Martin v Fasham Johnson Pty Ltd
[2008] VSC 289
•4 August 2008
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
No. 4832 of 2007
| JENNIFER MARTIN | Appellant |
| v | |
| FASHAM JOHNSON PTY LTD | Respondent |
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JUDGE: | Kyrou J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 24 July 2008 | |
DATE OF JUDGMENT: | 4 August 2008 | |
CASE MAY BE CITED AS: | Martin v Fasham Johnson Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2008] VSC 289 | |
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Appeal from Victorian Civil and Administrative Tribunal – Domestic Building List – powers to dismiss or strike out proceeding – distinction between a proceeding and a pleading in the proceeding – ss 75, 76, 77, 78 and 98, Victorian Civil and Administrative Tribunal Act 1998 (Vic).
Natural justice – alleged apprehended bias on the part of a member of Victorian Civil and Administrative Tribunal.
Direction that Victorian Civil and Administrative Tribunal be differently constituted – s 148(8), Victorian Civil and Administrative Tribunal Act 1998 (Vic).
Legal practitioner – appropriateness of acting if also a material witness – r 13.4, Professional Conduct and Practice Rules 2005 (Vic).
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APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr J Brett | Access Law |
| For the Respondent | Mr A Laird | Schetzer Brott & Appel |
HIS HONOUR:
Introduction and summary
This is an appeal under s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (“VCAT Act”) from certain paragraphs of an order made on 30 January 2007 by the Victorian Civil and Administrative Tribunal (“Tribunal”), constituted by a Senior Member, in a proceeding (“VCAT proceeding”) under the Domestic Building Contracts Act 1995 (Vic) (“DBC Act”) brought by Dr Jennifer Martin against Fasham Johnson Pty Ltd (“Fasham Johnson”).
The appeal is brought pursuant to leave granted by Habersberger J on 20 September 2007[1] following an appeal by Dr Martin to his Honour from a Master’s refusal to grant leave.
[1]Martin v Fasham Johnson Pty Ltd [2007] VSC 354.
The key issues in this appeal are whether, when the VCAT proceeding was before the Tribunal on 30 January 2007, it erred in law in either purporting to strike out the proceeding or in assuming it had already struck it out on 30 November 2006 and in making an indemnity costs order. Another issue is whether the Tribunal’s conduct gave rise to apprehended bias.
For the reasons set out in this judgment, I have concluded that the Tribunal erred in law in assuming that it had struck out the VCAT proceeding and have decided to allow the appeal.
Facts
It was common ground before me that the facts and procedural history of this proceeding are accurately set out in Habersberger J’s reasons for granting Dr Martin leave to appeal. In the following paragraphs 6 to 21 of this judgment, I draw heavily on the relevant portions of Habersberger J’s reasons, with appropriate modifications to reflect the issues raised in the submissions before me on the substantive hearing of the appeal.
On 26 June 2004, Dr Martin lodged an application in the Tribunal’s Domestic Building List pursuant to the DBC Act in relation to a dispute arising out of an agreement between Dr Martin and Fasham Johnson in December 2003 for Fasham Johnson to construct a new family home on Dr Martin’s land.
Dr Martin has been represented by Gabriel Kuek, the principal of Access Law, in the VCAT proceeding. Mr Kuek is Dr Martin’s husband.
Dr Martin delivered amended points of claim dated 18 October 2004, a third version dated 21 November 2005 and a fourth version dated 2 February 2006. By an order made on 21 April 2006, the Senior Member struck out the then latest version of the amended points of claim, with liberty to replead. Paragraph 2 of that order was that:
By 19 May 2006 the Applicant must file and serve Points of Claim. Such Points of Claim must set out the material facts relied on and [give] proper particularization.
Dr Martin sought leave to appeal this order from a Master and then appealed to Gillard J from the Master’s dismissal of her application for leave. His Honour dismissed the appeal.[2] Dr Martin then unsuccessfully sought leave to appeal to the Court of Appeal from the decision of Gillard J.[3] In his judgment, Eames JA said that Gillard J “rightly regarded” the grounds, which included denial of a fair hearing and apprehended bias on the part of the Senior Member, “as absolutely specious”.[4]
[2]Martin v Fasham Johnson Pty Ltd (Unreported, Supreme Court of Victoria, Gillard J, 21 July 2006).
[3]Martin v Fasham Johnson Pty Ltd (Unreported, Supreme Court of Victoria, Court of Appeal, Eames and Neave JJA, 22 September 2006).
[4]At [22]. Neave JA agreed with Eames JA.
In the meantime, Mr Kuek sought a hearing in the Tribunal so that application could be made for a stay of the orders made by the Senior Member pending the hearing and determination of the application to this Court. The Senior Member initially declined to hear the application because the accusation of bias was still unresolved. Nevertheless, by arrangement between the Tribunal registry and Mr Kuek, the application was listed before the Senior Member on 31 May 2006. On that day, rather than applying for a stay, Dr Martin’s counsel asked that the Senior Member no longer participate in the hearing because of apprehended bias. The Senior Member reserved his decision on the question of his disqualification for apprehended bias. He also reserved the costs of that day.
