procedural. Respondent's application under s75 VCAT Act dismissed; applicant to file any s77 application by 18 December 2009; proceeding referred to administrative mention 31 March 2010; costs reserved with...
Key principles
An application under s75 to summarily dismiss a proceeding should be exercised with caution and only where the claim is obviously hopeless or bound to fail; where the applicant's...
A prior interlocutory decision concerning an extension of time under s126 (the EOT decision) did not give rise to issue estoppel preventing the Tribunal from determining a...
Questions of policy interpretation (including the scope of clause 8.6 of the Ministerial Order and whether notice of one defect constitutes notice of related defects) and factual...
Issues before the court
Whether the respondent's s75 application to summarily dismiss the applicant's review proceeding discloses a case that is frivolous, vexatious,...
Whether the Tribunal's earlier decision refusing an extension of time under s126 (the EOT decision) gives rise to issue estoppel preventing the...
Whether interpretation of clause 8.6 of the Ministerial Order and related policy clauses can be resolved on a summary application.
Plain English Summary
The Tribunal refused the insurer's application to summarily strike out the owner's review of a rejected insurance claim. The insurer argued the claim was an abuse of process and estopped by an earlier Tribunal decision refusing an extension of time. The Tribunal held the earlier decision did not decide the substantive insurance questions and that the applicant's case raised open and arguable issues (notably the interpretation of clause 8.6 of the Ministerial Order and when damage occurred) which require evidence and expert opinion, so the matter cannot be decided summarily. The s75 dismissal application was therefore rejected and the review will proceed to be heard.
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Deep Dive
1,819 words · generated 26/07/2026
What happened
This is a VCAT Domestic Building List decision (Deputy President C. Aird) concerning multiple warranty insurance claims arising from movement in a common slab serving three townhouses in Richmond. The applicant, Matthew Judkins, owned Units 1 and 1B. He lodged claims in November 2005 in respect of Units 1 and 1B. Vero Insurance rejected the Unit 1 claim in December 2005 because it concluded the rectification cost was less than the $1,000 excess and the damage was not the builder's responsibility; the applicant did not seek review of that decision. Claims for Units 1A and 1B were investigated further and subsequently rejected in early January 2008; the owners of those units sought review in VCAT (D74/2008).
Cited legislation
1 cited instrument linked from this judgment.
The applicant later (17 November 2008) lodged a second Unit 1 claim (the “second unit 1 claim”). Vero rejected it on 11 February 2009 on multiple grounds including time-bar, failure to notify within 180 days, causation (attributing damage to soil moisture changes and sewer blockages rather than builder fault), and failure to mitigate. The applicant sought review of that refusal.
Vero applied under s75 of the VCAT Act to summarily dismiss the applicant’s s77 review application, asserting (a) the review was an abuse of process and frivolous, and (b) issue estoppel arose from an earlier Tribunal decision (the EOT decision by Senior Member Cremean dated 9 April 2009) which had dismissed the applicant’s application for an extension of time under s126 in D74/2008.
Deputy President Aird heard the s75 application. He reviewed the pleading and legal framework and dismissed the respondent's s75 application (order 1). He concluded the Points of Claim disclosed an open and arguable case raising issues of policy interpretation and fact that required evidence and expert opinion and could not be summarily struck out. The matter was remitted to further case management, with directions for filing of any s77 application and an administrative mention.
Why the court decided this way
There are three core strands to the Tribunal’s reasoning.
The proper standard for s75 strike-out: The Tribunal emphasised caution in using s75 to summarily dismiss proceedings. The test is whether the proceeding is obviously hopeless or bound to fail; summary termination is appropriate only where the claim discloses no reasonable cause of action or is unsustainable in law or fact. The Tribunal relied on authority (Norman v Australian Red Cross Society and related VCAT guidance) that a Tribunal should not conduct a trial before a trial and must only strike out plainly hopeless matters.
The EOT decision did not create issue estoppel: Vero argued that the earlier refusal to extend time (SM Cremean’s EOT decision in D74/2008) founded an estoppel that barred the applicant’s later review. Deputy President Aird rejected that submission: the EOT decision addressed a distinct interlocutory question, whether to grant an extension of time under s126 in D74/2008, and principally focussed on the prejudice to the insurer caused by renovations such that the insurer could not investigate damage during the policy period. That ruling did not decide the substantive indemnity questions or the legal interpretation of policy and Ministerial Order clauses that the later review raises. In short, the prior ruling did not decide the same issue between the same parties in a way that would found issue estoppel.
