Thurin v Krongold Constructions (Aust) Pty Ltd

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2022 0051

DAVID THURIN	First Applicant
and
LISA THURIN	Second Applicant
v
KRONGOLD CONSTRUCTIONS (AUST) PTY LTD (ACN 103 839 49) (AND OTHERS ACCORDING TO THE ATTACHED SCHEDULE)	Respondents

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JUDGES:	McLEISH, NIALL and WALKER JJA
WHERE HELD:	Melbourne
DATE OF HEARING:	1 and 2 September 2022
DATE OF JUDGMENT:	20 October 2022 First revision (appearances): 20 October 2022
MEDIUM NEUTRAL CITATION:	[2022] VSCA 226

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CONSTITUTIONAL LAW – Federal jurisdiction – Referral of questions of law by Victorian Civil and Administrative Tribunal – Claim against construction company in respect of building works – Company claimed apportionment and contribution from third party on basis of alleged breaches of Commonwealth law – Whether apportionment and contribution claims mean matter ‘arising under’ law made by Commonwealth Parliament within s 76(ii) of the Constitution – Apportionment and contribution claims brought matter within federal jurisdiction – Irrelevant that third party not joined – Once a federal matter, VCAT lacked jurisdiction to hear and determine – Whether company’s incorporation under Corporations Act 2001 (Cth) means matter ‘arising under’ Commonwealth law – Incorporation under Corporations Act insufficient to attract federal jurisdiction.

STATUTORY CONSTRUCTION – Whether s 77 of Victorian Civil and Administrative Tribunal Act 1998 empowers VCAT to refer proceeding in federal jurisdiction to Supreme Court – Statutory language to be given full meaning – Provision construed to operate to full extent of State legislative power – Referral not an exercise of federal judicial power – Re-enactment presumption inapplicable – Provision empowers VCAT to refer proceeding.

Constitution s 76(ii); Victorian Civil and Administrative Tribunal Act 1998, ss 57B, 57C, 77, 96; Domestic Building Contracts Act 1995, ss 53, 57; Trade Practices Act 1974 (Cth) ss 74B, 74D, 75AF and 75AG; Wrongs Act 1958, ss 23B, 24, 24AE, 24AH, 24AI; Judiciary Act 1903 (Cth) s 39(2); Corporations Act 2001 (Cth) ss 119, 124, 125; Interpretation of Legislation Act 1984, s 6(1).

Citta Hobart Pty Ltd v Cawthorn (2022) 96 ALJR 476, Palmer v Ayres (2017) 259 CLR 478, Malecki v Macko [2022] FCA 766, followed; R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141, explained; Moorgate Tobacco Co Ltd v Philip Morris Ltd (1980) 145 CLR 457, LNC Industries Ltd v BMW (Australia) Ltd (1983) 151 CLR 575, Edwards v Santos Ltd (2011) 242 CLR 421, Hobart International Airport Pty Ltd v Clarence City Council (2022) 96 ALJR 234, discussed; Qantas v Lustig (2015) 228 FCR 148, Oliver v Nine Network Australia Pty Ltd [2019] FCA 583, Osborn v Bank of the United States 22 US (9 Wheat) 738 (1824), not followed.

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Counsel
Applicants:		Mr MG Roberts KC with Dr COH Parkinson KC and Mr N Guenther
First Respondent:		Mr JAF Twigg KC with Ms K Weston-Scheuber, Mr M Hosking and Mr CFE Dawlings
Second Respondent:		Mr AE Klotz
Third Respondent:		Mr KJ Naish
Attorney-General of the Commonwealth:		Mr G Hill SC with Ms S Zeleznikow
Attorney-General for the State of Victoria:		Ms RJ Orr KC with Mr OM Ciolek and Mr L Chircop
Solicitors
Applicants:	Herbert Smith Freehills
First Respondent:	Krongold Group
Second Respondent:	Meridian Lawyers
Third Respondent:	DLA Piper
Attorney-General of the Commonwealth:	Australian Government Solicitor
Attorney-General for the State of Victoria:	Victorian Government Solicitor’s Office

TABLE OF CONTENTS

Introduction

Factual and procedural background

Further procedural steps and reserved questions

Wrongs Act provisions

Jurisdiction and powers of VCAT

Chapter III of the Constitution

Questions 3 and 4 — claims against Swan Hardware

Question 5

Question 2

Submissions

Consideration

Barrett

Authorities after Barrett

United States authorities

Conclusion on question 2

Question 1

Question 6

Legislative power

Meaning of ‘refer’

Construction of s 77

Part 3A of the VCAT Act

Conclusion on question 6(a)

Orders

SCHEDULE OF PARTIES

MCLEISH JA
NIALL JA
WALKER JA:

Introduction

The Victorian Civil and Administrative Tribunal (‘VCAT’) has jurisdiction to hear and determine disputes under the Domestic Building Contracts Act 1995 (‘the DBC Act’). Very frequently the respondent in such disputes is a corporation incorporated under the Corporations Act 2001 (Cth). One question raised in the present case is whether that circumstance brings the dispute within federal jurisdiction so as to deprive VCAT of the ability to hear and determine it.
Also very frequently, building disputes in VCAT involve multiple parties who make claims against each other. Those claims may include claims for apportionment of liability for loss and damage suffered by an applicant, or claims for contribution toward any judgment for such loss or damage. Such claims may raise allegations of contravention of consumer protection laws.
Since 2012, the relevant consumer law has been the Australian Consumer Law, given effect by s 8 of the Australian Consumer Law and Fair Trading Act 2012 and, in relation to the conduct of corporations, by s 131 of the Competition and Consumer Act 2010 (Cth). Before that time, similarly, consumer law was found not only in State legislation but also in the Competition and Consumer Act (formerly the Trade Practices Act 1974 (Cth) (‘the TPA’)). Reliance on the Commonwealth emanations of that law raises further questions about federal jurisdiction under ch III of the Constitution.
This case has all these features. It concerns a proceeding brought in VCAT by two natural persons against a corporation. That corporation has, by way of defence, pleaded an apportionment claim against another corporation, based on a claim under the TPA. In those circumstances, the defendant corporation contended that VCAT lacked jurisdiction to hear the matter because the matter is one in federal jurisdiction. It further contended that VCAT could not refer the matter to the Supreme Court pursuant to s 77 of the Victorian Civil and Administrative Tribunal Act 1998 (‘the VCAT Act’).
In these circumstances, VCAT has referred six questions of law to this Court for determination, pursuant to s 96(1) of the VCAT Act. In summary, we have concluded that:
(a)the VCAT proceeding involves a matter arising under a law of the Parliament within the meaning of s 76(ii) of the Constitution, and hence a matter in federal jurisdiction, by reason of the reliance by the defendant in the VCAT proceeding on a claim under the TPA, meaning that VCAT lacks jurisdiction to hear and determine the proceeding;
(b)the matter is not one in federal jurisdiction merely by reason of the fact that the defendant to the VCAT proceeding is a corporation incorporated under the Corporations Act; and
(c)VCAT has jurisdiction to refer the matter to the Supreme Court pursuant to s 77 of the VCAT Act.

Factual and procedural background

David and Lisa Thurin engaged the first respondent, Krongold Constructions (Aust) Pty Ltd (‘Krongold’) to demolish their house in Whernside Avenue, Toorak, and construct a new residence and other amenities. These works constituted major domestic building works within the meaning of the DBC Act. The relevant contract, executed in September 2006, was a major domestic building contract under the DBC Act.
The performance of the contract gave rise to several disputes. First, Mr and Mrs Thurin alleged that defective pipes were used in internal plumbing works. Secondly, they alleged that the internal plumbing works, as well as bathroom works and other miscellaneous installations, were not properly carried out. Thirdly, it was claimed that the irrigation system and the lawn were not properly installed and were not fit for purpose.
On 31 October 2017, Mr and Mrs Thurin commenced a proceeding in the Supreme Court (‘the 2017 SC proceeding’). The writ named Swan Hardware & Staff Pty Ltd (‘Swan Hardware’)[1] and Plumbing Plus Bathroom Kitchen Laundry Pty Ltd (‘Plumbing Plus’) as defendants. By general indorsement of claim, the plaintiffs alleged that either of the defendants had imported the allegedly defective pipes into Australia and had contravened various provisions of the TPA by supplying the pipes to Krongold’s plumbing contractor, MDG Plumbing Contractors Pty Ltd (‘MDG Plumbing’). They claimed damages accordingly. Ultimately, the plaintiffs filed a statement of claim making such allegations against Swan Hardware only.
[1]In its capacity as corporation and also as trustee of a unit trust.
On 13 December 2017, Mr and Mrs Thurin formally notified Krongold of the various disputes that had arisen in performance of the contract. Ultimately, an expert was purportedly appointed under the contract to determine the disputes, and on 15 May 2018 he determined that Mr and Mrs Thurin had suffered loss and damage of $3,583,437.88. Krongold declined to pay that sum, or an additional amount in respect of the expert’s fees.
On 22 May 2018, Mr and Mrs Thurin commenced a proceeding in VCAT seeking to enforce the expert determination. VCAT has jurisdiction under s 53 of the DBC Act to make orders to resolve a domestic building dispute. As explained later in these reasons, subject to an important qualification relating to federal jurisdiction, VCAT’s jurisdiction in this respect is to a substantial extent exclusive of the jurisdiction of Victorian courts.[2]
[2]DBC Act, s 57.
Krongold served points of defence dated 15 June 2018 contesting the allegations. Mr and Mrs Thurin then amended their points of claim, including by claiming damages under the contract. On 3 August 2018, Krongold served a further defence, together with points of counterclaim. Relevantly for present purposes, Krongold pleaded by way of defence and counterclaim that any loss and damage suffered by Mr and Mrs Thurin was apportionable.
In relation to the alleged use of defective pipes in the internal plumbing works, the apportionment was based on claims that:
(a)MDG Plumbing had breached its duty of care and duty under the Building Act 1993 in installing the allegedly deficient pipes;
(b)the supplier of the pipes, Swan Hardware, had breached the implied warranty of fitness for purpose in s 74B of the TPA; and
(c)the architect, Casper Architecture and Design Pty Ltd (‘Casper’) had breached its duty of care in certifying the completion of the internal plumbing works and failing to serve any defect notice in respect of those works.
Krongold alleged that each of MDG Plumbing, Swan Hardware and Casper were concurrent wrongdoers within the meaning of s 24AH of the Wrongs Act 1958, so as to require apportionment of the loss and damage claimed. Alternatively, it alleged that Swan Hardware and Casper were liable in respect of the same damage and that Krongold should recover contribution from them under pt IV of the Wrongs Act.
In relation to the alleged deficiencies in the internal plumbing works, bathroom works and miscellaneous installations, Krongold claimed:
(a)apportionment (but not contribution) in respect of MDG Plumbing for the loss and damage claimed for the internal plumbing works, which were allegedly done in breach of its duty of due skill and care;
(b)apportionment (but not contribution) in respect of the waterproofing contractor, Bicon Pty Ltd, for the loss and damage claimed for the bathroom works, which were allegedly done in breach of its duty of due skill and care; and
(c)apportionment (and contribution) in respect of Casper for the loss and damage claimed for the internal plumbing works, bathroom works and the miscellaneous installations, and for its failure to serve notices or otherwise advise Mr and Mrs Thurin in relation to the defects in those works.
In relation to the alleged deficiencies in the irrigation system and lawn, Krongold claimed apportionment (and contribution) in respect of various contractors, and Casper, based on alleged breaches of duty.
As a result of the new allegations in the counterclaim, Krongold sought orders joining the parties in respect of whom apportionment or contribution claims were made, other than MDG Plumbing, which was by then in liquidation.
On 29 August 2018, VCAT made an order joining Swan Hardware and Casper, on the basis that it was arguable that the limitation period in respect of the internal plumbing works was to expire on 8 September 2018 (reserving their rights to bring any application under s 75 of the VCAT Act at a later date). The other applications for joinder were adjourned.
Mr and Mrs Thurin then further amended their points of claim on 6 September 2018 to claim against Casper for any loss and damage caused or contributed to by it.
On 7 November 2018, VCAT joined Bicon Pty Ltd and three other contractors as respondents, as Krongold had sought.
On 20 May 2019, Krongold commenced another proceeding in the Supreme Court, against Swan Hardware (‘the 2019 SC proceeding’). In its statement of claim, it repeated the allegations it had previously made against Swan Hardware under the TPA, and made additional allegations under other provisions of the TPA relating to defective goods and misleading and deceptive conduct, as the basis for claiming contribution in relation to the defective pipes claim in the event that Mr and Mrs Thurin succeeded in that claim. Krongold referred to its pleadings in VCAT and pleaded that VCAT had no jurisdiction in respect of claims brought under the TPA.

