Subway Systems v Ireland [2014] VSCA 142

Court of Appeal (Vic)|2014-07-01|Before: Mr J, Beach JA, Like Beach JA, Maxwell P

Subway Systems Australia Pty Ltd (ACN 009 277 034) v Ireland [2013] VSC 550 (Croft J)

ARBITRATION - Franchise agreement - Arbitration clause - Disputes arising under agreement - Franchisees brought proceedings in Victorian Civil and Administrative Tribunal - Whether Tribunal bound to refer parties to arbitration - Whether Tribunal 'a court before which an action is brought' - C_ommercial Arbitration Act 2011_ (Vic) s 8.

STATUTORY INTERPRETATION - Statute implementing international agreement - UNCITRAL Model Law on International Commercial Arbitration - Certainty and uniformity of interpretation paramount - Interpretation unconstrained by technical rules - Extrinsic materials - Recourse to working documents of international body - Victorian Act used identical language to Model Law - Act intended to be 'as uniform as possible' with Model Law - Commercial Arbitration Act 2011 (Vic).

1 The applicant ('Subway Systems') and the first and second respondents (the 'Irelands') are parties to a franchise agreement, under which the Irelands operate a Subway business in a suburban shopping centre. The franchise agreement includes an arbitration clause.

2 Disputes having arisen between the Irelands and Subway Systems, the Irelands brought a proceeding in the Victorian Civil and Administrative Tribunal (the 'Tribunal'). They allege that Subway Systems has breached the franchise agreement, has acted negligently and has engaged in misleading or deceptive conduct. They seek an award of damages.

3 Subway Systems contended before the Tribunal that the matters in dispute were within the scope of the arbitration clause and that, by force of s 8 of the Commercial Arbitration Act 2011 (Vic) (the 'Act'), the Tribunal was precluded from hearing the proceeding and must instead refer the parties to arbitration. The obligation in s 8 of the Act applies to 'a court before which an action is brought in a matter which is the subject of an arbitration agreement'.[1] The Tribunal held that it was not a 'court' for this purpose and that s 8 of the Act therefore had no application. An appeal by Subway Systems[2] was dismissed.[3] Subway Systems now seeks leave to appeal from that decision.

4 The question of construction which arises is whether, for the purposes of s 8, the Tribunal is 'a court before which an action [has been] brought'. This is an important question not only for these parties but more generally, as the same provision has been enacted, in identical terms, as part of the respective Commercial Arbitration Acts of all other States.[4] In at least New South Wales and Queensland, there are adjudicative tribunals with jurisdictions comparable to the jurisdiction of the Tribunal which the Irelands have invoked. Given that this is a uniform law throughout Australia, this Court's decision will have implications for those other jurisdictions.[5]

5 I have had the advantage of reading in draft the respective reasons for judgment of Beach JA and Kyrou AJA. Like Beach JA, I have concluded that s 8 of the Act applies to the Tribunal in the circumstances of this case and that the appeal must therefore be allowed. My reasons are, however, somewhat different. What seems to me to be decisive is the special character of the Act, and the special rules of interpretation which are as a result engaged.

6 What is distinctive about this Act is that it enacts, as the domestic law of Victoria, a 'model law' adopted by an international body. As far as I have been able to ascertain, there is no comparable law on the Victorian statute book. There are Victorian laws implementing national model laws[6] but none implementing a law of international origin.

7 The clear policy of the Act (and of the model law which it enacts) is that, when parties have agreed to have disputes between them determined by private arbitration, neither party is at liberty to litigate the matter in dispute through the adjudicative mechanisms of the State. For this statutory purpose, in this statutory context, the Tribunal is indistinguishable from those other adjudicative bodies of the State which bear the title 'court'.

8 The United Nations Commission on International Trade Law ('UNCITRAL') was established by resolution of the General Assembly of the United Nations in December 1966. In June 1985, UNCITRAL adopted the Model Law on International Commercial Arbitration (the 'Model Law'). The General Assembly then recommended that:[7]

All States give due consideration to the Model Law ... in view of the desirability of uniformity of the law of arbitral procedures and the specific needs of international commercial arbitration practice ...

9 The Model Law was amended for the first time by UNCITRAL in July 2006. Again, the General Assembly resolved that all States 'give favourable consideration' to enacting the revised articles of the Model Law.[8] (References hereafter to 'the Model Law' will be to the 2006 version unless otherwise indicated.)

10 The Model Law is accompanied by an Explanatory Note from the UNCITRAL Secretariat. The following introductory remarks are apposite:[9]

The Model Law constitutes a sound basis for the desired harmonization and improvement of national laws. It covers all stages of the arbitral process from the arbitration agreement to the recognition and enforcement of the arbitral award and reflects a worldwide consensus on the principles and important issues of international arbitration practice. It is acceptable to States of all regions and the different legal or economic systems of the world. Since its adoption by UNCITRAL, the Model Law has come to represent the accepted international legislative standard for a modern arbitration law and a significant number of jurisdictions have enacted arbitration legislation based on the Model Law.
The form of a model law was chosen as the vehicle for harmonization and modernization in view of the flexibility it gives to States in preparing new arbitration laws. Notwithstanding that flexibility, and in order to increase the likelihood of achieving a satisfactory degree of harmonization, States are encouraged to make as few changes as possible when incorporating the Model Law into their legal systems. Efforts to minimise variation from the text adopted by UNCITRAL are also expected to increase the visibility of harmonization, thus enhancing the confidence of foreign parties, as the primary users of international arbitration, in the reliability of arbitration law in the enacting State.[10]

11 Certainty and uniformity were key objectives of the adoption of the Model Law, as appears from the following section of the 'Note':[11]

Problems stemming from inadequate arbitration laws or from the absence of specific legislation governing arbitration are aggravated by the fact that national laws differ widely. Such differences are a frequent source of concern in international arbitration, where at least one of the parties is, and often both parties are, confronted with foreign or unfamiliar provisions and procedures. Obtaining a full and precise account of the law applicable to the arbitration is, in such circumstances often expensive, impractical or impossible.
Uncertainty about the local law with the inherent risk of frustration may adversely affect the functioning of the arbitral process and also impact on the selection of the place of arbitration. Due to such uncertainty, a party may hesitate or refuse to agree to a place, which for practical reasons would otherwise be appropriate. The range of places of arbitration acceptable to parties is thus widened and the smooth functioning of the arbitral proceedings is enhanced where States adopt the Model Law, which is easily recognizable, meets the specific needs of international commercial arbitration and provides an international standard based on solutions acceptable to parties from different legal systems.

12 Of particular relevance to the present question are the following parts of the Explanatory Note:

(b) Delimitation of court assistance and supervision

Recent amendments to arbitration laws reveal a trend in favour of limiting and clearly defining court involvement in international commercial arbitration. This is justified in view of the fact that the parties to an arbitration agreement make a conscious decision to exclude court jurisdiction and prefer the finality and expediency of the arbitral process.

In this spirit, the Model Law envisages court involvement in the following instances. A first group comprises issues of appointment, challenge and termination of the mandate of an arbitrator (articles 11, 13 and 14), jurisdiction of the arbitral tribunal (article 16) and setting aside of the arbitral award (article 34). These instances are listed in article 6 as functions that should be entrusted, for the sake of centralization, specialization and efficiency, to a specially designated court or, with respect to articles 11, 13 and 14, possibly to another authority (for example, an arbitral institution or a chamber of commerce). A second group comprises issues of court assistance in taking evidence (article 27), recognition of the arbitration agreement, including its compatibility with court-ordered interim measures (articles 8 and 9), court-ordered interim measures (article 17 J), and recognition and enforcement of interim measures (articles 17 H and 17 I) and of arbitral awards (articles 35 and 36).
Beyond the instances in these two groups, 'no court shall intervene, in matters governed by this Law'. Article 5 thus guarantees that all instances of possible court intervention are found in the piece of legislation enacting the Model Law, except for matters not regulated by it (for example, consolidation of arbitral proceedings, contractual relationship between arbitrators and parties or arbitral institutions, or fixing of costs and fees, including deposits). Protecting the arbitral process from unpredictable or disruptive court interference is essential to parties who choose arbitration (in particular foreign parties).

