a document of 18 paragraphs and 15 pages.
By the new document particulars of defective and incomplete works were identified by reference to four reports, respectively dated August 2000 and January, February and March 2002.
By her amended counterclaim the defendant sought to implicate the messrs Bell as persons who had engaged in conduct making them personally liable either under statute or at common law. Careful examination of the counterclaim would have revealed that the allegations which were made raised not only likely factual issues but legal questions of some complexity.
Also by the amended counterclaim a fresh complaint was raised - that there had been an agreement or representation that an opaque screen would be placed between the spa and the services area. That agreement or representation had allegedly been breached.
* On or about 8 August - that is, within two months of the delivery of the amended points of set-off and counterclaim - each of Bell Corp and the messrs Bell delivered points of defence. In essence, the denials by Bell Corp to the earlier set-off and counterclaim were repeated, the newly raised claim was denied, and the messrs Bell denied the allegations raised against them as individuals.
* On 16 August an on-site conference was held in accordance with the Tribunal's orders made 13 June. There was no settlement. The Tribunal then gave directions, inter alia, as follows:
"2. By 18 November 2002, each party must file and serve a statement of the evidence in chief to be given at the hearing by each of their witnesses. Each statement must consist of a narrative of the evidence to be given in chief by the witness concerned. 3. By 9 December 2002 each party must file and serve a statement of any evidence in chief to be given by each of their witnesses in reply to the evidence of another party. 4. A party will not be allowed to present any evidence in chief at the hearing which is not contained in a witness statement or witness statement in reply without leave of the Tribunal. A party wanting to call such additional evidence in chief orally may be ordered to pay the actual costs of the other parties for the time taken to illicit (sic) such oral evidence. ... 6. This proceeding and any counterclaim is set down for hearing on 24 February 2003, commencing at 10 am at 55 King Street, Melbourne with an estimated hearing time of 20 days. Costs may be ordered if the hearing is adjourned or delayed because of a failure to be fully prepared or to comply with previous directions of the Tribunal."
* Bell Corp made further discovery by affidavit sworn 9 October.
Circumstances disclosed by the affidavit in support of directions sought on 10 December 2002
* On 25 November the deponent contacted the plaintiffs' solicitors requesting a time for exchange of witness statements.
* On 27 November she received a letter from the plaintiffs' solicitors. It sought an extension of time. The reason given was that "our client is in the process of formulating an all encompassing offer of compromise". Reference was made to "the interests of mitigating both parties' costs".
* On 28 November the deponent faxed a letter to the plaintiffs' solicitors stating that a compromise offer could be made at any time; and that the parties must comply with the Tribunal's orders. She said in the letter that if an arrangement was not made by 29 November an immediate application would be made to VCAT to enforce compliance with the orders made on 16 August and to confirm the hearing date.
* On 29 November the defendant's statements of evidence were filed with the Tribunal and served on the plaintiffs' solicitors.
* Also on 29 November the deponent faxed a letter to the plaintiffs' solicitors foreshadowing that she would seek to have the matter listed for directions in relation to the plaintiffs' failure to file and serve their statements of evidence.
* On 2 December the plaintiffs' solicitors made an open offer of settlement. On the same day they faxed a letter saying that their clients did not intend to file and serve witness statements until the expiry of the period for which the offer was open.[4]
* The defendant was prejudiced by the plaintiffs' failure to file and serve statements as ordered. This "flows from the difficulty now created in making replies to the evidence (if any) of [the plaintiffs], and by the veiled threat to the hearing date". The defendant was experiencing continuing "water ingress problems to her apartment". An expert's report dated 31 October 2002 was exhibited in relation to the alleged problems.
* The defendant sought orders under s. 76 of the Act; alternatively self-executing orders to ensure that the hearing proceeded on 24 February 2003.
The history of the application dealt with on 10 December 2002
* The defendant's solicitors sought a directions hearing by letter of 2 December, citing the plaintiffs' failure to serve their evidence in chief.
