Krongold Constructions (Aust) Pty Ltd v Thurin
[2023] VSCA 191
•17 August 2023
| SUPREME COURT OF VICTORIA COURT OF APPEAL |
| S EAPCI 2023 0032 |
| KRONGOLD CONSTRUCTIONS (AUST) PTY LTD (ACN 103 839 149) | Applicant |
| v | |
| DAVID THURIN & ORS | Respondents |
| (ACCORDING TO THE ATTACHED SCHEDULE) |
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| JUDGES: | BEACH, McLEISH and NIALL JJA |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 25–26 May 2023 |
| DATE OF JUDGMENT: | 17 August 2023 |
| MEDIUM NEUTRAL CITATION: | [2023] VSCA 191 |
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CONSTITUTIONAL LAW – Federal jurisdiction – Victorian Civil and Administrative Tribunal (‘VCAT’) lacking jurisdiction to hear and determine federal matter – Referral of matter by VCAT to Supreme Court under Victorian Civil and Administrative Tribunal Act 1998, s 77 – Whether referral invokes jurisdiction of Supreme Court to hear and determine referred matter – Referral power exists where VCAT considers subject matter of proceeding more appropriately dealt with by different entity – Requires assessment as to whether subject matter in jurisdiction of receiving court – Distinction between ‘proceeding’ and ‘subject matter’ does not bear on legal effect of referral to a court – No constitutional impediment to treating referral as providing means by which jurisdiction of a court is invoked – Referral under s 77 to Supreme Court invokes jurisdiction of the Court without need for further initiating process.
LIMITATION OF ACTIONS – Building dispute proceeding referred from VCAT to Supreme Court – Proceeding in VCAT commenced within limitation periods in Building Act 1993, ss 134 and 134A – Whether referral to Supreme Court constitutes bringing of action – Parties in VCAT on notice of subject matter within limitation period – Referral process designed to bring action to conclusion in appropriate forum – Referral not bringing of action – Limitation periods do not bar claims.
JURISDICTION – Third parties to proceeding in VCAT referred to Supreme Court – Order by VCAT for third party joinder not for purpose of VCAT determining its jurisdiction – Joinder order involved invalid exercise of federal judicial power – Subsequent conduct of third parties a consequence of joinder order, not a submission to jurisdiction independently of it – Referral cannot give legal effect to invalid exercise of federal judicial power – Referral did not invoke jurisdiction of Supreme Court in relation to third parties – Herald and Weekly Times Pty Ltd v Victoria [2006] VSCA 146, distinguished.
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| Counsel | |||
| Applicant: | Mr JAF Twigg KC with Dr K Weston-Scheuber and Mr M Hosking | ||
| First and Second Respondents: | Mr MG Roberts KC with Dr CO Parkinson KC and Mr N Guenther | ||
| Third Respondent | Mr KJ Naish | ||
| Fourth Respondent | Mr PG Cawthorn KC with Mr AE Klotz | ||
| Attorney-General for the State of Victoria | Ms R Orr KC, Solicitor-General for the State of Victoria, with Ms E Smith and Mr S Crock | ||
| Attorney-General of the Commonwealth | Mr G Hill SC with Mr T Wood | ||
Solicitors | |||
| Applicant: | Krongold Group of Companies | ||
| First and Second Respondents: | Herbert Smith Freehills | ||
| Third Respondent | DLA Piper Australia | ||
| Fourth Respondent | Meridian Lawyers | ||
| Attorney-General for the State of Victoria | Victorian Government Solicitor | ||
| Attorney-General of the Commonwealth | Australian Government Solicitor | ||
BEACH JA
MCLEISH JA
NIALL JA:
Introduction
This proceeding, which takes the form of questions referred under s 17B of the Supreme Court Act1986, is a further instalment in a long running building dispute that has emanations in various proceedings in the Victorian Civil and Administrative Tribunal (‘VCAT’) and the Supreme Court. The proceeding in VCAT came to include claims under the Trade Practices Act 1974 (Cth) (‘TPA’) and was thus within federal jurisdiction and beyond the jurisdiction of VCAT. In Thurin v Krongold,[1] this Court held that, despite the matter being in federal jurisdiction, VCAT had the power under s 77 of the Victorian Civil and Administrative Tribunal Act 1998 (‘VCAT Act’) to refer the subject matter of the proceeding to the Supreme Court. That occurred when Quigley J as President of VCAT acting under s 77 of the VCAT Act referred ‘the matter’ to the Supreme Court. Issues have arisen about the effect of the referral under s 77, and in particular how the referral interacts with limitation periods in the Building Act1993. These issues are of general importance and a judge of the Supreme Court has referred questions of law to this Court.
[1]Thurin v Krongold Constructions (Aust) Pty Ltd [2022] VSCA 226, [5] (McLeish, Niall and Walker JJA) (‘Court of Appeal Reasons’).
These reasons answer those questions.
In summary, we have concluded that a referral to the Supreme Court under s 77 of the VCAT Act invokes the jurisdiction of the Court without the need for a fresh or new initiating process. The making of a referral does not constitute the bringing of an action for the purpose of the time limits in ss 134 or 134A of the Building Act. We have also concluded that, in the present case, VCAT did not have jurisdiction to join the architect and supplier of pipes as respondents to the VCAT proceeding, and the claims against those parties in the VCAT proceeding do not form part of the matter referred under s 77.
The referral of questions to this Court
On 24 March 2023, pursuant to s 17B of the Supreme Court Act, Stynes J referred the following questions to this Court, which we would answer as follows:
Question 1
What is the effect of Justice Quigley’s order made on 13 December 2022 pursuant to s 77(3) of the Victorian Civil and Administrative Tribunal Act 1998 (as corrected on 15 December 2022), that VCAT proceeding BP715/2018 ‘be struck out and the matter referred to the Supreme Court of Victoria’ (the ‘Section 77 Order’)?
Answer: Subject to the answer to question 2, the effect of Quigley J’s order is to invoke the jurisdiction of the Supreme Court to hear and determine the referred matter, without the need for any further initiating process.
Question 2
Having regard to the answer in Question 1, is:
(a) Casper Architecture and Design Pty Ltd (ACN 078 809 604); and/or
(b) Swan Hardware & Staff Pty Limited (ACN 005 273 165),
a party to any proceeding in the Supreme Court of Victoria arising as a result of the Section 77 Order?
Answer: No.
Question 3
Having regard to the answer to Question 1, do sections 134 and/or 134A of the Building Act 1993 bar the Thurins’ claims against Krongold Constructions (Aust) Pty Ltd (ACN 103 839 149) and/or Casper Architecture and Design Pty Ltd?
Answer: No, with respect to the Thurins’ claims against Krongold Constructions (Aust) Pty Ltd (ACN 103 839 149); otherwise unnecessary to answer.
The facts[2]
[2]The factual account is largely drawn from the parties’ Annotated Statement of Agreed Facts dated 22 May 2023.
In September 2006, the applicant (‘Krongold’) and the first and second respondents (‘the Thurins’) entered into a building contract under which Krongold agreed to carry out works at a property in Toorak, including constructing a new residence (‘the dwelling’) (‘the Building Contract’).
The architect on the project, and the contract administrator under the Building Contract, was Russell Casper of the third respondent (‘Casper’).
