[2003] VCAT 2001

1. Pursuant to section 77 (1) of the Victorian Civil and Administrative Tribunal Act 1998, the proceeding is struck out.

2. Pursuant to section 77 (3) of the Act, the matter is referred to the County Court.

1. This matter comes before me by way of an application by the respondents pursuant to s77 of the Victorian Civil and Administrative Tribunal Act 1998. The application is based upon the assertion that there are related proceedings currently on foot in the County Court and that the subject matter of the proceeding before me would be more appropriately dealt with by that court. Such application is opposed.

2. In the application before me, no evidence was called. The matter proceeded by way of submissions with reference to various documents. Accordingly, the matters that I am about to set out by way of factual background are not intended to be findings of fact which might bind some future decision maker. They represent my understanding of that background, based upon what was submitted to me, agreed upon, or contained in the documents to which reference was made.

3. Bearing that in mind, the background to this matter is as follows. By a document headed "Contract of Lease" dated 25 May 1996, William and Kaye Crampsey ("the Crampsey's") entered into an arrangement with Julie-Ann May Rosengrave ("Rosengrave") in respect of a property at 21 Scenorama Road, Coronet Bay ("the property"). Rosengrave is referred to in various documents as Julie-Ann Rosengrave and Ann May Rosengrave McLean, but there is no suggestion that different persons are involved.

4. The contract of lease, which has been hand written and does not give the appearance of having been professionally prepared, is somewhat unusual. Basically, Crampseys agreed to lease the property to Rosengrave for two years at a "rental fee" of $120 per week commencing 19 June 1996. The document goes on to read "......paid with the option of re-renting for $120.00.....per week or purchase property for $58,000.00....if re-renting or purchasing property not required no monies will be refunded. If property purchased monies paid in rent to date will be deducted from principle (sic)". There are various other clauses, some of which are somewhat confusing, but they do not relate to the present dispute save possibly for one clause which reads "If rent falls one (1) month in arrears and conditions broken could revoke this agreement".

5. In June, 1996, Rosengrave moved into the property. Darren McLean ("McLean") either moved in with her then or shortly thereafter. At the end of the two year term, Rosengrave apparently continued to reside in the property (with McLean) and gave no notice of anything to the contrary. This arrangement continued, and with weekly payments, however they be categorised, continuing. Apparently in late 2001 or early 2002, Rosengrave, for health reasons, moved to Queensland. McLean has continued to reside in the property.

6. It is alleged in the County Court proceedings that Mr Crampsey wrote to Rosengrave and McLean in June 2002 offering to sell the property, identifying the last fortnightly payment made by Rosengrave and McLean, and stating that there was an outstanding balance of $19,898.60. This letter also asked for a little time in order to organise things.

7. It is further alleged that, by a letter dated 26 November 2002 from the solicitors for Rosengrave and McLean (who, in that letter, described themselves as being solely solicitors for Rosengrave), that their client had offered to purchase the property for $19,898.60, and that offer was accepted. It is further alleged that the figure of $19,898.60, is obtained by subtracting the sum of $38,101.40, being the total of payments made between 19 June 1996 and 14 June 2002, from something, presumably the agreed price of $58,000 (see paragraph 2 (f) of the statement of claim).

8. By letter dated 10 December 2002, the solicitors for Rosengrave (as they continued to describe themselves) wrote to the solicitors for the Crampseys and pressed for settlement, and asked for a date and time thereof. Settlement has not been achieved.

9. By letter dated 7 April 2003, the solicitors for Rosengrave enquired of the solicitors for the Crampseys as to whether they were prepared to accept service of process.

10. McLean remains in occupation of the property. As shall be discussed, the payments, however they might be categorised, remain up to date, although there have been some "hiccups" in recent times. However, it was agreed that payments, including a small part-payment in respect of arrears of payments, are up to date.

