Victorian Civil and Administrative Tribunal|2004-06-04|Before: Giuliano Agencies P, Windows Franchising P, Kellam J

Koster v Mike Giuliano Agencies Pty Ltd [2004] VCAT 1046 (4 June 2004)

1. The application pursuant to Section 77(1) of the Victorian Civil and Administrative Act l988 is dismissed.

4. Further Directions Hearing to be listed on Friday 25th June 2004 at 10.00am. (Submissions as to costs will also be heard).

1 This matter comes before me by way of an application pursuant to s.77 of the Victorian Civil and Administrative Tribunal Act (1998) ("The Act"). It arises against a background of an application by Anthony John Koster and Maree Koster ("Koster") against Mike Giuliano Agencies Pty Ltd ("Giuliano") and Gardenbay Windows Franchising Pty Ltd ("Gardenbay"). For the sake of convenience, I am grouping other named parties under those collective titles. The matter is a complicated one involving a franchising agreement, alleged advice from a financial consulting firm as to entering into the agreement, agency, faulty workmanship, negligence, limitation periods, unconscionable conduct and several other issues. There is both a claim by Koster and a counterclaim by Gardenbay. Many issues are involved. Many of those issues involve the Fair Trading Act 1999 ("The FTA") and its predecessor, the Fair Trading Act 1985. There has also been reference to the Trade Practices Act 1985, although reliance upon it, if not abandoned, appears more doubtful.

2 Mr Pauline of Counsel appeared on behalf of Gardenbay, whose application pursuant to s.77 this is. Mr Larkin of Counsel appeared on behalf of Koster. Mr Azo, Solicitor, appeared on behalf of Giuliano. All legal representatives made oral submissions and Mr Pauline also put before me written submissions. There was considerable reference to authorities.

3 Gardenbay, supported by Giuliano, is alleging that the application by Koster should be struck out and referred to a more appropriate court or tribunal pursuant to s.77 of the Act. This application is opposed by Koster. As shall be discussed, the submissions on behalf of Gardenbay, and supported by Giuliano, are to the effect that, given the quantum involved and the complexity of this matter, this Tribunal is not the appropriate forum. Detailed pleadings and more formal case management practices will be required. In particular, those seeking the change of forum referred to and relied upon the decision of the former President of this Tribunal, His Honour Justice Kellam, in Bentley v Cash Resources (2002) VCAT 1399. The application pursuant to s.77 of the Act seeks referral to the Federal Court of Australia. However, whilst not entirely relinquishing arguments that the Federal Court might be a more appropriate forum, Mr Pauline conceded that, if reliance upon the Trade Practices Act 1985 was not being pursued, the Supreme Court of Victoria would be the more appropriate alternative forum, and his submissions, whilst concentrating largely upon why this Tribunal would not be the appropriate forum, were focussed upon the Supreme Court as being the suitable alternative forum.

4 In argument before me, there was some reference to various factual matters. This was comparatively minimal. Needless to say, in a jurisdictional argument such as this, I am making no finding of facts relating to the merits of the matter. Any assumptions of fact made are solely for the purpose of placing this application in context.

5 It is alleged by Koster that, from approximately 1992, Giuliano was engaged, for reward, to provide financial advice and management services. In approximately 1997, Koster invested in a franchise business system operated by Gardenbay. Koster was either introduced to Gardenbay by Giuliano, or relied upon Giuliano's advice in investing in Gardenbay, or Giuliano was an agent of Gardenbay (depending upon the various assertions made). Without going into the matter in any detail, the franchise business turned out to be a financial failure. Koster is suing Giuliano and Gardenbay for amounts which, on the face of the documents, probably exceed $250,000. Gardenbay is counterclaiming against Koster for repair work, loss of profits and the like, the amount of the counterclaim approaching $200,000.

6 The pleadings - if they can be so described - have become more and more complicated. There have been various orders of this Tribunal in relation to them. Koster now has on foot lengthy and complicated "Further Amended Points of Claim" which cover much ground - Mr Pauline submitted that there were at least twelve separate legal bases of claim contained therein. The relief sought is multi-headed, and the damages claimed are equally complicated. Gardenbay has served and filed "Amended Points of Counterclaim", which document also raises a multitude of issues. Again, the relief sought and the damages claimed are multi-faceted. Koster has filed and served a detailed defence to the amended counterclaim. As I understand it, Giuliano is placing in issue all relevant allegations.