...

(b) Arbitration agreement and the courts

Articles 8 and 9 deal with two important aspects of the complex relationship between the arbitration agreement and the resort to courts. Modelled on article II (3) of the New York Convention, article 8 (1) of the Model Law places any court under an obligation to refer the parties to arbitration if the court is seized with a claim on the same subject-matter unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed. The referral is dependent on a request, which a party may make not later than when submitting its first statement on the substance of the dispute. This provision, where adopted by a State enacting the Model Law, is by its nature binding only on the courts of that State. However, since article 8 is not limited in scope to agreements providing for arbitration to take place in the enacting State, it promotes the universal recognition and effect of international commercial arbitration agreements.[12]

13 As these passages make clear, the Model Law is concerned with the concept of 'court jurisdiction' in two quite distinct senses. The first is captured by the statement that[13]

... the parties to an arbitration agreement make a conscious decision to exclude court jurisdiction and prefer the finality and expediency of the arbitral process.

Used in this way, 'court jurisdiction' means the jurisdiction to decide the matters in dispute. An agreement to have disputes determined by arbitration is, by definition, an agreement to exclude 'court jurisdiction' in this sense, and to confer jurisdiction instead on an arbitral tribunal. The two are mutually exclusive.

14 The second, and different, conception of 'court jurisdiction' is that exemplified by paragraph 16 of the Explanatory Note, set out above (see [12] above). That is the jurisdiction of courts to act in relation to an arbitral process. To that end, provision is made in the Model Law for the processes of municipal courts to be invoked in aid of the arbitral determination of the dispute, not for the purposes of determining the dispute itself. These may conveniently be referred to as 'adjectival' functions of courts, functions which are subsidiary or supplementary to the principal dispute resolution mechanism, which is arbitration.

15 These adjectival functions are referred to compendiously in the heading to art 6 (replicated in s 6 of the Act) as 'functions of arbitration assistance and supervision'. In the Act, the relevant functions are enumerated in s 6(1), which provides that they are to be performed by the Supreme Court, unless the arbitration agreement specifies that it is the County Court or the Magistrates' Court which is to have jurisdiction for that purpose, in which case the functions are to be performed by the specified court.[14]

16 Article 8 of the Model Law is concerned with court jurisdiction in the substantive sense, not the adjectival sense. The manifest purpose of art 8 is to ensure that, where parties have agreed to arbitrate their disputes, any recourse to a 'court' is precluded. The purpose of the Article is to impose an obligation on the 'court' in effect to enforce the agreement to arbitrate, by requiring that it decline to exercise jurisdiction over the dispute and instead refer the parties to arbitration.

17 Articles 8 and 9 of the Model Law are in these terms:

Article 8. Arbitration agreement and substantive claim before court

(1) A court before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so requests not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed.

(2) Where an action referred to in paragraph (1) of this article has been brought, arbitral proceedings may nevertheless be commenced or continued, and an award may be made, while the issue is pending before the court.

Article 9. Arbitration agreement and interim measures by court

It is not incompatible with an arbitration agreement for a party to request, before or during arbitral proceedings, from a court an interim measure of protection and for a court to grant such measure.[15]

18 Article 8(1) remains unchanged from the original 1985 version of the Model Law. The submissions for the present applicant referred to the 'Analytical Commentary' prepared by the UNCITRAL Secretariat on the draft text of the 1985 version. According to the introductory notes, the Commentary was intended to provide[16]

a summary of why a certain provision has been adopted and what it is intended to cover, often accompanied by explanations and interpretations of particular words.

19 In relation to art 8(1), the Commentary stated:[17]

Article 8 deals with an important 'negative' effect of an arbitration agreement. The agreement to submit a certain matter to arbitration means that this matter shall not be heard and decided upon by any court, irrespective of whether this exclusion is expressed in the agreement.

20 Article 2 of the Model Law contains the definitions. Relevantly, 'court' is defined to mean 'a body or organ of the judicial system of a State'.[18] According to the 1985 Commentary, this definition[19]

simply refers to, without interfering with, the national judicial system ... Taking into account the varied nomenclature, the term 'court' is not restricted to those organs actually called 'court' in a given country but would include any other 'competent authority' (such is the expression used in the 1958 New York Convention). The reference to the judicial system of 'a country' (instead of 'a State') has been used for the sole purpose of avoiding the misconception, possibly in a small federation of States, that merely 'State' courts are covered but not 'federal' courts.

21 The Victorian Parliament made quite explicit its intention to enact the Model Law. The 'Note' which appears at the beginning of the Act states:[20]

Sections of this Act that contain a reference to the 'Model Law' in the heading are substantially the same as the provisions of the UNCITRAL Model Law on International Commercial Arbitration ... so as to be as uniform as possible with the UNCITRAL Model Law. Some changes have been made to those provisions of the Act based on the UNCITRAL Model Law to amend or supplement the provisions in their application to domestic arbitrations in Victoria or to accommodate modern drafting styles and conventions (for example, provisions are drafted in gender neutral terms and archaisms are replaced with modern alternatives). Notes draw attention to substantive changes.

22 Section 8, as it appears in the Act, contains a reference in its heading to art 8 of the Model Law. It follows from the statement in the introductory 'Note' that the section was intended to be 'as uniform as possible with the UNCITRAL Model Law.' Unsurprisingly, therefore, the language of s 8 is relevantly identical to that of art 8. The section provides as follows:

Arbitration agreement and substantive claim before court (cf Model Law Art 8)

(1) A court before which an action is brought in a matter which is the subject of an arbitration agreement must, if a party so requests not later than when submitting the party's first statement on the substance of the dispute, refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed.

(2) Where an action referred to in subsection (1) has been brought, arbitral proceedings may nevertheless be commenced or continued, and an award may be made, while the issue is pending before the court.[21]

23 The phrase 'international origin' appears in the heading to s 2A of the Act, which relevantly provides:

2A International origin and general principles (cf Model Law Art 2A)

(1) Subject to s 1AC, in the interpretation of this Act, regard is to be had to the need to promote so far as practicable uniformity between the application of this Act to domestic commercial arbitrations and the application of the provisions of the Model Law (as given effect by the International Arbitration Act 1974 of the Commonwealth) to international commercial arbitrations and the observance of good faith.

24 The Victorian Parliament here expressed its intention that the interpretation of the Victorian Act should ensure 'so far as practicable' that there was uniformity between:

(a) the application of the Victorian Act to domestic commercial arbitrations; and

(b) the application of the provisions of the Model Law (as enacted at the Commonwealth level) to international commercial arbitrations.

25 The Commonwealth Act is the International Arbitration Act 1974 (Cth). It has the following objects:

The objects of this Act are:

(a) to facilitate international trade and commerce by encouraging the use of arbitration as a method of resolving disputes; and

(b) to facilitate the use of arbitration agreements made in relation to international trade and commerce; and

(c) to facilitate the recognition and enforcement of arbitral awards made in relation to international trade and commerce; and

(d) to give effect to Australia's obligations under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards adopted in 1958 by the United Nations Conference on International Commercial Arbitration at its twenty-fourth meeting; and

(e) to give effect to the UNCITRAL Model Law on International Commercial Arbitration adopted by the United Nations Commission on International Trade Law on 21 June 1985 and amended by the United Nations Commission on International Trade Law on 7 July 2006; and

(f) to give effect to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States signed by Australia on 24 March 1975.[22]

26 As will appear, uniformity of interpretation across jurisdictions has been viewed as of paramount importance where a treaty (or a law implementing a treaty) is concerned with international commerce. It is therefore significant that the Victorian Parliament has expressed its own intention that the application of the Model Law to domestic arbitrations should be in line with its application to international arbitrations.

27 The fact that the question in issue here is governed by the Victorian embodiment of the Model Law, rather than by the Model Law as implemented by another State or by the Commonwealth, emphasises the importance of uniformity. The fact that an international supplier of goods and services will very likely be subject, in a federation like Australia, to the laws of different States would seem to be a powerful argument for ensuring uniformity 'so far as practicable'.