* The Tribunal listed a directions hearing for 10 December 2002. By Notice headed "Non Compliance with VCAT Orders", dated 4 December 2002, it said that at such hearing the Tribunal might:
"(a) vacate any hearing date or compulsory conference date already fixed; (b) amend the timetable set out in previous directions; (c) if the defaulting party is the Applicant, dismiss the application or if the defaulting party has filed a counterclaim dismiss the counterclaim; (d) if the defaulting party is not the Applicant, determine the proceeding in favour of the applicant or order a party be struck out of the proceeding; (e) order the defaulting party or the party's representative to pay costs, including where appropriate, solicitor and client costs; (f) require any order as to costs to be complied with before continuing the proceeding; or (g) make any other order that is just."
The notice added, in bold type, that "it would be in the interests of all parties to remedy any default before the directions hearing".
* By letter dated 6 December delivered to the Tribunal and copied to the plaintiffs' solicitors Mrs Carageorgos forwarded her affidavit sworn that day and a memorandum of the directions sought by the defendant. The letter asked the Tribunal to confirm that the matter would be listed before a presidential member, "as the respondent is seeking, inter alia, an application (sic) pursuant to s. 76" of the Act in respect of the plaintiff's claim and that the plaintiff's defence to counterclaim be dismissed. The memorandum sought, alternatively, an order under s. 76 or self-executing orders.
* The principal issues were those of water ingress and height of the premises.[5]
* He sought relief "under s. 78, principally, of the ..... Act.[6] That was the first occasion upon which anything had been said about s. 78.
* The expert's report dated 31 October 2002 made good his submission that the water ingress problem was a major issue.
* There was an analogy between s. 78 and R. 24.02 of Chapter 1 of the Rules.
* Section 78 provided a lower threshold than did s. 76, an application under the latter of which could not be maintained.[7]
* The defendant and her husband had been put to great cost in connection with the preparation of witness statements; and the inconvenience of exploratory openings being made in their premises: "...they have got the pipes running down in their bedrooms and bowls located under the house".[8]
* As an alternative to orders under s. 78, self-executing orders should be made, and the hearing date confirmed - that is, in the event of compliance with the orders.
* His clients had been devoting some of their efforts in attempting to settle the matter and to avoid costs.
* This was not an attempt to put off the hearing date. "There is still a possibility of the hearing date of 24 February 2003 being maintained."[9] There was still time for witness statements and statements in reply to be provided before that date.
* He was not instructed what witness(es) the plaintiffs proposed to call.
* The orders made on 16 August did not compel production of witness statements. They imposed a potential sanction if statements were not provided in accordance with orders then made.
* The application under s. 78 came as "somewhat of a surprise". What had been considered was the operation of s. 76.
"It pains me to follow out the example of an unqualified Member of the Tribunal, but what has been done by your client, your instructors, in respect of compliance with the directions to this point? Do you know?[10]
"I am not - I don't know. All I know, sir, is that I understand and I am instructed that there have been meetings to discuss the preparation of witness statements and to formulate an offer of compromise with the intention of having that offer of compromise pitched at such a level to complete this matter."[11]
* His instructions were to the effect that statements could be prepared by 27 January 2003.[12] That would allow for statements in reply by 17 February, and for the hearing date of 24 February to be maintained. He did not have instructions as to the number of witnesses to be called.
* Dismissal for want of prosecution would be unjustified on the authorities.[13]
* Noted the commencement of the proceedings in October 2001 by the plaintiff; but not the sequence of events, involving apparently substantial delay by the defendant, thereafter.
"Was not able, in my view, to provide.... an excuse or reasonable excuse for the failure to comply with the direction.... up to the time due for compliance. No explanation at all was offered for the delay from 16 August until 18 November."
For that reason it was satisfied there was conduct of the kind referred to in s. 78(1)(a) of the Act.
* Said that no explanatory affidavit material had been provided to the Tribunal. No offer was made to pay costs or apologise for disregard of the Tribunal's unambiguous directions.
* Noted that counsel for the plaintiffs had been unable to specify the number of witnesses that might be called or the length of witness statements that might be filed.
* Opined that the plaintiffs faced a daunting task to be able to answer the statements filed by the defendant "either at or in proper time for the hearing"; and continued:
"The (sic) should have set about doing that much earlier than 18 November which is the outside date specified in the directions. Nothing otherwise persuades me that I should adjourn the hearing off to take into account this failure of the Applicants (sic) and the individuals."