Krongold engaged MDG Plumbing Contractors Pty Ltd (‘MDG Plumbing’) as a subcontractor to perform plumbing works for the construction of the dwelling. The plumbing works included the installation of pipes with the trademark ‘PEX PLUS’ (‘the PEX Plus pipes’). The PEX Plus pipes were supplied by the fourth respondent (‘Swan Hardware’) to MDG Plumbing.
Completion of the building
A compliance certificate for the plumbing works was issued on 8 September 2008. A notice of completion of stage 1 and certificate of occupancy were issued on 20 November 2008.
The dispute
On 23 January 2012 and 23 November 2015, sections of pipe carrying hot water burst and caused water damage to the dwelling. The Thurins contend that on each occasion it was a ‘PEX Plus’ pipe that burst. Remedial work, involving replacement of the pipes, was undertaken. A dispute has arisen as to who is responsible for payment for the remedial works. There were also some other disputes about other aspects of the construction and associated landscaping that have either come to an end or are presently irrelevant.
Various proceedings and interlocking claims in both VCAT and the Supreme Court have been issued. In short:
(a)on 31 October 2017, the Thurins commenced Supreme Court proceeding S CI 2017 04387 by a generally indorsed writ against Swan Hardware and others under ss 74A and 74B of the TPA in relation to the supply of the pipes (‘the 2017 Supreme Court proceeding’);
(b)on 22 May 2018, the Thurins issued proceedings in VCAT seeking payment of money under the Domestic Building Contracts Act1995 (‘DBC Act’) against Krongold for breach of the Building Contract (‘the VCAT proceeding’);
(c)on 3 August 2018, by defence and counterclaim, Krongold denied the allegations made by the Thurins and, in the alternative, pleaded that the claims were apportionable claims under s 24AE of the Wrongs Act 1958 and that Swan Hardware and Casper were concurrent wrongdoers (the former based on liability under ss 74A and 74B of the TPA) or alternatively were liable by way of contribution; and
(d)so as to enable its allegations against Swan Hardware and Casper to proceed, Krongold applied to have them joined to the VCAT proceeding. In August 2018, VCAT ordered that Swan Hardware and Casper be joined to the VCAT proceeding and gave leave to both the Thurins and Krongold to file amended points of claim and counterclaim in respect of the joined parties.
The expert determination
On 13 December 2017, the Thurins served Krongold with a notice of dispute under the contract. Subsequently, in April 2018, the Thurins appointed Dr Richard Manly QC as an expert for the purpose of making an expert determination in relation to the dispute. The power to appoint Dr Manly QC and his jurisdiction to make an expert determination is disputed by Krongold, who did not participate in the determination process. On 15 May 2018 Dr Manly QC delivered his expert determination. Subsequently, VCAT held that Dr Manly QC did not have jurisdiction to carry out the determination process in the absence of Krongold, and the expert determination was not a valid determination under the Building Contract.
The VCAT proceeding
As noted, on 22 May 2018, the Thurins commenced the VCAT proceeding and on 20 August 2018, Krongold applied to join Swan Hardware and Casper as respondents. Krongold alleged that if it were liable to the Thurins, Swan Hardware and Casper were liable as concurrent wrongdoers. By a proposed defence it sought apportionment under the Wrongs Act or alternatively contribution.
On 29 August 2018, Deputy President Aird heard part of Krongold’s joinder application and made orders in the VCAT proceeding. Among other things, these orders joined Swan Hardware and Casper as respondents to the VCAT proceeding whilst reserving their right to bring an application under s 75 of the VCAT Act to challenge the joinder (‘the 29 August orders’). Swan Hardware was represented by counsel who submitted that, because the apportionment claim relied on the TPA, there was no jurisdiction in VCAT to hear the claim. The submission was based on the provisions of the TPA rather than a constitutional limitation. It was not possible to determine that issue, hence the express reservation of the ability to later challenge the joinder.
Included within the 29 August orders were orders:
(a)directing Krongold to file and serve amended points of defence and counterclaim limited to its contention that Swan Hardware and Casper were concurrent wrongdoers; and
(b)directing the Thurins to file and serve amended points of claim if they sought to make any claims against Swan Hardware and Casper.
On 9 August 2019, Deputy President Aird made further orders in the VCAT proceeding. Among other things, those orders declared that cl 15 of the Building Contract did not apply to the dispute between the Thurins and Krongold and that the expert determination was unenforceable.
Pursuant to leave granted to them, on 6 September 2018, the Thurins filed and served amended points of claim. The amended points of claim included a ‘conditional’ claim against Casper but no claim against Swan Hardware. As against Casper it was said that if the Thurins’ claims against Krongold were apportionable claims (which was denied) then the Thurins claimed damages against Casper in respect of its proportionate liability.
Proceedings in the Supreme Court in 2019
On 20 May 2019, Krongold commenced Supreme Court proceeding S ECI 2019 02220 against Swan Hardware (‘the 2019 Supreme Court proceeding’).
With effect from 1 October 2019, Riordan J was appointed as an acting member of VCAT for the purposes of hearing the VCAT proceeding at the same time as the 2017 Supreme Court proceeding and the 2019 Supreme Court proceeding. Justice Riordan made directions that required each of the parties to prepare a single document headed in the 2017 Supreme Court proceeding that contained their respective allegations, claims or defences as the case may be drawn from the three proceedings. Thus, for example, the Thurins filed and served a composite document entitled ‘Points of Claim’ headed in the 2017 Supreme Court proceeding that set out their respective allegations drawn from the VCAT proceeding, the 2017 Supreme Court proceeding and the 2019 Supreme Court proceeding. Krongold, Swan Hardware and Casper filed similar documents.
Although the allegations were drawn together in composite documents, the VCAT proceeding and the Supreme Court proceedings remained conceptually distinct. No order for consolidation was, or could have been, made.
The challenge to VCAT’s jurisdiction
On 17 May 2022, 13 days before the trial of the Supreme Court proceedings and the VCAT proceeding, Krongold filed a summons in the VCAT proceeding and in the 2019 Supreme Court proceeding. By that summons Krongold sought an order that the VCAT proceeding be dismissed on the basis that VCAT lacked jurisdiction to hear and determine it. The bases for challenging jurisdiction included that the determination of the dispute would involve the purported exercise of federal jurisdiction.
The decision of the Court of Appeal
As a means of dealing with some of the jurisdictional issues that had arisen, Riordan J referred a number of questions of law to the Court of Appeal under s 96(1) of the VCAT Act concerning the jurisdiction of VCAT to hear and determine the VCAT proceeding.
This Court concluded:
(a)the VCAT proceeding involved a matter arising under a law of the Parliament within the meaning of s 76(ii) of the Constitution, and hence a matter in federal jurisdiction, by reason of the reliance by Krongold on a claim under the TPA, with the result that VCAT lacked jurisdiction to hear and determine the proceeding;
(b)the matter was not one in federal jurisdiction merely by reason of the fact that Krongold is a corporation incorporated under the Corporations Act 2001 (Cth); and
(c)VCAT had jurisdiction to refer the matter to the Supreme Court pursuant to s 77 of the VCAT Act.[3]
[3]Court of Appeal Reasons, [5] (McLeish, Niall and Walker JJA).
This Court held that by at least by 3 August 2018, when Krongold pleaded in its defence that, by reason of breach of the TPA, it was entitled to apportionment and contribution from Swan Hardware in respect of the losses claimed by the Thurins, the VCAT proceeding was in federal jurisdiction.[4]
[4]Ibid [64] (McLeish, Niall and Walker JJA).
