Teen Entertainment Enterprise Network Pty Ltd (ACN: 625 342 174)

Teen Entertainment Enterprise Network Pty Ltd v A&H Natoli Pty Ltd (Civil Claims) [2022] VCAT 1500

1. I direct the Principal Registrar to list proceedings C4877/2018 and C5571/2018 for a directions hearing on 20 February 2023 at 10:30am before a judicial member of the Tribunal, to make further procedural orders and decisions - including to determine whether to make an order under s 77 of the Victorian Civil and Administrative Tribunal Act 1998 ('VCAT Act') - in connection with questions that have arisen in the proceedings in light of the recent Court of Appeal decision of Thurin v Krongold Constructions (Aust) Pty Ltd [2022] VSCA 226 (Thurin v Krongold). Those questions include:
   1. Whether all, or any part of these proceedings, should be struck out on the basis that the subject matter of the proceedings is more appropriately dealt with by a Court in circumstances where the Tribunal lacks jurisdiction in regard to federal matters?
   2. If a party or parties advancing a claim or defence that raises a federal matter elects to abandon it in the proceedings, whether any part of these proceedings nevertheless can remain or should remain in the Tribunal?
2. I direct the Principal Registrar to take no further action, until further order, in regard to the directions made by me in orders 4 and 10 of my Order of 19 April 2022 and in orders 7 and 8 of my Order of 7 July 2022.
3. By 20 January 2023, the parties shall file and serve an outline of any submissions they may wish to make at the directions hearing, and in particular concerning the questions set out in order 1.
4. This Order is also made in proceeding C4877/2018.
5. Costs reserved.

For the applicants in C4877/2018 and respondents in C5571/2018

For the respondents C4877/2018 and applicant in C5571/2018

1. I am directing the Principal Registrar to list proceedings C4877/2018 and C5571/2018 for a directions hearing before a judicial member of the Tribunal to make the order referred to above, in light of the recent Court of Appeal decision of Thurin v Krongold. Only a judicial member can make an order under s 77 of the VCAT Act.
2. To assist the parties, I give detailed written reasons for this Order.

1. These two proceedings are brought in the original jurisdiction of the Tribunal,[1] in the Civil Claims List of the Civil Division. They have a complex history. They involve numerous parties, but it is convenient to note that the parties fall into two camps. The first comprises A&H Natoli, Organic Oz, Helen Natoli and Tony Natoli (collectively the Natoli parties) and the second involves Teen Entertainment, Irena Spaleta and Bob Spaleta (collectively the Spaleta parties).
2. In 2019, after a final hearing of the claim in C4877/2018 and counterclaim in C5571/2018, the Tribunal made orders dated 30 August 2019 against which the respondent in C4877/2018 successfully appealed.[2]

Teen Entertainment Enterprise Network Pty v A&H Natoli Pty Ltd [2020] VSC 388

1. On 26 June 2020, Justice Richards in the Supreme Court of Victoria found that the Tribunal had erred by determining the case on a particular legal cause of action, namely unconscionability under the Australian Consumer Law (ACL), that had not been identified or pleaded in the points of claim on foot at that time or on which submissions had been made to the Tribunal when it heard the claim and counterclaim. Accordingly, the Supreme Court remitted both these proceedings for hearing and determination again by the Tribunal differently constituted - see Teen Entertainment Enterprise Network Pty v A&H Natoli Pty Ltd [2020] VSC 388, Richards J (26 June 2020).[3]
2. In her findings on the appeal, Richards J described the parties' dispute in detail. It is helpful to repeat her description (my underlining is added for emphasis):
   1. Between 2012 and 2018, A&H Natoli Pty Ltd and Organic Oz Pty Ltd operated a green grocery business from leased premises in Centre Road, Bentleigh East. Tony Natoli was the director of both of these Natoli companies, and his wife Helen Natoli worked in the business. By 2014, the business had run into financial difficulties and the Natoli companies were in dispute with their landlord.
   2. The Natolis met Irena Spaleta and her husband Bob Spaleta through the soccer club at which their sons played. They were introduced by another soccer parent, who suggested that Mrs Spaleta might be able to help the Natolis with the dispute with their landlord. She agreed to assist, and was able to negotiate a resolution to the dispute.
   3. Mrs Spaleta then offered to provide the Natoli companies with further assistance in managing their finances. This arrangement continued for about a year, ending in late 2015. By 2017, the Natoli companies were again in financial trouble. Mrs Spaleta provided further assistance in managing their expenses. The terms on which she agreed to do this are in dispute.
   4. On 30 March 2018, a company called Teen Entertainment Enterprise Network Pty Ltd was incorporated. Its sole director was Mrs Spaleta's mother, Stefanija Posaric.
   5. On 4 April 2018, the Natoli companies entered into a written agreement with Teen, 'for the provision of exclusive management consultancy services'. The April 2018 agreement provided for Teen to provide a wide range of management services to the Natoli companies, on fairly unusual terms. Teen was to receive all proceeds of the Natoli companies' business, to be managed and retained 'for management dues', and could invest in the business as it found fit. It was to pay all business expenses, including rent and outgoings under the lease, and also agreed to pay existing supplier debts of $37,958.77. From 4 April 2018, Teen was to engage and manage all staff, and all new stock and equipment purchased by the business would be owned by Teen. A&H Natoli Pty Ltd was to remain the leaseholder of the premises, and Mr Natoli was to be engaged in the business and 'receive payment for his engagement from the proceeds of the business'. The Natoli companies were to provide Teen with the keys and security system codes for the premises, computer passwords and logins, and point of sale system codes. A breach of the agreement by the Natoli companies would result in ownership of the business vesting in Teen.
   6. The April 2018 agreement also provided that the Natoli companies would secure payment for the services to be provided and investments to be made by Teen, by providing security in the form of a charge over the business. On 7 May 2018, Mr Natoli, on behalf of the Natoli companies, executed a deed of charge in favour of Teen and Mr Spaleta. The May 2018 charge provided a charge over all of the Natoli companies' 'right title and interest' in the business, 'as security for the due and punctual payment' for the services to be provided by Teen and Mr Spaleta. On 30 May 2018, Teen registered the May 2018 charge over the Natoli companies' business on the Personal Properties Securities Register.
   7. Separately, on 4 April 2018, Mrs Natoli had executed a deed of charge in favour of Mrs Spaleta, Mr Spaleta, and Teen. The April 2018 charge secured payment for the services to be provided by Teen and the Spaletas, by way of a charge over the Natoli family home in Hughesdale, which is in Mrs Natoli's name.
   8. On 18 May 2018, the Natoli companies purported to terminate the April 2018 agreement. A letter from their solicitors to Ms Posaric asserted that the agreement was a sham and an unfair contract within the meaning of the Competition and Consumer Act 2010 (Cth).
   9. The Natoli companies commenced a proceeding in the Victorian Civil and Administrative Tribunal in June 2018 [C4877/2018]. They claimed that the April 2018 agreement was an unfair contract 'within the provisions of the Competition & Consumer Act 2010 (Cth), Schedule 2 of Australian Consumer Law and the Treasury Legislation Amendment (Small Business & Unfair Contract Terms) Act 2015 (Cth)'. The relief sought included declarations that the April 2018 agreement was properly terminated on 18 May 2018, and that the May 2018 charge was of no force or effect. They also sought an accounting and reimbursement of all funds received by Teen, less any payments properly made.
   10. Teen filed a defence and, in a separate proceeding [C5571/2018], brought a counterclaim against the Natoli companies. Teen claimed that:

(a) Mrs Natoli was an agent and representative of the Natoli companies, and a person who exercised control over their business as if she were a director. > > (b) In April 2017, the Natoli companies had entered into an agreement with Mrs Spaleta for the supply of managerial services, for which they would pay $200 per hour, and $500 per hour in respect of a notice of default served by the landlord. > > (c) In March 2018, Mrs Spaleta 'nominated' Teen pursuant to the agreement. > > (d) The 'parties' had agreed on an assignment of the business and the lease to Teen, upon which it would take over the rental bond and the supplier debt for the business. > > (e) The April 2018 agreement was an addendum to the existing agreement between the parties. > > (f) The Natoli companies had breached the agreement and the addendum agreement by failing to hand over management of the business to Teen, including by failing to provide it with access to the revenue of the business, staff contact details, and other information. Other breaches alleged were that the Natoli companies had dealt with funds as they pleased, used business proceeds for payment of personal expenses, and transferred proceeds to personal loan accounts. > > (g) The Natoli companies, and Mr and Mrs Natoli, had ample time and opportunity to seek legal and financial advice about the agreement and the addendum agreement. They had been involved in commercial trading activity and property transactions for over 20 years, had an accountant and business adviser, and had used the services of lawyers.

Teen sought relief including specific performance of the agreement and the addendum agreement, and damages for breach of contract.

1. Richards J summarised the course of the Tribunal's hearing and its orders:
   1. Both proceedings were listed for hearing in the Civil Claims List of the Tribunal, commencing on 18 February 2019 ... The Natoli companies were represented by their solicitor, Bill Karvela of Rigby Cooke, and Teen was represented by Mr Spaleta. At the start of the hearing, Mr Spaleta sought an adjournment, on the basis that the Natoli companies had not provided discovery of various categories of documents, contrary to an order for discovery made on 13 August 2018. The application was refused, and the hearing proceeded over four days in February and May 2019, with written submissions filed by the Natoli companies on 24 June 2019, and by Teen on 20 July 2019.
   2. On 30 August 2019, the Tribunal made the following orders:
      1. The Tribunal declares that the Agreement between the parties dated 4 April 2018 was properly terminated by A&H Natoli Pty Ltd and Organic Oz Pty Ltd on 18 May 2018.
      2. The Tribunal declares that the deed of charge dated 7 April 2018 executed by A&H Natoli Pty Ltd and Organic Oz Pty Ltd in favour of Teen Entertainment Enterprise Network Pty Ltd is of no force or effect.
      3. The Tribunal declares that the deed of charge dated 4 April 2018 executed by Helen Natoli in favour of Irene Spaleta, Bob Spaleta and Teen Entertainment Enterprise Network Pty Ltd is of no force or effect.
      4. The claim made by Teen Entertainment Enterprise Network Pty Ltd for specific performance of the Agreement dated 4 April 2018 is dismissed.
      5. The claim made by Teen Entertainment Enterprise Network Pty Ltd for damages is dismissed.

1. The orders were accompanied by written reasons for decision [A&H Natoli Pty Ltd v Teen Entertainment Enterprise Network Pty Ltd (Civil Claims) [2019] VCAT 1305 (Reasons)]. The Tribunal concluded that the April 2018 agreement was not an unfair contract for the purposes of Part 2-3 of the Australian Consumer Law (ACL), because it was not a standard form contract. However, the Tribunal found that there had been unconscionable conduct within the meaning of s 21 of the ACL. On that basis, the Tribunal considered it had power to make the orders set out above, under s 184 of the Australian Consumer Law and Fair Trading Act 2010 (Vic).
2. After receiving additional evidence and submissions from the parties, the Tribunal made further orders on 23 September 2019, that:
   1. Teen Entertainment Enterprise Pty Ltd must pay Organic Oz Pty Ltd and A&H Natoli Pty Ltd the sum of $4,102.07.
   2. Teen Entertainment Enterprise Pty Ltd must take immediate action to effect discharge of the securities registered with the Personal Properties Security Register with registration number 201805300051781. Teen Entertainment Enterprise Pty Ltd must notify Organic Oz Pty Ltd and A&H Natoli in writing immediately that the steps required for discharge have been completed on Teen's behalf.

• 8. After setting out the grounds of appeal,[4] the Tribunal's reasons for its decision,[5] and noting that 'Teen's complaints in this appeal focus on the fairness of the hearing and the finding of unconscionable conduct, and the Tribunal's jurisdiction to declare the charges of no force or effect', Richards J examined the Tribunal's jurisdiction under Ch 7 of the Australian Consumer Law and Fair Trading Act 2012 (Vic) ('Fair Trading Act'), in respect of a 'consumer and

trader dispute' within the meaning of s 182 of that Act, [6] and continued: (my underlining is added for emphasis)

Tribunal's consumer and trader dispute jurisdiction

1. The grounds on which the Tribunal may make an order under s 184 [of the Fair Trading Act] are diverse. They include contract, tort, and equity.[7] They extend to breach of an applicable statutory provision, including provisions of the ACL.
2. The ACL is Schedule 2 to the Competition and Consumer Act 2010 (Cth). Chapter 2 of the ACL provides general protections against misleading and deceptive conduct, unconscionable conduct, and unfair contract terms. The ACL applies as a law of Victoria, by virtue of the Fair Trading Act.[8]
3. The Tribunal's jurisdiction to hear and determine a consumer and trader dispute is concurrent with the jurisdiction of Victorian courts in commercial and consumer matters. In many respects, the Tribunal is the primary forum in Victoria for adjudicating consumer and trader disputes. Once an application has been made to the Tribunal in respect of such a dispute, the issues in dispute are not justiciable by a court, except in limited circumstances.[9] The Tribunal's jurisdiction to hear and determine consumer and trader disputes is limited by the fact that, not being 'a Court of a State', it cannot exercise federal jurisdiction.[10]
4. While Chapter 7 of the Fair Trading Act confers very broad powers on the Tribunal in respect of a consumer and trader dispute, it provides little guidance as to the circumstances in which those powers may be exercised. Section 186 provides that the Tribunal can only make an order to resolve a consumer and trader dispute on the application of a party to the dispute, or the Director of Consumer Affairs Victoria. Otherwise, it may appear as though there are no legal criteria that govern the exercise of the Tribunal's powers under s 184.
5. Additional powers are conferred on the Tribunal by s 185, in relation to a 'consumer dispute' and a 'trader-trader dispute'. Those powers include a power to make any order the Tribunal considers fair. At one time, a power in these terms was thought to enable the power to be exercised by reference to 'the general principle of fairness', guided but not confined by statute and the common law.[11] It is now clear, however, that the power is more constrained.
6. In Christ Church Grammar School v Bosnich,[12] Sifris J rejected the notion that a power to make any order the Tribunal considers fair can be exercised by reference to general notions of fairness and justice: [13]

In my opinion, although the matter is not free from difficulty, the tribunal is required, when deciding the merits of a case, to apply the law and not merely be guided by it. Any flexibility relates only to the form of the order and of course, to procedural and evidential matters. If this was not the case absurd results could follow. To the extent that the Supreme Court of Victoria has concurrent jurisdiction different results could follow. The court, not having the benefit of s 109, would have to apply the law while the tribunal could do what it considered fair even if the law was to the contrary. Further, such a result would encourage idiosyncratic notions of fairness and justice. If the intention was to exclude the operation of the law (as a matter of substance and not merely procedure or form) a specific section to such effect, clear and unambiguous, should have been inserted.

