Muto v Shepparton City Council [2018] VSCA 73

Court of Appeal (Vic)|2018-03-27|Before: Mr J, Keogh J, Kyrou JA

Muto v Shepparton City Council [2017] VSC 210 (Keogh J)

Janover v Muto [2017] VCC 811 (Judge Marks)

ADMINISTRATIVE LAW - Victorian Civil and Administrative Tribunal (VCAT) - Refusal of leave to appeal from VCAT - Matter heard and determined by single member - Victorian Civil and Administrative Tribunal Act 1998, cl 46E(1) of sch 1, required VCAT be constituted by two members - Requirement removed by amendment to cl 46E(1) made after hearing and before determination - Whether VCAT properly constituted - Whether order within VCAT jurisdiction - Effect of transitional provision - Appeal allowed - VCAT order set aside - Proceeding remitted to VCAT - Victorian Civil and Administrative Tribunal Act 1998, cls 46E and 46F of sch 1 - Local Government Act 1989 ss 81J(1)(b), 249.

ADMINISTRATIVE LAW - Appeal - Paragraph of County Court statement of claim seeking costs in VCAT struck out - Where basis for strike out is VCAT order as to costs - Effect of invalidity of VCAT's order and remitter of proceeding to VCAT - Whether utility in County Court proceeding - Application for leave to appeal refused.

1 These reasons deal with two applications for leave to appeal brought by Milvan Muto against the Shepparton City Council.

2 The first application relates to a decision made on 21 April 2017 by Keogh J in the Trial Division, in which he refused leave to the applicant to appeal against an order made on 15 April 2016 by the Victorian Civil and Administrative Tribunal ('VCAT').[1] That order ('VCAT order') was made on the application of the Council under cl 46F of sch 1 to the Victorian Civil and Administrative Tribunal Act 1998 ('VCAT Act'). The VCAT order provided that the Council was not required to pay the applicant's costs of a proceeding in which VCAT held, on 10 July 2013, that the applicant had engaged in serious misconduct in his capacity as a councillor of the Council ('serious misconduct proceeding'). That proceeding had been brought against the applicant by six councillors who had been authorised to do so by a Councillor Conduct Panel pursuant to s 81J(1)(b) of the Local Government Act 1989 ('LGA').

3 The second application relates to a decision made on 22 June 2017 by Judge Marks in a third party claim that the applicant had made against the Council in a County Court proceeding.[2] Relevantly, Judge Marks made an order striking out a paragraph of the applicant's statement of claim that sought indemnity for costs incurred by the applicant in the serious misconduct proceeding pursuant to cl 46F of sch 1 to the VCAT Act.

4 By way of brief overview, the legislative and factual background to the decisions of Keogh J and Judge Marks is as follows.

5 Clause 46F of sch 1 to the VCAT Act - which is in pt 13B of sch 1 - relevantly provides that a council is to bear the costs of a serious misconduct proceeding under s 81J(1)(b) of the LGA unless 'VCAT otherwise orders'. It was common ground that cl 46F of sch 1 to the VCAT Act meant that, unless VCAT otherwise ordered, a council must bear not only its own costs of such a proceeding but also the costs of the councillor who is the subject of the proceeding. In the present case, as the VCAT order 'otherwise ordered' for the purposes of cl 46F in relation to the serious misconduct proceeding against the applicant, he was required to pay his own costs of that proceeding.

6 Immediately prior to 1 March 2016, cl 46E(1) of sch 1 to the VCAT Act - which is also in pt 13B of sch 1 - required that VCAT be constituted for the purposes of a proceeding under s 81J(1)(b) of the LGA by at least two members ('pre-amendment cl 46E(1)'), as follows:

46E Constitution of [VCAT]

(1) [VCAT] is to be constituted for the purposes of proceedings under sections 30, 81D, 81E and 81J(1)(b) of the [LGA] by at least 2 members -

(a) one of whom is a senior member or presidential member and has been admitted to legal practice;

(b) one of whom is a person who has at least 5 years experience in local government governance matters.

7 With effect from 1 March 2016, s 95 of the Local Government Amendment (Improved Governance) Act 2015 ('Amending Act') amended cl 46E(1) of sch 1 to the VCAT Act by substituting 'sections 30 and 81E' for 'sections 30, 81D, 81E and 81J(1)(b)' ('post-amendment cl 46E(1)').[3] The effect of this amendment was that there was no longer a requirement that VCAT be constituted by at least two members for the purposes of a proceeding under s 81J(1)(b). VCAT could be constituted by a single member or otherwise as determined by the President of VCAT under s 64 of the VCAT Act.

8 Section 76 of the Amending Act inserted the following transitional provision in the LGA:

Transitional provision - Local Government Amendment (Improved Governance) Act 2015 - VCAT matters (by referral, on grounds of gross misconduct or for review)

(1) This section applies if, before the commencement day, an application -

...

(c) authorised by a Councillor Conduct Panel under section 81J(1)(b); or

...

has not been determined by VCAT.

(2) On and after the commencement day, VCAT must ... determine the application in accordance with -

...

(b) Part 13B of Schedule 1 to the [VCAT Act] -

as in force immediately before that day.

9 In 2013, the substantive serious misconduct proceeding was heard and determined by two members of VCAT - Senior Member Byard and Member McNamara - as required by pre-amendment cl 46E(1). However, the Council's application to VCAT for an order under cl 46F of sch 1 to the VCAT Act in respect of the costs of the serious misconduct proceeding was heard and determined by Senior Member Byard alone. Pre-amendment cl 46E(1) was in force when Senior Member Byard heard that application on 8 February 2016, but post-amendment cl 46E(1) was in force when he determined the application and made the VCAT order on 15 April 2016.

10 The applicant sought leave to appeal against the VCAT order on a number of grounds, one of which was that VCAT lacked jurisdiction to make the order because VCAT was not constituted by at least two members as required by pre-amendment cl 46E(1). Keogh J rejected that ground and all of the applicant's other grounds. In relation to the ground alleging that VCAT was not properly constituted, he held that post-amendment cl 46E(1) was in force when the 46F application was heard and determined.[4] Keogh J did not refer to the transitional provision in s 249 of the LGA.

11 On the hearing of his application for leave to appeal against the decision of Keogh J, the applicant confined his oral submissions to a single ground, namely, that Keogh J erred in rejecting the ground alleging that VCAT was not properly constituted. For the reasons that follow, I would grant the application for leave to appeal, allow the appeal and remit the proceeding to VCAT.

12 In his application for leave to appeal against the decision of Judge Marks, the applicant relied on a number of grounds. However, in his oral submissions, he contended that the outcome of the application would be determined by the outcome of the jurisdictional ground that was the subject of the application for leave to appeal against the decision of Keogh J. Although I have concluded that Keogh J erred in rejecting the jurisdictional ground, I would refuse the application for leave to appeal against the decision of Judge Marks on the basis that it would be futile to grant leave.

13 In November 2008, the applicant was elected as one of seven councillors to the Council. On 28 November 2011, allegations of 'gross misconduct' and 'serious misconduct' were made against him.

14 On 7 March 2012, the six other councillors were authorised by a Councillor Conduct Panel to commence the serious misconduct proceeding against the applicant pursuant to s 81J(1)(b) of the LGA.

15 The serious misconduct proceeding was heard by Senior Member Byard and Member McNamara on 6, 7 and 12 June 2013.[5] The applicant engaged Lewis Janover to act for him in the serious misconduct proceeding and certain other proceedings. However, that representation ended prior to the hearing of the serious misconduct proceeding and the applicant appeared in person for the majority of that hearing.

16 Judgment in the serious misconduct proceeding was delivered on 10 July 2013.[6] VCAT found that the applicant had engaged in serious misconduct and ordered that he be suspended from office as a councillor for six months and be ineligible to hold certain offices of the Council for four years. VCAT reserved the question of costs in relation to the serious misconduct proceeding.