The statutory provisions
Although the critical issue of construction concerns s 77 of the VCAT Act, it is convenient to refer to some of the provisions that found VCAT’s jurisdiction to hear and determine domestic building disputes.
The VCAT Act
Sections 59(1) and 60 of the VCAT Act are in the following terms:
59 Who are the parties to a proceeding?
(1) The parties to a proceeding are—
(a) in a proceeding in the Tribunal's original jurisdiction—
(i) the person who applies to the Tribunal, or who requests or requires a matter to be referred to the Tribunal; and
(ii)in the case of an inquiry by the Tribunal, the person who is the subject of the inquiry; and
(iii)any person joined as a party to the proceeding by the Tribunal; and
(iv)any other person specified by or under this Act or the enabling enactment as a party;
(b) in a proceeding in the Tribunal's review jurisdiction—
(i)the person who applies to the Tribunal for review of a decision, or who requests or requires a decision to be referred to the Tribunal for review; and
(ii) the decision-maker who made the decision; and
(iii)any person joined as a party to the proceeding by the Tribunal; and
(iv) any other person specified by or under this Act or the enabling enactment as a party.
60 Joinder of parties
(1) The Tribunal may order that a person be joined as a party to a proceeding if the Tribunal considers that—
(a) the person ought to be bound by, or have the benefit of, an order of the Tribunal in the proceeding; or
(b) the person’s interests are affected by the proceeding; or
(c) for any other reason it is desirable that the person be joined as a party.
(2) The Tribunal may make an order under subsection (1) on its own initiative or on the application of any person.
Section 77 of the VCAT Act provides:
77 More appropriate forum
(1) At any time, the Tribunal may make an order striking out all, or any part, of a proceeding (other than a proceeding for review of a decision) if it considers that the subject-matter of the proceeding would be more appropriately dealt with by a tribunal (other than the Tribunal), a court or any other person or body.
(2) The Tribunal's power to make an order under subsection (1) is exercisable only by a judicial member.
(3) If the Tribunal makes an order under subsection (1), it may refer the matter to the relevant tribunal, court, person or body if it considers it appropriate to do so.
(4) An order under subsection (1) may be made on the application of a party or on the Tribunal's own initiative.
Consequent upon the decision of the High Court in Burns vCorbett,[5] the VCAT Act was amended by the introduction of pt 3A to allow for matters to be heard in the Magistrates’ Court if VCAT does not have jurisdiction because the proceeding would be in federal jurisdiction.
[5](2018) 265 CLR 304; [2018] HCA 15.
Section 57B of the VCAT Act provides that the Magistrates’ Court may hear and determine an application for the matter to be heard in that Court if the application raises, or there is some doubt as to whether it raises, a controversy involving federal subject matter, the resolution of which may involve an exercise of judicial power, and VCAT would otherwise have had jurisdiction. Section 57B also provides for who can make such an application.
Section 57D allows the Magistrates’ Court to extend any limitation period that applies to the making of an application under s 57B to allow the application to be made and determined, if: (a) the application involves the same subject matter as an application to VCAT that was struck out, dismissed, rejected or withdrawn for lack of jurisdiction; (b) the late making of the application under s 57B is attributable to additional steps the applicant was required to take because the application to VCAT was struck out, dismissed, rejected or withdrawn; and (c) it is fair and reasonable to extend the limitation period.
The Building Act
Division 2 of pt 9 of the Building Act provides for time limits for the bringing of actions in relation to building work. For the purposes of that division:
building action means an action (including a counter-claim) for damages for loss or damage arising out of or concerning defective building work;
building work includes the design, inspection and issuing of a permit in respect of building work.[6]
[6]Building Act 1993, s 129.
Sections 134 and 134A provide the relevant limitations in the following way:
134 Limitation on time when building action may be brought
(1) Despite anything to the contrary in the Limitation of Actions Act1958 or in any other Act or law, a building action cannot be brought more than 10 years after the date of issue of the occupancy permit in respect of the building work (whether or not the occupancy permit is subsequently cancelled or varied) or, if an occupancy permit is not issued, the date of issue under Part 4 of the certificate of final inspection of the building work.
(2)Despite subsection (1), a building action may be brought more than 10 years but less than 15 years after the date of issue of the occupancy permit in respect of the building work (whether or not the occupancy permit is subsequently cancelled or varied) or, if an occupancy permit is not issued, the date of issue under Part 4 of the certificate of final inspection of the building work if—
(a) the building action is a cladding building action; and
(b)the building action has become or becomes prohibited on or after 16 July 2019 but before 1 December 2023 by this section as in force at any time before the commencement of section 49A of the Building Amendment (Registration and Other Matters) Act 2021.
(3)In this section—
“cladding building action” means a building action in connection with, or otherwise related to, a product or material that is, or could be, a non-compliant or non‑conforming external wall cladding product.
134A Limitation on time when plumbing action may be brought
Despite anything to the contrary in the Limitation of Actions Act 1958 or in any other Act or law, if a compliance certificate is issued in respect of plumbing work under Part 12A, an action (including a counter-claim) for damages for loss or damage arising out of or concerning any defects in the work cannot be brought more than 10 years after the date of issue of the certificate.
The DBC Act
Section 1 of the DBC Act relevantly provides that the ‘main purposes’ of the DBC Act are to regulate contracts for the carrying out of domestic building work and provide for the resolution of domestic building disputes by VCAT. Section 3(1) of the DBC Act defines a ‘domestic building contract’ as ‘a contract to carry out, or to arrange or manage the carrying out of, domestic building work other than a contract between a builder and a sub-contractor’, and defines a ‘major domestic building contract’ as ‘a domestic building contract in which the contract price for the carrying out of domestic building work is more than $5000 (or any higher amount fixed by the regulations)’.
The DBC Act provides for the resolution of ‘building disputes’. Section 53(1) provides that VCAT may make any order it considers fair to resolve a domestic building dispute. Section 53(2) sets out a non-exhaustive list of the orders that VCAT can make in relation to a building dispute including an order for the payment of money. A domestic building dispute is defined to include a dispute or claim arising between a building owner and a builder in relation to a domestic building contract or the carrying out of domestic building work, and between a builder and a sub-contractor or ‘building practitioner’ in relation to the same topic. A building dispute also includes a dispute between a building owner or builder and an architect in relation to any design work carried out by the architect in respect of domestic building work.
Relevantly, s 55 of the DBC Act provides that VCAT may only make an order to resolve a domestic building dispute on the application of a party to the dispute.
As will appear, Krongold seeks to bolster its construction of s 77(3) of the VCAT Act by reference to s 57 of the DBC Act, which provides as follows:
57VCAT to be chiefly responsible for resolving domestic building disputes
(1) This section applies if a person starts any action arising wholly or predominantly from a domestic building dispute in the Supreme Court, the County Court or the Magistrates’ Court.
(2) The Court must stay any such action on the application of a party to the action if—
(a) the action could be heard by VCAT under this Subdivision; and
(b) the Court has not heard any oral evidence concerning the dispute itself.
(3) This section does not apply to any matter dismissed by VCAT under section 77 of the Victorian Civil and Administrative Tribunal Act 1998.
(4) If an action is stayed under this section, any party to the action may apply to VCAT for an order with respect to the dispute on which the action was based.
(5) If a person applies to VCAT under subsection (4) VCAT must notify the Court and on such notification the Court must dismiss the action.
(6)Subsection (5) does not apply if VCAT refers the matter to the Court under section 77(3) of the Victorian Civil and Administrative Tribunal Act 1998.