On 26 October 2006 (following the decision of the Court of Appeal), the Senior Member made an order dismissing the application to disqualify himself and requiring that the hearing continue that day. Part of the continued hearing consisted of the determination of costs issues which are not the subject of this appeal. The remaining part of the continued hearing on 26 October 2006 concerned an application by Fasham Johnson that the proceeding be dismissed pursuant to ss 75 and 78 of the VCAT Act and an application by Dr Martin for leave to rely on a fifth version of the points of claim, dated 20 October 2006. The Senior Member refused to dismiss the proceeding. In his reasons he said:
I decline to hear and determine the Respondent’s application to dismiss the proceeding under ss 75 and 78 of the Act. Those sections give me a discretion to order dismissal or strike out: both are contemplated as alternatives. But the Points of Claim are already struck out. Therefore, the facts prevent me from having both the capacities mentioned to be able to do either. Neither section in my view operates in a way so as to enable only dismissal or nothing which would be their operation, this day, if I was to proceed to hear and determine the Respondent’s application. In any event, I rely upon remarks of Kirby J in Linden v Commonwealth of Australia (No2) (1996) 136 ALR 251 at 256. I should not lightly proceed to hear an application for dismissal of a proceeding that, to this point, has not managed to get off the ground. That would not be fair or in accordance with either s97 or s98 of the Act. But the Applicant must realize that opportunities to replead her proceeding in proper form are clearly reducing and may close off.
Counsel for Fasham Johnson opposed leave being granted to file the fifth version of the points of claim. He submitted that they were still deficient and not an appropriate formulation of a claim, a point which seemed to be conceded by counsel for Dr Martin, who sought the opportunity to deliver fresh points of claim. Counsel for Fasham Johnson opposed any adjournment, but submitted that if the matter was put off, Dr Martin should make a formal application to rely on either the fifth version of the points of claim or a new version if that course were adopted. The Senior Member agreed with the criticisms of the fifth version of the points of claim. During the hearing, however, the Senior Member said in respect of the fifth version of the points of claim:
I am allowing that document to stand as a document filed with the tribunal unless it is supplanted by another document filed with the tribunal so that the applicant’s case can finally be properly presented.[5]
[5]Transcript of Proceedings, Martin v Fasham Johnson Pty Ltd (Victorian Civil and Administrative Tribunal, 26 October 2006) 69.
Accordingly, on 26 October 2006, the Senior Member made a second order, relevantly as follows:
1.By 10 November 2006 the Applicant must file and serve Amended Points of Claim either in the form taken to have been filed this day or in a different form.
2No further opportunities to file and serve Amended Points of Claim will be provided by the Tribunal, unless an order is sought and applied for and granted.
3By 21 November 2006 the Respondent, if minded to do so, must serve a document (which may be in letter form) on the Applicant specifying any contentions in respect of the Amended Points of Claim filed under paragraph 1 and giving details of the same.
4By 28 November 2006 the Applicant, if served with a document referred to in paragraph 3 must respond in writing to the same in detail by document in reply (which may also be in letter form).
5Thereafter the Respondent may, by request in writing, request the Principal Registrar of the Tribunal to list for hearing an application for dismissal or strike out under s75 or s78 of the Victorian Civil and AdministrativeTribunal Act 1998 and in that regard I adjourn over the Respondent’s application currently before the Tribunal.
6In the event such a request is received the Principal Registrar must arrange for the hearing and determination by me of the question of the sufficiency of the Amended Points of Claim.
7In the event no such request is received I direct the Principal Registrar, otherwise, to list this matter for directions in the usual course.
Dr Martin wished to rely on a new, sixth, version of the points of claim instead of the much criticised fifth version. However, this sixth version of the points of claim, dated 13 November 2006, was not filed or served by Friday, 10 November 2006 as required by paragraph 1 of the second order made on 26 October 2006. On 13 November 2006, Dr Martin sought Fasham Johnson’s consent to an extension of time. That request was refused. Accordingly, by notice dated 17 November 2006, Dr Martin applied to extend the time within which the new points of claim could be filed, to Monday, 13 November 2006. That application was heard by the Senior Member on 30 November 2006.
At the hearing on 30 November 2006, the question of what would happen to the proceeding if time were not extended, which in turn raised the question of the status of the fifth version of the points of claim, was the subject of debate. Counsel for Fasham Johnson submitted that the second order made on 26 October 2006 meant that Dr Martin had to “file and serve amended points of claim either in the form that was taken to have been filed that day or in a different form. A fresh document be it in the original form or a fresh form had to be filed.”[6] As neither of those steps had been taken, counsel submitted that if time were not extended, the points of claim remained struck out, and in due course Fasham Johnson would make an application for costs. He submitted that the practical effect of not granting Dr Martin leave would be that the matter would end.
[6]Transcript of Proceedings, Martin v Fasham Johnson Pty Ltd (Victorian Civil and Administrative Tribunal, 30 November 2006) 136.
Mr Kuek argued that it was wrong to say that the points of claim were struck out. He said that he was “under the impression that the order implicitly accepted”[7] that the fifth points of claim had been filed and submitted, and that the effect of the order was that if a new (sixth) version of the points of claim was not filed and served by 10 November 2006, the fifth version remained on the file as Dr Martin’s claim. The Senior Member disputed that this was correct. He said that the points of claim had to be either in the existing form or “in a different form and you chose to follow the path of a different form.”[8] At the conclusion of the argument the Senior Member said:
It’s very apparent to me that the path has been chosen to provide a different form to the one which was taken to have been filed because it was inadequate so it was sought to fix that up. By 10 November there was no compliance with paragraph 1 of the orders made on 26 October. Paragraph 2 was very, very clear: “No further opportunities to file and serve amended points of claim will be provided by the tribunal unless an order is sought and applied for and granted.” That order is sought and applied for but I don’t grant it and don’t extend time. I’ll provide reasons in due course. I won’t hear the question of costs now.[9]
[7]Transcript of Proceedings, Martin v Fasham Johnson Pty Ltd (Victorian Civil and Administrative Tribunal, 30 November 2006) 142.
