[2003] VCAT 955

1. Pursuant to s.77(1) of the VCAT Act 1998, those paragraphs of the Applicant's Points of Claim based on negligence, being paragraphs 10, 11, 12 and 13(b), are struck out.

2. Pursuant to s.77(3), matter is referred to Supreme Court of Victoria.

3. Costs of this proceeding reserved, such question of costs also being referred to the Supreme Court of Victoria as part of this referred proceeding.

4. It is noted that the Supreme Court of Victoria has before it related matter No. 4486 of 2003.

Mr JAH Foxcroft SC with Mr A Laird instructed by Ebsworth and Ebsworth

1. This matter comes before me by way of an application by the respondent, Enviroprotect Pty Ltd ("Enviroprotect") and the joined party, CGU Insurance Ltd, Enviroprotect's alleged insurer, pursuant to s.77 of the Victorian Civil and Administrative Tribunal Act 1998.

2. It is their joint submission that, given the subject matter of this proceeding, the Supreme Court of Victoria would be a more appropriate forum. Their application was resisted by the applicant, 416 Gore Street Pty Ltd ("416"), to the principal proceedings, although, as shall be discussed, that applicant also advanced a "fall back" position. Mr Harrison, on its behalf, very sensibly adopted the approach that any duplication of litigation is to be avoided - a view which I certainly share - and, whilst not retreating from the position that these proceedings should be litigated at this Tribunal, addressed a significant portion of his submissions to the method by which these proceedings could in fact be transferred to the Supreme Court without the risk of falling foul of limitation of action provisions.

3. It was agreed by all parties that the matter is a complex one, and a very large amount of money is involved. The outline of the factual background which I shall now give is, of necessity, brief. My ruling in this matter does not involve any findings of fact relating to the merits of the matter. The following is intended to be no more than a brief outline so that the submissions, and my ruling, can be viewed in context. I should say at this stage that the submissions I receive from all counsel were detailed, helpful and practical, and were of great assistance.

4. The applicant is developing a site at 416 Gore Street, Fitzroy upon which was a derelict factory. It was necessary to have an asbestos audit and Enviroprotect carried out that audit. It is alleged by 416 that Enviroprotect did not carry out this audit as it should have, that it failed to detect all asbestos and that the project was delayed accordingly. 416 has issued proceedings against Enviroprotect out of this Tribunal, such proceedings being based in contract, negligence, and misleading conduct pursuant to the Trade Practices Act 1974 and the Fair Trading Act 1999. It is common ground that the entity contracted by 416 to construct the development, Fletcher Construction Australia Limited ("Fletcher"), has issued proceedings against 416 in the Supreme Court of Victoria, these being matter No. 4486 of 2003. The amount claimed by Fletcher in the Supreme Court is in excess of $1,800,000. The amount claimed by 416 against Envirprotect in this Tribunal is in excess of $478,000. Fletcher's action is at least in part related to alleged damages suffered as a result of variations and delay. At least part of the action of 416 against Enviroprotect relates to delay occasioned by the allegedly faulty asbestos audit. It is freely and properly conceded by those acting on behalf of 416 that there is a factual overlap in relation to the issues raised in the two proceedings. As the solicitors for 416 have stated in their open letter to the other parties, such letter being dated 1 August 2003 and having been put before me, "Our client concedes there is some factual overlap between the issues raised in the two proceedings. That factual overlap relates to, among other things, the quantum of the amount claimed by Fletcher in respect of asbestos removal works from 416 and the amount claimed by 416 against Enviroprotect. 416's position is that whatever amount it is obliged to pay Fletcher, it is entitled to recover from Enviroprotect. It has disputed the amount claimed by Fletcher as a consequence of Enviroprotect disputing the amount claimed by 416 against Enviroprotect".

5. I accept the submissions put by Mr Upjohn on behalf of the respondent and Mr Foxcroft SC with Mr Laird on behalf of the joined party, which, as the alleged insurer of the respondent, is defending a claim for indemnity by that respondent. I accept that the two actions are so intertwined that there is a risk of inconsistent findings. The problem is exacerbated by the fact that the relief sought in this Tribunal by the applicant is, to a very considerable extent, in anticipation of a loss which has not yet crystallised. As put by Mr Upjohn, it is very much in the nature of a pre-emptive strike by 416 in an attempt to obtain some indemnity in relation to the foreshadowed action which was ultimately issued against it by Fletcher.

6. It was agreed by all concerned that the duplication of litigation is to be avoided. The risk of inconsistent findings should also be eliminated if possible. Whilst, as stated, Mr Harrison did not abandon his position, the chief discussion, which, in the end, was scarcely argument - evolved into the means by which the transfer of this matter to the Supreme Court could best be achieved. An option was the staying of the Tribunal proceedings, but the ultimate view of all concerned was that a single hearing or consecutive hearings in the Supreme Court, hopefully dealing with all issues, was their preferred option.

7. In my view, the application pursuant to s.77 should succeed. I am then mindful of the anxiety expressed by Mr Harrison in relation to the imminent expiry of the limitation period in relation to those parts of the proceeding based otherwise than in negligence. As stated by all present (and, indeed, as has been stated many times before) the wording of s.77 is, with respect, far from perfect. The striking out of all or part of the proceeding pursuant to s.77(1) is the pre-requisite for the referral in s.77(3). Questions then arise as to what is left following such striking out; whether the Tribunal is then functus officio; what happens to those parts of the proceeding that are not struck out; whether such striking out could lead to difficulties in relation to limitation periods; and the like.

8. I have acceded to the suggestion of the parties as to their preferred method of referral, still bearing in mind Mr Harrisons' position that there should be no referral, but adopting, with gratitude, the submission of all concerned relating to the mode of such referral.

9. I agree that, as the section is worded, the striking out of all or part of the proceeding is the trigger for the referral. I also accept that, given such wording, once part of the proceeding has been struck out at this Tribunal, the entire proceeding can be referred to the more appropriate forum.

10. Accordingly, I am ordering that, pursuant to s.77(1), those paragraphs of the Points of Claim based on negligence, being paragraphs 10, 11, 12 and 13(b) are struck out. Pursuant to s.77(3) the matter is referred to the Supreme Court of Victoria, this being on the basis that the subject matter of this proceeding would be more appropriately dealt with by it, and it being appropriate so to refer the matter. It is noted that it already has before it matter No. 4486 of 2003. The costs of this proceeding are reserved, and that question of reserved costs is also referred to the Supreme Court of Victoria as part of the referred proceeding.