7 Mr Larkin on behalf of Koster submitted that the matter is not really all that complex and the Tribunal would basically be engaged in a fact-finding mission. Ultimately, that may prove to be correct but the pleadings are certainly quite involved with a multitude of allegations and defences, and considerable quantum is involved. I say at the outset that I am quite satisfied that this is not particularly simple litigation. A considerable number of questions of fact and law will need to be determined. A considerable number of witnesses, lay and expert, will probably be called. Estimates of the duration of the case stretch from one to four weeks. As stated, at least on the face of the documents, in excess of the jurisdictional limit of the County Court of Victoria is involved. Whilst I make no finding of fact in relation to the merits of the case, I am prepared to find that it does involve the factors just mentioned. As shall be discussed, the real issue seems to me to be whether those factors are sufficient to support a successful application pursuant to s.77 of the Act.

8 I shall now turn to the cases as advanced by the respective parties. I shall not analyse them in detail. For example, quite a number of the authorities relied upon by Mr Pauline relate to arguments which might subsequently be advanced or require determination at the ultimate hearing, as opposed to being directly related to the operation of s.77 of the Act.

9 Essentially the case for Gardenbay is that the matter is of such a nature and of such complexity that detailed pleadings and case management of the type to be found in the Supreme Court are required. Reference is made to the remarks of Kellam J in Bentley. When the amounts involved in the claim and the counterclaim are added, the total exceeds $400,000.

10 Difficulties have already been encountered in that Koster has had three attempts at setting out the points of claim upon which reliance is placed, and there is every likelihood that there will be further alterations and amendments. This demonstrates why case management and pleadings of the type found in a court are necessary. They are necessary if justice is to be done to the parties, and in particular to Gardenbay.

11 A large number of case management issues are involved. These are set out in the written submissions presented on behalf of Gardenbay. Also there set out is a list of the questions of law which may require determination, and lists of the numerous issues raised by Koster's points of claim and Gardenbay's counterclaim.

12 I shall not deal with these in detail in this summary. Suffice to say that they are set out in some twenty-six paragraphs spread over thirteen pages of Mr Pauline's submissions. They are there set out in point form, and include further issues which arise under each point of claim or counterclaim. Relevant authorities which may have to be considered are also set out. Such written submissions and the annexures attached to them are extremely thorough and very helpful. I will simply summarise them by saying that they set out in detail the complexities of the case and the need for appropriate case management as seen from Gardenbay's viewpoint.

13 The basis for the damages sought by each party is also complicated and would involve considerable evidence, including evidence in relation to alleged faulty workmanship at many sites. Overall, the duration of the case could be anticipated to be between two and four weeks, and involving many witnesses and lengthy submissions concerning matters of fact and law. All of this makes it a case of the type referred to by Kellam J in Bentley. For all the reasons set out in the oral and written submissions, the matter should be struck out pursuant to s.77 and referred elsewhere, preferably to the Supreme Court. That would be an appropriate forum. Such a reference would also ensure that justice was done between the parties.

14 Basically, Mr Azo, on behalf of Giuliano, supported the position put by Mr Pauline on behalf of Gardenbay. Further, he stated that his client did not possess great means and was anxious to avoid further delay, the matter having progressed slowly before this Tribunal.

15 His client would be denying any fiduciary relationship with Koster or any agency agreement with Gardenbay. Thus, effectively everything would be in issue. Mr Azo stated that he would be calling five witnesses and that his estimate of the duration of the case was two weeks.

16 The case presented by Mr Larkin on behalf of Koster could be summarised as follows. A plaintiff is entitled to choose the forum in which that plaintiff wishes to litigate, subject to the forum possessing the appropriate jurisdiction. In the present case, Koster selected VCAT as the appropriate forum in which to bring proceedings. This Tribunal possesses the jurisdiction to deal with the matter. In selecting VCAT, Koster was opting for a forum which would be less expensive and where there would not be the need for the quantity or type of formal pleadings that might be required in a court. Koster was conscious of the need to limit costs.

17 The other parties entered into and submitted to the jurisdiction of the selected forum. Until recently, by which stage the matter was well advanced, there has been no suggestion of going elsewhere.

18 Further, the submissions on behalf of the other parties failed to identify one area of fact or law that is beyond the ability of this Tribunal to handle. Members of this Tribunal frequently deal with FTA matters. Whilst the present case is a large one, in that it deals with a number of issues, it is largely a fact-finding mission. It is not a complex case involving questions of law which would be beyond the capacity of this Tribunal. Whilst a considerable number of issues may be raised, they are all basically matters involving the FTA, and therefore this Tribunal is the appropriate forum.

