Turner and Cathro v Hidayat (Credit) [2010] VCAT 1906

1. The applicants' application to reinstate this proceeding is dismissed.
2. The respondent's application for costs is listed for hearing at 10.00 am on 8 December 2010 at 55 King Street, Melbourne. .

1. The applicants' application to have this matter reinstated is dismissed and the orders of 2 August 2010 stand.

1. The applicants apply to have their application reinstated. This application is brought on two bases. The first basis is that it is an application under s120 of the Victorian Civil and Administrative Tribunal Act 1998 (the VCAT Act) to revoke the orders which I made on 2 August 2010. I call these the '2 August orders'. I shall deal in more detail with those orders shortly. Here, it is sufficient to say that they struck out the applicants' original application, ordered certain costs against the applicants and gave the respondent liberty to apply for judgment on her counterclaim. The second basis of the application is that this is a struck out proceeding and this is an application to reinstate it.
2. I first say something about the law. I then make findings based on all the material before me. Finally, I deal with the parties' submissions and state my conclusions.

1. Section 120 of the VCAT Act, when read in conjunction with rule 4.19 of the Victorian Civil and Administrative Tribunal Rules 2008, have this effect. A person in respect of whom an order has been made may apply to have that order reviewed if the person was not present and was not represented at the hearing at which the order was made. That application must be made within 14 days after the applicant becomes aware of the order. Only one such application may be made in respect of the same order unless the Tribunal gives leave. On such an application, the Tribunal may hear and determine it and if satisfied that the applicant had a reasonable excuse for not appearing or being represented at the hearing, and if it thinks fit, may revoke or vary the original orders made.
2. The cases say that the section involves a two-step approach. First, the Tribunal must determine whether there was a reasonable excuse for the person not attending or being represented at the relevant hearing. But even if the Tribunal is satisfied that there was such a reasonable excuse, the second step is for it to determine whether or not it should exercise its discretion to have the original orders varied or revoked. The exercise of that discretion will turn on the particular circumstances of the case including, among other things, whether the applicant's case is manifestly unmeritorious. This is all part of a broader consideration of justice and utility. It is futile and would not be in the interests of justice to reinstate a manifestly hopeless case. Other matters such as delay and prejudice may also be relevant.
3. In my view, similar considerations apply where (as here) the Tribunal is being asked to exercise its implied statutory jurisdiction to reinstate a struck out proceeding. The cases say that the striking out of a proceeding leaves the possibility of reinstatement compared with the dismissal of a proceeding, which does not leave such a possibility. I considered all these matters in detail in my earlier decision this year in Waddingham v Australian Securities Ltd & ors.[1] I also note that what s120 does must be interpreted liberally. This is a section which prevents a party being shut out from a case because of explained and reasonable absence.

1. This proceeding has had a somewhat chequered history. There have been amended and further amended particulars of claim. There have been various attempts at settlements and consent orders. Eventually, the Tribunal listed this matter for a compulsory conference, which was to occur on 2 August 2010. When listing the matter, the Tribunal required personal attendance by the parties. At the time and date of the listed compulsory conference, the respondent and her solicitor appeared, but neither the applicants nor their solicitor attended. A directions hearing followed. Unsurprisingly, the applicants and their solicitor did not attend. The respondent, her solicitor, and counsel who had been briefed specifically for that directions hearing attended.
2. The orders dated 2 August (which I have mentioned earlier) were then made. As I have said, the proceeding was struck out. There were costs which the applicants were required to pay, and there was liberty given to the respondent to apply for judgment. There is no dispute that the costs ordered by the 2 August orders have not yet been paid. A cheque for their amount was mentioned to the Tribunal at today's hearing.
3. On 4 August 2010, the applicants applied to have the 2 August orders set aside and the matter re-listed for a hearing on the merits. The application was accompanied by a statutory declaration from the applicants' solicitor, Mr Gleeson. It states that one of his staff entered the compulsory conference in his diary on 9 August rather than 2 August. However, an affidavit sworn by Mr Gleeson accompanying the applicants' submissions states that the compulsory conference was correctly entered in his diary and in fact that this is borne out by the extract from his diary which is exhibited to the affidavit.
4. The Tribunal's file includes an email sent by its registry on 27 July 2010 to the parties about the listing of the compulsory conference, confirming that it is to go ahead. There is no evidence before me as to why neither or the applicants nor their solicitor attended the compulsory conference.
5. On 17 August 2010, proposed consent orders to which the parties confirmed their agreement were filed with VCAT. I made these orders on 19 August 2010. The orders were that a stay previously ordered by the Tribunal of enforcement proceedings by the respondent be lifted with immediate effect, and that conditional on the applicants vacating the relevant property on or before 25 August 2010, paragraphs 1 and 3 of the 2 August orders be set aside and the matter be re-listed for a compulsory conference in September. Paragraph 2 of the 2 August orders was to remain in effect. That paragraph is the costs order against the applicants. The order went on to reserve certain costs. Paragraph 1 of the 2 August orders was that the applicants' application be struck out. Paragraph 3 of those orders was the order giving the respondent liberty to apply for judgment on her counterclaim.
6. The applicants did not vacate the premises by 25 August 2010, although it appears that they did vacate the premises shortly before the end of August. The 2 August orders therefore continued to stand, and I made this clear by orders which I made on 26 August 2010. The applicants have now reapplied or renewed their application to have the 2 August orders set aside. They do so under s120 of the VCAT Act or by way of reinstatement of a struck out proceeding.
7. In summary, the applicants' submission is this. They say that although they have not been blameless, their case is meritorious, it raises real questions, and should be heard on its merits. The respondent submits that the case should not be reinstated. She says that the applicants have, by consent orders of 19 August 2010, effectively been given an opportunity to reinstate the matter, that the applicants did not comply with the conditions in those orders and that accordingly, reinstatement did not occur. The respondent says that the case is unmeritorious in the sense that even if the applicants' claims were successful, the balance that would be owing to the respondent under the relevant contract would be equal to or would exceed the property's value. It would be a fruitless and costly exercise to continue the proceeding.