Further procedural steps and reserved questions

The multiplicity of proceedings raising related issues was addressed by a number of procedural steps. First, pursuant to s 29(3) of the VCAT Act, Quigley J as President of VCAT appointed Riordan J, as a member of the panel of judges appointed pursuant to s 29(1) of the VCAT Act, as an acting member to hear and determine the VCAT proceeding.
Secondly, on 4 October 2019, Riordan J directed that the 2017 SC proceeding be heard and determined together with the 2019 SC proceeding and the VCAT proceeding, and that all documents be filed as documents in the 2017 SC proceeding. Riordan J also made orders for the filing and service of substituted pleadings and evidence.
Thirdly, new pleadings were filed. It is possible to summarise those pleadings comparatively briefly:
(a)Mr and Mrs Thurin maintained their various claims against Krongold, Swan Hardware and Casper (but not against Plumbing Plus).
(b)Bicon was named as the fourth respondent but the plaintiffs made no claim against it.
(c)Krongold maintained its defences and claims of apportionment in respect of MDG Plumbing, Swan Hardware and Casper, as well as making contribution claims against Swan Hardware and Casper.
(d)By cross-claims, Krongold claimed:
(i)contribution from Swan Hardware, together with damages under the TPA;
(ii)contribution from Bicon (in respect of waterproofing works); and
(iii) contribution from Casper.
(e)The respondents other than Krongold filed defences and claimed contribution as against each other.
(f)Over time, various amended pleadings were filed, to which it is unnecessary to refer.
Finally, Riordan J referred questions of law to this Court, with the consent of Quigley J as required by s 96 of the VCAT Act. Those questions are set out later in these reasons. For present purposes, the following aspects of the various claims are significant:
(a)Krongold claimed apportionment and contribution against Swan Hardware, in both the VCAT proceeding and the 2019 SC proceeding, on the basis of alleged contraventions of the TPA.
(b)Krongold’s other claims of apportionment and contribution alleged breaches of duty but did not raise allegations under the TPA.
(c)Krongold is a corporation incorporated under the Corporations Act.
Issues have been raised in this context as to the jurisdiction of VCAT to hear the claims made in the VCAT proceeding, and, if it lacks such jurisdiction, as to the extent of the jurisdiction and powers of VCAT to make consequential orders.
The questions reserved for this Court are as follows:
(1)Is the subject matter of [the] VCAT proceeding … the same matter, or justiciable controversy, that is the subject matter of [the 2017 SC proceeding and the 2019 SC proceeding], and therefore a matter arising under a law made by the Parliament within the meaning of s 76(ii) of the Constitution?
(2)Does the fact that the respondents to the VCAT proceeding are corporations registered under the Corporations Act 2001 (Cth) mean that the VCAT proceeding involves a matter arising under any laws made by the Parliament within the meaning of s 76(ii) of the Constitution?
(3)Do the claims of Krongold in its amended points of defence for apportionment and contribution under parts IVAA and IV of the Wrongs Act, based on allegations of liability under the TPA Liability for Defective Goods provisions[3] and the TPA Misleading and Deceptive Conduct provision,[4] mean that the VCAT proceeding involves a matter arising under any laws made by the Parliament within the meaning of s 76(ii) of the Constitution?
[3]TPA, ss 74B, 74D, 75AF and 75AG.
[4]Ibid s 52.
(4)If yes to question 3, was the order made by VCAT on 29 August 2018 to join Swan Hardware to the VCAT proceeding beyond power and void?
(5)If no to question 4, does VCAT have power to strike out or dismiss the allegations of liability under the TPA Liability for Defective Goods provisions and the TPA Misleading and Deceptive Conduct provision in Krongold’s defence?
(6) If yes to questions 1, 2 or 3, does VCAT have jurisdiction to:
(a)refer part or all of the VCAT proceeding to the Supreme Court of Victoria under s 77 of the VCAT Act; or
(b) hear and determine the VCAT proceeding?
Before addressing the questions, it is convenient to say more about the principles of apportionment and contribution.

Wrongs Act provisions

Both apportionment of damages and claims for contribution are dealt with by the Wrongs Act.
Part IVAA addresses proportionate liability. In short, in any proceeding involving an ‘apportionable claim’, the liability of a defendant who is a ‘concurrent wrongdoer’ in relation to that claim is limited to an amount reflecting that defendant’s proportionate responsibility for the relevant loss or damage.[5] For these purposes, an ‘apportionable claim’ is relevantly a claim for economic loss or damage to property in an action for damages arising from a failure to take reasonable care;[6] and ‘concurrent wrongdoers’ are persons whose acts or omissions caused the loss or damage in question.[7]
[5]Wrongs Act, s 24AI.
[6]Ibid ss 24AE, 24AF(1).
[7]Ibid s 24AH.
The degree of apportionment is that which the court considers just, having regard to the extent of the defendant’s responsibility for the loss or damage.[8] The court may give leave for concurrent wrongdoers to be joined as defendants.[9] It must not have regard to the comparative responsibility of any person who is not a party to the proceeding unless that person is not a party because they are dead, or are a corporation that has been wound up.[10]
[8]Ibid s 24AI(1).
[9]Ibid s 24AL.
[10]Ibid s 24AI(3).
For the purposes of pt IVAA, ‘court’ includes a tribunal.[11]
[11]Ibid s 24AE.
If a defendant has judgment given against them as a concurrent wrongdoer, that defendant cannot be required to contribute to the damages recoverable from another concurrent wrongdoer in the same proceeding for the apportionable claim.[12]
[12]Ibid s 24AJ.
Part IV deals with contribution. Section 23B(1) provides that a person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage. By s 24(2), the amount of contribution is the amount found by the court or jury to be just and equitable having regard to the extent of the person’s responsibility for the damage. The word ‘court’ is not defined in pt IV, raising the possibility that VCAT lacks jurisdiction to determine claims for contribution under pt IV.[13]
[13]See Sensyn Australia v United Colours on Collins Pty Ltd [2000] VCAT 2643 [32]–[33] (Macnamara DP).

It can be seen that apportionment and contribution are alternative ways for a defendant to reduce their liability by identifying other wrongdoers who have contributed to the loss or damage in question. Apportionment under pt IVAA operates by reducing the defendant’s liability to reflect their proportionate responsibility. This generally requires joining the other wrongdoers as defendants. It is clear that apportionment claims may be made in VCAT.
Contribution under pt IV operates, not by reducing the defendant’s liability to the plaintiff, but by requiring the other wrongdoers to make payment to the defendant. It is in the nature of a third party proceeding. Contribution claims may be made in a court, and the Court was informed that they are frequently made in VCAT (as in this case), notwithstanding that pt IV does not contain a definition of the word ‘court’.
It will have been observed that, in the present case, Krongold claimed apportionment and contribution in VCAT against Swan Hardware and Casper, and also claimed contribution against Swan Hardware in the 2019 SC proceeding. In the consolidated pleading, filed in the 2017 SC proceeding, Krongold repeated all these claims.

Jurisdiction and powers of VCAT

Section 53 of the DBC Act, as already noted, empowers VCAT to ‘make any order it considers fair to resolve a domestic building dispute’. That includes ordering the payment of a sum of money found to be owing, or by way of damages: s 53(2)(b). It is not in issue that the dispute arising between Mr and Mrs Thurin and Krongold is a ‘domestic building dispute’. Nor is it in issue that, in exercising its power to resolve a domestic building dispute, VCAT is exercising judicial power.
Section 57 of the DBC Act is entitled ‘VCAT to be chiefly responsible for resolving domestic building disputes’. It provides:
(1)This section applies if a person starts any action arising wholly or predominantly from a domestic building dispute in the Supreme Court, the County Court or the Magistrates’ Court.
(2)The Court must stay any such action on the application of a party to the action if—
(a)the action could be heard by VCAT under this Subdivision; and
(b)the Court has not heard any oral evidence concerning the dispute itself.
(3)This section does not apply to any matter dismissed by VCAT under section 77 of the Victorian Civil and Administrative Tribunal Act 1998.^[[14]]
(4)If an action is stayed under this section, any party to the action may apply to VCAT for an order with respect to the dispute on which the action was based.
(5)If a person applies to VCAT under subsection (4) VCAT must notify the Court and on such notification the Court must dismiss the action.
(6)Subsection (5) does not apply if VCAT refers the matter to the Court under section 77(3) of the Victorian Civil and Administrative Tribunal Act 1998.
[14]The reference to ‘dismissal’ is inapt because s 77 of the VCAT Act permits the striking out of part or all of a proceeding, not its dismissal. We address the meaning of ‘strike out’ in this context below.
No application was made under this provision to have the judge stay the SC proceeding. As explained below, VCAT could not have heard the action because it involved a claim under the TPA.
The conferral of jurisdiction on VCAT attracts relevant provisions of the VCAT Act. In particular, s 77 of the VCAT Act provides:
77 More appropriate forum
(1)At any time, the Tribunal may make an order striking out all, or any part, of a proceeding (other than a proceeding for review of a decision) if it considers that the subject-matter of the proceeding would be more appropriately dealt with by a tribunal (other than the Tribunal), a court or any other person or body.
(2)The Tribunal's power to make an order under subsection (1) is exercisable only by a judicial member.
(3)If the Tribunal makes an order under subsection (1), it may refer the matter to the relevant tribunal, court, person or body if it considers it appropriate to do so.
(4)An order under subsection (1) may be made on the application of a party or on the Tribunal's own initiative.

