Victorian Civil and Administrative Tribunal|2006-04-21

Russo v Westpac Banking Corporation Ltd (Civil Claims) [2006] VCAT 678 (21 April 2006)

Victorian Civil and Administrative Tribunal Act 1998 - s.77 - Fair Trading Act 1999 - concurrent federal jurisdiction - whether Tribunal has jurisdiction - whether issue estoppel may arise - whether Supreme Court more appropriate forum.

For the Applicant: Mr Kooblal, Solicitor, Boyle, Telfer & Kooblal

For the Respondent: Mr Strong of Counsel, instructed by Allens Arthur Robinson

1 This matter comes before me by way of an application by Westpac Banking Corporation Ltd ("Westpac") pursuant to s.77 of the Victorian Civil and Administrative Tribunal Act 1998 ("the Act"). The respondent to this application, and the original applicant in this matter, is Guiseppe Peter Russo ("Russo"). In essence, Westpac is applying for the striking out of Russo's application and the transfer of the proceeding to the Supreme Court of Victoria. Such application is resisted by Russo. Mr Strong of counsel appeared on behalf of Westpac. Mr Kooblal appeared as solicitor for Russo.

2 The following matters are set out by way of factual background. Obviously no evidence was adduced as to the merits of this dispute and the following matters are so set out in order that this application and ruling can be seen in context and be better understood. The following is a very brief précis of that factual background.

3 Russo is a customer of Westpac. He is also a builder who used credit facilities available through Westpac for the development of a project relating to various blocks of land and houses to be built thereon and sold. In June and July, 2005, there was a falling out between Russo and Westpac. It is alleged that Russo sought an increase in the amount available to him through his Business Loan Account. It is alleged that it was represented to him that this would not adversely affect either that account, or two other loan accounts which Russo had with Westpac. It is then alleged that, despite this representation, the credit facilities made available to Russo were in fact substantially reduced by Westpac. This has led to Russo suffering loss and damage, resulting from his inability to sell some eight building blocks, three "spec" homes, substantial costs associated with refinancing, wasted advertising costs, and loss associated with incorrect evaluations. The total loss thus claimed exceeds $1.2 million, although, as I pointed out, there appears to be a fairly obvious mathematical error which may reduce that amount by $180,000. Whilst, at this point in time, no Points of Defence have been filed and served, it would be fair to say that, from Westpac's viewpoint, most of these matters are in issue.

4 On 28th November 2005, Russo issued an application out of this Tribunal, to which application was attached a lengthy document headed "Statement of Claim". In that document, Russo pleads reliance upon both the Trade Practices Act 1974 ("the TPA"), being Commonwealth legislation, and upon the Fair Trading Act 1999 ("the FTA"), being, of course, Victorian legislation. In the Statement of Claim, reliance upon the TPA and the FTA is frequently alleged to be in the alternative.

5 A directions hearing was conducted by Senior Member Vassie on 24th January 2006. The orders made by him on that day foreshadowed both the filing and serving by Russo of Amended Points of Claim in which references made to the TPA would be deleted and references to the appropriate sections of the FTA could be substituted. The orders made also foreshadowed the making by Westpac of this application pursuant to s.77 of the Act.

6 Accordingly, Russo filed and served Amended Points of Claim. Reliance is now placed solely upon the FTA, and reference is made specifically to ss.4, 8 and 11 of that Act. There is now no allegation of reliance upon the provisions of the TPA. On 21st February 2006, Westpac issued an application out of this Tribunal seeking that the proceeding be struck out pursuant to s.77(1) of the Act and be then referred to the Supreme Court of Victoria pursuant to s.77(3). An affidavit of Mary Anne Ferguson, the solicitor for Westpac, in support of the application was filed and served. An affidavit of Russo in response has also been filed and served.

7 It is against that background that submissions were made and that the application is to be determined. I shall now turn to a brief summary of the submissions made on behalf of the parties.