Relevant constitutional principles
In the Court of Appeal Reasons, this Court surveyed the relevant constitutional principles that apply where federal judicial power is purportedly conferred on a tribunal that is not a court.
It is convenient to reiterate some important but uncontroversial constitutional propositions:
(a)First, only a court established under Ch III of the Constitution or a court of a State within the meaning of that Chapter can exercise federal judicial power.[7]
(b)Second, only the Commonwealth Parliament can confer federal jurisdiction on a court and regulate its exercise.[8]
(c)Third, it follows from the second proposition that State Parliaments have no power to legislate with respect to the conferring of federal jurisdiction or regulating its exercise. This is a limitation on State legislative power. It is not a product of the application of s 109 of the Constitution.[9]
(d)Fourth, federal judicial power is conferred and regulated in respect of a ‘matter’ within the meaning of Ch III which for present purposes can be described, incompletely, as a justiciable controversy in respect of existing rights, duties or liabilities that might come before a court.[10]
(e)Fifth, the Commonwealth Parliament through ss 39, 68 and 79 of the Judiciary Act 1903 (Cth) has invested State courts with federal jurisdiction and regulated the exercise of that jurisdiction, essentially by ‘picking up’ State laws so that they apply in federal jurisdiction, subject to the Commonwealth otherwise providing in relevant respects.[11]
(f)Sixth, the determination by VCAT of a ‘building dispute’ by the making of binding orders involves the exercise of judicial power.
(g)Seventh, although VCAT can and does validly exercise State judicial power, VCAT is not a court of a State within the meaning of Ch III and cannot be invested with or exercise federal judicial power.[12]
[7]R v Kirby; Ex parte Boilermakers’ Society of Australia (1956) 94 CLR 254; [1956] HCA 10.
[8]Rizeq v Western Australia (2017) 262 CLR 1, 25 [59] (Bell, Gageler, Keane, Nettle and Gordon JJ); [2017] HCA 23 (‘Rizeq’).
[9]Ibid 25–6 [60]–[61] (Bell, Gageler, Keane, Nettle and Gordon JJ).
[10]Palmer v Ayres (2017) 259 CLR 478, 490–1 [26]–[27] (Kiefel CJ, Keane, Nettle and Gordon JJ); [2017] HCA 5.
[11]Rizeq (2017) 262 CLR 1, 26 [63] (Bell, Gageler, Keane, Nettle and Gordon JJ); [2017] HCA 23.
[12]Meringnage v Interstate Enterprises Pty Ltd (2020) 60 VR 361; [2020] VSCA 30.
Whether a proceeding is in federal jurisdiction, in the sense that its determination will involve or require the exercise of federal judicial power, may in the first place be assessed by reference to the issues joined in the proceeding by reference to the pleadings or constituent documents. Because federal jurisdiction arises with respect to matters, and because a matter is not co-extensive with a proceeding, it may be necessary to go beyond the pleadings or constituent documents of a particular piece of litigation, be it in a court or tribunal, in order to determine whether the matter is in federal jurisdiction and identify its scope.
It is necessary to say something about the concept of jurisdiction when used in respect of a court. Jurisdiction in this context means the authority to decide or adjudicate.[13] When jurisdiction of a court is regularly invoked the court comes under a duty to exercise that jurisdiction.[14]
[13]Rizeq (2017) 262 CLR 1, 12 [8] (Kiefel CJ); [2017] HCA 23.
[14]Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538, 559 (Mason CJ, Deane, Dawson and Gaudron JJ); [1990] HCA 55.
A State tribunal that is not a ‘court of a State’ within the meaning of ss 77(ii) and (iii) of the Constitution, on which State judicial power is conferred by State legislation—
has authority — in the exercise of non-judicial power — to ‘make up its mind’ or ‘“decide” in the sense of forming an opinion’ about the limits of its own jurisdiction ‘for the purpose of determining its own action’. The authority is not to ‘reach a conclusion having legal effect’ but to form an opinion for the purpose of ‘moulding its conduct to accord with the law’.[15]
[15]Citta Hobart Pty Ltd v Cawthorn (2022) 96 ALJR 476, 484 [24] (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ) (citations omitted); [2022] HCA 16 (‘Citta’).
It is a corollary of the above that VCAT has no jurisdiction to hear and determine a dispute under the Building Act in federal jurisdiction because:
(a)the VCAT Act and Building Act are incapable of investing VCAT with federal judicial power. They are required to be read down so as to deny VCAT judicial power in respect of any such matter; and
(b)s 39 of the Judiciary Act, both as a matter of constitutional power and text, only invests federal jurisdiction in State courts, and VCAT is not a ‘court of a State’ within the meaning of Ch III of the Constitution.
VCAT does, however, have power to form an opinion as to its jurisdiction for the purpose of determining its own action, including by exercising the referral power in s 77(3).
Question 1: The competing constructions of s 77 of the VCAT Act
The parties dispute the construction of s 77 of the VCAT Act. More specifically, they differ on the effect of a referral to the Supreme Court. On the one hand, Krongold submits that a referral does no more than bring the subject matter of the dispute that had been discontinued in VCAT to the attention of the Supreme Court. On the other, the Thurins submit that a s 77 referral involves the transfer of the proceeding, which has the effect of invoking the jurisdiction of the Supreme Court to hear and determine the referred matter in accordance with whatever case management procedures the Court determines to be appropriate.
The outcome of this disputed constructional question is considered to be a necessary first step in determining how, if at all, the limitation of action provisions in the Building Act may apply. On this ultimate question, Krongold submits that in order for the Supreme Court to exercise jurisdiction in a matter that is the subject of a referral, it is necessary for the moving party to commence a fresh proceeding in the Court, and that this involves the bringing of an action for the purposes of s 134, which must be done within 10 years of the issue of the occupancy permit in respect of the building work, or s 134A, which must be done within 10 years of the issue of the compliance certificate in respect of the plumbing work. The Thurins on the other hand submit that once a referral is made the jurisdiction of the Court to determine the controversy is enlivened without the need to bring a new action.
As is apparent, the issues involve questions of construction of both the VCAT Act and the limitation provisions in the Building Act. It is convenient, then, to set out the competing arguments in greater detail.
Krongold
Krongold submits that in its express terms, the power in s 77, which is enlivened on the striking out of the proceeding under s 77(1), is to refer the ‘matter’, in the sense of subject matter, and not a power to refer a proceeding. Krongold says the distinction used in s 77 between ‘proceeding’ and ‘matter’ is deliberate and critical to an understanding of the referral power. The power to refer subject matter, it is said, neither contemplates nor provides for the transfer or continuation of the proceeding previously existing in VCAT.
This approach is said to be consistent with other features of the section. First, s 77 authorises referrals to bodies other than courts including, for example, the Ombudsman. Such bodies do not hear and determine proceedings and their jurisdiction and powers attach to the subject matter that is referred without regard to the fact that the subject matter in VCAT took the conventional form of a proceeding. Relatedly, Krongold submits that s 77 is not a source of jurisdiction for the body to which the referral is made. That is, s 77 does not perform a double function of conferring a power on VCAT to refer a matter, and jurisdiction on the receiving entity to deal with it.[16]
[16]R v Commonwealth Court of Conciliation and Arbitration; ex parte Barrett (1945) 70 CLR 141, 165 (Dixon J); [1945] HCA 50.