28 Although Subway Systems is a company incorporated in Australia, the franchise agreement makes clear that it is operating under licence from an American corporation, Doctor's Associates Inc. That corporation is the owner of 'a proprietary system for ... establishing and operating restaurants featuring sandwiches and salads under [the] trade name and service mark SUBWAY®'. The franchise agreement is in a standard form, presumably for use throughout Australia. Subway Systems is incorporated in Western Australia but its principal office is in Queensland. The agreement provides that it will be 'governed by and construed in accordance with' the laws of Queensland.

29 A law of this kind - giving effect to an international agreement - attracts special rules of interpretation. There is now a substantial body of Australian jurisprudence on this subject, from which the following principles may be discerned:

(a) certainty and uniformity of application are of paramount importance;

(b) to that end, the rules generally applicable to the interpretation of domestic statutes give way to the rules applicable to the interpretation of treaties;

(c) because the international agreement is addressed to a much wider and more varied judicial audience than an act of a domestic legislature, the interpretation of the domestic enactment should be unconstrained by technical rules of interpretation and should instead be informed by 'broad principles of general acceptation'; and

(d) recourse may be had to the working documents of the international body by which, or through which, the agreed rules were developed.

30 In Shipping Corporation of India Limited v Gamlen Chemical Co Australasia Pty Ltd,[23] the High Court was concerned with the correct interpretation of a provision of the Hague Rules, which were contained in a schedule to the Sea-Carriage of Goods Act 1924 (Cth). According to Mason and Wilson JJ,[24] the Commonwealth Act 'enacted the Hague Rules which had been adopted by an international convention signed at Brussels in 1924'. Their Honours (with whom Gibbs CJ and Aickin J agreed) went on:

It has been recognized that a national court, in the interests of uniformity, should construe rules formulated by an international convention, especially rules formulated for the purpose of governing international transactions such as the carriage of goods by sea, 'in a normal manner, appropriate for the interpretation of an international convention, unconstrained by technical rules of English law, or by English legal precedent, but on broad principles of general acceptation', to repeat the words of Lord Wilberforce in James Buchanan & Co Ltd v Babco Forwarding & Shipping (UK) Ltd; see also Stag Line Ltd v Foscolo, Mango & Co Ltd.[25]

It is important that we should adhere to this approach when we are interpreting rules which have been formulated for the purpose of regulating the rights and liabilities of parties to international mercantile transactions where great store is set upon certainty and uniformity of application.[26]

31 Subsequent decisions have reinforced the importance of 'certainty and uniformity of application' where international agreements are implemented by domestic law. The New South Wales Court of Appeal followed Gamlen in Kotsambasis v Singapore Airlines Ltd,[27] a case concerned with legislation implementing the Warsaw Convention on international carriage by air. The same point was emphasised more recently in Povey v Qantas.[28]

32 In Rocklea Spinning Mills v Anti-Dumping Authority,[29] the Full Court of the Federal Court was concerned with the construction of a provision of the Customs Act 1901 (Cth). The Full Court said:

Guidance from international agreements

Because Pt XVB of the Customs Act is part of a legislative scheme designed to reflect and implement Australia's rights and obligations as set out in the GATT and the Countervailing Code, it is permissible to resort to the terms of those agreements for assistance in cases of ambiguity or uncertainty. The courts should in cases of doubt favour a construction of the Act which accords with the obligations of Australia under such international agreements, otherwise uncertainty would ensue if municipal courts gave a myriad of different constructions to the same basic concepts: see ICI; Chu Kheng Lim v Minister for Immigration, Local Government and Ethnic Affairs.

As the case law points out, an important consideration in examining legislation intended to implement international agreements is to give weight to the construction which the international community would attribute to the relevant instrument or concept: see Queensland v Commonwealth. In the present case the decisions of the European Court of Justice and the views of the GATT Panel should be accorded substantial weight in the light of this principle. Moreover, as a broad principle, it is obviously desirable that expressions used in international agreements should be construed, so far as possible, in a uniform and consistent manner by both municipal Courts and international Courts and Panels to avoid a multitude of divergent approaches in the territories of the contracting parties on the same subject matter.[30]

33 Consistently with Gamlen,[31] the task of interpretation is that 'appropriate for the interpretation of an international convention, unconstrained by technical rules of English law'. In El Greco v Mediterranean Shipping,[32] another case concerned with the Hague Rules, Allsop J (with whom Black CJ agreed) quoted with approval the following statement by Lord Diplock in Fothergill v Monarch Airlines Ltd:[33]

The language of that Convention that has been adopted at the international conference to express the common intention of the majority of the states represented there is meant to be understood in the same sense by the courts of all those states which ratify or accede to the Convention. Their national styles of legislative draftsmanship will vary considerably as between one another. So will the approach of their judiciaries to the interpretation of written laws and to the extent to which recourse may be had to travaux préparatoires, doctrine and jurisprudence as extraneous aids to the interpretation of the legislative text.

The language of an international convention has not been chosen by an English parliamentary draftsman. It is neither couched in the conventional English legislative idiom nor designed to be construed exclusively by English judges. It is addressed to a much wider and more varied judicial audience than is an Act of Parliament that deals with purely domestic law. It should be interpreted, as Lord Wilberforce put in James Buchanan & Co Ltd v Babco Forwarding & Shipping (UK) Ltd. ... 'unconstrained by technical rules of English law, or by English legal precedent, but on broad principles of general acceptation'.[34]

34 It is relevant here to note what was said by Brennan CJ in Applicant A v Minister for Immigration & Ethnic Affairs.[35] The High Court in that case was concerned with the construction of the word 'refugee' in the Migration Act 1958 (Cth). The term 'refugee' was defined by the Act as having the same meaning as it had in the Refugee Convention. Brennan CJ said:

If a statute transposes the text of a treaty or a provision of a treaty into the statute so as to enact it as part of domestic law, the prima facie legislation intention is that the transposed text should bear the same meaning in the domestic statute as it bears in the treaty. To give it that meaning, the rules applicable to the interpretation of treaties must be applied to the transposed text and the rules generally applicable to the interpretation of domestic statutes give way.[36]

35 Concerning the interpretation of treaties, Brennan CJ expressed his agreement with McHugh J's statement in the same case, that it was necessary to adopt 'an holistic but ordered approach'. Brennan CJ said:

The holistic approach to interpretation may require a consideration of both the text and the object and purpose of the treaty in order to ascertain its true meaning. Although the text of a treaty may itself reveal its object and purpose or at least assist in ascertaining its object and purpose, assistance may also be obtained from extrinsic sources. The form in which a treaty is drafted, the subject to which it relates, the mischief that it addresses, the history of its negotiation and comparison with earlier or amending instruments relating to the same subject may warrant consideration in arriving at the true interpretation of its text.[37]

It is necessary to begin with the construction of the definition as it appears in the Convention and Protocol. Regard primarily is to be had to the ordinary meaning of the terms used therein, albeit in their context and in the light of the object and purpose of the Convention. Recourse may also be had to the preparatory work for the treaty and the circumstances of its conclusion, whether to confirm the meaning derived by the above means or to determine a meaning so as to avoid obscurity, ambiguity or manifestly absurd or unreasonable results.[38]

37 Relevantly, s 2A(3) of the Victorian Act provides:

(3) Without limiting subsection (1), in interpreting this Act, reference may be made to the documents relating to the Model Law of -

(a) the United Nations Commission on International Trade Law; and

(b) its working groups for the preparation of the Model Law.

38 The Victorian Parliament was here expressing in legislative terms exactly the same principles of interpretation as had been set out in Applicant A.[39] Recourse may be had for interpretive purposes not only to the documents of UNCITRAL but also to the documents of the working groups which prepared the Model Law. Because the Victorian Act embodies and effectuates the Model Law, the working documents of the international body, prepared in developing the Model Law, are relevant to the interpretation of the provisions of the Act itself. Given the identity of language, this is hardly surprising.

39 It follows, in my view, that in interpreting s 8 of the Victorian Act, very great weight must be given to the intention of the drafters of art 8 of the Model Law and to the importance of uniformity of interpretation. We should avoid an interpretation of the section which would limit its intended scope by reason only of some peculiarity about the way in which the adjudicative structures of this jurisdiction have been established.