1. This approach has since been taken by other judges of this Court, in relation to similarly broad powers conferred on the Tribunal by other enabling legislation.[14] A power to make any order the Tribunal considers fair must be exercised in accordance with law.
2. In my view, the same constraint applies to the Tribunal's powers under s 184 of the Fair Trading Act, for the reasons given by Sifris J in Bosnich. While the Tribunal has very considerable flexibility as to the form of its orders, it may only make an order under s 184 where there is some legal basis for doing so.
3. This poses some challenges for members of the Tribunal sitting in its Civil Claims List. They are required to act fairly and in accordance with the rules of natural justice, and to conduct each proceeding with as little formality and technicality, and as much speed, as proper consideration of the matter permits.[15] They are able to make a broad range of orders on a broad range of grounds, some of which are highly technical. The parties may not have identified with any precision the legal basis for the relief that is sought. Very often, at least one of the parties to a dispute is not legally represented. In these circumstances, it can be difficult to strike the right balance between fairness, informality, speed, and legal principle.
4. The Court allowed the appeal finding that '[T]he Tribunal erred in deciding the case on the ground that Teen had engaged in unconscionable conduct, when Teen did not have an opportunity to present evidence or make submissions in relation to that ground'.[16]
5. To determine what orders should be made on the appeal - in particular, whether a new hearing was necessitated - the Court also considered the question whether the Tribunal had made an error of law in refusing Teen's application on the first day of the hearing for an adjournment.[17] The Court held that it had made such an error, finding that 'Teen had a legitimate complaint that the Natoli companies had not complied with the Tribunal's orders for discovery' and that this turned out to be material.[18] On this basis Richards J held that:
   1. ... Teen did not have a fair hearing in relation to determinative issues. Teen's second ground of appeal is made out.
6. Richards J went on to say:
   1. I am also satisfied that this is not a case in which the demonstrated procedural unfairness could have made no difference to the outcome. A finding of unconscionable conduct was open on the evidence before the Tribunal, although it was not a finding that was compelled by that evidence. If Teen had been on notice that it had to meet a claim of unconscionability, and if it had been able to test the Natoli companies' claims that they were in financial difficulty, the Tribunal may well have had different evidence to consider, and may have made different findings. Regretfully, I am persuaded that I should set aside the Tribunal's orders and remit the proceedings to be heard and decided again, by a different member of the Tribunal.
7. While Richards J found it unnecessary to determine Teen's other grounds of appeal based on denial of natural justice in the hearing generally, she did address the questions of law raised in grounds (2) and (3) of the appeal being:[19]

(2) Whether the Tribunal had jurisdiction to set aside the April 2018 charge, when three of the parties to it were not party to the proceeding in the Tribunal, no claim to set it aside was ever pleaded, and the Natoli companies lacked standing to seek that it be set aside.

(3) Whether the Tribunal had jurisdiction to set aside the May 2018 charge, when Mr Spaleta was not a party to the proceeding in the Tribunal.

1. In her concluding findings and reasons for her remittal orders, Richards J held in regard to these matters: (emphasis added)

1. Teen appealed against the Tribunal's orders setting aside the April 2018 charge and the May 2018 charge on the ground that one or more parties to each charge were not parties to the Tribunal proceeding. Mrs Natoli, Mr Spaleta, and Mrs Spaleta were parties to the April 2018 charge, but were not parties to the Natoli companies' proceeding. Mr Spaleta was a party to the May 2018 charge, but was not a party to the proceeding.
2. While I consider that this argument has substance,[20] it is not necessary to determine it given that I have decided to allow the appeal on other grounds. The proceeding will be remitted to the Tribunal for further hearing, and there will be an opportunity to ensure that the parties to each charge are joined as parties to the proceeding.

1. I propose to make orders granting leave to appeal, allowing the appeal, setting aside the Tribunal's orders, and remitting both proceedings to be heard and decided again, by a differently constituted Tribunal. Before I make those orders, I will invite further submissions from the parties as to any further orders that are sought, and the costs of the appeal.
2. Implicit in Richards J's statement in para [34] of her reasons on appeal - that the Tribunal 'cannot exercise federal jurisdiction' - was that, to the Supreme Court's notice at that time, no matter in federal jurisdiction arose in either of the two proceedings at that time. However, no issue was raised in the appeal on any question of federal judicial power.
3. For the purpose of this procedural order referring both proceedings to a judicial member of the Tribunal, I express no opinion on that question. No submission has been made to me on the topic.
4. However, in the light of the decision of the Court of Appeal in Thurin v Krongold, to which I will come to in a moment, in reaching my decision to refer the proceedings to a judicial member I have read the points of claim and counterclaim and defences that were before the Tribunal and the Supreme Court at the time of the appeal. I have also read the Natoli parties' solicitor's letter of termination and demand dated 18 May 2018 which predated the commencement of these proceedings in the Tribunal.
5. To assist the parties, it is convenient for me to highlight, at least in summary form, some areas where the potential for a question of a matter in federal jurisdiction, a 'federal matter', arises in these proceedings. (I explain below what is meant by a 'federal matter'.)

1. At that time of the appeal the pleadings on foot were:
   1. In C4877/2018 - A&H Natoli and Organic Oz's particulars of claim against Teen,[21] under which claims are advanced concerning an agreement dated 4 April 2018 in which allegations are made of it being an unfair contract 'within the provisions of the Competition and Consumer Act 2010 (Cth) and The Treasury Legislation Amendment (Small Business and Unfair Contract Terms) Act 2015 (Cth) (para 7); that the agreement was terminated by letter dated 18 May 2018 as being void ab initio (para 8);[22] that a deed of charge dated 7 May 2018 over property of 'Natoli and Organic Oz' was of no force or effect (para 11 - 13); that the Natoli companies 'have been misled and deceived by the Respondent and its representatives, Bob Spaleta and Irene Spaleta'; and seeking declarations, orders for withdrawal of the security interest registered over the applicants,[23] and an accounting and reimbursement of moneys.
   2. In C4877/2018 - Teen's points of defence to that claim,[24] where, under proposed amended 'further points of defence',[25] Teen makes an allegation by way of defence, amongst other things, in para 3(e), that Helen Natoli is and was 'a person who exercised full control over the Business as if she was a Director'.
   3. In C5571/2018 - Teen's points of counterclaim against A&H Natoli and Organic Oz[26] in which claims were originally advanced seeking an order for specific performance of an 'April 2017' agreement against the Natoli companies and for declarations that a deed of charge dated 7 May 2018 had been 'validly executed and registered' and entitlement to a transfer of lease, as well as damages for breach of the agreement. By 'further points of counterclaim' dated 29 October 2018 the authority and/or status of Helen Natoli 'as a director' is raised as a separate issue by para 3(e) (although without reference, at that time, to any Commonwealth statutory provision). The claim for specific performance of the April 2017 agreement is maintained, and the 2018 agreement is pleaded separately as an "Addendum to the Agreement' (para 18). Teen pleads the termination letter to be a repudiation of the Agreement and Addendum Agreement and elects to continue performance (para 24). Declaratory relief relating to the deed of charge dated 7 May 2018 is deleted and instead other orders are sought from the Tribunal including that the 'Business ... be transferred to [Teen]', as well as further orders for specific performance of the Addendum Agreement until 19 August 2027.
   4. In C5571/2018 - A&H Natoli and Organic Oz's points of defence to counterclaim[27] which deny most allegations and rely on 'the terms of' their points of claim against Teen in C4877/2018 (para 11).
2. While in preparing these reasons I have not read or needed to read all the correspondence between the parties[28] - and the Tribunal cannot know whether all the correspondence passing between the parties is on the Tribunal files[29] - in reviewing the files for the purposes of this ruling it is apparent that an allegation under the Competition and Consumer Act 2010 (Cth) was made as early as May 2018, in a letter from Rigby Cooke Lawyers, the solicitors representing the Natoli parties.[30]
3. I shall come to the course of the remittal in the Tribunal in a moment. It is convenient to jump ahead in time to the most recent development, being the decision of the Court of Appeal in Thurin v Krongold.[31]