[8]Transcript of Proceedings, Martin v Fasham Johnson Pty Ltd (Victorian Civil and Administrative Tribunal, 30 November 2006) 142.
[9]Transcript of Proceedings, Martin v Fasham Johnson Pty Ltd (Victorian Civil and Administrative Tribunal, 30 November 2006) 143-4.
In his written reasons, the Senior Member said:
12My reasons for declining to extend time (by three days but only one business day) to enable compliance include these:
aThis is now the 6th attempt at producing Points of Claim. A long period of time has now gone by.
bThe Points of Claim which have been produced on this occasion are no more impressive than any of the last 5 failures. … They are vague and imprecise and seriously deficient in particulars. They assert absurd causes of action … The full range of errors is apparent even upon a cursory examination of the document. No respondent should be called upon to plead to the same.
cThere is no satisfactory explanation for the delay (given that on this occasion the need for due compliance was emphatically made known). The affidavit of Mr Kuek (affirmed 29 November 2006) is completely unconvincing. He says he spent in excess of 80 hours working on a statement required by Mr Perkins. I could not examine that statement because it was claimed as privileged but a sizeable document which I saw was said to be the statement in draft form. He then says he was with Mr Perkins on 8, 9 and 10 November 2006 providing instructions in the matter. I fail to see how all this time could have been occupied on this matter. It is simply astounding considering I would have thought even a relatively inexperienced barrister could have produced a workable document after perhaps an afternoon’s work allowing for breaks.
dThere is nothing on oath or affirmation before me to indicate an arguable case, and how one might be put, in this matter. …
eThe serious prejudice being caused [to] the Respondent by constantly having to deal with a moving target - an incomplete, and unparticularized, document varying each time. The Respondent is incurring serious legal costs but not the Applicant herself who is represented by her husband and the barristers (6 in all so far) he chooses to brief. That is, unless he is charging his wife for his legal services.
…
14The point has been reached, I consider, that no reasonable cause of action can obviously be advanced after so many failed attempts at trying to plead it legally. This matter as it stands must be drawn to a close. No determination however has been made on the merits.
15But my decision on this occasion is simply that I refuse to extend time. If this means the Applicant’s cause of action remains struck out (not dismissed, I would add) then that is entirely the fault of her husband, her solicitor and the Counsel he has briefed. There would be nothing, I would think, to prevent the matter being re-commenced.
16I reserve liberty to the Respondent to apply for the costs of the proceeding.
The actual order made on 30 November 2006 was as follows:
1 Application refused.
2 Reserve liberty to apply for costs.
The matter came back before the Senior Member in the following way. Apparently in the belief that it was complying with paragraph 7 of the second order made on 26 October 2006, the Tribunal registry, by a letter dated 18 December 2006, notified the parties that a directions hearing would be held on 30 January 2007. Fasham Johnson then made application for an order that Dr Martin pay its costs of the proceeding which it argued had been struck out. It sought those costs on an indemnity basis. At the commencement of the hearing, Mr Kuek argued that the proceeding had not been struck out. He submitted that the hearing was for directions pursuant to the letter from the Tribunal. In response, the Senior Member said:
I refused to extend time for the failure to comply with the directions and that meant that the matter was stood there still struck out, without time having been extended to replead it. It was open to you to commence another proceeding if you wanted to, but not this one.[10]
[10]Transcript of Proceedings, Martin v Fasham Johnson Pty Ltd (Victorian Civil and Administrative Tribunal, 30 January 2007) 146.
Mr Kuek disputed this ruling. He again sought to argue that the fifth version of the points of claim remained on the file as Dr Martin’s claim, or alternatively that the proceeding had not been struck out, even if all former versions of the points of claim had been. When the Senior Member held against Dr Martin on this point, Mr Kuek sought to have the argument about the costs of the proceeding adjourned. The Senior Member agreed to this. Counsel for Fasham Johnson then sought to have the question of the costs of 30 November 2006 heard. Mr Kuek said that he was in a position to argue that question on the day, but sought to have it adjourned so that it could be heard on the same day as the main costs argument. The Senior Member agreed to this as well.
The order signed by the Senior Member on 30 January 2007 commenced as follows:
RULING AND REASONS THEREFOR:
1.I refer to my reasons delivered on 30 November 2006 and having regard to the same am of the view that no proceeding remains on foot for me to make directions in or orders in save as to costs. My reason for this view is to be found in such reasons and in the consideration that the proceeding was struck out by me and I did not extend time to enable the directions and orders I made on 26 October 2006 to be complied with. I note that I have said that I have made no determination on the merits. Further, I observe that paragraph 2 of the ‘Notice of Directions Hearing’ posted on 18 December 2006 is in error to the extent to which it asserts that there remains on foot a proceeding which has been struck out.
Under the heading “Directions”, the Senior Member then gave some directions about the filing of submissions, copies of authorities and any affidavits in respect of Fasham Johnson’s application for costs of the proceeding, including the costs of the hearing on 30 November 2006. The order continued:
5.I set this matter down for hearing on the question of costs only (there being no other questions arising out of a proceeding which is struck out) on 13 March 2007 … commencing at 10.00 am at 55 King Street Melbourne. Allow one day.
6.I reserve to determine for myself on 13 March 2007 whether under the provisions of the Victorian Civil and Administrative Tribunal Act1998 (“the VCAT Act”) the Applicant should be represented by her current solicitor.