8 The submissions made by Mr Strong on behalf of Westpac could be summarised as follows.

9 Westpac's application for striking out and referral is based upon four propositions. Firstly, federal jurisdiction has been attracted to this dispute, and as a result the Tribunal has no power to determine it. That the matter falls under a Commonwealth Act is underlined by the fact that Russo originally pleaded reliance upon the TPA. Amendment so as to delete that reliance does not alter the situation. Reference is made to various authorities, including Agtrack (NT) Pty Ltd v Hatfield [2005] HCA 38; (2005) 218 ALR 677. Westpac relies, inter alia, on the following extract from that decision at paragraph 32:-

"Whether federal jurisdiction with respect to one or more of the matters listed in ss.75 and 76 of the Constitution has been engaged in a legal proceeding is a question of objective assessment. If a party on either side of the record relies upon a right, immunity or defence derived from a federal law, there is a matter arising under s.76(ii) of the Constitution. It is not a question of establishing an intention to engage federal jurisdiction or an awareness that this has occurred."

10 Federal jurisdiction has been engaged in the present case, and, in any event, it is the intention of Westpac to seek relief, probably in the form of a declaration, pursuant to the TPA. It is also conceded (and in my opinion, very fairly) that the situation in Agtrack bore one marked distinction from the present case. In the present case, there is the unusual situation of concurrent and very similar Commonwealth and State Acts. In Agtrack, no such choice existed. Nevertheless, Westpac relies upon it and upon the other authorities to which reference has been made.

11 Secondly, a related problem exists as to whether a decision of this Tribunal can create issue estoppel in the event of any subsequent proceeding in the Federal Court. If, for example, Russo should be unsuccessful before this Tribunal, is he then prevented from making a similar application pursuant to the TPA? It may be that a decision of this Tribunal cannot bind a court exercising federal jurisdiction, or create an issue estoppel - see Miller v UNSW [2003] FCAFC 180; (2001) 132 FCR 147. It is at least arguable, or possible, that a problem of this kind could arise. Therefore it is preferable that the matter be referred elsewhere.

12 Thirdly, Russo's Amended Points of Claim are unclear and create confusion. For example, difficulties are created in relation to the nature of the loss allegedly suffered - see Marks & Ors v GIO Australia Holdings Limited & Ors [1998] HCA 69; (1998) 158 ALR 333. Given the pleadings contained in the Amended Points of Claim, novel and potentially complex points of law arise. It would be more appropriate for these to be dealt with by the Supreme Court. Certainly, given the way in which Russo has put his claim in the Amended Points of Claim, it would be more appropriate for the matter to be dealt with in a court of pleadings.

13 Fourthly, Russo is also relying upon negligence on the part of Westpac. This may require a determination of the complex and difficult question as to whether a duty of care to avoid pure economic loss should be imposed on Westpac. This is a difficult area of the law which has been considered at length by the High Court of Australia in cases such as Woolcock Street Investments Pty Ltd v CDG Pty Ltd & Anor [2004] HCA 16; (2004) 205 ALR 522. Again, it would be more appropriate if such a complex question were dealt with by the Supreme Court.

14 The submissions made by Mr Kooblal on behalf of Russo were at times irrelevant and a little difficult to follow, but, as I understand them, they could be summarised as follows. The Tribunal has jurisdiction to deal with the matter. It is now a claim brought entirely pursuant to the FTA. It is not a complex case. It is in fact quite simple. It may be that Westpac intends to issue proceedings in the Federal Court. That is a matter for it. It has not done so, and Russo opted to issue proceedings out of this Tribunal, which has jurisdiction to deal with it. Such proceedings were issued after earlier attempts to resolve the matter failed. The authorities referred to in support of Westpac's position are readily distinguishable.

15 I shall deal with the grounds advanced in support of Westpac's application in the order in which they were raised by Mr Strong.

16 I agree with the proposition of Mr Strong that the situation of the concurrent jurisdiction created by the TPA and the FTA is an unusual one and has the potential to create problems. However, I cannot agree with the submission that the mere existence of the Commonwealth legislation attracts federal jurisdiction to this dispute and that therefore this Tribunal has no power to determine it. Whatever may have been the situation, the claim is now brought solely pursuant to the provisions of the FTA, and therefore this Tribunal clearly possesses jurisdiction.