Thurin v Krongold [2022] VSCA 226

1. On 20 October 2022, the Victorian Court of Appeal delivered this decision. The case is the most recent decision of a superior appellate court on the legal issue that can arise under the Constitution of the Commonwealth of Australia of whether a proceeding in the Tribunal is one that raises an issue of federal jurisdiction under ch III of the Constitution, so as to deprive the Tribunal of its jurisdiction to hear and determine the legal proceeding. In the opening words of

its judgment, the Court of Appeal explains: (with my emphasis and insertions in square brackets)

1. ...Very frequently [a party] in ... disputes [brought in VCAT] is a corporation incorporated under the Corporations Act 2001 (Cth). One question raised in the present case is whether that circumstance brings the dispute within federal jurisdiction so as to deprive VCAT of the ability to hear and determine it_._
2. Also very frequently, ... disputes in VCAT involve multiple parties who make claims against each other. Those claims may include claims for apportionment of liability for loss and damage suffered by an applicant, or claims for contribution toward any judgment for such loss or damage. Such claims may raise allegations of contravention of consumer protection laws.
3. Since 2012, the relevant consumer law has been the Australian Consumer Law, given effect by s 8 of the [Victorian] Australian Consumer Law and Fair Trading Act 2012 and, in relation to the conduct of corporations, by s 131 of the Competition and Consumer Act 2010 (Cth). Before that time, similarly, consumer law was found not only in State legislation but also in the Competition and Consumer Act (formerly the Trade Practices Act 1974 (Cth) ('the TPA')). Reliance on the Commonwealth emanations of that law raises further questions about federal jurisdiction under ch III of the Constitution.

1. I note that in Thurin v Krongold three distinct legal issues were considered and determined by the Court of Appeal, namely:
   1. when does a dispute between parties to a proceeding in the Tribunal raise a federal matter?
   2. for the purposes of that case, if a federal matter is raised between parties to a dispute in a proceeding in the Tribunal, what are the consequences for the proceeding in the Tribunal?
   3. what is a federal matter?

I will address these issues in reverse order. However, to begin, it is convenient to set out the constitutional context.

1. The relevant provisions of the Constitution to which the Court of Appeal refers are these.
2. Chapter III of the Constitution deals 'The Judicature' and in s 71 it states that:

The judicial power of the Commonwealth shall be vested in a Federal Supreme Court, to be called the High Court of Australia, and in such other federal courts as the Parliament creates, and in such other courts as it invests with federal jurisdiction. The High Court shall consist of a Chief Justice, and so many other Justices, not less than two, as the Parliament prescribes.

1. Section 75 of the Constitution deals with the 'Original jurisdiction of the High Court':

(i.) Arising under any treaty:

(ii.) Affecting consuls or other representatives of other countries:

(iii.) In which the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is a party:

(iv.) Between States, or between residents of different States, or between a State and a resident of another State:

(v.) In which a writ of Mandamus or prohibition or an injunction is sought against an officer of the Commonwealth:

1. Section 76 deals with additional original jurisdiction that can be conferred on the High Court under Commonwealth legislation. It provides (emphasis added):

The Parliament may make laws conferring original jurisdiction on the High court in any matter--

(i.) Arising under this Constitution, or involving its interpretation:

(ii.) Arising under any laws made by the Parliament:

(iii.) Of Admiralty and maritime jurisdiction:

(iv.) Relating to the same subject-matter claimed under the laws of different States.

1. For shorthand, Courts and judges sometimes describe 'matters' that fall under s 75 or s 76 as matters of 'federal jurisdiction', or simply, 'federal matters'.
2. Section 77 deals with the power of the Commonwealth Parliament to define the jurisdiction of courts, be they federal courts or state courts. It provides: (emphasis added)

With respect to any of the matters mentioned in the last two sections the Parliament may make laws -

(i.) Defining the jurisdiction of any federal court other than the High Court:

(ii.) Defining the extent to which the jurisdiction of any federal court shall be exclusive of that which belongs to or is invested in the courts of the States:

(iii.) Investing any court of a State with federal jurisdiction.

1. Earlier cases - Burns v Corbett[32] and Meringnage v Interstate Enterprises Pty Ltd[33] (Meringnage) - had determined that a tribunal of law, such as VCAT and the Civil and Administrative Tribunal of New South Wales (NCAT), that exercises judicial power of a State, is not a 'court' for the purposes of ch III of the Constitution.
2. In Meringnage, in a case concerning s 75(iii), the Victorian Court of Appeal held: (with my emphasis added)
   1. In Burns v Corbett the High Court held that there is a negative implication from Ch III of the Commonwealth Constitution that federal jurisdiction can only be exercised by an institution of a State that is a 'court of a State'.[34] The issue has now arisen whether the Victorian Civil and Administrative Tribunal ('VCAT') is a court of a State and, if it is not, whether, in any event, it can exercise State judicial power to determine a suit against the Commonwealth of Australia. An affirmative answer to the latter question gains some support from the judgment of Basten JA in Attorney General (NSW) v Gatsby [2018] NSWCA 254; (2018) 99 NSWLR 1 ('Gatsby').
   2. In our view, VCAT is not a court of a State. Nor can it exercise State judicial power to determine a suit against the Commonwealth. We reject the support that is sought to be derived from Gatsby. We consider that the proceeding involves the exercise of judicial power. The Commonwealth is a party to the proceeding. The proceeding is a 'matter' falling under s 75(iii) of the Constitution. It can only be determined through the exercise of federal jurisdiction. It follows, from Burns v Corbett, that a suit against the Commonwealth can only be determined by an institution of a State that is a court of a State and that VCAT cannot hear and determine the claims brought against the Commonwealth in this proceeding.

1. On the third issue, of what is a 'federal matter' under s 76(ii), the Court of Appeal in Thurin v Krongold held: (with my emphasis added)
   1. ... where the 'very subject' of the dispute is something that owes its existence to a Commonwealth law, then the dispute will be a 'matter arising' under that law, even if the cause of action is founded in a State law or the common law_._ That proposition has since been accepted many times, most recently in Hobart International Airport. But it does not follow that any dispute to which a corporation is a party is a matter of that kind. To the contrary, we do not think that it is. In that regard, the authorities make clear that if a Commonwealth law is 'lurking in the background',[35] or merely an 'incidental consideration',[36] then the matter will not be one arising under that law.
   2. If a corporation is in dispute with another person about a contract, and nothing else, then the 'very subject' of the dispute is the contract - it is not the corporate status and capacity of the corporation. If the contract is regulated by a Commonwealth law (as in Hobart International Airport), or the property the subject of the contract owes its existence to a Commonwealth law (as in LNC Industries), then the matter is one arising under that law. But if the property the subject of the contract has no relevant connection with a Commonwealth law, the contract is not regulated by a Commonwealth law, and the only connection with a Commonwealth law is that a party is a corporation incorporated under the Corporations Act, then in our opinion the authorities do not compel, or even point towards, the matter being one 'arising under' a Commonwealth law.
   3. Thus, we consider that a matter in which the sole connection with a Commonwealth law is that one or more of the parties to the dispute is a corporation incorporated under the Corporations Act lacks the necessary sufficiency of connection required to characterise the matter as one that arises under the Corporations Act. In that context, we accept the distinction identified by Besanko J in Malecki:

There would appear to be a distinction between a 'matter' - in the sense of the justiciable controversy between the parties arising out of the substratum of facts and claims representing, or amounting to, the dispute or controversy between or amongst the parties ... - arising under federal law, and a party's ability or capacity to agitate a matter or liability in relation to a matter arising under federal law. It is the matter which must itself arise under federal law in order for jurisdiction to be engaged, in that the jurisdictional basis must be endogenous to the justiciable controversy between the parties. If this is a valid and relevant distinction, it means that the Court will not have jurisdiction in a matter itself bearing no real connection to federal law merely by reason of the link, exogenous to the justiciable controversy, between a party or parties to the matter, and the Corporations Act.[37]

1. This distinction attracts some textual support from the terms of ss 75 and 76, which define the universe of federal matters that cannot be resolved other than by an exercise of judicial power by a court. It is apparent from the face of those sections that the matters there referred to can, broadly speaking, be divided into two classes:

(a) in one class, comprised of 75(iii), 75(iv) and 75(v), jurisdiction depends on the character of the parties, rather than solely on the subject of the controversy; > > (b) in the other class, comprised of ss 75(i), 75(ii) and all the sub-sections of s 76, jurisdiction depends on the subject of the controversy, rather than on the character of the parties.

Within that taxonomy, s 76(ii) of the Constitution is concerned with 'the character of the cause, whatever may be the parties'.[38]

1. In summary, where the source of the rights and duties that are in issue between the parties is a Commonwealth law, the matter will properly be characterised as one 'arising under' that law. That will include a matter where the claim is one directly founded on a law of the Commonwealth. It will also include a claim at common law or equity, or under a law of a State, where the claim concerns a right or property which is the creation of federal law. In contrast, where the source of the rights and duties in issue between the parties is a law of a State or the common law, and the only connection with a law of the Commonwealth is that such a law is the source of one party's legal capacity to sue or be sued (and where that capacity is not in issue between the parties), the matter will not properly be characterised as one 'arising under' the Commonwealth law. Rather, the party's capacity is merely an incidental consideration.
2. We do not consider that the particular provisions of the Corporations Act relied upon by Krongold alter this conclusion. Those provisions make clear the nature of a corporation and the lack of limits on its capacities. They are fundamentally directed to its status and its legal capacity (including its capacity to bring or defend a proceeding). That is part of the context in which the legal rights, duties and liabilities of a corporation arise; but that goes to a party's ability to agitate a matter, rather than the identification of the dispute or controversy between the parties.

1. On the second issue regarding the consequences if a federal matter is raised between parties in a proceeding in the Tribunal, the Court of Appeal found at para [33] that in a case involving the joinder of a party to advance a claim under the Commonwealth Trade Practices Act (TPA), 'VCAT could not have heard the action because it involved a claim under the TPA'. VCAT therefore did not have power to make the order for joinder. The Court of Appeal held: (with my emphasis added)
   1. VCAT is not a 'court of a State' within the meaning of s 77(iii) or, therefore, within s 39(2) of the Judiciary Act. [39] It has therefore not been invested with federal jurisdiction by the Commonwealth Parliament. Moreover, the State Parliament is incapable of conferring on a body other than a 'court of a State', judicial power in respect of any 'matters' in ss 75 or 76 of the Constitution. [40]

1. The conferral of jurisdiction on VCAT by the State Parliament is therefore required to be read down so as to deny VCAT judicial power in respect of any such matter.[41]

1. On the first issue, referring to Palmer v Ayers [2017] HCA 5; (2017) 259 CLR 478, 490-1 [26]-[27] (Kiefel, Keane, Nettle and Gordon JJ),[42] the Victorian Court of Appeal Thurin v Krongold held: (with my emphasis added)

48 ...a 'matter' is a controversy, being the subject matter of a dispute which may be litigated in a legal proceeding. It encompasses all claims made within the scope of the controversy, whether or not those claims are ultimately established.

1. Where a Commonwealth law is relied on as the source of a claim or defence asserted in the course of a justiciable controversy, the controversy is one 'arising under' a law of the Commonwealth within the meaning of s 76(ii) of the Constitution.[43] For that purpose, it is enough that the claim or defence be 'genuinely in controversy and that it give rise to an issue capable of judicial determination'; that is, it is 'enough that the claim or defence be genuinely raised and not incapable on its face of legal argument'.[44]

1. Krongold submitted that the point at which a claim formed part of a controversy between persons was not determined by when issue is formally joined between those persons in legal proceedings articulating the claim, but by when, as a matter of fact, the claim is made as between those persons. As such, it is possible for a claim to enter into a controversy, including one already in the course of litigation, by being the subject of notification or dispute between the parties.
2. That submission should be accepted. It is well established that the identification of a 'matter' in federal jurisdiction does not depend on the form taken by the proceedings in question.[45] The 'matter' is not co-extensive with any legal proceeding but is the subject matter for determination in a legal proceeding or 'controversies which might come before a Court of Justice'.[46]
3. The 'matter' might therefore take shape before the issues have been delineated in pleadings at all, for example in correspondence between the parties.[47]
4. It follows that there was no requirement for the claims made by Krongold in respect of Swan Hardware to be formally incorporated into the points of claim in VCAT in order for those claims to form part of the controversy between Krongold and Mr and Mrs Thurin, and for that controversy to extend to Swan Hardware. No order for joinder was required in order for the 'matter' to be enlarged to accommodate those claims.
5. It is therefore irrelevant that the claims could not be adjudicated upon until Swan Hardware was joined, either to comply with s 24AI(3) of the Wrongs Act in respect of apportionment, or to attract jurisdiction in relation to the contribution claim.

1. Since the claims form part of the matter as soon as they are raised, the question of jurisdiction arises and must be answered as at that point. Issues of parties to a proceeding and joinder are irrelevant to the identification of the matter and must likewise be irrelevant to deciding whether the matter so identified is genuinely raised and capable of legal argument.
2. It follows that, **once the federal claims in respect of Swan Hardware were raised - ** which they were at least by the time Krongold served its defence dated 3 August 2018[48] - the matter the subject of the VCAT proceeding came within federal jurisdiction. VCAT thereafter lacked jurisdiction to hear and determine it. One consequence is that VCAT lacked power to order that Swan Hardware be joined as a party to the VCAT proceeding.

Application of Thurin v Krongold to this remittal proceeding

1. A question arises in these proceedings from the Court of Appeal's reasoning about the issue of the constitutional limitation on the Tribunal's civil jurisdiction (which is to say the exercise of the Tribunal's 'judicial power' of the State of Victoria as opposed to administrative or non-judicial powers that are also conferred on the Tribunal) can be avoided or cured by the expedient of a party electing (if they wish to do so) to withdraw and abandon a stated claim or defence - whether in a pleading or in correspondence - that might have raised a federal matter?
2. A further question arises whether a common law duty or equitable obligation which relies on the existence of a duty or obligation arising under a Commonwealth law (such as a duty imposed on a director under the Corporations Act 2001 (Cth)), or the scope of which requires a determination of the scope of the duty or obligation arising under a Commonwealth law, raises a federal matter?

