1. The proceeding be struck out pursuant to section 77(1).
2. The matter be referred to the Magistrates' Court pursuant to section 77(3).

1. This decision deals with an application by the Second Respondent to strike out the proceeding and have the matter referred to the Magistrates' Court, pursuant to section 77 of the Victorian Civil and Administrative Tribunal Act 1998 ("the VCAT Act"), as the more appropriate forum. In the alternative, the Second Respondent submits that the proceedings against it should be struck out pursuant to section 75(1) on the basis that they are an abuse of process.
2. The substantive application relates to a loan contract which financed the purchase, by the Applicants, of a holiday time-share interest. The loan contract was subsequently assigned to the Second Respondent.
3. The Applicant's contend, in essence, that they were induced to enter into the loan contract by the misleading and deceptive conduct of the First Respondent. In the proceedings before me, Ms Lucia Fitzgerald, one of the Applicants, said that the Applicants are seeking an order that the loan agreement was void ab initio (presumably under paragraphs 108(2)(d) and (c) of the Fair Trading Act 1999).
4. The Second Respondent has commenced proceedings against the Applicants in the Magistrates' Court. These proceedings commenced shortly after the VCAT application was filed and seek the recovery of monies owing under the loan contract. The following steps have been taken in the Magistrates' Court proceedings:-
   • an application to have the proceedings stayed was struck out on 18 January 2008 as the Defendants failed to appear;
   • the relevant documents have been made available for inspection and a defence has been filed;
   • a compulsory conference has been held, but it failed to resolve the issues in dispute;
   • the matter has been set down for a one day hearing on 9 May 2008.
5. By contrast, no timetable has been set down for the further conduct of the VCAT application; no defences have been filed and nor have any directions been issued regarding the exchange of documents.

1. Section 77 empowers a judicial member of the Tribunal to make an order striking out all or part of a proceeding (other than a review proceeding) if the member considers that the subject matter of the proceeding would be more appropriately dealt with by another body. The power is discretionary and must be exercised judicially.[1] The obligation to act rationally and reasonably; to pay regard to material considerations and to ignore irrelevant considerations; and to make findings of fact based on probative material, are all incidents of the duty to act judicially.[2] A further incident of the duty to act judicially is the duty to hear a party and allow him or her a reasonable opportunity to present his or her case and, coupled with that duty, is the duty to consider the case put. These matters are also dealt with in sections 97 and 98 of the VCAT Act.
2. In the circumstances of this case I am persuaded that the subject matter of the proceeding would be more appropriately dealt with by the Magistrates' Court. Accordingly, I propose to make an order striking out the proceeding and transferring it to the Magistrates' Court. In reaching this conclusion I have had regard to the following matters:-

(i) The two proceedings are closely intertwined and the issues raised for determination in both proceedings are substantially the same. In the proceedings before me, Ms Fitzgerald made it clear that the defence filed in the Magistrates' Court proceeding dealt with matters which were substantially the same as the matters sought to be advanced in support of the Applicants' claim in this jurisdiction.

Given the similarities between the two proceedings, it is desirable that they both be determined by the same decision making body to avoid duplication and the risk of inconsistent decisions.[3]

(ii) The Magistrates' Court proceedings are well advanced and have been set down for a one-day hearing on 9 May 2008. The proceedings in this jurisdiction are not as advanced, no directions have been made for the filing of defences and the matter has not been set down for hearing.

(iii) I am conscious that the transfer of the VCAT matter may result in additional costs being incurred by the Applicants. However, given the advanced stage of the proceedings in the Magistrates' Court, I am not persuaded that the cost differential between the two jurisdictions is so great as to outweigh the other factors to which I have referred.