ORDERS
7.Having heard the parties, I am satisfied as required under s109 of the VCAT Act that in acceding to the request of the Applicant to adjourn this matter relating to costs the Respondent is being unnecessarily disadvantaged this day. I note the submission of the Applicant that the 30 November 2006 costs matter could have been dealt with today but should be dealt with together with the other costs issues. I note therefore that the Applicant was in a position to respond to submissions in respect of the 30 November 2006 costs matter this day.
8.In consequence, I order the Applicant to pay the costs of the Respondent which I fix in the sum of $1782.00.
9.I require such sum referred to in paragraph 8 to be paid by no later than 4.00 pm on 12 March 2007.
Before Habersberger J, Dr Martin originally sought leave to appeal against paragraphs 1 and 5 to 9 of the order made on 30 January 2007. That application was later limited to paragraphs 1, 5, 7, 8 and 9. It was also argued before Habersberger J that all of the challenged paragraphs of the order made on 30 January 2007 were tainted by apprehended bias on the part of the Senior Member in the conduct of the hearing leading up to the making of that order. Habersberger J granted leave to appeal against paragraphs 1, 5, 7, 8 and 9 of the order of 30 January 2007 and in relation to the alleged apprehended bias. Pursuant to that leave, Dr Martin’s notice of appeal sets out the following questions of law:
1Were paragraphs 1 and 5 of the orders made on 30 January 2007 wrong in law in that they impliedly ordered that the proceedings were deemed to have been struck out?
2Were paragraphs 1 and 5 of the Orders made on 30 January 2007 wrong in law in that they impliedly ordered that the proceedings were deemed to have been struck out, in circumstances where no argument had been heard nor consideration given to the criteria set out in ss 75, 76 or 78 of the Victorian Civil & Administrative Tribunal Act 1998?
3Were paragraphs 1 and 5 of the orders made on 30 January 2007 wrong in law in that they were predicated upon an incorrect assumption, that is, that the proceedings had been struck out?
4Were paragraphs 7, 8 and 9 of the orders made on 30 January 2007 wrongly made in that such Orders –
(a)were made on the basis that the Respondent was being unnecessarily disadvantaged, and/or
(b)were made by calculation of costs on an indemnity basis when there was no or no adequate reason for such basis given by the Tribunal?
5Were paragraphs 1, 5, 7, 8 and 9 of the orders made on 30 January 2007 wrongly made in that the Tribunal could reasonably be apprehended to be biased in its conduct of the hearing leading up to the making of such orders?
The facts relied upon for questions of law 4 and 5 are discussed later in this judgment.
There was no dispute before me that Mr Kuek is not only the husband and lawyer of Dr Martin, but also a material witness in the VCAT proceeding.
Relevant statutory provisions and legal principles
The Tribunal’s jurisdiction under the DBC Act is conferred by Part 5 of that Act. When the Tribunal hears and determines a proceeding under the DBC Act, s 53 gives the Tribunal power to make a wide range of orders. Section 44 of the VCAT Act provides that in exercising its original jurisdiction, the Tribunal has the functions conferred on it by or under the enabling enactment (in this case, the DBC Act) as well as any functions conferred on it by or under the VCAT Act, any regulations made under the VCAT Act, and the Victorian Civil and Administrative Tribunal Rules 2008 (Vic) (“VCAT Rules”). It was common ground that no orders have been made by the Tribunal under s 53 of the DBC Act that are relevant to this appeal.
In the Domestic Building List of the Tribunal, there is a distinction between the proceeding, which is commenced by an application in accordance with form 7 of the VCAT Rules,[11] and points of claim which are akin to a pleading. Paragraph 5 of the Tribunal’s “Practice Note – Domestic Building List: PNDB1 (2007) – General Procedures” recognises the distinction between the application and points of claim and contemplates that, in some circumstances, an application need not be accompanied by points of claim. That paragraph also contemplates that another document may articulate the applicant’s claim in lieu of points of claim. For a short and simple claim, it would be possible for form 7 to be adapted and supplemented with attachments so that the claim is fully articulated in the application without the need for points of claim. Where an applicant has articulated his or her claim in points of claim, a striking-out of the points of claim does not have the effect of striking out the proceeding, although, in the absence of leave to file new points of claim, what remains of the proceeding (in the application and other filed documents) may not suffice to enable the applicant to establish his or her claim. Likewise, in proceedings in this Court, there is a distinction between the proceeding and a pleading in that proceeding. An order striking out a statement of claim does not bring the proceeding to an end.[12]
[11]See VCAT Rules, r 6.14 and VCAT Act, ss 43 and 67(1).
[12]See rr 23.01 and 23.02 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) and the commentary in Williams, Civil Procedure Victoria [23.01.5].
As the Tribunal is a creature of statute, it has no inherent jurisdiction.[13] Although the Tribunal has some implied powers which are incidental to its express powers and functions,[14] it does not have a general or “at large” power to dispose of a proceeding against the wishes of the applicant[15] in a manner akin to striking out or dismissal without conducting a hearing of the merits. The Tribunal can only take such action if there is a statutory provision which confers that power on it and the provision is validly invoked. The only provisions conferring such a power are ss 75, 76, 77 and 78 of the VCAT Act, and any applicable provision of the relevant enabling enactment.
[13]R v Perkins [2002] VSCA 132, [16]; Herald and Weekly Times Pty Ltd v Victorian Civil and Administrative Tribunal (2006) 24 VAR 174, 181; [2006] VSCA 7, [27].