17 If the proposition advanced by Mr Strong were correct, basically all cases involving a corporation brought pursuant to the FTA could not be heard other than by a body possessing federal jurisdiction. The very existence of the TPA would attract federal jurisdiction to such a case. It is clearly envisaged that the FTA embrace claims involving corporations. It is littered with references to them, and it is quite clear that a reference to a "person" in the FTA includes a reference to a body corporate - see, for example, s.10. Whilst the argument advanced by Mr Strong is an ingenious one, I cannot accept that the authorities upon which he relies arguably lead to the conclusion that the FTA is stripped of a significant part of its jurisdiction. I am in no way suggesting that Mr Strong misquoted the authorities. Indeed, he went out of his way to be fair in that regard, conceding, for example, that the situation in Agtrack, where there was no choice of jurisdictions, differed markedly from that in the present case. This is not a situation of an inconsistent state law being invalid under the Constitution.

18 It may be that, at some stage, Westpac will initiate some type of proceeding in the federal jurisdiction. However, it has not done so. Whether it will do so remains speculative. Russo has initiated proceedings pursuant to the FTA and for which this Tribunal clearly has jurisdiction. I do not accept that such jurisdiction disappears because of the possibility that Westpac may initiate proceedings elsewhere.

19 I also do not accept the related submission concerning issue estoppel and the problems which may arise in that regard. Of course it is desirable to avoid multiplicity of litigation. It is desirable to avoid even the risk of this. However, if the submission of Mr Strong is correct, the result would again be that, theoretically, no case in which there is reliance upon the provisions of the FTA could be determined by this Tribunal if concurrent relief was also available pursuant to the TPA. The risk of duplication of litigation would always exist, and a submission such as the present one could always be made. This seems to me to be a highly unattractive and impractical result, and one not intended by the legislature.

20 Furthermore, the submission proceeds on the basis that no issue estoppel may be created here. In this regard, I would refer to the reasons for decision of Deputy President Macnamara and Senior Member Monk in Guss & Ors v Yarra CC [2001] VCAT 1626, wherein, at paragraph 32, they stated:-

"We accept that there may be Tribunal decisions which are apt to create res judicatae or issue estoppels. See for instance Lambidis v Commissioner of Police (1995) 37 NSWLR 320 and the cases there considered."

21 In Accident Compensation Commission v Detar [1989] VicRp 82; [1989] VR 931, the Full Court of the Supreme Court of Victoria considered whether a recommendation of the Conciliation Division of the Accident Compensation Tribunal had the capacity to create res judicata or issue estoppel. At page 936 of that decision, the Full Court stated as follows:-

"The requirements of the doctrine of estoppel per rem judicatam are often expressed as a judicial decision pronounced by a judicial tribunal. But the tribunal does not have to be one of the regular courts. A statutory tribunal is counted as a judicial tribunal for these purposes, and ... there are extremely few cases in which a civil authority has been held incapable of making any pronouncement having the effect of res judicata ..."

22 In Detar, reference is also made to the statement of Gibbs J in Administration of the Territory of Papua and New Guinea v Daera Guba (1973) 130 CLR 353 at 453 as follows:-

"The doctrine of estoppel extends to the decision of any tribunal which has jurisdiction to decide finally a question arising between parties, even if it is not called a court, and its jurisdiction is derived from statute or from the submission of parties, and it only has temporary authority to decide a matter ad hoc."

23 This Tribunal has the jurisdiction to hear and determine a dispute of this kind - see s.108 of the FTA. In my view, particularly in a matter such as this being determined in the Tribunal's original jurisdiction and not being a review of an administrative decision, issue estoppel can be created by a decision of the Tribunal. For reasons both of practicality involving the intention of the legislature, and as a matter of law, it seems to me that the submission of Mr Strong based on issue estoppel must also fail.