Krongold says that once the subject matter is referred, it is up to the parties involved to articulate what they seek from the new entity in accordance with the powers conferred on that entity. This break in the source of jurisdiction, and the powers that may be exercised, is said to reinforce the construction that s 77(3) cannot have the effect that the new entity simply continues where VCAT left off.
In substance Krongold submits that a referral under s 77 is an administrative exercise that merely entails handing over the file so that the subject matter is or may be brought to the attention of the receiving entity. Krongold submits that the absence of any specific statutory consequences once the referral is made, such as preserving steps already taken, is important. It contrasts s 77 with s 57(3) of the DBC Act.
Krongold also calls in aid a constitutional argument in support of its construction. It submits that if the effect of the s 77 Order was to cause the VCAT proceeding to be continued in the Supreme Court, and to treat substantive steps taken in the VCAT proceeding as having been taken in the Supreme Court, VCAT would have impermissibly exercised judicial power in respect of a matter in federal jurisdiction. The net effect of that construction would be to give binding force to a decision of VCAT made in the purported exercise of federal judicial power. Krongold submits that a State law cannot authorise a tribunal that is not a State Court to take such a step.
Casper
Casper supports the submissions made by Krongold as to the effect of a referral order. It says the effect of the s 77 Order is to strike out the proceeding in VCAT and bring it to the attention of a receiving body. In the case of a referral to the Supreme Court, s 77 does not result in the existing proceeding being continued as if it had been properly commenced in the Supreme Court, or otherwise legitimise steps taken without jurisdiction as if they had been taken in the Supreme Court.
Thurins
The Thurins submit that the effect of a referral under s 77 is to invoke the jurisdiction of the new forum to exercise its powers or perform its functions in relation to the referred matter. They submit that what happens next, that is, how the jurisdiction of the receiving body deals with the matter referred, depends on and is a function of its powers and the kind of jurisdiction it exercises.
They submit that the effect of the referral in this case was to refer the whole of the justiciable controversy then pending in VCAT to the Supreme Court and that justiciable controversy comprised the referred ‘matter’. The Thurins also submit that the power in s 77(1) to strike out the proceeding has the effect of standing the matter out of the list and does not bring about a dismissal of the proceeding.
Attorney-General for Victoria
In her written case, the Attorney-General for Victoria, who intervenes as of right,[17] submits that the effect of the s 77 Order is to remove the VCAT proceeding from VCAT’s list, invoke the jurisdiction of the Supreme Court to hear and determine the controversy between Krongold and the Thurins that was the subject of the VCAT proceeding, and require the Court to commence the process of hearing and determining that controversy by taking steps to create a proceeding in the Court for that purpose.
[17]Judiciary Act1903 (Cth) s 78A.
The s 77 Order does not transfer the VCAT proceeding to the Supreme Court. Nor does it deem steps taken in the VCAT proceeding before the s 77 Order was made to have been taken in the Supreme Court, or otherwise cause such steps to have continued effect in the Supreme Court.
In oral argument, the Victorian Attorney adopted a variation of her submissions that did not require the issuing of a separate proceeding in the Court once a referral had invoked the jurisdiction of the court.
Attorney-General of the Commonwealth
The Commonwealth Attorney-General did not proffer a construction of s 77 but did make helpful submissions on the constitutional context in which the constructional question arises.
Decision
Subject to one qualification, the submissions of the Attorney-General for Victoria on the construction of s 77 of the VCAT Act should be accepted. A referral under s 77 to the Supreme Court invokes the jurisdiction of the Court. On receipt of a referral, the first task of the Court is to satisfy itself that it has jurisdiction with respect to the referred matter and, if an affirmative answer is given to that question, the Court is required, in the sense of being under a duty, to exercise jurisdiction in respect of it. In order to do so, it will usually be necessary to give directions to enable the issues to be presented in a form appropriate for judicial determination by the Court. Contrary to Victoria’s primary submission, that does not mean that it will be necessary for a proceeding to be commenced by originating process. It may be accepted that the jurisdiction of a court will usually be engaged by the moving party filing an originating process. In the Supreme Court this will generally take the form of a writ or originating motion. Yet there is no universal requirement that the originating process take a particular form.
The purpose of commencing a proceeding is to enliven the jurisdiction of the court. In the context of a referral under s 77, that step is achieved by the making of the referral itself. Once the Court’s jurisdiction is thereby enlivened, the filing of some fresh initiating process would not be necessary for that purpose.
That construction of s 77 is supported both by the text and context, including its purpose and the nature of the function that is contemplated both by VCAT and the receiving court.
The starting point for the operation of s 77 is that there be a proceeding in VCAT. Given the holding in this Court in the Court of Appeal Reasons, it is not necessary that VCAT have jurisdiction to hear and determine the proceeding. Second, the power exists where VCAT considers that the subject matter of the proceeding would be more appropriately dealt with by a different entity. That requires VCAT to identify the subject matter of the proceeding and another entity that would, in VCAT’s assessment, be able to deal with that subject matter. In the context of a referral to a court, that would plainly require an assessment as to whether the subject matter is within the jurisdiction of the receiving court in the sense that the court would have authority to decide the issues that arise. Generally speaking, courts do not ‘deal with’ matters other than by deciding controversies in accordance with law and making binding determinations.
VCAT has a very diverse jurisdiction, although once its review jurisdiction is taken out of account, as s 77(1) provides, much of VCAT’s jurisdiction involves the exercise of judicial power to determine disputes between parties about existing rights and liabilities. In many, perhaps most, cases, the Supreme Court would have jurisdiction with respect to the subject matter of those proceedings. In such cases, the subject matter will be a legal controversy about claimed rights, interests and liabilities, of a kind capable of determination in either VCAT or the Court.
Section 57 of the DBC Act provides a mechanism that makes VCAT the primary venue for the determination of building disputes under that Act. It does so by providing that a court must stay an action if it could be heard in VCAT, and then by allowing for the matter to proceed in VCAT. However, s 57 does not deny the jurisdiction of the Supreme Court to hear a proceeding arising under the DBC Act, and expressly contemplates that VCAT may make a referral under s 77 of the VCAT Act. There is no reason to treat s 57 of the DBC Act as reflecting a limitation on the general power in s 77 of the VCAT Act.[18] Its effect is to ensure that domestic building disputes that are commenced in a court are transferred to VCAT, but the section recognises that VCAT may refer matters to a court under s 77 without thereby triggering an obligation to send the matter back to VCAT.
[18]Section 57 is not an easy section to construe; the reference in s 57(3) to VCAT dismissing a proceeding under s 77 is infelicitous and does not change the meaning of ‘strike out’ in s 77.
Krongold is right to draw attention to the difference in language within s 77 between a proceeding and the subject matter of a proceeding. Section 77(3) provides for VCAT to refer the matter once it has made an order striking out the proceeding. That distinction, however, does not bear on the legal effect of a referral to a court. The proceeding is the means or vehicle by which the controversy is framed for determination in VCAT. It will take its shape by reference to the practices and procedures that are applicable to VCAT, some of which may be peculiar to that body. A proceeding embodies the subject matter, but there is an obvious conceptual distinction between the two: generally the rights and liabilities in question will exist independently of the proceeding and the proceeding will be the means by which the contest is brought forward for determination. Orders made in the proceeding will be the means by which those rights and liabilities are determined.
Krongold submits that, because the proceeding is not itself referred, the legal effect of s 77 must be merely to bring the subject matter to the attention of the receiving body. In our view, the second proposition does not follow from the first.