1. I am not satisfied that the proceeding should be reinstated under either of the bases relied on by the applicants. There is no explanation why the applicants or their solicitor did not attend the compulsory conference. There are contradictory statements by their solicitor, and I find that evidence unsatisfactory. Even if I were to assume that there was a reasonable excuse for neither the applicants nor their solicitor attending, the subsequent history of the matter does not satisfy me that I should exercise my discretion to revoke the 2 August orders. That subsequent history is this.
2. On 19 August 2010, the Tribunal made orders with the parties' consent. There is no evidence from the applicants that they were pressured to consent, although their solicitor in one of his submissions states that there was pressure. In my view, there is simply insufficient evidence that pressure of this kind existed. The consent orders are therefore true consent orders made with voluntary consent from the parties. The Tribunal cannot, in my view, alter these without some very compelling reason, such as a clear lack of true consent or that the order does not reflect the agreement of the parties. No such reason exists. The consent orders assume, at their basis, the fact of the 2 August orders. They contemplate the reinstatement of the proceeding if certain conditions are complied with. Those conditions were not complied with. This is not a case where there has been a failure to attend a hearing and nothing more. The parties have in fact turned their minds to reinstatement, have made consent orders about it, and in my view, I should not adopt a course which would effectively ignore or treat as void those consent orders. For similar reasons, I do not propose, as the applicants suggested, to extend the time limit in the consent orders beyond 25 August 2010. That was the time set for compliance with the conditions in those orders.
3. I now say something about the merits of the applicants' claim. I note that the further amended particulars of claim primarily seek reopening of the contract between the parties, but on a limited basis. The applicants do not say that the contract should be reopened and wholly set aside. They seek the setting aside of certain conditions in the contract, for example which entitle the respondent to certain interest and late fees on default, to certain legal costs on an indemnity basis, and to add to the outstanding balance certain amounts expended in returning the relevant property to its condition on the preliminary settlement date. I have in the material before me an affidavit from the respondent to which is exhibited an appraisal of the value of the property. It is by no means clear that there will be sufficient equity in the property to satisfy whatever balance might (had the hearing gone ahead) have been declared to be owing by the applicants to the respondent. The applicants' material refers to their impecuniosity. I take these matters into account when I come to the conclusion that there is a real possibility that the hearing might, if it went ahead, be a fruitless exercise.
4. I should add that in this decision I have not taken into account certain matters. I have not taken into account the respondent's submissions about what she said was the earlier conduct by the applicants of the proceeding, or that they might seek to further amend their claims if the proceeding were reinstated. I have not taken into account what was said to be the unsatisfactory condition in which the applicants left the property and what was said to be their failure to come with clean hands. All of these matters seem to me not relevant to the Tribunal's statutory jurisdiction. I do not think that applications should be thwarted when they are of such an important nature. However, for the other reasons I have given, I dismiss this application for reinstatement.
5. I note that the respondent seeks costs, including (at least in part) against the applicants' solicitor. Under s109 of the VCAT Act, I am obliged in these circumstances to give the applicants' solicitor an opportunity to be heard on this point, and on that basis, I re-list the matter for a costs hearing.

[1] [2010] VCAT 1311