Thurin v Krongold Constructions (Aust) Pty Ltd - [2024] VSC 42

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
TECHNOLOGY, ENGINEERING AND CONSTRUCTION LIST

S ECI 2023 00644

DAVID THURIN	First Plaintiff
and
LISA THURIN	Second Plaintiff
v
KRONGOLD CONSTRUCTIONS (AUST) PTY LTD (ACN 103 839 149)	Defendant

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JUDGE:	Garde J
WHERE HELD:	Melbourne
DATE OF HEARING:	24 January 2024
DATE OF JUDGMENT:	16 February 2024
CASE MAY BE CITED AS:	Thurin v Krongold Constructions (Aust) Pty Ltd
MEDIUM NEUTRAL CITATION:	[2024] VSC 42

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JURISDICTION – Federal jurisdiction – Victorian Civil and Administrative Tribunal (VCAT) lacking jurisdiction to hear and determine federal issues – Referral of matter by VCAT to Supreme Court under Victorian Civil and Administrative Tribunal Act 1998 (Vic) (‘VCAT Act’) s 77(3) – Nature and extent of the power of the Supreme Court to extend limitation periods under VCAT Act s 77(4) – Purpose of VCAT Act s 77(4) – Meaning and effect of s 77(4) – Whether proceeding commenced in the Supreme Court involves the same subject matter as a proceeding in VCAT – Whether late commencement of proceeding attributable to additional steps the plaintiffs were required to take to have proceeding determined by the court – Whether it is fair and reasonable to extend the limitation period.

LIMITATION OF ACTIONS – Building dispute referred by VCAT to Supreme Court – Proceeding in VCAT commenced within limitation periods in Building Act 1993 (Vic) (‘Building Act’) ss 134 and 134A – Parties in VCAT on notice of subject matter within limitation period – Power of Supreme Court under VCAT Act s 77(4) to extend limitation period – Whether VCAT Act s 77(4) and Building Act ss 134 and 134A are inconsistent – Whether VCAT Act s 77(4) or Building Act ss 134 and 134A more specific provision – Intention of Parliament in enacting VCAT Act s 77(4).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr M Roberts KC Dr C Parkinson KC Mr L Stanistreet	Herbert Smith Freehills
For the Defendant	Mr J Twigg KC Dr K Weston-Scheuber	Neslihan Dastan
For Casper Architecture and Design Pty Ltd (ACN 078 809 604)	Mr N Hopkins KC Mr K Naish	DLA Piper Australia

HIS HONOUR:

Introduction

I have two applications before me concerning the power of the Supreme Court to extend limitation periods under s 77(4) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (‘VCAT Act’). By a summons filed 12 October 2023, David and Lisa Thurin seek to join Casper Architecture and Design Pty Ltd (ACN 078 809 604) (‘Casper’) as a defendant to this proceeding. Likewise, by a summons filed 21 November 2023, the current defendant, Krongold Constructions (Aust) Pty Ltd (ACN 103 839 149) (‘Krongold’) seeks to join Casper as a defendant to this proceeding for the purposes of a contribution claim under Part IV and an apportionment claim under Part IVAA of the Wrongs Act 1958 (Vic) (‘Wrongs Act’). Krongold also seeks to join Swan Hardware & Staff Pty Ltd (ACN 005 273 165), the trustee of the Swan Hardware & Staff Unit Trust (ABN 80 597 079 103), (‘Swan Hardware’) as a defendant for the purpose of apportionment under Part IVAA of the Wrongs Act. Both the Thurins and Krongold seek orders under s 77(4) of the VCAT Act extending the limitation period applicable to building actions. Swan Hardware has not sought to resist the application against it.

In simple terms, the proceeding is a building dispute where the Thurins as owners claim against Krongold, their builder, for installing defective pipes in a new home constructed in about 2008 at Whernside Avenue, Toorak. The installed pipes ruptured in 2012 and 2015. Swan Hardware is said to have supplied the pipes installed in the Thurins’ home. The proceeding was commenced as a major domestic building dispute in Victorian Civil and Administrative Tribunal (‘VCAT’) proceeding no BP715/2018 (‘VCAT proceeding’). Krongold subsequently made claims against Swan Hardware under the Trade Practices Act 1974 (Cth). On 13 December 2022, the VCAT proceeding was struck out by Quigley J as VCAT President, and the matter was referred to the Supreme Court.