[14]Herald and Weekly Times Pty Ltd v Victoria (2006) 25 VAR 124, 131-2; [2006] VSCA 146, [18]-[20] (“HWT”). This case discusses the distinction between dismissal of a proceeding (which terminates the proceeding) and striking out of a proceeding (which ordinarily does not) and the Tribunal’s implied power to reinstate a proceeding that has been struck out.
[15]An applicant may withdraw a proceeding with the leave of the Tribunal under VCAT Act, s 74(1). See also s 115(b) of the VCAT Act, which empowers the Tribunal to dismiss a proceeding where an applicant fails to comply with a settlement agreement.
Section 75 of the VCAT Act provides:
75 Summary dismissal of unjustified proceedings
(1)At any time, the Tribunal may make an order summarily dismissing or striking out all, or any part, of a proceeding that, in its opinion –
(a)is frivolous, vexatious, misconceived or lacking in substance; or
(b)is otherwise an abuse of process.
…
(4)An order under subsection (1) or (2) may be made on the application of a party or on the Tribunal’s own initiative.
…
It is a precondition to the making of an order by the Tribunal summarily dismissing or striking out all, or any part, of a proceeding pursuant to s 75, that the Tribunal make an express finding that that proceeding or part of the proceeding (as relevant) is frivolous, vexatious, misconceived or lacking in substance, or is otherwise an abuse of process, and that its reasons support such a finding. Reasons which, in essence, merely repeat the words of s 75(1) are inadequate and may reveal appellable error.[16]
[16]Pong Property Development Pty Ltd v Strangio (2005) 23 VAR 128, 140-1; [2005] VSC 217, [63], [67], [68].
Section 75 empowers the Tribunal to dismiss or strike out part of a proceeding. That is, the whole of a proceeding need not be dismissed or struck out. Given the distinction between the proceeding commenced by the application and the points of claim in proceedings under the DBC Act, the power to dismiss or strike out part of a proceeding extends to dismissal or striking out of one or more claims in the points of claim or some other document which articulates the applicant’s claims in lieu of points of claim.
The power to make an order pursuant to s 76 of the VCAT Act (which deals with summary dismissal or striking out of all or part of a proceeding for want of prosecution) or s 77 (which deals with striking out of all or any part of a proceeding in the Tribunal’s original jurisdiction where there is a more appropriate forum for the subject-matter of the proceeding) is only enlivened where the Tribunal has made a finding that the requirements specified in those provisions are met. It was common ground before me that ss 76 and 77 are not relevant in this appeal.
Section 78 of the VCAT Act provides:
78 Conduct of proceeding causing disadvantage
(1)This section applies if the Tribunal believes that a party to a proceeding is conducting the proceeding in a way that unnecessarily disadvantages another party to the proceeding by conduct such as –
(a)failing to comply with an order or direction of the Tribunal without reasonable excuse; or
(b)failing to comply with this Act, the regulations, the rules or an enabling enactment; or
(c)asking for an adjournment as a result of (a) or (b); or
(d)causing an adjournment; or
(e)attempting to deceive another party or the Tribunal; or
(f)vexatiously conducting the proceeding; or
(g)failing to attend mediation or the hearing of the proceeding.
(2)If this section applies, the Tribunal may –
(a)order that the proceeding be dismissed or struck out, if the party causing the disadvantage is the applicant;
…
Section 78(2) makes it clear that an order dismissing or striking out the proceeding under that section can only be made where the Tribunal finds that the applicant’s conduct unnecessarily disadvantages another party. Unlike ss 75 and 76, s 78(2) does not empower the Tribunal to dismiss or strike out a part of a proceeding. It therefore does not authorise the striking out of points of claim, as this does not constitute a striking out of the proceeding.
Where the Tribunal is exercising a power under ss 75, 76, 77 or 78, its order (which, in accordance with s 117(6) of the VCAT Act, includes its reasons for decision) must expressly state that it is doing so. It cannot exercise such an important power “impliedly”, “in passing” or in a latent manner. In compliance with the Tribunal’s obligations to act fairly (s 97 of the VCAT Act) and to comply with the rules of natural justice (s 98(1)(a) of the VCAT Act), before an order is made under ss 75, 76, 77 or 78, reasonable notice must be given to the applicant that such an order may be made and the grounds for the foreshadowed order.[17]
[17]See Towie v Victoria [2008] VSC 177, [43].
Section 98 of the VCAT Act provides:
98 General procedure
(1)The Tribunal –
(a)is bound by the rules of natural justice;
(b)is not bound by the rules of evidence or any practices or procedures applicable to courts of record, except to the extent that it adopts those rules, practices or procedures;
(c)may inform itself on any matter as it sees fit;
(d)must conduct each proceeding with as little formality and technicality, and determine each proceeding with as much speed, as the requirements of this Act and the enabling enactment and a proper consideration of the matters before it permit.
…
(3)Subject to this Act, the regulations and the rules, the Tribunal may regulate its own procedure.
…
During argument, Mr Laird, who appeared for Fasham Johnson, submitted that s 98(3) authorises the Tribunal to bring to an end a proceeding that is before it. I do not accept this submission. While s 98(3) authorises a myriad of procedural orders and actions, it does not authorise the Tribunal to dismiss, strike out or permanently stay the whole of a proceeding before it, or to otherwise dispose of the whole of such a proceeding in a manner akin to a dismissal, striking out or permanent stay except perhaps where this is sought by consent to give effect to a settlement agreement. I need not decide whether s 98(3) empowers the Tribunal to make an order (other than by consent) dismissing, striking out or permanently staying a claim in a document akin to a pleading (such as points of claim) as distinct from dismissing, striking out or permanently staying a proceeding as a whole. A temporary stay of a proceeding (for example, pending the outcome of an application to the Supreme Court in relation to that proceeding) is procedural in nature and is authorised by s 98(3).