* Concluded that s. 78 where it applied authorised a departure from the rules of natural justice which would otherwise apply. See s. 98(1), (4).
* Opined that Mrs Stephenson had been denied the opportunity to find out about and meet the plaintiff's claim and the defence to counterclaim. This was "a denial of the very principles of natural justice that they would maintain a right to claim for themselves".
* Noted that "a striking out is of course not the same as a dismissal and I would note I have made no adjudication on the merits".
* Said that an element in the exercise of his discretion was "the overall justice of the situation".[16]
"I am satisfied, considering the submissions of the Respondent, that the Respondent has experienced and continues to experience hardship and inconvenience by reason of the condition of the premises. If I was to allow the Applicant and the individuals any further opportunity to comply with Directions (bearing in mind that they have had nearly four months to do so to this point) there is likely to be a very great delay in the hearing of the case. I have no faith that the Applicant and the individuals could comply with Directions relating to Witness Statements by 27 January 2003 or at all otherwise. Any adjournment of the proceedings will, in view of what I have been told, have a profound impact on the Respondent's quality of living at the premises in question. The fairness mentioned by s.97 must work both ways and it would be unfair to the Respondent to require her or her family to endure conditions any longer than necessary or reasonable. Apparently, apart from water seepage or leaks, distractive testing has taken place leaving large holes in the roof or ceiling. Accordingly I make the Orders which I have made. I decline to exercise any discretion to formulate self-executing orders as I have no belief as to when or how they might be complied with. I should not make orders which I consider could be futile. Under s.78 I am not required to specify self-executing orders before I exercise my discretion. The section does not require the giving of a 'second chance'. In any event, I might ask otherwise, why should I do so when given the nature of the failure in this case? Further, if self-executing orders were complied with, the impact on the hearing would be very great and the Respondent would suffer significant hardship beyond that already undergone by her and family members. Often, of course, it is appropriate to give a 'second chance' but the failure in this case does not warrant that opportunity if I consider overall the interest of justice. I would feel differently perhaps if at least some activities were evident in purported compliance with the directions. But nothing of the sort appears to have happened. Nor, considering that the Directions not complied with in this case were made nearly four months ago, have I a belief that self-executing orders, if made, would not be a futile exercise. The fact is that the Applicant and the individuals have had quite sufficient time to adequately prepare but have chosen not to do so despite clear directions of the Tribunal. I should add, I did not make those directions in August 2002 with a view to them being only casually followed or not followed at all. There are, in my view, no circumstances at all persuading me to give the Applicant and the individuals a 'second chance'. There has been no compliance; no reasonable explanation given for the failure; no offer to pay costs; no apology; and no apparent effort yet to do anything about compliance. It is not even known who might be called or how long it might be, in reality, before compliance could be expected. On the other side of the ledger, I have a case of clear prejudice, or likely prejudice, and hardship."
Error of law in the context of an exercise of discretion by the Tribunal
"Section 148 of the VCAT Act is concerned with the invocation of judicial power to examine for legal error what has been done in an administrative tribunal. Although s. 148 uses the word `appeal', it is clear that the Supreme Court is asked to exercise original, not appellate jurisdiction and to do so in proceedings which are in the nature of judicial review. That is not to say that there are no other avenues for judicial review. The VCAT Act makes no express provision excluding the general supervisory jurisdiction of the Supreme Court. It may, therefore, be doubted that s.148 should be understood as doing more than providing, in some cases, an important discretionary reason for not permitting resort to that general supervisory jurisdiction on the basis that s. 148 provides a suitable alternative remedy. Nevertheless, it is important to recognise that the essential character of s. 148 is that it provides for the institution of proceedings in the Supreme Court, by leave, in which the legal correctness of what the Tribunal has done can be challenged."[32]
"The kind of judicial review for which leave was sought in this case is narrower than the general supervisory jurisdiction which was invoked in Kemper."[33]
"(That question) is not necessarily a question of law: it is stated in such a way as not to show that it is a question of law. For one does not know whether the question is what matters the Tribunal in fact took into account or on the other hand whether matters which were in fact taken or not taken into account were relevant or irrelevant. If the latter is the intended meaning, then the notice of appeal does not set out the question or questions of law said to be involved in the decision; for the notice as framed is not sufficiently specific."[39]
* As at 10 December there was sufficient time for the plaintiffs to provide witness statements, for the delivery of statements in reply, and for the matter to proceed on 24 February 2003. The orders made on 16 August contemplated three weeks for the preparation of statements in reply. That was achievable even if the plaintiffs did not deliver statements until 27 January.