These applications follow two decisions of the Court of Appeal following referrals to that Court in Thurin v Krongold Constructions (Aust) Pty Ltd[1] and in Krongold Constructions (Aust) Pty Ltd v Thurin.[2]
[1](2022) 407 ALR 187 (McLeish, Niall and Walker JJA) (‘first referral decision’).
[2][2023] VSCA 191 (Beach, McLeish and Niall JJA) (‘second referral decision’).

In the first referral decision, the Court of Appeal held that although the VCAT proceeding was within the federal jurisdiction by reason of the claims made against Swan Hardware and therefore beyond the jurisdiction of VCAT, VCAT did have power under s 77(3) of the VCAT Act to refer the matter to the Supreme Court.

In the second referral decision, the Court of Appeal held that the making of a referral to the Supreme Court invoked the jurisdiction of the Court without the need for a fresh or initiating process. As a referral, it did not constitute the bringing of an action for the purpose of the time limits in s 134 or s 134A of the Building Act 1993 (Vic) (‘Building Act’). The Court also held that as VCAT did not have jurisdiction to join Casper or Swan Hardware as respondents to the VCAT proceeding, with the result that the claims against those parties in the VCAT proceeding did not form part of the matter referred under s 77.[3]
[3]Second referral decision [3].

In October 2023, Parliament passed legislation to empower courts to address the position in this matter and others like it. By s 67 of the Justice Legislation Amendment Act 2023 (Vic) (Act No 26 of 2023) (‘Amendment Act’), Parliament amended s 77 of the VCAT Act to permit a court to extend any limitation period that applies to the commencement of a proceeding in relation to a matter referred to the court by VCAT subject to compliance with certain conditions.

The main issues that arise for determination in the applications before me are:

(a) whether the Court has jurisdiction under s 77(4) of the VCAT Act to add Casper and Swan Hardware as parties to this proceeding and to extend time;

(b) whether in the circumstances of this matter the Court should make orders under s 77(4); and

(c) whether ss 134 and 134A of the Building Act prevent the Court from making orders under s 77(4) in relation to building matters.

There was no dispute that VCAT had validly struck out the VCAT proceeding under s 77(1) and referred the matter to the Supreme Court under s 77(3) of the VCAT Act.

In support of their submissions, the Thurins rely on the affidavit and exhibits of their solicitor Simon Kaufman filed 8 November 2023. Casper relies on the affidavit and exhibits of its solicitor Sarah Fountain filed 4 December 2023.

Amendment Act

Following the coming into force of the Amendment Act, s 77 of the VCAT Act is now in the following form:

(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)An order under subsection (1) may be made on the application of a party or on the Tribunal's own initiative.
(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)If the Tribunal refers a matter to a court under subsection (3), the court may extend any limitation period that applies to the commencement of a proceeding in relation to that matter so as to allow the proceeding to be commenced and determined, if the court is satisfied that—
(a)the proceeding involves the same subject matter as a proceeding in the Tribunal that was struck out under subsection (1) on the ground, or on grounds that included, that the Tribunal lacked jurisdiction to exercise judicial power to resolve controversies involving federal subject matter within the meaning of section 57A(1); and
(b)the late commencement of the proceeding is attributable to additional steps the person commencing it was required to take to have it determined by the court because the Tribunal proceeding was struck out; and

(c) it is fair and reasonable to extend the limitation period.
(5)The Tribunal's power to make an order under subsection (1) and to refer a matter under subsection (3) is exercisable only by—
(a) a presidential member; or
(b)a senior member who has been an Australian lawyer for not less than 5 years.