40 The intention of the drafters of art 8 is, of necessity, to be determined having regard to the definition of 'court' in art 2(c). As noted earlier, 'court' is there defined to mean 'a body or organ of the judicial system of a State'. It seems clear that this definition was intended to be sufficiently general to be capable of application to the 'judicial system' of each contracting State, whatever the constituent elements of that system might be.

41 Whether a particular decision-making tribunal is part of the 'judicial system' of a particular State was thus intended to be determined as a question of substance, not of form. As noted earlier, the 1985 UNCITRAL Commentary emphasised that the term 'court' was not restricted to those organs actually called 'court'.[40] What is determinative, therefore, is the character of the functions which the tribunal performs. Is it a 'competent authority', in the sense of having a recognised adjudicative jurisdiction?

42 The New Shorter Oxford Dictionary gives a number of meanings for the word 'judicial' which emphasise the centrality of function:

'of or pertaining to proceedings in a court of law';
'of or pertaining to the administration of justice';
'giving judgment or a decision on a matter';
'having the function of judgment'; and
'invested with authority to judge causes'.[41]

43 Taking this functional approach to the definition of 'court' accords with the manifest purpose of art 8. That is, parties who have agreed to have a relevant dispute dealt with by arbitration are prohibited, by force of their agreement, from taking the dispute - and the other disputant - into the adjudicative processes of the State. This policy reflects the fundamental distinction between arbitral processes (consensual and private) and judicial processes (State-sponsored, public, non-consensual).[42] Having agreed to the former, the parties have no recourse to the latter. Article 8 (and the corresponding provision in domestic law) ensures that the 'judicial system' bars any attempt to litigate a dispute which is covered by an arbitration agreement.

44 On this analysis, the drafters of art 8(1) of the Model Law would undoubtedly have intended it to apply to a body like VCAT. Although the Tribunal is not called a court, and its adjudicators are not called judges, its function is judicial. It is 'invested with authority to judge causes', and its decisions determine the rights and liabilities of the parties to proceedings before it. Importantly, as the applicant's submission pointed out, the Tribunal has a very broad jurisdiction to determine commercial disputes under the Australian Consumer Law and Fair Trading Act 2012 (Vic).[43] That jurisdiction, which was invoked by the Irelands in the present case, is conferred on the Tribunal in common with each of the Victorian courts.[44]

45 If it is correct that Article 8 itself would apply to VCAT, then it would be strange indeed if the Parliament of Victoria had intended (when it enacted s 8 in identical language) to narrow the scope of the provision and - to that extent - defeat the clear policy of the Model Law. Certainly, on my analysis, that would have constituted a departure in substance from the Model Law, a deliberate decision by the legislature to take a narrower view of 'judicial system' than that taken by the drafters of the Model Law. Had such a change been intended, it must be assumed that (consistently with the introductory 'Note' to the Act) the departure would have been expressly adverted to in the form of a note to s 8.[45]

46 There is, moreover, no discernible policy rationale which might explain such a narrowing of the scope of s 8. That is, I can see no basis on which Parliament might have regarded litigation at VCAT as properly falling outside the scope of s 8, while comparable litigation in the Magistrates' Court or the County Court would fall within it.

47 Further, such a significant exclusion - which (it must be assumed) would have been done deliberately - would have confounded the objective of uniformity which the Act itself emphasises. This would have been to create a particular

Victorian variation, attributable ultimately to nothing more than a difference in nomenclature - the very thing UNCITRAL said in 1985 was irrelevant in this context.

48 Given the interpretive principles flowing from the special character of this Act, and given the Victorian Parliament's express commitment to uniformity with the Model Law, it seems to me to be of little significance that the Act did not specifically re-enact the Model Law definition of 'court'. In the absence of any policy basis for viewing VCAT's adjudicative role as different - for the purposes of this particular Act - from the equivalent role played by the courts, I would not be prepared to infer from that omission alone that the legislature had made a deliberate decision to make s 8 narrower than the Model Law provision which it replicated.

49 Section 8 of the Commercial Arbitration Act 2011 (the 'Act') provides that, where a relevant request has been made, a court before which an action is brought in a matter which is the subject of an arbitration agreement must refer the parties to arbitration.[46] The word 'court' is not defined in the Act. The issue in the present proceeding is whether VCAT is a court within the meaning of s 8 of the Act.

50 The respondents commenced a proceeding against the applicant at VCAT. The applicant contends that there is an arbitration agreement in force between the parties that requires VCAT, pursuant to s 8 of the Act, to refer the parties to arbitration. In an application before VCAT, the applicant sought to have the respondents' claims against it referred to arbitration. The applicant was unsuccessful.

51 The applicant then sought leave to appeal under s 148(1) of the Victorian Civil and Administrative Tribunal Act 1998 (the 'VCAT Act'). On 18 October 2013, a judge of the Trial Division granted the applicant leave to appeal, but dismissed the appeal.[47] The applicant now seeks leave to appeal the order made in the Trial Division dismissing its appeal from VCAT. Recognising that the matter is of general importance, the respondents did not contest the applicant's application for leave to appeal.[48]

Arbitration agreement and substantive claim before court (cf Model Law Art 8)

(1) A court before which an action is brought in a matter which is the subject of an arbitration agreement must, if a party so requests not later than when submitting the party's first statement on the substance of the dispute, refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed.

(2) Where an action referred to in subsection (1) has been brought, arbitral proceedings may nevertheless be commenced or continued, and an award may be made, while the issue is pending before the court.

53 The Act commences with a note. The note provides:

Note

Sections of this Act that contain a reference to the 'Model Law' in the heading are substantially the same as the provisions of the UNCITRAL Model Law on International Commercial Arbitration (as adopted by the United Nations Commission on International Trade Law on 21 June 1985 with amendments as adopted by that Commission in 2006) so as to be as uniform as possible with the UNCITRAL Model Law. Some changes have been made to those provisions of the Act based on the UNCITRAL Model Law to amend or supplement the provisions in their application to domestic arbitrations in Victoria or to accommodate modern drafting styles and conventions (for example, provisions are drafted in gender neutral terms and archaisms are replaced with modern alternatives). Notes draw attention to substantive changes. The original numbering of the 'articles' of the UNCITRAL Model Law has been retained but converted to references to 'sections' and articles containing more than one sentence have been reformatted into subsections. There are a number of additional provisions to those based on the UNCITRAL Model Law.

54 As the note provides, sections of the Act that contain a reference to the 'Model Law' in the heading are substantially the same as the provisions of the UNCITRAL Model Law on International Commercial Arbitration so as to be as uniform as possible with the Model Law. Some changes are said in the note to have been made to provisions in the Act based on the Model Law 'to amend or supplement the provisions in their application to domestic arbitrations in Victoria or to accommodate modern drafting styles and conventions'. The note goes on to provide that notes in the Act draw attention to substantive changes.

55 The note appears immediately above s 1AA. Section 1AA provides:

1AA Purposes

The purposes of this Act are -

(a) to improve commercial arbitration processes to facilitate the fair and final resolution of commercial disputes by arbitration without unnecessary delay or expense; and

(b) to make consequential amendments to other Acts; and

(c) to repeal the Commercial Arbitration Act 1984.

1AC Paramount object of Act

(1) The paramount object of this Act is to facilitate the fair and final resolution of commercial disputes by impartial arbitral tribunals without unnecessary delay or expense.

(2) This Act aims to achieve its paramount object by -

(a) enabling parties to agree about how their commercial disputes are to be resolved (subject to subsection (3) and such safeguards as are necessary in the public interest); and

(b) providing arbitration procedures that enable commercial disputes to be resolved in a cost effective manner, informally and quickly.

(3) This Act must be interpreted, and the functions of an arbitral tribunal must be exercised, so that (as far as practicable) the paramount object of this Act is achieved.

(4) Subsection (3) does not affect the application of section 35 of the Interpretation of Legislation Act 1984 for the purposes of interpreting this Act.

57 The note and ss 1AA and 1AC precede pt 1 of the Act. Part 1 of the Act commences with s 1. Section 1(1) of the Act provides that the Act applies to domestic commercial arbitrations.