* An explanation for the default had in fact been provided. The plaintiffs were making a genuine attempt to settle the claim and counterclaim.
* The plaintiffs were late notified of the drastic remedy sought by the defendant; the gist of the defendant's position, until 6 December, was that she would seek orders requiring delivery of statements, and for costs.
* The orders deprived the plaintiffs the opportunity of recovering a substantial sum, or setting it off against any amount recovered by the defendant.
* The orders deprived the plaintiffs of the opportunity of defending a substantial counterclaim, in part for unspecified damages.
* The plaintiffs had not defaulted in any interlocutory step but this. Further, the plaintiffs had served an expert's report in April 2002 which dealt with the defective/incomplete workmanship claim.
* The Tribunal had considered the impact that the making of an order would have on the plaintiff's opportunity to be heard.
* It was not a question whether the Court was startled by the Tribunal's decision[53]. Parliament had conferred an extreme remedy upon the Tribunal, and the Tribunal had exercised it.
* The plaintiff was put on notice of the possibility of a s. 78 Order - by the Tribunal's notice dated 4 December and received on 6 December by the plaintiff. Micallef v ICI Operations Pty Ltd and anor[54] was an instance of a pro-forma notification being considered to act as a stark warning.
* The Reasons of the Tribunal should not be subjected to over zealous scrutiny.
* The elements of s. 78(1) were properly considered by the Tribunal; see paragraphs 7-14 of its Reasons. In fact there were few elements for consideration.
* The Tribunal had not misapplied Queensland v JL Holdings, which in any event did not purport to set down binding rules for the exercise of discretion.
* No point was available about the Tribunal's failure to make a self-executing order. The matter had been raised as an alternative by the defendant, and not at all by the plaintiffs. In any event, it was for the Tribunal to decide whether that was the appropriate remedy in the particular case.
* There was obvious continuing disadvantage to the defendant by reason of the state of the premises. The Tribunal had rightly said that the fairness required by s. 97 must work both ways.
* The subject matter of the belief formed by the Tribunal for the purposes of sub-s. (1).
* The nature of the power conferred by sub-s. (2) in the context of the armoury of power conferred upon the Tribunal by ss. 75-77. By this I mean, particularly, that s. 78(2) 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.
* The requirement imposed upon the Tribunal by s. 97. That section should be considered to import the concept that, ordinarily, the interests of case management should not be employed so as to shut a party out of litigating its case. The ultimate aim of the Tribunal, as much as of a court, must be the attainment of justice in respect of issues joined.
* The requirement imposed by s. 98(1)(a), to the extent that a party should ordinarily be given an opportunity to be heard upon the merits. That opportunity is not absolute. It may be lost without breach of the rules of natural justice. But the consequence that the making of an order under s. 78(2) will deprive a party of an opportunity to be heard upon the merits is surely relevant to exercise of the discretion whether to so order.
* The power to make costs orders conferred by ss. 109(2)(3) and 78(2)(c). The last-mentioned, it appears, might be exercised even though no order is made under s. 78(2)(a) or (b).
* "Nothing otherwise persuades me that I should adjourn the hearing off."
* "There is likely to be a very great delay in the hearing of the case."
* "Any adjournment of the proceedings will... have a profound impact on the [defendant's] quality of living...."
* "... if self executing orders were complied with, the impact on the hearing would be very great."
1. Appeal from orders made by the Tribunal on 10 December 2002 allowed.
2. Orders referred to in paragraph 1 hereof set aside.
3. In lieu thereof order that the plaintiffs pay the defendant's costs of and incidental to the application made on 10 December 2002 on a party and party basis; and that the application made that day is otherwise dismissed.