Questions of law 1, 2 and 3 – legal effect of the Tribunal’s orders
There was some debate before me as to the effect of paragraph 1 of the Tribunal’s second order of 26 October 2006. Mr Brett, who appeared for Dr Martin, submitted that paragraph 1 of that order meant that if Dr Martin did not file a sixth version of the points of claim, the fifth version, which the Tribunal treated as being filed on 26 October 2006, would stand. Although Mr Brett conceded that paragraph 1 of the order was ambiguous, he submitted that when it was read in light of paragraph 16 of the Tribunal’s reasons, its meaning became clear. Paragraph 16 stated: “It is preferable that I allow the Applicant to file the new Amended Points of Claim and to allow the Applicant to amend those or allow them to stand in their present form by a certain date”. Mr Laird submitted that paragraph 1 of the order gave Dr Martin a choice of either filing the fifth version of the points of claim or filing a new, sixth, version. He submitted that Dr Martin had elected to file a sixth version and therefore could no longer rely on the fifth version. He further submitted that, as the sixth version was not filed within the time required by paragraph 1 of the order, in the absence of an extension of time, no points of claim remained on foot after 10 November 2006.
I accept Mr Brett’s submissions. Although the Senior Member criticised the fifth version of the points of claim on 26 October 2006, he said he was prepared to treat it as being filed and therefore that version became the operative version. He was also prepared to give Dr Martin the opportunity to file a sixth version by 10 November 2006. She failed to do so. The consequence is that the fifth version remained on foot. In relation to that version, paragraph 1 of the second order of 26 October 2006 was capable of compliance by Dr Martin simply doing nothing – as the Tribunal had already treated the fifth version as being filed, it was not necessary for Dr Martin to re-file that version. The words “must file” in paragraph 1 of the second order of 26 October 2006 did not require a re-filing of the fifth version; the words were used to indicate that Dr Martin must either rely on the fifth version or file and serve a sixth version by 10 November 2006. A literal and technical reading of paragraph 1 of the second order of 26 October 2006, which would have the effect of depriving Dr Martin of all points of claim in circumstances where the Tribunal had been prepared to accept the fifth version of the points of claim as being filed, would be contrary to ss 97 and 98(1)(d) of the VCAT Act and therefore inappropriate.
On 26 October 2006, the Tribunal expressly refused to dismiss the proceeding under either s 75 or s 78 of the VCAT Act. It follows that when Dr Martin filed an application with the Tribunal on 17 November 2006 seeking an extension of time to 13 November 2006 within which she could file the sixth version of the points of claim, both the VCAT proceeding and the fifth points of claim remained on foot. Between 17 November 2006 and 30 November 2006, when the application seeking an extension of time was heard, neither Fasham Johnson nor the Tribunal gave notice to Dr Martin that anything other than the application for an extension of time would be dealt with on 30 November 2006. The order that the Tribunal made at the conclusion of the hearing on 30 November 2006 reflects the fact that the subject matter of the hearing on 30 November 2006 was Dr Martin’s application for an extension of time. The only substantive order that was made by the Tribunal was to refuse the application for an extension of time. This is also borne out by paragraph 15 of the Tribunal’s reasons for decision, which is set out in paragraph 17 of this judgment.
Before me, Mr Laird submitted that when the Tribunal’s reasons for its decision of 30 November 2006 are read as part of its order of 30 November 2006, as is required by s 117(6) of the VCAT Act, it is clear that, on that day, the Tribunal determined to bring the VCAT proceeding to an end without an adjudication on the merits. He submitted that, as at 30 January 2007, the VCAT proceeding was no longer on foot save for the purpose of determining outstanding costs issues and that, as Dr Martin had not appealed against the operative order dismissing her proceeding (that is, the order of 30 November 2006), the appeal to this Court should be dismissed. In the alternative, he submitted that if the VCAT proceeding was struck out on 30 January 2007 rather than on 30 November 2006, the Tribunal had not made any error of law.
Mr Brett submitted that there was nothing in the Tribunal’s order of 30 November 2006 or its reasons for decision of that day which constituted a striking out of the proceeding and which would have enabled Dr Martin to appeal to this Court. He submitted that although the transcript of the hearing of 30 November 2006 contained statements by the Senior Member which could be interpreted as indicating that the Senior Member was acting on the basis that he was striking out the proceeding, the transcript does not form part of the Tribunal’s order and could not be used as the basis of an appeal to this Court.
I accept Mr Brett’s submissions. There is nothing on the face of the order of 30 November 2006 nor the Tribunal’s reasons for decision which indicates that the Tribunal was exercising a power conferred upon it by any provision of the VCAT Act to strike out the VCAT proceeding. There was no finding that the preconditions for the exercise of the powers in ss 75 or 78 were satisfied and no order was made under those sections. The fact that the transcript and reasons for decision indicate a desire by the Senior Member to “draw the proceeding to a close” cannot alter the legal character of the order made by the Tribunal.[18]
[18]In any event, a proceeding which is struck out does not ordinarily come to an end and the Tribunal has implied power to reinstate it: HWT (2006) 25 VAR 124, 131-2; [2006] VSCA 146, [18]-[20].