In directing attention to the subject matter of the proceeding, s 77 is concerned with matters of substance, not form. It is not necessary for VCAT to ask whether the proceeding in VCAT can be determined in the proposed court but whether, as a matter of substance, the subject matter falls within the court’s jurisdiction, having regard to the nature of the dispute and perhaps the identity of the parties. It is not necessary that the receiving entity, relevantly in this context a court, have exactly the same powers and processes as VCAT. The issue is to be assessed by VCAT at a higher level of abstraction: does the receiving court have jurisdiction to resolve the controversy by making orders of the kind sought by the moving party?
In the context of s 77, VCAT will have determined that it is either not appropriate or not possible for VCAT to determine the controversy before it, but considers that there is a court that can ‘deal’ with it. If it were intended that it would be up to one or other of the parties to engage the court process by commencing a proceeding, it would be sufficient for VCAT to simply strike out the proceeding. The taking of that step would free the party to commence a fresh court proceeding and avoid the possibility that it would be litigating the same dispute in two fora giving rise to a potential abuse of process. But s 77 goes further and empowers VCAT to take the next step of making a referral under s 77(3). At least where a referral to a court is contemplated, an obvious purpose of s 77 is to facilitate the determination of the controversy that VCAT itself is unable or (where jurisdiction exists) unwilling to entertain. That purpose would not be advanced by treating a referral as having no legal effect.
The fact that s 77(1) requires VCAT to strike out the proceeding as a precondition to a referral under s 77(3) is relevant to the construction of s 77 as a whole. A strike out in this context does not mean that the proceeding in VCAT is dismissed.[19] At least in the first instance, the premise of s 77 is that VCAT will not determine the proceeding and the subject matter will be sent elsewhere. The fact that the proceeding is struck out rather than dismissed reinforces the general notion that underpins s 77 that the subject matter will be determined or considered by the appropriate forum. The strike out mechanism also supports the view that s 77 is not concerned to terminate the controversy without resolution, but serves to ensure that the subject matter is ‘dealt with’ in the appropriate forum. To a significant extent the purpose is to ensure a measure of continuity rather than to treat the striking out of the proceeding as the end of the matter.
[19]Court of Appeal Reasons, [150] (McLeish, Niall and Walker JJA).
No different construction of s 77 is called for because the section allows for referrals to a variety of bodies, only some of which are courts. The effect of a referral will be a product of both s 77 and the powers and functions of the receiving body. For example, some administrative bodies may have a power to decline to deal with a matter falling within their authority. Such a decision may be based on matters of resourcing, competing priorities or other factors influenced by a particular statutory setting. On the other hand, as already observed, a court cannot decline to exercise jurisdiction once it is validly invoked.
The suggestion that s 77 merely brings a matter to the attention of a court does not sit well with the nature and function of a court to determine controversies raised before it. Exceptional cases apart,[20] a court has no interest of its own in having a proceeding commenced and, until its jurisdiction is invoked, has no role to play. It would be anomalous to construe s 77(3) as placing a court in the position of deciding whether a proceeding should be commenced. A construction of s 77(3) which gives such limited effect to a referral would not only be inconsistent with the character of a court, it would also fail to achieve the provision’s purpose of ensuring that the matter is ‘dealt with’ by the appropriate forum.[21]
[20]For example, directing the commencement of proceedings for contempt.
[21]Of course, it would be open to the Court in dealing with the matter to take a different view from VCAT on the issue of jurisdiction and dismiss the proceeding for want of jurisdiction.
The availability in pt 3A of the VCAT Act of a different mechanism to bring into the state court system controversies that had started within VCAT but which are doomed for want of jurisdiction does not require s 77 to be read down or be given a different operation. Part 3A operates independently of s 77 and, importantly, is dependent on the making of an application by an appropriate party. There is no reason to construe it as limiting the powers of VCAT, including its own motion powers, under s 77.
Finally, there is no constitutional impediment to treating a referral under s 77 as providing the means by which the jurisdiction of the court to which a referral is made is invoked. In the context of federal judicial power, State legislation can neither invest a court with federal jurisdiction nor regulate the manner of its exercise. One of the functions of s 77 is to allow VCAT to refer a matter to a court and in doing so invoke the jurisdiction of that court to determine the controversy referred.
In the context of federal judicial power, the making of a referral will be the first occasion on which federal judicial power is engaged.[22] The referral will not have the effect of making binding any decision that VCAT may have made when it had the proceeding before it, and such a course would be constitutionally infirm.[23] Nor does it require the court to adopt, or treat as having been done, any antecedent step taken by VCAT. Of course, if the parties had prepared points of claim and defence in VCAT there would be no impediment to the court ordering that those documents stand as the pleadings in the court. Such a direction would not validate or treat the actual or purported exercise of powers by VCAT as having been done by the court. It would not give effect to any decision of VCAT but would simply reflect that the documents prepared for one purpose can be used for another.
[22]Ruhani v Director of Police (2005) 222 CLR 489; [2005] HCA 42.
[23]Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245, 259–60 (Mason CJ, Brennan and Toohey JJ); [1995] HCA 10 (‘Brandy’).
It follows that a referral to the Supreme Court under s 77 of the VCAT Act invokes the jurisdiction of the Court without the need for any further initiating process.
Question 3: The limitation periods in the Building Act
The central issue under question 3 is whether the 10 year limitation periods in the Building Act prevent the Supreme Court from hearing the referred matter. It is convenient to deal with the position of the Thurins and Krongold first, before turning to Swan Hardware and Casper in the context of question 2.
The essential dates are as follows:
(a)on 8 September 2008, a compliance certificate for the plumbing works was issued;
(b)on 20 November 2008, an occupancy permit was issued in respect of the dwelling;
(c)on 22 May 2018, the Thurins commenced the VCAT proceeding;
(d)on 7 September 2018 and 19 November 2018, the limitation periods in ss 134 and 134A of the Building Act, for the bringing of a building action with respect to the building work and an action for damages with respect to the plumbing work respectively, expired;
(e)on 13 December 2022, Quigley J made orders striking out the VCAT proceeding and referring the matter to the Supreme Court.
Krongold submits that in order to take the benefit of the referral, the Thurins would have to commence a proceeding in the Supreme Court, which would entail the bringing of an action within the meaning of ss 134 and 134A of the Building Act. In so submitting, Krongold relies on its preferred answer to question 1. On that approach, the action in VCAT was no longer on foot and steps needed to be taken to commence a proceeding in the Court.
In its written case, Krongold accepts that the Thurins had brought a building action in VCAT which stopped time running.[24] Krongold submits that the effect of bringing the action in VCAT stopped time for that action only and that time continued to run in respect of other actions. For that reason, any post-referral action in the Supreme Court must be brought within the 10 year time periods in ss 134 and 134A.
[24]It expressly abandoned a contention in its written case that the VCAT proceeding was not an action brought for the purposes of ss 134 and 134A of the Building Act.
For the reasons explained in answer to question 1, a referral under s 77 invokes the jurisdiction of the court, and does not require or contemplate that the moving party commence a new proceeding in the court. For the purpose of a limitation period, the commencement by a party of an action or proceeding falls within the notion of bringing an action. That notion plainly contemplates the taking of a step that is within the control of the moving party. The making of a referral is not readily described as an ‘action’ being ‘brought’.