19 Having commenced the proceeding here, and this Tribunal having jurisdiction, Koster should not be forced to go elsewhere unless there is a powerful reason for so doing. Reference is made to the analysis of the law in relation to stays and inappropriate forums in Ocean Sun Line Special Shipping Co. Inc. v Fay [1988] HCA 32; (1988) 165 CLR 197, and in particular to the judgment of Brennan J. In the present case, there is no evidence that the continuance of the action would work an injustice to the other parties because it would be oppressive or vexatious or an abuse of process. The case should continue at VCAT.

20 There was some discussion concerning whether or not an onus exists in an application such as this before this Tribunal. Mr Pauline effectively conceded that it was up to the parties making the application pursuant to s.77 to satisfy the Tribunal that there should be a striking out and referral. Whether or not an onus in the traditional sense exists, it seems to me that the words used by Kellam J in Bentley are relevant. They are:-

"...I accept that s.77 applies a forum non conveniens doctrine to the Tribunal and that it would need to be clear that the Tribunal was an inappropriate forum".

21 I say at the outset that it is certainly not clear to me that this Tribunal is an inappropriate forum for the purposes of s.77. I prefer and accept the submissions of Mr Larkin in this regard.

22 I have arrived at this conclusion for a number of reasons which I shall now set out. They are not dealt with in order of importance or significance.

23 Firstly, the remarks of Kellam J in Bentley must be seen in context. At that time, s.111 of the FTA granted to this Tribunal exclusive jurisdiction in circumstances where proceedings had been brought here prior to the commencement of any related proceedings in a court. Kellam J ruled that this was the effect of Ss.111 and 112. Accordingly, he ordered that the proceeding be set down for hearing before this Tribunal. He went on to make remarks by way of obiter dicta - or observations - concerning the significant increase in the number of cases involving the FTA before this Tribunal, and the growing number of large and complex cases. These could damage the capacity of the Civil Claims List to deal with the volume before it "unless serious consideration is given to increased resourcing of the List". His Honour went on:-

"That said, I accept the submission made by Mr Gray that inadequate capacity on the part of VCAT to hear Civil Claims cases would not be an appropriate basis to strike out a proceeding under s.77 of the VCAT Act ...

In my view, if the subject matter is complex, involves difficult issues of fact and law, and requires pleadings and case management processes which are more typical of processes adopted by the Supreme Court, an argument may well be advanced that such a case should be struck out and referred to the Supreme Court".

24 Subsequently, s.111 of the FTA was amended. An exception to the exclusive jurisdiction of the Tribunal was added in the form of s.111(c), permitting the Tribunal to refer a proceeding to another forum pursuant to s.77 of the VCAT Act.

25 It seems to me that Kellam J was not setting down any hard and fast rules in relation to future cases. He was criticising the existing situation, and perhaps highlighting the need for some legislative change so that, in an appropriate case, an FTA matter could be referred pursuant to s.77. His Honour foreshadowed that, in certain circumstances, "an argument may well be advanced" concerning striking out or referral. He was not ruling upon such argument. He also expressed the view that the balance of convenience was not to be assessed by reference to the parties alone.

26 With respect, I agree with the observations of Kellam J. Assessment of the balance of convenience may well involve more than reference to the parties alone. There may well be matters of such complexity and difficulty that, in the circumstances prevailing, an application pursuant to s.77 would be successful. However, I repeat that His Honour was not laying down rules of law or practice and his observations were just that - observations. Clearly each application must be viewed on its merits and consideration given to the prevailing circumstances.

27 Indeed, the circumstances prevailing in Bentley's case should be remembered. The case not only was complex, likely to be of some weeks' duration, and involving a substantial sum of money, but it was also one where the relief sought was a final injunction. Therefore it could only be heard by a judicial member of this Tribunal. This explains the observations made by Kellam J concerning the strain on judicial resources. Further, it is clear that it was Kellam J who in fact invited the parties to be prepared to make submissions as to why the proceedings should not be stayed and referred to the Supreme Court pursuant to s.77. The point does not seem to have been a contentious one. Apparently, only one party made any submissions. Kellam J then made what seems to have been almost the inevitable ruling concerning jurisdiction, and followed that up with some reflections upon the difficulties that might face this Tribunal in relation to complex commercial cases (and particularly if they require determination by a judicial member).