I therefore conclude that the only legal effect of the Tribunal’s order of 30 November 2006 was to dismiss Dr Martin’s application for an extension of time for the filing of the sixth version of the points of claim and to reserve liberty to apply for costs. Notwithstanding that order, the VCAT proceeding and the fifth version of the points of claim remained on foot.
It follows that at the hearing on 30 January 2007, the Tribunal either erroneously assumed that it had already struck out the VCAT proceeding or purported on that day to strike out the proceeding. On either interpretation of the order of 30 January 2007, the Tribunal erred in law. On the first interpretation, the Tribunal misconstrued the legal effect of its order of 30 November 2006 for the reasons already discussed. On the second interpretation, the Tribunal failed to make findings, with appropriate reasons, that would satisfy the preconditions for the exercise of the powers in ss 75 or 78 of the VCAT Act. Accordingly, insofar as the Tribunal purported to strike out the VCAT proceeding pursuant to ss 75 or 78 of the VCAT Act, it acted beyond power.
I find that the most likely explanation is that on 30 January 2007, the Tribunal erroneously assumed that it had struck out the VCAT proceeding on 30 November 2006. Accordingly, I answer question of law 3 “yes”. It follows that the appeal against paragraphs 1 and 5 of the Tribunal’s order of 30 January 2007 must be allowed, those paragraphs must be set aside, and the VCAT proceeding must be remitted to the Tribunal pursuant to s 148(7) of the VCAT Act.
Question of law 4 – apprehended bias
The allegation that there was apprehended bias on the part of the Senior Member relates to a suggestion by the Senior Member that Mr Kuek may have perjured himself. This suggestion arose in the context of a statement in Mr Kuek’s affidavit of 29 November 2006 (which was filed in support of the application for an extension of time to file amended points of claim) that he had spent in excess of 80 hours preparing a statement to assist Dr Martin’s counsel to draft the amended points of claim. The Senior Member had previously accepted “at face value” that Mr Kuek had spent 80 hours but questioned why the task had taken that long.[19] By the time the issue was revisited on 30 January 2007, the Senior Member had forgotten that he had accepted that 80 hours had been spent on the task and also that the task was preparing a statement rather than points of claim. Mr Kuek contributed to this confusion. The exchange between Mr Kuek and the Senior Member proceeded as follows:
[19]Transcript of Proceedings, Martin v Fasham Johnson Pty Ltd (Victorian Civil and Administrative Tribunal, 30 November 2006) 99.
Mr Kuek:“With respect, the points of claim that was filed that was dated 13 November was drawn by [Mr Perkins of counsel].”
Senior Member: “Yes, I know that and it took 80 hours to do it.”
Mr Kuek:“I can only implore the tribunal to accept what I put in my affidavit and plainly you have chosen not to.”
Senior Member: “Yes, that’s right, because I find it fanciful and unreal: 80 hours to do a document that would take, as I said in my reasons, a junior member of counsel perhaps with an afternoon tea break, the whole of an afternoon.”
Mr Kuek:“With respect, I think we’re at cross-purposes. 80 hours was the time I spent preparing the statements for Mr Perkins and they were detailed.”
Senior Member: “I’ve never heard of an 80-hour statement.”
Mr Kuek:“It’s pretty pointless me revisiting that because I’ve put my evidence before the tribunal. You have chosen to disbelieve them.”
Senior Member: “Yes.”
Mr Kuek:“When in fact there was no controverting evidence, you have chosen to disbelieve a practising solicitor of the Supreme Court of Victoria.”
Senior Member: “Yes, I have.”
Mr Kuek:“And you have effectively exhibited a bias against me.”
Senior Member: “No, you were very luck[y] that I didn’t refer that matter on.”
Mr Kuek:“With respect, you are invited to, tribunal, if you take the view that the matter ought to be referred on, then it would be determined by an independent tribunal - - -”
Senior Member: “Yes, you’re lucky I didn’t do it.”
Mr Kuek:“- - - whether or not I put in 80 hours.”
Senior Member: “I think it’s fanciful and unreal to suggest that all of that time was spent in the way you say it was.”[20]
[20]Transcript of Proceedings, Martin v Fasham Johnson Pty Ltd (Victorian Civil and Administrative Tribunal, 30 January 2007) 155-6.
It was common ground before Habersberger J that what was meant by the Senior Member’s comment was a referral to the appropriate prosecuting authority for consideration of perjury charges.
Mr Brett submitted that the Senior Member’s comment indicated that there was apprehended bias on the part of the Senior Member. Given that I have upheld the appeal in relation to question of law 3, it is not necessary for me to make a finding on apprehended bias.
The facts that gave rise to the submissions on apprehended bias, however, are relevant to the question of whether I should direct, pursuant to s 148(8) of the VCAT Act, that the Tribunal should not be constituted by the same Senior Member for the hearing and determination of the VCAT proceeding. This issue is discussed separately below.
Question of law 5 – indemnity costs order
Paragraphs 7 to 9 of the Tribunal’s order of 30 January 2007 dealt with costs. Paragraph 8 ordered Dr Martin to pay Fasham Johnson’s costs fixed in the amount of $1,782. It was common ground before me that this amount represented the actual costs incurred by Fasham Johnson. The Tribunal thus ordered payment of costs on an indemnity basis.