Substantive questions require a hearing: The Tribunal identified central interpretative and factual questions that must be decided at a hearing with evidence and expert opinion. In particular, clause 8.6 of the Ministerial Order (taken with the policy) raises questions: what constitutes 'notice of a defect'; whether the earlier claims or the insurer's investigation constituted notice of related defects; and whether notice of one defect captures related defects that manifest after the policy period. Moreover, factual issues about whether the damage occurred during the policy period (and therefore whether the policy responded) are matters that require expert evidence. Because these issues are not demonstrably hopeless and require hearing, the Tribunal concluded the s75 application should be dismissed.
The Tribunal repeatedly stressed that on s75 the inquiry is not into likely success on the merits but whether the claim is doomed to fail or lacking substance; given the legal and factual questions raised, the claim was not so doomed.
Before and after state of the law
Before this decision, the established VCAT approach to s75 applications, as articulated in Norman v Australian Red Cross Society, required caution; VCAT should not use s75 to pre-empt full hearings except in plainly hopeless cases. This judgment applies and reinforces that settled approach.
After this decision, the judgment stands as a reaffirmation within VCAT’s Domestic Building List that:
Interlocutory or collateral decisions (such as refusals of s126 extensions) do not automatically give rise to issue estoppel against prosecuting distinct substantive complaints.
Interpretation of insurance policy terms and Ministerial Order provisions that raise substantive fact-finding and expert-evidence questions should not be struck out under s75; they must be determined at full hearing.
VCAT will resist turning s75 into a device for merits-based pre-trial disposal when the pleadings disclose arguable legal questions.
This decision therefore preserves the procedural protection for claimants asserting complex insurance and building-defects claims that require expert evidence.
Key passages with plain-English translation
"The Tribunal should exercise caution before summarily terminating a proceeding. It should only do so if the proceeding is obviously hopeless, obviously unsustainable in fact or in law, or on no reasonable view can justify relief, or is bound to fail." (Judgment summary of s75 standard)
Plain-English: You should not throw a case out of Tribunal unless it is clearly hopeless and cannot succeed under any reasonable argument.
"These are all questions which can only be determined after hearing the evidence, and considering the legal contentions of each of the parties. They cannot be determined summarily without hearing and considering the expert evidence, and legal contentions of the parties in relation to the proper interpretation of the relevant clauses of the policy and the Ministerial Order."
Plain-English: Important questions, about what counts as 'notice' and whether earlier claims covered later defects, need witnesses and expert reports; you cannot decide them at a quick strike-out hearing.
"It must be remembered that in considering an application under s75 I am not required to consider or be satisfied as to the likely success of the [applicant's] claim. I am required to consider whether the allegations are 'frivolous, vexatious, misconceived or lacking in substance', in other words, whether they are doomed to fail."
Plain-English: The Tribunal’s job on a strike-out application is not to predict who will win; it is to decide whether the claimant's case is so bad that it cannot possibly succeed.
What fact patterns trigger this precedent
This judgment will be triggered in fact patterns that combine:
Multiple related insurance claims arising from a common defect (for example, shared structural elements causing damage to multiple titles).
An insurer who makes an initial decision on one claim, continued investigation on related claims, and later rejects a subsequent claim (or vice versa).
A prior interlocutory ruling (for example, refusal of an extension of time) that the insurer seeks to rely on to prevent subsequent litigation, asserting issue estoppel or abuse of process.
Complex causation and timing questions where expert evidence is needed to establish whether loss/damage occurred during the policy period.
Policy terms and regulatory/ministerial provisions (e.g. clause 8.6 of the Ministerial Order) whose interpretation is contested and dependent on factual context.
In any of these scenarios, a respondent insurer seeking to strike out a claimant's proceeding under s75 will face the threshold articulated in this decision: unless the claim is plainly hopeless, and the issues do not require evidence, the Tribunal will likely refuse summary dismissal.