28 Returning to the present case, the circumstances here prevailing do not seem to me to justify a striking out and referral to another forum. Whilst I appreciate Mr Pauline's argument that Oceanic Sun Line concerns a stay of proceedings rather than the striking out and referral pursuant to this particular legislation, there seems to me to be some parallels between the situations, so that the judgment of Brennan J is instructive. In that judgment, Brennan J referred to the principals to be found in the judgment of Scott LJ in St Pierre v South American Stores (Gath & Chaves) Ltd (1936) 1 KB 382 at 398. In so referring, His Honour stated:-

"The formulation by Scott LJ is, and should remain, the law of this country and "oppressive" and "vexatious" should be understood according to their ordinary meaning."

29 The statement of Scott LJ to which reference is made reads as follows:-

"The true rule about a stay under s.41, so far as relevant to this case, may I think be stated thus:- (1) A mere balance of convenience is not a sufficient ground for depriving a plaintiff of the advantages of prosecuting his action in an English court if it is otherwise properly brought. The right of access to the King's court must not be lightly refused. (2) In order to justify a stay two conditions must be satisfied, one positive and the other negative: (a) the defendant must satisfy the court that the continuance of the action would work an injustice because it would be oppressive or vexatious to him or would be an abuse of the process of the court in some other way; and (b) the stay must not cause an injustice to the Plaintiff. On both the burden of proof is on the defendant.

30 If that approach were adopted in the present case, and even leaving to one side the question of onus, it would be far from clear to me that the proceeding brought by Koster before this Tribunal should be struck out. The requirements referred to by Scott LJ are not present.

31 Next, and many of these reasons are necessarily intertwined, I agree that Koster, having selected this Tribunal, and the matter having progressed a considerable distance, should be entitled to continue the litigation here unless there are very persuasive reasons to the contrary. In other words, the type of approach adopted in Oceanic Sun Line seems to me to be given considerable support if there has been no initial objection to the jurisdiction and the matter has in fact progressed a very considerable distance before any objection is taken. That is the situation in the present case.

32 Further, I accept that Koster, in issuing proceedings out of this Tribunal, was specifically conscious of factors such as costs and (hopefully) absence of necessity for detailed pleadings. In addition, in relation to matters involving the FTA, this Tribunal is almost an automatic starting point. One of these factors - expense - also seemed to trouble Mr Azo, although he was supporting Mr Pauline's submissions. Combining some of these factors, if an applicant such as Koster has opted to issue proceedings out of this Tribunal because it seems the appropriate jurisdiction, it is less expensive, and there is less formality, and the other parties have participated in the proceeding without objection and for a considerable period, it seems to me that it would indeed require the existence of powerful contrary factors before such applicant should not be permitted to continue with the litigation.

33 A related factor is that of delay. Mr Azo expressed his concern on behalf of Giuliano concerning delay. This concern seems to me to support the position of Koster rather than that of Gardenbay. I repeat that this matter is well advanced before this Tribunal. To start again before the Supreme Court - and, of course, this is no criticism of the Supreme Court - seems to me inevitably to involve increased rather than decreased delay. Given the distance that this litigation has already travelled before this Tribunal, I see no reason why, with a suitable timetable in place, it should not be listed for hearing in a matter of months. If the parties are genuinely concerned in relation to delay, it seems to me more appropriate that the matter remain here rather than being struck out and referred.

34 Finally, and possibly most importantly, I agree entirely with the submission of Mr Larkin that the matters raised in this case, whether they be of fact or law, are matters well within the capacity and ability of this Tribunal to determine. There may be a considerable number of issues, and that undoubtedly gives the case a more complicated appearance, but the determination of the individual issues is a task well within the capacity of many members of this Tribunal. In other words, there may be a large number of questions of fact and law, but I am confident that there is nothing in the individual questions which is beyond the capacity of this Tribunal. The issues, however many they may be, already seem to me to be reasonably well defined, as set out in Mr Pauline's submissions. Even if there remain other outstanding issues, I am confident that the case can be managed in such a way as to bring it on for hearing, and deliver justice to the parties, in the near future.

35 In summary, it is far from clear to me that this Tribunal is an inappropriate forum for the conduct of this litigation. On the contrary, it is my opinion that it is more appropriate that the proceeding continue before this Tribunal. Accordingly, the application pursuant to s.77 of the Act is dismissed.

Koster v Mike Giuliano Agencies Pty Ltd [2004] VCAT 1046

At a glance

Court

Decision date

Before

Source

Judgment (45 paragraphs)

Koster v Mike Giuliano Agencies Pty Ltd [2004] VCAT 1046 (4 June 2004)

Parties

Cases Cited (1)