• 36. For example, were allegations of breach of director's statutory duty to be abandoned the situation may remain that the Tribunal must still - in the exercise of its judicial power to determine the subject matter in dispute between the parties raised in the Tribunal proceeding - be required to make a finding of fact or a determination of liability or rights or obligations arising under another law (be it an enabling enactment,[49] the common law or under equitable principle) which finding of fact or determination of liability or rights or obligations is premised upon the determination of the establishment of another duty (or its scope) that is owed under a Commonwealth law.[50]

1. Another question which arises from the Court of Appeal's reasons, both from the concluding words to para 3 of its judgment and the width of the expression used in para 111 and 115, is whether the provisions of the ACL are to be properly characterised as dependent for their 'existence' or 'source' upon a Commonwealth law, and whether this means that a claim or defence brought or made under the ACL of Victoria is nevertheless a matter arising under a Commonwealth law under Ch III of the Constitution? As Justice Richard's observes: 'The ACL is Schedule 2 to the Competition and Consumer Act 2010 (Cth).'
2. Other questions also potentially arise in regard to the issues raised by the Natoli parties in their letter of demand dated 18 May 2018 concerning the manner of execution or validity of documents executed in the name of a company by a particular person in their 'capacity as director'. The determination of these claims may potentially raise legal issues concerning the requirements for a company director to validly execute documents to bind a company, which may potentially require consideration and determination by the Tribunal of issues arising from different sections of the Corporations Act 2001 (Cth).[51]

Conduct of the remittal - applications & Orders, joinder of new parties & amendments

• 39. Since the decision of Richards J remitting the proceedings to the Tribunal, there have been numerous procedural orders and interlocutory applications made to the Tribunal.[52]

1. The history of the remittal is set out in the Tribunal's previous interlocutory orders and reasons for them. It is unnecessary to narrate this history. It will suffice to say that on 4 November 2022 these two proceedings came before me again for directions.
2. Reviewing the case files shortly before the directions hearing I looked at the state of the parties' now significantly amended pleadings and involving additional parties, to consider whether the pleadings were in a sufficient state of readiness for the proceedings to be listed for a final hearing under the remittal.
3. In the Spaleta parties' New Points of Counterclaim in C5571/2018 against the Natoli parties dated 21 July 2022, Teen as applicant to counterclaim advances various allegations against Helen Natoli and Tony Natoli as either directors or persons alleged to be 'de facto or shadow directors'. Those allegations include an allegation of breach of director's duties under a Commonwealth law, namely the Corporations Act 2001 (Cth).[53] Those statutory director's duties are alleged, in an insolvency context or where there is 'doubtful solvency' of a company, to give rise to implied duties under the common law, or fiduciary obligations in equity, to creditors and the Spaleta parties, which are alleged to have been breached.
4. As had occurred in earlier hearings, the Natoli parties were legally represented and the Spaleta parties were not. I provided the parties with a copy of the recent Thurin v Krongold decision and discussed its significance to the allegations raised in the now amended claims brought in the proceedings, in particular by the Spaleta parties' New Points of Counterclaim in C5571/2018.
5. I explained that while the Court of Appeal in Thurin v Krongold confirmed the Tribunal's jurisdiction to hear cases where a party is a corporation under the Corporations Act 2001 (Cth) the Court of Appeal also held that because s 76(ii) of the Constitution deprives the Tribunal of jurisdiction in proceedings in which a claim arises under Commonwealth law, an order made by the Tribunal to join a party as a respondent to bring claims against the joined party under the Commonwealth Trade Practices Act 1974 (TPA) was therefore beyond the power of the Tribunal and void.
6. I drew the parties' attention to the fact that in the Spaleta parties' New Points of Counterclaim dated 21 July 2022, they make allegations against the Natoli parties for breaches of a Commonwealth law, namely the Corporations Act 2001 (Cth) and that they advance claims for breaches of directors' duties under that Commonwealth law and knowing involvement in breaches of directors' duties arising under that Commonwealth law.[54]
7. While no objection to the Tribunal's jurisdiction was raised in the points of defence to the new counterclaim, or at the directions hearing, that is not germane. The question is one of the Tribunal's authority and power to hear and determine the dispute. The Tribunal must be satisfied that it has jurisdiction.
8. In discussion at the directions hearing, it was raised by Irena Spaleta whether the constitutional limitation on the Tribunal's jurisdiction might be avoided by the Spaleta parties electing to withdraw their allegations that advance claims that are reliant on Commonwealth law.
9. I indicated to the parties that as I apprehended the case as now framed, as raising issues under Commonwealth law, I would reserve my decision as to the procedural course to now be adopted and foreshadowed to the parties that I would list the matter before a judicial member of the Tribunal for consideration under s 77 of the VCAT Act.
10. I have determined to adopt that course because:

(a) On their face, the New Points of Counterclaim filed by the Spaleta parties expressly advance claims which I have referred to that arise under or are potentially reliant upon a Commonwealth law. > > (b) On its face, there is also now a real question arising from the reasoning of the Court of Appeal's decision in Thurin v Krongold whether the Natoli parties' claims based on the ACL may also raise claims arising under laws made by the Commonwealth Parliament in the relevant sense. I will not dwell on that other than to note it. > > (c) Returning to the Spaleta parties' allegations concerning breaches of directors duties, while it is not apparent from the New Points of Counterclaim against the Natoli parties that any relief by way of an 'order' from the Tribunal is actually sought under that Commonwealth Act,[55] what appears to arise from the manner in which the directors duty allegations are raised is that alleged breaches of directors duty under that Commonwealth law or knowing involvement in such breaches under that Commonwealth law are alleged to give rise to a breach of an obligation to the Spaleta parties arising under common law or fiduciary duty owing in equity to the Spaleta parties, and further that these directors' duties (or breaches of duty) are relevant to the question whether there has been a breach of s 18 of the ACL (misleading and deceptive conduct), s 4 of the ACL (misleading representations with respect to future matters) s 20 and 21 of the ACL (unconscionable conduct) and s 236 of the ACL (liability for loss). Accordingly, whether there is a duty arising under the Commonwealth law, its scope and whether the duty has been breached will be the factual and legal questions for determination in the proceeding raised in the counterclaim made under the ACL. > > (d) And returning to the Natoli parties' original points of claim against Teen (at the time called 'particulars of claim'), the termination letter of 18 May 2018 in addition to referring to and relying on two specific Commonwealth laws[56] also raised allegations concerning the purported execution by Teen of the 4 April 2018 Agreement and of the 7 May 2018 deed of charge by a person (not a party) 'in your capacity as a director'.[57] Accordingly, a question arising under a Commonwealth law may also potentially arise in the determination of that allegation despite no provision of a Commonwealth law being specifically relied on. Likewise, the claim for relief raised in the original points of claim for an order from the Tribunal requiring Teen to 'withdraw the security interest registered over the Applicants', may also raise a question arising under a Commonwealth law.

11. Other than to note the test to be applied[58] I express no opinion about those claims, for I believe it is appropriate that that issue should be one to be considered by a judicial member in considering and determining whether or not to make orders under s 77 of the VCAT Act.
12. I apprehend that one legal consequence of the Court of Appeal's decision in Thurin v Krongold may be that although this Tribunal's grant of leave to replead and join an additional respondent was at large, which is to say framed in general terms,[59] that grant of leave could not authorise a party to file an amended pleading that raised a controversy between the parties that brought the 'subject of the VCAT proceeding' within federal jurisdiction'.
13. Any decision by any party to withdraw and abandon any claim or defence is entirely up to their election. I shall leave to the judicial member of the Tribunal to determine[60] - after hearing submissions from the parties and hearing from them about what they may or may not elect to do regarding withdrawal and abandonment of any claims or defences raised in the current pleadings - whether a federal matter raised as part of the subject matter of the dispute is to be litigated in these proceedings so as to bring their justiciable controversy within federal jurisdiction.

