Primrose Meadows Pty Ltd v River View Pty Ltd

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST

S CI 2017 00615

PRIMROSE MEADOWS PTY LTD (ACN 089 757 755)	Plaintiff
v
RIVER VIEW PTY LTD (ACN 071 155 943)	Defendant

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JUDGE:	CROFT J
WHERE HELD:	Melbourne
DATE OF HEARING:	16 August 2017
DATE OF JUDGMENT:	30 August 2017
CASE MAY BE CITED AS:	Primrose Meadows Pty Ltd v River View Pty Ltd
MEDIUM NEUTRAL CITATION:	[2017] VSC 487

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PRACTICE AND PROCEDURE – Victorian Civil and Administrative Tribunal – Natural justice – Whether conduct of proceeding causing disadvantage – Criteria for determination of proceeding in the absence of appearance by respondent – Victorian Civil and Administrative Tribunal Act 1998 s 78, 97, 98 and 102.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J. McKay	Case Legal
For the Defendant	Mr D. Clarke	Bardoel & Adams

HIS HONOUR:

Introduction

This proceeding has been brought by Originating Motion, dated 22 February 2017 pursuant to s 148(1) of the Victorian Civil and Administrative Tribunal Act 1998 (“the VCAT Act”). The Plaintiff, Primrose Meadows Pty Ltd, is seeking to appeal from orders of the Victorian Civil and Administrative Tribunal (“the Tribunal” or “VCAT”); including those made by Senior Member R Davis on 25 January 2017 in proceeding number BP1247/2016.[1]
[1]River View Pty Ltd v Primrose Meadows Pty Ltd (25 January 2017).

In the Defendant’s Points of Claim (as the Applicant in the VCAT proceedings) it is alleged that by a lease dated 7 February 2007, the Plaintiff (the Respondent in the VCAT proceedings) leased to the Defendant in these proceedings the premises known as the Lincolnshire Arms Hotel, 1 Keilor Road, North Essendon for a term of five years from 2 September 2006 with eight options for further terms of five years (“the Lease”). The Defendant claims that it exercised the first option contained in the Lease and that, following the exercise of the first option, the parties entered into Terms of Settlement on 19 June 2012 to resolve a dispute between them with respect to the Lease and its renewal.

The Defendant claims that there were express terms of the Terms of Settlement that the Plaintiff would provide to it a renewed lease of the Premises commencing on 2 September 2011 on the same terms and conditions as the Lease with an agreed rent of $390,000 plus GST. It further claims that the renewed lease had to be identical to the “lease by renewal” document prepared by the Plaintiff’s solicitor, signed by the Defendant and attached to the Terms of Settlement. The Defendant claims that, pursuant to the Terms of Settlement, the parties signed a deed dated 21 June 2012, which was identical to the “lease by renewal” document attached to the Terms of Settlement (“Renewed Lease”).

On the basis of the claimed Renewed Lease, the Defendant claims to have exercised the second option contained in the Lease, by letter dated 27 May 2016 to the Plaintiff. On the basis of these matters and in reliance upon s 27(2) of the Retail Leases Act 2003, the Defendant claims to be entitled to specific performance of the agreement for lease produced by this exercise of option.

Before attention is focused on the manner in which the VCAT proceeding was conducted, it is important in the context of these proceedings to make reference to the pleading response in the VCAT proceedings on the part of the Plaintiff. In a document described as “Response to an Active Case”, the Plaintiff provided what is, clearly in substance, a defensive pleading to the Points of Claim. The critical pleading, contained in paragraph 3 of that document, is a denial that it entered into Terms of Settlement to resolve the dispute between the parties. The particulars to this denial are as follows:

The terms of settlement are signed by Shane Strausmann who was not authorised by the Respondent to enter into any terms of settlement and the terms of settlement were obtained by fraudulent conduct and do not bind the Respondent.

It is then pleaded that there is no retail lease within the meaning of the Retail Shop Leases Act 2003 due to this fraudulent conduct and that the Defendant—described in the pleadings as the “Plaintiff” in the VCAT proceedings—could not have exercised the second option as alleged. As discussed at the hearing of these proceedings, it would appear that this document was prepared by a practitioner primarily practising in Queensland, which is probably the reason for the heading to this document, unusual in Victorian terms, and an erroneous reference to the Victorian Retail Leases Act 2003. Nevertheless, the substance and intent of this document and the issues raised are relevantly clear, though it is certainly the case that one might have expected an application in VCAT for both a more detailed pleading and further particularisation. It is, however, not a matter of relevance in these proceedings, as explained in the reasons which follow.

In substance, the critical question in these proceedings is whether the disposition in favour of the Defendant by Senior Member Davis on 25 January 2017 involved a vitiating denial of natural justice to the Plaintiff, with the result that the orders made by the Senior Member should be set aside.

Principles applicable with respect to appeals

Section 148(1) of the VCAT Act provides:

A party to a proceeding may appeal on a question of law from an order of the Tribunal in the proceeding—
(a)if the Tribunal was constituted for the purpose of making the order by the President or a Vice President, whether with or without others, to the Court of Appeal with leave of the Court of Appeal; or
(b)in any other case, to the Trial Division of the Supreme Court with leave of the Trial Division.

It follows from this provision that any appeal is dependent upon two important qualifications. First, that the appeal be on a question of law, and secondly, that the Court gives leave to appeal. The legislative policy underlying these provisions is that “VCAT decisions should not generally be disturbed where cases have been decided in that forum other than on questions of law and where there is something about the decision bearing upon the question of law which warrants a grant of leave to appeal.”[2] It follows that “[t]his Court is not entitled to enter into the fact finding exercise which the legislature has deliberately entrusted to a specialist tribunal.”[3]

[2]Commissioner of State Revenue v Frost (2011) 83 ATR 832 at 834 [5] citing Secretary to the Department of Premier and Cabinet v Hulls [1999] 3 VR 331 at 335–6 and Myers v Medical Practitioners Board (Vic) (2007) 18 VR 48 at 55 [28].

[3]Boucher v Dandenong Ranges Steiner School Inc (2005) 145 LGERA 21 citing Spurling v Development Underwriting (Vic) Pty Ltd [1973] VR 1 and Whitehorse City Council v Golden Ridge Investments Pty Ltd [2005] VSCA 198.

The leave requirement under s 148(1) of the VCAT Act is designed to maintain this position. As Pagone J said in Commissioner of State Revenue v Frost:[4]

The requirement for leave under s 148(1) of the VCAT Act “is a safeguard that the appeal is on a pure question of law and that the grounds supporting the question of law articulated for determination by the Court do found the subject matter of the appeal”.[5] It also confers a discretion about whether to grant leave[6] which an applicant must persuade the Court to exercise in its favour. What must be shown will depend upon the particular case bearing in mind the statutory criteria being a grant of leave and not special leave.[7] It will ordinarily be necessary (in addition to a clearly articulated question of law)[8] for an applicant to make out a prima facie case[9] and in an appropriate case it may be necessary for the applicant to show that the question upon which leave is sought has public or general importance.[10]

[4](2011) 83 ATR 832 at 833–4 [3].

[5]Commissioner of State Revenue v STIC Australia Pty Ltd (2010) 81 ATR 682 at 687 [10].

[6]Secretary to the Department of Premier and Cabinet v Hulls [1999] 3 VR 331; Al-Hakim v Monash University (Unreported, Victorian Supreme Court of Appeal, 28 March 2003); Myers v Medical Practitioners Board (Vic) (2007) 18 VR 48.

[7]See Morris v R (1987) 163 CLR 454 at 475.

[8]Osland v Secretary to the Department of Justice [No 2] (2010) 241 CLR 320 at 333 [21].

[9]Morris v R (1987) 163 CLR 454 at 475; Secretary to the Department of Premier and Cabinet v Hulls [1999] 3 VR 331 at 335.

[10]Secretary to the Department of Premier and Cabinet v Hulls [1999] 3 VR 331 at 335–6; Commissioner of State Revenue v Challenger Property Nominees Pty Ltd (2006) 63 ATR 65 at 69 [20], 77 [65] (“Challenger”).

In considering an application of this nature, courts have been concerned to respect the role entrusted by the legislature to the particular tribunal and not, in effect, subvert this position by seeking out error. Thus, Kirby J in Roncevich v Repatriation Commission said:[11]
[11](2005) 222 CLR 115 at 136 [64].

Courts conducting this form of review have been repeatedly enjoined by this Court to avoid overly pernickety examination of the reasons.[12] The focus of attention is on the substance of the decision and whether it has addressed the “real issue” presented by the contest between the parties.

Similarly, in Vegas Nominees Pty Ltd v Werribee Sports & Community Club Inc, Ashley J said:[13]
This Court has said more than once that it should not examine briefly stated reasons by an expert Tribunal in an over-legalistic manner or by the over-zealous drawing of inferences in order to disclose some supposed error; although where unambiguous language is used, the user should be taken to mean what the words say. I should add that the Court is not entitled to interfere with the Tribunal’s decision unless it is satisfied that there was in fact a vitiating error of law. It is not enough for the appellant to show that the Tribunal’s reasons for its decision are so expressed as to suggest the possibility that it proceeded upon a wrong view of the law. In support of the several propositions that I have just stated I refer to Portland Properties Pty Ltd v Melbourne & Metropolitan Board of Works,[14] Michaelis Bayley (Vic) Pty Ltd v Melbourne & Metropolitan Board of Works[15] and Teston Investments Pty Ltd v Melbourne & Metropolitan Board of Works.[16]

Additionally, “[o]n appeal this Court must recognise the forensic realities of the way in which the case was put to the Tribunal. It is these realities to which a Tribunal must respond in its reasons.”[17]

[12]Minister for Immigration and Ethnic Affairs v Guo (1997) 191 CLR 559 at 575, 597. Cf Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at 348 [74].

[13](Unreported, Supreme Court of Victoria, Ashley J, 21 December 1994) [13].

[14](1971) 38 LGRA 6 at 18.

[15](1980) 44 LGRA 65 at 67–8.

[16](1985) 62 LGRA 346 at 349–50.

[17]The Gombac Group Pty Ltd v Vero Insurance Ltd [2005] VSC 442, [59].

As a result of orders made by Ginnane J on 22 March 2017, these proceedings were conducted on the basis of a “rolled up” application both for leave to appeal and, if leave were to be granted, the hearing of the appeal itself. In this respect, I entirely agree that this course is appropriate in appeals of this nature in order to avoid the unnecessary time and cost of a separate leave application and, if leave be granted, a separate hearing of the appeal. This is particularly so in matters of this kind, as the matters the subject of each hearing, if leave is granted, tend to traverse the same or very similar ground.

It should also be noted in the context of these proceedings that neither party directed any particular or detailed attention to the question of leave,[18] but rather focused their submissions on the substantive matters the subject of the appeal. In any event, for the reasons which follow, I am satisfied that the plaintiff has both established a question of law which warrants the grant of leave to appeal and, further, has been successful in this appeal. Were this simply an application for leave to appeal, I would, on the material to which reference has been made in these reasons, find that a sufficiently arguable case has been established on the part of the Plaintiff, as discussed in Secretary to the Department of Premier and Cabinet v Hulls.[19] Moreover, I am also satisfied that the application raises a question which has public importance[20] as it is critical to confidence in the justice system that parties can be assured of procedural fairness, the application of the rules of natural justice. On this basis, it follows that I will treat the Proposed Notice of Appeal as the settled Notice of Appeal for the purpose of these proceedings.
[18]But see, Defendant’s Submissions (21 July 2017), [50]–[55].
[19][1999] 3 VR 331.
[20]Secretary to the Department of Premier and Cabinet v Hulls [1999] 3 VR 331 at 335–6 [11].

Nature of the appeal

The Proposed Notice of Appeal identifies relevant questions of law and the grounds of appeal in the following terms, together with the variety of orders made in VCAT, the subject of this appeal:

(a)       The 24 January 2017 orders:
BEFORE:  Senior Member E Riegler
HEARING TYPE:           In Chambers
DATE OF ORDER:        24 January 2017

ORDERS
Having regard to the Applicant’s opposition to the Respondent’s request to vacate the hearing listed for 25 January 2017, the Tribunal orders:
1.The Respondent’s application to vacate the hearing listed for 25 January 2017 is to be heard before the presiding member prior to the commencement of the hearing.
2.The Respondent is given leave to appear by telephone at the return of its application to vacate the hearing listed for 25 January 2017, subject to telephone contact details being provided to the Tribunal by 9AM on 25 January 2017.
3.In the event that the Respondent’s application to vacate the hearing listed for 25 January 2017 is refused, the hearing will, subject to any further orders made by the Tribunal, immediately commence thereafter.
4.Liberty to apply.
(“the 24 January 2017 orders”).

(b)       The 25 January 2017 orders:
BEFORE:  Senior Member Robert Davis
HEARING TYPE:           Hearing
DATE OF HEARING:     25 January 2017
DATE OF ORDER:        25 January 2017

ORDERS
1.Pursuant to s 78(1)(g) of the Victorian Civil and Administrative Tribunal Act 1998 (“the Act”) the respondent has caused the applicant a disadvantage by failing to attend the hearing of this proceeding and comply with orders made by the Tribunal.
2.Pursuant to s 78(2)(b)(i) of the Act the proceeding is determined in favour of the applicant and the respondent shall pay the applicant the sum of $750.00 (being costs of 20 December 2016) and hearing fee of this day in the sum of $487.90, totalling $1,237.90. It is noted that these costs were incurred by the vexatious conduct of the respondent within the meaning of s 92(2)(a) of the Retail Leases Act 2003.
3.I declare that by the letter referred to in paragraph [10], the applicant exercised the option for a further term commencing 2 September 2016.
4.I grant specific performance of the Agreement for Lease including an order that the respondent prepare, execute and provide to the applicant a lease concerning the premises (as referred to in Particulars of Claim) for the period 2 September 2016 to 1 September 2021 on the terms of the Lease (as varied by the Renewed Lease) and containing six options for further terms of five years. Such document be executed by the respondent on or before 3 March 2017.

It is noted that while pursuant to order 2 of the orders of 24 January 2017 the respondent was given leave to be by telephone this day, no application to appear by telephone was made.
(“the 25 January 2017 orders”).
2.IS THE APPEAL FROM THE WHOLE OR PART ONLY OF THE ORDER, AND IF SO WHAT PART?
(a)The appeal is from the whole of orders 1 to 3 of the 24 January 2017 orders.
(b)The appeal is from the whole of orders 1 to 4 of the 25 January 2017 orders.

3. DOES THE PLAINTIFF REQUIRE LEAVE TO APPEAL?
(a)With respect to the 24 January 2017 orders, yes.
(b)With respect to the 25 January 2017 orders, yes.

4.THE QUESTION OF LAW UPON WHICH THE APPEAL IS BROUGHT OR WHICH IS INVOLVED IN THE ORDER
(a)With respect to the 24 January 2017 orders:
1.The learned Senior Member erred in not granting the plaintiff’s application to adjourn the hearing of the proceeding, instead listing the application to be heard before the Tribunal on 25 January 2017.
2.The learned Senior Member erred in not taking any, or sufficient, account of the balance of prejudice against (on the one hand) the plaintiff in not vacating the hearing date, and against (on the other hand) the defendant in vacating the hearing date.
3.In balancing the prejudice to the parties on the question of whether the hearing date should be vacated, the learned Senior Member erred in failing to take any, or sufficient, account of the fact that:
(a)this was the plaintiff’s first (and only) adjournment application;
(b)there was no prejudice that the defendant might suffer by reason of the adjournment that could not be remedied by the payment of its costs;
(c)it was open to the learned Senior Member to order that the plaintiff pay the defendant’s costs of and incidental to the adjournment;
(d)it was open to the learned Senior Member to fix the defendant’s said costs and make a self-executing order with respect to their payment;
(e)the plaintiff had received relatively short notice of the hearing date;
(f)the plaintiff’s application was reasonable in the circumstances.

(b)With respect to the 25 January 2017 orders:
1.The learned Senior Member erred in not granting the plaintiff’s application to adjourn the hearing of the proceeding, especially so in circumstances where the plaintiff could not attend at the hearing of the application.
2.The learned Senior Member erred in not taking any, or sufficient, account of the balance of prejudice against (on the one hand) the plaintiff in not vacating the hearing date, and against (on the other hand) the defendant in vacating the hearing date.
3.In balancing the prejudice to the parties on the question of whether the hearing date should be vacated, the learned Senior Member erred in failing to take any, or sufficient, account of the fact that:
(a)this was the plaintiff’s first (and only) adjournment application;
(b)there was no prejudice that the defendant might suffer by reason of the adjournment that could not be remedied by the payment of its costs;
(c)it was open to the learned Senior Member to order that the plaintiff pay the defendant’s costs of and incidental to the adjournment;
(d)it was open to the learned Senior Member to fix the defendant’s said costs and make a self-executing order with respect to their payment;
(e)the plaintiff had received relatively short notice of the hearing date;
(f)the plaintiff’s application was reasonable in the circumstances.

5.THE GROUNDS OF APPEAL
(a)With respect to the 24 January 2017 orders:
1.The learned Senior Member ought to have granted the plaintiff’s application to adjourn the hearing of the proceeding, instead of listing the application to be heard before the Tribunal on 25 January 2017.
2.The learned Senior Member erred in not taking any, or sufficient, account of the balance of prejudice against (on the one hand) the plaintiff in not vacating the hearing date, and against (on the other hand) the defendant in vacating the hearing date.

3.In balancing the prejudice to the parties on the question of whether the hearing date should be vacated, the learned Senior Member erred in failing to take any, or sufficient, account of the fact that:
(a)this was the plaintiff’s first (and only) adjournment application;
(b)there was no prejudice that the defendant might suffer by reason of the adjournment that could not be remedied by the payment of its costs;
(c)it was open to the learned Senior Member to order that the plaintiff pay the defendant’s costs of and incidental to the adjournment;
(d)it was open to the learned Senior Member to fix the defendant’s said costs and make a self-executing order with respect to their payment;
(e)the plaintiff had received relatively short notice of the hearing date;
(f)the plaintiff’s application was reasonable in the circumstances.

(b)With respect to the 25 January 2017 orders:
1.The learned Senior Member ought to have granted the plaintiff’s application to adjourn the hearing of the proceeding, especially in circumstances where the plaintiff could not attend at the hearing of the application.
2.The learned Senior Member erred in not taking any, or sufficient, account of the balance of prejudice against (on the one hand) the plaintiff in not vacating the hearing date, and against (on the other hand) the defendant in vacating the hearing date.
3.In balancing the prejudice to the parties on the question of whether the hearing date should be vacated, the learned Senior Member erred in failing to take any, or sufficient, account of the fact that:
(a)This was the plaintiff’s first (and only) adjournment application;
(b)there was no prejudice that the defendant might suffer by reason of the adjournment that could not be remedied by the payment of its costs;
(c)it was open to the learned Senior Member to order that the plaintiff pay the defendant’s costs of and incidental to the adjournment;
(d)it was open to the learned Senior Member to fix the defendant’s said costs and make a self-executing order with respect to their payment;
(e)the plaintiff had received relatively short notice of the hearing date;
(f)the plaintiff’s application was reasonable in the circumstances.

…

The VCAT proceedings

The first directions made by the Tribunal in the VCAT proceedings were made by Senior Member Riegler on 18 November 2016. The Plaintiff, the respondent in the VCAT proceedings, was at that directions hearing represented by counsel. The orders made by the Senior Member on that date were for the completion of the process of pleading, a compulsory conference and matters of a procedural nature. In view of the importance of the terms of the VCAT orders in these proceedings, the orders of Senior Member Riegler on 18 November 2016 are set out in full to the extent the orders are now relevant:

1.By 2 December 2016, the Respondent must file and serve any counterclaim in the form of Points of Counterclaim (with the fee payable) which must include fully itemised particulars of the counterclaim, loss and damage claimed, and the relief or remedy sought. Points of Counterclaim may accompany Points of Defence in the one document.
2.By 23 December 2016, the Applicant must file and serve any Reply and/or Points of Defence to Counterclaim specifying the material facts relied upon. Any set-off claimed must be fully set out.
3.This proceeding (and any counterclaim) is listed for a compulsory conference to be conducted on 25 January 2017 commencing at 10.00am at 55 King Street Melbourne. Costs may be ordered if the compulsory conference is adjourned or delayed because of a failure to comply with directions including those relating to the compulsory conference.
4.The parties may each be represented by professional advocates at the conference.
5.All parties must attend a compulsory conference personally or be represented by a duly authorised person with personal knowledge of the issues in dispute, and who has, for all practical purposes, unlimited authority to settle. Costs may be ordered if a party’s representative does not have unlimited authority to settle, or where a party refuses to negotiate in good faith at the compulsory conference.

…

References in this and other VCAT orders to the Respondent and the Applicant are, of course, a reference to the Plaintiff in these proceedings, Primrose Meadows Pty Ltd, and to the Defendant in these proceedings, River View Pty Ltd, respectively.

In spite of the Tribunal’s orders of 18 November 2016, the Plaintiff failed to file any defence in the VCAT proceedings in accordance with those orders. As conceded by the Plaintiff’s counsel in these proceedings, there is no explanation forthcoming for this omission and it remains a matter for speculation as to whether or not this failure was caused by the Plaintiff itself or its Queensland solicitor. In any event, notice was given to the Plaintiff of a Compliance Hearing in VCAT which was listed for 20 December 2016. At that hearing, Deputy President Aird made orders extending the date by which the respondent was required to file and serve Points of Defence and any counterclaim to 9 January 2017 and the date by which the Applicant was required to file and serve any reply and/or Points of Defence to Counterclaim to 20 January 2017. The orders further provided that if the respondent complied with the order for filing and serving Points of Defence and any counterclaim, then the compulsory conference listed for 25 January 2017 “shall proceed” and that “… previous directions in relation to the conduct of the Compulsory Conference apply”. However, in the event that the respondent failed to comply with the order—namely, order two—for the filing and serving of Points of Defence and any counterclaim, then the following would apply:

5.If the respondent fails to comply with order 2 the compulsory conference listed for 25 January 2017 will be vacated and the proceeding listed for hearing on that day for 1 day commencing at 10.00am at 55 King Street, Melbourne.

The orders then reserved liberty to apply and reserved costs but, significantly in the circumstances of this proceeding, concluded with the following order:
8.I direct the Principal Registrar to email these orders to the respondent’s solicitor today.

Unfortunately, the emailing of the orders to the respondent’s solicitor, namely, the Plaintiff’s solicitor in these proceedings, did not occur on 20 December 2016 as ordered. Rather, a copy of the 20 December 2016 orders was emailed after the Christmas/New Year holiday period, namely, on 3 January 2017. This delay was doubly unfortunate because, as later events suggest, had these orders been emailed by the Principal Registrar as ordered by Deputy President Aird on 20 December 2016, there seems every prospect that their contents would have been brought to the attention of the Plaintiff’s solicitor and, at least one would hope in spite of the somewhat unsatisfactory procedural history of the VCAT proceedings at that time, have been acted upon.

The 20 December 2016 hearing was on the Tuesday before Christmas, with Christmas Eve on the following Friday. Consequently, there was the best part of a week of business days available before Christmas in contrast to the position on 3 January, which was the Tuesday immediately after the New Year’s Day public holiday and at a time when many businesses and professional offices are closed. Consequently, there was a delay of some two weeks in the notification of the 20 December 2016 VCAT orders, which was, given the time of the year, serious, and particularly having regard to the fact that the effect of these orders was to provide for a hearing of the VCAT proceeding on 25 January 2017 in default of the filing and service of Points of Defence and any counterclaim by the Plaintiff. This became even more critical as the provisions of “order two” of these orders extending the date for filing and serving Points of Defence and any counterclaim to 9 January 2017 were not complied with. It was not until 24 January 2017 that something in the nature of a pleading by way of defence and counterclaim was filed by the Plaintiff—namely, the document headed “Response to an Active Case” to which reference has already been made.[21] Having regard to these matters, it becomes very important to consider what occurred on 24 January 2017.
[21]See above, [5].

By letter dated 24 January 2017 (sent that day by email), the Plaintiff’s solicitors, Case Legal Pty Ltd, the principal office of which is situated in Brisbane, wrote to the “Registrar” of VCAT. Omitting formal parts, the contents of this letter are as follows:

RE: Primrose Meadows Pty Ltd and River View Pty Ltd; BP1247/2016
We refer to the various correspondence, and the correspondence, dated 19 January 2017, setting down the Hearing of this matter for 1 day on 25 January 2017.
As you would be aware the Uniform Civil Procedure Rules, what is required to be done between 22 December and 9 January, those days are not to be included in the time line for the delivery of what is required.
The first the writer became aware of the Orders of 20 December 2016, was upon the writer’s return from leave on 23 January 2017.
Today our client provided us with clear instructions on a Notice to Defend the points of claim which have been sent to the Registry.
The writer is a sole practitioner who is resident in Brisbane with a Melbourne office. The writer cannot attend tomorrow 25 January 2017 and there would be clear breach of natural justice in the event the matter proceeded to a Hearing without the writer in attendance.
The Plaintiff’s claim is based on a renewal of a Lease, which the Respondent alleges is a fraudulent renewal of a Lease.
The Respondent has instructed this firm to issue proceedings against the Plaintiff and other parties in the Supreme Court of Victoria in relation to the alleged fraudulent conduct.
We look forward to receiving the filed Notice and confirmation that the matter will not be proceeding to a Hearing on 25 January 2017.
In future all correspondence should be addressed to Case Legal.
[Emphasis added]

Two points should be made in relation to the contents of this letter, the significance of which become clearer in light of subsequent events to which reference is made. The first is that not only does the letter state that a defensive pleading has been provided and sent to the Registry but, secondly, it also provides telephone contact details for the Plaintiff’s legal representative—both in the footer to the letter and also at the top of the letter or email, together with an email address of Mr Niren Raj, described as the “Responsible Person”. Consequently, when it comes to the 25 January 2017 VCAT hearing, the letter itself makes it clear that a defence is being raised and also provides a means of telephone or email contact if the Tribunal sought to make contact.

Returning to the events of 24 January 2017, the position is that the Plaintiff’s solicitor said, in the 24 January 2017 letter sent by email, that as a result of not being aware of the 20 December 2016 orders until 23 January he was not in a position to attend the VCAT hearing on 25 January 2017, the following day; adding that there would be a breach of natural justice in the event that the matter proceeded to a hearing without the Plaintiff’s solicitor being in attendance and, further, seeking confirmation that the matter would not proceed to a hearing on 25 January 2017. Moreover, at this time the Plaintiff had filed a defensive pleading—deficient though it may or may not have been—thus, at least procedurally, having cured or at least complied with order 2 of the 20 December 2016 orders of Deputy President Aird. True it is that compliance was late in terms of the 9 January 2017 date provided for in order 2 of those orders; however, given that those orders were not provided to the Plaintiff’s solicitor by email until about two weeks after the date specified by the Deputy President in those orders, it might be said that provision of a defensive pleading on or before 24 January was within the time period provided for in those orders having regard to this position.

It is said against the Plaintiff that there is no evidence apart from the 24 January letter that the Plaintiff’s solicitor had not received the 20 December 2016 VCAT orders until 23 January 2017. The point was made, however, by counsel for the Plaintiff that the Plaintiff’s solicitor is an officer of the Court, having as he does a branch office in Melbourne, and absent some positive evidence to the contrary there is no reason why this Court should not accept the position put by such a practitioner in formal correspondence with the Tribunal. Indeed, having regard to the events which followed and the serious consequences for the Plaintiff’s position, I would not regard any controversy in this respect as detracting from the serious deficiencies in procedural fairness and natural justice, in the conduct of the VCAT proceedings on 25 January 2017. Moreover, the Plaintiff’s solicitor is a person bound by the codes of ethics which govern the legal profession, together with the other statutory duties and requirements. For all these reasons, I accept that there is no basis for not believing that he did not know of the 20 December 2016 VCAT orders until 23 January 2017.

The Plaintiff’s application for an adjournment of the hearing on 25 January 2017 as contained in the 24 January 2017 letter was apparently considered by Senior Member Riegler and was the reason for the orders which he made in Chambers—i.e. on the papers—on 24 January 2017. Those orders are set out in the Proposed Notice of Appeal and are described as “the 24 January 2017 orders”. The intended effect of those orders appears to have been that the application to vacate the hearing listed for 25 January 2017 was to be heard by the presiding member of the Tribunal prior to the commencement of that hearing on 25 January 2017. For this purpose, an order was made giving leave to the Plaintiff, the respondent in the VCAT proceedings, to appear by telephone “at the return of its application to vacate the hearing listed for 25 January 2017” subject to telephone contact details being provided to the Tribunal by 9.00am on 25 January 2017. In this respect it should, as noted previously, be kept in mind that the 24 January 2017 letter does contain telephone contact details, though there is no suggestion that telephone contact details were provided in any formal way in accordance with the 24 January 2017 orders. The reason for this appears to be as a result of a misunderstanding arising out of email communication between VCAT and the Plaintiff’s solicitor in emails dated 25 January 2017.

Returning to the 24 January 2017 orders, the final substantive order provides for the possibility of the application to vacate the hearing listed for 25 January 2017 being refused, in which event “… the hearing will, subject to any further orders made by the Tribunal, immediately commence thereafter”. It would seem that this order contemplates expressly reserving the discretion in the Tribunal member presiding on 25 January 2017 to proceed other than to a hearing, even in the event that the application to vacate the hearing was refused. Moreover, however one reads these orders, it is, in my view, clear that as contended by the Plaintiff, the first step contemplated and provided for at the hearing on 25 January 2017 was the determination of the application to vacate the order for a hearing of the substance of the VCAT proceeding.

The orders of 24 January 2017 were, early on 25 January 2017, followed by what can only be described as a most unfortunate email communication from “Customer Service – Civil Division” of VCAT—at 8.39am. Omitting formal parts, this email is as follows:

I refer to your email dated 24 January 2017.
Your email was referred to a Senior Tribunal Member. The Member has declined to grant an adjournment, and advised that the orders dated 24 January 2017 remain in effect.

To say that this email is confusing is, in the chain of events in which it falls, an understatement. First, it does not even accurately reflect the position as set out in the 24 January 2017 orders in any helpful way. As indicated previously, the effect of those orders was to defer the hearing and determination of the adjournment application to the hearing on 25 January 2017 and, clearly, as the first matter to be dealt with at that hearing as the determination of the adjournment application would dictate what followed at that hearing. Unfortunately, the Plaintiff’s solicitor misunderstood the position being put by the VCAT email and, responding at 8.47am, on 25 January 2017, replied, omitting formal parts, as follows:
Thank you for your email.
Our client has suffered prejudice and will refer this matter to the Supreme Court for review.

Thus, the position at about 8.50am on 25 January 2017—shortly before the commencement of the listed hearing on that day, is that the Plaintiff’s solicitor understood that the adjournment application had been refused and that the matter would proceed to a hearing on substantive matters, in spite of the fact that he had informed the Tribunal that he would not be able to attend and properly represent his client at that hearing. Moreover, this is in circumstances where defensive pleadings had been filed and which raise serious allegations with respect to the validity of the renewed lease arising out of the Deed of Settlement on the basis of alleged fraud and, further, in circumstances where a dispute between the parties involves significant sums of money in terms of the amount of rent payable under any renewed lease. So, at this point the Plaintiff’s solicitor is left thinking that the only avenue remaining for his client is a review in the Supreme Court as the Tribunal has refused the adjournment application and is about to determine the substantive dispute at a hearing about to commence on that day. Unfortunately, the confusion and misunderstandings which have apparently bedevilled these VCAT proceedings turn from bad to worse on 25 January 2017.

I turn now to the VCAT hearing on 25 January 2017, with particular reference to the transcript of that proceeding. Senior Member Davis, having had the Plaintiff, the respondent in the VCAT proceedings called, ascertained that there was no appearance. Continuing:[22]

MR DAVIS: Okay. I note the time is 11 minutes past 10. I say that for the transcript. Just before you start, Mr McKenzie, there has been correspondence from the respondent to the tribunal. They’ve asked for an adjournment. Apparently someone is in Brisbane, and I can’t – I have difficulty following it at all but - - -
MR McKENZIE: I’ve sighted the letter of 24 January seeking - - -
MR DAVIS: Yes. Apparently this morning, and he said he couldn’t come. I don’t understand it but – and I understand that you’re opposing the adjournment.

Of significance in this exchange, as emphasised by the Plaintiff in its submissions, is that immediately upon the respondent being unsuccessfully called, the Senior Member confirmed the correspondence had been received, requesting an adjournment. Consequently, it cannot be said that the letter of 24 January 2017 was not on the VCAT file at all or had not made its way to the Senior Member. The second point is that the Senior Member gave a wrong or incomplete synopsis of the contents of the 24 January 2017 letter in terms of the excuse for non-attendance. He merely observed that “someone is in Brisbane” and “he said he couldn’t come”. As submitted by the Plaintiff, to suggest that all that was being put to justify the adjournment was that someone was in Brisbane and could not come is a serious misapprehension.

[22]VCAT Transcript (25 January 2017), 2.

As explained thus far, the actual position was that the adjournment application—having regard to the asserted fact that the notice provided by the 20 December 2016 orders with respect to the 25 January 2017 hearing had only been received by the Plaintiff’s solicitor or conveyed to him on 23 January 2017, two days before the listed hearing—was on the basis that it was impossible to run the case in those circumstances. Moreover, the passages of the VCAT transcript set out above contain a clear acknowledgment that the 24 January 2017 letter had been received and also, unfortunately, provide a very clear indication that it had not been read carefully. Quite apart from the issue of the adjournment application, the letter also indicates, as observed previously, that defensive pleadings had by then been provided and that they raised serious allegations which were said to affect the basis of any renewed lease.

Somewhat surprisingly, the VCAT hearing did not, at this stage, address the adjournment application. Rather, the counsel for the applicant in the VCAT proceedings pressed the Senior Member to make an order in its favour on the substantive issues in the VCAT proceedings. This invited the following exchange between the Senior Member and the applicant’s counsel:[23]

MR DAVIS: But what worries me about that, and this is why I’m telling you first rather than you telling me because I think it often may be more useful – is that I will make all those orders. Then next week we’re going to get an application to have this thing set aside, and then there’s going to be another battle, and someone will probably set it aside and we’re back where you started. Now, what I will do - - -
MR McKENZIE: I’ve had a discussion - - -
MR DAVIS: Now, what I was thinking was a possibility, and it’s only – I’m thinking it’s a possibility. I certainly haven’t – I’m not sure – is if I was to order them to put in a defence and/or counter-claim by, say, next Wednesday, subject to your availability, I would list it – see if I can get a listing for Monday because I’ve just had a two-week case that has gone off so – I don’t know what your availability is. And I would make default orders, in the sense that they would be self-executing. If they – and I would order you costs of today, including your hearing fees and things and, if they fail to do any of that, well, you will get your default, including your declaration.
Now, that’s my thought on the matter. If you – and that may be better because what I think will happen is that, if I do what you’re going to ask me to do, and I do have some sympathy with you, it will either get set aside or they will may go to the Supreme Court because there are laws to say – well, look, these people have had chances, I know, but to then – you don’t know. Having said that, that’s all I want to say and you can tell me what you want and I will then obviously think about it, but it’s an unpleasant situation.

[23]VCAT Transcript (25 January 2017), 3.

Even though the letter of 24 January 2017 did provide a broad summary of the defensive pleading which was said to then have been filed, confusion then reigned in the VCAT hearing in relation to the defence, as the following exchange indicates:[24]
[24]VCAT Transcript (25 January 2017), 3, 4.

MR McKENZIE: Yes, sir. The situation is that I have had an opportunity to have a discussion with my client. I did say that the tribunal would be minded to be concerned about the way in which this particular respondent has conducted themselves but they had had opportunities and time in circumstances. My instructor tells me that some document was filed yesterday with the registry. We haven’t been served with anything.
MR DAVIS: Well, I don’t think I know about that document. I don’t think it’s on the file, that I’m aware. There certainly is a defence, but that – there’s an amended points of claim but that’s last August. So I don’t think that’s the one we’re talking about. And I don’t know - - -
MR McKENZIE: No. We haven’t amended our points of claim, sir. We

only - - -
MR DAVIS: No, no, sorry. Amended defence and setoff was filed, but that was last August, and I note that in - - -
MR McKENZIE: We haven’t – it must be in the wrong proceeding or wrong heading, sir.
MR DAVIS: Well, there could be all sorts of things but because there was all sorts – I’ve been to Shepparton and there were all sorts of files on my desk – and some of them seemed to have nothing to do with me – this morning.
MR McKENZIE: Right.
MR DAVIS: And I was having – but it was only on 24 January, which was yesterday, that Senior Member Riegler made the order but, more importantly, it was only on 19 January, which was last week, that - - -
MR McKENZIE: Deputy President - - -
MR DAVIS: - - - made the order, listed for one day commencing – but it looked to me like more than a one-day matter, having quickly looked at it, but you might know more about it than me, but it looked a lot more than one day.
MR McKENZIE: It depended what the defence was, and if there was one.
MR DAVIS: I mean, if it was a highly fought matter, I don’t think we would do this in a day, but - - -
MR McKENZIE: To the extent that – we either served the notice or we didn’t, and we therefore have the – have taken up the option or we haven’t, we say it’s a fairly simple matter from our point of view.

It will be recalled that the 24 January 2017 letter says quite clearly that a “Notice to Defend the points of claim” had been sent to the Registry and, additionally, states that: “The Plaintiff’s claim is based on a renewal of the lease, which the Respondent alleges is a fraudulent renewal of a Lease”. Consequently, one might think it tolerably clear that any suggestion on the part of the applicant in the VCAT proceedings that the live issues between the parties were confined, simply, to whether notices had been served under the renewed lease was not correct and that there are other, serious, issues to be argued and determined.

So, in the absence of any appearance by the respondent to the VCAT proceedings, the Plaintiff in these proceedings, and knowing from the 24 January 2017 letter that serious issues were raised by way of defence, it might be thought that the appropriate course, having regard to the clear uncertainty as to whether the relevant defensive pleading had been located, would have been to make further inquiries and certainly not proceed further until that document had been found. Moreover, the Senior Member’s acknowledgement that there were all sorts of files on his desk on return from Shepparton and some appeared to have been misfiled, would suggest that further inquiries should have been made—again, particularly, having regard to the general nature of the defence having been described in the 24 January 2017 letter. In any event, rather than make further inquiries, the Senior Member was urged to “press on”, as the following exchange indicates:[25]
[25]VCAT Transcript (25 January 2017), 5.

MR DAVIS: Now, I just don’t know – I really don’t know what – my inclination is that I won’t be doing you any favours if I just make a straight order today.
MR McKENZIE: My instructions, sir, are these. I discussed with my client the wariness that the tribunal member would have, particularly in these sort of circumstances, and I said what might happen is that, if we press to go on, we might be allowed to go on, but we will run the risk that someone will then seek to set it aside. At present, because of the way their dealings with case legal and this fellow Raj who has been – Niren Raj who is the reference in that correspondence - - -
MR DAVIS: I can’t understand what they’re doing in Brisbane. I mean, there’s when I was at the bar there were about 4 or 5 hundred barristers at the bar. There’s probably triple that now, or quadruple – you can tell me – but – and I’m sure they could get someone here to appear, if they really needed to.
MR McKENZIE: They’ve been down here with counsel earlier on - - -
MR DAVIS: So I’m – I’ve got no – I’ve got no sympathy with the fact that Mr Raj – or Ms Raj is in Brisbane.
MR McKENZIE: Yes, sir.
MR DAVIS: I think that’s of no consequence.
MR McKENZIE: Yes, sir. And - - -
MR DAVIS: And I do worry about this because not everyone may take the same view that I take and - - -

The hearing then proceeded and John Matthew O’Halloran was sworn and examined by the applicant’s counsel. Mr O’Halloran is an hotelier and the sole director of the applicant company, the Defendant in these proceedings. His evidence, fairly summarised, was directed to the giving and service of the notice of exercise of option document because, as the following exchange indicates, when the applicant’s counsel sought to take matters to the deed of renewal of lease, he was cut off by the Senior Member:[26]
[26]VCAT Transcript (25 January 2017), 10–1.

Mr McKENZIE: At this stage, if I can take you to the deed of renewal of lease, which is the second document. I think that’s attached to the file ….. if it’s not on - - -
MR DAVIS: Do I need that? Do I need this evidence?
MR McKENZIE: Possibly not, sir, because it’s not …..
MR DAVIS: I don’t think I need that. It’s not being contested.
MR McKENZIE: In those circumstances that will complete the evidence, sir ….. exercise the opportunity - - -
MR DAVIS: Okay. Thank you very much?---Thank you, sir.
[MR O’HALLORAN] WITHDREW

Almost immediately after Mr O’Halloran’s evidence concluded, Senior Member Davis delivered his reasons for decision. The critical part of those reasons, as revised, are as follows:[27]

Yesterday afternoon the respondent requested an adjournment because, apparently, its legal representatives were in Brisbane. Senior Member Riegler told the registry to communicate with the respondent’s solicitor, informing him that there would be no adjournment, and he could remake an application before me today. The respondent has not shown before me today. I decided that the matter should proceed to hearing undefended, as the respondent was not here and orders have not been complied with. I have since heard evidence from Mr O’Halloran’s solicitor for the applicant.
He has informed me that a notice of renewal of option was sent, which appears to renew the option that the applicant is seeking in terms of a declaration that is sought. That is a declaration by letter dated 27 May 2016 referred to in paragraph ten of the applicant’s exercise of option for a further term commencing dated 2 December 2016. Further, it is clear on the material which I have read that the applicant is seeking specific performance of an agreement of a lease, including an order that the respondent prepare, execute and provide to the applicant a lease concerning the premises for a period of two years for a period of 2 September 2016 to 1 September 2021, on the terms of the lease as viewed by the renewal lease and containing six options for further terms for five years.
Thus, I am satisfied that the applicant has made out its case. I am satisfied that the applicant has been caused a disadvantage in this matter pursuant to s 78(1)(g) of the Victorian Civil and Administrative Tribunal Act. That disadvantage has been caused by the respondent failing to attend the hearing this day, as well as a disadvantage in failing to comply with orders of this tribunal. As a result, I intend to make the orders sought by the applicant. And I will make an order for the hearing fee, as I am allowed to do. And I believe that there has been a degree of vexatiousness in this matter. And I think that, as a result of that, insofar as the hearing fee is concerned, section 92 of the Retail Leases Act 2003 is complied with in the sense that the applicant is entitled to that fee. And I will make those orders accordingly.

[27]Revised Reasons, Victorian Civil and Administrative Tribunal, Senior Member R. Davis, Matter No. BP1247 of 2016, River View Pty Ltd v Primrose Meadows Pty Ltd Melbourne, 25 January 2017 [10.38am] p 1.

As will be observed from these reasons, the Tribunal did not address any aspect of the issues raised by the Plaintiff in its defensive pleadings. Neither did it address any of the matters raised in the 24 January 2017 letter with respect to the adjournment application. Perhaps the latter is not surprising because the transcript indicates that, at the time these reasons were delivered—though apparently revised later—the Senior Member had not even addressed or dealt with the adjournment application. At the conclusion of the Tribunal’s dealing with substantive matters and costs, the applicant’s counsel sought to address the adjournment issues, as the following exchange indicates:[28]
[28]VCAT Transcript (25 January 2017), 15–7.

MR McKENZIE: Yes, sir. There’s only one aspect that I might raise with the tribunal, which - - -
MR DAVIS: Yes.
MR McKENZIE: I’m looking at the order that was made by Senior Member Riegler on 24 January.
MR DAVIS: When was this order made?
MR McKENZIE: It was 24 January, yesterday’s order by - - -
MR DAVIS: Yes.
MR McKENZIE: - - - the Senior Member, and it said:
The plaintiff’s application to the ….. shall be heard before the presiding member.

Now, I don’t think we got a formal order to say that the plaintiff – sorry, the respondent’s application – that the respondent has not appeared, and therefore no application has been - - -
MR DAVIS: Well, I think I’ve said the fail to appear. I didn’t – that’s order 1.
MR McKENZIE: Yes.
MR DAVIS: ….. now, it does mention about by telephone, but I don’t think there was any telephone number given, and it was never asked. I perhaps should note – I will put a note on the order.
MR McKENZIE: So I would just like to tell you that in case they come back and no longer - - -
MR DAVIS: Yes. Noted that while, pursuant to order 2 of the orders of 24 – it is noted that while, pursuant to order 2 of the orders of 24 January 2017, the applicant was given leave to appear by telephone on this day, no application to appear by telephone was made, and no details were provided.
MR McKENZIE: I’m troubled, sir, with the difficulty we’ve had with these people. The letter from Case Legal, 24 January, does identify a responsible person and a telephone number.
MR DAVIS: Well, do you think we should have rung them?
MR McKENZIE: I don’t think it was required that we ring them, but - - -
MR DAVIS: Well, that’s the normal way it happens.
MR McKENZIE: But when they say they’re given leave to appear by telephone at the return of its application to vacate the hearing, in effect, we called them, they made no telephone call and no number was given.
MR DAVIS: Well, that’s why I’m saying no details were provided.
MR McKENZIE: Well, I was troubled by that, bearing in mind that they wrote on the 24^th – they actually said they won’t be here, and they don’t intend to be available to deal with it, but that’s all they say.
MR DAVIS: Well, do you want me to say that specifically? Well, I think that I said there was no application to appear by telephone, no details were provided. Do you want me to cross out the words “no details provided”?
MR McKENZIE: I’m not – I was concerned …..
MR DAVIS: All right. I will cross those words out.
MR McKENZIE: ….. cause me some difficulty because - - -
MR DAVIS: I think - - -
MR McKENZIE: Yes, thank you, sir.
MR DAVIS: All right. And if it comes to the point where you argue it, well, that’s something you can - - -
MR McKENZIE: Have to deal with.
MR DAVIS: I’m sure you will attend with that.
MR McKENZIE: Yes, sir.
MR DAVIS: I mean, we all know, as I’ve said, when you start taking bets on what’s likely to happen.
MR McKENZIE: Exactly.
MR DAVIS: All right. Well, if that’s satisfactory, I will - - -
MR McKENZIE: Thank you, sir.
MR DAVIS: I will make those orders.

Thus, the position with respect to the adjournment application is, in my view, that it was never properly dealt with having regard to the contents of the 24 January 2017 letter from the Plaintiff’s solicitor, which was clearly before the Tribunal. Moreover, on the basis of Senior Member Riegler’s orders made on 24 January 2017 and, indeed, as a matter of logical sequence, the adjournment application should have been dealt with properly and resolved, with reasons, prior to any discussion of, much less embarking upon the substantive hearing of the matter. Neither the Senior Member’s revised reasons, nor the material set out in the VCAT transcript provides any such reasons.

Nature of natural justice — or procedural fairness

In Warehouse Group v Bevendale (No 2),[29] Balmford J discussed natural justice generally and also in the context of an application to adjourn a hearing to enable a party to present its case. Her Honour said:[30]
[29][2002] VSC 291.
[30][2002] VSC 291 [38], [39], [42], [43], [54], [55], [57], [61].

38. In National Companies and Securities Commission v News Corp Ltd,[31] Gibbs CJ quoted with approval the following passage from the judgment of Tucker LJ in Russell v Duke of Norfolk:[32]
[31](1984) 156 CLR 296 at 311–2.
[32][1949] 1 All ER 109 at 118.
The requirements of natural justice must depend on the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject-matter that is being dealt with, and so forth.

Gibbs CJ went on to say:
The authorities show that natural justice does not require the inflexible application of a fixed body of rules; it requires fairness in all the circumstances, which include the nature of the jurisdiction or power exercised and the statutory provisions governing its exercise. Moreover, as Stephen J said in Salemi v MacKellar [No 2] (1977) 137 CLR 396 at 444, the rules of natural justice “may also vary from case to case although each be conducted before one and the same tribunal or person”.

39. The argument before me on this issue was conducted on the basis that the relevant rule of natural justice was the requirement that a person be given a reasonable opportunity to present a case before a decision is made against that person. …
…
42. The leading Victorian case on the exercise of the discretion to grant an adjournment is McColl v Lehmann,[33] where Kaye J said:[34]
[33][1987] VR 503.
[34][1987] VR 503 at 506.
…
The decision whether to accede to or refuse the application for adjournment of the hearing was within the Magistrate’s discretion. An appellate court will rarely interfere with a trial judge’s exercise of discretion upon such an application: Bloch v Bloch (1981) 55 ALJR 701, at p. 703; 37 ALR 55 at pp. 58–9, per Wilson J. However, the result of refusal to grant an adjournment might be to prevent the party seeking it from presenting his case or defence; in some circumstances such result could constitute an injustice. This is so because it is essential to the fair trial of an action – whether civil or criminal – that all parties are able to present their case as fully as necessary and within the limits of the law. To overcome an injustice so brought about or threatened, an appellate court will interfere with the trial judge’s discretion. This principle was expressed by Atkin LJ in Maxwell v Keun [1928] 1 KB 645, at p. 653, as follows: “I quite agree the Court of Appeal ought to be very slow indeed to interfere with the discretion of the learned judge on such a question as an adjournment of a trial, and it very seldom does do so; but, on the other hand, if it appears that the result of the order made below is to defeat the rights of the parties altogether, and to do that which the Court of Appeal is satisfied would be an injustice to one or other of the parties, then the Court has power to review such an order, and it is to my mind, its duty to do so.”
In Bloch v Bloch Wilson J, with whose judgment Gibbs CJ, Murphy and Aickin JJ agreed, described the passage cited as “the rule in terms which have won general acceptance”. …

His Honour went on at 507 to cite from the judgment of Sir Jocelyn Simon P in Walker v Walker:[35]
[35][1967] 1 All ER 412 at 414; [1967] 1 WLR 327 at 330.
Sir Jocelyn Simon P ... referred to the twofold effect of the authoritative guidance provided by the Court of Appeal in Maxwell v Keun in these terms; ‘First, where the refusal of an adjournment would result in a serious injustice to the party requesting the adjournment, the adjournment should be refused only if that is the only way that justice can be done to the other party; and, secondly, that although the granting or refusal of an adjournment is a matter of discretion, if an appellate court is satisfied that the discretion has been exercised in such a way as would result in an injustice to one of the parties, the appellate court has both the power and the duty to review the exercise of the discretion.’

43. Those extracts are echoed in the well-known passage from the judgment of Dawson, Gaudron and McHugh JJ in State of Queensland vJL Holdings Pty Ltd[36]… Their Honours said:
[36](1997) 189 CLR 146 at 155.
In our view, the matters referred to by the primary judge were insufficient to justify her Honour’s refusal of the application by the applicants to amend their defence and nothing has been made to appear before us which would otherwise support that refusal. Justice is the paramount consideration in determining an application such as the one in question. Save in so far as costs may be awarded against the party seeking the amendment such an application is not the occasion for the punishment of a party for its mistake or for its delay in making the application. Case management, involving as it does the efficiency of the procedures of the court, was in this case a relevant consideration. But it should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties.

While that passage does not relate directly to an application for an adjournment, it is equally apposite in that context.

…
54. In the context of the passage cited above from JL Holdings,[37] it should be noted that the Tribunal’s reasons for refusing the application for an adjournment did not refer to case management or to the efficiency of the procedures of the Tribunal. However, there is implicit in the Tribunal's Reasons an assumption that there is a prima facie principle that adjournments should not be granted. That assumption must be grounded in the underlying principle of case management that it is the duty of the court to keep the proceedings moving.
[37]Warehouse Group v Bevendale (No 2) [2002] VSC 291, [43].
55. There also appears in the Tribunal’s Reasons an element of punishment of Warehouse for what the Tribunal perceived to be the breadth of the request for particulars, its misapprehension as to the procedure of the Tribunal, and its failure to apply for a directions hearing; and of rewarding Bevendale for not applying for a directions hearing. Like an application to amend a pleading, an application for an adjournment “is not the occasion for the punishment of a party for its mistake”.[38]
[38]Warehouse Group v Bevendale (No 2) [2002] VSC 291, [43] extracting State of Queensland vJL Holdings Pty Ltd (1997) 189 CLR 146 at 155.
…

57. Mr Wright … referred to s98(1)(d) of the VCAT Act, providing that the Tribunal:
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.

He submitted that the effect of that provision was that “there is a prima facie statutory obligation on the Tribunal to hear the case on the appointed day in order to fulfil the requirement to act with such speed as the circumstances permit and that can only be displaced by a compelling reason why it ought not to proceed on the appointed day”. However, that submission is untenable. S98(1)(d) is a balancing provision. If Mr Wright’s interpretation were accepted, it would be more difficult to obtain an adjournment in the Tribunal than in a court; a distinction which would be impossible to justify. I note that the Tribunal, in giving extensive reasons for its decision not to grant an adjournment, did not rely on that provision, which in any case cannot override the requirement of s98(1)(a) of the VCAT Act that it is bound by the rules of natural justice.

…
61. I have come to the conclusion that in all the circumstances of this case the failure of the Tribunal to grant the application for an adjournment constituted a denial of natural justice to Warehouse. …

[Plaintiff’s emphasis]

In Hallett v SLA Partners Pty Ltd,[39] the Court of Appeal considered the case of a refused adjournment application in the County Court. In allowing the appeal, Eames JA said:[40]
[39][2005] VSCA 318.
[40][2005] VSCA 318, [3], [4], [15].

3. To obtain leave the applicant must show that the orders are attended with sufficient doubt to warrant the grant of leave and that substantial injustice will result if the orders are allowed to stand: see Dodoro v Knighting.
4.The decision to refuse an adjournment is the exercise of a discretion which will only be overturned where the exercise of the discretion has been tainted by error of fact or law or is so plainly unreasonable or unjust as to manifest error: see House v R; Mobilio v Balliotis.
…
15. … A decision to refuse an adjournment is not one that would readily be overturned on appeal, but in this case the impact of refusing the adjournment was substantial, leading as it did to a relatively unprepared and unsuccessful response to the application to dismiss the proceedings. In my view there was no significant prejudice to the respondent which could not have been met by costs orders in allowing the adjournment, and once it was accepted that the solicitors representing the applicant had not received notice of the application until the last minute, there were strong reasons why an adjournment ought to have been granted. In saying that I recognise that the solicitors for the applicant expected a summons to issue sooner rather than later. None the less, requiring the applicant's counsel to defend the dismissal application, when he was quite unprepared to respond to it, and in circumstances where there was no prejudice to the respondent if an adjournment had been granted, was tantamount to a denial of natural justice. In my opinion the respondent’s solicitor ought to have agreed to the request by Mr Hallett’s solicitor for an adjournment of the hearing of the summons. The fact that he had only received very late notice of the summons seems not to be disputed. However irritating that may have been to the respondent and its solicitors, a short adjournment would have avoided the incurring, on both sides, of considerable additional cost and of further delay.

[Plaintiff’s emphasis; citations omitted]

Maxwell P expressed similar views in Hallett v SLA Partners Pty Ltd:[41]
[41][2005] VSCA 318, [17]–[23].

17.I agree, and I would add only the following additional remarks of my own.
18. It appears not to be widely appreciated that the rules of natural justice apply with as much rigour to decisions of courts of law as they do to administrative decisions. This is the second time in a week when I have had to deal with an issue where solicitors refused to agree to a reasonable request for adjournment. It is axiomatic that a party required to respond to a proceeding, an application, a summons, is entitled to reasonable notice of that application and a reasonable opportunity to prepare his or her case in answer to it. That is a bedrock principle of justice and it is vitally important that every practitioner be aware of it.
19. Leaving aside for the moment the inconvenience and cost which the respondent’s refusal of the adjournment has occasioned, the refusal of the adjournment appears to me to betray a failure to appreciate that fundamental principle. The solicitors for the respondent were informed, by a person whose credibility they had no reason to doubt, that he had just received the papers for an application to be heard the following day. He requested an adjournment for 14 days and it was refused.
20. The reasons given in the affidavit of the solicitor in question are consistent with the mistaken position which the respondent has adopted throughout in relation to the question of adjournment. That is, the respondent has mistakenly treated its quite legitimate complaints about what is said to be Mr Hallett’s non-compliance with procedural rules of the County Court as somehow affecting his bedrock entitlement to natural justice. Mr Hallett may well have been egregiously in default of County Court orders. He may have gone overseas in a way which would be capable of being characterised as showing indifference to the proceeding that he was supposedly conducting. But these matters were nothing to the point. No prior default on his part could in any way have disentitled him to procedural fairness in relation to the application to dismiss.

21. It is a matter of real concern that this principle appears not to have been appreciated even as late as today. The respondent still maintains in this Court that to have allowed Mr Hallett an adjournment would have enabled him ‘to achieve by stealth’ an extension of time with respect to the pleadings. That submission confuses two quite different concepts. What the applicant wanted, and what he was entitled to, was reasonable time to prepare to meet a very serious application — of which his solicitor had just received notice — to dismiss his proceeding. That had nothing to do with getting more time to file a pleading. The time was required to enable him to deal with an attack based on his non-compliance, which may turn out to have been wholly justified. It is no more relevant to say in opposition to this application for leave to appeal that there had been default than it was relevant to say that in opposition to the adjournment application at the time. Nor, I would add, is it in any way relevant to raise on this application an argument that there were costs orders unpaid and that this was another reason why the County Court judge should have dismissed the proceeding. To repeat, the plaintiff's application for adjournment did not raise the question of the merits of the application to dismiss the proceeding. The only issue was whether the applicant required time in order to exercise his right at law to respond to the application.

22. For the reasons given by Eames JA, it is clear that the plaintiff was not given that opportunity and that there was a breach of natural justice. The decision dismissing his proceeding must therefore be set aside because it was arrived at in breach of natural justice.
23. … [T]here will be no grant of a certificate. The costs of the appeal have been entirely occasioned by the respondent’s conduct of the adjournment application and of this appeal. For the reasons I have given, the respondent has mistaken the nature of the adjournment application and the appeal and the principles in issue.

[Plaintiff’s emphasis; citations omitted]

A slightly different situation emerged in Beling v Dimkovski & Anor,[42] where an application was made during the trial hearing in order to enable the respondent to locate relevant bank statements. The Tribunal had rejected the application in circumstances where Smith J took a different view on appeal on the basis of the requirements of natural justice. His Honour said:[43]
[42](2006) 24 VAR 152.
[43](2006) 24 VAR 152 at 153–4.

7. … Thus, it seems to me, the rejection of the request for an adjournment denied Mr Beling the opportunity to lead significant evidence. …
…
9. … The tribunal expressed the view that it was “incumbent upon you to bring to that hearing all the evidence that is required to support your claim and to have it ready for the day.” …
10. Accepting those points, was there a denial of natural justice and a denial of a reasonable opportunity to call evidence resulting from the refusal to grant an adjournment to Mr Beling to collect the evidence required?
11. I have come to the conclusion that there were such denials. As noted above, the evidence was significant in respect of two key issues. Even if it be assumed that the issue arose because of sloppy preparation by Mr Beling, he sought an opportunity to lead the necessary evidence and that opportunity could have been given without detriment to the defendants by an appropriate costs order (s 109(3)(a) VCAT Act 1998). I suggest that what arose before the tribunal is the sort of problem that arises in jurisdictions intended to be simple and speedy. Such an approach is necessary to enable small claims to be dealt with at a minimum of cost. But the lack of formality carries with it the danger that parties, on occasions, will not have anticipated what may be an issue or the evidentiary weaknesses in their cases. Natural justice and a reasonable opportunity to call evidence require that adjournments be given in appropriate cases on appropriate terms. This was such a case.

[Plaintiff’s emphasis]

The position indicated and re-affirmed in the authorities to which reference has been made is also emphasised in the judgment of Nettle J (as his Honour then was) in Collection House Limited v Taylor,[44] where his Honour particularly emphasizes that the paramount consideration is to do justice between the parties and that applications for adjournment are not an occasion for punishment of a party for its mistake or delay in making its application. More particularly, his Honour said:[45]
[44](2004) 21 VAR 333.
[45](2004) 21 VAR 333 at 340–1 [20]–[25].

20. The tribunal is bound by the rules of natural justice and bound as part of the requirement to afford natural justice to afford each party a reasonable opportunity to present his or her case. Failure to do so is an error of law and possibly also jurisdictional error. But it is not every breach of the rules of natural justice that will render a decision invalid. The court may refuse relief if satisfied that what appears on face to have been a denial of natural justice could have had no bearing on the outcome.
21. As has already been recorded, Mr Easy made a suggestion late in the hearing that he be given an adjournment to obtain further evidence about the nature of the secondment arrangements. The appellant now contends that Mr Easy’s suggestion constituted a request for an adjournment and that the member’s response, that he was loathe to grant further time, was tantamount to a refusal. Thus it is said that the appellant was denied an opportunity properly to present its case.
22. The respondent submits that there are two answers to the appellant’s contention. The first is that the appellant should have anticipated that the secondment arrangements were likely to be a significant issue in the case and had plenty of opportunity in advance of the hearing to prepare its evidence accordingly, and hence that the appellant was given a proper opportunity to present its case. ...
23. I do not think the respondent’s first answer to be very persuasive. It is not to the point that the appellant might have anticipated the need for evidence on the secondment arrangements. Applications for adjournments are not to be decided on the basis of whether a party could have anticipated the requirement which gives rise to a need for adjournment. It is not an occasion for punishment of a party for its mistake or for its delay in making its application. The paramount consideration is to do justice and thus to enable the parties to present their case as fully as necessary within the limits of the law. Delay of itself is rarely a basis for refusal.
24. Here it became apparent in the course of the hearing that the member regarded the nature and terms of the secondment arrangements as a significant issue. As was later to emerge from the member’s written reasons for decision, the member also thought to be significant the fact that the appellant did not provide any documentary evidence of the arrangements. In those circumstances, the refusal of an adjournment to allow the appellant to adduce written evidence was likely to create an appreciable risk of injustice. Yet the only apparent reason for the member’s reticence to allow more time was the minor inconvenience of delay.
25. It goes without saying that any decision to allow or to refuse an adjournment was a matter in the member’s discretion and that it was the sort of exercise of discretion with which an appellate court is hesitant to interfere. But an appellate court will interfere if satisfied that the discretion has been exercised in such a way as to result in an injustice to one of the parties. In this case I think that it was.

[Plaintiff’s emphasis; citations omitted]

Application of natural justice principles in this appeal

The contents of the Proposed Notice of Appeal have, for convenience, been set out in full previously[46] and so it is not necessary to again set out or refer in any detail to the grounds of appeal. It is sufficient for present purposes to observe that the grounds raise, in substance, a single question — namely, whether the Tribunal denied the Plaintiff natural justice in failing to properly consider its application for an adjournment of the hearing of the matter and, in the process, balance the prejudice to the Plaintiff in denying it the right to defend against the factors militating in favour of dismissal.
[46]See above, [13].

I accept, as contended by the Plaintiff, that there are four propositions of law that are critical in this respect. These propositions very much derive from the authorities to which reference has been made and extracts from the judgments which have been set out at some length. Nevertheless, this appeal raises important matters and it is desirable, at the risk of some repetition, to make specific reference to some passages in the judgments in these authorities which have already been set out in the broader context of the judgments in which they are to be found. It is to these four propositions of law which I now turn in some detail.

First, reference is made to s 78(2) of the VCAT Act which provides as follows:

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

…

(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; or
(b)if the party causing the disadvantage is not the applicant—
(i)determine the proceeding in favour of the applicant and make any appropriate orders; or
(ii)order that the party causing the disadvantage be struck out of the proceeding;

(c)make an order for costs under section 109.

…

It will be seen from these provisions that a precondition to the exercise of the power under s 78(2) is the Tribunal’s consideration, as required by sub-s 78(1) of the question whether a party to a proceeding is “conducting the proceeding in a way that unnecessarily disadvantages another party to the proceeding” and, as the authorities indicate, then to consider and balance the prejudicial effect of preventing parties such as the Plaintiff from defending its case on the merits. In this respect, reference should also be made to the provisions of ss 97 and 98(1)(a) of the VCAT Act, which relevantly provide:

97       Tribunal must act fairly
The Tribunal must act fairly and according to the substantial merits of the case in all proceedings.
98       General procedure
(1)       The Tribunal—
(a)is bound by the rules of natural justice;

…

These provisions have been considered in a number of authorities, particularly Bell Corp Victoria Pty Ltd v Stephenson[47] and Gevah Constructions Pty Ltd v GRN Australia Pty Ltd.[48] It is to these cases that I now turn.

[47](2003) 20 VAR 280 at 298 [51]–[52].

[48][2006] VSC 266, [28].

In Bell Corp Victoria Pty Ltd v Stephenson, Ashley J said:[49]
[49](2003) 20 VAR 280 at 298 [51]–[52].

51In my opinion, bearing in mind the submissions of counsel directed to the provision here under scrutiny, the subject matter, scope and purpose of the Act show that if the tribunal forms a belief concerning the matters required by s 78(1)(a) of the Act the following matters must be considered in the exercise of the discretion under subs (2):
•The subject matter of the belief formed by the tribunal for the purposes of subs (1).
•The nature of the power conferred by subs (2) in the context of the armoury of power conferred upon the tribunal by ss 75-77. By this I mean, particularly, that s 78(2) operates in circumstances which at least do not require that the proceeding be frivolous, vexatious, misconceived, lacking in substance or otherwise an abuse of process; and which at least do not require that the circumstances demonstrate want of prosecution. Put another way, the subsection contemplates the making of an order with very serious consequences in circumstances that very probably would not fit the templates set up by ss 75 and 76. Whilst it can rightly be said that the creation of such a remedy in the situation contemplated by s 78(1) shows that an intention that orders be made in some cases where the situation exists, it should also be firmly concluded, in statutory context, that the remedy should be of last resort and not first resort.
•The requirement imposed upon the tribunal by s 97. That section should be considered to import the concept that, ordinarily, the interests of case management should not be employed so as to shut a party out of litigating its case. The ultimate aim of the tribunal, as much as of a court, must be the attainment of justice in respect of issues joined.
•The requirement imposed by s 98(1)(a), to the extent that a party should ordinarily be given an opportunity to be heard upon the merits. That opportunity is not absolute. It may be lost without breach of the rules of natural justice. But the consequence that the making of an order under s 78(2) will deprive a party of an opportunity to be heard upon the merits is surely relevant to exercise of the discretion whether to so order.
•The power to make costs orders conferred by ss 109(2)(3) and 78(2)(c). The last-mentioned, it appears, might be exercised even though no order is made under s 78(2)(a) or (b).

52It may be that in a particular case the tribunal will consider some other matter to be relevant. It does not follow from the fact that only some matters must be considered that other matters are necessarily irrelevant. Other matters will only be irrelevant if they infringe an implied limitation on the factors to which regard may legitimately be held. Any such limitation must be found in the subject matter, scope and purpose of the statute.

The position was again emphasised by Hargrave J in Gevah Constructions Pty Ltd v GRN Australia Pty Ltd, where his Honour said:[50]
[50][2006] VSC 266, [28].
28.As to the matters which the Tribunal is bound to take into account in exercising its discretion under s. 78(2), Ashley J stated:
“In my opinion, bearing in mind the submissions of counsel directed to the provision here under scrutiny, the subject matter, scope and purpose of the Act show that if the tribunal forms a belief concerning the matters required by s 78(1)(a) of the Act the following matters must be considered in the exercise of the discretion under subs (2):
·The subject matter of the belief formed by the tribunal for the purposes of subs (1).
·The nature of the power conferred by subs (2) in the context of the armoury of power conferred upon the tribunal by ss 75-77. By this I mean, particularly, that s 78(2) operates in circumstances which at least do not require that the proceeding be frivolous, vexatious, misconceived, lacking in substance or otherwise an abuse of process; and which at least do not require that the circumstances demonstrate want of prosecution. Put another way, the subsection contemplates the making of an order with very serious consequences in circumstances that very probably would not fit the templates set up by ss 75 and 76. Whilst it can rightly be said that the creation of such a remedy in the situation contemplated by s 78(1) shows that an intention that orders be made in some cases where the situation exists, it should also be firmly concluded, in statutory context, that the remedy should be of last resort and not first resort.
·The requirement imposed upon the tribunal by s 97. That section should be considered to import the concept that, ordinarily, the interests of case management should not be employed so as to shut a party out of litigating its case. The ultimate aim of the tribunal, as much as of a court, must be the attainment of justice in respect of issues joined.
·The requirement imposed by s 98(1)(a), to the extent that a party should ordinarily be given an opportunity to be heard upon the merits. That opportunity is not absolute. It may be lost without breach of the rules of natural justice. But the consequence that the making of an order under s 78(2) will deprive a party of an opportunity to be heard upon the merits is surely relevant to exercise of the discretion whether to so order.
·The power to make costs orders conferred by ss 109(2)(3) and 78(2)(c). The last-mentioned, it appears, might be exercised even though no order is made under s 78(2)(a) or (b).

It may be that in a particular case the tribunal will consider some other matter to be relevant. It does not follow from the fact that only some matters must be considered that other matters are necessarily irrelevant. Other matters will only be irrelevant if they infringe an implied limitation on the factors to which regard may legitimately be held. Any such limitation must be found in the subject matter, scope and purpose of the statute.”[51]

It is significant in the present context that both Ashley J and Hargrave J referred to these matters as “relevant considerations” that were mandatory in the context and sense of judicial review.

[51][2003] VSC 255, [51]–[52].

Secondly, the “natural justice” requirement under s 98(1)(a) of the VCAT Act required the Tribunal to weigh the clearly drastic effect on the Plaintiff in proceeding with the substantive hearing of the matter with any prejudice which would be likely suffered by the Defendant. In this context, Balmford J, in Warehouse Group v Bevendale (No 2),[52] approved the following statement of principle from the speech of Lord Simon of Glaisdale in Walker v Walker:[53]
[52][2002] VSC 291, [42].
[53][1967] 1 WLR 328 at 330.

First, where the refusal of an adjournment would result in a serious injustice to the party requesting the adjournment, the adjournment should only be refused if that is the only way that justice can be done to the other party; and, secondly, that although the granting or refusal of an adjournment is a matter of discretion, if an appellate court is satisfied that the discretion has been exercised in such a way as would result in an injustice to one of the parties, such appellate court has both the power and the duty to review the exercise of the discretion.

Similarly, in Hallett v SLA Partners Pty Ltd, Eames JA said:[54]
In my view there was no significant prejudice to the respondent which could not have been met by costs orders in allowing the adjournment, and once it was accepted that the solicitors representing the applicant had not received notice of the application until the last minute, there were strong reasons why an adjournment ought to have been granted. In saying that I recognise that the solicitors for the applicant expected a summons to issue sooner rather than later. None the less, requiring the applicant’s counsel to defend the dismissal application, when he was quite unprepared to respond to it, and in circumstances where there was no prejudice to the respondent if an adjournment had been granted, was tantamount to a denial of natural justice.
[Plaintiff’s emphasis]

As contended by the Plaintiff, the balancing exercise is not dissimilar to that undertaken by a court considering whether to grant an interlocutory injunction. Nevertheless, this analogy is not perfect by any means, but does emphasise the point that competing interests and prejudices need to be balanced — something which clearly did not occur in the proceedings before the Tribunal the subject of this appeal.

[54][2005] VSCA 318, [15].

Thirdly, a party will not ordinarily be punished for breach of previous interlocutory orders. Thus, in Hallett v SLA Partners Pty Ltd, Maxwell P said:[55]
[55][2005] VSCA 318, [20].

The respondent has mistakenly treated its quite legitimate complaints about what is said to be Mr Hallett’s non-compliance with procedural rules of the County Court as somehow affecting his bedrock entitlement to natural justice. Mr Hallett may well have been egregiously in default of County Court orders. He may have gone overseas in a way which would be capable of being characterised as showing indifference to the proceeding that he was supposedly conducting. But these matters were nothing to the point. No prior default on his part could in any way have disentitled him to procedural fairness in relation to the application to dismiss.

Similarly, in Beling v Dimlovski & Anor, Smith J said:[56]
Even if it be assumed that the issue arose because of sloppy preparation by Mr Beling, he sought an opportunity to lead the necessary evidence and that opportunity could have been given without detriment to the defendants by an appropriate costs order (section 109(3)(a) VCAT Act 1998). … Natural justice and a reasonable opportunity to call evidence require that adjournments be given in appropriate cases on appropriate terms. This was such a case.

These statements reinforce and echo the strong statement by Nettle J (as his Honour then was) in Collection House Limited v Taylor, where his Honour said:[57]
It is not an occasion for punishment of a party for its mistake or for its delay in making its application. The paramount consideration is to do justice and thus to enable the parties to present their case as fully as necessary within the limits of the law.

[56](2006) 24 VAR 152 at 154 [11].

[57](2004) 21 VAR 333 at 341 [23].

Fourthly, to the extent case management principles and considerations of scarce Court resources and the interests of other litigants in access to those resources might be said now to qualify these principles, they do not override them. Instead, the position which, in my view, is made clear in Aon Risk Services Australia Ltd v Australian National University[58] is that they are an additional factor to take into account, but in all the circumstances and having regard to the fundamental importance of doing justice between the parties. Thus, in Aon, Gummow, Hayne, Crennan, Keifel and Bell JJ said:[59]
[58](2009) 239 CLR 175.
[59](2009) 239 CLR 175 at 211–2 [93]-[95].

93.Rule 21(2)(b) indicates that the rules concerning civil litigation no longer are to be considered as directed only to the resolution of the dispute between the parties to a proceeding. The achievement of a just but timely and cost-effective resolution of a dispute has an effect upon the court and upon other litigants. In Sali v SPC Ltd Toohey and Gaudron JJ explained that case management reflected:[60] “[t]he view that the conduct of litigation is not merely a matter for the parties but is also one for the court and the need to avoid disruptions in the court’s lists with consequent inconvenience to the court and prejudice to the interests of other litigants waiting to be heard ...”
94.It will be recalled that in J L Holdings the plurality said that nothing in Sali v SPC suggested that principles of case management might be employed “except perhaps in extreme circumstances, to shut a party out from litigating an issue which is fairly arguable”.[61] Their Honours said that case management was not to be seen as an end to itself and that the ultimate aim of the court remained the attainment of justice, even in changing times.[62] In Gale v Superdrug Stores Plc[63] Millett LJ expressed a similar concern, regarding the need to ensure that justice is not sacrificed. Waller LJ, delivering the judgment of the Court of Appeal in Worldwide Corporation Ltd v GPT Ltd,[64] said that such a concern did not pay sufficient regard to the fact that the courts are concerned to do justice to all litigants. Where a party had had a sufficient opportunity to plead his or her case, it may be necessary for the court to make a decision which may produce a sense of injustice in that party, for the sake of doing justice to the opponent and to other litigants.[65]
95.The statement of Waller LJ identifies a fundamental premise of case management. What may be just, when amendment is sought, requires account to be taken of other litigants, not just the parties to the proceedings in question. The statement is consistent with what was said in Sali v SPC, which reflected a proper understanding of case management. The statements in J L Holdings do not reflect such an understanding and are not consistent with what was said in Sali v SPC. To say that case management principles should only be applied “in extreme circumstances” to refuse an amendment implies that considerations such as delay and costs can never be as important as the raising of an arguable case; and it denies the wider effects of delay upon others.

Similarly in Eaton v ISS Catering Pty Ltd & Ors, Neave JA and Hargrave and Dixon AJJA said:[66]
47.In the past, appellate courts more readily accepted that an adjournment should be granted if its refusal would prevent a party making out his or her case.[67] That predisposition must now be qualified in light of the importance which is now accorded to case management principles, following the High Court’s decision in AON,[68] the subsequent enactment of the Civil Procedure Act 2010, and the further authorities mentioned below. Although the ‘overarching purpose’ of the Act and the rules includes the fair and just resolution of disputes, it also includes the efficient and timely resolution of disputes.

[60]Sali v SPC Ltd (1993) 67 ALJR 841 at 849; 116 ALR 625 at 636; and see also at 843-844; 629 per Brennan, Deane and McHugh JJ.

[61]Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 at 154.

[62]Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 at 154.

[63][1996] 1 WLR 1089 at 1098; [1996] 3 All ER 468 at 477.

[64][1998] EWCA Civ 1894.

[65]Worldwide Corporation Ltd v GPT Ltd [1998] EWCA Civ 1894.

[66](2013) 42 VR 635 at 646–7 [47].

[67]See, for example, State of Queensland and Another v JL Holdings Pty Ltd (1997) 189 CLR 146;

Opeka Pty Ltd v Mackie Group Pty Ltd [2003] VSC 183 at [32]–[35].

[68]AON Risk Services Australia Pty Ltd v ANU (2009) 239 CLR 175.

The authorities in this respect were also helpfully drawn together in support of the overall position as I have indicated by Mukhtar AsJ in Furman Constructions (Vic) Pty Ltd v Raju & Anor where his Honour said:[69]
[69][2012] VSC 269, [30]–[34].

31.This court has had occasion to pronounce on the content of the requirement of natural justice in adjournment applications. In Opeka Pty Ltd v Mackie Group Pty Ltd,[70] Justice (now Justice of Appeal) Nettle of this court surveyed the authorities (at that time, before Aon was decided) and summarised the position this way:
[70][2003] VSC 183.
In short the point of these authorities seems to me to be that if the refusal of an adjournment has shut a party out or is likely to have shut a party out of an opportunity to advance a sustainable proposition which may have affected the outcome of the proceeding, the result of the refusal will be seen to constitute a miscarriage of justice and will be set aside. But it is incumbent upon an appellant from a refusal of an adjournment to establish that the effect of the refusal was to deprive him of the opportunity of putting a sustainable proposition that may have affected the outcome of the proceeding.

32.In the subsequent case of Collection House Ltd v Taylor,[71] his Honour on the same issue said this:
[71][2004] VSC 49.
It is not to the point that the appellant might have anticipated the need for evidence ... [a]pplications for adjournments are not to be decided on the basis of whether a party could have anticipated the requirement which gives rise to a need for adjournment. It is not an occasion for punishment of a party for its mistake or for its delay in making its application. The paramount consideration is to do justice and thus to enable the parties to present their case as fully as necessary within the limits of the law. Delay of itself is rarely a basis for refusal.
[citations omitted]

33.The same thinking was taken by the Chief Justice of this court in MacDiggers Pty Ltd v Dickenson. Her Honour said:[72]
Justice is the paramount consideration. Various factors will weigh in the determination of what is just in the circumstances, including of course the ‘litigation strain’ to all involved, the prejudice to the applicant if refused, the prejudice to the respondent if granted, and the appropriateness of a costs order. The decision whether to exercise the discretion to grant an adjournment is not a situation to punish an applicant for any mistake or otherwise but to ensure a fair and reasonable hearing.
[citations omitted]

34.None of this altered by Aon, at least not as a matter of principle. That case establishes, if I may put it in rudimentary terms, that speed and efficiency are essential to a just resolution of disputes and that courts are concerned to do justice to all litigants not just the litigants in the case at hand. As was said earlier in Sali v SPC Ltd[73] (an adjournment case) “what might be perceived as an injustice to a party when considered only in the context of an action between parties may not be so when considered in a context which includes the claims of other litigants and the public interest in achieving the most efficient use of Court resources.”[74]

[72][2008] VSC 576, [65].

[73](1993) 67 ALJR 841.

[74](1993) 67 ALJR 841 at 844.

It is, in my view, a fair summary of the position put and relied upon by the Defendant in this respect that in the VCAT proceedings case management principles were properly given significant importance in the conduct of these proceedings; particularly given the reliance placed by the Defendant on the decision of the High Court in Aon. However, for the reasons indicated, I am of the opinion that neither the decision in Aon nor the other authorities considered support the Defendant’s position, which would have the effect of eliminating or so skewing the balancing exercise in favour of case management principles as to negate the need for any consideration, or any serious consideration, of real prejudice which may be suffered by parties such as the Plaintiff in the present circumstances being prevented from having its case heard as a result of the refusal of an adjournment application in circumstances such as the present. The Defendant also sought to rely on what was said to be, expressly or impliedly, vexatious or egregious conduct on the part of the Plaintiff in the conduct of the VCAT proceedings or, alternatively, in dealings with the Defendant in relation to their dispute.[75] These are, however, not matters of relevance in relation to the denial of natural justice as it occurred in VCAT on 25 January 2017. As discussed in these reasons, there was no proper consideration by the Tribunal on that date of the issues then before it—and that is the critical focus, whether or not these other matters as raised by the Defendant might be or have been relevant in a different context.
[75]Defendant’s Submissions (21 July 2017), [6]–[39].

On the basis of the principles and their application which has been considered in light of the various authorities to which reference has been made, I turn now to consider whether the manner in which the Tribunal treated the Plaintiff’s application for adjournment and the manner in which the Plaintiff’s position was dealt with more broadly complied with the law in applying the principles of natural justice in the context of the VCAT legislation and more generally. In other words, does the manner in which the Tribunal proceeded amount to a vitiating error or errors of law? For the reasons which follow, and as contended by the Plaintiff, I am of the opinion that the Tribunal did not comply with the law in this respect, failed to accord natural justice to the Plaintiff and made vitiating errors of law. More particularly, I am of this opinion for the preceding reasons, the relevance of which, in establishing this position, is conveniently summarized, as follows:

(1)The Tribunal did not carefully read the 24 January 2017 letter and clearly did not understand the basis of the Plaintiff’s application for an adjournment. The issue of the adjournment clearly went far beyond the mere presence of the Plaintiff’s solicitor in Queensland, though this appears to have been the extent of the Tribunal’s understanding of the application. The fact that the solicitor had only received the notice of hearing two days before its commencement was clearly not appreciated by the Tribunal, even though this issue was raised and explained in the 24 January 2017 letter. This position and the contributing failure of VCAT to give timely notice of orders with respect to the 25 January 2017 hearing following and in accordance with the orders of Deputy President Aird made on 20 December 2016 was also a contributing factor clearly not appreciated by the Tribunal. These were matters that cast an entirely different complexion on the nature of the Plaintiff’s application for an adjournment.
(2)The Tribunal failed to appreciate that the breach which had produced the whole “short-circuiting” and orders designed to expedite the proceeding made by Deputy President Aird on 20 December 2016 had been remedied — in that a defensive pleading had been filed. In spite of this, Senior Member Davis spoke at the 25 January 2017 hearing about making a self-executing order for the filing of a defence — a step which had already occurred. Moreover, it should be observed that this was on the basis of the misapprehension that no defensive pleading had been filed; not a discussion or comment with respect to the adequacy or otherwise of that pleading.
(3)As a result of not taking note of the filing of the defence and the clear statement in the 24 January 2017 letter as to the nature of the Plaintiff’s defence, the Tribunal failed to appreciate that the lease instrument itself was being impugned on the ground of fraud, and that the factual dispute went well beyond the mere service of the 27 May 2016 renewal notice.
(4)The Tribunal, in proceeding to a hearing, undefended, in these circumstances, failed to receive evidence as to the actual issue in dispute — which was the due execution of the Terms of Settlement and the subsequent lease in 2012. Indeed, the Tribunal specifically refused to receive any evidence to prove the validity of that instrument. As a result, the hearing did not “proceed undefended” in the usual way. There was simply no evidence on the sole relevant question of fact — or mixed fact and law, which was clearly raised in the Plaintiff’s defensive pleadings and referred to clearly enough for present purposes in the 24 January 2017 letter.
(5)The Tribunal proceeded on the basis that no application for adjournment had even been lodged by the Plaintiff. In other words, the Tribunal misconstrued the 24 January 2017 orders of Senior Member Riegler as requiring a telephone appearance in order for the application to be made. On the contrary, the 24 January 2017 orders acknowledged the existence of an extant application and merely directed the timing of the appearance. The Tribunal could and should have dealt with that application on the materials to hand and, if there was any issue in relation to contacting the Plaintiff’s solicitor, serious attempts should have been made by the Tribunal to telephone the Plaintiff’s solicitor’s office, with the contact details clearly provided in the 24 January 2017 letter.
(6)At no time during argument or in Senior Member Davis’ reasons did he properly address the application, or possible application of sub-ss 78(1) and (2) of the VCAT Act nor, particularly, take account of the mandatory considerations which the Tribunal was required to consider before exercising the powers under s 78(2) of the VCAT Act. The failures in this respect are quite significant and may be summarized as follows in that the Tribunal did not:
(a)recognise that an order under s 78(2) is a “last resort not first resort”;
(b)have regard to the principle that case management principles should not ordinarily prevent pursuit of any defence at all;
(c)have regard to the Plaintiff’s right to be heard;
(d)weigh the prejudice to the Plaintiff against the prejudice to the Defendant, or other litigants;
(e)consider whether an order for costs would ameliorate any prejudice to the Defendant; or
(f)consider the Aon matters such as length of delay, the wasted hearing time, and consequent prejudice to other litigants.

(7)The Tribunal apparently appreciated that the proper course was to adjourn and actively suspected that orders would ‘likely’ be set aside. This is significant, as orders can only be set aside if there is a reasonable defence and excuse for not attending (see s 120 of the VCAT Act), or there was a denial of natural justice or other error of law. So, this rather disturbing candid admission by the Tribunal that the orders would likely be set aside was tantamount to an admission that the Tribunal was fully aware that the hearing could not proceed in accordance with law. The attitude was ‘I will make the order and you can justify it as best you can later’. This is clearly not a principled basis upon which to proceed, and a matter of great regret that a proceeding should be conducted on this basis.

Finally, an issue arises on the basis of the Defendant’s submissions as to whether or not there is any valid defence to the substantive proceedings upon which the Plaintiff can rely. This issue is raised by the Defendant on the basis that the appeal from the Tribunal’s decision should not be allowed in circumstances where it would make no difference to the ultimate resolution of matters between the parties if the Tribunal’s decision, otherwise vitiated as it may be, would not ultimately be any different from the ultimate result. There are, however, a number of reasons why this is not a relevant consideration in the present circumstances.

In Hurwood v State of Victoria, the Court of Appeal said:[76]

The resolution of the question in issue depended in large part on an assessment of the applicant’s credit as to a series of circumstances and details together with an assessment of the medical evidence in the light of the applicant’s evidence. This Court has not had the benefit of observing the applicant’s oral evidence, and given that her evidence was attacked both with respect to its accuracy as to matters of detail and as to her truthfulness, this Court should not in my view enter into the formation of a factual conclusion as to the first question. This question should be resolved by a judge at first instance.

This caution on the part of the Court of Appeal is, with respect, most apposite in the present circumstances. As discussed in the preceding reasons with respect to the principles applicable to appeals under s 148(1) of the VCAT Act, reference was made to a number of authorities which make it very clear that this Court is not, on appeal, to usurp the role of VCAT in its fact-finding but is, rather, limited to an appeal on a question of law. It is clear from the authorities that the role of the Court is not to try the matter in lieu of VCAT, but to deal with the identified question or questions of law on appeal.[77]

[76][2005] VSCA 176, [33].

[77]Jason Pizer and Emrys Nekvapil, Pizer’s Annotated VCAT Act (2015, 5^th ed) 935–42.

In the present circumstances, having regard to the matters raised by the Plaintiff in its defensive proceedings, evidence would need to be taken with respect to the issues raised, in terms of fraud and related matters at the very least. Questions of credit would arise and cross-examination would be an integral part of the process of testing factual matters and credit. Moreover, without in any way seeking to pre-empt the conduct of the trial by VCAT, it would seem that the defensive pleadings now filed by the Plaintiff would need to be particularised and, in all likelihood, there would be an application to provide an amended and expanded points of defence and any counterclaim. Additionally, having regard to the issues that have arisen, one would think it likely that there would be points of reply filed by the Defendant and only then would all issues between the parties become clear and would it be possible for any hearing and adjudication of those issues. Clearly, that is a matter for VCAT, and particularly having regard to the position that it seems quite clear, if not accepted as common ground, that the VCAT proceeding involves a retail premises lease and, under the broad provisions of ss 81 and 89 of the Retail Leases Act 2003, would be within the exclusive jurisdiction of VCAT. For this reason also, it would be quite inappropriate for this Court to embark on a process of, in effect, trying the substantive factual and legal matters in dispute itself.

Conclusion and orders

For the preceding reasons, the Plaintiff’s application for leave to appeal is granted and its application on appeal to set aside various orders of VCAT, critically those of Senior Member Davis made on 25 January 2017, is successful and it is appropriate that the matter be remitted to VCAT for rehearing accordingly.

The Court will not, however, purport to direct VCAT with respect to hearing arrangements in relation to the VCAT proceedings; as sought in paragraph 3 of the Orders sought as set out in the Originating Motion of 22 February 2017.

Having regard to the manner in which the proceedings have been conducted thus far by the Tribunal, I am of the opinion that the Tribunal should be constituted for the rehearing of the matter by Tribunal members other than the Senior Member who presided at the hearing on 25 January 2017.

I otherwise reserve the question of costs and will hear the parties further in relation to this issue if necessary.

The parties are to bring in orders to give effect to these reasons.

[2017] VSC 487

30 August 2017