How later courts have treated it
This decision is a Tribunal-level (VCAT) ruling applying established VCAT authorities (Norman and other VCAT decisions) and is best read as an application and reinforcement of VCAT’s settled approach to s75. It cites and applies VCAT authorities such as Wood v Calliden Insurance Ltd and Johnston v Victorian Managed Insurance Authority in support of the proposition that s75 is not a vehicle for merits adjudication. As a Deputy President decision, it is persuasive within VCAT but not binding on superior courts. Later VCAT matters concerning strike-out under s75 in insurance or building-defect contexts would treat this as useful authority for the proposition that interpretative and expert-driven questions should proceed to hearing.
Practitioners should look to subsequent Tribunal decisions for the extent to which Aird DP’s emphasis on clause 8.6 interpretation and the non-applicability of issue estoppel in that factual matrix has been applied, particularly where insurers attempt to rely on earlier interlocutory rulings to dispose of later claims.
Still-open questions
Precise scope of clause 8.6: The Tribunal identified several interpretative sub-questions (what amounts to 'notice', does insurer investigation constitute notice, and whether notice covers related defects that become evident after the policy period). The judgment does not answer these; they remain open until a hearing determines them concretely in the factual matrix of this case.
When an earlier decision constitutes issue estoppel: This decision rejects estoppel on these facts because the earlier EOT decision resolved a distinct question. However, the boundaries remain: if a prior decision had directly and finally determined a substantive question (say the timing of damage), issue estoppel might arise. The precise dividing line between an interlocutory decision that precludes later litigation and one that does not remains fact-dependent.
Interaction with Insurance Contracts Act s54 and policy clauses: The applicant pleaded s54 (which limits an insurer's ability to avoid claims for innocent nondisclosure/omission) and contractual notice clauses. How s54 operates in conjunction with clause 7.12 and 8.6 of the Ministerial Order and specific policy terms will be determined at hearing, and the precise interplay remains to be settled factually and legally.
Impact of renovations and lost evidence: The earlier EOT decision stressed irretrievable prejudice caused by renovations. The question of how Tribunal fact-finders will treat post-policy renovations and evidentiary loss at a substantive hearing (versus an interlocutory EOT decision) is yet to be tested on the merits.
Strategic use of s75 by insurers: While this judgment curtails use of s75 where disputes are arguable and fact-intensive, insurers may refine strategies for earlier investigations, evidence preservation and pleading to strengthen any future strike-out grounds. How courts and VCAT will balance procedural efficiency against access to a full hearing in future cases remains a continuing theme.
Conclusion: Judkins v Vero Insurance Ltd is a procedurally significant VCAT decision reaffirming that s75 is a narrow tool reserved for plainly hopeless matters. It prevents insurers from short-circuiting complex, expert-dependent insurance disputes by relying on prior interlocutory rulings, and it preserves the claimant's right to a full hearing on the substantive questions of notice, timing and causation under the policy and the Ministerial Order.
By 18 December 2009 the applicant must file and serve any application under s77 of the Victorian Civil and Administrative Tribunal Act1998. If such application is received it is to be listed for hearing before a judicial member together with D74/2008. The orders of 13 August 2009 in D74/2008 apply in relation to the conduct of the hearing of any s77 application.
The proceeding is referred to an administrative mention on 31 March 2010 at which time the parties must make recommendations for its further conduct. There is liberty to the parties to apply by consent for the proceeding to be referred to a directions hearing.
Costs reserved with liberty to apply. I direct the principal registrar to list any application for costs for hearing before Deputy President Aird for one hour.
[2]
This proceeding concerns one of three townhouses in Wertheim Street, Richmond which share a common slab. They were built in or about 1998 and 1999 and the certificate of occupancy was issued on 26 October 1999.
In November 2005, the applicant who owns units 1 and 1B made a claim under the relevant policy of warranty insurance in respect of both units. The owner of unit 1A also made a claim. The claim for unit 1 ('the first unit 1 decision') was rejected because the respondent insurer was not satisfied that the cause of the damage was the builder's responsibility, and considered the cost of rectification to be less than the standard excess of $1,000. The applicant did not seek a review of that decision.
The respondent continued to investigate the cause of the distress to units 1A and 1B. The claims in relation to units 1A and 1B were rejected in early January 2008 on the grounds that the cause of distress to the units was not the builder's responsibility.
