Application under section 75(1) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic)

Wills v Wilson (Building and Property) [2025] VCAT 1022

1. The first respondent's application for summary dismissal, made on the basis that the Tribunal does not have jurisdiction, is dismissed.
2. The principal registrar is directed to list the proceeding for its final hearing, at 10:00am on 26 May 2026, with an estimated duration of 3 hours.
3. If the parties have not complied with their obligations to make discovery of documents under the Order of 2 May 2025, they must do so by 24 April 2026.
4. No order as to costs.

Mr C Loane estate agent, with the respondent in attendance

1. The applicants were the tenants, and the respondent was the landlord, of shop premises in Spencer Street Melbourne pursuant to a lease dated 13 April 2022. It appears[1] that the lease was in the form of a 'commercial lease' but that on 12 July 2023 the respondent's estate agent issued to the applicants a document headed 'Disclosure Statement by the Landlord under the Retail Leases Act 2003'.
2. The applicants ceased being the tenants in December 2024, and another couple became the respondent's tenants of the premises.[2]
3. The applicants had paid a security deposit under their lease. The respondent has retained $4,175.00 from the deposit, as compensation for seven items of alleged damage to the premises.
4. After an exchange of correspondence, the applicants issued this proceeding seeking payment of that sum.[3]
5. On 22 January 2025 a Senior Member made an Order in Chambers requiring the applicants to file and serve Points of Claim to better articulate the claims sought to be made and the respondent to file and serve Points of Defence; and listing a directions hearing to be held on 2 May 2025. At that directions hearing the presiding Senior Member ordered the parties to make discovery of documents and listed the case for a hearing of 3 hours' duration on 10 November 2025. The respondent then wrote to the Tribunal asserting that it lacked jurisdiction to hear and determine the dispute, and a Senior Member made an Order in Chambers converting what would have been the final hearing into a preliminary hearing on the issue of jurisdiction. In substance the respondent was seeking summary dismissal of the proceeding under section 75(1) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic).
6. I heard that application on 10 November 2025. Before the hearing the parties had filed and served written material, and I heard the parties' oral submissions in the hearing.
7. The respondent submits that the Tribunal lacks jurisdiction because the applicants issued the proceeding before first obtaining a certificate from the Small Business Commissioner under section 87(1) of the Retail Leases Act 2003 (Vic).
8. The applicants submitted that before issuing the proceeding they had engaged in negotiations with the respondent which had not resulted in a resolution;[4] and that they had been advised by officers of both the Small Business Commission and this Tribunal that it was unnecessary to participate in such a mediation given the parties' negotiations. The underlying theme of these submissions was that 'substance' should prevail over 'form' - that being compelled to participate in a futile mediation (that is, after negotiations had been conducted) would serve no purpose.
9. The applicants also made a number of other submissions which I addressed in the hearing and rejected on the basis that they were misconceived or irrelevant. For example the applicants argued that by VCAT receiving the initiating Application form with the filing fee it had 'accepted' jurisdiction; that the convening of the directions hearing and the respondent's participation in that directions hearing also amounted to VCAT accepting jurisdiction and the respondent being estopped from challenging jurisdiction; that their claim had merit; and that the respondent's delay in challenging jurisdiction was contrary to its obligations under the Civil Procedure Act 2010 (Vic). I explained to the parties in the hearing that the Tribunal does not have inherent jurisdiction and cannot give itself jurisdiction or even have jurisdiction conferred on it by consent, so that parties' conduct in a proceeding cannot operate to give the Tribunal jurisdiction if it does not have jurisdiction. I also explained that the Civil Procedure Act 2010 (Vic) does not apply to VCAT. Arguments about the merits were not to the point when the controversy was about jurisdiction.
10. Section 87 of the Retail Leases Act 2003 (Vic) states:

Retail tenancy disputes must first be referred for alternative dispute resolution

(1) A retail tenancy dispute may only be the subject of proceedings before the Tribunal (whether under this Act, the Fair Trading Act 1999 or any other Act) if the Small Business Commission has certified in writing that mediation or another appropriate form of alternative dispute resolution under this Part has failed, or is unlikely, to resolve it.

(2) This section does not apply to proceedings for an order in the nature of an injunction.

(3) This section does not affect the validity of any decision made by the Tribunal.

