Republic of Turkey v Mackie Pty Ltd [No 2]

[2021] VSCA 189

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2019 0027

THE REPUBLIC OF TURKEY	Appellant
v
MACKIE PTY LTD (ACN 097 603 846) [No 2]	Respondent
and
ATTORNEY-GENERAL OF THE COMMONWEALTH	Intervener
and
ATTORNEY-GENERAL FOR THE STATE OF VICTORIA	Intervener

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JUDGES:	TATE, BEACH and McLEISH JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	On the papers
DATE OF JUDGMENT:	25 June 2021
MEDIUM NEUTRAL CITATION:	[2021] VSCA 189

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PRACTICE AND PROCEDURE – Victorian Civil and Administrative Tribunal lacking jurisdiction to hear and determine dispute – Remittal of proceeding to County Court – Costs – Costs of primary proceeding – Costs of appeal to Trial Division – Costs of appeal – Victorian Civil and Administrative Tribunal Act 1998, s 148(7)(d).

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REPRESENTATION:	Counsel	Solicitors
For the Appellant	Mr R Andrew with Mr N J Phillpott	AUM Lawyers
For the Respondent	Mr J A F Twigg QC with Mr C F E Dawlings	Herbert Smith Freehills
For the Attorney-General of the Commonwealth	Ms R Amamoo	Australian Government Solicitor
For the Attorney-General for the State of Victoria	Ms K E Foley	Victorian Government Solicitor

TATE JA

BEACH JA
McLEISH JA:

1. On 30 March 2021, this Court determined that the Victorian Civil and Administrative Tribunal (‘the Tribunal’) lacked jurisdiction to hear and determine the primary proceeding between the appellant and the respondent, because the subject matter of the proceeding was a matter ‘affecting consuls or other representatives of other countries’ within the meaning of s 75(ii) of the Constitution and the Tribunal is not a court of the State (‘the separate question’).[1]

   [1]Republic of Turkey v Mackie Pty Ltd [2021] VSCA 77.

1. As a result, we granted leave to appeal on the ground which raised the separate question (ground 7) and the appeal was allowed on that ground alone.  We made an order that no order was made with respect to the remaining grounds of appeal. 

1. The appellant and the respondent were ordered to file and serve submissions with respect to costs.  On 15 April 2021, the appellant filed its submissions on costs.  On 22 April 2021, the respondent filed its submissions on costs.  We deal with the parties’ submissions on costs below.

1. The respondent’s submissions, in addition to containing submissions on costs, contained a submission that this Court, pursuant to s 148(7)(b) of the Victorian Civil and Administrative Tribunal Act 1998 (‘the VCAT Act’) should now make an order that the Tribunal could have made under s 77(3) of the VCAT Act, referring the proceeding back to the County Court. The submission was that the order the Tribunal ought to have originally made was to strike out the proceeding under s 77(1) of the VCAT Act, and to refer the proceeding back to the County Court under s 77(3). Section 148(7)(b) empowers this Court to make an order that the Tribunal could have made in the proceeding, and thus this Court should now make the order that the Tribunal should have made under s 77(3).

1. On 27 April 2021, the appellant filed reply submissions, in which it contended that this Court had no jurisdiction to make any order under s 77 of the VCAT Act. In support of that submission, the appellant relied upon a decision of Perry J in Qantas Airways Ltd v Lustig.[2]

   [2](2015) 228 FCR 148 (‘Qantas’).

1. In view of the differences between the parties, the Court convened a hearing of the matter on 29 April 2021 at which orders were made giving the parties (including the interveners) leave to file further submissions about the applicability of Qantas to the circumstances of this case; whether, pursuant to s 148(7)(d) of the VCAT Act, the proceeding could or should be remitted to the County Court or the Trial Division of the Supreme Court; and the possibility of reserving the costs of the proceeding before the Tribunal, and before the Trial Division of the Supreme Court, to the County Court or the Supreme Court (if the proceeding were to be remitted). Submissions on these issues were filed by the respondent on 14 May 2021, by the appellant on 28 May 2021, and by the Attorney-General for the State of Victoria on 4 June 2021.

Submissions as to remittal or referral of the proceeding to the County Court or the Trial Division

1. The respondent submitted that Qantas is not applicable to this proceeding but that, if it is, it was incorrectly decided. It submitted that s 148(7)(b) of the VCAT Act (permitting this Court to make, on an appeal, ‘an order that the Tribunal could have made in the proceeding’) empowered this Court to make an order that the Tribunal would not have been able to make because of a want of jurisdiction. In terms, it submitted:

It is open on the text, permissible and preferable, to read s 148(7)(b) to include orders that the Tribunal would not have been able to make because of the jurisdictional limitation.

1. In the alternative, the respondent submitted that this Court has jurisdiction under s 148(7)(d) to make, on an appeal, ‘any other order the court thinks appropriate’.

1. In summary, the respondent’s submission was that it did not seek any order pursuant to s 77 of the VCAT Act, but rather sought an order pursuant to either s 148(7)(b) or 148(7)(d) of the VCAT Act referring or remitting the proceeding to either the County Court or the Trial Division. Given the quantum of the claim, the County Court was submitted to be the more appropriate jurisdiction.

1. In response, the appellant submitted that s 148(7)(b) does not permit this Court to make an order that the Tribunal could not have made. In that respect, the appellant again relied upon Qantas.

1. In relation to s 148(7)(d), the appellant submitted that this section does not provide any power to ‘remit’ the proceeding to another court. The appellant observed that s 148(7)(d) is a general provision which, if used to remit the proceeding to another court, would stand in conflict with s 148(7)(c) which permits this Court, on appeal, to make an order ‘remitting the proceeding to be heard and decided again … by the Tribunal …’. The appellant submitted:

When there is a conflict between a general provision and a specific provision, the specific provision prevails.  It has been said that this principle has ‘a particular application’ where the conflict arises from different sections within the same Act.  It is ‘common sense’ that Parliament having before it two apparently conflicting sections at the same time, cannot have intended the general provision to have deprived the specific provision of effect.  That must be even more so where the conflict arises within the same section.

It might also be asked, if Parliament intended s 148(7)(d) to cover remitter of the proceeding generally, then why make any specific provision in s 148(7)(c)? Indeed, it might be asked, what work would s 148(7)(c) have to do?

1. The appellant also submitted that using s 148(7)(d) to transfer the proceeding to another court by remitting it is inconsistent with s 148(7)(b) because the Tribunal could not transfer the proceeding under s 77. Additionally, the appellant submitted that the original costs in the Tribunal and on appeal to the Trial Division ‘cannot be remitted’. At most, all that could be remitted is the primary proceeding.

1. The Attorney-General for the State of Victoria submitted that s 148(7)(d) permitted this Court to remit the proceeding to the County Court or the Trial Division of the Supreme Court, and it also extended to permitting this Court to reserve the costs of the proceeding before the Tribunal, and the Trial Division, to the County Court or the Supreme Court (if the proceeding were to be remitted). The Attorney-General observed that, in light of the way the respondent now claims the relief it seeks, Qantas has no direct application, and it is therefore not necessary for this Court to consider whether Perry J’s construction of s 77(3) of the VCAT Act in Qantas is correct.

Submissions as to costs

1. The appellant submitted that, as it had been successful in this Court, it should have its costs in this Court, and in the Trial Division, and in the Tribunal.

1. The respondent submitted that, upon remittal to the County Court, the costs of the parties before the Tribunal, including any orders for reserved costs, should be reserved for determination by the County Court.

1. With respect to the proceeding in the Trial Division, the respondent submitted that the costs order made in its favour in that proceeding should not be set aside and should be permitted to operate according to its terms.

1. In relation to the costs in this Court, the respondent submitted that despite the appellant’s success on appeal, the appellant should pay the respondent’s costs up to and inclusive of 16 March 2020[3] on a standard basis, and thereafter each party should bear its own costs.[4]  Alternatively, the respondent submitted that each party should bear the whole of its own costs of the proceeding in this Court.  The respondent submitted that the appellant should not be awarded its costs in this Court because the point on which it succeeded was not raised by it, and the argument on which it succeeded was in substance the argument put by the Commonwealth Attorney-General, not the argument put by the appellant.

   [3]This being the date upon which this Court directed the appellant to give notice to the Attorneys-General of the Commonwealth, the States, the Australian Capital Territory and the Northern Territory that the proceeding involved a matter arising under the Constitution or involved its interpretation within the meaning of s 78B of the Judiciary Act 1903 (Cth).

   [4]In addition, the respondent submitted that there should be no order with respect to the costs of the interveners.  For completeness, we would observe that neither intervener has sought to make any application for costs.  Nor has any party sought to recover costs from either intervener.  In accordance with standard practice, we make no orders for costs with respect to the interveners.

Consideration

1. The original litigation between the appellant and the respondent commenced in the County Court in 2013. In 2014, the parties agreed that it should be stayed pursuant to s 57 of the Domestic Building Contracts Act 1995, and the respondent then applied to the Tribunal to determine the dispute.

1. In the Tribunal, in the Trial Division and in this Court, until the question whether the Tribunal lacked jurisdiction was raised by this Court, the parties proceeded on the basis that the Tribunal had jurisdiction to determine their dispute.  This assumption was wrong. The proper forum for the hearing of the dispute was, and is, the County Court.

1. One way of providing for the proceeding to be heard by the County Court would have been to set aside the previous stay order in that court, which was made on the erroneous basis that the action could be heard in the Tribunal.  However, no appeal has been brought from that order.  Furthermore, the County Court, when ordering the stay of the proceeding and the transfer of the whole of the file to the Tribunal, dismissed the proceeding then before it.

1. Section 148(7) of the VCAT Act provides:

The Court of Appeal or the Trial Division, as the case requires, may make any of the following orders on an appeal —

(a)       an order affirming, varying or setting aside the order of the Tribunal;

(b)       an order that the Tribunal could have made in the proceeding; 

(c)an order remitting the proceeding to be heard and decided again, either with or without the hearing of further evidence, by the Tribunal in accordance with the directions of the court;

(d)any other order the court thinks appropriate.

1. Section 148(7) confers power on this Court in aid of the exercise of its jurisdiction under s 148(1).[5] While the broad language of s 148(7)(d) does not enlarge the jurisdiction of this Court under s 148(1), it permits this Court to make any order that the Court thinks appropriate as long as that order is not inconsistent with the limited nature of an appeal under s 148(1).[6]

   [5]Osland v Secretary, Department of Justice [No 2] (2010) 241 CLR 320, 332 [19] (French CJ, Gummow and Bell JJ).

   [6]Ibid 332–3 [20].

1. The appellant’s submission that the existence of s 148(7)(c), conferring a specific power to make an order remitting the proceeding to the Tribunal, precludes the more generally expressed power in s 148(7)(d) from extending to orders of a different kind, namely remittal, referral, or transfer to a court, must be rejected.  As the Attorney-General for Victoria submitted:

While the word ‘remit’ can be understood as referring to an appellate court sending a proceeding back to the Court ‘from whence it came’, the ordinary legal understanding can be broader, meaning the action of referring a case ‘from one court to another, especially a lower court’ or simply referring a matter to someone in authority to deal with. This broader understanding of ‘remittal’ is evidenced in various statutes. The High Court, for example, has the power to remit matters to other courts (including matters in its original jurisdiction). Section 28(1) of the Admiralty Act 1988 (Cth) provides for a remittal of proceedings in the Federal Court or the Supreme Court of a State to the federal circuit court or a court of a State or Territory.

1. As was submitted by the Attorney-General for Victoria, these varied examples of remitters demonstrate that the appellant’s narrow conception of ‘remittal’ is not correct. Once that is understood, the appellant’s submissions about the limited scope of s 148(7)(d) fall away. While an order remitting a proceeding to the Tribunal to be heard and decided again falls under s 148(7)(c), this does not limit the breadth of the power under s 148(7)(d) to make orders remitting or referring a proceeding to a court having the necessary jurisdiction, where appropriate. It is clearly appropriate, and in the interests of justice, to make an order remitting or referring a proceeding to a forum that has jurisdiction to hear and determine it when the forum from when it came lacked jurisdiction to do so.[7] There is no inconsistency between s 148(7)(c) and reading s 148(7)(d) as authorising remittal or referral to another court with the jurisdiction to hear and determine the matter. The remittal (referral) sought by the respondent under s 148(7)(d) is of a different kind from the remittal referred to in s 148(7)(c).

   [7]Remedial legislation has been introduced into the Victorian Parliament addressing the jurisdictional issue.  The Victorian Civil and Administrative Tribunal and Other Acts Amendment (Federal Jurisdiction and other Matters) Bill 2021 is directed to empowering the Magistrates’ Court to hear and determine disputes arising in federal jurisdiction where the Tribunal cannot do so, in light of the decisions in Burns v Corbett (2018) 265 CLR 304 and Meringnage v Interstate EnterprisesPty Ltd (2020) 60 VR 361. The Magistrates’ Court can then transfer a substituted proceeding to the County Court or the Supreme Court, where appropriate.

1. The County Court has jurisdiction under the Domestic Building Contracts Act and is plainly an appropriate forum.  We see no difficulty in referring the matter to the County Court, even though that Court previously dismissed the proceeding before it.  The County Court did not decide that case on its merits, and has been shown to have proceeded, albeit by consent, on the mistaken basis that the Tribunal would have jurisdiction in relation to the matter.  While the dismissal order is not being formally set aside, that order must in the circumstances give way to an order of this Court that the County Court hear and determine the case which was subsequently commenced in the Tribunal, on its merits.

1. Similarly, there is no impediment to this Court reserving to the court which hears the remitted proceeding any costs that have already been incurred in either the Tribunal, the Trial Division or this Court.  More particularly, there is no constitutional impediment to the County Court dealing with the issue of which (if any) party should ultimately bear responsibility for the payment of costs incurred in the Tribunal.  Jurisdiction in respect of costs lies with the court having jurisdiction in respect of the substantive matter and it is open to this Court to refer outstanding questions of costs to that court.

1. In light of these conclusions, it is not necessary to address s 148(7)(b) of the VCAT Act, or the question whether Qantas was correctly decided.

1. Consistently with what we have said above, the appropriate course for this Court to take is to make orders remitting (referring) the proceeding for hearing and determination by the County Court.  We turn now to the issue of costs.

1. In our view, the costs of the proceeding before the Tribunal and before the Trial Division should be determined having regard to the ultimate result of the proceeding between the parties.  It follows that the costs of the proceeding before the Tribunal and before the Trial Division should be reserved to the County Court judge who hears and determines the remitted proceeding.

1. The appellant and the respondent both acted under the misapprehension that the Tribunal had jurisdiction to hear and determine their dispute.  Neither party should be penalised in respect of that matter.  The just outcome is that the liability to pay those costs should be determined by the court that hears and determines the merits of the underlying disputes between the parties, the County Court.

1. While we think that these costs should probably follow the ultimate outcome of the proceeding, or perhaps be determined on an issues basis, we are not in a position to resolve that matter prior to the ultimate resolution of the proceeding.  That said, nothing in these reasons is intended to fetter the exercise of discretion involved in dealing with the costs which we will reserve to the County Court judge who hears and determines the remitted proceeding.

1. Having been unsuccessful in relation to the separate question in this Court, however, the respondent should pay the appellant’s costs of the separate question.  Otherwise, we think that the parties should bear their own costs of the proceeding in this Court.  We see no reason to deprive the appellant of its costs on the issue on which it succeeded in this Court.  In our view, those costs should follow the event.

1. Finally, we would grant the respondent an indemnity certificate under s 4 of the Appeal Costs Act 1998 in respect of the appellant’s and the respondent’s costs of the separate question in this Court.

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