Explanatory memorandum

The Explanatory Memorandum of the Bill for the Amendment Act (‘Bill’) relevantly states:

Clause 67 substitutes sections 77(2) and 77(4) and inserts section 77(5) of the Victorian Civil and Administrative Tribunal Act 1998.
The substitution of section 77(2) provides that an order under subsection (1) may be made on the application of a party or on VCAT’s own initiative. This was formerly in section 77(4) and has been moved to section 77(2) to make the section read more consistently.
The substitution of section 77(4) provides the Courts with the power to extend the limitation period that applies to an application that raises or may raise a controversy involving federal subject matter which is unable to be finally determined by VCAT, where the matter is referred to the Court by VCAT under section 77(3) and certain conditions are satisfied.
New section 77(5) expands the class of members who can exercise powers under sections 77(1) and 77(3), to improve efficiency at VCAT. This amendment provides that an order under section 77(1) and a referral under section 77(3) can be made by a Presidential member or a senior member who has been an Australian lawyer for not less than 5 years. It is intended that this will improve the VCAT’s ability to efficiently transfer federal jurisdiction matters to the courts.[4]
[4]Explanatory Memorandum, Justice Legislation Amendment Bill 2023, 40.

Second Reading Speech

The Second Reading Speech of the Bill in the Legislative Assembly contained the following passage:

Addressing various legal and procedural issues in respect of the Victorian Civil and Administrative Tribunal’s jurisdiction outlined in Thurin v Krongold and other Supreme Court decisions
The Bill will address various legal and procedural issues in respect of the Victorian Civil and Administrative Tribunal’s (VCAT’s) jurisdiction which have been outlined in recent Supreme Court decisions. These reforms will provide certainty about the jurisdiction and rights of parties in impacted cases, noting that this parliament cannot legislate on matters of Commonwealth constitutional law that limit the operation of tribunals.
The Court of Appeal’s decision in [the first referral decision] late last year highlighted that, because of certain provisions in the Commonwealth Constitution, VCAT does not have jurisdiction over cases that indirectly raise matters of federal law. The decision will require the transfer of many cases intended to be heard by VCAT to the courts. Currently, orders to transfer cases can only be made by VCAT’s judicial members.
In response to Krongold, the Bill will implement several reforms in the [VCAT Act] to minimise delay and clarify uncertainties faced by litigants in affected matters. The reforms will:
•expand the class of VCAT members who can make orders to transfer federal jurisdiction matters to a court for determination,
•provide courts with the power to extend the limitation period for federal jurisdiction matters referred to them by VCAT, and
•preserve the rights and liabilities of parties involved in previous VCAT decisions which are no longer valid due to the matters having an ‘indirect’ connection to federal law.

The Part 10 retrospective validation amendments have been included as they are considered an appropriate response in this context given the high volume of past decisions which are now invalid on the basis of the recent findings that VCAT lacks the required jurisdiction. Commentary from the legal profession regarding Krongold and Vaughan Constructions Pty Ltd v Melbourne Water Corporation (Building and Property) demonstrates that the profession views these decisions as having effectively reduced the previously-understood scope of VCAT’s jurisdiction in a significant way. The Bill will provide litigants with certainty, avoid the need for litigants to spend additional time and money having their disputes re-heard at courts, and avoid the risk of the courts receiving an influx of applications to re-hear previous VCAT matters.[5]
[5]Victoria, Parliamentary Debates, Legislative Assembly, 16 August 2023, 2917 (Anthony Carbines, Minister for Police, Minister for Crime Prevention, Minister for Racing) (‘Second Reading Speech’) (footnote omitted).

Legislative steps in the amendment of s 77 of the VCAT Act

The passage of the Bill through the Parliament occurred in the following manner:

(a) On 20 October 2022, the Court of Appeal handed down the first referral decision;

(b) On 15 August 2023, the Bill was introduced to Parliament in the Legislative Assembly;

(c) On 16 August 2023, the second reading of the Bill was moved in the Legislative Assembly;

(d) On 17 August 2023, the Court of Appeal handed down the second referral decision;

(e) On 31 August 2023, the Bill was passed by the Legislative Assembly;

(f) On 31 August 2023, the second reading of the Bill was moved in the Legislative Council;

(g) On 3 October 2023, the Bill passed the Legislative Council without amendment;

(h) On 10 October 2023, the Bill received the royal assent; and

(i) On 11 October 2023, ss 67 and 68 of Act No 26 of 2023 commenced.

The Bill was drafted prior to the handing down of the second referral decision and not subsequently amended.
Legislative Council Debate

On 3 October 2023, while the Bill was in committee in the Legislative Council, the following discussion took place:

Clause 67 (17:14)
Georgie CROZIER: Attorney, this clause relates to sections 77(2) and 77(4) – and inserts section 77(5) – of the Victorian Civil and Administrative Tribunal Act 1998, so it goes to the VCAT-related amendments, or part 10 of the bill does. With respect to part 10 of the bill and the procedure of referring VCAT matters to other courts where a question involving federal jurisdiction is raised, an issue was identified in the Court of Appeal case – which I think you are aware of – Thurin v Krongold Constructions (Aust) Pty Ltd. I understand that this bill, however, does not fix the specific problem with respect to the operation of statutory limitations on proceedings where third parties are joined to an action after federal issues are identified. In short, even though a claim involving federal jurisdiction may be transferred from VCAT to a court, it can still mean that a claim against a third party could be statute-barred because of the transfer.
It is also my understanding that lawyers have written to the Shadow Attorney-General Mr O’Brien – I have got a copy of that letter, actually – identifying that the bill does not resolve the specific problem and that the Attorney has received similar correspondence. So does the government acknowledge that this is a problem? Will the government propose house amendments to deal with this gap, and if not, how does the government propose to tackle what has been identified through this case? It is quite a technical issue and a tricky one, which I think you are aware of, but do you have plans to address those issues?
Jaclyn SYMES: Yes, this case has caused us quite a bit of thinking time in relation to the cases where it has been ruled that jurisdictional issues mean that certain matters cannot be at VCAT and need to go to higher courts. We are confident that the amendments that we have proposed cover it, and I would draw the house’s attention to the amendment to section 77(4) of the VCAT Act, which proposes to substitute:
If the Tribunal refers a matter to a court under subsection (3), the court may extend any limitation period that applies to the commencement of a proceeding in relation to that matter so as to allow the proceeding to be commenced and determined …

There is a set of considerations that they can draw on to form that view, including in paragraph (b):
the late commencement of the proceeding is attributable to additional steps the person commencing it was required to take to have it determined by the court because the Tribunal proceeding was struck out …

We have specifically provided for the ability of courts to extend the limitation period for the exact scenario that you have outlined. Of course if there are remaining concerns about the operation of that clause, I am happy to keep an eye on it. The intention would be to allow courts to not be bound by the statute of limitations because of those technicalities. There may be situations where it is not appropriate to do so, so having the court discretion, with the backing of this discussion of the intention being to allow the courts to not be bound, I think gets around those concerns. But I do acknowledge that there is a view out there that perhaps it is still a concern. We do not share that concern, so if it remains a problem – I do not want people barred from a proceeding because they initiated it in the wrong court. That is an inherent unfairness, and we think that this amendment should get around that.[6]
Clause agreed to; clauses 68 to 72 agreed to.
[6]Victoria, Parliamentary Debates, Legislative Council, Tuesday 3 October 2023, 3013-3014 (Georgie Crozier MLC; Jaclyn Symes MLC, Attorney-General).

Limitation provisions

The Building Act specifies time limits for the bringing of actions relating to building work. Section 129 contains the following relevant definitions:

building action means an action (including a counter-claim) for damages for loss or damage arising out of or concerning defective building work;
building work includes the design, inspection and issuing of a permit in respect of building work.

Sections 134 and 134A contain the relevant limitations, and are expressed in the following terms:

134 Limitation on time when building action may be brought
(1) Despite anything to the contrary in the Limitation of Actions Act 1958 or in any other Act or law, a building action cannot be brought more than 10 years after the date of issue of the occupancy permit in respect of the building work (whether or not the occupancy permit is subsequently cancelled or varied) or, if an occupancy permit is not issued, the date of issue under Part 4 of the certificate of final inspection of the building work.
(2)Despite subsection (1), a building action may be brought more than 10 years but less than 15 years after the date of issue of the occupancy permit in respect of the building work (whether or not the occupancy permit is subsequently cancelled or varied) or, if an occupancy permit is not issued, the date of issue under Part 4 of the certificate of final inspection of the building work if—
(a) the building action is a cladding building action; and
(b)the building action has become or becomes prohibited on or after 16 July 2019 but before 1 December 2023 by this section as in force at any time before the commencement of section 49A of the Building Amendment (Registration and Other Matters) Act 2021.

(3)In this section—
cladding building action means a building action in connection with, or otherwise related to, a product or material that is, or could be, a non-compliant or non‑conforming external wall cladding product.

134A Limitation on time when plumbing action may be brought
Despite anything to the contrary in the Limitation of Actions Act 1958 or in any other Act or law, if a compliance certificate is issued in respect of plumbing work under Part 12A, an action (including a counter-claim) for damages for loss or damage arising out of or concerning any defects in the work cannot be brought more than 10 years after the date of issue of the certificate.

The time within which Krongold must bring an action to recover contribution under s 23B of the Wrongs Act is specified in s 24(4) of that Act in the following manner:

Notwithstanding any provision in any statute requiring a notice to be given before action or prescribing the period within which an action may be brought, where under section 23B any person becomes entitled to a right to recover contribution in respect of any damage from any other person, proceedings to recover contribution by virtue of that right may be commenced by the first-mentioned person–
(a)at any time within the period–
(i)within which the action against the first-mentioned person might have been commenced; or
(ii)within the period of twelve months after the writ in the action against the first-mentioned person was served on him–
whichever is the longer …

Section 68 of the Amendment Act amended the definition of ‘writ’ in s 23A(3) of the Wrongs Act so that it included an application to VCAT. Section 70 of the Amendment Act made the change in definition retrospective by providing that this amendment applied on or after the commencement date whether or not the damage in question occurred before, on or after the commencement date.

Joinder of parties

Under r 9.06(b) of the Supreme Court (General Civil Procedure) Rules 2015, the Supreme Court at any stage of a proceeding may order that –

any of the following persons be added as a party—
(i)a person who ought to have been joined as a party or whose presence before the Court is necessary to ensure that all questions in the proceeding are effectually and completely determined and adjudicated upon; or
(ii)a person between whom and any party to the proceeding there may exist a question arising out of, or relating to, or connected with, any claim in the proceeding which it is just and convenient to determine as between that person and that party as well as between the parties to the proceeding;

Rule 1.13 defines ‘question’ to mean:

any question, issue or matter for determination by the Court, whether of fact or law or of fact and law, raised by the pleadings or otherwise at any stage of a proceeding by the Court, by any party or by any person not a party who has a sufficient interest.

Key dates

In the second referral decision, the Court of Appeal set out the key dates that apply to a proceeding by the Thurins against Casper:

(a) On 8 September 2008, a compliance certificate for the plumbing works was issued;

(b) On 20 November 2008, a certificate of occupancy was issued in respect of the dwelling;

(c) On 22 May 2018, the Thurins commenced the VCAT proceeding; and

(d) On 7 September 2018 and 19 November 2018, the limitation periods in ss 134 and 134A of the Building Act for the bringing of a building action with respect to the building work and an action for damages with respect to the plumbing work respectively expired.[7]

[7]Second referral decision, [76].

Any fresh proceeding by the Thurins or Krongold against Casper is now statute barred under ss 134 and 134A of the Building Act unless an extension of time for bringing the proceeding is granted under s 77(4) of the VCAT Act.

Thurins’ submissions

In summary, the Thurins submitted:

(a) the extrinsic material demonstrated that Parliament in enacting the Amendment Act intended to address the circumstances of this proceeding;

(b) Casper was aware of the issues in dispute and fully participated in the VCAT proceeding;

(c) the term ‘matter’ is not co-extensive with ‘proceeding’ and extends to any controversy that might come before a court;

(d) the claims made by the Thurins against Casper were part of the matter before VCAT even if not validly part of the VCAT proceeding;

(e) the requirements of s 77(4)(a) and (b) of the VCAT Act are satisfied. The VCAT proceeding was struck out because the controversy involved federal subject matter; and

(f) it is fair and reasonable to extend the limitation period under s 77(4)(c). Casper actively participated in the VCAT proceeding, and there was no delay by the Thurins.

Krongold’s submissions

Krongold supported the Thurins’ application to add Casper as a party to this proceeding and extend the period in which a proceeding might be brought against it.

In summary, Krongold submitted:

(a) under s 24AL of the Wrongs Act, the Court may give leave for any one or more persons who are concurrent wrongdoers in relation to an apportionable claim to be joined as a defendant to the proceeding;

(b) the discretion to join a defendant to the proceeding under s 24AL was broad and unfettered;[8]
[8]Referring to Fabfloor (Vic) Pty Ltd v BNY Trust Company of Australia Ltd & Ors [2016] VSC 99, [30] (Dixon J).

(c) the time within which Krongold must bring a proceeding to recover contribution had expired unless the Court extended the limitation period or the Thurins issued a writ against Krongold;

(d) if time is extended as sought by the Thurins, Krongold may commence a contribution proceeding within the time as extended under s 24(4)(a)(i) of the Wrongs Act;

(e) alternatively, Krongold relied on s 77(4) of the VCAT Act to extend the period in which it may issue a proceeding for contribution against Casper;

(f) Krongold’s contribution claim involves the same subject matter as the VCAT proceeding; and

(g) alternatively, Krongold sought an order that the Thurins issue a writ in the current proceeding to enable Krongold to rely on s 24(4)(a)(ii) of the Wrongs Act.

Casper’s submissions

In summary, Casper submitted:

(a) the Thurins are time barred by ss 134 and 134A of the Building Act from commencing a proceeding against Casper;

(b) the Thurins do not meet the requirements of s 77(4)(a) or (b) of the VCAT Act;

(c) it is not fair and reasonable to extend the limitation period under s 77(4)(c) of the VCAT Act;

(d) s 77(4) does not permit an extension of time in building actions; and

(e) the same considerations apply to the proposed joinder of Casper by Krongold.

Reply submissions

Both the Thurins and Krongold made reply submissions. In their reply submissions, the Thurins made the following main points:

(a)in both the first and second referral decisions, the Court of Appeal held that the word ‘matter’ in s 77(3) meant the subject matter of the proceeding to which s 77(1) refers. This was the controversy that was brought to VCAT;
(b)the Court of Appeal determined in the first referral decision that Krongold’s claim against Swan Hardware and in the second referral decision that the Thurins claim against Casper were not part of the VCAT proceeding. They were not part of the ‘matter’ referred to the Supreme Court under s 77(3) because the VCAT proceeding had become a federal matter prior to the joinder order being made. The joinder order was void and Swan Hardware and Casper never became parties to the VCAT proceeding;
(c)because the claims against Swan Hardware and Casper in the VCAT proceeding were void, and did not form part of the matter referred to the Supreme Court pursuant to s 77(3), a new proceeding would need to be commenced against them to invoke the Supreme Court’s jurisdiction to hear and determine those claims; and
(d)in the absence of an extension of the limitation period, the claims were statute barred.

In its reply submissions, Krongold submitted:

(a)the subject matter of the proceeding before VCAT included the claims made against Swan Hardware and Casper;
(b)s 77(4) empowered the court to extend the limitation period relating to the commencement of a proceeding in relation to the matter referred under s 77(3); and
(c)Krongold’s claim against Casper for apportionment of liability as a concurrent wrongdoer or for contribution is a proceeding ‘in relation to’ the Thurins’ claim against Krongold and part of the matter referred to the court.

Threshold issue of statutory construction

Casper and the other parties disagree as to how s 77(4) of the VCAT Act should be construed. It is only after the VCAT proceeding is struck out and the matter referred to a court that the power in s 77(4) arises. Casper contends for a narrow construction of s 77(4) so that the jurisdiction of a court to extend a limitation period is limited to the extent of the matter as validly referred. Casper submitted that this did not include claims made against parties invalidly joined to the VCAT proceeding. The Thurins submitted that Casper’s construction of s 77(4) would have the effect that s 77(4) does not fix the problem for which it was enacted.

The Thurins and Krongold contend for a wider construction of s 77(4) so that a court to which a matter is referred by the Tribunal under s 77(3) is able to extend the limitation period relating to all claims forming part of the matter before the Tribunal, whether or not the parties were validly joined to the VCAT proceeding.

The construction issue that arises is similar in nature to the question raised in the debate in committee in the Legislative Council on 3 October 2023.[9]
[9]Victoria, Parliamentary Debates, Legislative Council, Tuesday 3 October 2023, 3013-3014 (Georgie Crozier MLC; Jaclyn Symes MLC, Attorney-General).