58 Section 2 of the Act contains definitions and rules of interpretation. Section 2 relevantly provides:

2 Definitions and rules of interpretation (cf Model Law Art 2)

(1) In this Act -

arbitral tribunal means a sole arbitrator or a panel of arbitrators;

arbitration means any domestic commercial arbitration whether or not administered by a permanent arbitral institution;

arbitration agreement - see section 7;

confidential information, in relation to arbitral proceedings, means information that relates to the arbitral proceedings or to an award made in those proceedings and includes the following -

(a) the statement of claim, statement of defence and all other pleadings, submissions, statements or other information supplied to the arbitral tribunal by a party;

(b) any information supplied by a party to another party in compliance with a direction of the arbitral tribunal;

(c) any evidence (whether documentary or otherwise) supplied to the arbitral tribunal;

(d) any notes made by the arbitral tribunal of oral evidence or submissions given before the arbitral tribunal;

(e) any transcript of oral evidence or submissions given before the arbitral tribunal;

(f) any rulings of the arbitral tribunal;

(g) any award of the arbitral tribunal;

disclose, in relation to confidential information, includes publishing or communicating or otherwise supplying the confidential information;

domestic commercial arbitration - see section 1;

exercise a function includes perform a duty;

function includes a power, authority or duty;

interim measure - see section 17;

Model Law means the UNCITRAL Model Law on International Commercial Arbitration (as adopted by the United Nations Commission on International Trade Law on 21 June 1985, and as amended by the United Nations Commission on International Trade Law on 7 July 2006);

party means a party to an arbitration agreement and includes -

(a) any person claiming through or under a party to the arbitration agreement; and

(b) in any case where an arbitration does not involve all of the parties to the arbitration agreement, those parties to the arbitration agreement who are parties to the arbitration;

the Court means, subject to section 6(2), the Supreme Court.

Note

The definitions of arbitration agreement, confidential information, disclose, domestic commercial arbitration, exercise, function, interim measure, Model Law, party and the Court are not included in the Model Law.

...

(5) Notes (other than the Model Law note to section 1) included in this Act do not form part of this Act.

Note

This provision is not included in the Model Law.

(6) A heading to a section of this Act (other than sections 1AA, 1AB, 1AC and 1AD) does not form part of this Act.

Note

This provision is not included in the Model Law.

59 The reference to the Model Law Note in s 2(5) is a reference to a Note headed 'Model Law note' that appears immediately after s 1(6) of the Act.

2A International origin and general principles (cf Model Law Art 2A)

(1) Subject to section 1AC, in the interpretation of this Act, regard is to be had to the need to promote so far as practicable uniformity between the application of this Act to domestic commercial arbitrations and the application of the provisions of the Model Law (as given effect by the International Arbitration Act 1974 of the Commonwealth) to international commercial arbitrations and the observance of good faith.

...

(3) Without limiting subsection (1), in interpreting this Act, reference may be made to the documents relating to the Model Law of -

(a) the United Nations Commission on International Trade Law; and

(b) its working groups for the preparation of the Model Law.

(4) Subsection (3) does not affect the application of section 35 of the Interpretation of Legislation Act 1984 for the purposes of interpreting this Act.

Note

This section differs from the Model Law. Art 2A(1) has been changed as a consequence of the application of the Act to domestic (instead of international) commercial arbitrations. Art 2A(2) is omitted because it is covered by the provision referred to in section 1AC(4). Subsections (3) and (4) reflect section 17 of the International Commercial Arbitration Act 1974 of the Commonwealth.

5 Extent of court intervention (cf Model Law Art 5)

In matters governed by this Act, no court must intervene except where so provided by this Act.

Court for certain functions of arbitration assistance and supervision (cf Model Law Art 6)

(1) The functions referred to in sections 11(3) and (4), 13(4), 14(2), 16(9), 17H, 17I, 17J, 19(6), 27, 27A, 27B, 27H, 27I, 27J, 33D, 34 and 34A are, subject to subsection (2), to be performed by the Supreme Court.

(2) If -

(a) an arbitration agreement provides that the County Court or the Magistrates' Court is to have jurisdiction under this Act; or

(b) the parties to an arbitration agreement have agreed in writing that the County Court or the Magistrates' Court is to have jurisdiction under this Act and that agreement is in force -

the functions are to be performed, in relation to that agreement, by the County Court or the Magistrates' Court, as the case requires.

Note

This section differs from the Model Law to the extent that it relates to functions conferred on the Court with respect to domestic arbitrations that are not referred to in the Model Law.

63 Having regard to the definition of 'the Court' in s 2(1) of the Act, it is not immediately apparent why the words 'the Supreme Court' were used in s 6(1) of the Act.

41 Court rules

(1) Rules of court may be made for carrying the purposes of this Act into effect and, in particular, for or with respect to the following -

(a) applications to a court under this Act and the costs of such applications;

(b) the payment or bringing of money into and out of a court in satisfaction of claims to which arbitration agreements apply and the investment of that money;

(c) the examination of witnesses before a court or before any other person and the issue of commissions or requests for the examination of witnesses outside Victoria, for the purposes of an arbitration;

(d) offers of compromise in relation to claims to which arbitration agreements apply;

(e) any other matter or thing for or with respect to which rules are by this Act authorised or required to be made by a court.

(2) Subsection (1) does not limit the rule-making powers conferred on a court by any other Act.

Note

There is no equivalent to this section in the Model Law.

65 Section 8 of the Act is in identical terms to art 8 of the Model Law. The heading of art 8 is identical to the heading of s 8, and the two paragraphs in art 8 are identical to the two sub-sections of s 8 (although the word 'paragraph' in paragraph (2) of art 8 has been replaced with the word 'sub-section' in sub-section (2) of s 8 of the Act).

66 Article 2, like s 2 of the Act, is headed 'Definitions and rules of interpretation'. Article 2 of the Model Law contains three definitions as follows:

For the purposes of this Law:

(a) 'arbitration' means any arbitration whether or not administered by a permanent arbitral institution;

(b) 'arbitral tribunal' means a sole arbitrator or a panel of arbitrators;

(c) 'court' means a body or organ of the judicial system of a State.

67 The note at the end of s 2(1) of the Act says that the definitions of 'arbitration agreement', 'confidential information', 'disclose', 'domestic commercial arbitration', 'exercise', 'function', 'interim measure', 'Model Law', 'party' and 'the Court' are not included in the Model Law. However, at least arguably, these are not the only 'substantive changes' made in s 2 of the Act to art 2 of the Model Law. Notwithstanding the terms of the note at the commencement of the Act, the note at the end of s 2(1) fails to disclose that the word 'court' defined in art 2 of the Model Law is not defined in s 2 of the Act. Further, it is not entirely correct to say that the definition of 'arbitration agreement' is not included in the Model Law. The definition of 'arbitration agreement' in s 2 of the Act refers to s 7 of the Act. The definition in s 7 of the Act mirrors the definition in Option II of art 7 of the Model Law.

68 So far as ss 2A, 5 and 6 of the Act are concerned, s 5 is identical to art 5 and the differences between ss 2A and 6 and articles 2A and 6 are accurately reflected in the notes at the end of ss 2A and 6.

69 Part Two of the document containing the Model Law is headed 'Explanatory Note by the UNCITRAL Secretariat on the 1985 Model Law on International Commercial Arbitration as amended in 2006'. A footnote to this part of the document states that:

This note was prepared by the secretariat of the United Nations Commission on International Trade Law (UNCITRAL) for information purposes only; it is not an official commentary on the Model Law.

70 Section 2A(3) permits a court to make reference to documents relating to the Model Law of the United Nations Commission on International Trade Law.

Recent amendments to arbitration laws reveal a trend in favour of limiting and clearly defining court involvement in international commercial arbitration. This is justified in view of the fact that the parties to an arbitration agreement make a conscious decision to exclude court jurisdiction and prefer the finality and expediency of the arbitral process.
In this spirit, the model envisages court involvement in the following instances [reference is then made to instances envisaged in various articles of the Model Law, of which there are equivalents in the Act].
Beyond the instances [referred to], 'no court shall intervene, in matters governed by this Law'. Article 5 thus guarantees that all instances of possible court intervention are found in the piece of legislation enacting the Model Law, except for matters not regulated by it. ...