It appears that the Tribunal’s decision to order indemnity costs was influenced by its view that, in arguing that the VCAT proceeding was still on foot on 30 January 2007, Mr Kuek was seeking to reagitate matters that the Tribunal had already determined on 30 November 2006. As I have decided that the Tribunal had not determined those matters on 30 November 2006, Mr Kuek was justified in submitting to the Tribunal that the VCAT proceeding and the fifth version of the points of claim remained on foot. In any event, as the Tribunal’s orders of 30 January 2007, including the order for the payment of costs on an indemnity basis, were influenced by an erroneous interpretation of the legal effect of the order of 30 November 2006 and the status of the proceeding, the costs order cannot stand. I note that Mr Laird conceded that if the proceeding was still on foot on 30 January 2007, it would be hard to justify an indemnity costs order being made on that day.
How the Tribunal should be constituted
It is clear from the transcript of the hearing of 30 November 2006 that the procedural history of the VCAT proceeding had resulted in the relationship between Mr Kuek and the Senior Member being very strained. Mr Kuek’s multi-faceted role as the husband of Dr Martin, the solicitor acting for her, and a material witness in her case contributed to this. He was more persistent and uninhibited than an independent lawyer would have been. At times, he was disrespectful. For his part, the Senior Member was concerned that Mr Kuek’s handling of the VCAT proceeding may be prejudicing Dr Martin and irritated by the manner in which the proceeding was being conducted. These factors, along with provocation on the part of Mr Kuek, resulted in the Senior Member at times being sarcastic and dismissive towards Mr Kuek.
As I have already indicated, the Senior Member suggested that Mr Kuek had perjured himself without any factual basis for doing so. He also told Mr Kuek: “You’ve probably got a lame duck proceeding”[21] and “you are flogging a dead horse”.[22]
[21]Transcript of Proceedings, Martin v Fasham Johnson Pty Ltd (Victorian Civil and Administrative Tribunal, 30 January 2007) 156.
[22]Transcript of Proceedings, Martin v Fasham Johnson Pty Ltd (Victorian Civil and Administrative Tribunal, 30 January 2007) 162.
As the Senior Member has expressed the view that a material witness for Dr Martin had possibly committed perjury and also expressed adverse views about the merits of the VCAT proceeding, it would be unfair to Dr Martin for that Senior Member to hear and determine the VCAT proceeding.[23]
[23]The relevant principles for determining whether a court should order that a tribunal be reconstituted are discussed in Northern NSW FM Pty Ltd v Australian Broadcasting Tribunal (1990) 26 FCR 39, 42-3; Kapoor v Monash University (2001) 4 VR 483, 499 [51]; Davidson v Fish [2008] VSC 32, [14]-[21].
As for Mr Kuek’s multi-faceted role, it has long been recognised that a legal representative best protects his or her client by being independent and objective. An emotional attachment to a client’s cause based on a close personal relationship can cloud judgment, strain dealings with other parties and cause unintended prejudice to the client. This case is a good example. I note that the Court of Appeal criticised Mr Kuek’s handling of Dr Martin’s case and his lack of objective judgment.[24]
[24]Martin v Fasham Johnson Pty Ltd (Unreported, Supreme Court of Victoria, Court of Appeal, Eames and Neave JJA, 22 September 2006) [9], [10], [23], [25], [30].
During the hearing before me, I drew Mr Brett’s attention to r 13.4 of the Professional Conduct and Practice Rules 2005 (Vic), which provides:
A practitioner must not unless exceptional circumstances warrant otherwise in the practitioner’s considered opinion:
13.4.1 appear for a client at any hearing, or
13.4.2 continue to act for a client,
in a case in which it is known, or becomes apparent, that the practitioner will be required to give evidence material to the determination of contested issues before the court.[25]
[25]The Rules define “court” to include a tribunal such as the Tribunal. See the discussion of a similar rule in Chapman v Rogers; Ex parte Chapman [1984] 1 Qd R 542, 545.
Mr Brett informed me that he will bring r 13.4 to the attention of Mr Kuek and that it was a matter of common sense that Mr Kuek should not have appeared. Mr Kuek needs to reflect on his ongoing role very carefully.
Proposed orders
The VCAT proceeding has been on foot since 26 June 2004. Since that time, little progress has been made towards a hearing and determination of the substantive issues. The proceeding has been unduly tied up in procedural skirmishes. This is not in the interests of the parties and is contrary to s 98(1)(d) of the VCAT Act.
The VCAT proceeding must be placed back on a proper footing, with a clear timeline for its expeditious resolution either on the merits or pursuant to a proper exercise of a summary dismissal or strike out power. The Tribunal’s second order of 26 October 2006 contemplated this approach. As I have found that the fifth version of the points of claim remains on foot, it is open to the Tribunal to make orders along the lines of paragraphs 3 to 7 of the Tribunal’s second order of 26 October 2006, with suitable modifications in relation to dates and other matters. There is a clear need for the Tribunal to convene a directions hearing as soon as possible to make appropriate orders for the future conduct of the VCAT proceeding.
Subject to the submissions of the parties, I propose to make the following order:
(a)The appeal against paragraphs 1, 5, 7, 8 and 9 of the order of the Victorian Civil and Administrative Tribunal (“Tribunal”) dated 30 January 2007 in proceeding VCAT reference number D395/2004 (“VCAT proceeding”) is allowed.
(b)Paragraphs 1, 5, 7, 8 and 9 of the order of the Tribunal dated 30 January 2007 in the VCAT proceeding are set aside.
(c)The VCAT proceeding is remitted to the Tribunal to be dealt with according to law and it is directed that the Tribunal is to be constituted other than by the Senior Member who made the order dated 30 January 2007.
I will hear from the parties on the precise form of the order and on the question of costs.
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