11. The history of litigation of this matter is as follows. By an application dated 11 August 2003 and processed on 14 August 2003, the Crampseys sought from McLean and Rosengrave possession of the property and also sought arrears of rent. This application was issued out of the Tribunal, and was issued pursuant to the provisions of the Residential Tenancies Act 1997. The matter came on before Member Kefford on 8 September 2003. It is asserted by Ms Lo Piccolo, on behalf of the Crampseys, that no hearing on the merits was in fact conducted on that occasion. I accept that. While what can be described as orders were made by Member Kefford, what is recorded is more in the nature of notations. These read as follows:-

1. The respondents dispute that the agreement under which they occupy the premises is a residential tenancy under the Residential Tenancies Act 1997.

2. The respondent Darren McLean undertakes to pay no less than $130.00 per week commencing 12 September 2003 being rent of $120.00 with $10.00 per week towards arrears (or purchase price) without prejudice to the respondents' rights to dispute the jurisdiction of this Tribunal.

3. Both parties shall make written submissions to the Tribunal (quoting this file number R2003/36428) within 21 days and the Tribunal will determine whether the application will proceed as a hearing, mediation or directions hearing and on what date and what time shall be allowed. The dispute may be heard and determined under the Residential Tenancies Act 1997 and/or Fair Trading Act 1999.

4. Liberty to applicants to apply urgently if order 2 is not complied with.

12. As I interpret what has been recorded, McLean and Rosengrave were at that stage raising a question of jurisdiction. Whilst the situation is somewhat confused, I do not accept the proposition advanced in paragraph 7 of the further written submissions on behalf of the Crampseys that the question of jurisdiction had been determined by an order on that occasion. The "orders" seem to me to be a mixture of notations, the recording of an undertaking, the setting of a timetable and the reservation of liberty if the undertaking should be breached.

13. On 18 September 2003, Rosengrave and McLean issued proceedings out of the County Court. These are numbered CI-03-05664. Basically these proceedings allege that a valid and enforceable contract for sale of the property was entered into in 2002, and there is sought a declaration, specific performance of the contract and, alternatively, damages. I should add that the Crampseys have entered an appearance and filed a Defence in relation to these proceedings. The Defence, in essence, places everything of substance in issue.

14. Thereafter there was considerable correspondence and the renewal of the matter was again listed before Member Kefford on 29 September 2003. As I understand the situation, the matter was brought back on because McLean had not been complying with paragraph 2 of the orders referred to above. Accordingly, the Crampseys sought to renew the proceedings. On 29 September 2003, Member Kefford made the following orders:-

1. The renewal of proceedings is withdrawn as regular payments appear to have been made by post.

2. The orders of September 8 2003 remain in force but the time in which written submissions may be provided (or added to) is extended by 14 days from today's date.

15. The first of these orders was obviously made because the payments were then up to date, and, as stated, it is agreed that they are still up to date.

16. It is against this background that the letter which basically constitutes the application pursuant to s77 has been forwarded by the solicitors who are now presumably acting on behalf of both Rosengrave and McLean, and written submissions on behalf of the Crampseys have been provided. Further, it is in this context that the oral submissions and reference to documents took place.

17. Mr Pillai, on behalf of Rosengrave and McLean, submitted that the real issue to be determined is whether the relationship between the parties is that of landlord and tenant or of vendor and purchaser. This is the very issue to be determined in the litigation before the County Court. Therefore this Tribunal should not hear the matter because the County Court is a more appropriate forum.

18. Ms Lo Piccolo submitted that this Tribunal should continue to deal with the matter because, regardless of what the County Court might decide in relation to the existence of a contract, the statement of claim makes it clear that it was rent which was being paid prior to the alleged agreement in 2002, and McLean had remained in occupation of the premises after that date. Therefore he had continued on as a tenant. The payments made in respect of the property had always been acknowledged as and treated as rental. Specific performance of the contract is sought with the alleged purchase price being fixed at the figure representing the balance in 2002. Regardless of whether the payments are now up to date, arrears are owing and the Crampseys seek possession of the premises. The orders sought by them fall squarely under the Residential Tenancies Act 1997. This Tribunal has jurisdiction. It should deal with the matter.