72 The explanatory memorandum deals with art 8 in the following terms:

Articles 8 and 9 deal with two important aspects of the complex relationship between the arbitration agreement and the resort to courts. Modelled on article II(3) of the New York Convention, article 8(1) of the Model Law places any court under an obligation to refer the parties to arbitration if the court is seized with a claim on the same subject matter unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed. The referral is dependent on a request, which a party may make not later than when submitting its first statement on the substance of the dispute. This provision, where adopted by a State enacting the Model Law, is by its nature binding only on the courts of that State. However, since article 8 is not limited in scope to agreements providing for arbitration to take place in the enacting State, it promotes the universal recognition and effect of international commercial arbitration agreements.

73 VCAT is a statutory tribunal. There is now a significant body of cases in which it has been held that VCAT is not a court.[49] That said, when VCAT exercises original jurisdiction,[50] it discharges a function that, at least, resembles the exercise of judicial power by a court.[51]

74 Notwithstanding the cases to which I have just referred (and which hold that VCAT is not a court), the word 'court', when undefined in some statutes, has, on occasion, been held to include VCAT. For example, the authorities in respect of s 471B of the Corporations Act 2001 show that the word 'court' in that section is not to be construed in a strict sense, but rather in a fashion that is broad enough to cover a proceeding in a tribunal such as VCAT.[52] Similarly, in my view, it could not be doubted that the expression 'any court', in s 65(8) of the Constitution Act 1975, includes VCAT.

75 From time to time the Victorian Parliament has defined the word 'court' so as to pick up various unspecified tribunals[53] or to pick up VCAT specifically for certain specified provisions.[54] On other occasions the word 'court' is defined in a way that plainly excludes VCAT.[55] While s 38 of the Interpretation of Legislation Act 1984 contains definitions of the expressions 'Coroners Court', 'County Court', 'Court of Appeal', 'Family Court', 'Federal Court', 'High Court', 'Magistrates' Court', 'Supreme Court' and 'VCAT', there is no general definition applying to statutes ('unless the contrary intention appears') of the word 'court'.

76 In discussing judicial power in the context of arbitration, French CJ and Gageler J said in TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia:[56]

Underlying each of those dimensions of the judicial power of the Commonwealth is its fundamental character as a sovereign or governmental power exercisable, on application, independently of the consent of those whose legal rights or legal obligations are determined by its exercise. That fundamental character of the judicial power of the Commonwealth is implicit in the frequently cited description of judicial power as 'the power which every sovereign authority must of necessity have to decide controversies between its subjects, or between itself and its subjects', the exercise of which 'does not begin until some tribunal which has power to give a binding and authoritative decision (whether subject to appeal or not) is called upon to take action'. Judicial power 'is conferred and exercised by law and coercively', 'its decisions are made against the will of at least one side, and are enforced upon that side in invitum', and it 'is not invoked by mutual agreement, but exists to be resorted to by any party considering himself aggrieved'.[57]

77 In the same case, the plurality[58] said of judicial power and arbitration:

The exercise of judicial power is an assertion of the sovereign, public authority of a polity. Whilst it is 'both right and important to observe that the determination of rights and liabilities lies at the heart of the judicial function', parties are free to agree to submit their differences or disputes as to their legal rights and liabilities for decision by an ascertained or ascertainable third party, whether a person or a body. As will be explained, where parties do so agree, 'the decision maker does not exercise judicial power, but a power of private arbitration'.[59]

78 The applicant submits that 'court' in s 8 is to be construed as including VCAT because to do otherwise would severely limit the width of operation of the operation of the Act. In essence, the applicant submits that the Act falls to be construed consistently with the provisions of the Model Law and the way the Model Law falls to be construed. The applicant then submits that, upon its proper construction, the Model Law (and in particular art 8) has application to any 'body or organ of the judicial system' of the relevant State. Reliance is placed by the applicant upon both the explanatory note prepared by the secretariat of UNCITRAL[60] and the definition of 'court' in art 2 ('a body or organ of the judicial system of a State').

79 The applicant's argument might be considerably strengthened if the word 'court' was defined in s 2(1) of the Act in like terms to that found in art 2 of the Model Law. Instead, the Victorian Parliament chose not to define 'court', but rather to define 'the Court'. There is no extrinsic material that throws light on why the Victorian Parliament took this approach.[61] A question arises as to whether one might infer from the lack of any reference in the note following s 2(1) to the failure to define 'court' that such failure does not involve some substantive change.[62]

80 The respondents resist the applicant's argument, submitting that the omission of the Model Law's definition of 'court' shows an intention that 'court' in the Act should not be given any wider meaning than its traditional meaning. Further, the respondents submit that in any event VCAT does not answer the description of 'a body or organ of the judicial system of a State'. At best, the respondents submit that VCAT might answer the description of a body or organ of a quasi-judicial system of a State. In making this submission, the respondents point to the fact that VCAT cannot enforce its own orders.[63]

81 In support of their submissions that 'court' in s 8 of the Act does not include VCAT, the respondents also submitted that, when one examined s 6 of the Act, one could see that the Parliament had given careful consideration to the existence, and potential roles, of the Magistrates' Court and the County Court. Section 6 of the Act facilitates the agreement between parties that certain functions under the Act may be performed by a court other than the Supreme Court (specifically, the County Court or the Magistrates' Court). It was submitted that the failure to make reference to VCAT in this section (or any other section of the Act) told against the word 'court' in s 8 having a wider than traditional meaning.

82 Next, it was submitted on behalf of the respondents that if one looked at s 41 of the Act, the word 'court' in that section could not include VCAT. The argument was then that 'court' in s 41 could not have a different meaning from 'court' in s 8.

83 There is no doubt that the rule making power set out in paragraphs (b), (c) and (d) of s 41(1) could not apply to VCAT. The rule making power in these paragraphs could only apply to the Supreme Court, the County Court and the Magistrates' Court, exercising a function given to them by an agreement between the parties as contemplated by s 6 of the Act.[64] However, it does not necessarily follow that s 41 of the Act does not permit VCAT to make rules in relation to, at least, applications or requests that might be made under s 8(1) of the Act. While one might not necessarily expect VCAT to make any such rules, nothing in the Act prevents such a course. And depending upon the construction to be given to the word 'court', s 41 may specifically permit such a course.[65]

84 The respondents submitted that there was no reason to give the word 'court' a wider than traditional meaning. Their submission was that the purpose of the Act was to require parties to an arbitration agreement to stay away from what has traditionally been thought of as the more expensive and time consuming regime of traditional court approaches to dispute resolution. So it was submitted by the respondents that while the policy of the Act favours quicker and cheaper arbitrations over longer and more expensive court processes, the Act is silent as to any preference between the quicker and cheaper VCAT route on the one hand and the equivalently quicker and cheaper arbitration route on the other hand.

85 The applicant resisted this submission by saying that a proper consideration of the Model Law and its purpose was to require parties to relevant arbitration agreements to abide such agreements not merely because of cost and time factors but also because the parties had agreed other matters that were important to them, such as the choice of law to be applied, the forum in which the dispute is to be determined and the identity and qualifications of the person or body charged with resolving a relevant dispute.