4. In the further hearing of the claim and counterclaim, the Tribunal not be constituted by the member who made the orders the subject of this appeal.
[1] It was in part a set off against the claim by Bell Corp; but it is convenient to describe the whole as a counterclaim.
[3] I note, however, that less formal requests had been made in November 2001; and that Bell Corp had refused them.
[4] The offer was open, I think, until 16 December.
[5] See part of Ex 8 to affidavit of Anthony Desiderio sworn 31 January 2003, transcript of application 10 December 2002, p. 3.
[10] Earlier the Tribunal had said that citing to it the decision of a member of the Tribunal who was not legally qualified was "like quoting to me a Magistrate's decision": Tribunal T 16.
[12] That is the gist of what he said, on a fair reading of the relevant Tribunal transcript.
[13] The Tribunal indicated its familiarity with the principles, saying "I used to lecture on it".
[14] Ex AD9 to Mr Desiderio's affidavit sworn 31 January 2003.
[15] See the Guide to Judicial Conduct, 2002, published by AIJA on behalf of the Council of Chief Justices at paragraph 4.5; and Fletcher Construction Australia Ltd v Lines Macfarlane & Marshall Pty Ltd [2001] VSCA 167; [2001] 4 VR 28 at [48]- [51].
[16] Citing s. 97 and Queensland v JL Holdings Pty Ltd [1997] HCA 1; (1996) 189 CLR 146.
[17] The underlining represents sections in the Tribunal's reasons added between 10 and 13 December.
[18] Written submissions, paragraph 27.
[19] [1936] HCA 40; (1936) 55 CLR 499 at 504-505.
[20] [1953] HCA 25; (1956) 94 CLR 621 at 627.
[21] (1988) 20 FCR 1 at 13, citing, inter alia, the unreported judgment of Gummow J in Khan v Minister for Immigration and Ethnic Affairs (judgment 11 December 1987).
[23] [2001] HCA 49; (2001) 207 CLR 72 at 81.
[24] [1989] VicRp 18; [1989] VR 197 at 199.
[25] [1995] VicRp 70; [1995] 2 VR 508 at 517-519.
[26] [1998] VSCA 106; [1999] 2 VR 436 at 449, 452, 458-9, 460.
[29] Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB 223 at 230, 233-234.
[31] Gaudron, Gummow, Hayne and Callinan JJ.
[33] At 81; Kemper Reinsurance Co v Minister of Finance [2000] 1 AC 1 was a case in which leave to apply for an order of certiorari was refused.
[37] Full Court of Supreme Court, judgment 23 May 1994, unreported.
[38] All the judges proceeded on that footing; Eames J after expressing some initial doubt.
[41] See, for example, Tadgell JA at [9].
[42] See, for example, Tadgell JA at [23], [27]-[28].
[44] See, for example, per Tadgell JA at [33] and [41]; Ormiston JA at [50], [52]; Callaway JA at [57].
[45] See, for example, per Ormiston JA at [44]-[46].
[46] [1990] HCA 33; (1990) 170 CLR 321 at 356.
[47] [1986] HCA 40; (1986) 162 CLR 24 at 39-40.
[50] See JL Holdings at 154, 155; Smith at [20], [21], [33], [35]; Bhatia at [46], [54]-[59].
[51] Bhatia at [58]. There the provision was a Rule of Court.
[53] I had referred to "the startle factor" in the course of argument: T 10.
Bell Corp Victoria Pty Ltd
Stephenson [2003] VSC 255
(1996) 189 CLR 146
(1936) 55 CLR 499
(1956) 94 CLR 621
(1988) 20 FCR 1
(2001) 207 CLR 72
(1990) 170 CLR 321
(1986) 162 CLR 24
Appeal allowed; orders made by the Tribunal on 10 December 2002 set aside; plaintiffs to pay the defendant's costs of and incidental to the application made on 10 December 2002 on a party and party basis; the application made on 10 December is otherwise dismissed; the Tribunal constituted to hear the proceeding in future is not to be constituted by the member who made the impugned orders (paras 333-336).