1. The 'Part' referred to is Part 10 of the Retail Leases Act 2003 (Vic) which contains sections 81 - 92. A mediation or other form of alternative dispute resolution ('ADR') 'under this Part' is different to a mediation that parties choose to have conducted by a private mediator, or a negotiation carried out in the absence of a mediator or other neutral third party. The Small Business Commissioner could not give a certificate in relation to a private mediation.
2. The Retail Leases Act 2003 (Vic) does not set out how the Commissioner is to 'certify in writing'. Usually if legislation seeks to require that a particular form be used, that requirement is set out in a Statutory Rule rather than in an Act. The concept of 'certifying' or of issuing a 'certificate' is not confined to government departments, officials or officers of the legal system. In building contracts, for example, various types of people can be appointed by the parties to certify whether a contractor's progress claim is payable. In the absence of any clear legislative provision requiring the Small Business Commissioner to use a particular form of words or style of document in order to 'certify in writing', there is no particular mechanism which is mandated. In a 19th century Act or Regulation it might be arguable that a certificate had to be given under seal, like a deed, but by 2003 word processing was commonplace and I see no reason to think that the Small Business Commissioner or a delegate is required by the Retail Leases Act 2003 (Vic) to literally sign a piece of paper with a pen in order to 'certify in writing'. It could be done by email or text.
3. The applicants do not contend that they received a document from the Small Business Commissioner. They rely on the alleged oral advice received from officers of the Victorian Small Business Commission.
4. The words 'has failed, or is unlikely, to resolve it' in section 87(1) are somewhat curious. 'Has failed' speaks of an existing reality but 'is unlikely' is a conclusion. If the words 'or is unlikely' were not present, the phrase could only operate when a mediation or ADR process had come to an end. With those words present, the Commissioner can 'certify in writing', before the process has been completed or even started.
5. The person forming the view and certifying that the process 'is unlikely to resolve' the dispute would be the Commissioner, who in practice is unlikely to be the person who has conducted the mediation.
6. The ability of the Commissioner to certify that an incomplete mediation or ADR process is unlikely to resolve a dispute gives the Commissioner considerable flexibility. The Commissioner could do so on the basis of their view of their own resources, rather than on the events in the process such as the quality of the parties' communications. That is, faced with a scarcity of resources the Commissioner could conclude that a mediation was unlikely to resolve a dispute because it could not be held expeditiously.
7. Section 87(3) might be described as a 'saving provision'. It says that section 87 'does not affect the validity of any decision made by the Tribunal'. The Retail Leases Act 2003 (Vic) could have been enacted with no such sub-section. By including section 87(3), the legislature has said that all decisions of the Tribunal are valid even if the proceeding was issued in the absence of a certificate from the Small Business Commissioner. As VCAT is empowered to conduct mediations and compulsory conferences, as well as formal hearings, this is unsurprising as a matter of policy.
8. A similar style of saving provision appears in the Domestic Building Contracts Act 1995 (Vic). Domestic Building Dispute Resolution Victoria ('DBDRV') is established by that Act, to administer a scheme for the resolution of domestic building work disputes. Amongst other things it conducts conciliations between disputing parties. Section 56(1) provides that 'A party to a domestic building work dispute must not make an application to VCAT in relation to the dispute unless the chief dispute resolution officer [of DBDRV] has issued a certificate of conciliation to the party certifying that the dispute - (a) was not suitable for conciliation; or (b) was not resolved by conciliation'. Section 56(4) says, 'This section does not affect the validity of any decision made by VCAT any time before, on or after' the establishment of DBDRV. The precise words used in the Domestic Building Contracts Act 1995 (Vic) are not identical to those in the Retail Leases Act 2003 (Vic), but they reflect and record the same concept.
9. Neither the Retail Leases Act 2003 (Vic) or the Domestic Building Contracts Act 1995 (Vic) expressly say the Tribunal does not have jurisdiction in the absence of a certificate by the Small Business Commissioner or the chief dispute resolution officer.
10. In those circumstances I feel compelled to conclude that the intention of the Retail Leases Act 2003 (Vic) was to strongly encourage parties in retail tenancy disputes to engage with the Small Business Commissioner, but not to deprive this Tribunal of jurisdiction if they did not or if the Commissioner concluded that mediation was unlikely to resolve the parties' dispute.