[1] Under Division 2 of the Victorian Civil and Administrative Tribunal Act 1998 (VCAT Act), s 43.

[2] The grounds of appeal are set out below at FN 4.

[3] The Court's remittal order was made on 16 November 2020.

[4] Teen Entertainment Enterprise Network Pty v A&H Natoli Pty Ltd [2020] VSC 388[, at para 15 being:](, at para 15 being:)

(1) Whether the Tribunal denied Teen natural justice or procedural fairness in:

(a) deciding the case on the basis of unconscionable conduct contrary to s 21 of the ACL, when a claim under that section was the subject of neither pleading, evidence or submission of any party, nor of the questions identified for determination by the Tribunal's orders of 28 May 2019;

(b) refusing on 18 February 2019, the first day of the trial, to adjourn the trial for the Natoli companies' failure to discover their financial records, which Teen needed to prove aspects of its case; and

(c) the Tribunal's conduct of the proceeding generally.

(2) Whether the Tribunal had jurisdiction to set aside the April 2018 charge, when three of the parties to it were not party to the proceeding in the Tribunal, no claim to set it aside was ever pleaded, and the Natoli companies lacked standing to seek that it be set aside.

(3) Whether the Tribunal had jurisdiction to set aside the May 2018 charge, when Mr Spaleta was not a party to the proceeding in the Tribunal.

[5] Teen Entertainment Enterprise Network Pty v A&H Natoli Pty Ltd [2020] VSC 388, at para 16 - 29.

[6] Teen Entertainment Enterprise Network Pty v A&H Natoli Pty Ltd [2020] VSC 388, at para 30 - 31.

[7] FN [20] citing Tucci v Victorian Civil and Administrative Tribunal [2010] VSC 425, [41].

[8] FN [21] citing Australian Consumer Law and Fair Trading Act 2012 (Vic), Pt 2.2.

[9] FN [22] citing Fair Trading Act, s 187. See also ss 188 and 189, which provide for proceedings commenced in a court to be stayed or dismissed where the Tribunal is a more appropriate forum for a consumer and trader dispute.

[10] FN [23] citing Commonwealth Constitution, s 75; Judiciary Act 1903 (Cth), ss 38-39; Lustig v Qantas Airways Ltd [2015] FCA 253; (2015) 228 FCR 148, [49]-[68]; Meringnage v Interstate Enterprises Pty Ltd [2020] VSCA 30, [78]-[98], [144]-[148].

[11] FN [24] citing Re Law and MCI Technologies Pty Ltd [2006] VCAT 415; (2006) 24 VAR 225, [39]-[41], in relation to s 109 of the former Fair Trading Act 1999 (Vic).

[12] FN [25] (2010) 34 VAR 23 (Bosnich).

[13] FN [26] Bosnich, [40].

[14] FN [27] stating 'In relation to s 165 of the Owners Corporations Act 2006 (Vic), see Energy Technology Australia Pty Ltd v Owners Corporation PS 439401J [2017] VSC 145, [73]-[79]; Elwick 9 Pty Ltd v Freeman [2018] VSC 234, [56]; and Acapulco Gold Pty Ltd v Wallis [2019] VSC 414, [33]. In relation to s 53 of the Domestic Building Contracts Act 1995 (Vic) see Versa-Tile Pty Ltd v 101 Construction Pty Ltd [2017] VSC 73, [10]; Shen v Hatfield [2019] VSC 360, [11] and Eliana Construction and Developing Group Pty Ltd (in liq) v Ramani [2020] VSC 115, [54]'.

[15] FN [28] citing Victorian Civil and Administrative Tribunal Act 1998 (Vic) (VCAT Act), ss 97-98.

[16] Teen Entertainment Enterprise Network Pty v A&H Natoli Pty Ltd [2020] VSC 388, at 50 for the reasons stated at para 41 - 49.

[18] Teen Entertainment Enterprise Network Pty v A&H Natoli Pty Ltd [2020] VSC 388, at para 51 - 64.

[20] FN[38] stating 'Teen relied on the following authorities in relation to the need to join as a party a person whose rights or liabilities may be affected by an order sought in a proceeding: News Ltd v Australian Rugby Football League Ltd [1996] FCA 870; (1996) 64 FCR 410, 523-6; State of Victoria v Sutton [1998] HCA 56; (1998) 195 CLR 291, [76]-[81] (McHugh J); John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19; (2010) 241 CLR 1, [131].'

[21] Filed on 13 June 2018 (in VCAT proceeding initiated as BP847/2018 under an application filed on 8 June 2018), later ordered to be 'points of claim' in C4877/2018.

[22] Referring to a letter dated 18 May 2018 from Rigby Cooke, solicitors for the applicants (discussed below at para [19]).

[23] See para 15 of the points of claim. While no section of any Act is mentioned, presumably this was a reference to the Personal Property Security (PPS) Register under Personal Property Securities Act 2009 (Cth). (From January 2012, the charges register maintained by ASIC in regard to charges over company assets was transferred to the PPS Register: see https://asic.gov.au/for-business/running-a-company/company-officeholder-duties/what-books-and-records-should-my-company-keep/charges-and-the-personal-property-securities-register/). A question arises whether the Tribunal has power to make an order to remove such a charge from that Commonwealth register. (In the result at the first hearing, the Tribunal made declarations that the deed of charge executed by Helen Natoli dated 4 April 2018 and the deed of charge executed by the Natoli companies dated 7 April 2018 were of no force or effect and made further orders on 23 September 2019 requiring Teen to effect a discharge of the securities registered with the PPS Register - see para [7] above.)

[25] Following the hearing, Teen sought to rely on 'Further Points of Defence' dated 10 June 2019 attached to written submissions dated 20 July 2019, on the basis that it brought that defence 'into line with the Further Points of Counterclaim dated 30 October 2018' - see submissions p 18).

[26] Originally filed 3 August 2018 and then amended on 29 October 2018 by 'Further Points of Counterclaim'.

[28] Currently, as things stand, there are many hundreds of pages of filed materials on the Tribunal files for both proceedings, paper copies of which fill two archive boxes. Court Book 1 alone, prepared on 26 May 2019, has 185 emails identified in its index.

[29] For example, it is not uncommon in legal proceedings in the Tribunal for parties to have made statements to each other in settlement discussions or correspondence that are, for that reason, not on the Tribunal file and also would not usually be compellable or admitted into evidence before the Tribunal because of the 'without prejudice privilege' that usually attaches to such communications: see VCAT Act s 106; Evidence Act 2008 (Vic) s 131.

[30] The letter was originally exhibited to an affidavit of Bill Karvela sworn 7 June 2018 in support of an ex parte application dated 7 June 2018 for freezing order and interlocutory injunction made by A&H Natoli (in what was commenced as proceeding BP847/2018). At the ex parte hearing on 8 June 2019 the Tribunal granted the application and joined Organic Oz as second applicant. (The Tribunal also directed the Principal Registrar to refer the file to the heads of list of Building and Property List and Civil Claims List to consider whether the proceeding should be transferred to Civil Claims List.) The letter became Exhibit A3 at the Tribunal hearing (in proceeding C4877/2018) on 18 February 2019, being the solicitors' termination letter mentioned earlier in para 8 of Richards J's decision.

[31] [2022] VSCA 226.

[32] (2018) 92 ALJR 423; [2018] HCA 15.

[33] [2020] VSCA 30; (2020) 60 VR 361.

[34] FN [2] That is, within the meaning of s 77(iii) of the Constitution...

[35] FN [66] citing LNC Industries [1983] HCA 31; (1983) 151 CLR 575, 582 (Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ), quoting Windeyer J in Felton [1971] HCA 39; (1971) 124 CLR 367, 391.