Applications for review of the insurer's decisions in relation to units 1A and 1B were lodged (by the applicant and the owner of unit 1A) within the prescribed period, in related proceeding D74/2008. The owners of the three units obtained an expert report from Tony Croucher of Buildspect, dated 30 June 2008, who says that extensive rectification works to the common slab are required. There has been significant movement in the slab causing extensive consequential damage to each of the units which must also be rectified. Mr Croucher estimates the total cost of rectification works for the three units will be $441,882.
The applicant also applied for an extension of time under s126 of the Victorian Civil and Administrative Tribunal Act1998 in which to seek a review of the first unit 1 decision ('the EOT application'). That application was dismissed on 9 April 2009 by Senior Member Cremean who found the prejudice suffered by the respondent, because of the extensive renovation works carried out to Unit 1, was such that it would be unfair for him to exercise the tribunal's discretion and grant an extension of time. Relevantly, he said:
In my view, however, the effect of s126(4) in this case is decisive. Section 126(4) clearly has an operation that thwarts the unfettered nature of the discretion given by s126(1). I may not extend time if I am satisfied that to do so "would cause any prejudice or detriment to a party or potential party that cannot be remedied by an appropriate order for costs or damages".
[3]
if the applicant failed to make the second unit 1 claim within the time provided by the insurance policy, then:
[4]
i) during the period from November 2005 to January 2008, the insurer was investigating the cause of the movement of the footings at the site, for the purposes of assessing claims in respect of units 1A and 1B (the unit 1A and unit 1B claims);
[5]
ii) each of the first unit 1 claim, the unit 1A and unit 1B claims, put the insurer on notice of a defect directly or indirectly related to the defect the subject of the second unit 1 claim;
[6]
iii) the alleged failure of the applicant to give make the second unit 1 claim within the time limited specified by the policy constitutes an omission within the meaning of s54 of the Insurance Contracts Act 1984; (sic) and
[7]
iv) pursuant to s54, Vero may not refuse to pay the claim by reason only of that omission.
[8]
b) as to the asserted failure to notify the builder within 180 days of the date on which the applicant first became aware, or might have been expected to become aware, of some fact or circumstance which might give rise to the claim;
[9]
i) each of the first unit claims, the unit 1A and unit 1B claims, put the insurer on notice of a defect directly or indirectly related to the defect the subject of the second unit 1 claim; and
[10]
ii) as a consequence of the operation of clause 37 of the insurance policy and section 54 of the Insurance Contracts Act 1984, Vero may not refuse to pay the claim by reason only of the alleged failure to notify the builder of the defect the subject of the second unit 1 claim.
[11]
The applicant has in fact acted reasonably to attempt to minimise his loss in respect of unit 1 by the following acts:
[12]
in November 2005, the applicant lodged claims in respect of units 1 and 1B with Vero;
in respect of unit 1, on 9 December 2005 Vero rejected the unit 1 claim as set out above on the found that the damage at that time was less than $1,000;
in respect of unit 1B, Vero did not finally reject the unit 1B claim until 2 January 2008; and
on 29 January 2008, the applicant commenced proceeding no D74/2008 in this Tribunal, seeking a review of the decision in respect of the Unit 1B claim.
[13]
At a directions hearing on 13 August 2009 the respondent foreshadowed an application under s75 of the Victorian Civil and Administrative Tribunal Act1998 for the summary dismissal of the application for review, and directions were made for the hearing of that application ('the s75 application'). The insurer contends that the tribunal's decision of 9 April 2009 founds an issue estoppel against the applicant and accordingly the application for review is an abuse of process.
In considering the s75 application I am not required to determine the merits of the application for review. I am simply required to consider whether the Points of Claim dated 27 May 2009 disclose an open and arguable case and whether the applicant is estopped from maintaining his application for review by reason of the tribunal's decision of 9 April 2009.
(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 -
[15]
(a) is frivolous, vexatious, misconceived or lacking in substance; or
[16]
(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.