86 Notwithstanding the inability of VCAT to enforce its own orders, in my view VCAT answers the description of 'a body or organ of the judicial system of [Victoria]'.[66] VCAT possesses the six features referred to by Lord Sankey LC in Shell Oil Co of Australia Ltd v Federal Commissioner of Taxation.[67] This is so, at least, in respect of VCAT's exercise of original jurisdiction.[68]

87 In Thiess v Collector of Customs & Ors,[69] the High Court recently restated again the correct approach to be taken to issues of statutory construction, in the following terms:

This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the [statutory] text. So must the task of statutory construction end. The statutory text must be considered in its context. That context includes legislative history and extrinsic materials. Understanding context has utility if, and insofar as, it assists in fixing the meaning of the statutory text.[70]

88 The court went on to endorse again a quote from earlier authority that it is:

one of the surest indexes of a mature and developed jurisprudence not to make a fortress out of the dictionary; but to remember that statutes always have some purpose or object to accomplish, whose sympathetic and imaginative discovery is the surest guide to their meaning.[71]

89 All of that said, one might debate at length the consequences of the failure by the Victorian Parliament to define the word 'court' in s 2(1) of the Act in the same terms as that word is defined in art 2 of the Model Law. Further, one might debate at length the failure to make reference to this omission in the note following s 2(1), having regard to the terms of the note at the commencement of the Act. However, as has been said before, it is the nature of contestable statutory provisions that persuasive arguments can commonly be mounted in support of alternative interpretations.[72]

90 When one examines the provisions of the Act, the Model Law and the extrinsic materials to which I have referred, and when one takes into account the purposes of the Act as specified in s 1AA and the paramount object of the Act as specified in s 1AC, one is driven towards a conclusion that the underlying purpose

of the Act was not merely to express a preference for low cost speedy arbitrations over longer more expensive court trials - but rather, and partly in the interests of uniformity, to express a preference for holding parties to their bargains that in terms involve preferring arbitration of whatever kind has been agreed between the parties over State sponsored dispute resolution (no matter how cost efficient or time effective the relevant State body or arm might prove to be).[73]

91 It follows that, with great respect to the reasoning of the VCAT member who first heard the applicant's application under s 8 of the Act, and similarly to the careful and detailed reasoning of the judge at first instance from whom this application for leave to appeal is brought, I must disagree with their conclusions. In my view, the word 'court' in s 8 includes VCAT. I am fortified in this conclusion by the reasons for judgment of Maxwell P, which I have had the benefit of reading in draft.

92 I would grant leave to appeal, treat the appeal as having been heard instanter and allow the appeal. The word 'court' in s 8 of the Commercial Arbitration Act 2011 includes VCAT.

93 I have had the benefit of reading the judgment of Beach JA in draft and gratefully adopt his Honour's statement of the facts, issues and statutory provisions that are relevant to this application. I also adopt his Honour's abbreviations and definitions.

94 In my opinion, the question of whether VCAT is a 'court' for the purposes of s 8 of the Act must be answered by the application of the ordinary rules of statutory interpretation as expanded by the Act.

95 In Project Blue Sky Inc v Australian Broadcasting Authority,[74] the High Court stated that the primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all of the provisions of the statute. The process of construction must always begin by examining the context of the provision that is being construed.[75] The duty of a court is to give the words of a statutory provision the meaning that the legislature intended them to have. Ordinarily, the legal meaning will correspond with the grammatical meaning of the provision. However, the context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.[76]

96 Section 8 of the Act does not define the word 'court'. If one were to consider that word in isolation, one would need to consider the common law criteria for determining which bodies are courts and assess whether VCAT satisfies those criteria.[77] In my opinion, VCAT could not be characterised as a court under the common law because it is not bound by the rules of evidence;[78] it cannot enforce its own decisions;[79] some of its members are not legally qualified;[80] it can be required to apply a statement of government policy;[81] and it can be required to provide advisory opinions.[82] Further, VCAT and its predecessor, the Victorian Administrative Appeals Tribunal, were expressly established to be inexpensive, informal and speedy administrative tribunals rather than courts.[83]

97 The common law position is reflected in the Civil Procedure Act 2010, s 3 of which defines 'court' as the Supreme Court, the County Court and the Magistrates' Court. Although the Interpretation of Legislation Act 1984 does not define 'court', it uses that word in contradistinction to 'tribunal' and 'persons acting judicially'.[84]

98 The common law position is also reflected in the Constitution Act 1975, which also draws a distinction between 'court' and 'tribunal'.[85] Moreover, s 87AAA, which is in pt IIIAA - 'The Judiciary' - defines 'judicial office' to mean the office of a judge or associate judge of the Supreme Court or the County Court and the office of magistrate.

99 As VCAT has generally not been regarded as a court, if Parliament had intended that it be treated as a court for the purposes of the Act, it could easily have said so.

100 Section 8(1) of the Act contains the word 'action' which generally refers to a legal proceeding. While the word 'action' used in that sense appears in the Supreme Court Act 1986,[86] the County Court Act 1958,[87] and the Magistrates' Court Act 1989,[88] it does not appear in the VCAT Act. The most common mechanism for seeking relief from VCAT is the filing of an 'application'.[89] Moreover, s 3(1) of the Limitation of Actions Act 1958 defines 'action' as including any proceeding in a 'court of law'. These provisions strongly suggest that the filing of an application with VCAT does not constitute the bringing of an action before a court within the meaning of s 8(1) of the Act.

101 The conclusion at [100] above is reinforced by s 27A(2) of the Limitation of Actions Act 1958 which provides that a reference to 'a court' in pt IIA of that Act - which deals with personal injury actions - includes VCAT for the purposes of s 217 of the Australian Consumer Law and Fair Trading Act 2012 ('ACLFT Act') or s 236 of the Australian Consumer Law (Victoria). The clear implication is that VCAT is not otherwise a court for the purposes of the Limitation of Actions Act 1958. Interestingly, s 217(3) of the ACLFT Act states that a proceeding under that section 'may be brought before VCAT or any court of competent jurisdiction'. This strongly suggests that VCAT is not a court of competent jurisdiction.

102 Of course, s 8 cannot be considered in isolation. It must be read in the context of the other provisions of the Act and the purposes of the Act.

103 The other provisions of the Act in which there is a reference to a 'court' are ss 2, 5, 9, 17I(1)(a)(iii), 27F(8), 36(1)(a)(v), (2), 38 and 41. The subject-matter of these provisions indicates that they apply to courts exercising functions under the Act. This proposition is borne out by an examination of ss 2, 5 and 41.

104 Section 2 of the Act sets out definitions and rules of interpretation. It does not define 'court' but it does define 'the Court'. The definition of 'the Court' in s 2(1) and the elaboration of that definition in s 6 indicate that the references to 'court' in the Act are to the traditional courts in the State's judicial hierarchy, namely, the Supreme Court, the County Court and the Magistrates' Court. Sections 2 and 6 also indicate that the references to a 'court' in the Act are intended to be to courts which could have jurisdiction under s 6 to intervene in, and exercise supervisory functions over, commercial arbitrations. Those courts are the Supreme Court, the County Court and the Magistrates' Court. The above intention is reinforced by s 5 - which refers to interventions by a 'court' - and by s 41, which provides for the making of rules of court by a 'court' that may exercise functions under the Act.[90] VCAT does not fall within the express language of ss 2(1), 5, 6 or 41. Moreover, the inclusion of VCAT in those sections would be inconsistent with their evident purpose.

105 The key purpose and paramount object of the Act are to 'facilitate the fair and final resolution of commercial disputes by impartial arbitral tribunals without unnecessary delay or expense.'[91] Implicit in the key purpose and paramount object and s 8 of the Act is the proposition that, while courts are impartial and fair, they are unable to resolve commercial disputes 'without unnecessary delay or expense'. That implicit proposition has no application to VCAT and, accordingly, the key purpose and paramount object of the Act would not be undermined by a finding that 'court' in s 8 does not include VCAT. This is because, under s 98(1)(d) of the VCAT Act, VCAT 'must conduct each proceeding with as little formality and technicality, and determine each proceeding with as much speed, as the requirements of [the VCAT] Act and the enabling enactment and a proper consideration of the matters before it permit.'

106 It is true that s 1AC(2) of the Act provides that the Act 'aims to achieve its paramount object by ... enabling parties to agree about how their commercial disputes are to be resolved' and that s 1AC(3) states that the Act 'must be interpreted ... so that (as far as practicable) the paramount object ... is achieved.' It is also true that the bases upon which an arbitral award can be challenged in the Supreme Court under the Act are, in some respects, narrower than the bases for challenging a decision of VCAT under the VCAT Act.[92] The provisions of the Act to which I have referred clearly intend to facilitate the giving effect to consensual arbitration. However, they do not state that arbitrations are exclusive of all other dispute resolution mechanisms. The extent to which other dispute resolution mechanisms are excluded depends on the meaning and effect of s 8 of the Act. There is nothing in the Act which excludes the application of the ordinary rules of statutory interpretation to the task of ascertaining the purpose and effect of s 8 of the Act. The fact that s 1AC(4) of the Act expressly preserves the application of s 35 of the Interpretation of Legislation Act 1984 confirms this.