Chapter III of the Constitution

Chapter III of the Constitution is entitled ‘The Judicature’. Section 75 provides for the original jurisdiction of the High Court. Section 76 enables the Parliament to make laws conferring additional original jurisdiction on the High Court:
The Parliament may make laws conferring original jurisdiction on the High Court in any matter:
(i) arising under this Constitution, or involving its interpretation;
(ii) arising under any laws made by the Parliament;
(iii) of Admiralty and maritime jurisdiction;
(iv)relating to the same subject‑matter claimed under the laws of different States.
By s 77, the Commonwealth Parliament is empowered to make laws with respect to matters mentioned in ss 75 and 76 defining the jurisdiction of any federal court other than the High Court, defining the extent to which the jurisdiction of any federal court shall be exclusive of all courts of the States, and ‘investing any court of a State with federal jurisdiction’.[15]
[15]Section 77(iii).
The Commonwealth Parliament has deployed the power in s 77(iii) to enact (among other provisions) s 39(2) of the Judiciary Act 1903 (Cth), which invests ‘the several Courts of the States’ with federal jurisdiction in all matters in which the High Court has original jurisdiction, or in which original jurisdiction can be conferred upon the High Court, subject to certain exceptions and conditions.
VCAT is not a ‘court of a State’ within the meaning of s 77(iii) or, therefore, within s 39(2) of the Judiciary Act.[16] It has therefore not been invested with federal jurisdiction by the Commonwealth Parliament. Moreover, the State Parliament is incapable of conferring on a body other than a ‘court of a State’, judicial power in respect of any ‘matters’ in ss 75 or 76 of the Constitution.[17]
[16]Meringnage v Interstate Enterprises Pty Ltd (2010) 60 VR 361 (‘Meringnage’).
[17]Burns v Corbett (2018) 265 CLR 304 (‘Burns’); Meringnage (2010) 60 VR 361, 372 [26] (Tate, Niall and Emerton JJA). The limitations on the powers of State Parliaments with respect to the investing of federal jurisdiction go further than this, but it is not necessary to enter into that area: Rizeq v Western Australia (2017) 262 CLR 1, 25 [60] (Bell, Gageler, Keane, Nettle and Gordon JJ), citing MZXOT v Minister for Immigration and Citizenship (2008) 233 CLR 601, 618 [20] (Gleeson CJ, Gummow and Hayne JJ).
The conferral of jurisdiction on VCAT by the State Parliament is therefore required to be read down so as to deny VCAT judicial power in respect of any such matter.[18]
[18]Burns (2018) 265 CLR 304, 345 [64] (Kiefel CJ, Bell and Keane JJ), 364 [120] (Gageler J).
The first three questions reserved in the present proceedings ask whether this limitation on State legislative power is infringed because the VCAT proceeding involves such a matter — specifically, a matter arising under a law made by the Commonwealth Parliament.[19]
[19]Constitution s 76(ii).
The meaning of ‘matter’ in ch III of the Constitution was confirmed in Palmer v Ayres:[20]
A ‘matter’, as a justiciable controversy, is not co-extensive with a legal proceeding, but rather means the subject matter for determination in a legal proceeding — ‘controversies which might come before a Court of Justice’ (emphasis added). It is identifiable independently of proceedings brought for its determination and encompasses all claims made within the scope of the controversy. What comprises a ‘single justiciable controversy’ must be capable of identification, but it is not capable of exhaustive definition. ‘What is and what is not part of the one controversy depends on what the parties have done, the relationships between or among them and the laws which attach rights or liabilities to their conduct and relationships’.
The requirement that, for there to be a ‘matter’, there must be an ‘immediate right, duty or liability to be established by the determination of the Court’ reinforces that the controversy that the court is being asked to determine is genuine, and not an advisory opinion divorced from a controversy, and, further, that only a claim is necessary. A matter can exist even though a right, duty or liability has not been, and may never be, established.[21]
[20](2017) 259 CLR 478, 490–1 [26]–[27] (Kiefel, Keane, Nettle and Gordon JJ) (‘Palmer’).
[21]Citations omitted.
As this passage makes clear, a ‘matter’ is a controversy, being the subject matter of a dispute which may be litigated in a legal proceeding. It encompasses all claims made within the scope of the controversy, whether or not those claims are ultimately established.
The remainder of these reasons will deal with the questions in the following order. It is convenient first to decide whether the making of the apportionment and contribution claims against Swan Hardware in the VCAT proceeding, invoking alleged contraventions of the TPA, means that the VCAT proceeding involves a matter arising under any law of the Parliament (question 3). As part of that issue, it will be necessary to decide whether the order joining Swan Hardware to the VCAT proceeding was void (question 4).
For the reasons that follow, the making of those claims brought the VCAT proceeding into federal jurisdiction, and the order joining Swan Hardware was void.
It is therefore strictly unnecessary to decide questions 1 and 2, which offer alternative paths to the same answer about federal jurisdiction. However, as the parties urged, we will still consider whether the fact that Krongold and the other respondents to the VCAT proceeding are corporations incorporated under the Corporations Act means, of itself, that the VCAT proceeding involves a matter arising under any laws of the Parliament (question 2).
We will not address question 1, which asks whether the subject matter of the two proceedings in the Supreme Court and the proceeding in VCAT is the same, so as to constitute a single matter arising under any laws of the Parliament.
Finally, we will turn to questions 5 and 6, which deal with the consequences of VCAT being deprived of jurisdiction once the TPA claims were made against Swan Hardware.

Questions 3 and 4 — claims against Swan Hardware

As mentioned, Krongold served a defence dated 3 August 2018 to Mr and Mrs Thurin’s amended points of claim in the VCAT proceeding alleging, relevantly, that it was entitled to apportionment and contribution in respect of losses said to have been caused to Mr and Mrs Thurin by Swan Hardware. When it did so, Krongold introduced into the VCAT proceeding allegations of breach of a Commonwealth law, namely the TPA.
Where a Commonwealth law is relied on as the source of a claim or defence asserted in the course of a justiciable controversy, the controversy is one ‘arising under’ a law of the Commonwealth within the meaning of s 76(ii) of the Constitution.[22] For that purpose, it is enough that the claim or defence be ‘genuinely in controversy and that it give rise to an issue capable of judicial determination’; that is, it is ‘enough that the claim or defence be genuinely raised and not incapable on its face of legal argument’.[23]
[22] Citta Hobart Pty Ltd v Cawthorn (2022) 96 ALJR 476, 486 [31] (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ) (‘Citta’); [2022] HCA 16.
[23]Ibid 486–7 [35].
Mr and Mrs Thurin submitted that, although Krongold had purported to raise claims of contribution and apportionment in respect of Swan Hardware, those claims were incapable of legal argument in the absence of an order of VCAT joining Swan Hardware as a party under s 60 of the VCAT Act. In relation to apportionment, reliance was placed on the requirement of joinder in s 24AI(3) of the Wrongs Act. As far as contribution was concerned, it was submitted that it was inherent in the nature of such a claim that it could not be made against a non-party.
Krongold submitted that the point at which a claim formed part of a controversy between persons was not determined by when issue is formally joined between those persons in legal proceedings articulating the claim, but by when, as a matter of fact, the claim is made as between those persons. As such, it is possible for a claim to enter into a controversy, including one already in the course of litigation, by being the subject of notification or dispute between the parties.
That submission should be accepted. It is well established that the identification of a ‘matter’ in federal jurisdiction does not depend on the form taken by the proceedings in question.[24] The ‘matter’ is not co-extensive with any legal proceeding but is the subject matter for determination in a legal proceeding or ‘controversies which might come before a Court of Justice’.[25]
[24]Fencott v Muller (1983) 152 CLR 570, 608 (Mason, Murphy, Brennan and Deane JJ) (‘Fencott’); Palmer (2017) 259 CLR 478, 490–1 [26] (Kiefel, Keane, Nettle and Gordon JJ).
[25]Palmer (2017) 259 CLR 478, 490 [26] (emphasis in original), citing In re Judiciary and Navigation Acts (1921) 29 CLR 257, 265–6 (Knox CJ, Gavan Duffy, Powers, Rich and Starke JJ), and South Australia v Victoria (1911) 12 CLR 667, 675 (Griffith CJ); Abebe v Commonwealth (1999) 197 CLR 510, 524 [24] (Gleeson CJ and McHugh J).
The ‘matter’ might therefore take shape before the issues have been delineated in pleadings at all, for example in correspondence between the parties.[26]
[26]Tucker v McKee (2022) 402 ALR 254, 263 [26]–[27] (Allsop CJ, Kenny and Jagot JJ); [2022] FCAFC 98; National Australia Bank Ltd v Nautilus Insurance Pty Ltd [No 2] (2019) 377 ALR 627, 648–50 [82]–[85] (Allsop CJ); [2019] FCA 1543; Malecki v Macko [2022] FCA 766 [26]–[27] (Besanko J) (‘Malecki’); Hooper v Kirella (1999) 96 FCR 1, 15 [53], 16 [56], [59] (Wilcox, Sackville and Katz JJ).
It follows that there was no requirement for the claims made by Krongold in respect of Swan Hardware to be formally incorporated into the points of claim in VCAT in order for those claims to form part of the controversy between Krongold and Mr and Mrs Thurin, and for that controversy to extend to Swan Hardware. No order for joinder was required in order for the ‘matter’ to be enlarged to accommodate those claims.
It is therefore irrelevant that the claims could not be adjudicated upon until Swan Hardware was joined, either to comply with s 24AI(3) of the Wrongs Act in respect of apportionment, or to attract jurisdiction in relation to the contribution claim.
Equally, the claims do not become other than genuinely raised or capable of legal argument, just because joinder would be required in order to have them adjudicated. No other obstacle to the claims being arguable has been identified.
Since the claims form part of the matter as soon as they are raised, the question of jurisdiction arises and must be answered as at that point. Issues of parties to a proceeding and joinder are irrelevant to the identification of the matter and must likewise be irrelevant to deciding whether the matter so identified is genuinely raised and capable of legal argument.
It follows that, once the federal claims in respect of Swan Hardware were raised — which they were at least by the time Krongold served its defence dated 3 August 2018[27] — the matter the subject of the VCAT proceeding came within federal jurisdiction. VCAT thereafter lacked jurisdiction to hear and determine it. One consequence is that VCAT lacked power to order that Swan Hardware be joined as a party to the VCAT proceeding.
[27]This Court was not provided with any evidence concerning whether the TPA claims against Swan Hardware were raised in correspondence between Krongold and Swan Hardware at some earlier date.
Question 3 should therefore be answered ‘yes’, and question 4 should be answered ‘yes’ also.

Question 5

Question 5 asks whether VCAT would have power to strike out or dismiss the claims made by Krongold in respect of Swan Hardware, if the joinder order was not beyond power and void. It follows from our answer to question 4, holding that the order was beyond power, that question 5 does not arise.

Question 2

Question 2 is addressed to the scope of the phrase ‘arising under any laws made by the Parliament’ in s 76(ii) of the Constitution, and whether the fact that a corporation is incorporated under and regulated by the Corporations Act means that any matter in which a claim is made against that entity falls within that description.

Submissions

In summary, Krongold submitted that any matter in which a claim is made against a company incorporated under the Corporations Act is a matter arising under a law made by the Commonwealth Parliament, because any right or duty claimed against the company — whatever the nature of that right or duty — will owe its existence to the Corporations Act. Alternatively, it was said that any such right or duty would depend for its enforcement on the Corporations Act. In so submitting, Krongold relied upon a passage from the reasons of Latham CJ in R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett, which has since been cited with approval, that:
a matter may properly be said to arise under a Federal law if the right or duty in question in the matter owes its existence to Federal law or depends upon Federal law for its enforcement, whether or not the determination of the controversy involves the interpretation (or validity) of the law.[28]
[28](1945) 70 CLR 141, 154 (‘Barrett’).
Krongold also relied upon the judgment of Lee J in Mulley v Hayes,[29] and upon a decision of the United States Supreme Court, Osborn v Bank of the United States.[30]
[29](2021) 286 FCR 360, 378–9 [55].
[30]22 US (9 Wheat) 738, 823 (Marshall CJ for the Court) (1824) (‘Osborn’).
Further, Krongold submitted that the Corporations Act is not ‘a simple act of incorporation, and … nothing more’ (quoting from Osborn). It relied upon the following sections of that Act:
(a)section 119, which provides for a company to come into existence as a body corporate upon registration;
(b)section 124, which provides that a company has the legal capacity and powers of an individual as well as the powers of a body corporate; and
(c)section 125, which has the effect of abolishing the doctrine of corporate ultra vires.
Krongold submitted that the consequence of these provisions, applying the reasoning in Osborn, is that any matter in which a claim is made against such a company is a matter arising under a law made by the Commonwealth Parliament.
Mr and Mrs Thurin and the interveners submitted that the mere fact that a corporation incorporated under the Corporations Act is a party to a proceeding does not mean that such a proceeding is in federal jurisdiction. They accepted that a proceeding where the corporate status or powers of the corporation in question were in issue would be a proceeding in federal jurisdiction, because that would involve a matter arising under the Corporations Act. But they submitted that, where there is no dispute of that kind, the matter does not ‘arise under’ the Corporations Act. They submitted that there is a meaningful difference between a ‘matter’ — the justiciable controversy between the parties arising out of the substratum of facts and claims — arising under federal law, and a party’s ‘ability or capacity to agitate’ such a matter.[31]
[31]Relying upon Malecki [2022] FCA 766 [33] (Besanko J).
There were some differences of emphasis and expression between the submissions of Mr and Mrs Thurin and the interveners on question 2, but in broad summary, their submissions were directed to the proposition that, although the cause of action or the defence itself need not arise directly under federal law in order for a matter to be one arising under a law of the Commonwealth, nonetheless there must be a sufficiency of connection between a federal law and the issues in dispute in the proceeding for the matter to have that character.[32]
[32]Although the Commonwealth did not use the language of ‘sufficient connection’, it accepted that a matter could arise under a Commonwealth law even though the right or duty sought to be enforced, or the defence asserted, has a source other than Commonwealth law. It submitted that ‘there are questions of degree involved, and the Commonwealth Act in question must have some significance to the issues in dispute’. In oral argument, the Commonwealth accepted the third category as articulated by Victoria, although it indicated that it disagreed in some respects with Victoria’s application of that category.

The interveners urged caution in reliance on United States authorities, both because of the different constitutional text and jurisprudence as between the United States and Australia, and because Osborn has been criticised[33] and overtaken by later statutory developments in the United States.[34]
[33]See, eg, Textile Workers Union of America v Lincoln Mills of Alabama, 353 US 448, 481–2 (Frankfurter J, dissenting) (1957); Erwin Chemerinsky, Federal Jurisdiction (Wolters Kluwer, 8^th ed, 2021) 312, 314–16.
[34]See SG v American National Red Cross, 938 F 2d 1494, 1497 (Campbell J for the Court) (1^st Cir 1991).
The Commonwealth also pointed to the consequences of Krongold’s submission, namely:
(a)State tribunals would be deprived of jurisdiction in any matter involving the exercise of State judicial power to which a corporation was a party, which would stultify the original jurisdiction of VCAT and analogous bodies in other States; and
(b)the Federal Court’s jurisdiction under s 39B(1A)(c) of the Judiciary Act would be dramatically expanded to include matters with no real connection to federal law.
We note immediately that we have not found it necessary to consider these consequences in reaching our conclusion as to question 2.

Consideration

As already noted, question 2 is addressed to the scope of the phrase ‘arising under any laws made by the Parliament’, and whether the fact a corporation is incorporated under and regulated by the Corporations Act falls within that phrase.
In Citta, the plurality observed as follows:
A ‘matter’ referred to in s 75 or s 76 of the Constitution encompasses a justiciable controversy about a legal right or legal duty having an existence that is not dependent on the commencement of a proceeding in the forum in which that controversy might come to be adjudicated. Amongst the circumstances in which a justiciable controversy answers the description in s 76(ii) of a matter ‘arising under’ a law made by the Commonwealth Parliament is where a Commonwealth law is relied on as the source of a claim or a defence that is asserted in the course of the controversy.[35]
[35] (2022) 96 ALJR 476, 485–6 [31] (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ), citing LNC Industries Ltd v BMW (Australia) Ltd (1983) 151 CLR 575, 581 (Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ) (‘LNC Industries’), Barrett (1945) 70 CLR 141, 154 (Latham CJ), and Felton v Mulligan (1971) 124 CLR 367, 408 (Walsh J) (‘Felton’).
In light of that statement it is unsurprising that, in this Court, all the parties accepted that a dispute that concerns a right or duty that has its immediate source in a Commonwealth law — such as a claim made under the TPA — would fall within the scope of s 76(ii). All the parties also accepted that a dispute in which a party claims a defence that has its immediate source in a Commonwealth law would fall within the scope of s 76(ii). These propositions are plainly correct, and need not be interrogated further for the purposes of considering question 2.
More importantly, all parties accepted that these two propositions do not exhaust the scope of the matters that can arise under a Commonwealth law. That, too, is consistent with the passage from Citta, quoted above. It is also consistent with various other authorities, which we discuss below. In that regard, we accept that there is a third category of matters that can be properly characterised as arising under a Commonwealth law, namely where the subject-matter of the controversy, although not arising directly under a Commonwealth law, is sufficiently connected to a Commonwealth law so that it is properly characterised as arising under that law, albeit indirectly.
It is necessary, in addressing question 2, to consider the key High Court authorities in some detail.

Barrett

As noted above, central to Krongold’s argument was the decision of Latham CJ in Barrett. That case concerned an attempt to enforce the rules of the Federated Clerks’ Union of Australia (‘FCUA’). The FCUA was an organisation registered under the Commonwealth Conciliation and Arbitration Act 1904 (Cth) (‘Arbitration Act’). Section 58E of that Act provided as follows:
(1)The Court may, upon complaint by any member of an organization and after giving any person against whom an order is sought an opportunity of being heard, make an order giving directions for the performance or observance of any of the rules of an organization by any person who is under an obligation to perform or observe those rules.
(2)Any person who fails to comply with such directions shall be guilty of an offence.
Penalty: Fifty pounds.
Various members of the FCUA were in dispute as to who its office-holders were following elections that had been held pursuant to the FCUA’s rules. The Arbitration Court, relying on s 58E, held that the respondents were rightfully in office. The prosecutors then sought a writ of prohibition directed to the Arbitration Court on the basis that s 58E was invalid because a controversy between members of an organisation registered under the Arbitration Act in relation to the observance of the rules of the organisation was not a matter ‘arising under’ a Commonwealth law. While such a controversy was a ‘matter’, the prosecutors submitted that:
any right that a member of an organization may have to require the observance of the rules of the organization by other members of the organization does not depend upon and is not created by the Arbitration Act, but is derived from the agreement of the members of the organization to be bound by the rules of the organization. Therefore, it is argued, the controversy between the parties is not a matter arising under any law made by the Parliament, but is a matter arising at common law under the agreement of the members.[36]
[36]Barrett (1945) 70 CLR 141, 150 (Latham CJ).
Latham CJ rejected that submission. His Honour held that the FCUA rules bound the members, not merely because the members had agreed to be bound by the rules, but because the rules were those of an organization which was registered under the Act. He observed that the provisions of the Arbitration Act attached, ‘by means of Federal legislation, characteristics to the rules of a registered organization which they would not otherwise possess’.[37] He held, as a consequence, that:
the rules as rules of the organization derive their force from the Act, and, therefore, a controversy as to the observance or performance of the rules is a matter arising under the Act. A claim that the rules should be observed and performed is a claim to a right conferred by or under the statute. It therefore arises under the statute. When a member applies for an order under s 58E, he is seeking to enforce a right which would not exist, as it actually exists, apart from the Federal law contained in the Arbitration Act, and he is necessarily litigating a claim arising under that law.[38]
[37]Ibid 151.
[38]Ibid.
Having so concluded, Latham CJ went on to consider the United States cases, which were said to require that in order to be a matter ‘arising under’ a law, the case had to concern the interpretation of that law. Latham CJ observed that in the United States there were two distinct approaches to this issue. Given that divergence of opinion, he considered that the US decisions were ‘not of very great assistance’.[39] However, he also observed as follows:
It has long been accepted as law that a corporation created under an Act of Congress may, merely because it derives its existence and its rights as a corporation from Federal laws, sue (or be sued) in the Federal courts upon any claim whatever (Osborn v Bank of US and other cases cited in Federal Intermediate Credit Bank of Columbia v Mitchell).[40]
[39]Ibid 153.
[40]Ibid (citations omitted).
Krongold placed particular weight on this passage.
The passage extracted above was simply a statement about the position in the United States; Latham CJ did not adopt that statement as applicable in Australia. Nor has this passage been referred to or relied upon since in the High Court.[41]
[41]Other aspects of Osborn have been referred to in several decisions of the High Court, sometimes with approval (see, eg, Waterside Workers’ Federation (Australia) v JW Alexander Ltd (1918) 25 CLR 434, 451 (Barton J); Momcilovic v The Queen (2011) 245 CLR 1, 155 [391] (Heydon J, dissenting)) and sometimes to point out that later US cases had departed from some aspects of Osborn (see, eg, Bank of NSW v Commonwealth (1948) 76 CLR 1, 365 (Dixon J); Crouch v Commissioner for Railways (Qld) (1985) 159 CLR 22, 40–1 (Mason, Wilson, Brennan, Deane and Dawson JJ); R v Murray and Cormie; Ex parte Commonwealth (1916) 22 CLR 437, 456 (Isaacs J)). Several such references occurred prior to Engineers and concerned the implied immunities doctrine: see D’Emden v Pedder (1904) 1 CLR 91; Baxter v Commissioners of Taxation (NSW) (1907) 4 CLR 1087; Heiner v Scott (1914) 19 CLR 381.
The second passage on which Krongold placed weight was as follows:
[A] matter may properly be said to arise under a Federal law if the right or duty in question in the matter owes its existence to Federal law or depends upon Federal law for its enforcement, whether or not the determination of the controversy involves the interpretation (or validity) of the law. In either of these cases, the matter arises under the Federal law. If a right claimed is conferred by or under a Federal statute, the claim arises under the statute.[42]
[42](1945) 70 CLR 141, 154.
It is of course important to bear in mind that this short passage in a judgment of a single justice of the High Court is not to be approached as if it were the text of the Constitution. Further, these general comments are to be understood in the context of the particular case, which concerned the enforcement of the rules of a registered organisation. In any event, as set out above, Latham CJ had already held that the matter in Barrett arose under a Commonwealth law because the rules of the organisation were binding by reason of the Arbitration Act.[43]
[43]Ibid 151–2.
Similarly, Starke J observed that it was implicit in the statutory provisions that provided for the performance and observance of the rules of a registered organization that those rules ‘shall be performed and observed by its members; the rules impose a duty upon the members of the organization to observe and obey them’.[44] Power to enforce that duty was then conferred upon the Arbitration Court.
[44]Ibid 160.
Dixon J said that s 58E ‘must be taken to perform a double function, namely to deal with substantive liabilities or substantive legal relations and to give jurisdiction with reference to them’.[45] After referring to two forms that legislation may take, he said:
But, under either form of legislation, it is quite clear that a liability is imposed and that the liability accordingly supplies an appropriate subject or ‘matter’ upon which ‘judicial power’ or ‘jurisdiction’ may operate, whether the jurisdiction is given in the same breath or quite independently.[46]
[45]Ibid 165.
[46]Ibid 166.
The key conclusion in Barrett was that the FCUA rules were enforceable because the FCUA was registered under the Arbitration Act. But neither that registration, nor the status of the FCUA as a corporation, was in issue between the parties; and it was not the registration of the FCUA alone that caused the matter to be one arising under a Commonwealth law. Rather, it was the effect of the registration on the rules that was significant. The connection between the Commonwealth law and the dispute between the parties was that a party was seeking to enforce norms of conduct embodied in the rules by relying upon a Commonwealth law. The case did not concern the capacity or legal status of the entity whose rules were in issue.

Authorities after Barrett

Latham CJ’s judgment in Barrett has been referred to in various High Court cases since. Those subsequent cases make clear that a matter may arise under a Commonwealth law in circumstances going beyond a claim made directly under, or defended by reason of, a Commonwealth law. However, none of those subsequent cases holds that the mere fact that a party to a dispute or a proceeding is a corporation incorporated under the Corporations Act renders that dispute or proceeding a matter arising under a Commonwealth law. Nor, in our opinion, do any of those cases compel us to reach that conclusion.
In Moorgate Tobacco Co Ltd v Philip Morris Ltd,[47] the plaintiff (‘Moorgate Tobacco’) sued the respondent (‘Philip Morris’) in the Supreme Court of New South Wales seeking declarations that it was the proprietor of certain trade names and that Philip Morris was not the proprietor of a certain trade mark. It also sought injunctive relief. Moorgate Tobacco failed at trial, and sought leave to appeal to the Privy Council, a course that was only available if the matter was not one in federal jurisdiction.
[47](1980) 145 CLR 457 (‘Moorgate Tobacco’).
Moorgate Tobacco’s claims rested largely on the existence and terms of a licence agreement said to have been made between the parties. By the alleged agreement Moorgate Tobacco granted to Philip Morris a licence of all rights in Australia in respect of certain trade names and trade marks, such rights being described as ‘Trade Mark Rights’. The alleged agreement also provided that it was not to be construed as creating in Philip Morris any proprietary interest in the ‘Trade Mark Rights’, and that Phillip Morris renounced any proprietary interest in those rights.
Moorgate Tobacco alleged that Philip Morris had breached the licensing agreement by manufacturing and marketing in Australia cigarettes using the trade mark, and that Philip Morris had applied for registration of the trade mark. Moorgate Tobacco claimed that these actions were in breach of fiduciary obligations owed by Philip Morris to it and, alternatively, that the application for registration constituted unfair competition. The plurality observed that Moorgate Tobacco’s case ‘was based on contract, trust or fiduciary obligation, and the tort of unfair competition’.[48]
[48]Ibid 474 (Stephen, Mason, Aickin and Wilson JJ).
It was common ground between the parties that, by reason of s 39(2) of the Judiciary Act, the Supreme Court was invested with federal jurisdiction to determine matters arising under the Trade Marks Act 1995 (Cth). The parties were also in agreement that a matter is one arising under a Commonwealth law if the right, title, duty, privilege, protection or immunity in issue ‘owes its existence to Federal law or depends upon Federal law for its enforcement’ (by reference to Barrett). The parties also accepted that ‘if in the proceedings there arose an issue as to the existence or non-existence of a right created by the Trade Marks Act the Supreme Court was exercising federal jurisdiction’. However, the parties were in dispute as to precisely when a matter ‘arises’ within the meaning of s 76(ii).[49]
[49]Ibid 476.
The plurality said as follows:
The cases establish that federal jurisdiction is attracted if the right or duty based in a federal statute is directly asserted by the plaintiff or defendant, but not if the federal question arises only in some incidental fashion. So too federal jurisdiction is attracted if the court finds it necessary to decide whether or not a right or duty based in federal law exists, even if that matter has not been pleaded by the parties.
…
In inviting the Supreme Court to make declarations on questions which were crucial to the outcome of the trade mark applications the applicant in our opinion raised for decision matters arising under the Trade Marks Act and attracted the exercise of federal jurisdiction. Although the word ‘matter’ in s 76(ii), as we have seen, has often been translated as embracing ‘right’, ‘title’, ‘duty’, ‘privilege’, ‘protection’, ‘immunity’ and ‘defence’, its content should not be confined to these terms and to what they denote. ‘Matter’ is the subject matter for determination in a legal proceeding …; in our opinion it extends to a claim that a party satisfies or does not satisfy a statutory description, whether it be a qualification or a condition, when conformity with that description is made essential to the grant of a right for which the federal statute makes provision.
In this case the proprietorship issues were raised directly for decision … Although the applicant’s three principal grounds for relief are causes of action based on the general law and do not owe their existence to the Trade Marks Act, the applicant was unwilling to confine its case to the three grounds and to the relief which those grounds might afford, dissociated from issues arising under the federal statute and from relief directed to the obtaining of rights under that statute. Indeed, both the pleadings and the manner in which the case was fought create the strong impression in our minds that registration of the trade mark … was the real bone of contention between the parties. What is more, many of the issues which arise in the case under the contract, trust and fiduciary obligation claims would have inevitably arisen for decision in opposition proceedings. In these circumstances we find it impossible to conclude that the issues which arose under the Trade Marks Act were merely an ‘incidental consideration’, to use the expression of Barwick CJ in Felton v Mulligan. They were directly pleaded and asserted by the applicant with a view to obtaining registration of a trade mark.[50]
[50]Ibid 476, 479–80 (citations omitted).
Nothing in Moorgate Tobacco requires or supports the conclusion that the mere fact that a party to a dispute is a corporation incorporated under the Corporations Act causes that dispute to be one ‘arising under’ that Act. The case was not concerned with the capacity of the parties, but with the fact that the real substance of their dispute concerned the registration of a trade mark under the Trade Marks Act (even though the causes of action did not advert to or assert any right under that Act).
In LNC Industries,[51] the plaintiff sued the defendant in the Supreme Court of New South Wales in relation to an alleged agreement that the defendant would hold for the benefit of the plaintiff certain units of quota for the importation of passenger motor vehicles. The units of quota arose under licences granted under the Customs (Import Licensing) Regulations (‘Customs Regulations’), made under the Customs Act 1901 (Cth). Those licences had been issued to the plaintiff, and transferred to the defendant; the plaintiff claimed that the defendant held the units of quota for the benefit of the plaintiff. The defences concerned contractual and trust issues, but did not raise any question concerning the Commonwealth law or the regulations that established the import quota system. The question for the High Court was whether the decision of the Supreme Court was made in the exercise of federal jurisdiction — if it was, then no appeal would lie to the Privy Council.
[51](1983) 151 CLR 575.
The plaintiff submitted that the matter was not in federal jurisdiction because it was seeking to enforce rights which owed their existence to the contracts between the parties, that neither the existence of the rights nor their enforcement depended upon the Customs Act or the Customs Regulations, and that the defence did not raise, and the trial judge did not decide, any question that arose under the Act or the Regulations. Therefore, the plaintiff submitted, the proceeding did not arise under any law made by the Parliament. That the Act and Regulations formed part of the background against which the case was to be decided, and that the case might involve their interpretation or effect, was insufficient to render the matter one ‘arising under’ those laws.

The Court held that the subject matter of the contracts and trusts asserted by the plaintiff was entitlements that existed only as a result of federal law; thus the matter was one ‘arising under’ that law. After referring to Felton and to Latham CJ’s reasons in Barrett, the plurality said as follows:
When it is said that a matter will arise under a law of the Parliament only if the right or duty in question in the matter owes its existence to a law of the Parliament that does not mean that the question depends on the form of the relief sought and on whether that relief depends on federal law. A claim for damages for breach or for specific performance of a contract, or a claim for relief for breach of trust, is a claim for relief of a kind which is available under State law, but if the contract or trust is in respect of a right or property which is the creation of federal law, the claim arises under federal law. The subject matter of the contract or trust in such a case exists as a result of the federal law.[52]
[52]Ibid 581 (Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ).
The plurality went on to explain why it was that, in that case, the disputes concerning the contracts and the alleged trusts were matters arising under a Commonwealth law:
The contracts in the present matter were concerned solely with entitlements under the Regulations. The object of the plaintiff’s claim was identified in the statement of claim as ‘any benefit accruing’ after a certain time as a result of the utilization of a quota under the Regulations. It is common ground that the ‘benefit’ mentioned is any ‘benefit’ which might accrue under the Regulations. The subject matter of the contracts and of the action arose under and existed only by reason of the provisions of the Regulations and the Act in pursuance of which the Regulations were made. …
The present case is not, to use the words of Windeyer J in Felton v Mulligan, one in which the Regulations are merely ‘lurking in the background’. The very subject of the issue between the parties is an entitlement under the Regulations. In substance the plaintiff’s primary claim is to the benefit of rights and privileges under the Regulations. In these circumstances the matter involved in the action arose under laws made by the Parliament.[53]
[53]Ibid 582 (citations omitted).
Again, nothing in LNC Industries leads to the conclusion that the mere fact that a party to a dispute is a corporation incorporated under the Corporations Act causes that dispute to be one ‘arising under’ that Act. The case did not turn on the capacity of the parties, but on the source of the substantive rights the subject of the agreement.
LNC Industries was followed in Edwards v Santos Ltd.[54] In that case the plaintiffs were native title claimants in relation to land the subject of an authority to prospect under the Petroleum Act 1923 (Qld). The holders of the authority were two companies, which had entered into an indigenous land use agreement (‘ILUA’) under the Native Title Act 1993 (Cth) (‘NTA’). During negotiations for a new ILUA, which the parties were contractually required to undertake by reason of the first ILUA, a dispute arose as to whether the grant of a petroleum lease to the companies would be a ‘pre-existing rights based act’ under s 24IB of the NTA. The native title claimants applied to the Federal Court for a declaration that the grant would not be a ‘pre-existing rights based act’ on the ground that the purported renewals of the authority to prospect were void having regard to the requirements of s 40(2) of the Petroleum Act.
[54](2011) 242 CLR 421 (‘Edwards’).
The Federal Court held it had no jurisdiction. The High Court disagreed. It held that the dispute between the parties arose under the NTA for two interrelated reasons.
(a)First, the interests the native title claimants sought to protect — native title rights — arose out of the NTA (even though their native title claims had not yet been determined).[55]
(b)Secondly, the dispute turned on whether the companies had the ‘immediate right’ that they claimed, and that ‘immediate right’ was ‘integrally connected with the NTA’. The controversy between the parties arose from the assertion by the companies that the authority to prospect would automatically lead to ‘production licences’, ie leases, which were ‘pre-existing rights based acts’ within the meaning of s 24IB of the NTA. That assertion, and the denial of that assertion by the plaintiffs on the ground that the authority to prospect was void (as a matter of State law), was a controversy that arose under the NTA.[56]
[55]Ibid 437 [40] (Heydon J, French CJ, Gummow, Crennan, Kiefel and Bell JJ agreeing at 425 [1], Hayne J relevantly agreeing at 426 [6]).
[56]Ibid 437 [41].
Heydon J, with whom French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ relevantly agreed, said as follows:
While a claim to damages for breach of contract is a claim for relief under State law, if the contract is in respect of a right which is a creature of federal law, the claim arises under the federal law. That is true whether the State law is common law, like the law of contract, or statute law, like the position of the [authority to prospect] in relation to the ‘production licences’, ie leases, under s 40 of the Petroleum Act. And there is also a matter arising under a federal law if the source of a defence which asserts that the defendant is immune from a liability or obligation of that defendant is a law of the Commonwealth. Here the petroleum defendants are alleging that they are immune from the ‘right to negotiate provisions of the NTA’ because of the pre-existing rights based acts provisions of the NTA. Hence there is a matter arising under a federal law.[57]
[57]Ibid 438–9 [45], citing LNC Industries (1983) 151 CLR 575, 581 (Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ); Felton (1971) 124 CLR 367, 408 (Walsh J); Agtrack (NT) Pty Ltd v Hatfield (2005) 223 CLR 251, 262 [29] (Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ).
Again, this decision provides no support for the proposition that the mere fact that a party to a dispute is a corporation incorporated under the Corporations Act will mean that the matter is one arising under that Act. We also observe, for completeness, that the same may be said of the High Court’s decisions in TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia[58] and PT Bayan Resources TBK v BCBC Singapore Pte Ltd,[59] each of which applied LNC Industries to slightly different sets of circumstances. It is not necessary for present purposes to consider those decisions in detail.
[58](2013) 251 CLR 533.
[59](2015) 258 CLR 1.
Most recently, the High Court has had occasion to consider the scope of s 76(ii) in Hobart International Airport Pty Ltd v Clarence City Council.[60] That case concerned claims by two Councils in relation to leases between two Tasmanian airport corporations (the ‘Lessees’) and the Commonwealth. Those leases were the subject of Commonwealth legislation: the Airports (Transitional) Act 1996 (Cth) (‘the Transitional Act’), which established ‘a framework to give effect to the Government’s decision to lease all the Federal airports effectively as ongoing businesses with staff and management in place’.[61] The Transitional Act provided for the leasing of certain airports (including the airports in question), for the transfer of airport land and assets from the Federal Airports Corporation (‘FAC’) to the Commonwealth, for the grant of an airport lease to a company and for the transfer of employees, assets, contracts and liabilities of the FAC to the lessee.[62] Further, leases granted under the Transitional Act were required to comply with the rules in pt 2 of the Airports Act 1996 (Cth).[63]
[60](2022) 96 ALJR 234; [2022] HCA 5 (‘Hobart International Airport’).
[61]Ibid 241–2 [5] (Kiefel CJ, Keane and Gordon JJ).
[62]Transitional Act, s 3.
[63]These rules included rules about airport leases (s 14); restrictions on acquisition and transfer of leases (pt 2 div 4); a statutory obligation to use the site as an airport (pt 2 div 5); and restrictions on lessees (pt 2 div 6), including prohibited and required terms of any sub-lease (pt 2 div 6 sub-div C).
The Councils sought to enforce a provision of the lease that required the Lessees to pay to the Commonwealth a sum in lieu of rates, which the Commonwealth would then pass on to the Councils. The issue in the case was whether the Councils, as non-parties to the leases, could obtain declaratory relief in relation to the Lessees’ obligations. In considering that question, a majority of the High Court held that a claim of that kind involved a matter ‘arising under’ a Commonwealth law.
(a)Kiefel CJ, Keane and Gordon JJ did so on the basis that the ‘rights and obligations of the Commonwealth and the Lessees under the leases owe[d] their existence to’ the Transitional Act.[64]
(b)Gageler and Gleeson JJ put it slightly differently:
A matter can be characterised as one ‘arising under any laws made by the Parliament’ in a range of circumstances. Once again, these appeals do not call for an exploration of the limits of that range. Each appeal is concerned with a controversy about an existing contractual obligation. If that controversy is justiciable, so as to constitute a matter within the central conception of that term, then that justiciable controversy is properly characterised as a matter arising under a law made by the Parliament on the basis that the contract imposing the obligation came into existence as an incident of the exercise of a capacity to ‘grant an airport lease’ conferred on the Commonwealth by a law made by the Parliament.[65]
[64]Hobart International Airport (2022) 96 ALJR 234, 245 [27], citing Barrett(1945) 70 CLR 141, 154 (Latham CJ); LNC Industries (1983) 151 CLR 575, 581 (Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ); Edwards (2011) 242 CLR 421, 438 [45] (Heydon J).
[65]Hobart International Airport (2022) 96 ALJR 234, 250 [50] (citations omitted).
We do not consider that that reference by Gageler and Gleeson JJ to the ‘capacity’ of the Commonwealth to grant an airport lease should be understood to require the broader conclusion that, if a law confers ‘capacity’ on an entity, then anything that entity does constitutes a matter ‘arising under’ that law. In that regard, we accept the Commonwealth’s submission that Hobart International Airport was not as a case where a matter arose under a Commonwealth law simply because the Transitional Act conferred a ‘bare capacity’ to grant an airport lease. Rather, it was a case where the subject matter of the lease was so closely regulated by the Transitional Act (and, through it, the Airports Act) that the rights and obligations of the parties to the leases owed their existence to that legislation.
The cases discussed above are clear authority for the proposition that, where the ‘very subject’ of the dispute is something that owes its existence to a Commonwealth law, then the dispute will be a ‘matter arising’ under that law, even if the cause of action is founded in a State law or the common law. That proposition has since been accepted many times, most recently in Hobart International Airport. But it does not follow that any dispute to which a corporation is a party is a matter of that kind. To the contrary, we do not think that it is. In that regard, the authorities make clear that if a Commonwealth law is ‘lurking in the background’,[66] or merely an ‘incidental consideration’,[67] then the matter will not be one arising under that law.
[66]LNC Industries (1983) 151 CLR 575, 582 (Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ), quoting Windeyer J in Felton (1971) 124 CLR 367, 391.
[67]Moorgate Tobacco (1980) 145 CLR 457, 480 (Stephen, Mason, Aickin and Wilson JJ), quoting Barwick CJ in Felton (1971) 124 CLR 367, 374.
If a corporation is in dispute with another person about a contract, and nothing else, then the ‘very subject’ of the dispute is the contract — it is not the corporate status and capacity of the corporation. If the contract is regulated by a Commonwealth law (as in Hobart International Airport), or the property the subject of the contract owes its existence to a Commonwealth law (as in LNC Industries), then the matter is one arising under that law. But if the property the subject of the contract has no relevant connection with a Commonwealth law, the contract is not regulated by a Commonwealth law, and the only connection with a Commonwealth law is that a party is a corporation incorporated under the Corporations Act, then in our opinion the authorities do not compel, or even point towards, the matter being one ‘arising under’ a Commonwealth law.
Thus, we consider that a matter in which the sole connection with a Commonwealth law is that one or more of the parties to the dispute is a corporation incorporated under the Corporations Act lacks the necessary sufficiency of connection required to characterise the matter as one that arises under the Corporations Act. In that context, we accept the distinction identified by Besanko J in Malecki:
There would appear to be a distinction between a ‘matter’ — in the sense of the justiciable controversy between the parties arising out of the substratum of facts and claims representing, or amounting to, the dispute or controversy between or amongst the parties … — arising under federal law, and a party’s ability or capacity to agitate a matter or liability in relation to a matter arising under federal law. It is the matter which must itself arise under federal law in order for jurisdiction to be engaged, in that the jurisdictional basis must be endogenous to the justiciable controversy between the parties. If this is a valid and relevant distinction, it means that the Court will not have jurisdiction in a matter itself bearing no real connection to federal law merely by reason of the link, exogenous to the justiciable controversy, between a party or parties to the matter, and the Corporations Act.[68]
[68][2022] FCA 766 [33].
This distinction attracts some textual support from the terms of ss 75 and 76, which define the universe of federal matters that cannot be resolved other than by an exercise of judicial power by a court. It is apparent from the face of those sections that the matters there referred to can, broadly speaking, be divided into two classes:
(a)in one class, comprised of 75(iii), 75(iv) and 75(v), jurisdiction depends on the character of the parties, rather than solely on the subject of the controversy;
(b)in the other class, comprised of ss 75(i), 75(ii) and all the sub-sections of s 76, jurisdiction depends on the subject of the controversy, rather than on the character of the parties.
Within that taxonomy, s 76(ii) of the Constitution is concerned with ‘the character of the cause, whatever may be the parties’.[69]
[69]Geoffrey Lindell, Cowen and Zines’s Federal Jurisdiction in Australia (Federation Press, 4th ed, 2016) 47. The taxonomy is not absolute because, in both ss 75(ii) and 75(v), the subject matter is to some extent blended with the character of the party: Republic of Turkey v Mackie Pty Ltd (2021) 64 VR 467, 500 [127] (McLeish JA).
In summary, where the source of the rights and duties that are in issue between the parties is a Commonwealth law, the matter will properly be characterised as one ‘arising under’ that law. That will include a matter where the claim is one directly founded on a law of the Commonwealth. It will also include a claim at common law or equity, or under a law of a State, where the claim concerns a right or property which is the creation of federal law. In contrast, where the source of the rights and duties in issue between the parties is a law of a State or the common law, and the only connection with a law of the Commonwealth is that such a law is the source of one party’s legal capacity to sue or be sued (and where that capacity is not in issue between the parties), the matter will not properly be characterised as one ‘arising under’ the Commonwealth law. Rather, the party’s capacity is merely an incidental consideration.
We do not consider that the particular provisions of the Corporations Act relied upon by Krongold alter this conclusion. Those provisions make clear the nature of a corporation and the lack of limits on its capacities. They are fundamentally directed to its status and its legal capacity (including its capacity to bring or defend a proceeding). That is part of the context in which the legal rights, duties and liabilities of a corporation arise; but that goes to a party’s ability to agitate a matter, rather than the identification of the dispute or controversy between the parties.
In that regard, we consider the obiter observations of Lee J in Oliver v Nine Network Australia Pty Ltd,[70] elaborated in Mulley,[71] and of Katzmann J in Hafertepen v Network Ten Pty Ltd,[72] to be incorrect, and we decline to follow them. We note two other judges of the Federal Court have indicated their disagreement with that approach.[73] We also note that, since the present matter was argued, Lee J has stated, consistently with the ratio of one of those decisions, that, pending contrary appellate authority, the mere fact that a respondent’s ability to be sued is conferred by and depends on the Corporations Act is insufficient to attract federal jurisdiction.[74]

United States authorities

[70][2019] FCA 583 [16]:

It seems to me arguable that if a respondent is a corporation, the relevant matter arises under a law made by the Parliament within the meaning of s 39B(1A)(c) of the [Judiciary Act]. Chapter 2B of the Corporations Act 2001 (Cth) provides for the basic features of a company. … [T]he capacity of a company created under the Corporations Act, including its ability to be sued, is to be found in s 119 when it provides that a company on registration comes into existence as a body corporate. It is s 124(1) which gives the entity powers of a body corporate. … The ability to sue the respondent as an entity now arises under and depends upon a law of the Commonwealth.

[71](2021) 286 FCR 360, 378–9 [55] (Lee J).

[72][2020] FCA 1456 [44]:

Further, in a case such as the present, where the respondent is a corporation, the ability to sue ‘arises under and depends upon a law of the Commonwealth’: Oliver v Nine Network Australia Pty Ltd.

[73]Seven Network v Cricket Australia (2021) 393 ALR 53, 66 [62] (Anastassiou J); [2021] FCA 1031; DJ Builders & Son Pty Ltd (in liq) v Queensland Building and Construction Commission [No 3] (2021) 156 ACSR 539, 544–5 [16]–[17] (Derrington J); [2021] FCA 1041; see also Malecki [2022] FCA 766 [29]–[33] (Besanko J).

[74]Smith v National Australia Bank Ltd [2022] FCA 1186 [116].

Finally, we note that Krongold sought to rely upon Osborn, a decision of the United States Supreme Court concerning when a case or controversy ‘arises under’ a law of the United States, referred to in Barrett. In Osborn, the United States Supreme Court held that a case against the Bank of the United States, which was a corporation incorporated under federal law, was a case ‘arising under’ federal law. It said as follows:
The charter of incorporation not only creates it, but gives it every faculty which it possesses. The power to acquire rights of any description, to transact business of any description, to make contracts of any description, to sue on those contracts, is given and measured by its charter, and that charter is a law of the United States. This being can acquire no right, make no contract, bring no suit, which is not authorized by a law of the United States. It is not only itself the mere creature of a law, but all its actions and all its rights are dependant on the same law. Can a being, thus constituted, have a case which does not arise literally, as well as substantially, under the law?[75]
[75]22 US (9 Wheat) 738, 823 (Marshall CJ for the Court) (1824).

Later, the Court said this:
It is said, that a clear distinction exists between the party and the cause; that the party may originate under a law with which the cause has no connexion; and that Congress may, with the same propriety, give a naturalized citizen, who is the mere creature of a law, a right to sue in the Courts of the United States, as give that right to a Bank.
This distinction is not denied; and, if the act of Congress was a simple act of incorporation, and contained nothing more, it might be entitled to great consideration. But the act does not stop with incorporating the Bank. It proceeds to bestow upon the being it has made, all the faculties and capacities which that being possesses. Every act of the Bank grows out of this law, and is tested by it. To use the language of the constitution, every act of the Bank arises out of this law.[76]
[76]Ibid 826–7.
We do not consider Osborn to be persuasive for present purposes. As we noted above, in Barrett Latham CJ considered the US authorities to be of ‘very limited assistance’, because of the divergence of approach within the US jurisprudence. The constitutional context, and the development of the Australian jurisprudence, are sufficiently different from the United States context to render Osborn of no real assistance.[77]

Conclusion on question 2

[77]See discussion in Mark Leeming, Authority to Decide: The Law of Jurisdiction in Australia (Federation Press, 2^nd ed, 2020) 206-7.

For these reasons, we consider that the answer to question 2 is ‘no’.

Question 1

As noted earlier, we do not consider it appropriate to answer question 1. Given our answer to question 3, it does not arise and, unlike question 2, no party urged us to answer it in those circumstances.

Question 6

Question 6 is in two parts. The second part — question 6(b) — asks whether, given an affirmative answer to any of questions 1, 2 or 3, VCAT had jurisdiction to hear and determine the VCAT proceeding. It is not in controversy that, given our answers to questions 2 and 3, the answer to question 6(b) is ‘no’.
The larger question in question 6(a) is whether, in these circumstances, VCAT has power to refer part or all of the VCAT proceeding to the Supreme Court under s 77 of the VCAT Act.
Section 77, it will be recalled, empowers VCAT to strike out part or all of a proceeding (other than a proceeding for review of a decision) if it considers the subject matter would be ‘more appropriately dealt with’ by another tribunal, a court or any other person or body. If VCAT makes such an order, it may refer the matter to the relevant tribunal, court, person or body ‘if it considers it appropriate to do so’.
Question 6(a) is addressed to the power of referral in circumstances where the subject matter of the proceeding is in federal jurisdiction. Necessarily, that raises the anterior question of the power to strike out part or all of a proceeding in those circumstances.
The issue is one of construction. A critical step in that exercise in this instance is to identify the extent of the State’s legislative power to permit VCAT to make orders in a proceeding in federal jurisdiction. Section 77 is to be construed so as to operate to the full extent of, and not to exceed, the legislative power of the State.[78]

Legislative power

[78]Interpretation of Legislation Act 1984, s 6(1); Gaynor v Attorney-General (NSW) (2020) 102 NSWLR 123, 140 [53] (Bell P) (‘Gaynor’).

It is well established that it is the ‘first duty’ of a court or quasi-judicial body to identify whether or not it has jurisdiction.[79] That is true of VCAT, including where the issue as to its jurisdiction is whether the matter lies in federal jurisdiction.[80] In addressing that question, VCAT does not exercise federal judicial power, or adjudicate on any federal controversy. It merely performs the familiar duty of bodies entrusted with judicial power to identify their own jurisdiction.[81]
[79]Federated Engine-Drivers and Firemen’s Association of Australasia v Broken Hill Pty Co Ltd (1911) 12 CLR 398, 415 (Griffith CJ); Gaynor (2020) 102 NSWLR 123, 155 [130] (Leeming JA).
[80]Gaynor (2020) 102 NSWLR 123, 155–6 [131]–[132] (Leeming JA).
[81]Ibid 156 [134], 157 [137]–[138] (Leeming JA).
These principles were not really in issue before us. The question was rather whether, having decided that the matter was one in federal jurisdiction, which it therefore lacked jurisdiction to hear and determine, VCAT could have resort to s 77 to strike out part or all of the proceeding and refer the proceeding to the Supreme Court.
The parties addressed this question principally by reference to general principles of statutory construction, rather than limits on legislative power. With one qualification, which we discuss below, it was accepted on all sides that the State could legislate to confer power on VCAT to transfer proceedings over which it lacks jurisdiction to a court or other decision-making body.[82] The question was whether it had done so by enacting s 77.
[82]Qantas Airways Ltd v Lustig (2015) 228 FCR 148, 174 [109] (Perry J) (‘Qantas v Lustig’).
The qualification was that Krongold submitted that the State could only legislate to confer a very narrow, ‘procedural’ power to transfer a dismissed proceeding. This was said to be because the ability of a court or tribunal to dismiss a proceeding it lacks jurisdiction to decide is a necessary corollary of the obligation of the court or tribunal to act within its jurisdiction, while a power to go further and refer the dismissed proceeding to another decision-making body is not similarly necessary. Krongold placed reliance on the following observations of six members of the High Court in Citta:
Having a judicially enforceable duty to comply with the limits of its own jurisdiction, a court or a non-court tribunal must have power to take steps needed to ensure its own compliance with that duty. If not expressed in the legislation establishing the court or non-court tribunal or in the legislation conferring jurisdiction on it, that power is necessarily implied on the basis that ‘everything which is incidental to the main purpose of a power is contained within the power itself’.[83]
[83](2022) 96 ALJR 476, 484 [21] (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ) (citations omitted), quoting Burton v Honan (1952) 86 CLR 169, 177 (Dixon CJ).
In our view, this passage is addressing the implied powers of a court or tribunal that lacks jurisdiction, and not the scope of State legislative power to confer additional powers on a court or tribunal to deal with that circumstance. But in any event, the implied powers are said to extend to ‘everything which is incidental’ to the power to determine jurisdiction. In our view, that readily extends to a power to decline to exercise jurisdiction and to refer the proceeding to a body having jurisdiction. There is, in any event, no constitutional reason why such a power could not be legislatively conferred, because its exercise involves no adjudication of the controversy that lies outside jurisdiction, and therefore no exercise of federal judicial power.[84] It would therefore be open to the Parliament of Victoria to empower VCAT to dismiss a proceeding for want of jurisdiction, or to transfer it to a court or other body having jurisdiction, including in cases where the reason VCAT lacks jurisdiction is because the matter is one in federal jurisdiction.[85]

Meaning of ‘refer’

[84]See, in related contexts, Gaynor (2020) 102 NSWLR 123, 140 [55] (Bell P), 157 [138] (Leeming JA); Huynh v Attorney-General (NSW) (2021) 107 NSWLR 75, 93 [58] (Basten JA), 127 [190], 129–30 [200]–[201] (Leeming JA).

[85]Qantas v Lustig (2015) 228 FCR 148, 174 [109] (Perry J); Wilson v Chan & Naylor Parramatta Pty Ltd (2020) 103 NSWLR 140, 144 [11] (Leeming JA).

Before turning to the question of construction, we note that the parties also joined issue on the meaning of the word ‘refer’ in s 77(3). Krongold submitted that ‘refer’ in this context could mean only a procedural handing over of a file for the purpose of the receiving body deciding what then to do. Anything more, it was submitted, would mean treating steps taken in VCAT as having validly engaged the judicial power of the Commonwealth, contrary to ch III of the Constitution as applied in Burns. Mr and Mrs Thurin, in contrast, submitted that ‘refer’ meant ‘transfer’, in the sense in which case transfer legislation operates.[86] In particular, that would mean that steps taken in VCAT were treated as having been done in the receiving body. [87]
[86]See, eg, Courts (Case Transfer) Act 1991, ss 13, 22.
[87]See generally Re Macks; Ex parte Saint (2000) 204 CLR 158.
This argument raises its own issues about legislative power, bearing on the scope of the word ‘refer’. Among other things, one effect of the argument advanced by Mr and Mrs Thurin would seem to be that the determination made by VCAT in the present case as to the validity of the award would take effect, after referral, as a decision of the Supreme Court, even though VCAT made the determination when it had no jurisdiction to do so.[88] In our view, it is neither appropriate nor necessary to deal with this argument, which raises questions of State legislative power and statutory construction.
[88]The orders concerning the expert determination were made in August 2019, which was well after the matter had become a matter in federal jurisdiction by reason of the raising by Krongold of the TPA claim against Swan Hardware (which had occurred at least by August 2018).
It is not appropriate, because it lies outside the scope of the questions reserved. It would in any event be premature to address the question what consequences an order for referral would have, when no such order has yet been sought. The issue before us is confined to the question of the power to refer.
It is not necessary, because it is possible to address the question of construction on the assumption, consistent with s 6(1) of the Interpretation of Legislation Act 1984, that ‘refer’ has the widest meaning which it can have within the limits of State legislative power.

Construction of s 77

The present issue was addressed and decided by Perry J in Qantas v Lustig.[89] She held that s 77 did not permit VCAT to strike out a proceeding, or refer a matter, in circumstances where it lacked jurisdiction to hear and determine the proceeding itself. The obstacle to the jurisdiction of VCAT in that case was that the matter was in federal jurisdiction by virtue of a defence under a law of the Commonwealth having been raised. The analysis of Perry J did not, however, depend on the fact that the matter lay in federal jurisdiction. She held that s 77 did not enable VCAT to strike out or refer a matter in respect of which it lacked jurisdiction, irrespective of the nature of the defect in jurisdiction.
[89](2015) 228 FCR 148.
Krongold urged the correctness of that decision. Alternatively, it submitted that Parliament was to be taken to have acted on the basis that the decision was correct when it subsequently enacted pt 3A of the VCAT Act, with the result that the conclusion of Perry J reflected the proper construction of s 77, even if it had not been correct when Qantas v Lustig was decided. We shall return to pt 3A below.
Mr and Mrs Thurin, supported by the Attorney-General for Victoria, submitted that Qantas v Lustig was wrongly decided in this respect. The Commonwealth Attorney-General made short written submissions broadly supportive of the reasoning of Perry J, but ultimately indicated that he did not wish to advance a position on the question of construction contrary to that urged on behalf of the State.
Perry J advanced two reasons for the construction she adopted. First, she considered that the words ‘more appropriately’ in s 77(1) suggested that VCAT had, in effect, a choice between forums in the exercise of a discretion based on an evaluation of the factors for and against the proceeding being heard and determined by VCAT, as opposed to another forum.[90] She considered that this accorded with the ordinary meaning of the words used, and was broadly analogous to the discretion of a court to decline to exercise jurisdiction on inappropriate forum grounds.
[90]Ibid 173 [106].
Krongold embraced this reasoning, and submitted that it was supported by the words ‘(other than the tribunal)’ in s 77(1), which pointed to an evaluative process comparing two (or more) bodies all having jurisdiction.
Secondly, Perry J noted that, if VCAT lacks jurisdiction over any part of the proceeding, there is no ‘matter’ before it for determination, within the meaning of s 77(3). As such, because to ‘remit or transfer’ proceedings is to exercise jurisdiction in respect of’ those proceedings, there is no ‘matter’ to which the power to refer could attach. Perry J referred to the decision of Gummow J in McIntosh v National Australia Bank Ltd,[91] and that of the New South Wales Court of Appeal in Sunol v Collier.[92] Krongold also supported this reasoning, adding that the exercise of the strike-out power did not amount to terminating the proceeding, even if the referral power was exercised in respect of the matter; the proceeding remained in VCAT but was struck from the list.
[91](1988) 17 FCR 482, 483–4 (‘McIntosh’).
[92](2012) 81 NSWLR 619, 624 [19] (Bathurst CJ, Allsop P and Basten JA) (‘Sunol’).
Section 77 is in pt 4 of the VCAT Act, which contains provisions dealing with ‘general procedure’. Self-evidently, the purpose of such provisions is to facilitate the resolution of matters that are brought before VCAT. As the heading to s 77 indicates, sometimes the question may arise whether there is a more appropriate forum than VCAT for that purpose. The purpose of conferring a power to refer a matter to another decision-making body is therefore to enable the resolution of the matter. Whether or not it is strictly correct to describe this as a ‘remedial’ measure, it is plainly a provision directed at the efficient resolution of the matter in question.
The statutory language does not indicate that the concern of the section is to permit a choice only between forums suitable for hearing and determining the proceeding. The question is whether there is another forum in which the subject matter of the proceeding ‘would be more appropriately dealt with’. In our view, that language is apt to extend to dealings with that subject matter other than by way of hearing and determination. In particular, to dismiss a proceeding for want of jurisdiction is to ‘deal with’ the subject matter of the proceeding. Section 77(1) squarely presents the question whether the subject matter would be more appropriately dealt with elsewhere, inevitably by a body having jurisdiction to hear and determine the substance of the matter. Such a body appears to us to be plainly a forum in which it would be ‘more appropriate’ to deal with the matter, as opposed to a forum that lacks jurisdiction.
In our opinion, there is no warrant for not giving the statutory language its full meaning. We do not accept Krongold’s submission that the words ‘(other than the Tribunal)’ point to an assumption that VCAT has jurisdiction to decide the proceeding in question. The expression merely confirms the comparison to be undertaken.
Further, the injunction in s 6(1) of the Interpretation of Legislation Act to construe legislation so as to operate to the full extent of the legislative power of the State serves to confirm the width of the provision, given the scope of that legislative power we have identified.
With great respect to Perry J, we are not persuaded that s 77(1) proposes a choice between hearing and determining a proceeding in two or more forums having jurisdiction to do so. For the reasons given, we do not think that ‘dealt with’ is to be construed so narrowly. Had Parliament wanted to achieve such a result, it could easily have used the phrase ‘heard and determined’ instead.
We also do not agree that the word ‘matter’ in s 77(3) means a controversy justiciable in VCAT. The ordinary meaning of the word conveys the subject matter of the proceeding, to which s 77(1) refers, namely the controversy that has been brought before VCAT, without implying that such subject matter must be justiciable in VCAT. A controversy or ‘matter’ exists, as we have discussed above, independently of the question where jurisdiction lies to hear and determine it.[93]
[93]Fencott (1983) 152 CLR 570, 603 (Mason, Murphy, Brennan and Deane JJ); Citta (2022) 96 ALJR 476, 485–6 [31] (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ).
In that context, the truism that to ‘remit or transfer a proceeding is to exercise jurisdiction in respect of it’ does not shed light on the meaning of ‘matter’.[94] Even if, in exercising the power of referral in s 77(3), VCAT exercises jurisdiction in respect of a controversy that lies outside its jurisdiction, it does so pursuant to State rather than federal judicial power.[95] As explained earlier, such a power involves no hearing and determination of a matter within federal jurisdiction, but is merely an incident of the ordinary duty of a State court or tribunal to determine its own jurisdiction.
[94]Qantas v Lustig (2015) 228 FCR 148, 174 [108], citing McIntosh (1988) 17 FCR 482, 483–4 (Gummow J).
[95]Citta (2022) 96 ALJR 476, 485 [26] and [28] (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ).
The same may be said of the power to strike out part or all of a proceeding, which is the necessary precondition to the exercise of the referral power. The strike-out power involves no adjudication of the merits. As Mukhtar AsJ put it, with reference to s 77, in Bashour v Victorian Civil and Administrative Tribunal,[96] ‘to “strike out” is not to dismiss; it means to remove the case from the list or body of cases entered on the Tribunal’s list of cases for hearing’. By analogy, to ‘strike out’ part of a proceeding is to remove the relevant subject matter with which that part of the proceeding is concerned from the matters to be heard and determined. That construction of s 77 is supported by the fact that ss 75(1) and 76(1) of the VCAT Act distinguish between ‘dismissing’ and ‘striking out all, or any part of’ a proceeding.[97]
[96][2016] VSC 527 [8].
[97]In that respect, the reference in s 57(3) of the DBC Act to a matter being ‘dismissed’ by VCAT under s 77 is inapt.
The decisions in McIntosh and Sunol do not point to any different conclusion. Each of them turned on the construction of statutory provisions with little in common with s 77. In McIntosh, it was held that ‘matters for determination’ in a proceeding in the Federal Court did not extend to matters in respect of which the Court lacked jurisdiction. Similarly, the issue in Sunol was whether a question of law in respect of which a body lacked jurisdiction could be said to ‘arise’ in the proceeding before that body; the answer, in the negative, does not bear on the issue presented by s 77.
For these reasons, subject to considering the significance of the enactment of pt 3A, the powers of VCAT under s 77 are properly construed as arising in a case where VCAT lacks jurisdiction to hear and determine the proceeding.

Part 3A of the VCAT Act

Part 3A was introduced into the VCAT Act in 2021. It is entitled ‘Federal subject matter’, a phrase defined to mean subject matter of the kind referred to in ss 75 and 76 of the Constitution (other than the constitutional writs in respect of officers of the Commonwealth in s 75(v)). Section 57B relevantly enables an application to be made to the Magistrates’ Court by a person who is unable to apply to VCAT because the matter is in federal jurisdiction, or by a person whose application to VCAT was struck out, dismissed, rejected or withdrawn because the matter was in federal jurisdiction.

By ss 57B(2) and 57C, the Magistrates’ Court must then hear and determine the application, if satisfied that the application raises, or there is some doubt whether it raises, a controversy involving federal subject matter whose resolution would involve, or there is some doubt whether it would involve, an exercise of judicial power.
Other provisions address in some detail matters such as the extension of limitation periods (s 57D), the rights and liabilities of persons under decisions of VCAT that were invalid by reason of VCAT having exercised judicial power involving federal subject matter (ss 57F–57I) and transfer of proceedings from the Magistrates’ Court to the Supreme Court or the County Court: s 57J. Among other things, the Court is (like VCAT) not bound by the rules of evidence (s 57C(3)(c)) and the Court’s powers regarding costs are those applicable in VCAT: s 57C(3)(i).
The argument advanced by Krongold was that Parliament is to be taken to have enacted pt 3A in the knowledge that Perry J had ruled that the powers in s 77 were unavailable in a case where VCAT lacks jurisdiction. Rather than amend s 77 to give VCAT power in that situation, Parliament had chosen to enact a comprehensive scheme to enable the Magistrates’ Court to hear and determine such cases. Consistently with that approach, the Second Reading Speech and statement of compatibility tabled under the Charter of Human Rights and Responsibilities Act 2006 stated that pt 3A was intended to address and rectify the ‘jurisdictional gap’ identified in Burns.[98] It was submitted that this Court should act consistently with that parliamentary endorsement of the decision in Qantas v Lustig.
[98]Victoria, Parliamentary Debates, Legislative Assembly, 26 May 2021, 1785, 1788 (Natalie Hutchins, Minister for Crime Prevention, Corrections, Youth Justice and Victim Support).
The ‘re-enactment presumption’ is a principle of statutory construction to the effect that, when statutory language has been given a particular meaning by judicial decision, if Parliament re-enacts the provision or re-uses the language in question by amending the statute in which it is contained, Parliament is presumed to have intended that the language has the meaning judicially ascribed to it.[99]
[99]DPP Reference No 1 of 2019 (2021) 95 ALJR 741, 746–8 [10]–[17] (Kiefel CJ, Keane and Gleeson JJ), 754–5 [51]–[52] (‘DPP Reference’); [2021] HCA 26; Georgopoulos v Silaforts Painting Pty Ltd (2012) 37 VR 232, 243 [40] (Osborn JA and J Forrest and Beach AJJA).
Krongold accepted that its argument based on pt 3A was only an ‘indirect’ application of the principle. That concession was properly made, because it is not suggested that Parliament in enacting pt 3A (or making other amendments to the VCAT Act in the interim) has either re-enacted s 77 or used any language construed in Qantas v Lustig. Instead, the argument is that it has left s 77 unchanged, and that it can be inferred that it endorsed the construction of s 77 adopted in Qantas v Lustig.
For the principle to apply, the terms of the re-enactment, or the circumstances surrounding it, must be such that the legislative adoption of the meaning assigned by the courts to the language in question is ‘tolerably clear’.[100]
[100]DPP Reference (2021) 95 ALJR 741, 747 [12] (Kiefel CJ, Keane and Gleeson JJ).
In our opinion, the principle has no application in the present case. First, pt 3A cannot be said to proceed on the assumption that the decision in Qantas v Lustig is correct. On any view, s 77 is not a comprehensive answer to the jurisdictional problem identified in Burns. Put differently, whether or not Qantas v Lustig was correctly decided, there was an identified need for a legislative response that went into a great deal more detail than s 77.
Secondly, having settled upon the response that is now pt 3A, no inconsistency or difficulty arises if s 77 offers an alternative pathway in cases where VCAT lacks jurisdiction. In particular, s 77 is not otiose on that analysis, because it has a different field of operation. It enables VCAT to act of its own motion, or on the application of a person who may not be eligible to engage the procedure in pt 3A. Unlike pt 3A, it enables a matter to be referred directly to the Supreme Court or the County Court, bypassing the Magistrate’s Court.
Thirdly, there is no reference in the extrinsic materials concerning pt 3A to s 77 or the decision in Qantas v Lustig, such as might have supported an inference of the kind urged by Krongold.
In the circumstances, the fact that Parliament addressed the jurisdictional problem by enacting pt 3A does not found an inference that Parliament considered that s 77 did not empower VCAT to refer a matter in which it lacked jurisdiction to another decision-making body. The enactment of pt 3A is equally explicable on the basis that, even if s 77 did confer such power, an additional, more comprehensive regime was desirable.

Conclusion on question 6(a)

Accordingly, we consider that the construction of s 77 advanced in Qantas v Lustig is not correct and should not be followed. The answer to question 6(a) is ‘yes’.

Orders

The questions referred to the Court should be answered as follows:
1.       Not necessary to answer.
2.       No.
3.       Yes.
4.       Yes.
5.       Does not arise.
6.       (a)      Yes.
(b)      No.
We will hear the parties as to costs. Our present inclination is that, because each party has had a measure of success and the ultimate fate of any referral application remains unknown, there should be no order as to costs.
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SCHEDULE OF PARTIES

DAVID THURIN First applicant

LISA THURIN Second applicant

and

KRONGOLD CONSTRUCTIONS (AUST) PTY LTD

(ACN 103 839 49)
First respondent

SWAN HARDWARE & STAFF PTY LIMITED (ACN 005 273 165) Second respondent

CASPER ARCHITECTURE AND DESIGN PTY LTD (ACN 078

809 604)
Third respondent

BICON PTY LTD (ACN 070 741 374) Fourth respondent

and

ATTORNEY-GENERAL OF THE COMMONWEALTH Intervener

ATTORNEY-GENERAL FOR THE STATE OF VICTORIA Intervener

[2022] VSCA 226

20 October 2022 First revision (appearances): 20 October 2022