[17]
It is well established that caution must be exercised in determining whether a proceeding should be struck out pursuant to the provisions of s75. In Norman v Australian Red Cross Society1998 14 VAR 243 where, after considering the judgment of the Court of Appeal in Rabel v State Electricity Commission of Victoria [1998] 1 V.R. p.102 Deputy President McKenzie said:
[18]
(a) The application is for the summary termination of the proceedings. It is not the full hearing of the proceeding.
[19]
(b) The Tribunal may deal with the application on the pleadings or submissions alone, or by allowing the parties to put forward affidavit material or oral evidence. The Tribunal's procedure is in its discretion and will depend on the circumstances of the particular case.
[20]
(c) If the Complainant indicates to the Tribunal that the whole of his or her case is contained in the material placed before the Tribunal, the Tribunal is entitled to determine whether the complaint lacks substance by asking whether, on all the material placed before it, there is a question of real substance to go to a full hearing. However, if a Complainant indicates to the Tribunal that there is other evidence that he or she can call to support the claim and the Tribunal, on the application, does not permit that evidence to be called, then the Tribunal cannot determine the application on the basis that the Complainant's material contains the whole of his or her case.
[21]
(d) An application to strike out a complaint is similar to an application to the Supreme Court for summary dismissal of civil proceedings under RSC r23.01 (see also commentary on this rule Williams, Civil Procedure Victoria). Both applications are designed to prevent abuses of process. However, it is a serious matter for a Tribunal, in interlocutory proceedings which would generally not involve the hearing of oral evidence, to deprive a litigant of his or her chance to have a claim heard in the ordinary course.
[22]
(e) The Tribunal should exercise caution before summarily terminating a proceeding. It should only do so if the proceeding is obviously hopeless, obviously unsustainable in fact or in law, or on no reasonable view can justify relief, or is bound to fail. This will include, but is not limited to a case where a complainant can be said to disclose no reasonable cause of action, or where a Respondent can show a good defence sufficient to warrant the summary termination of the proceeding. (emphasis added)
[23]
The respondent contends that the application for review concerns the same claim as the unit 1 claim. In his reasons for dismissing the EOT applicaton, SM Cremean found that the policy only responded to loss and damage which occurred during the policy period which expired on 26 April 2006.
In considering the application for review the tribunal will have to determine whether the loss and damage identified by Mr Croucher occurred during the policy period. The insurer contends that much of the damage occurred outside the policy period. Whilst the difficulties in ascertaining the level of damage was a relevant factor in the tribunal's consideration of EOT application, the tribunal did not determine whether they were matters which could be properly taken into account by the respondent in considering whether the applicant is entitled to indemnity under the policy.
The applicant submits that there are two questions which arise from the second unit 1 decision both of which will require an interpretation of the policy and the Ministerial Order[1]:
if a claim is made outside the policy period, but relating to loss or damage occurring within the policy period, is cover still provided by the policy?
if a decision is made on a claim, and the damage the subject of that claim subsequently gets worse, does the insurance policy permit the insured to lodge a second claim in respect of that subsequent damage?
The relevant clauses of the Ministerial Order are clauses 54, 7.12 and 8.6. Clause 5.4 sets out the period of insurance, clause 7.12 permits a term in the policy of insurance whereby 'an insurer may refuse to accept any claims after the expiration of 180 days from the end of the period of insurance...' and clause 8.6 provides:
[24]
If a person gives notice of a defect, that person is to be taken for the purposes of the policy to have given notice of every defect of which the defect notified is directly or indirectly related, whether or not the claim in respect of the defect that was actually notified has been settled.
[25]
So, the applicant contends that the interpretation of clause 8.6, insofar as it relates to the applicant's second unit 1 claim, is an issue which should be determined by the tribunal. I agree with this. Some of the questions to be determined might include: what constitutes 'notice of a defect'? Does the first unit 1 claim constitute 'notice', or does the investigative work carried out by the insurer in respect of the unit 1A and 1B claims concerning the common slab, constitute 'notice'?. Does clause 8.6 mean that where a defect is notified during the term of the policy that such notice includes all related and associated defects which subsequently become apparent, whether during or after the expiration of the period of insurance? Do the claims concern the same loss and damage?
These are all questions which can only be determined after hearing the evidence, and considering the legal contentions of each of the parties. They cannot be determined summarily without hearing and considering the expert evidence, and legal contentions of the parties in relation to the proper interpretation of the relevant clauses of the policy and the Ministerial Order.
