[2004] VCAT 1619

1. Application of the 3rd and 4th Respondents pursuant to s75 Victorian Civil and Administrative Tribunal Act 1999 dismissed.

2. Costs reserved in relation to s75 application and discovery.

1. This application was heard and determined on 29 July 2004. I indicated that I would be provide reasons for dismissing the application of the 3rd and 4th Respondents (s75 Applicants) which had been brought under s75 Victorian Civil and Administrative Tribunal Act 1999 (VCAT Act).

2. The following chronology deals with relevant actions and is my summation of that provided by the parties before me.

* 2 July 2002 - VCAT Proceedings issued - Dilican -v-. Black & Silver & Mimtas.

* 7 October 2002 judgment against Black & Silver for $21,739.00 (Respondent did not appear).

* 8 October 2002 - Letter from Semra Alakoc on behalf of Applicant to VCAT requesting the orders be amended to include Ahmet Mimtas.

* 10 October 2002 - Senior Member Steele considers and refuses request. because it was considered at the hearing but the evidence showed the Applicant's contractual relationship was with the company, not the second respondent.

* 21 October 2002 - Statutory Declaration of Ahmet Mimtas in support of application for review under s. 120 VCAT Act.

* 19 November 2002 - Application to VCAT by Black & Silver to set aside judgment - dismissed.

* 26 November 2002 - Letter from VCAT to Applicant enclosing certified copy of order.

* 13 December 2002 - VCAT judgement registered at Magistrates' Court.

* 13 March 2003 - Letter from Sembra Alakoc on behalf of Applicant to VCAT requesting that orders made on 7 October 2002 be amended to include Ahmet Mimtas.

* 27 June 2003 - Black & Silver applies to Magistrates' Court for order that sheriff discontinue execution of warrant. Terms of Settlement reached including terms that Black and Silver will apply to have VCAT judgment set aside and Plaintiff will consent to that application.

* 16 July 2003 - Hearing of application by Black and Silver International Pty Ltd in a matter in the Broadmeadows Magistrates' Court between Dilcan Pty Ltd v. Black and Silver International Pty Ltd.

* 16 July 2003 - Terms of Settlement singed by Ruhi Alakoc, Semra Alakoc and Ahmet Mimtas.

* 29 July 2003 - Letter from John Sayers & Assoc. on behalf of First Respondent to VCAT enclosing Statutory Declaration Statutory Declaration of Ahmet Mimtas and letter of Applicant consenting to second application for review.

* 30 July 2003 - Letter from John Micallef & Co on behalf of Applicant to VCAT confirming that Dilcan Pty Ltd consents to Respondent's Application to re-hear the application.

* 12 August 2003 - Letter from John Sayers & Assoc. on behalf of First Respondent to VCAT setting out basis of making a second application under s. 120 of the VCAT Act.

* 3 September 2003 - Member Vassie grants Black & Silver's application to set aside order made 7 October 2002.

* 14 October 2003 - Letter from John Micallef & Co on behalf of Applicant to VCAT requesting order be made that the (now) s75 Applicants be joined as third parties to the defendant's application.

* 15 October 2003 - Fax from John Sayers & Assoc. on behalf of First and Second Respondents to VCAT seeking consent order joining the s75 Applicants as third parties to the proceedings on the basis that they are necessary parties.

* 20 October 2003 - Member Vassie (by consent) orders joinder of the s75 Applicants to proceedings.

* 2 February 2004 - Member Coldbeck (by consent including consent of Leslie & Boness) order the s75 Applicants be added a Respondents and timetable ordered - parties represented.

* 21 April 2004 - Compulsory Conference - Member Vassie (by consent) makes orders for further pleadings and listing.

"75. Summary dismissal of unjustified proceedings

(1) At any time, the Tribunal may make an order summarily dismissing or striking out all, or any part, of a proceeding that, in its opinion--

(a) is frivolous, vexatious, misconceived or lacking in substance; or

(2) If the Tribunal makes an order under sub-section (1), it may order the applicant to pay any other party an amount to compensate that party for any costs, expenses, loss, inconvenience and embarrassment resulting from the proceeding.

(3) The Tribunal's power to make an order under sub-section (1) or (2) is exercisable by--

(a) the Tribunal as constituted for the proceeding; or

(4) An order under sub-section (1) or (2) may be made on the application of a party or on the Tribunal's own initiative.

(5) For the purposes of this Act, the question whether or not an application is frivolous, vexatious, misconceived or lacking in substance or is otherwise an abuse of process is a question of law"

4. The s75 Applicants submitted that the order made by the Member on 3 September 2003 were made irregularly because -

a. the doctrine of election operated to preclude the setting aside of the orders made 7 October 2002, and/or

b. the Tribunal cannot be said to have been satisfied that the applicant had a reasonable excuse for not attending or being represented at the hearing, and/or

c. the application for review under s. 120 was not made within the time specified by rule 4.18(1)), and

d. the consent of the parties cannot bestow jurisdiction onto the Tribunal that does not exist, nor can it cure orders made irregularly.

5. The doctrine of election argument was referred to in the High Court case of Peterson v Moloney (1951) CLR 91 which provides that once a third party has obtained judgement against an agent (having made an election to sue the agent and not the principal), the third party is barred from recovering later against the principal so long as the judgement stands.

6. I do not accept the proposition that there is a prohibition in the doctrine of election that precludes the setting aside of the default order. In my view the default judgement in this case no longer stands on and from the date that the Member made his order pursuant to s120 VCAT Act to allow the review of the decision made by the Senior Member on 7 October 2002. Accordingly the doctrine of election does not arise.

7. I might point out that the Member had before him a consent application (or at the very least a non-opposed application) for review. It was consented to by all the parties to the proceeding at that time. In such circumstances a Member of a Tribunal is unlikely to question the propriety of the application without good reason.

8. The s75 Applicants submitted that the application was distinguishable from the case of Sunray Irrigation Services Pty Ltd v Hortulan Pty Ltd (in Liq) [1993] VicRp 55; [1993] 2 VR 40 where having obtained judgement against the agent it was determined that the plaintiff had no knowledge or means of knowledge of the existence of a principal and the judgement was set aside. That was so because on all the evidence the 1st and 2nd Respondents knew the existence of and the alleged role in the transaction played by the s75 Applicants.

9. It should be noted that in the Sunray case (and indeed all the cases to which I was referred) the Applicant to set aside judgement was made by the judgement creditor not the judgement debtor. The case before me is noticeably different in that respect, as the applicant was the person who was then the judgement debtor, but who had obtained the consent of the judgement creditor.

10. The rule that a judgement against co-contractor should not be set aside by consent to enable the plaintiff to proceed against other co-contractors as well, because to do so would evade the rule that a judgement against one joint contractors released the others (Hammond v Schofield [1891] 1.Q.B. 453, referred to in the Sunray case) has no application here because the claim made against the s75 Applicants was not based upon an allegation that they were co-contractors. It was based upon an allegation that they contravened provisions of the Fair Trading Act 1999 (FTA) and are liable in damages under s159 of that Act as a result. For that reason, and because it was not a judgment creditor that was seeking to set aside the judgment, the authorities cited by the s.75 Applicants are distinguishable from the present case.

11. With respect to the argument that the Member could not be said to be satisfied that the 1st and 2nd Respondents had a reasonable excuse for not attending or being represented at the hearing and did not apply within the 14 day period of becoming aware of the order (even though s126 VCAT Act gives power to extend time) I note that I am not acting as a Court of Appeal and must accept that the Member was fully cognisant of the matters required under the VCAT Act. I am not able to look behind that decision in my role under s75 of the VCAT Act.

12. The s75 Applicants correctly submitted that the Tribunal is a creature of statute and cannot have jurisdiction conferred on it other than that to be found in the Act and the enabling enactments. It clearly cannot cure orders made irregularly or contrary to power (unless it can be said to be a "slip" as set out in s119 which is not applicable in this case).

13. I note that the overriding consideration for the Tribunal is to act fairly and according to the substantial merits (s97) apply principles of natural justice, without being bound by the rules of evidence or practice of the courts (except insofar as it adopts those practices), inform itself on any matter as it sees fit and conduct proceedings with as little formality and as much speed as the proper consideration of matters permits (s98).

14. The s75 Applicants submitted they could not appeal the decision made by the Member on 3 September 2003 as they had no standing (or indeed knowledge of the case at that time).

15. However they became aware of the case when joined as "interested parties" by order of the Member on 20 October 2003. They further participated in the proceedings both by consenting to interlocutory orders joining them as Respondents on 2 February 2004, complying with all interlocutory orders and lodging their own application (for indemnity) against the 1st Respondent on or about 3 March 2004.

16. Such actions are not capable of conferring jurisdiction on the Tribunal, but I am of the view that the Tribunal had jurisdiction and if that view is incorrect my further view is that in any event s75 should not be used as a substitute for rights of appeal on jurisdictional or other grounds that were available but not utilised at the appropriate time. Rights of appeal accrued when the s75 Applicants were joined as interested parties on 20 October 2003.

17. In my view an action has to be plainly defective, even perhaps hopeless or certain to fail for a Tribunal to order summary dismissal. In this case there is a question of real substance to go to hearing with allegations of claims for damages for breaches of the FTA. There is a real dispute as to the facts to be determined on contested evidence to be given at trial. There is no abuse of process by the reinstatement by consent of the original proceedings. No defence has been shown that would warrant a summary dismissal of the proceedings as being manifestly unsustainable at law. Of course by making such findings, I make no finding as to the substance of the Applicants claim or the outcome of the case.

18. The s75 Applicants argued that the documents filed as pleadings in this case did not disclose any or sufficient claim against them under the FTA provisions. It must be remembered that the Tribunal is not a Court of pleadings (although in this case there are certainly many documents in the nature of pleadings). To comply with the overriding principles governing the conduct of the Tribunal (and referred to earlier in these reasons) it is my view that parties need knowledge of case being brought against them. The documents filed in these proceedings more than satisfy that requirement and are sufficient in my view to bring the issues in dispute and the claims made to the attention of the s75 Applicants.

19. It follows that there should be no summary dismissal as there is a real issue to litigate and there has been no abuse of process. The matter shall proceed to hearing on 11 August 2004 as scheduled.