[36] FN [67] citing Moorgate Tobacco [1980] HCA 32; (1980) 145 CLR 457, 480 (Stephen, Mason, Aickin and Wilson JJ), quoting Barwick CJ in Felton [1971] HCA 39; (1971) 124 CLR 367, 374.

[37] FN [68] [2022] FCA 766 [33].

[38] FN [69] citing Geoffrey Lindell, Cowen and Zines's Federal Jurisdiction in Australia (Federation Press, 4th ed, 2016) 47. The taxonomy is not absolute because, in both ss 75(ii) and 75(v), the subject matter is to some extent blended with the character of the party: Republic of Turkey v Mackie Pty Ltd (2021) 64 VR 467, 500 [127] (McLeish JA).

[39] FN [16] citing Meringnage v Interstate Enterprises Pty Ltd (2010) 60 VR 361.

[40] FN [17] citing Burns v Corbett (2018) 265 CLR 304 ('Burns'); Meringnage (2010) 60 VR 361, 372 [26] (Tate, Niall and Emerton JJA). The limitations on the powers of State Parliaments with respect to the investing of federal jurisdiction go further than this, but it is not necessary to enter into that area: Rizeq v Western Australia [2017] HCA 23; (2017) 262 CLR 1, 25 [60] (Bell, Gageler, Keane, Nettle and Gordon JJ), citing MZXOT v Minister for Immigration and Citizenship [2008] HCA 28; (2008) 233 CLR 601, 618 [20] (Gleeson CJ, Gummow and Hayne JJ).

[41] FN [18] citing Burns (2018) 265 CLR 304, 345 [64] (Kiefel CJ, Bell and Keane JJ), 364 [120] (Gageler J).

[42] In the passage quoted from Citta, the High Court held:

A 'matter', as a justiciable controversy, is not co-extensive with a legal proceeding, but rather means the subject matter for determination in a legal proceeding - 'controversies which might come before a Court of Justice' (emphasis added). It is identifiable independently of proceedings brought for its determination and encompasses all claims made within the scope of the controversy. What comprises a 'single justiciable controversy' must be capable of identification, but it is not capable of exhaustive definition. 'What is and what is not part of the one controversy depends on what the parties have done, the relationships between or among them and the laws which attach rights or liabilities to their conduct and relationships'.

The requirement that, for there to be a 'matter', there must be an 'immediate right, duty or liability to be established by the determination of the Court' reinforces that the controversy that the court is being asked to determine is genuine, and not an advisory opinion divorced from a controversy, and, further, that only a claim is necessary. A matter can exist even though a right, duty or liability has not been, and may never be, established.

[43] FN [22] citing Citta Hobart Pty Ltd v Cawthorn [2022] HCA 16; (2022) 96 ALJR 476, 486 [31] (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ) ('Citta'); [2022] HCA 16.

[44] FN [23] citing C_itta_, 486-7 [35].

[45] FN [24] citing F_encott v Muller_ (1983) 152 CLR 570, 608 (Mason, Murphy, Brennan and Deane JJ) ('Fencott'); Palmer [2017] HCA 5; (2017) 259 CLR 478, 490-1 [26] (Kiefel, Keane, Nettle and Gordon JJ).

[46] FN [25] citing Palmer [2017] HCA 5; (2017) 259 CLR 478, 490 [26] (emphasis in original), citing In re Judiciary and Navigation Acts [1921] HCA 20; (1921) 29 CLR 257, 265-6 (Knox CJ, Gavan Duffy, Powers, Rich and Starke JJ), and South Australia v Victoria [1911] HCA 17; (1911) 12 CLR 667, 675 (Griffith CJ); Abebe v Commonwealth [1999] HCA 14; (1999) 197 CLR 510, 524 [24] (Gleeson CJ and McHugh J).

[47] FN [26] citing Tucker v McKee [2022] FCAFC 98; (2022) 402 ALR 254, 263 [26]-[27] (Allsop CJ, Kenny and Jagot JJ); [2022] FCAFC 98; National Australia Bank Ltd v Nautilus Insurance Pty Ltd [No 2] [2019] FCA 1543; (2019) 377 ALR 627, 648-50 [82]-[85] (Allsop CJ); [2019] FCA 1543; Malecki v Macko [2022] FCA 766 [26]-[27] (Besanko J) ('Malecki'); Hooper v Kirella [1999] FCA 1584; (1999) 96 FCR 1, 15 [53], 16 [56], [59] (Wilcox, Sackville and Katz JJ).

[48] FN [27] noting 'This Court was not provided with any evidence concerning whether the TPA claims against Swan Hardware were raised in correspondence between Krongold and Swan Hardware at some earlier date.'

[49] See VCAT Act, Division 2 - Original Jurisdiction, ss 43 - 44; s 3 Definition 'enabling enactment'.

[50] See, for example, Chameleon Mining NL v Murchison Metals Ltd [2010] FCA 1129 at [84] - [132] for a comprehensive discussion of the applicable legal principles regarding the general law and statutory duties of directors, which Jacobson J held 'apply equally to directors who are validly appointed, and to 'de facto' directors, 'shadow directors' and 'officers'' and referred to Corporations Act 2001 (Cth) ss 9, 180, 181, 182, 710, 711, 728.

[51] Such as such as Corporations Act 2001 (Cth) s 126 (Agent exercising a company's power to make contracts) or s 127 (Execution of documents (including deeds) by the company itself) or Part 2B.2 (Assumptions people dealing with companies are entitled to make) s 128 and 129, representing in statutory form of the 'indoor management rule', now contained in that Commonwealth law.

[52] Since the Supreme Court's decision on appeal to remit the proceedings to the Tribunal, Orders have been made by the Tribunal on the following dates:

[53] The specific sections mentioned are ss 180 -183.

[54] The allegation of ancillary liability relies on s 79 of the Corporations Act 2001 (Cth).

1. Damages for breach of Addendum Agreement for the period 4 April 2018 to 19 August 2027;

2. A declaration that the deed of charge dated 4 April 2018 is a valid charge.

3. A declaration that the deed of charge dated 7 May 2018 is a valid charge.

8. Such other orders as the Tribunal deems appropriate.

[56] Namely, the Competition and Consumer Act 2010 (Cth) and The Treasury Legislation Amendment (Small Business and Unfair Contract Terms) Act 2015 (Cth).

[57] The Amended Points of Claim filed by the Natoli parties continue to rely on the termination letter dated 18 May 2018.

[58] The test adopted by the Court of Appeal's decision in Thurin v Krongold is expressed as follows_:_

55. Where a Commonwealth law is relied on as the source of a claim or defence asserted in the course of a justiciable controversy, the controversy is one 'arising under' a law of the Commonwealth within the meaning of s 76(ii) of the Constitution. For that purpose, it is enough that the claim or defence be 'genuinely in controversy and that it give rise to an issue capable of judicial determination'; that is, it is 'enough that the claim or defence be genuinely raised and not incapable on its face of legal argument'.

[59] I refer to my orders on 19 April 2022 when the case first came before me for directions. By orders 2 and 3 parties I granted both parties liberty to file new points of claim and counterclaim. I also refer to my Orders at the next directions hearing on 7 July 2022 in which I granted leave for Tony Natoli to be added as a respondent to the counterclaim in C5571/2018 and by order 2, ordered that reformatted points of claim and counterclaim be filed and served.

[60] Which is to say once it is determined that the claim or defence is genuinely raised and one capable on its face of legal argument, as indicated by the Court of Appeal.