As I recently observed in Wood v Calliden Insurance Ltd & Ors[2008] VCAT 1339 at [15]:
[26]
It must be remembered that in considering an application under s75 I am not required to consider or be satisfied as to the likely success of the Woods' claim. I am required to consider whether the allegations are 'frivolous, vexatious, misconceived or lacking in substance', in other words, whether they are doomed to fail. This does not contemplate a detailed consideration of the evidence. As Senior Member Cremean observed in Johnston v Victorian Managed Insurance Authority[2008] VCAT 402 at [15-17]:
[27]
.... I do not think Parliament intended that the Tribunal should be functioning as a court of pleadings. From time to time, of course, and contained within the Sixth Respondent's submissions, it is expressly disclaimed that the Tribunal is a court of pleadings. And that remains the reality: the Tribunal is not a court in the normal sense of that word and is not, most definitely, a court of pleadings.
There is also this point. The primary function of the tribunal, apart from alternative dispute resolution, is to conduct hearings. A hearing is a trial of the action. There should not be a trial before a trial. (emphasis added)
It must be remembered that the application in this proceeding is an application for review of the insurer's decision to refuse indemnity under the policy. This is a distinct and separate issue from those raised in the EOT application. Accordingly, there can be no issue estoppel.
I will therefore dismiss the respondent's application under s75 and reserve the question of costs with liberty to apply. I note that there is an application by the applicants in the related proceeding under s77 of the VCAT Act for that proceeding to be transferred to the County Court, where proceedings have been commenced, but not yet served, against Telstra Corporation Ltd and General Television Corporation Limited, which is to be heard by a judicial member in the New Year. The application to join them as parties to the tribunal proceedings are adjourned pending determination of the s77 application.
My understanding is that if this application was dismissed, a similar application would be made to transfer this proceeding. Accordingly, I will not list this proceeding for a further directions hearing at this time, rather I will list it for an administrative mention with liberty to the parties to apply for the matter to be listed for a directions hearing.
Parties
Applicant/Plaintiff:
Judkins
Respondent/Defendant:
Vero Insurance Ltd
Legislation Cited (1)
Contracts Act 1984
Cases Cited (1)
Judkins v Vero Insurance Ltd (Domestic Building) [2009] VCAT 2505 (3 December 2009)
AI Analysis
Outcomeprocedural
Disposition:
Respondent's application under s75 VCAT Act dismissed; applicant to file any s77 application by 18 December 2009; proceeding referred to administrative mention 31 March 2010; costs reserved with liberty to apply; directions for listing if s77 application received.
It is contended that the prejudice lies in the inability to retrieve documents that once or once may have existed. I do not find this compelling. What I do find compelling, however, is that works have been undertaken (a "complete internal makeover") to Unit 1 such that it is not now possible for the Respondent to ascertain the level of damage arising during the policy period - that is, to 26 April 2006. The Respondent now has no hope of being able to establish whether this is so or not. As is pointed out to me, the Respondent cannot now call evidence as to the state of the damage prior to that date. Nor can it satisfactorily test any evidence of the Applicants as to the state of such damage. In other words, it cannot now - after this passage of time and with works having been undertaken - effectively defend itself against a claim.
I consider this to be the critical consideration. It is a prejudice, in my view, which cannot possibly be compensated for by an order for costs or damages. Neither costs nor damages can undo what has been done. The Respondent, in my view, is irretrievably prejudiced
On 17 November 2008 the applicant made a further claim under the relevant policy ('the second unit 1 claim'). This claim was rejected by the respondent on 11 February 2009 on the following grounds:
(a) the claim was made out of time;
(b) the applicant had failed to notify the insurer within 180 days of becoming aware, or when he ought to have become aware, of any matter which might give rise to a claim;
(c) the applicant's claim was not caused by the faulty workmanship of the builder, but rather was a result of soil moisture changes caused by re-occurring blockages to the sewer main in Wertheim Street, and trees located opposite the property in and around the channel nine carpark.
(d) the applicant had failed to take any steps during 2003 and 2008 to minimise his loss.
The applicant has applied for a review of that decision ('the application for review'). In his Points of Claim dated 27 May 2009 the applicant asserts: