The Big Apple Group Pty Ltd v Melbourne City Council
[2020] VSC 393
•29 June 2020
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S ECI 2018 01753
| THE BIG APPLE GROUP PTY LIMITED (ACN 120 289 330) | Applicant (Appellant) |
| v | |
| MELBOURNE CITY COUNCIL | Respondent |
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JUDGE: | Ginnane J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 26 May 2020 |
DATE OF JUDGMENT: | 29 June 2020 |
CASE MAY BE CITED AS: | The Big Apple Group Pty Ltd v Melbourne City Council |
| MEDIUM NEUTRAL CITATION: [2020] VSC 393 | |
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ADMINISTRATIVE LAW – Victorian Civil and Administrative Tribunal – Consent orders dismissing claim and counterclaim – Subsequent application to set aside consent orders – Whether VCAT has jurisdiction to collaterally review the existence of the agreement on which consent orders were based – Whether the existence of the agreement is a jurisdictional fact – Whether VCAT has implied or inherent power to set aside orders – Whether VCAT functus officio once consent orders made – Whether VCAT orders have effect until set aside – Victorian Civil and Administrative Tribunal Act 1998 ss 93(1), 119 and 120.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant (Appellant) | Ms L Collaris | Robertson Legal & Conveyancing Lawyers Pty Ltd |
| For the Respondent | Ms K Burke | Maddocks |
HIS HONOUR:
The Big Apple Group Pty Ltd (‘the Big Apple’) seeks leave to appeal the orders of a Senior Member of the Victorian Civil and Administrative Tribunal (‘Tribunal’ or ‘VCAT’) made 3 September 2018 in determining, as a preliminary question, that the Tribunal did not have jurisdiction to set aside consent orders, which had been made five and a half years previously.[1] On that occasion, both parties were represented by Counsel. The Tribunal’s orders of 3 September 2018 were:
1.The answer to the preliminary question: Does the Tribunal have jurisdiction in this proceeding to determine whether the consent orders made on 23 January 2013 should be set aside? – No.
2.The applicant’s application dated 16 January 2018 is dismissed for want of jurisdiction.
3.Costs reserved.
[1]The Big Apple Group Pty Ltd v Melbourne City Council (Building and Property) [2018] VCAT 1323, [1] (‘VCAT Decision’).
For the following reasons the application for leave to appeal under s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (‘VCAT Act’) is refused and the proceeding is dismissed.
Background
The Big Apple operated a lounge, club and bar known as ‘The Red Violin’ in premises in Bourke Street, Melbourne, owned by the respondent, the Melbourne City Council (‘the Council’). The Big Apple leased the premises from the Council in December 2006 for five years with an option to renew for a further three years.
On 2 December 2011, the Big Apple commenced proceedings against the Council in the Tribunal (‘Proceeding’) arising from disputes about rights and obligations under the lease. The Council filed a counterclaim in the Proceeding.
On 23 January 2013, a Senior Member made orders by consent dismissing both the claim and counterclaim (‘Consent Orders’). The Consent Orders stated that:
ORDERS BY CONSENT
1. The appellant’s claim is dismissed.
2. The respondent’s counterclaim is dismissed.
3. No order as to costs, including reserved costs.
The settlement agreement, which was followed by the parties seeking the Consent Orders, was set out in a Deed of Settlement dated 25 January 2013, being two days after the parties sought and obtained the Consent Orders. It provided that in consideration of the Big Apple discontinuing the Proceeding, the Council would grant it authority to relocate its business to another premises and transfer the late night liquor licence it held at its Bourke Street premises. Such a licence was required for the service of liquor after 1:00am.[2]
[2]The description of facts contained in [6]-[9] is based on [6]-[11] of the VCAT decision.
Under the settlement agreement, the Big Apple was entitled to remain in possession of the premises for approximately one and a half years. After the expiration of that period, in June 2014, the Council re-entered the premises. On 9 July 2014, the Big Apple applied unsuccessfully to the Tribunal for an injunction claiming that the terms of settlement should be set aside because it would not have entered into them if it had known that there was a moratorium on issuing liquor licences for service of liquor after 1:00am. The Tribunal refused the injunction application.
At the time of executing the settlement agreement, the Council had imposed a moratorium on granting planning permits for licensed premises with trading hours after 1:00am, which prevented the relocation of late night liquor licences (‘Moratorium’).
In January 2018, almost five years after the Consent Orders were made, the Big Apple filed an application in the Proceeding seeking to set aside the Deed of Settlement and the Consent Orders and seeking loss and damages. The application was listed for preliminary hearing to determine whether the Tribunal had jurisdiction to set aside the Consent Orders.
The Big Apple, represented by its director, submitted to the Senior Member that the Consent Orders were invalid due to jurisdictional error. It again submitted that it would not have entered into the settlement agreement had it known that the Moratorium was in place.[3] It advanced other grounds before the Senior Member, however, they were not relied on before this Court.[4]
[3]Ibid [10].
[4]See ibid, [5], [36].
On 3 September 2018, the Senior Member determined that the Tribunal did not have jurisdiction to set aside the Consent Orders and dismissed the Big Apple’s application filed on 16 January 2018 for want of jurisdiction.
Summary of the Senior Member’s reasons
The Senior Member considered that the Tribunal did not have jurisdiction to hear the matter because the Tribunal became functus officio upon authenticating a final order in a proceeding. The Tribunal had no inherent or implied power to set aside properly-perfected consent orders, such as those made on 23 January 2013, as it was functus officio. Neither of the statutory exceptions that permit the reopening of a case contained in ss 119 and 120 of the VCAT Act were applicable in this case. The former deals with correcting mistakes and the latter deals with circumstances where a person against whom an order was made did not appear and was not represented.
The Senior Member stated that once an order has been perfected, it could only be set aside by the Supreme Court pursuant to the appeal process contained in s 148 of the VCAT Act. Until such time that the Consent Orders were set aside pursuant to that section, they remained in force, even if affected by jurisdictional error.
The Big Apple’s proposed grounds of appeal
The Big Apple now seeks leave to appeal the Senior Member’s orders. The question of law that it contends arises from the Consent Orders is:
Whether VCAT has jurisdiction, in the Proceeding, to determine whether consent orders made in the Proceeding on 23 January 2013 should be set aside on the grounds of jurisdictional error.
The four proposed grounds of appeal advanced are that the Senior Member erred in: (1) failing to find that VCAT had jurisdiction to determine whether the Consent Orders made should be set aside on grounds of jurisdictional error; (2) failing to find that the provisions of the VCAT Act, whether expressly or by implication, did not give any legal effect to a decision of the Tribunal that involved a jurisdictional error; (3) finding that where a decision of the Tribunal is affected by jurisdictional error, the decision remains until it is set aside; and, (4) in finding that VCAT was functus officio. The four grounds of appeal are interconnected.
The source of the Tribunal’s power: s 93(1) of the VCAT Act
The Senior Member derived his authority to make the Consent Orders from s 93(1) of the VCAT Act. Section 93, which is contained within Part 4 of Division 5 which is titled ‘Compulsory Conferences, Mediation and Settlement’, states:
(1)If the parties agree to settle a proceeding or any part of it at any time, the Tribunal may make any orders necessary to give effect to the settlement.
(2)The Tribunal’s power to make an order under subsection (1) is exercisable by any member including, if the settlement is achieved through mediation conducted by a member, that member.
(3)If the parties agree to settle a proceeding or any part of it at a compulsory conference at which the principal registrar is presiding, the principal registrar may exercise the Tribunal’s powers to make orders under subsection (1).
(4)If the parties agree to settle a proceeding or any part of it at a compulsory conference at which a person nominated under section 83(1)(c) or clause 52(3) of Schedule 1 is presiding–
(a) the Tribunal may make any orders under subsection (1); or
(b) the principal registrar may exercise the Tribunal’s power to make any orders under subsection (1).
The Big Apple’s Submissions
The Big Apple submitted that the word ‘if’ at the beginning of s 93(1) has the effect that the availability of the power to make orders under the sub-section is contingent upon the existence of an agreement by the parties to settle the proceeding. Without such an agreement, an essential prerequisite for the enlivening of s 93(1) is absent and the Tribunal lacks the power to make necessary orders to give effect to the settlement. In short, the existence of an agreement to settle is a jurisdictional fact for the exercise of the power conferred by s 93(1).
The Big Apple submitted that in this case, no valid order had been made under s 93 as the settlement agreement giving rise to the Consent Orders was affected by fraud. The effect of the fraud was that the applicant and the respondent did not in fact agree to settle the proceeding before the Tribunal and so the jurisdictional fact required to enliven s 93(1) was not present. The resulting Consent Orders were never validly made. Counsel for the Big Apple submitted that:
[A]t this point in time we simply don’t know whether or not the jurisdiction has been enlivened or not because the enquiry hasn’t been conducted into whether or not the parties settled the proceeding.[5]
[5]Transcript of Proceedings, The Big Apple Group Pty Ltd v Melbourne City Council (Supreme Court of Victoria, S ECI 2018 01753, Ginnane J, 26 May 2020) 24 (‘T’).
The Big Apple relied on the Court of Appeal judgment in Saville v Hallmarc Constructions Pty Ltd which described the characteristics of jurisdictional facts.[6] It also referred to Gedeon v Commissioner of New South Wales Crime Commission, where the High Court said that the term ‘jurisdictional fact’:[7]
is used to identify a criterion the satisfaction of which enlivens the exercise of the statutory power or discretion in question. If the criterion be not satisfied then the decision purportedly made in exercise of the power or discretion will have been made without the necessary statutory authority required of the decision maker.
[6](2015) 47 VR 17.
[7](2008) 236 CLR 120, 139 [43].
The Big Apple submitted that if the Consent Orders, being final orders, were not validly made, the proceeding had not been finalised and Tribunal was not functus officio.
By way of elucidating its submission, the Big Apple submitted that if, following VCAT making the Consent Orders, the parties had not signed the Deed of Settlement, presumably in circumstances such as a disagreement about its terms, an agreement would never have been reached and there would have been no legal foundation for the Consent Orders to be made.
The Big Apple relied primarily on the decision of the High Court in Minister for Immigration and Multicultural Affairs v Bhardwaj (‘Bhardwaj’).[8] The facts of Bhardwaj as summarised by Gleeson CJ were as follows:[9]
The respondent, whose student visa was cancelled by a delegate of the appellant, applied to the Immigration Review Tribunal (the Tribunal [IRT]) for a review of the decision. The application was received on 21 August 1998. The Tribunal proposed to deal with the matter on 15 September 1998, and invited the respondent to attend a hearing. Late in the afternoon of 14 September 1998 the Tribunal received, from the respondent's agent, a letter stating that the respondent was ill and would be unable to attend the next day, and requesting an adjournment. By an administrative oversight, the letter did not come to the attention of the member of the Tribunal to whom the matter had been assigned. The Tribunal dealt with the matter on 15 and 16 September, adversely to the respondent, and notified the respondent and his agent on 17 September [September decision]. The reason given for the Tribunal's decision was that the respondent had not provided any information which suggested that the cancellation of his visa was unfair or inappropriate. When the respondent's agent was informed of the decision, the attention of the Tribunal member was drawn to the letter of 14 September. A new hearing date was arranged. The Tribunal heard the respondent's explanation of the conduct which had resulted in the cancellation of his visa, accepted the explanation, and, on 22 October 1998, revoked the cancellation [October decision].
[8](2002) 209 CLR 597 (‘Bhardwaj’).
[9]Bhardwaj (n 8) 602 [2].
The issue for the High Court to determine was whether the IRT had the power to make the October decision given that it had already made the September decision.[10] Gleeson CJ stated that:[11]
… it was not inconsistent with the statutory scheme for the Tribunal, upon becoming aware that it had not given effect to its own intention, and that it had failed to conduct a review of the delegate's decision, to give the respondent the opportunity which the statute required, which he wanted, and which the Tribunal had intended to give him. On the contrary, it was in accordance with the requirements of the Act.
[10]Ibid 602 [3].
[11]Ibid 606 [15].
Similarly, Gaudron and Gummow JJ, after determining that the failure to afford Mr Bhardwaj a reasonable opportunity to present evidence resulted in the IRT failing to conduct a review as required by the Migration Act 1958 (Cth), said that:[12]
There is, in our view, no reason in principle why the general law should treat administrative decisions involving jurisdictional error as binding or having legal effect unless and until set aside. A decision that involves jurisdictional error is a decision that lacks legal foundation and is properly regarded, in law, as no decision at all.
[12]Ibid 614-5 [51] (Gaudron and Gummow JJ, McHugh J agreeing at 618 [63]).
Hayne J wrote:[13]
Once it is recognised, as it must be in the present case, that in September 1998 the Tribunal had not performed the duty imposed on it … it is clear that not only was there no bar to the Tribunal completing its task by the steps it took in October, it was duty bound to do so.
… Here the Tribunal performed its duty only once—by the making and publication of its October decision.
[13]Ibid 647 [155]-[156].
Callinan J agreed, stating that:[14]
In my opinion, whether the Tribunal's October decision is good depends upon whether the September decision was bad in a jurisdictional sense … I have formed the opinion that what happened in September 1998 … was a failure to exercise a jurisdiction which the Tribunal was bound to exercise. … It follows, in my opinion, that the Tribunal had not exercised its jurisdiction in September 1998 and that therefore it was open for it to do so in October 1998.
[14] Ibid 648-9 [162]-[165] ([164] omitted).
After referring to passages in Gaudron and Gummow JJ’s judgment, the Senior Member stated that:[15]
the above passage makes it clear, not only that the principle enunciated by the High Court only applies to administrative decisions, but also the ability of administrative decision-makers to remake and reconsider a decision depends upon whether the applicable legislation, expressly or impliedly, requires a decision involving jurisdictional error to be given legal effect.
[15]VCAT Decision [51].
The Big Apple submitted that the Senior Member had distinguished Bhardwaj on the incorrect basis that the decision under review was an administrative decision, whereas the proceeding before him was a civil proceeding in the original jurisdiction of the Tribunal. It also submitted that the principle of functus officio has no operation where there was a jurisdictional error.
The Big Apple also referred to the statement of Warren CJ in Director of Housing v Sudi,[16] that:
In Bhardwaj, the majority of the High Court held that the Immigration Review Tribunal was permitted to disregard its own purported decision vitiated by jurisdictional error and to remake the decision afresh. The tribunal could do so even in the absence of any order by a court of competent jurisdiction quashing the original purported decision or declaring it to be invalid. In coming to this conclusion, the majority of the High Court must have accepted that the tribunal could inquire into, and decide for itself, whether its original purported decision was a nullity. That is to say, the majority must have accepted that the tribunal could, in effect, carry out a collateral review of its own decision.
[16](2011) 33 VR 559, 566 [30] (‘Sudi’).
The Council’s submissions
The Melbourne City Council submitted that the Senior Member’s decision was correct. There was no power to set aside the Consent Orders. On 23 January 2013 the parties had agreed to settle the proceeding and therefore VCAT had not erred in acting under s 93. Section 93(1) did not require the Tribunal to be independently satisfied that the parties had agreed to settle, it simply provides that if parties ‘agree to settle’, then the Tribunal could make orders to give effect to the settlement.
The Council accepted that there did have to be an agreement or settlement at the time the Tribunal exercised the power conferred by s 93. But, it was sufficient that the parties informed the Tribunal that they had agreed to settle. In any event an agreement or settlement did exist between the Big Apple and the Council on 23 January 2013 when the Tribunal made the Consent Orders under s 93.[17] If the Big Apple’s submission were correct, the Tribunal would have to investigate to determine whether there was a valid agreement or settlement before making orders under s 93(1).
[17]The Council relied on Al-Hakim v Monash University [1999] VSC 511 (Beach J).
The Council next submitted that on making the Consent Orders the Tribunal was functus officio. It had no inherent or implied jurisdiction to alter the order.
The Big Apple had delayed for three and a half years before returning to VCAT to try to set aside the Consent Orders. In its application of January 2018, the Big Apple sought remedies that assumed the agreement of January 2013 was still in existence, including seeking damages that could only be awarded on the basis that the agreement had been performed. The agreement could not be treated as it had never existed. As Giles CJ Comm D said in FAI General Insurance Co Ltd v Ocean Marine Mutual Protection and Indemnity Association:[18]
Neither rescission by a party nor a judge's say so can turn the clock back to have that literal effect, and a contract avoided ab initio is not in Newspeak an uncontract. There was a contract, and there cannot be avoidance ab initio unless the avoiding party is in a position to restore the other party to the pre- contractual position, at law with some exactitude but in equity by substantial restoration with allowances... Avoidance ab initio means that the parties are to be restored substantially to the positions they would have been in had there not been a contract, but it remains that there was a contract.
[18](1997) 41 NSWLR 559, 563 (citation omitted).
The High Court’s decision in Bhardwaj did not assist the Big Apple. It concerned the proper exercise of the IRT’s administrative jurisdiction, whereas VCAT had made the Consent Orders in its original jurisdiction. Secondly, the High Court decision was based on the terms of the statutory jurisdiction of the IRT and did not establish that administrative tribunals can inquire into the validity of previous decisions. The Big Apple had not identified any statutory provision authorising VCAT to set aside the Consent Orders. Thirdly, the Big Apple had overstated the effect of the Court of Appeal’s analysis of Bhardwaj made in Sudi. Fourthly, the IRT’s failure to fulfil its statutory function was a jurisdictional error in that it had not fulfilled its statutory function in the September decision, but the Big Apple had identified no such error by VCAT in making the Consent Orders. Fifthly, the Big Apple’s submission that Bhardwaj established that a decision involving jurisdictional error had no application to VCAT because Bhardwaj concerned the exercise of administrative power. Finally, VCAT’s orders operate until set aside and only the Court can set them aside.
The Council submitted that fraud does not always unravel an order previously made and whether it does so depends on the statutory context as was clear from the High Court’s judgment in SZFDE v The Minister for Immigration and Citizenship.[19]
[19](2007) 232 CLR 189; see also Leung v Minister for Immigration and Multicultural Affairs (1999) 79 FCR 400.
Next the Council submitted that the Court of Appeal judgment in Director of Public Prosecutions v Edwards[20] established that the doctrine of functus officio applies to a decision of a tribunal or an inferior court even if their orders are affected by jurisdictional error. In McVey v St Vincent’s Hospital (Melbourne) Ltd,[21] Eames JA stated:
Save, for limited purposes, it may be doubted that a judge of the County Court, an inferior statutory court, would have power to set aside a perfected judgment of that court. The only remedy would be by way of appeal to the Court of Appeal, and that is the course the applicant has attempted to pursue. An appellate court has power ‘to strike off the fetters’, which might restrain an inferior court from setting aside the judgment entered pursuant to a consent judgment.[22]
[20](2012) 44 VR 114.
[21][2005] VSCA 233.
[22]Ibid [41], Ashley JA and Hollingworth AJA agreeing (citations omitted).
The Council also relied on Warren CJ’s statement in Sudi that:[23]
… Bhardwaj is not an authority for the broad proposition that administrative tribunals can, in general, conduct inquiries into the validity of purported decisions of any administrative body if the decision happens to be material to the dispute before the tribunal.
[23]Sudi (n 16) 566-7 [31].
The Chief Justice also stated that the Tribunal’s ability to conduct a collateral review of an earlier decision:[24]
… remains a question of construction of the relevant statutory provisions. The question is whether the provisions evince an intention that the tribunal should attach ‘some relevant legal consequence’ to a purported decision of the kind in question, even if the decision is vitiated by jurisdictional error.
[24]Ibid.
Analysis
It was not disputed that at the time the Senior Member made the Consent Orders, the parties requested him to do so and did so on the basis that they had agreed to settle the Proceeding. That is why the orders are headed ‘Orders by Consent’. In my opinion, the Senior Member was able to act on the basis that the parties had agreed to settle the proceeding and therefore he had power to make the Consent Orders under s 93(1). The Big Apple now wants the Tribunal, more than 5 years later, to inquire into whether the settlement agreement was void for fraud or misrepresentation or misleading conduct and to determine whether the jurisdictional fact required for the exercise of the s 93(1) power was in fact in existence at the time the Consent Orders were made.
Section 93 is to be interpreted by applying the meaning of the words used and the context in which they are used.[25]
[25]CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384, 408 and Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27, 46-7 [47] (Hayne, Heydon, Crennan and Kiefel JJ).
In my opinion, the Tribunal did not have jurisdiction to do what the Big Apple requested. In my opinion, the VCAT Act does not empower the Tribunal to conduct a collateral review of its previous decision to make Consent Orders, when the Tribunal has asked to make them by the parties because they have settled the proceeding or reached an agreement to do so. When the Tribunal is so requested, as it was on 23 January 2013 in this proceeding, the jurisdictional fact or precondition for the exercise of the s 93 power is established. Sections 119 and 120 are two clear, but limited, exceptions which provide the Tribunal with power to reconsider previous orders.
The decision in Bhardwaj turned on the circumstance that September decision was not the performance of the statutory function that the IRT was required to perform and thus the further October decision was able to be made afresh. As Hayne J stated, the IRT in making the September decision had not performed the duty imposed on it.[26]
[26]Bhardwaj (n 10) 647 [155]-[256] and Jadwan Pty Ltd v Secretary, Department of Health (2003) 145 FCR 1.
The Court of Appeal judgments in Sudi establish that the operation of the Tribunal intended by the VCAT Act does not include a power to collaterally review the validity of an administrative decision under the Residential Tenancies Act 1997. That reasoning equally applies to the issue in this case. As Warren CJ stated:[27]
… the VCAT Act sets up VCAT as a forum for speedy and inexpensive resolution of specific kinds of disputes.
In order to entertain a collateral attack on the validity of an administrative decision while dealing with an application under the RTA [Residential Tenancies Act], VCAT would have to, in effect, conduct a trial within a trial. VCAT would need to leave the subject of tenancy law and enter the domain of administrative law. It would have to make difficult decisions about whether the challenge falls within the limits (if any) of permissible collateral attack, whether the impugned administrative decision is affected by error and whether the alleged error is jurisdictional. Such a complex, technical and time-consuming inquiry would destroy the advantages of litigating the tenancy dispute in VCAT rather than in a court.
The possibility of this detour into administrative law would be all the more anomalous given that VCAT does not possess general civil jurisdiction but only has original jurisdiction in respect of specific kinds of disputes and claims. Moreover, parties to a VCAT proceeding cannot, as of right, be legally represented and cannot, as of right, appeal VCAT’s decision.
…
I am satisfied that the RTA and the VCAT Act evince an intention to deny VCAT power to collaterally review the validity of a purported administrative decision that happens to be material to the tenancy dispute before VCAT.
[27]Sudi (n 16) 567 [34]-[36], 569 [43].
If the Big Apple’s construction of s 93 were accepted, the Tribunal would have to conduct an inquiry or investigation into whether the settlement agreement was genuinely formed. This ‘trial within a trial’, to adopt Warren CJ’s description in Sudi, is inconsistent with the legislature’s intention for the Tribunal to be a speedy and inexpensive forum for dispute resolution.
The Big Apple’s submissions would also mean that Consent Orders made under s 93(1) would always be conditional and cease to have any effect if the parties’ agreement was later found to have been induced by fraud or misrepresentation or mistake or misunderstanding. This outcome would affect the finality of Tribunal orders and the capacity to give immediate and permanent effect to them.
The right of a party to seek leave to appeal under s 148 against orders, including those made under s 93, is a further significant matter supporting the Senior Member’s conclusion. A party aggrieved by s 93 orders can seek to appeal to this Court and if required, can seek an extension of time. Alternatively it can commence a separate proceeding seeking to set aside the agreement.[28]
[28]Cf Clone Pty Ltd v Players Pty Ltd (in liq) (recs & mgrs apptd) (2018) 264 CLR 165.
As the Council submitted, to accept the Big Apple’s case that the Tribunal could undertake a collateral review of a previous order, would require inserting words into s 93(1) to the effect of:
If the Tribunal is satisfied that the parties agree to settle a proceeding or any part of it at any time, the Tribunal may make any orders necessary to give effect to the settlement;
Parliament’s choice of words in s 93, when read as part of the VCAT procedures established by the VCAT Act, make clear that VCAT has neither power nor obligation to inquire into whether the parties had reached agreement enlivening s 93(1), when they inform the Tribunal that they have. Section 93(1) enlivens the jurisdiction of the Tribunal when parties inform it that they have agreed to settle the dispute and consent to the making of orders to give effect to the settlement.
Even if I accepted the Big Apple’s submission that VCAT had jurisdiction to inquire whether an agreement had actually been reached at the time that it made the orders, VCAT could only have concluded in this proceeding that a settlement agreement had been reached. Its terms were set out in the Deed of Settlement executed just two days later. In my opinion, it cannot be said that no settlement agreement existed on 23 January 2013 when the Tribunal made the Consent Orders.
The determination of a claim for fraud committed by one party against another in connection with a settlement agreement being made raises a separate cause of action. Warren CJ explained in Sudi why some fragmentation may be necessary, when collateral challenges are sought to be raised in VCAT proceedings:[29]
these matters are a necessary consequence of setting up a specialist forum of limited jurisdiction. If the jurisdiction of a court or tribunal is limited, a dispute between the parties to a proceeding in that court or tribunal may raise issues that fall outside of its limited jurisdiction. This may lead to fragmentation of proceedings. In some circumstances, it may also require the court or tribunal to make an assessment of the strength of a party’s case in another forum. These difficulties are the flipside of the policy benefits derived from limiting VCAT’s jurisdiction — the quick, efficient, inexpensive and informal resolution of issues arising under the RTA that do fall within VCAT’s jurisdiction.
[29]Sudi (n 16) 568 [39].
No implied or inherent power to set aside an order made under s 93
I do not accept that the Tribunal has an inherent power to strike out and subsequently correct a wrong decision, even if it has identified an error.[30] That is a role of this Court exercising appellate powers from orders of VCAT.
[30]See Fishlock v State of Victoria [2016] VCAT 1214 (Senior Member Steele) and Willner v City of Melbourne [2016] VCAT 154 (Garde J).
Nor can such a power be implied. The Tribunal is a statutory body and does not have the inherent or implied powers possessed by this Court. The Big Apple relied on the New South Wales Court of Appeal decision in Logwon Pty Ltd v Warringah Shire Council (‘Logwon’),[31] for the proposition that bodies created by statute, in that case the Land and Environment Court, possessed an implied power to set aside their own orders. But that Court was a superior court, although of limited jurisdiction. It therefore had the inherent powers of a Supreme Court including the right to set aside its own orders.
[31](1993) 33 NSWLR 13.
Section 119 and 120 of the VCAT Act
The Senior Member considered whether the provisions of ss 119 and 120 had any operation in the circumstances before him. He correctly concluded that they did not.
Section 119 contains a ‘slip rule’ power. It empowers the Tribunal to correct a ‘clerical mistake’, ‘an error arising from an accidental slip or omission’, ‘a material miscalculation of figures or a material mistake in the description of any person, thing or matter referred to in the order’ or ‘a defect in form’.[32] It does not authorise collateral review of a previous order.
[32]VCAT Act s 119.
Section 120 provides that ‘a person in respect of whom an order is made may apply to the Tribunal for a review of the order if the person did not appear and was not represented at the hearing at which the order was made’.[33] This section does not apply in this matter because the Big Apple did appear at the Tribunal as the Senior Member explained.[34]
[33]Ibid s 120.
[34]VCAT Decision [39]-[45].
The decision remains until set aside
The Big Apple submitted that the Senior Member erred in determining that the Consent Orders remained enforceable until set aside. I do not accept this submission. The Consent Orders had been made and, as I have previously stated, the Tribunal could not conduct a collateral review of the making of the Consent Orders to determine their validity. They remain in operation unless and until a Court in an appropriate proceeding sets them aside.
In support of this part of its submission, the Big Apple referred to the Court of Appeal decision in Mercier Rouse Street Pty Ltd v Burness (‘Mercier’).[35] In that case, Santamaria JA stated, in the context of finding that VCAT had denied a litigant procedural fairness that:[36]
The decision of VCAT involved a jurisdictional error and as such, may be regarded as no decision at all. Nevertheless, in the absence of any application to set aside the decision, it appears that the order of VCAT remains capable of enforcement and, prima facie, affords the O’Bryans a right to a remedy in respect of [a] claim.
I am satisfied that the notice of contention filed by the O’Bryans in this proceeding constitutes a collateral challenge to the validity of the VCAT decision of the kind described by Hayne J in Minister for Immigration & Multicultural Affairs v Bhardwaj - indeed it expressly asserts that the order was made without jurisdiction and is invalid and of no legal effect. In the circumstances, it is appropriate that this Court make a declaration confirming that the VCAT order is a nullity and is incapable of enforcement.
[35][2015] VSCA 8. Warren CJ and Neave JA agreed with Santamaria JA’s judgment save that Warren CJ did not decide the issue of VCAT’s jurisdiction to hear the particular dispute [1] and Neave JA expressed the ‘tentative view’ that it did possess jurisdiction [8].
[36]Ibid [208]-[209].
The decision in Mercier supports the Senior Member’s conclusion that the Consent Orders remains capable of enforcement until set aside.
Finding that VCAT was functus officio
Whether the Tribunal was functus officio depended on whether the Consent Orders were in fact to be taken as never made because of jurisdictional error. As I have concluded, in my opinion, the Tribunal had no jurisdiction to conduct a collateral review of the validity of the Consent Orders and the Tribunal possessed jurisdiction to make those Consent Orders under s 93(1). The Consent Orders remain in operation and the Tribunal is functus officio in the proceeding in which they were made.
Conclusion
The Big Apple’s proposed grounds of appeal cannot succeed and the appeal has no real prospect of success. Accordingly, leave to appeal is refused and the proceeding is dismissed.
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