The making of a referral by VCAT reflects a decision that the matter should not proceed in VCAT and that there is a more suitable and available forum. Such a decision, and the consequent referral, may be made over the objection of the applicant in VCAT. Whether or not the moving party agrees to the course, s 77 involves a decision made by VCAT. Having made a referral, VCAT is not a party in the new forum, and as required by s 77(1), the proceeding in VCAT will have been struck out in the sense of removing it from the list of matters to be heard in VCAT. Thereafter, VCAT has no role to play. The making of a referral does not, as a matter of ordinary language, constitute the bringing of an action by VCAT.
This approach is consistent with the rationale underpinning the limitation periods. Necessarily, the parties in VCAT will have been on notice of the subject matter of the action within the limitation period, and the applicant will have brought forward its case within time. The controversy that forms the subject matter of the action will not have been determined and, even though the VCAT proceeding is not itself transferred, the referral process is designed to bring the action to a conclusion in the appropriate forum. In light of that purpose, there is no reason to construe the references in ss 134 and 134A to an ‘action’ being ‘brought’ as encompassing the making of a referral order under s 77(3) of the VCAT Act.
For these reasons, ss 134 and 134A do not bar the Thurins’ claims against Krongold that fall within the referred matter. Question 3 must be answered ‘no’ in respect of the claims between those parties.
Question 2: The position of Swan Hardware and Casper
The position in relation to Swan Hardware and Casper is more complex. Neither entity was a party to the VCAT proceeding when it was commenced. They were purportedly made parties to the proceeding by means of an order made by VCAT on 29 August 2018.
Casper submits that by reason of ss 59 and 60 of the VCAT Act, the parties to a VCAT proceeding are the initiating party and any person joined as a party by VCAT. Casper submits that it became a party by order, and VCAT lacked jurisdiction to make such an order once the matter was in federal jurisdiction. For that reason, it is said, Casper was never a party to the VCAT proceeding. It says that regardless of its participation in the VCAT proceeding, there was no power in VCAT to join it, and the conduct of the parties could not invest VCAT with jurisdiction.
Casper submits that:
(a)it was not a party to VCAT proceeding;
(b)no claim has validly been made against it; and
(c)a referral does not commence an action and if the claims against it are to be pursued, that would have to occur in a new action in the court.
We have already dealt with the construction of s 77 and it follows from our conclusion on question 1 that the referral invoked the jurisdiction of the Supreme Court, at least in relation to the Thurin/Krongold claims, and no fresh originating process is required to have the matter determined in the Supreme Court. That disposes of part of Casper’s submission but does not address its further objection that because it was not validly joined, it was not a party to the VCAT proceeding and could not be the subject of a referral, with the result that if any claim is to be made against it that must be done in the Supreme Court.
Swan Hardware effectively makes the same submission. We note that the Thurins made no claim against Swan Hardware in VCAT. On the other hand, Krongold made claims against Swan Hardware and Casper in the VCAT proceeding. As already noted, Krongold submits that a new action is required, and it does not seek to argue in the alternative that if the Thurins’ contentions about the effect of a s 77 referral are accepted, then it validly made a claim against the joined parties.
As noted above, s 59 of the VCAT Act provides that the parties to a proceeding in VCAT are the person who applies to VCAT and any other person specified by or under the VCAT Act or the enabling Act. It is tolerably clear that in relation to a domestic building dispute in VCAT, the parties to the proceeding in VCAT will be the parties to the dispute. In their application filed under the DBC Act the Thurins were the applicants and Krongold was the single respondent. The subject matter of the application was a building dispute between the Thurins as the building owners and Krongold as the builder.
As explained by the Court of Appeal Reasons, once federal claims were raised in connection with the VCAT proceeding, the matter came within federal jurisdiction and VCAT lacked jurisdiction to hear and determine the claims. This Court identified one of the consequences as being that VCAT lacked power to order that Swan Hardware be joined as a party to the VCAT proceeding.[25] This Court acknowledged that there may be some powers that a tribunal can exercise with respect to a matter in federal jurisdiction and these powers may include a power to refer the matter to a court. The starting point for that conclusion is the proposition, confirmed in Citta, that the first step that a tribunal should take is to confirm whether or not it has jurisdiction. It may exercise some powers that are incidental to that process which do not involve the exercise of federal jurisdiction. Importantly, the initial process of determining the existence of jurisdiction does not entail the adjudication of any federal claim.
[25]Court of Appeal Reasons, [50], [64] (McLeish, Niall and Walker JJA).
In our opinion, an order joining a party is not of that kind. It is not an incident of the power to determine jurisdiction but a power conferred on the premise that the body has jurisdiction.[26] The effect of an order for joinder is to bring the party before the tribunal as part of its adjudicative function. In the context of the VCAT proceeding, it was an exercise of judicial power. That was the conclusion reached in the Court of Appeal Reasons.[27] In practical terms, the joinder of Casper and Swan Hardware, and the subsequent filing of points of claim that included allegations and claims against them, had the purported effect of broadening the building dispute that was before VCAT. It was this building dispute arising from the domestic building work that, absent federal jurisdiction, VCAT would have had jurisdiction to resolve.
[26]CGU Insurance Ltd v Blakeley (2016) 259 CLR 339, 346 [12] (French CJ, Kiefel, Bell and Keane JJ); [2016] HCA 2.
[27]Court of Appeal Reasons, [64] (McLeish, Niall and Walker JJA).
Once it is recognised that the order for joinder was not validly made because it involved the invalid exercise of federal judicial power, s 77 could not validly operate on the premise that the order was valid. In other words, s 77 cannot, as a matter of legislative power, give legal effect to an invalid exercise of federal judicial power.[28] To do so would render hollow the constitutional restriction. To treat Casper and Swan Hardware as parties to the VCAT proceeding for the purposes of the referral would not merely be to proceed on a factual premise, but would purport to give effect and attach legal consequences to an invalid act. Section 77 cannot validly produce that consequence.
[28]Brandy (1995) 183 CLR 245, 259–60 (Mason CJ, Brennan and Toohey JJ); [1995] HCA 10.
The Thurins contend that the order for joinder was an available power to enable the claim to be put before the court or tribunal as a necessary step in determining jurisdiction. However, that was not the purpose or effect of the joinder order. Although the centrepiece of federal judicial power is the power to adjudicate the justiciable controversy and an order for joinder does not go to the ultimate question of liability, it is not the case that federal judicial power is only engaged at the final point of decision. Orders, including orders of a procedural nature, will involve the exercise of federal judicial power if they are related to or form part of the exercise of the adjudicative power. The correct characterisation may be revealed by the purpose for which an order is made or the nature of the order. Here, the order for joinder was not made for the purpose of VCAT determining its jurisdiction. It is clear that the order was made to allow any claims (including potential claims) to be decided and was made on that day because the ss 134 and 134A limitation periods were looming and VCAT determined to join the parties while reserving the opportunity to the joined parties to later challenge jurisdiction. Further, an order for joinder had a substantive legal effect in that it rendered Swan Hardware and Casper amenable to the jurisdiction. Decisions as to the existence of jurisdiction stand apart at the threshold and determine whether or not the body has jurisdiction with respect to the matter. The joinder order was not of that kind.
VCAT’s jurisdiction with respect to Casper and Swan Hardware depended on the legal efficacy of its joinder order. Once it is recognised that it could not make a joinder order there was no proper basis on which VCAT could make an incidental order to transfer a matter that concerned Casper or Swan Hardware to the Court.
Whether or not it might have been open to the existing parties to the VCAT proceeding, as the Thurins submitted, to join a sub-contractor, supplier or architect, simply by serving amended points of claim, and therefore avoiding the exercise by VCAT of judicial power, is not relevant. In fact, an order for joinder was made and it was based on that joinder that Swan Hardware and Casper were treated as parties and subject to the jurisdiction of VCAT. It is not practicable to construct a different hypothetical scenario based on service of points of claim without an anterior order for joinder. It is entirely artificial to consider what would have happened had VCAT not exercised the power that it did. We note, in any event, that ss 59(1)(a)(iii) and 60 of the VCAT Act provide no support for the suggestion that the need for an order for joinder could be avoided in this way.
The contrast with Krongold’s position as a respondent to the VCAT proceeding is important. The Thurins commenced the VCAT proceeding as an action against Krongold, seeking damages. That step required no action and involved no exercise of power by VCAT. Although VCAT purportedly took steps in relation to the VCAT proceeding, no question of validity arises in respect of those earlier steps. Eventually VCAT came to the question of whether or not it had jurisdiction. Ultimately that issue was determined in this Court when it was held that VCAT had no jurisdiction to adjudicate on the matter but it did have power to refer under s 77 of the VCAT Act.[29]
[29]Court of Appeal Reasons, [132] (McLeish, Niall and Walker JJA).
The Thurins seek to overcome the invalidity of the joinder order by contending that, as a matter of fact, Casper and Swan Hardware had participated in the proceeding so as to submit to jurisdiction and, again as a matter of fact, the claims involving Casper and Swan Hardware formed part of the subject matter of the proceeding.
The Thurins submit that jurisdiction has a personal dimension, a subject matter dimension and a geographic, or territorial, dimension.[30] In the context of a court, personal jurisdiction is concerned with whether the person is answerable to the court’s command because the person is present and served; the plaintiff is authorised to serve process outside the jurisdiction or consent or voluntary submission to jurisdiction. The Thurins rely on the following passage in Thomas as elucidating the difference between personal and subject matter jurisdiction:
Personal jurisdiction is distinct from subject matter jurisdiction. Existence of the former does not confer, or establish, the existence of the latter. Conversely, the existence of personal jurisdiction does not depend on the substance of the case advanced. In other words, while subject matter jurisdiction will determine whether the desired fruits of the exercise of personal jurisdiction are available, a finding that subject matter jurisdiction is wanting does not impugn a finding of personal jurisdiction.[31]
[30]Thomas v The a2 Milk Company Ltd [No 2] [2022] VSC 725, [23]–[24] (Button J) (‘Thomas’); Laurie v Carroll (1958) 98 CLR 310, 323 (Dixon CJ, Williams and Webb JJ); [1958] HCA 4.
[31]Thomas [2022] VSC 725, [27] (Button J) (citations omitted).
As to submitting to jurisdiction, the Thurins argued that even if the order for joinder was void, Casper by its conduct nonetheless became a party because it acceded to VCAT’s personal jurisdiction over it. By acceding to personal jurisdiction, Casper was a party to the proceeding at the time VCAT came to determine whether or not it had jurisdiction and therefore was in an indistinguishable position to that of Krongold. Although the Thurins make no claim in VCAT against Swan Hardware, they submit that the same consequence would follow for Swan Hardware.
The submission cannot be accepted. First, VCAT is not a court and the principles governing the identification of parties that apply to courts cannot simply be applied to it. We have referred above to ss 59 and 60 of the VCAT Act. Second, as a matter of legislative power, the Victorian parliament cannot confer any authority on VCAT to exercise federal jurisdiction or exercise any powers in relation to it. The power in s 60 of the VCAT Act to join parties was therefore not available. Nor can the conduct of the parties invest VCAT with jurisdiction. Third, recourse to the concept of personal jurisdiction is of no assistance in assessing whether federal jurisdiction or state jurisdiction is involved and provides no constitutional footing for the participation by the parties in an invalid exercise of federal judicial power.[32]
[32]Zurich Insurance Company Ltd v Koper [2023] HCA 25 [34] (Kiefel CJ, Gageler, Gleeson and Jagot JJ).
In the case of Casper, each of the examples relied on by the Thurins to illustrate that Casper submitted to jurisdiction post-dated the joinder order made by VCAT on 29 August 2018. The conduct of the parties can properly be seen as a consequence of the joinder order, and not a submission to jurisdiction independently of it.
Secondly, the identity of the parties to a proceeding is not just a matter of fact but also one of law. Both parties sought to gain something from the decision of this Court in Herald and Weekly Times Pty Ltd v Victoria.[33] An issue in that case was whether a media outlet, Herald and Weekly Times Pty Ltd (‘HWT’), was a party to a VCAT proceeding and therefore bound by an order made by VCAT in the context of a proceeding for contempt.
[33][2006] VSCA 146.
This Court concluded that HWT had become a party by reason of its participation in the proceeding in VCAT. This Court said:
… if the tribunal had jurisdiction to entertain the proceeding that was before it, HWT became a party to it for reasons that include the following. First, where a person participates in a proceeding, as HWT did, it is a question of fact whether it has submitted to the jurisdiction of the tribunal in question. … We consider that, notwithstanding that HWT argued that there was lack of power in the Tribunal to grant the injunction sought, as a matter of fact, by participating in the proceeding as it did, it became a party to it. Secondly, that HWT was treated as a party to the proceeding was specifically noted by his Honour …[34]
[34]Ibid [22] (Chernov, Nettle and Ashley JJA).
The passage proceeds on the premise that the tribunal had jurisdiction. It does not address the situation which currently arises. For the reasons already given, the participation that did occur arose in the shadow of the order for joinder. Had the true constitutional position been understood in August 2018, there would have been no power for Swan Hardware or Casper to be joined to the proceeding and no power in VCAT to take further steps other than for the dismissal of the proceeding or referral of its subject matter.
It follows that, in relation to Swan Hardware and Casper, question 2 must be answered ‘no’. The referral did not invoke the jurisdiction of the Supreme Court in relation to any claims made in the VCAT proceeding concerning those parties.
Question 3: Swan Hardware and Casper
Given that the s 77 referral did not encompass Swan Hardware and Casper it is not necessary to address question 3 in respect of them (noting that question 3 does not in any event refer to Swan Hardware). If any limitation of action issues arise with respect to Swan Hardware and Casper in either the 2017 Supreme Court proceeding or the 2019 Supreme Court proceeding, they will fall to be determined on their merits. Similarly, if down the track any party seeks to join Swan Hardware or Casper as a party to the referred proceeding, questions of whether the expiry of any limitation period in respect of any such proposed claim will fall to be determined in accordance with conventional principles relating to the joinder of parties.
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SCHEDULE OF PARTIES
KRONGOLD CONSTRUCTIONS (AUST) PTY LTD (ACN 103 839 149) Applicant v DAVID THURIN First Respondent LISA THURIN Second Respondent CASPER ARCHITECTURE AND DESIGN PTY LTD (ACN 078 809 604) Third Respondent SWAN HARDWARE & STAFF PTY LTD (ACN 005 273 165) AND SWAN HARDWARE & STAFF PTY LTD (IN ITS CAPACITY AS TRUSTEE OF THE SWAN HARDWARE & STAFF UNIT TRUST) (ABN 80 597 079 103) Fourth Respondent BICON PTY LTD (ACN 070 741 374) Fifth Respondent AND ATTORNEY-GENERAL FOR THE STATE OF VICTORIA Intervener AND ATTORNEY-GENERAL OF THE COMMONWEALTH Intervener
15
20
0