19. This matter, including the submissions made in relation to it, raises a number of questions. These include:-Is the nature of the relationship between the parties that of landlord and tenant or of vendor and purchaser? Whatever the pleadings may say, how does one categorise the payments made by Rosengrave and McLean, or either of them, before the alleged agreement in 2002? How does one categorise the payments made after the alleged agreement, and should they also be deducted from the alleged purchase price? What is the nature of the original arrangement between the Crampseys and Rosengrave as set out in the document headed 'Contact of Lease'? Is that document in reality a type of contract to purchase on terms or a contract giving an option to purchase? What is McLean's legal position in relation to the original agreement, given that he was not a party to it, but has remained in occupation of the property and made payments in relation to it? What legal effect flows from the failure of any party to take any step at the end of the two year period described in the 'Contract of Lease'? If Rosengrave and McLean are successful in obtaining specific performance of the contract, what is the situation in relation to payments made since the date of such contact? Is McLean a purchaser already in occupation of the property purchased?

20. There is considerable overlapping in these questions, but nevertheless it can be seen that there are a significant number of issues raised.

21. Further, subsidiary issues arise as to the status of the proceedings before this Tribunal. I accept that, despite the fact that the solicitors for Rosengrave and McLean made reference to process being served in their letter of 7 April 2003, the proceedings issued out of this tribunal pre-date the issuing of the County Court proceedings. I am aware of the provisions of both the VCAT Act and the Retail Tenancies Act in relation to jurisdiction, and in particular I am aware of what is contained in S.448 of the Retail Tenancies Act. However, the issues to be determined in the County Court proceedings are not entirely identical to those raised in the application before this Tribunal, and, in any event, it is the very nature of the relationship between the parties and therefore, of necessity, whether the Retail Tenancies Act applies, that is to be determined by the County Court. Therefore, I am not of the view that S.448 has any application.

22. However, some questions remain as to the status of the application before this Tribunal. As discussed, the second order of Member Kefford of 8 September 2003 in fact appears to be the recording of an undertaking without prejudice to the rights of McLean and Rosengrave to dispute jurisdiction. The orders made on 29 September clearly envisage that the jurisdictional argument is to continue, as an extended time for provision of written submissions is granted. However, the first order made on that date refers to the renewal of proceedings being withdrawn because payments are up to date. As stated, it is agreed the payments are still up to date.

23. The position is thus a little confusing. The impression given is that an agreement was reached in relation to payment of 'rental' and arrears and that such agreement was recorded by way of an undertaking by McLean. The renewal of proceedings was subsequently withdrawn, presumably by the Crampseys, and presumably because the apparent agreement reached earlier had been honoured. The status of the application, and the question of what remains on foot, is an interesting one.

24. It is clear that the power to strike out pursuant to section 77 is a discretionary one and that, accordingly, such discretion must be exercised judicially. I am also conscious of the observations of Kellam J in Bentley v Cash Resources (2002) VCAT 1399 that Section 77 applies a 'forum non convenlens' doctrine to the Tribunal and that it would need to be clear that the Tribunal was an inappropriate forum.

25. Because of the multiplicity of questions and issues set out above, many of which relate to the proceedings in the County Court and the essential questions there to be determined, I am of the view that it is clear that this Tribunal is an inappropriate forum. To decide otherwise would involve duplication of litigation and the real risk of conflicting decisions or rulings.

26. The application pursuant to section 77 by McLean and Rosengrave is successful. I am of the view that the County Court is the relevant court to which this matter should be referred pursuant to section 77 (3) of the VCAT Act. The proceeding is struck out pursuant to section 77 (1). Of course, such striking out may carry with it an inherent right to reinstatement, but I reserve that right in any event. The matter is also referred to the County Court pursuant to section 77 (3).

27. It was agreed between the parties that, regardless of the outcome, the question of costs should be reserved. Accordingly, I order that costs be reserved. I also reserve liberty to apply.