17 On 14 November 2013, Mr Janover commenced a proceeding in the County Court to recover legal costs from the applicant. The applicant added the Council as a third party to that proceeding on 6 February 2014 ('County Court third party proceeding'). In his third party claim against the Council, the applicant sought that the Council indemnify him in respect of the legal costs incurred by him in the serious misconduct proceeding and certain other proceedings.

18 On 14 July 2014, Judge Lacava made an order requiring the Council to advise the County Court whether it would fund legal representation for the applicant to argue the County Court third party proceeding. The Council's solicitors sent a letter dated 21 July 2014 to the applicant ('Council's funding letter') which stated the following:

We advise that our client is prepared to fund legal representation for you to argue the Third Party proceeding (but for no other purpose), strictly subject to the following:

Our client will pay for the reasonable costs of a solicitor and junior counsel ('Your Representatives') to appear on your behalf only in regard to the determination of the Third Party proceeding;
Your Representatives will be selected and engaged on your behalf by our client, with their costs to be paid pursuant to the scale contained in Appendix A to the County Court Civil Procedure Rules 2008 - Effective 1.1.2014 to Date;
Despite being selected and engaged on your behalf by our client, Your Representatives shall act for you and not for our client, as if you had engaged them yourself, such that you are in fact their client;
In respect to payment of the costs of Your Representatives, our client shall be an 'associated third party payer' for the purposes of the Legal Profession Act 2004 (Vic); and
Our client's agreement to fund your costs of the determination of the Third Party proceeding as set out above is strictly without prejudice to our client's right to argue that it is not obliged to indemnify you in regard to this or any other legal proceeding (which it will in fact argue).

19 The applicant filed an amended statement of claim dated 19 June 2015 in the County Court third party proceeding. Paragraph 19 sought a declaratory order that the Council is obliged to indemnify him, pursuant to s 76 of the LGA, in relation to costs he incurred in the serious misconduct proceeding and certain other proceedings, including costs payable to Mr Janover. That section relevantly provides:

A Council must indemnify and keep indemnified each Councillor ... against all actions or claims (whether arising during or after the term of office ... of that Councillor ...) in respect of any act or thing done or omitted to be done in good faith in the exercise or purported exercise of any function or power conferred on the ... Councillor ... by or under this or any other Act.

20 Paragraph 20 of the amended statement of claim sought a declaratory order that the Council is obliged to bear the applicant's costs of the serious misconduct proceeding pursuant to cl 46F of sch 1 to the VCAT Act as follows:

Further, or alternatively, to the extent that the [applicant's] costs of the serious misconduct proceeding were incurred, the [Council] is obliged to bear them pursuant to Cl. 46F, Schedule 1 to the [VCAT Act].

21 On 26 and 27 October 2015, Judge Anderson heard argument in the County Court third party proceeding about the applicant's claim for an indemnity pursuant to s 76 of the LGA as a preliminary matter. On 18 November 2015, he ordered that the applicant's third party claim against the Council be struck out insofar as it relied on an indemnity under s 76 of the LGA.[7]

22 On 18 November 2015, Judge Anderson also made an order which required that the applicant and the Council consult about:

(a) whether the Council should make an application to VCAT under cl 46F of sch 1 to the VCAT Act for an order that it not be required to bear the applicant's costs of the serious misconduct proceeding; and

(b) whether the Council's foreshadowed application to strike out or dismiss the County Court third party proceeding should be deferred until after the Council decided whether to make an application under cl 46F.[8]

Council's application for an order under cl 46F of the VCAT Act

23 On 24 November 2015, the Council applied to VCAT under cl 46F of sch 1 to the VCAT Act for an order that VCAT 'otherwise order', the effect of which would be that the Council would not be liable to pay the applicant's costs of the serious misconduct proceeding ('46F application'). The 46F application was made in the serious misconduct proceeding.[9]

24 The 46F application was heard on 8 February 2016. At that time, pre-amendment cl 46E(1) required that VCAT be constituted by at least two members. Notwithstanding this, the application was heard by Senior Member Byard sitting alone. The applicant appeared in person. Relevantly, at that hearing:

(a) the applicant sought an adjournment on the grounds that he received inadequate notice of the hearing, did not know the purpose of the hearing, and had been deprived of the opportunity to properly prepare for it;

(b) Senior Member Byard refused to grant an adjournment; and

25 On 15 April 2016, when post-amendment cl 46E(1) was in force, Senior Member Byard delivered judgment on the 46F application.[10] The VCAT order which he made on that day was in the following terms:

Pursuant to Clause 46F of Schedule 1 of the [VCAT Act] ... the [Council] is not required under that clause to pay or indemnify [the applicant] for his costs in relation to [the serious misconduct] proceeding ... after 4 June 2012.

Further developments in the County Court third party proceeding

26 On 27 May 2016, Judge Anderson made orders which:

(a) granted leave to Mr Janover to discontinue his proceeding against the applicant;[11]

(b) struck out para 20 of the applicant's amended statement of claim dated 19 June 2015; and

27 The applicant filed a further amended statement of claim dated 30 May 2016, which included amendments but retained para 20.

28 Further developments in the County Court third party proceeding are discussed below under the heading 'Decision of Judge Marks'.

29 The applicant applied to the Trial Division for leave to appeal against the VCAT order on the following proposed grounds:

(a) He was denied procedural fairness as a result of Senior Member Byard's refusal of his application for an adjournment.

(b) The jurisdictional ground referred to at [10] above.

(d) VCAT had failed to properly construe and apply cl 46F of sch 1 to the VCAT Act.

(e) The VCAT order was infected by error because the 46F application was made without proper authority from the Council.

30 That application was heard by Keogh J on 23 and 24 November 2016. The applicant appeared in person. The Council tendered an affidavit from Robert Crow, a solicitor engaged by the Council who instructed counsel before Keogh J. In the affidavit, Mr Crow stated that he commenced the 46F application on instructions from the Council's CEO and he exhibited to the affidavit instruments of delegation from the Council to the CEO. The applicant asked to be allowed to cross-examine Mr Crow, however he was not present in Court at that time. The applicant did not renew his request despite Mr Crow instructing at the Bar table throughout the second day of the hearing.

31 As I have already stated, on 21 April 2017, Keogh J refused the applicant leave to appeal against the VCAT order.

32 Keogh J rejected all of the applicant's proposed grounds of appeal. As the applicant's oral submissions before the Court of Appeal sought to challenge only Keogh J's rejection of the jurisdictional ground, I will confine my discussion to his reasons for rejecting that ground.

33 Keogh J concluded that the 46F application was made as part of the serious misconduct proceeding under s 81J(1)(b) of the LGA and therefore cl 46E(1) of sch 1 to the VCAT Act applied.[12] However, he found that Senior Member Byard had jurisdiction to decide the 46F application sitting alone because, by the time the 46F application was heard and determined, the requirement that VCAT be constituted by two members no longer applied.[13]

34 Keogh J stated three reasons for rejecting the jurisdictional ground. First, by virtue of the Amending Act, pre-amendment cl 46E(1) no longer applied to a serious misconduct proceeding under s 81J(1)(b) of the LGA and therefore VCAT could be constituted by a single member in accordance with s 64 of the VCAT Act.[14] Secondly, there was no transitional provision in the Amending Act and, absent such a provision, it was not possible to conclude that Parliament's intention was for pre-amendment cl 46E(1) to apply to all proceedings issued but not completed prior to 1 March 2016.[15] Thirdly, the amendment to cl 46E(1) applied retrospectively because it did not alter any rights or obligations of the parties that existed prior to 1 March 2016 and did not create, modify or abolish substantive rights. Keogh J stated that the parties' right to have VCAT determine an application under cl 46F had not been modified, only the composition of VCAT when deciding that application.[16]

35 The County Court third party proceeding was heard between 6 and 17 February 2017. The applicant appeared in person. One of the issues at trial was whether the applicant could rely on para 20 of his further amended statement of claim as that paragraph, when it appeared in the applicant's amended statement of claim, had been struck out by Judge Anderson on 27 May 2016. Another issue at trial was the meaning and scope of the Council's funding letter referred to at [18] above.

36 On 14 February 2017, the seventh day of the trial, the applicant made an application that Judge Marks recuse herself on grounds of apprehended and actual bias. Judge Marks refused to recuse herself. She held that none of the matters raised by the applicant, either singularly or cumulatively, were sufficient to establish either actual or apprehended bias as required by the relevant authorities.[17]

37 Judge Marks found that Judge Anderson had struck out para 20 of the applicant's amended statement of claim because the VCAT order had dealt with the 46F application.[18] She concluded that, as VCAT had considered the 46F application and dealt with the question of whether the Council was obliged to pay the applicant's costs of the serious misconduct proceeding, there was no basis for para 20 to be retained in the further amended statement of claim.[19] Accordingly, she ordered that para 20 be struck out of the further amended statement of claim.

38 Judge Marks found that Judge Anderson had intended to strike out para 20 in its entirety, and that it remained in the applicant's further amended statement of claim because it was not brought to Judge Anderson's attention. She stated that, had it been necessary, she would have made an order under the slip rule amending Judge Anderson's order to make it clear that the applicant did not have leave to rely on para 20.[20] However, no order was made under the slip rule.

39 Judge Marks concluded that the only extant issue in the County Court third party proceeding was whether the Council's funding letter contractually obligated the Council to fund legal representation for the applicant for that proceeding. She found that the letter did not give rise to any such obligation.[21] On 22 June 2017, she ordered that there be judgment for the Council against the applicant in the County Court third party proceeding.

40 The applicant's proposed grounds of appeal against the decision of Keogh J are as follows:

His Honour's finding that VCAT was properly constituted when it heard the ... cl 46F application is incorrect because it is based on the application of amending legislation, which had not commenced at the date of the hearing.
His Honour incorrectly construed or applied cl 46F of Schedule 1 to the VCAT Act, and in doing so considered irrelevant matters.
When finding that the VCAT correctly refused to adjourn the ... cl 46F application, his Honour took into consideration irrelevant matters and did not consider relevant matters that [the applicant] was denied procedural fairness.
In concluding that Mr Crow had the necessary authority to make the ... cl 46F application ... his Honour relied on evidence that the applicant was not given an opportunity to challenge.

41 At noted at [11] above, at the hearing of the application for leave to appeal, senior counsel for the applicant - who, with junior counsel, commendably appeared pro bono pursuant to the Victorian Bar Duty Barristers' Scheme - elected to make submissions only on the applicant's proposed ground 1 ('jurisdictional ground'). He did not abandon proposed grounds 2-4, but accepted that the inevitable consequence of that election was that those grounds would fail.

42 The applicant required an extension of time within which to bring his application for leave to appeal against the decision of Judge Marks. As the application for an extension of time was not opposed by the Council, it was granted. That application for leave to appeal relied on eight proposed grounds of appeal which the applicant had personally drafted. However, at the hearing of the application for leave to appeal, his senior counsel sought, and was granted, leave to amend the proposed grounds. The amended proposed grounds are as follows:

1.1 Whether her Honour erred by striking out paragraph 20 of the Further Amended Statement of Claim.

Her Honour held (at [42]) that paragraph 20 of the [further amended statement of claim] ... would be struck out as there was no longer any basis for a 's 46F claim' to be raised in the County Court proceedings as the s 46F issue had been dealt with by [VCAT] (and subsequently by the Supreme Court on appeal from [VCAT]; see Muto v Shepparton City Council [2017] VSC 210).

1.2 Whether her Honour erred by failing to provide adequate reasons for striking out paragraph 20 of the Further Amended Statement of Claim.

1.3 Whether her Honour erred by finding that it was open to the Court to amend previous orders of the Court by the slip rule.

Although her Honour did not in fact do so, her Honour held (at [43]) it was open to the Court to rely on the slip rule to amend Order 4 of the orders of Judge Anderson made 27 May 2016 ... granting leave to [the applicant] to file the Proposed [further amended statement of claim] ... dated 18 May 2016.

2.1 Whether her Honour's decision was vitiated by actual bias.

The applicant ... refers to pages 156, 166 and 167 of the transcript (7 February 2017, day 2 of the trial).

2.2 Whether her Honour's decision was vitiated by apprehended bias.

The applicant ... refers to pages 156, 166 and 167 of the transcript (7 February 2017, day 2 of the trial).

2.3 Whether her Honour denied the applicant ... procedural fairness by failing to permit him to cross-examine a witness.

Her Honour (at [90]) refused to [give] the applicant ... an opportunity to cross-examine the author of the letter which the applicant ... contends forms a contract between the parties ...

[Abandoned]
[Abandoned]
Whether her Honour erred by making orders beyond the power of the Court.

Whether her Honour erred by [making] orders on the Court's own motion.
[Abandoned].

43 At the hearing of the applications for leave to appeal, senior counsel for the applicant conceded that, if the applicant fails on the jurisdictional ground and the VCAT order remains extant, his application for leave to appeal against the decision of Judge Marks must fail. However, in further written submissions, it was contended that the outcome of, and any relief in, the application for leave to appeal against the decision of Keogh J cannot have any bearing on the outcome or relief in the application for leave to appeal against the decision of Judge Marks.

44 In the course of the Council's oral submissions, the Bench noted that the Council had not filed a notice of contention in respect of Keogh J's finding that the 46F application formed part of the serious misconduct proceeding under s 81J(1)(b) of the LGA, rather than being a separate proceeding. Despite being given an opportunity to apply for leave to file such a notice, the Council declined to do so.

45 After the hearing of the applications for leave to appeal, and notwithstanding that he was represented by counsel, the applicant sent an email to the registry of the Court of Appeal setting out further submissions. At the direction of the Bench, the registry wrote to the applicant to inform him that submissions made after the hearing would only be considered if they were filed with leave. As the applicant did not seek such leave, his email was not considered by the Bench.

46 As the jurisdictional ground in the application for leave to appeal against the decision of Keogh J is central to the outcome of that application and the application for leave to appeal against the decision of Judge Marks, I will discuss it first.

47 A statutory requirement that a court or tribunal be constituted in a particular manner for a specified class of proceeding is, generally speaking, jurisdictional in nature.[22] Where this general principles applies, if the court or tribunal in question is not constituted in the prescribed manner, it lacks jurisdiction in relation to that class of proceeding and any order that it purports to make is invalid.[23] This is because the statutory requirement is not a matter of procedure but relates fundamentally to the constitution of the decision-making body itself.[24]

48 Where a statute confers jurisdiction on a court or tribunal to hear and determine a particular type of proceeding, the court or tribunal must be constituted in the prescribed manner for both the hearing and determination of such a proceeding.[25] This is because, in such a case, the court or tribunal does not have jurisdiction to hear the proceeding without determining it (unless the proceeding is discontinued prior to its determination) or to determine the proceeding without conducting a hearing.[26] In other words, the jurisdiction to hear and determine the proceeding is part of a single adjudicative process and cannot be bifurcated.

49 There are good reasons for this principle. The proceeding cannot be determined as an isolated act. The determination must be informed by the evidence adduced, and the submissions made, by the parties during the hearing. Likewise, the hearing of the proceeding is not an end in itself but is part of the process of making a determination. Further, the court or tribunal may, during the hearing, make rulings - such as rulings on the admission or exclusion of evidence - which may have a decisive impact on the final determination of the parties' substantive rights. Thus, it needs to be properly constituted when making such rulings.

50 In order to comply with a statutory requirement that prescribes the manner in which a court or tribunal is to be constituted to hear and determine a proceeding, the court or tribunal must be properly convened from the commencement of the hearing. The parties must be given notice of the hearing and the hearing must be conducted according to law. Where, for the purposes of a proceeding, a court or tribunal is not constituted in the prescribed manner when it hears that proceeding, ordinarily it will not have jurisdiction to determine the proceeding even if, at the time of the determination, it is constituted in the prescribed manner. This is so unless the relevant statute expressly or impliedly provides to the contrary.[27]

51 Where a properly constituted court or tribunal determines a proceeding and adjourns or reserves the issue of costs of the proceeding, a question arises as to whether the costs issue can be determined by that court or tribunal differently constituted. In Orr v Holmes,[28] the Full Court of the Supreme Court of Queensland upheld an appeal, ordered a new trial and adjourned the question of costs. A costs order was subsequently made by a differently constituted Full Court because one of the judges who was a member of the Full Court when the adjournment order was made had died in the intervening period. Dixon J stated:

An order had been pronounced upon the appeal or application for a new trial. The order which was drawn up included a specific provision adjourning or reserving the question of costs and so treating it as a distinct matter. The case is not one of the death of a judge before the hearing and determination of a proceeding are concluded by a court of which he is a necessary member. The order had disposed of the proceeding before the court and, as a matter of jurisdiction, the Supreme Court constituted as a Full Court in any manner might hear and determine the question of costs adjourned or reserved. No doubt as a matter of convenience the court would not be differently constituted to deal with costs that are adjourned or reserved, if it could be avoided. But that consideration does not affect jurisdiction.[29]

52 An amending Act will not be construed as operating retrospectively to change rights and obligations that existed prior to the amendment, without a clear statement to the contrary. The intention for an amendment to operate retrospectively must appear with 'reasonable certainty' before the legislation will be understood to affect rights or liabilities already in existence.[30] However, the presumption against retrospectivity arises only when an amendment, if it were read to operate retrospectively, would impinge upon rights or duties already accrued.

53 The presumption against retrospectivity is reflected in s 14(2) of the Interpretation of Legislation Act 1984, which provides that when a provision of an Act is amended, the amendment shall not, unless the contrary intention expressly appears, affect any right, privilege, obligation or liability acquired, accrued or incurred under that Act or provision.

54 Whether the requisite intention to rebut the presumption against retrospectivity exists in an amending Act will depend on the circumstances of the particular case and the words of the relevant statute. The strength of the presumption against retrospectivity will also depend on the nature and degree of injustice that would result if the statute were to operate retrospectively.[31] Self-evidently, one form that an intention to rebut the presumption against retrospectivity may take is an express transitional provision which states that provisions of the amending Act are to apply to rights or obligations that have already accrued.

55 The presumption against retrospectivity does not apply to provisions which are procedural in the sense that they do not affect pre-existing substantive rights or liabilities.[32] Relevantly, provisions that govern the mode or conduct of court proceedings are procedural for the purpose of the presumption against retrospectivity.[33] Amendments relating to the power to award costs have been found to be procedural in nature, rather than substantive, where no injustice is caused.[34]

56 The applicant submitted that Keogh J erred in finding that VCAT had jurisdiction to make the VCAT order, as he had erroneously applied post-amendment cl 46E(1) when making that finding. The applicant contended that post-amendment cl 46E(1) was not yet in effect at the relevant time, namely when VCAT was constituted for the 46F application. Accordingly, so it was said, the 46F application was required to be heard by two members in accordance with pre-amendment cl 46E(1).

57 The applicant argued that Senior Member Byard did not have jurisdiction to hear or decide the 46F application sitting alone. This was said to be because VCAT was not constituted for the hearing of that application in accordance with pre-amendment cl 46E which was in effect when VCAT was constituted prior to, and for, the hearing on 8 February 2016. The applicant further contended that, if VCAT was invalidly constituted at the time of the hearing, it must follow that anything that VCAT did leading up to, and informing the VCAT order was also invalid. Accordingly, so it was said, the VCAT order was invalid.

58 The applicant submitted that the commencement of the Amending Act before the VCAT order was made could not retrospectively validate the constitution of VCAT at the hearing of the 46F application. He contended that there was no express provision in the Amending Act which stated that it could operate to retrospectively validate the hearing of the 46F application by one member only. He argued that this absence, in conjunction with s 14(2) of the Interpretation of Legislation Act 1984, militated against an interpretation of s 95 of the Amending Act as retrospectively regularising the hearing of the 46F application. He further argued that, to the contrary, it can be implied from the transitional provision in s 249 of the LGA[35] that it was the intention of Parliament that the Amending Act have no retrospective operation.

59 At the hearing of the application for leave to appeal, the applicant contended that the removal of the requirement that proceedings pursuant to s 81J(1)(b) of the LGA be heard by two members by the Amending Act was not merely a procedural right, but a substantive one as it went to the jurisdiction of VCAT. However, in his further written submissions, he resiled from this position.[36]

60 The applicant submitted that, due to the erroneous decision of Keogh J and the invalid VCAT order, there must be a re-hearing of the 46F application. He contended that VCAT should be constituted for that hearing by two members. That was said to be because s 249 of the LGA provides that, if an application is authorised by a Councillor Conduct Panel under s 81J(1)(b) of the LGA before the commencement of the Amending Act, and it is not determined prior to that commencement, that application must be determined in accordance with pre-amendment cl 46E(1).

61 The Council submitted that the appropriate time for considering whether VCAT was properly constituted was when it made the VCAT order, rather than when it heard the 46F application. Accordingly, so it was said, the VCAT order is valid because, when VCAT exercised its power to make that order, it was properly constituted in accordance with post-amendment cl 46E(1) which was then in effect. The Council relied on the principles in Project Blue Sky Inc v Australian Broadcasting Authority[37] in support of its submission that, even if pre-amendment cl 46E(1) applied, the fact that the requirements of the clause were not satisfied did not necessarily mean that the VCAT order was invalid. It contended that pre-amendment cl 46E(1) ought to be construed as procedural and that, as the subject matter of the VCAT order was costs and the consequences for the parties of holding the order invalid would be significant and out of proportion to any prejudice flowing from non-compliance with pre-amendment of 46E(1), it could not have been a purpose of pre-amendment cl 46(1) that non-compliance with it would invalidate the VCAT order.

62 The Council further submitted that, as VCAT was not exercising significant powers by making the VCAT order, if it was not properly constituted when it heard the 46F application, such an error was not sufficiently serious to invalidate that order.[38]

63 The Council argued that, as Senior Member Byard was qualified to make a decision on the question of costs - as distinct from the substantive issue of serious misconduct which required expertise in matters of local government - on its proper construction cl 46E(1) of sch 1 to the VCAT Act did not require any higher procedural safeguards for parties affected by decisions made under cl 46F than that of a member sitting alone. The Council contended that the applicant had lost no substantive right nor suffered any injustice by VCAT being constituted by only Senior Member Byard on the question of costs, which amounted to a procedural error only.[39]

64 The Council relied on Orr[40] for the proposition that, as Senior Member Byard and Member McNamara had reserved the question of costs of the serious misconduct proceeding, that question was a 'distinct matter' which could be determined by VCAT differently constituted.

65 The Council contended that the transitional provision in s 249 of the LGA did not operate to cause pre-amendment cl 46E(1) to apply to the hearing of the 46F application. It submitted that, although the Councillor Conduct Panel had authorised the six councillors to make an application under s 81J(1)(b) of the LGA prior to 1 March 2016, that substantive proceeding had been 'determined' for the purposes of s 249 of the LGA on 10 July 2013 when VCAT had made its substantive findings. Further, it argued that the costs of the application had, in effect, been determined on that day because cl 46F of sch 1 to the VCAT Act dealt with the issue of costs by providing that, in the ordinary course, the Council bears the costs of proceedings under s 81J(1)(b) of the LGA. The Council noted that it made its 46F application after 10 July 2013.

66 According to the Council, even if the substantive proceeding had not been 'determined' for the purposes of s 249 of the LGA, the 46F application was not a proceeding under s 81J(1)(b) of the LGA. Rather, it was said to be ancillary to such a proceeding and was made under cl 46F of sch 1 to the VCAT Act. The Council submitted that, in those circumstances, VCAT's jurisdiction to hear the 46F application was not derived from s 81J(1)(b) and therefore s 249 of the LGA did not have the effect that the application was governed by pre-amendment cl 46E(1). Accordingly, so it was said, s 249 of LGA does not apply to the 46F application.

67 Without conceding that the VCAT order is invalid, the Council submitted that, if it were, this Court ought to determine the 46F application in the exercise of its power under s 148(7)(b) of the VCAT Act. That section provides that, on an appeal to the Supreme Court from an order of VCAT, the Court may make 'an order that [VCAT] could have made in the proceeding'.

68 The Council contended that this Court has all relevant factual matters before it to determine the 46F application, as they appear in VCAT's reasons and are not subject to challenge. It argued that remittal of the application to VCAT would be futile as it is 'fanciful' to suppose that a different decision would be made, regardless of how VCAT is constituted.

69 In my opinion, the jurisdictional ground is made out.

70 As will be seen, some of the Council's submissions cannot be accepted because they are inconsistent with Keogh J's finding, set out at [33] above, that the 46F application formed part of the serious misconduct proceeding. The Council has not sought to challenge this finding despite being given an opportunity by this Court to do so. In the absence of a notice of contention, the correctness of that finding was not before this Court and our analysis must necessarily proceed on the assumption that the finding was correct.

71 In accordance with the principles summarised at [47]-[50] above, the requirement in pre-amendment cl 46E(1) that, 'for the purposes of proceedings under [s 81J(1)(b)] of the [LGA]', VCAT must be constituted by at least two members with the requisite qualifications, was jurisdictional in nature. As VCAT could not determine the 46F application without first[41]onducting a hearing,41 that requirement applied for the hearing and determination of the 46F application. As VCAT was not constituted in accordance with pre-amendment cl 46E(1) at the time of the hearing of the 46F application, no hearing according to law took place and therefore the VCAT order is invalid.

72 I do not accept the Council's submission that the principles in Project Blue Sky need to be considered to determine whether an order made by VCAT constituted otherwise than as required by pre-amendment cl 46E(1) is invalid. That is because the cases I have cited in support of the principles summarised at [47]-[50] above establish that requirements about the constitution of a court or tribunal are jurisdictional in nature and it is a fundamental principle that an order made by a court or tribunal with no power to do so is invalid.

73 I also do not accept the Council's submission that the fact that the subject matter of the VCAT order was costs - which were said to be procedural in nature and of less significance than rights which were substantive - was relevant to whether non-compliance with pre-amendment cl 46E(1) rendered that order invalid. Keogh J's finding that the 46F application formed part of the serious misconduct proceeding meant that the 46F application was 'for the purposes of proceedings under [s 81J(1)(b)] of the [LGA]' and thus engaged the jurisdictional requirements of pre-amendment cl 46E(1) for the constitution of VCAT. As the Council did not challenge Keogh J's finding, it was not open to it to contend that the 46F application did not engage those requirements.[42]

74 In my opinion, Orr does not assist the Council. That case dealt with a change in the judges who comprised the Full Court of Queensland for the purposes of determining a costs issue following the unavailability of one of the judges who was a member of the Full Court when it determined the substantive issue. The question of costs was determined by the Full Court rather than, for example, by a single judge sitting as a trial judge. In the present case, it is not clear why Member McNamara did not participate in the 46F application. Consistently with Orr, if he was unavailable, a different member with the qualifications required by pre-amendment cl 46E(1) could have adjudicated the costs issue with Senior Member Byard. However, nothing that was said in Orr supports the validity of the VCAT order which was made otherwise than by at least two members of VCAT with the qualifications set out in pre-amendment cl 46E(1).

75 As stated at [33] above, Keogh J concluded that post-amendment cl 46E(1) was in force at the time VCAT heard and determined the 46F application. This conclusion was wrong. Post-amendment cl 46E(1) commenced on 1 March 2016, well after the VCAT hearing on 8 February 2016. Keogh J was also in error in stating that the Amending Act did not contain a relevant transitional[43]rovision.43 The transitional provision in s 249 of the LGA (which was inserted by s 76 of the Amending Act) clearly provides that, where a proceeding under s 81J(1)(b) of the LGA has not been determined by VCAT as at 1 March 2016, pre-amendment cl 46E(1) continues to apply to that proceeding. For the reasons set out at [70] and [73] above, it is not open to the Council to contend that the serious misconduct proceeding had been determined prior to 1 March 2016 and that the 46F application was a separate or ancillary proceeding which did not form part of the serious misconduct proceeding.

76 In the absence of the transitional provision in s 249 of the LGA, the issue of whether the amendment to cl 46E(1) on 1 March 2016 could have applied retrospectively to regularise the hearing of the 46F application which did not comply with pre-amendment cl 46E(1) would have arisen. This issue does not arise because s 249 leaves no room for post-amendment cl 46E(1) to apply retrospectively. Similarly, in the light of Keogh J's unimpugned finding that the 46F application was part of the serious misconduct proceeding, the fact that the subject matter of the application is procedural in nature (costs) cannot prevent the transitional provision from operating according to its terms.

77 I agree with the applicant's submission that, as the VCAT order is invalid, it should be set aside. I reject the Council's submission that this Court should itself determine the 46F application in accordance with s 148(7)(b) of the VCAT Act rather than remitting the proceeding to VCAT. As the transitional provision in s 249 of the LGA preserves pre-amendment cl 46E(1), the 46F application must be heard and determined by at least two members of VCAT with the requisite qualifications. The members of this Court who have heard the applications for leave to appeal do not possess the second of those qualifications, namely, at least five years' experience in local government governance matters. Accordingly, even if it were otherwise appropriate for this Court to determine the 46F application, it would defeat the purpose underlying the prescription of those qualifications for this Court to determine the application.

78 I also reject the Council's submission that remittal of the 46F application to VCAT would be futile because it is inevitable that the application will be decided in the same manner irrespective of how VCAT is constituted. This is not a case where only one outcome is possible. Upon remittal, VCAT must hear and determine the 46F application according to law. It is not a matter for this Court to pre-empt the outcome of VCAT's deliberations.

79 For the above reasons, I would: grant the application for leave to appeal against the decision of Keogh J; allow the appeal; set aside Keogh J's orders and, in the place of those orders, make orders to the following effect:

(a) the application for leave to appeal against the VCAT order is granted;

(d) the 46F application is remitted to VCAT - constituted by at least two members as required by pre-amendment 46E(1) - to be heard and determined according to law; and

(e) Senior Member Byard must not be one of those members.

80 The precise form of these orders and any additional orders, such as those dealing with costs, will be matters for further submissions from the parties.

Decision of Judge Marks - Striking out of para 20 of statement of claim

81 The applicant noted that the basis of Judge Marks's decision to strike out para 20 of his further amendment statement of claim was that the issue of his indemnification from the Council for the costs of the serious misconduct proceeding had been dealt with by the VCAT order. He submitted that, if this Court determines that the VCAT order is invalid, it would follow that Judge Marks fell into error by striking out that paragraph. Thus, so it was said, in that event, his proposed ground 1.1 must be upheld.

82 The applicant conceded that, as none of his proposed grounds of appeal sought to impugn Judge Marks's decision in relation to the Council's funding letter, proposed ground 2.3, which alleged that Judge Marks had denied him procedural fairness by failing to permit him to cross-examine the author of that letter, could not proceed.

83 The applicant did not make any oral submissions in support of the remaining extant proposed grounds, namely, 1.2, 1.3, 2.1, 2.2, 5 and 7.

84 The Council submitted that, if the VCAT order is invalid, then the applicant's claim under cl 46F of sch 1 to the VCAT Act in the County Court third party proceeding remained a live issue. However, it contended that regardless of whether the VCAT order is valid, there would be no utility in para 20 being reinstated in the applicant's further amended statement of claim as no consequences arose from it having been struck out. The Council argued that, if the VCAT order was determined to be valid or remade after remittal to VCAT, para 20 would have no utility because the issue of the applicant's cl 46F claim would have been dealt with by VCAT. In the alternative, the Council argued, if the VCAT order was determined to be invalid (or the order were not remade after remittal), then para 20 would still have no utility as the Council would then be required to bear the applicant's costs of the serious misconduct proceeding, which is the ordinary position if VCAT does not 'otherwise order' under cl 46F of sch 1 to the VCAT Act.

85 The Council submitted that Judge Marks was correct to strike out para 20 of the applicant's further amended statement of claim because that issue had been dealt with by VCAT by way of the VCAT order. However, the Council contended that even if Judge Marks was not correct in striking out para 20, she had indicated in her reasons that if she was not correct to do so, she would have amended Judge Anderson's order dated 27 May 2016 in a manner that did not permit the applicant to proceed with para 20.

86 The Council further contended that, even if Judge Marks would have erred if she had applied the slip rule in that manner, as a matter of relief, the consequence of the VCAT order being invalid would be that the County Court third party proceeding would return to the position it was in at the time that Judge Anderson struck out the applicant's claim under s 76 of the LGA on 18 November 2015. That position, the Council argued, was that only the cl 46F claim was outstanding, which claim was effectively on hold pending VCAT's decision on the 46F application.

87 The applicant's submissions have correctly acknowledged that there is overlap between the 46F application and the County Court third party proceeding. The applicant desires the same outcome from the application and the proceeding, namely, that the Council pay his costs of the serious misconduct proceeding.

88 There is no ongoing challenge by the applicant to the County Court's dismissal of his claim for indemnity under s 76 of the LGA or his contractual claim based on the Council's funding letter. The only extant dispute relates to the applicant's claim for indemnity under cl 46F of sch 1 to the VCAT Act in accordance with para 20 of his further amended statement of claim. Judge Anderson struck out that paragraph as it appeared in the applicant's amended statement of claim after the VCAT order was made. It was understandable that he did so because the entitlement of the applicant to indemnity under cl 46F had been determined adversely to him by VCAT and, unless and until the VCAT order was successfully challenged on appeal, it would continue to govern the legal position between the parties. It was also understandable that Judge Marks struck out para 20 as it appeared in the applicant's further amended statement of claim. This was because the VCAT order continued to govern the legal position between the parties after the challenge to the validity of the order before Keogh J was unsuccessful.

89 As I have concluded that the VCAT order is invalid, the legal and factual basis on which Judge Marks struck out para 20 of the applicant's further amended statement of claim was erroneous. It follows that the applicant has a real prospect of success in relation to proposed ground 1.1 of his application for leave to appeal.

90 However, that does not necessarily mean that leave to appeal should be granted. This Court has a discretion to refuse leave to appeal notwithstanding that the appeal has a real prospect of success where no substantial injustice would be caused, such as where granting leave would be futile.[44] In the present case, it would be futile to grant leave.

91 Paragraph 20 as it originally appeared in the applicant's amended statement of claim, and as it subsequently appeared in his further amended statement of claim, was foredoomed to failure insofar as it sought indemnity under cl 46F of sch 1 to the VCAT Act. This is because, according to its terms, that clause imposed a legal obligation on the Council to pay the applicant's costs of the serious misconduct proceeding subject to the power of VCAT to extinguish that obligation by 'otherwise ordering'. The County Court at no time had any power to change the obligation of the Council or the rights of the applicant under cl 46F. An order by the County Court that the Council pay the applicant's costs of the serious misconduct proceeding would not confer on the applicant any rights he did not already have under cl 46F. More importantly, it could not prevent VCAT, on application of the Council, from 'otherwise ordering' and thereby negating the Council's obligation to pay the applicant's costs.

92 If the Council fails to persuade VCAT to 'otherwise order', the applicant will be entitled to his costs of the serious misconduct proceeding and there would be no point in pursuing the County Court third party proceeding. If the Council persuades VCAT to 'otherwise order', the factual and legal basis upon which Judge Marks struck out para 20 of the applicant's further amended statement of claim will be vindicated.

93 It follows that no useful purpose can be achieved by setting aside the decision of Judge Marks to strike out para 20 of the applicant's further amended statement of claim and thereby permitting the applicant to pursue his claim for indemnity under cl 46F of sch 1 to the VCAT Act in accordance with that paragraph. This is especially so in the light of the fact that the Council's 46F application will be before VCAT pursuant to the remitter from this Court.

94 Even if the applicant's claim in the County Court under cl 46F had some

utility, it would be contrary to the public interest for there to be two proceedings in relation to the same subject matter before two separate forums. VCAT is clearly the most appropriate forum because it decided the serious misconduct proceeding and the subject matter of the applicant's claim relates to the costs of that proceeding. Moreover, in accordance with pre-amendment cl 46E(1), VCAT will be constituted by at least two members with the qualifications set out in that clause.

95 For the above reasons, I would refuse the application for leave to appeal against the decision of Judge Marks.

96 For the reasons that follow, I agree with Kyrou JA's conclusion that the Victorian Civil and Administrative Tribunal ('the Tribunal') was improperly constituted for the hearing and determination of the respondent's application that it not pay the applicant's costs of the proceeding. As a result, the Tribunal's purported decision was made without jurisdiction and must be set aside. My reasons differ somewhat from those of Kyrou JA but I will seek to avoid unnecessary repetition.

97 Under div 1B of pt 4 of the Local Government Act 1989 ('the LGA') provision is made for a Councillor Conduct Panel formed under div 1D to deal with allegations of misconduct or serious misconduct (as defined) on the part of a councillor. Until 1 March 2016, a Councillor Conduct Panel could make a finding of misconduct, but not a finding of serious misconduct. If the Panel considered that there were reasonable grounds on which the Tribunal might make a finding of serious misconduct, it could instead authorise an applicant to apply to the Tribunal. Section 81J of the LGA relevantly provided:

(1) After a Councillor Conduct Panel has conducted a hearing, the Panel may -

(a) make a finding of misconduct against a Councillor; or

(b) authorise an applicant to make an application to VCAT if the Panel considers that there are reasonable grounds on which VCAT may make a finding of serious misconduct against a

Councillor; or

(c) whether or not a finding of misconduct against a Councillor has been made, make a finding that remedial action is required; or

(d) in addition to any findings made under paragraphs (a) to (c), direct that the Council amend its Councillor Code of Conduct in a particular way or to address a particular issue; or

(e) dismiss the application.

Section 81K of the LGA then provided for the Tribunal to make findings and orders in the case of an application commenced in the Tribunal after an authorisation under s 81J(1)(b).

98 Section 81Q of the LGA also provided for review by the Tribunal of a Panel decision (but not of a decision under s 81J(1)(b)).

99 Ordinarily, the Tribunal is constituted in the manner determined by the President of the Tribunal: Victorian Civil and Administrative Tribunal Act 1998 ('the VCAT Act'), s 64(3). However, s 58 of the VCAT Act provides for sch 1 to the Act to set out variations from the ordinary procedure. In that regard, again before 1 March 2016, pt 13B of sch 1 set out two variations for certain proceedings under the LGA.[45] The first, in cl 46E, related to the constitution of the Tribunal. It was in the following terms:

(1) The Tribunal is to be constituted for the purposes of proceedings under sections 30, 81D, 81E and 81J(1)(b) of the Local Government Act 1989 by at least 2 members -

(a) one of whom is a senior member or presidential member and has been admitted to legal practice;

(b) one of whom is a person who has at least 5 years' experience in local government governance matters.

(2) The Tribunal is to be constituted for the purposes of proceedings for review of a decision made by a Councillor Conduct Panel under section 81Q of the Local Government Act 1989 by a senior member or presidential member who has been admitted to legal practice sitting alone.

100 The second variation, in cl 46F, made provision regarding costs of the proceedings, being by implication the proceedings mentioned in cl 46E.[46] Clause 46F stated:

(1) Despite section 109, the Council must bear the costs of the proceedings if -

(a) the Council is a party to a proceeding referred to VCAT[47] under section 81J(1)(b) of the Local Government Act 1989; or

(b) the Council applies to VCAT for review under section 81Q(2) of the Local Government Act 1989.

(2) The Council is not required to bear the costs of the proceedings under subclause (1) if VCAT otherwise orders.

101 The scheme changed fundamentally with effect from 1 March 2016, with the commencement of relevant provisions of the Local Government Amendment (Improved Governance) Act 2015. In particular, instead of being empowered only to authorise an application to the Tribunal in respect of serious misconduct, a Councillor Conduct Panel may now hear such an application itself: s 81B(1). As a result, the Tribunal can no longer hear an application alleging serious misconduct and there is no provision for a Panel to authorise such an application.[48] However, s 81Q still provides for the Tribunal's review jurisdiction.

(1) After a Councillor Conduct Panel has conducted a hearing, the Panel may -

(a) make a finding of misconduct against a Councillor; or

(b) make a finding of serious misconduct against a Councillor; or

(c) whether or not a finding of misconduct or serious misconduct against a Councillor has been made, make a finding that remedial action is required; or

(d) in addition to any findings made under paragraphs (a) to (c), direct that the Council amend its Councillor Code of Conduct in a particular way or to address a particular issue; or

(e) dismiss the application.

103 At the same time, cls 46E and 46F were amended to reflect the reduced jurisdiction of the Tribunal. They now read as follows:

46E Constitution of Tribunal

(1) The Tribunal is to be constituted for the purposes of proceedings under sections 30 and 81E of the Local Government Act 1989 by at least 2 members -

(a) one of whom is a senior member or presidential member and has been admitted to legal practice;

(b) one of whom is a person who has at least 5 years experience in local government governance matters.

(2) The Tribunal is to be constituted for the purposes of proceedings for review of a decision made by a Councillor Conduct Panel under section 81Q of the Local Government Act 1989 by a senior member or presidential member who has been admitted to legal practice sitting alone.

46F Costs

(1) Despite section 109, the Council must bear the costs of the proceedings if the Council applies to VCAT for review under section 81Q(2) of the Local Government Act 1989.

(2) The Council is not required to bear the costs of the proceedings under subclause (1) if VCAT otherwise orders.

104 As Kyrou JA explains, the present applicant was the subject of an authorisation by a Councillor Conduct Panel for an application alleging serious misconduct to be made in the Tribunal under s 81J(1)(b) as it previously stood. The allegations in question were determined and the respondent then sought that the Tribunal order 'otherwise' as to the applicant's costs under cl 46F.

105 There was a hearing as to the costs issue on 8 February 2016. Shortly thereafter, the legislation was amended in the manner described above. The Tribunal subsequently determined 'otherwise' as the respondent had sought. However, the hearing and determination were conducted by a single member purportedly constituting the Tribunal.

106 Argument before this Court proceeded on the basis that 'proceedings under' s 81J(1)(b) of the LGA, within the meaning of former cl 46E, included any application by a Council that the Tribunal order 'otherwise' as to costs. It is true that Keogh J observed, as was the case, that the costs application in the present case was made as part of the substantive proceeding. Unlike Kyrou JA, I do not take him as having decided that, as a matter of law, it formed part of that proceeding for the purposes of cl 46E. But as I have said, the respondent accepted that cl 46E applied to the costs application. In my opinion, it was correct to do so. While there may be policy reasons imagined by which it might not be thought necessary for members of the Tribunal to possess particular qualifications for dealing with costs issues, the normal course is for costs to be decided by the same persons, as far as possible, as constituted the body that made the substantive decision. Moreover, it would be anomalous if the 'proceedings' referred to in cls 46E and 46F did not extend to an application for costs, because the general rule as to costs would then not apply to the costs hearing itself.

107 The position is reached, then, that when the costs matter was heard, the Tribunal was required to be constituted by at least two suitably qualified members, but it was not so constituted. If not for the intervening amendments to the legislation, the question would then arise whether, despite that circumstance, a properly constituted Tribunal (whatever that might entail) could nonetheless have proceeded to determine the application, having regard to what transpired at the improperly constituted hearing.[49] But in light of the amendments it is not necessary to consider that issue further.

108 In my opinion, the critical issue in this appeal is whether the amendments which commenced on 1 March 2016 operated with retrospective effect, in the sense that they gave legal effect to the hearing already conducted by the improperly constituted Tribunal. In that regard, it might well be argued that the change in the manner of constitution of a tribunal is a question of procedure alone, especially if concerning only a question of costs, thereby attracting a presumption that the change applied with respect to matters already heard but not yet determined.[50] But even assuming that such a presumption is attracted in the present case, it must yield to a statutory provision to the contrary. In that respect, s 249 of the LGA is determinative.

109 Section 249 is relevantly in the following terms:

(1) This section applies if, before the commencement day, an application -

(a) made under section 81B that has been referred to VCAT under section 81D; or

(b) made under section 81E; or

(c) authorised by a Councillor Conduct Panel under section 81J(1)(b); or

(d) for review under section 81Q -

has not been determined by VCAT.

(2) On and after the commencement day, VCAT must ... determine the application in accordance with -

(a) Divisions 1A and 1B of Part 4; and

(b) Part 13B of Schedule 1 to the [VCAT Act] -

as in force immediately before that day.

110 At first glance, this provision might be thought not to bear on a costs application under cl 46F, on the basis that such an application is not one 'authorised by a Councillor Conduct Panel under' s 81J(1)(b) of the LGA. Moreover, it could be said that the application that was so authorised has 'been determined' upon the Tribunal making findings on the substantive allegations. On either basis, the requirements of sub-s (1) would not be met and s 249 would have no application. Perhaps for that reason, comparatively little attention was given to the provision in argument before us (or, it seems, before Keogh J). But to construe s 249 as being confined to the substantive application would produce anomalous results.

111 In the first place, it is the evident purpose of s 249 to continue the application of the whole of pt 13B of sch 1, not only cl 46E. In other words, the rule as to costs and the ability of a Council to seek an order 'otherwise' as provided for in cl 46F are also to be preserved, as s 249(2)(b) expressly states. That purpose could not be achieved if the 'application' referred to in s 249(1)(c) does not extend to the question of costs or if it is 'determined' for the purposes of sub-s (1) before the question of costs arises.

112 Secondly, for the reasons already given, the better view is that a 'proceeding under' s 81J(1)(b), within the meaning of cl 46E, includes any claim for costs. Consistently with that approach, the 'application' which is 'authorised ... under' s 81J(1)(b), within the meaning of s 249(1), should also be read as including any such claim.

113 Thirdly, s 249 (along with ss 247 and 248, which deal with alternative scenarios, the detail of which is not presently relevant) evinces a clear intention to preserve the pre-amendment complaints jurisdiction, relevantly including that regarding serious misconduct, while pending matters are determined. There is no reason to suppose that, in doing so, Parliament was seeking to continue the provisions governing that jurisdiction selectively rather than in their entirety. The transitional provisions do not disclose any intention to alter the remnant jurisdiction in that way.

114 The application of s 249 to the present case has three important consequences. The first is to confirm that, at the time of the hearing, there were required to be at least two suitably qualified members. The second is that, at the time of determination as well, the Tribunal was required to be constituted by at least two suitably qualified members. Thirdly, at all times, cl 46F operated to impose the costs rule, subject to the ongoing power of the Tribunal to order otherwise which the respondent sought to invoke.[51]

115 It follows that the Tribunal was improperly constituted both when it heard the costs application and when it made its decision. This is not a case where it might be thought that a defect in the constitution of a tribunal at the time of hearing did not infect the ultimate decision of the tribunal, once properly constituted. The Tribunal was never properly constituted for the resolution of the costs question.

116 In my opinion, that error goes beyond any matter of procedure in the conduct of the hearing and extends to the jurisdiction of the Tribunal to decide the question of costs.[52] Its decision must therefore be set aside.

117 In respect of the decision of Judge Marks, I agree with Kyrou JA, for the reasons he gives, that leave to appeal should be refused.

[1] Muto v Shepparton City Council [2017] VSC 210 ('Keogh J decision').

[2] Janover v Muto [2017] VCC 811 ('Judge Marks decision'.)

[3] The Amending Act also amended cl 46F of sch 1 to the LGA. This amendment need not be discussed as it was common ground that the clause in its unamended form applied to the issues dealt with in the decision of Keogh J and the decision of Judge Marks. See Keogh J decision [48].

[4] As appears from [9] above, Keogh J was wrong to conclude that post-amendment cl 46E(1) was in force when the 46F application was heard by VCAT.

[5] Heard together with the serious misconduct proceeding was a proceeding brought by the Secretary to the Department of Planning and Community Development, which alleged gross misconduct against the applicant. The gross misconduct proceeding is not presently relevant.

[6] Secretary to the Department of Planning and Community Development v Muto (No 4) [2013] VCAT 1180.

[7] Janover v Muto [2015] VCC 1530 [115].

[8] Janover v Muto [2015] VCC 1530 [116].

[9] The Council had been added as a party to the serious misconduct proceeding on 18 September 2015.

[10] Dobson v Muto (No 2) (Unreported, Victorian Civil and Administrative Tribunal, Senior Member Byard, 15 April 2016).

[11] Janover v Muto (No 3) [2016] VCC 717 [11].

[13] Keogh J decision [35], [37]. See n 4 above.

[15] Keogh J decision [38]. As appears from [8] above, Keogh J was wrong to conclude that there was no transitional provision.

[21] Judge Marks decision [110], [139].

[22] R v Moore; ex parte Australian Telephone and Phonogram Officers' Association [1982] HCA 5; (1982) 148 CLR 600, 615, 632-4; G J Coles & Co Ltd v Retail Trade Industrial Tribunal (1986) 7 NSWLR 503, 513-14, 517 ('Coles'); A-G (Vic) v Warehouse Group (Australia) Pty Ltd (2002) 11 VPR 113, 119 [22]-[23] ('Warehouse Group'); A-G (NSW) v World Best Holdings Ltd [2005] NSWCA 261; (2005) 63 NSWLR 557, 578-9 [97], 584 [126], 593 [197]-[198] ('World Best Holdings'); Johnson v Director of Consumer Affairs (Vic) [2011] VSC 595 [87] ('Johnson').

[23] Coles (1986) 7 NSWLR 503, 514; World Best Holdings [2005] NSWCA 261; (2005) 63 NSWLR 557, 584 [126]; Johnson [2011] VSC 595 [87].

[24] Coles (1986) 7 NSWLR 503, 514; Warehouse Group (2002) 11 VPR 113, 119 [22].

[25] See the cases cited at n 22.

[26] This is consistent with the hearing rule of natural justice which obliges a decision-maker to afford each party to a contested dispute a reasonable opportunity to present its case before making a decision.

[27] It is not necessary for me to decide whether, and the extent to which, any common law principles - such as the principle of necessity - may also provide an exception to the general rule.

[29] Orr [1948] HCA 16; (1948) 76 CLR 632, 637-8. See also Wentworth v Rogers (No 3) (1986) 6 NSWLR 642, 645-9, 653.

[30] Maxwell v Murphy [1957] HCA 7; (1957) 96 CLR 261, 267 ('Maxwell').

[31] Doro v Victorian Railways Commissioners [1960] VicRp 12; [1960] VR 84, 86.

[32] Maxwell [1957] HCA 7; (1957) 96 CLR 261, 267; Victrawl Pty Ltd v Telstra Corporation Ltd [1995] HCA 51; (1995) 183 CLR 595, 615; Rodway v The Queen [1990] HCA 19; (1990) 169 CLR 515, 518-19 ('Rodway').

[33] Rodway [1990] HCA 19; (1990) 169 CLR 515, 518-19; McKain v R W Miller & Co (SA) Pty Ltd [1991] HCA 56; (1991) 174 CLR 1, 26-7.

[34] See, eg, Galvin v Forests Commission of Victoria [1939] VicLawRp 42; [1939] VLR 284, 297-8; Jackman v Dandenong Sewerage Authority (No 2) (1967) 20 LGRA 413, 415; Thaina Town (On Goulburn) Pty Ltd v City of Sydney Council [2007] NSWCA 300; (2007) 71 NSWLR 230, 255 [118], 256 [129].

[36] The applicant referred to Johnson [2011] VSC 595 [84]-[85], and conceded that the present case could be distinguished from Esber v Commonwealth [1992] HCA 20; (1992) 174 CLR 430.

[37] (1998) 194 CLR 355, 388-91 [91]-[93], 392 [97] ('Project Blue Sky').

[38] The Council contrasted the 'very significant powers' that were in issue in R v Ashby [2010] VSC 14; (2010) 25 VR 107, 112 [39].

[39] The Council referred to Arnett v Holloway [1960] VicRp 6; [1960] VR 22, 31-3; Civic Workers Plus Pty Ltd v Hill [2000] VSCA 61; (2000) 1 VR 640, 652 [32].

[41] Pursuant to s 98(1)(a) of the VCAT Act, VCAT must comply with the hearing and bias rules of natural justice in exercising its powers. Section 100 provides that VCAT must conduct an oral hearing unless the parties agree that the proceeding be conducted 'on the basis of documents'.

[42] It follows that R v Ashby [2010] VSC 14; (2010) 25 VR 107 upon which the Council relied (see n 38 above) is not relevant to the issues to be decided in the present case.

[43] See [34] above.

[44] Kennedy v Shire of Campaspe [2015] VSCA 47 [14]; Note Printing Australia Ltd v Leckenby [2015] VSCA 105; (2015) 50 VR 44, 70-1 [79]; Bensons Funds Management Pty Ltd v Body In Balance Chiropractic Pty Ltd [2015] VSCA 198 [7]-[9].

[45] The provisions set out are those in force immediately before 1 March 2016. While the provisions took a different form again prior to 31 October 2012, including when the present Tribunal proceeding was commenced, the differences are not material.

[46] Ordinarily, the question of costs would be governed by s 109 of the VCAT Act.

[47] The reference to a proceeding 'referred' to the Tribunal under s 81J(1)(b) is anomalous since s 81J(1)(b) has at no time provided in those terms. The reference must therefore be read as describing a proceeding authorised to be commenced under s 81J(1)(b).

[48] The Tribunal retains a power to hear applications alleging 'gross misconduct', as defined: s 81E.

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