11. I note in passing that in exhibit 'E' to the applicants' affidavit sworn 19 October 2025 the applicants sought to prove that they spoke to officers of the Small Business Commissioner by disclosing extracts of telephone bills and displaying some screenshots of calls made from a mobile telephone. The exhibit does not include a letter or email from the Small Business Commissioner. The most I could possibly conclude from this exhibit is that the applicants communicated with the office of the Commissioner. I could not conclude that the Commissioner 'certified' anything under section 87(1) of the Retail Leases Act 2003 (Vic). However, for the reasons above I do not think that is relevant to the question before me.
12. I should add that if the applicants' lease was a commercial lease, and not a retail premises lease (so that the dispute would not be a retail tenancy dispute) section 87(1) would simply not apply. On the material before me, however, I take the view that the applicants' lease was a retail premises lease. In paragraph 1 of their affidavit the applicants say that this proceeding is 'in relation to the commercial premises' in Spencer Street, and in paragraph 2.2(a) they use the expression 'a ground floor commercial shop, leased and operated by the applicants for business purposes'. At page 37 of the Disclosure Statement, exhibited to their affidavit, the permitted use of the premises is described as, 'unlicensed café', which I take to mean a café not licensed to sell alcohol. The applicants also filed some documents with the Tribunal, one of which Registry has indexed as '16. Move in. pdf' in the section of the digital file called '2. Initial Application (including documents lodged with app, if any)'. Two photographs in '16. Move in. pdf' show the premises to be a shop.
13. Mr Loane, the respondent's estate agent, signed a document on 8 October 2025 in the presence of a witness,[5] in which he set out material establishing, in my view, that the applicants were cooking and selling meals in the premises under various brands and business names which would be delivered to customers through delivery services.
14. I suspect that the applicants emphasised the word 'commercial' in their documents and submissions as they thought it would improve their prospects of defeating the respondent's application for summary dismissal, but that in fact this was unnecessary.
15. In opposing the application for summary dismissal the applicants purportedly referred to some decided cases and one section of the Victorian Civil and Administrative Tribunal Act 1998 (Vic). The section does not exist, and given the applicants' summary of it, this cannot be simply a typographical error in stating the section number. The citation for the case allegedly called 'Reynolds' is a genuine citation, but of another case altogether. I conclude that the applicants have unwisely used an AI program which has had, as they say, a hallucination.
16. It is understandable that self-represented litigants might seek to gain knowledge of legal principles by using AI. At present, the result of an AI search could give the user some pointers, in much the same way as could a law firm's bulletin on recent legal developments issued for marketing purposes.[6] That is, the information could be a starting point and head the user in the right direction.
17. Parties should not use AI without carefully checking the outcome and ensuring that the generated text is both legally accurate and factually relevant.
18. In this proceeding the Tribunal will not be awarding costs, because both sides are self-represented and because of section 92 of the Retail Leases Act 2003 (Vic). However, submitting inaccurate AI junk text wastes the Tribunal's time and undoubtedly has the potential of wasting the time of the parties' legal practitioners (i.e., if there are any) and could well result in an order for costs being made.
19. Meanwhile the respondent cited Koronczyk v Victorian Small Business Commissioner and others [2023] VSC 431 as establishing that, 'the act or event which enables a party under a retail premises lease to commence proceeding in the Tribunal... is the procurement by that party of a certificate from the VSBC. Without it, jurisdiction is not enlivened'. (emphasis added)
20. Koronczyk is a genuine case, but the respondent has misunderstood the judgment. The case does not stand for the proposition asserted by the respondent in the passage quoted above. Quite the opposite.
21. Koronczyk is a judgment by Croft J, in an interesting situation. The decision is not directly on point, because it did not involve a VCAT proceeding issued in the absence of a certificate by the Commissioner. Instead, Mr Koronczyk was the guarantor of a company which was a tenant of retail premises in which it ran a takeaway food business. The Commissioner had arranged a mediation between the tenant and its landlords, but not involving Mr Koronczyk. The Commissioner had issued a certificate in relation to that retail tenancy dispute. Mr Koronczyk sought a mediation in which he would be a party. The Commissioner declined, and instead issued a certificate stating that such a mediation or another appropriate form of alternative dispute resolution under Part 10 has failed, or is unlikely, to resolve the retail tenancy dispute between Mr Koronczyk and the landlords. Mr Koronczyk sought an order from the Supreme Court quashing that certificate and compelling the Commissioner to arrange for a mediation to be conducted. The Small Business Commissioner applied for summary judgment against Mr Koronczyk, submitting that his application was a delaying tactic that sought to delay the landlords from prosecuting their claim in VCAT. It is apparent on reading the judgment that the tenant company was insolvent.
22. At paragraph 25 Croft J said:[7]