Principles of statutory construction

The principles of statutory construction are well known. In Project Blue Sky Inc v Australian Broadcasting Authority, the plurality of the High Court said:
The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined “by reference to the language of the instrument viewed as a whole”... Thus, the process of construction must always begin by examining the context of the provision that is being construed.
A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court “to determine which is the leading provision and which the subordinate provision, and which must give way to the other”. Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.
Furthermore, a court construing a statutory provision must strive to give meaning to every word of the provision...
[T]he duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.[10]
[10](1998) 194 CLR 355, 381–2 [69]–[71], 384 [78] (McHugh, Gummow, Kirby and Hayne JJ) (citations omitted). See also Maroondah City Council v Fletcher(2009) 29 VR 160, 168–9 [36] (Warren CJ and JA and Osborn AJA); Commissioner of State Revenue (Vic) v Landrow Properties Pty Ltd(2010) 79 ATR 800, 813–4 [51] (Neave, Harper and Hansen JJA).
In Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) (‘Alcan’), the High Court said:
This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.[11]
[11](2009) 239 CLR 27, 46–7 [47] (Hayne, Heydon, Crennan and Kiefel JJ) (citations omitted).
The plurality of the High Court emphasised the importance of text, context and purpose in SZTAL v Minister for Immigration and Border Protection:
The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose. Context should be regarded at this first stage and not at some later stage and it should be regarded in its widest sense. This is not to deny the importance of the natural and ordinary meaning of a word, namely how it is ordinarily understood in discourse, to the process of construction. Considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected.[12]
[12](2017) 262 CLR 362, 368 [14] (Kiefel CJ, Nettle and Gordon JJ) (citations omitted).
In CIC Insurance Ltd v Bankstown Football Club Ltd, the plurality of the High Court said:
It is well settled that at common law, apart from any reliance upon s 15AB of the Acts Interpretation Act 1901 (Cth), the court may have regard to reports of law reform bodies to ascertain the mischief which a statute is intended to cure... the modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses “context” in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statute was intended to remedy. Instances of general words in a statute being so constrained by their context are numerous.[13]
[13](1997) 187 CLR 384, 408 (Brennan CJ, Dawson, Toohey and Gummow JJ) (citations omitted).
These principles are consistent with s 35(a) of the Interpretation of Legislation Act 1984 (Vic) (‘Interpretation Act’), which requires that when interpreting an Act, a construction that would promote the purpose or object underlying the Act is to be preferred to a construction that would not promote that purpose or object.
First and second referral decisions

In determining the proper construction of s 77(4), I am much assisted by the principles enunciated in the reasons of the Court of Appeal in the first and second referral decisions. I will now set out the relevant principles.

First referral decision - What is the meaning of the term ‘matter’?

The Court of Appeal referred to the meaning of the term ‘matter’ in Ch III of the Constitution, and held:

The meaning of ‘matter’ in ch III of the Constitution was confirmed in Palmer v Ayres (in their capacities as liquidators of Queensland Nickel Pty Ltd (in liq)):[14]
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.[15]

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. [16]

[14](2017) 259 CLR 478, 490–1 [26]–[27] (Kiefel, Keane, Nettle and Gordon JJ) (‘Palmer’).

[15]Citations omitted.

[16]First referral decision, [47], [48].

In summary, a ‘matter’ is a justiciable controversy encompassing all claims made within the scope of the controversy, whether or not the claims are ultimately established.

First referral decision - When does federal jurisdiction arise?

Federal jurisdiction arises when the source of a claim or defence asserted in the course of a justiciable controversy is one that arises under a law of the Commonwealth within the meaning of s 76(ii) of the Constitution. It is enough that the claim or defence raising federal jurisdiction is genuinely in controversy and that it gives rise to an issue capable of judicial determination. The claim or defence must be genuinely raised and not incapable on its face of legal argument.[17]
[17]Ibid [55].

Once Krongold initiated federal claims against Swan Hardware, the subject matter of the VCAT proceeding came within the federal jurisdiction. Thereafter, VCAT lacked jurisdiction to hear and determine the matter. It lacked the power to order that Swan Hardware be joined as a party to the VCAT proceeding.[18]
[18]Ibid [64].

First referral decision - Is there a difference between ‘matter’ and ‘proceeding’?

