Pacific Wireless Pty Ltd v Breeze Logistics Australia Pty Ltd (No. 2)
[2019] VSC 130
•5 March 2019
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2018 00758
| PACIFIC WIRELESS PTY LTD (ACN 087 960 950) | Plaintiff |
| v | |
| BREEZE LOGISTICS AUSTRALIA PTY LTD (ACN 603 369 044) | Defendant |
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JUDGE: | LYONS J |
WHERE HELD: | Melbourne |
DATE OF WRITTEN SUBMISSIONS: | 27 February 2019 |
DATE OF RULING: | 5 March 2019 |
CASE MAY BE CITED AS: | Pacific Wireless Pty Ltd v Breeze Logistics Australia Pty Ltd (No. 2) |
MEDIUM NEUTRAL CITATION: | [2019] VSC 130 |
JUDGMENT APPEALED FROM: | [2018] VCAT 173 (Member R Daly) |
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ADMINISTRATIVE LAW – Appeal from decision of Victorian Civil and Administrative Tribunal – Costs of Tribunal hearing – Where settlement offers not relevant before Tribunal but relevant following successful appeal on question of law – Where relevant authorities not before Tribunal and only raised on appeal – Where facts not in dispute - Where remedial consequence of dealing with an error of law - Remittal not warranted to avoid unnecessary expense and delay
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr M Hoyne | Best Hooper |
| For the Defendant | Mr S Rowland | Aughtersons Solicitors |
HIS HONOUR:
On 18 February 2019, I delivered reasons for judgement in this proceeding, granting the plaintiff leave to appeal and allowing the appeal.[1] I made orders for the parties to confer about the finals orders to be made in the proceeding as a result of the Judgment. They have done so. For the most part, the parties have agreed upon the orders to be made, including setting aside the Order of Member R Daly made on 8 February 2018 in the VCAT proceeding that was the subject of this appeal and in its place ordering, among other things, that Breeze pay Pacific the sum of $41,382.
[1]Pacific Wireless Pty Ltd v Breeze Logistics Australia Pty Ltd [2019] VSC 64 (the ‘Judgment’). In these reasons, I will adopt the terms defined in the Judgment.
The only issue that remains to be determined is the question of costs of the VCAT proceeding. This is because Pacific served two offers to settle the VCAT proceeding. The first was a letter dated 18 April 2017 offering to settle the VCAT proceeding for $35,000 ‘all in’ (the ‘first offer’). The second was a letter dated 16 October 2017 offering to settle the VCAT proceeding for $30,000 ‘all in’ (the ‘second offer’). This is in a context where Pacific’s solicitors wrote to Breeze’s solicitors on 7 September 2017 setting out the basis upon which it asserted it was entitled to the Termination Payment.
Breeze did not accept either offer. Pursuant to the Reasons, Pacific received only $15,276.45 in the VCAT proceeding. As a result, the offers were not relevant on the question of costs and no orders for costs were made by the Tribunal. However, Pacific now seeks to rely upon those offers in seeking its costs of the VCAT proceeding in light of its successful appeal to this Court and the order to be made that Breeze pay Pacific the sum of $41,382.
Breeze submits that I have no jurisdiction to deal with this question of costs. This is because it asserts that the question of costs of the VCAT proceeding was not the subject of a question of law on appeal in this proceeding. It relies upon the decision of the High Court in Osland v Secretary Department of Justice (‘Osland’)[2] to the effect that the Court’s power to review a decision of VCAT conferred by s 148(1) of the Act is limited to questions of law and the Court could not assume for itself the functions of the Tribunal in making orders on appeal.
[2](2010) 241 CLR 320 (‘Osland’).
Before considering Osland, it is necessary to note s 148(7) of the Act. Relevantly, s 148(7)(b) of the Act allows the Trial Division of the Court on an appeal to make any order that the Tribunal could have made in the proceeding. Further, s 148(7)(d) allows the Trial Division on appeal to make any order that the Court thinks appropriate.
In Osland, French CJ, Gummow and Bell JJ concluded that s 148(7) does not enlarge the jurisdiction of the Court but confers power in aid of its exercise.[3] They continued:
The Court of Appeal,[4] in the exercise of its jurisdiction under s 148 of the VCAT Act, may make substitutive orders where only one conclusion is open on the correct application of the law to the facts found by the Tribunal. Such a case arises when no other conclusion could reasonably be entertained. In that event, the Court can make the order that the Tribunal should have made. The language of s 148(7) is also wide enough to allow the Court of Appeal to make substitute orders in other circumstances. But its powers must … be exercised having regard to the limited nature of the appeal. Absent such restraint, a question of law would open the door to an appeal by way of rehearing. Where there is a factual matter that has to be determined as a consequence of the appeal, it may be that it is able conveniently to be determined by the Court of Appeal upon uncontested evidence or primary facts already found by the Tribunal. When the outstanding issue involves the formation of an opinion which is, as in this case, based upon considerations of public interest, then it should in the ordinary case be remitted to the body established for the purpose of making that essentially factual, evaluative and ministerial judgement.[5]
[3]Osland (n 2) [19].
[4]The relevant Tribunal was constituted by President Morris J. Accordingly, the appeal from the Tribunal’s Order was to the Court of Appeal.
[5]Osland (n 2) 332-3 [20] (citations omitted).
Hayne and Kiefel JJ concluded:
Section 148(7) is concerned with orders which might be made on an appeal to the Court of Appeal under s 148(1)(a). Paragraph (b) of s 148(7) provides that the Court may make an order that the Tribunal could have made in the proceeding. The power to make such an order, or the other orders listed in s 148(7), arises only following review of the Tribunal’s decision for legal error. Section 148(7) does not operate to expand the jurisdiction given by s 148(1)(a). Although expressed in wide language, the powers given by s 148(7) are only to be exercised as a remedial consequence of dealing with an error of law.[6]
[6]Ibid [78] (citations omitted).
From the above passage, the plurality considers that the Court may make substitutive orders in limited circumstances, including in an matter involving uncontested facts which arises as a consequence of the appeal but which does not involve the formation of opinion by the Tribunal on matters of public interest. Hayne and Kiefel JJ consider that the powers given by s 148(7) are only to be exercised as a remedial consequence of dealing with an error of law.
I have not heard detailed argument on the application of Osland by this or other Courts. However, on my reading of Osland, this Court does have jurisdiction, in the circumstances of this proceeding, to consider the costs of the VACT proceeding. In my view, the question of the costs of the VACT proceeding turns on uncontested facts relating to the offers. The outcome of the issue does not depend upon considerations of public interest requiring any particular expertise of the Tribunal. It turns on a question of the exercise of a discretion in relation to costs.
Further, in my view, the costs issue now arises as a consequence of the successful appeal. To make orders dealing finally with those costs in such circumstances would be to exercise the powers of s 148(7) in aid, and as a remedial consequence, of the resolution of the error of law in this proceeding. The settlement offers were not relevant in the VCAT proceeding because they were in excess of the amount in fact awarded by the Tribunal. They have now become relevant by reason of the increased amount of the award made as a result of dealing with the question of law raised in this proceeding. In these circumstances, I consider that this Court is in as good a position as the Tribunal to deal with the issue. Of course, it must do so in light of the costs principles which apply in VCAT proceedings, including the prima face position that each party is to bear their own costs.[7]
[7]Victorian Civil and Administrative Tribunal Act 1998 (Vic) s 109.
To the extent that it is relevant, this approach is also consistent with the overarching purpose of the Civil Procedure Act 2010 and the rules of the Court to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.[8] The expense and delay of remitting the issue to the Tribunal is not warranted, particularly in circumstances where the issues the subject of the appeal have been resolved. I note that there have been occasions where the Court has decided to exercise a discretionary power under s 148(7)(b) of the Act, to avoid unnecessary expense and delay, ordinarily appropriate for remittal to VCAT.[9]
[8]Civil Procedure Act 2010 (Vic) s 7.
[9]See, eg, Swan v Uecker (2016) 50 VR 74 [79]; Casa Di Iorio Investments Pty Ltd v Guirguis [2017] VSC 266 [71]; Champion v Rohrt [2016] VSCA 215 [66].
For example, in Macedon Ranges Shire Council v Romsey Hotel Pty Ltd & Anor (No 2),[10] the Court of Appeal determined an application for the costs of a Tribunal hearing following the outcome of an appeal therefrom, notwithstanding that the proceeding was otherwise remitted to the Tribunal for rehearing. The Court considered that it was appropriate to order those costs on appeal, ‘[o]therwise more time will be spent and expense incurred in dealing with the costs issue, separately from the rehearing of the merits’.[11] This was in circumstances where the Court of Appeal concluded that, if the evidence and submissions on appeal had been advanced before the Tribunal, it was ‘almost certain’ that the appeal ground upheld would never has arisen.[12]
[10][2008] VSCA 58 (‘Macedon Ranges’), which I note was decided prior to Osland.
[11]Ibid [12].
[12]Ibid [4].
On the basis that this Court has jurisdiction to determine the issue pursuant to either s 148(7)(b) or s 148(7)(d) of the Act, I will now consider whether Pacific is entitled to its costs of the VCAT proceeding under s 112(2) of the Act as a result of the orders made in this proceeding.
In summary, s 112 applies where a party does not accept an offer to settle the proceeding which complies with the requirements of ss 112(1)(a), 113 and 114 of the Act within the time that the offer is open. If orders are made by the Tribunal that are not more favourable to the party who did not accept the offer, then, unless the Tribunal orders otherwise, the party who made the offer is entitled to an order for their costs after the offer was made.
Although I have not received detailed submissions on this point, it appears that the offer made on 18 April 2017 does not comply with s 112(1)(a) of the Act because it was made before the VCAT proceeding was issued. Further, it appears that the offer made on 16 October 2017, stated to be open for a period of 7 days, does not comply with s 114(2) of the Act, which requires such an offer be open for a minimum period of 14 days. If the offers do not comply with the requirements of the Act, the presumption of a costs order in s 112 would not be raised in any event.
However, on the assumption that the offers comply with the requirements necessary to raise the presumption, the issue for determination is whether the Court, standing in the shoes of the Tribunal, should ‘order otherwise’ in the circumstances of this case. In my view, it should ‘order otherwise’, with the result that Pacific is not entitled to its costs of the VCAT proceeding.
This is primarily because the authorities Pacific relied upon in order to succeed on appeal, relating to the way in which the law treats overhead costs in claims for loss of profit in contract, were not drawn to the attention of the Tribunal in the VCAT proceeding. I noted this at [80] of the Judgment. Indeed, no reference was made to them in the transcript of the VCAT proceeding or the Reasons. In my view, it was those cases which were determinative of the principal grounds of appeal dealing with contractual damages and also the genuine pre-estimate of Pacific’s damage. I am confident that, similar to the reasoning in Macdeon Ranges, if these cases had been drawn to the attention of the Tribunal, it is extremely unlikely that the appeal grounds which I have upheld would have arisen.
Further, the legal issues involved in the VCAT proceeding were not straightforward. This is evident from the Judgment. Indeed, as I set out at [103] of the Judgment, the result that Breeze may be required to pay all the Minimum Monthly Payments remaining under the Service Agreement notwithstanding that no services were provided, at first blush, seems odd and might be seen to punish customers like Breeze or act to lock them into such agreements.
In all these circumstances, I do not consider it appropriate to order that Breeze pay Pacific’s costs of the VCAT proceeding.
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