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Subway Systems Australia v Ireland

Subway Systems Australia v Ireland

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Case Copied 18 October 2013 75 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

No. S CI 2012 6362

SUBWAY SYSTEMS AUSTRALIA PTY LTD (ACN 009 277 034)

Applicant

AARON IRELAND

LYNETTE IRELAND

Respondents

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JUDGE:	CROFT J
WHERE HELD:	Melbourne
DATE OF HEARING:	20 September 2013 (with further Supplementary Submissions 27 September and 4 and 14 October 2013)
DATE OF JUDGMENT:	18 October 2013
CASE MAY BE CITED AS:	Subway Systems Australia v Ireland
MEDIUM NEUTRAL CITATION:	[2013] VSC 550

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ARBITRATION – Application for leave to appeal from orders made by Victorian Civil and Administrative Tribunal – Appeal on question of law – Whether Victorian Civil and Administrative Tribunal is a “court” and therefore obliged to refer the parties to arbitration in a matter which is the subject of an arbitration agreement – Director of Housing v Sudi [2011] VSCA 266 – Commercial Arbitration Act 2011, ss 2, 6 and 8; Victorian Civil & Administrative Tribunal Act 1998, s 77.

RETAIL LEASES – Extent to which other agreement or arrangement would be void if it were contained in a retail premises lease – Retail Leases Act 2003, s 94.

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr J. Moore	Minter Ellison
For the Respondents	Mr J. Catlin	George Konidaris & Co

HIS HONOUR:

Introduction

This is an application for leave to appeal under s 148(1) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (“the VCAT Act”) against part of the orders of the Victorian Civil and Administrative Tribunal (“VCAT”), constituted by Senior Member Riegler, made on 18 October 2012 in VCAT Proceeding R43 of 2012, in which the Applicant in this proceeding, Subway Systems Australia Pty Ltd (“SSA”), and Subway Realty Pty Ltd (“SR”) were respondents and the Respondents, Aaron Ireland and Lynette Ireland (“Irelands”) in this proceeding were the applicants. This proceeding in VCAT is referred to in these reasons for judgment as “the VCAT proceeding”; and the Reasons of Senior Member Riegler as the “VCAT Reasons”.

The part of the orders appealed against is as follows:

“2.The respondents’ [SSA and SR] application for Orders dated 18 May 2012 is dismissed.”[1]

[1]Draft Notice of Appeal annexed to the Affidavit of Michelle Shannon Power (13 November 2012) in support of Application for Leave to Appeal (Tab 10) (“the draft Notice of Appeal”).

The draft Notice of Appeal sets out the questions of law upon which the proposed appeal is brought and, or alternatively, which are said to be involved in the order appealed against, as follows:

(a)Whether VCAT is a “court” for the purposes of s 8(1) of the Commercial Arbitration Act 2011 (“the CAA”).
(b)Whether VCAT was bound to refer the dispute between the Irelands and SSA to arbitration pursuant to s 8 of the CAA.

The grounds of appeal as set out in the draft Notice of Appeal are that VCAT was in error in finding that the Tribunal is not a “court” for the purposes…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2013] VSC 550
Decision Date: 18 October 2013

CaseChat Overview and Summary

Subway Systems Australia filed an application in the Court of Appeal against the orders made by the Victorian Civil and Administrative Tribunal (VCAT). The dispute revolves around the interpretation and application of the Commercial Arbitration Act 2011 and the Retail Leases Act 2003, in the context of an arbitration agreement between the parties. Subway Systems Australia sought leave to appeal VCAT's orders, arguing that VCAT is a "court" under the Commercial Arbitration Act 2011 and should have referred the parties to arbitration under the arbitration agreement they had executed.

The central legal issue before the Court was whether VCAT, as an administrative tribunal, could be considered a "court" within the meaning of the Commercial Arbitration Act 2011, thereby obligating it to refer the parties to arbitration. Additionally, the Court needed to determine the extent to which a particular agreement or arrangement would be void if it were contained in a retail premises lease, as per the Retail Leases Act 2003.

The Court of Appeal held that VCAT is not a "court" for the purposes of the Commercial Arbitration Act 2011, and therefore, it was not obliged to refer the parties to arbitration. The Court reasoned that VCAT operates as an administrative tribunal and its functions are distinct from those of a court. Furthermore, the Court found that the agreement in question would not be void if it were contained in a retail premises lease, as it did not contravene the provisions of the Retail Leases Act 2003. The Court dismissed the application for leave to appeal.

The Court of Appeal dismissed the application for leave to appeal and affirmed the orders of VCAT.

Orders