107 In this context, it is relevant to note that, although VCAT performs functions under a multiplicity of enabling enactments, its jurisdiction is confined to those enabling enactments. This is to be contrasted with the traditional courts of the State which have broad jurisdiction in civil and criminal matters, subject to monetary and other limits in some cases. Moreover, while VCAT has jurisdiction in some commercial matters, much of its jurisdiction relates to consumer matters in respect of which it is intended that individuals be able to pursue their legal rights without the need for legal representation.

108 I do not agree that resort can be had to the definition of 'court' in art 2 of the Model Law to determine the meaning of 'court' in s 8 of the Act. This is because when s 2(1) of the Act is compared with art 2 of the Model Law, it is clear that s 2(1) has: repeated the definition of 'arbitral tribunal' without amendment; included an amended version of the definition of 'arbitration'; and omitted the definition of 'court'.[93] As the definition of 'court' in art 2 of the Model Law is the only definition that is entirely omitted from s 2(1) of the Act, the omission must mean that the definition is not intended to apply to the Act. At the very least, the omission is neutral. It certainly cannot be inferred from the omission that the definition was intended to apply to the Act.

109 It should also be noted that s 2A(3) of the Act provides that, in interpreting the Act, reference 'may' be made to the documents relating to the Model Law of UNCITRAL and its working groups for the preparation of the Model Law. If the Act had intended that the definitions and explanatory documents relating to the Model Law were to govern the interpretation of the Act, it would have mandated that those definitions and documents be taken into account.

110 Even if the conclusion at [108] above is wrong, VCAT would still not be a 'court' for the purposes of the Act. This is because VCAT is not 'a body or organ of the judicial system of [Victoria]' within the meaning of the definition of 'court' in art 2 of the Model Law. The judicial system of Victoria comprises the courts of the State. It does not include statutory tribunals which have compulsory dispute resolution functions. Had the Model Law intended to include all state bodies or organs that have compulsory dispute resolution functions, it could have easily said so.

111 Further, if it is appropriate to refer to the definition of 'court' in art 2 of the Model Law, reference should also be made to UNCITRAL's commentary on the Model Law insofar as the commentary may elucidate the meaning of 'court'.

112 A report of the Secretary-General of UNCITRAL[94] sets out commentary on the Model Law ('UNCITRAL's commentary'). In relation to the definition of 'court', UNCITRAL's commentary states:

[The definition of 'court'] simply refers to, without interfering with, the national judicial system ... Taking into account the varied nomenclature, the term 'court' is not restricted to those organs actually called 'court' in a given country but would include any other 'competent authority' (such is the expression used in the 1958 New York Convention).

113 UNCITRAL's commentary on art 8 of the Model Law makes it clear that art 8 is closely modelled on art II(3) of the 1958 New York Convention.[95] UNCITRAL's commentary on art 5 of the Model Law includes the following:

Although the provision, due to its categorical wording ... may create the impression that court intervention is something negative and to be limited to the utmost, it does not itself take a stand on what is the proper role of courts. It merely requires that any instance of court involvement be listed in the model law.

114 So much of the text of the Model Law as has its origin in the New York Convention must be construed in the context, and in the light of the object and purpose of, that Convention.[96] There are four references to the term 'competent authority' in the New York Convention. Although the term is not defined, it is used to describe a body that has authority in relation to the recognition, enforcement, setting aside and suspension of an arbitral award.[97] These are judicial functions which under s 6 of the Act are performed by the Supreme Court or, if an arbitration agreement provides, by the County Court or the Magistrates' Court. The functions have nothing to do with VCAT or any other tribunal.

115 Having regard to the language of s 8 of the Act, the context in which the word 'court' appears in the Act, the key purpose and paramount object of the Act, the wording of the Model Law and the extrinsic materials relating to the Model Law, VCAT is not a court for the purposes of the Act.

116 The discussion of the concept of 'judicial power' in TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia[98] does not affect the conclusion at [115] above. While the broad distinction between consensual arbitration and coercive State-sponsored dispute resolution mechanisms is conceptually very clear, this distinction is not reflected in the Act. Rather, the Act reflects a narrower distinction between consensual commercial arbitration and judicial adjudication by courts that belong to the traditional court hierarchy of the State.

117 I would grant leave to appeal, treat the appeal as having been heard and dismiss the appeal.

[3] Subway Systems v Ireland [2013] VSC 550 ('Reasons').

[4] See, eg, Commercial Arbitration Act 2010 (NSW) s 8; Commercial Arbitration Act 2011 (SA) s 8; Commercial Arbitration Act 2012 (WA) s 8; Commercial Arbitration Act 2013 (Qld) s 8; Commercial Arbitration Act 2014 (Tas) s 8.

[5] See Minister for Industrial Affairs v Civil Tech Pty Ltd [1997] SASC 6298; (1997) 69 SASR 348, 355; Energy Brix Australian Corporation Pty Ltd v National Logistics Coordinators (Morwell) Pty Ltd [2002] VSCA 113; (2002) 5 VR 353, 363-4 [20].

[6] See, eg, Health Practitioner Regulation National Law (Victoria) Act 2009 (Vic); Marine (Domestic Commercial Vessel National Law Application) Act 2013 (Vic); Co-operatives National Law Application Act 2013 (Vic); Electronic Conveyancing (Adoption of National Law) Act 2013 (Vic).

[7] UNCITRAL Model Law on International Commercial Arbitration, GA Res 40/72, UN GAOR, 40th sess, 112th plen mtg, Supp No 17, UN Doc A/40/17 (11 December 1985) annex I [2] ('UNCITRAL 1985').

[8] Revised articles of the Model Law on International Commercial Arbitration of the United Nations Commission on International Trade Law, and the recommendation regarding the interpretation of article II, paragraph 2, and article VII, paragraph 1, of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York, 10 June 1958, GA Res 61/33, UN GAOR, 61st sess, 64th plen mtg, Agenda Item 77, Supp No 17, UN Doc A/61/17 (4 December 2006) annex I ('UNCITRAL 2006 Amendments').

[9] UNCITRAL 1985, UN Doc A/40/17 as amended by UNCITRAL 2006 Amendments, UN Doc A/61/17.

[10] Ibid 23-4 [2]-[3] (emphasis added).

[11] Ibid 25 [8]-[9] (emphasis added).

[12] Ibid 27 [15]-[17], 29 [21] (emphasis added).

[15] UNCITRAL 1985, UN Doc A/40/17 as amended by UNCITRAL 2006 Amendments, UN Doc A/61/17, arts 8 and 9.

[16] International commercial arbitration: analytical commentary on draft text of a model law on international commercial arbitration - report of the Secretary-General, 18th session, Agenda Item 4, UN Doc A/CN.9/264 (25 March 1985) 4, [5] ('Analytical Commentary').

[18] UNCITRAL 1985, UN Doc A/40/17 as amended by UNCITRAL 2006 Amendments, UN Doc A/61/17, art 2.

[20] Commercial Arbitration Act 2011 (Vic) pt 1A (emphasis added).

[30] Ibid 421 (emphasis added, citations omitted). In fact, Queensland v Commonwealth [1989] HCA 36; (1989) 167 CLR 232 was not relevantly concerned with the construction of domestic legislation. Rather, the Court was concerned to identify whether the relevant treaty imposed an international duty on Australia, which would then engage the external affairs power.

[32] [2004] FCAFC 202; (2004) 140 FCR 296, 327 [143] (emphasis added, citations omitted).

[35] (1997) 190 CLR 225 ('Applicant A').

[36] Ibid 230-1 (emphasis added, citations omitted).

[40] See [20] above.

[41] Brown L (ed), The New Shorter Oxford English Dictionary, (Clarendon Press, 1993) 1459.

[42] See TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia [2013] HCA 5; (2013) 295 ALR 596, 606 [28], 616 [75].

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