1. In addition to the cost differential between the two jurisdictions, Ms Fitzgerald advanced three other points in her submission opposing the section 77 application:-
   • the matter is essentially a consumer dispute and the VCAT proceedings were commenced before the proceedings in the Magistrates' Court;
   • the Second Respondent has been aware of the dispute since May 2006, but delayed filing the Magistrates' Court proceedings until after the Applicants had filed their application with the Tribunal; and
   • the delay in having the VCAT proceeding determined was a result of the actions taken by the Second Respondent and they should not benefit from the delay they have caused.
2. In this context I have also had regard to Ms Fitzgerald's affidavit of 12 March 2008.
3. I propose to deal briefly with each point.
4. The two proceedings were initiated around the same time, though it appears that the VCAT application was filed shortly before the proceedings in the Magistrates' Court. While relevant, I do not consider that this outweighs the matters to which I referred earlier.
5. As to the second matter, counsel for the Second Respondent acknowledged that his client had been aware of the dispute between the parties since May 2006. But rather than initiating legal proceedings as a first step, the Second Respondent sought to resolve the dispute by direct dialogue between the parties. When these attempts had been exhausted, the Magistrates' Court proceedings were instituted. In my view, the approach taken by the Second Respondent was not unreasonable and does not tell against granting the section 77 application.
6. As to the delay in determining the VCAT application, I am not persuaded that the delay was a result of inappropriate action on the part of the Second Respondent. It appears from the file that the section 77 application was listed for hearing at the same time as a scheduled directions hearing. But this did not occur as the directions hearing was not listed before a member with power to determine the section 77 application. The subsequent delay in determining the section 77 application was not the fault of the Second Respondent.
7. In all the circumstances, I consider that the subject matter of the proceeding would be more appropriately dealt with by the Magistrates' Court. Further, it would be appropriate if the matter was heard concurrently with the proceeding listed on 9 May 2008. This would afford the Applicants an opportunity to put their case in respect of the First Respondent, who is not a party to the current Magistrates' Court proceeding.
8. As I have granted the section 77 application, I need not consider the Second Respondent's alternative submission pursuant to section 75(1).

1. The Second Respondent submitted that if I granted its section 77 application, I should order that the Applicants pay the Second Respondent's costs in respect of the proceedings. The only submission advanced in support of the costs application was that costs should follow the event.
2. The general rule in the Tribunal is that each party bears their own costs (section 109(1)). There is no presumption, or general practice, whereby costs follow the event. Section 109(2) empowers the Tribunal to order that a party pay all or a specified part of the costs of another party in a proceeding. But such an order may only be made if the Tribunal is satisfied that it is 'fair to do so' having regard to the matters set out in section 109(3). The matters set out in section 109(3) include the nature and complexity of the proceeding; the relative strengths of the claims made by the parties and they way in which the proceeding was conducted.

3. The words "having regard to" in section 109(3), require that the matters specified, so far as they are relevant in a particular case, be taken into account and given weight as fundamental elements in determining whether or not to order costs.[4] But the expression connotes primacy not exclusivity[5] and an order may only be made if the Tribunal considers it "fair to do so".
4. None of the matters specified in section 109(3) are enlivened in this case. Having regard to that fact and the circumstances of this case, I am not persuaded that it would be fair to make an order for costs. Accordingly, I dismiss the Second Respondent's application for costs.

[1] Carrigans Agricultural Repairs Pty Ltd v Viticulture Technologies (Aust) Pty Ltd [2003] VCAT 2036 at [15]

[2] Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 at 367 per Deane J; Re Australian Bank Employees Union; Ex parte Citicorp Australia Ltd [1989] HCA 41; (1989) 167 CLR 513 at 519.

[3] See generally Raline Industries Pty Ltd v MJPE Investments [2006] VCAT 1607 at [36] to [38]; Crampsey v McLean [2003] VCAT 2001 at [20] to [26]; and Gore Street Pty Ltd v Enviroprotect Pty Ltd [2003] VCAT 955 at [6].

[4] R v Hunt; Ex parte Sean Investments [1979] HCA 32; (1979) 180 CLR 322 at 329 per Mason J; R v Toohey; Ex parte Moreling Station [1982] HCA 69; (1982) 158 CLR 327 at 333.

[5] In a different statutory context see Rathborne v Abel (1964) 38 ALJR 293 at 301 per Kitts J