24 As stated, the two submissions with which I have just dealt are related. I am fortified in my view as to the general approach to be taken in relation to them by the decision of Beach J in Vamot Pty Ltd v Tempacoe Pty Ltd and Anor [2000] VSC 251. In that matter Tempacoe issued an application out of this Tribunal seeking to recover an amount which it claimed was owed to it by Vamot in respect of work done in connection with construction of townhouses. Vamot foreshadowed an application pursuant to s.77 of the Act, but in fact issued a separate proceeding out of the Federal Court of Australia, alleging that Tempacoe had engaged in misleading and unconscionable conduct pursuant to both the TPA and the FTA. Negligence was also alleged. Vamot then sought, pursuant to the provisions of the Jurisdiction of Courts (Cross Vesting) Act 1987, to have the matter transferred to the Supreme Court and thence to the Federal Court. Having expressed some doubts generally concerning this procedure, Beach J stated as follows:-

"The fact of the matter is that, having regard to the provisions of the Fair Trading Act 1999 as they now stand, in particular the provisions of s.108, which provision I consider to be retrospective and which would apply therefore to the present dispute between the parties, VCAT now has the power to give to Vamot virtually all of the relief it is seeking in the Federal Court proceeding.

The conclusion I have come to in relation to the matter is that ... in my opinion it is not in the interests of justice that such a transfer should take place."

25 The first two submissions advanced on behalf of Westpac fail.

26 The third and fourth submissions advanced by Mr Strong could also be described as interrelated, as they are both based upon the existence of allegedly complex or novel propositions of law which would be more appropriately dealt with by the Supreme Court. These submissions also fail. I agree that there is considerable room for improvement in the wording of Russo's Amended Points of Claim. However, if Russo ultimately fails because he is bringing a claim that is misconceived or for which there is no legal foundation, so be it. Those are issues for the person hearing the matter.

27 As I have said in various earlier decisions relating to s.77 of the Act, I am confident that this Tribunal possesses personnel and procedures competent and adequate to deal with complex and substantial matters involving the FTA. Whilst the Tribunal is not a court of pleadings, documents akin to pleadings can be required. In decisions such as Geopec Pty Ltd v Ausbuild Pty Ltd & Anor (delivered 20th December 2005), Bovalino v Crea (delivered 17th August 2005), and Dragon Image Pty Ltd v NP Distribution Pty Ltd (delivered 16th March 2005), I have dealt with arguments similar to those now advanced. I have expressed my confidence in the ability of members of this Tribunal to hear and determine cases such as this one. I have expressed the view that appropriate case management processes can be put in place. I have expressed the view that this Tribunal could almost be described as the first port of call for applications such as this pursuant to the FTA.

28 In those earlier decisions, I have also referred to the observations of Warren J in R_ogan & Ors v Rushton_ (QLD) Pty Ltd [2002] VSC 375 to the effect that questions of cost and convenience are to be taken into account in an application such as this.

29 In R_ogan_, Warren J also referred to the connection between the alleged conduct and the jurisdiction as being a factor to be considered. Bearing in mind that this is a claim brought pursuant to the provisions of the FTA, that consideration would not lead me to the conclusion that the matter should be referred to the Supreme Court, and indeed is supportive of the proposition that it should remain here.

30 As in the decisions referred to above, I am not persuaded in the present case that the Supreme Court is a more appropriate forum. I am not persuaded that it is the natural forum based upon connecting factors, to use the words of Gillard J in Ewins v BHP Billiton Limited [2005] VSC 4. The application has been issued out of this Tribunal and has advanced a considerable distance. It is within the Tribunal's jurisdiction, and many proceedings brought pursuant to the provisions of the FTA are determined here. There are experienced members well equipped to hear it. Appropriate case management procedures can be adopted. I am satisfied that greater cost, delay and inconvenience would be caused if the proceeding were now struck out and referred to the Supreme Court.

31 In summary, the application pursuant to s.77 of the Act fails and is dismissed. I shall hear the parties as to any ancillary orders that are required, and I shall reserve the liberty to apply.

Fair Trading Act 1999

Russo v Westpac Banking Corporation Ltd

At a glance

Court

Decision date

Source

Judgment (21 paragraphs)

Russo v Westpac Banking Corporation Ltd (Civil Claims) [2006] VCAT 678 (21 April 2006)

Parties

Legislation Cited (1)

Cases Cited (6)