It should be observed, in relation to these provisions, that sub‑section 87(1) of the Retail Leases Act which requires that retail tenancy disputes must first be referred for alternative dispute resolution has two elements to it. The first is that any mediation or other appropriate form of alternative dispute resolution has failed or, alternatively, that mediation or other appropriate form of alternative dispute resolution is unlikely to resolve the dispute. Mediation as the relevant process in the present context is, by its nature, a consensual process. Clearly, being mindful of this the legislature provided by way of sanction for refusal to take part or withdraw from the mediation the possibility of costs sanctions in any subsequent proceeding in the Tribunal under the provisions of section 92(2)(b).

1. A reading of this paragraph in isolation would appear to support the respondent's submission. However, if one turns to paragraph 39, under the heading Analysis, one can see that His Honour employed a purposive interpretation of the legislation and would not countenance the Small Business Commissioner being forced to undertake activities which would be futile. His Honour said:

... provisions such as section 86(3) of the RLA must, in my view, be interpreted as being in the nature of a procedural provision rather than a mandatory provision as [Mr Koronczyk] contends; in spite of the use of the word "must" in respect of arranging a mediation. This, in my view, follows from the broad conferral of power on the [Commissioner] with respect to dispute resolution in Part 10 of the legislation and regard for what must, ultimately, be the voluntary nature of "mediation", whether in a broad or narrow sense. Were section 86(3) to be interpreted as a mandatory provision it would follow that the process provided for in the provisions of Part 10 to which reference has been made could be stymied by a party simply refusing to take part in a mediation in which case it would either be pointless or impossible for the [Commissioner] to 'arrange' a mediation for the purpose of the provisions of s 86(3), or otherwise. Then, after summarising the history of the dispute His Honour said at paragraphs 43 & 44:

Having regard to the [landlords'] position that the [Commissioner] has no power to compel a party to attend a mediation, and the fact that the solicitor for the Landlords had told [the Commissioner] that they would not be attending a mediation, I accept that it is very difficult to see what further steps were open to [the Commissioner] . It follows ... that in accordance with the functions conferred on the [Commissioner] under s 84(1) of the Retail Leases Act, and the expansive definition of mediation (or other form of alternative dispute resolution) under s 85 of the RLA, that the [ Commissioner] has discharged its obligations under s 84(1) of the RLA to undertake making arrangements to facilitate the resolution of the dispute between the parties. No other steps were available to it and in all the circumstances it follows that by simply convening a mediation with the knowledge one party would not attend would be entirely futile and an unnecessarily costly and delay generating exercise. As indicated previously, a proper approach to statutory construction would not produce this result with respect to the operation of Part 10 of the Retail Leases Act. (emphasis added)

Moreover I do not accept, as [Mr Koronczyk] contends, that the [Commissioner] is effectively able to compel mediation by withholding a certificate until a recalcitrant party cooperates. This assumes that cooperation would be forthcoming in response to this approach rather than, as indicated previously, merely a means of preventing dispute resolution proceeding under Part 10 of the Retail Leases Act in VCAT or otherwise in accordance with its provisions operating as indicated previously. Moreover, it was conceded by [Mr Koronczyk] at the hearing of this matter that VCAT has no jurisdictional or other bar to proceeding with hearing and determining a retail lease dispute in spite of the lack of a certificate as a result of s 87(3) of the Retail Leases Act. (emphasis added)

... Section 87(3) of the Retail Leases Act leaves the Tribunal free to deal with the dispute between the Landlord parties and [Mr Koronczyk] the guarantor. The relief sought by [Mr Koronczyk] in this proceeding can in no way constitute a necessary prerequisite to the Tribunal dealing with the dispute of which it is seized and in that sense the relief sought by the plaintiff cannot do any justice as between any of the parties.

1. The respondent's application for summary dismissal, on the basis that the Tribunal does not have jurisdiction, must be refused.
2. The final hearing will be relisted. Regrettably, resource pressures on the Tribunal are such that there is no available hearing time for many months. The Order of 2 May 2025 already required the parties to give discovery of documents. If they have not already fully complied, they must do so before the final hearing.
3. In view of the amount of money in dispute, the unfortunate delay before the next available hearing time, and the fact that the respondent cannot claim her estate agent's fees as 'costs' because the estate agent is not a legal practitioner, I repeat my suggestion to the parties that they might reconsider attempting to settle this dispute by communicating on a without prejudice basis.

[1] A schedule to the lease and the Disclosure Statement are exhibited to the affidavit of the applicants sworn 19 October 2025.

[2] In the hearing the applicants spoke of their lease being 'assigned', but then of them not being given for execution a deed of assignment and the assignment taking effect 'at common law'.

[3] The applicants say that the incoming tenants accepted the premises in its condition on the day the applicants left and the new tenants took possession, and that the new tenants assumed all obligations under the lease including the 'make good' provisions, in consequence of which the respondent has no claim to the security deposit.

[4] Documents exhibited to the applicants' affidavit include quite detailed letters from the applicants' lawyers in November 2024 setting out their then proposed assignment of the lease to the new tenants and their request for the return of their security deposit; and some remarkably pedantic and perplexing replies from the respondent's estate agent in which the agent professed to be unable to understand that the lawyers' letters addressed to the estate agent actually related to the interests of the respondent as landlord. I am satisfied that this correspondence did constitute negotiations.

[5] Mr Sloan wrote in this document that it was 'sworn / affirmed', which are separate concepts, and the status of the witness is unclear.

[6] Such bulletins inevitably contain disclaimers that they are general information and are not to be taken to be legal advice

[7] Where I use [square brackets] I have taken the liberty of replacing some abbreviations used by His Honour. (Round brackets) are in the original text.