It is well established that the identification of a ‘matter’ in federal jurisdiction does not depend on the form taken by the proceeding in question. The ‘matter’ is not co-extensive with any legal proceeding, but is the subject matter for determination in a proceeding or the ‘controversies which might come before a Court of Justice.[19]
[19]Ibid [58].

A ‘matter’ might take shape before all of the issues had been delineated in pleadings at all, for example in correspondence between the parties.[20]
[20]Ibid [59].

The ordinary meaning of the word ‘matter’ 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 independently of the question where jurisdiction lies to hear and determine it.[21]
[21]Ibid [148].

First referral decision - What is the meaning of ‘strike out’?

To strike out a proceeding is not to dismiss the proceeding. Strike out involves no adjudication on the merits, and means the removal of the case from the list or body of cases entered on the list of cases for hearing. There is a distinction between ‘dismissing’ and ‘striking out’ a proceeding.[22]

Second referral decision – Was the issue of a proceeding necessary to enliven the jurisdiction of a court in the context of a referral?

[22]Ibid [150].

The purpose of commencing a proceeding is to enliven the jurisdiction of the court. In the context of a referral under s 77, that step is achieved by the making of the referral. Once the court’s jurisdiction is enlivened by the referral, the filing of fresh initiating process is not necessary for that task.[23]
[23]Second referral decision, [59].

At least in the first instance, the premise of s 77 is that VCAT will not determine the proceeding and the subject matter will be sent elsewhere. The fact that the proceeding is struck out rather than dismissed reinforces the general notion that underpins s 77 that the subject matter will be determined or considered by the appropriate forum. The strike out mechanism also supports the view that s 77 is not concerned to terminate the controversy without resolution, but serves to ensure that the subject matter is dealt with in the appropriate forum. To a significant extent, the purpose is to ensure a measure of continuity rather than to treat the striking out of the proceeding as the end of the matter.[24] A referral to the Supreme Court under s 77 of the VCAT Act invokes the jurisdiction of the Court without the need for any further initiating process.[25]

Second referral decision – What was the effect of the joinder of Casper and Swan Hardware to the VCAT proceeding?

[24]Ibid [68].

[25]Ibid [74].

Section 77 cannot validly operate on the premise that the joinder order is valid, as that would give legal effect to an invalid exercise of federal judicial power, and render hollow the constitutional restriction. It would give effect and attach legal consequences to an invalid act.[26]
[26]Ibid [91].

VCAT’s jurisdiction with respect to Casper and Swan Hardware depended on the legal efficacy of its joinder order. Once it is recognised that it cannot make a joinder order, there was no proper basis on which VCAT could make an incidental order to transfer a matter that concerned Casper or Swan Hardware to the Court.[27] The referral did not invoke the jurisdiction of the Supreme Court in relation to any claims made in the VCAT proceeding concerning these parties.[28]
[27]Ibid [93].
[28]Ibid [103].

The context of the Amendment Act

In the second referral decision the Court of Appeal determined that once a matter in VCAT was in the federal jurisdiction, VCAT was not competent to join or determine claims against additional parties. The Court described the issue as to how the referral of a matter to the Supreme Court interacted with limitation periods in the Building Act as being of general importance.[29]
[29]Second referral decision, [1].

During the second referral hearing in the Court of Appeal, the Solicitor-General appearing for the Attorney-General for Victoria submitted that it was necessary for a separate proceeding to be commenced in the Supreme Court following a referral from VCAT.[30] However, in oral argument, the Solicitor General varied this submission and contended that a separate proceeding was not required to be issued once a referral invoked the jurisdiction of the Court.[31] The Bill was drafted at a time when the Attorney General’s view was that a fresh proceeding would or might be necessary if a matter was referred by VCAT to a court of competent jurisdiction under s 75(3) of the VCAT Act. It was not subsequently amended.
[30]Second referral decision, [54].
[31]Ibid [56].

The proceeding between the Thurins and Krongold was issued within time, and made claims in contract and negligence. It was not a claim in the federal jurisdiction. However, the claim made by Krongold against Swan Hardware involved federal issues, with the result that the whole matter became a matter in the federal jurisdiction. VCAT had no power to entertain such a claim or to join Swan Hardware and Casper as parties to the VCAT proceeding. Both of these joinders had taken place within time.

The result is that fresh proceedings between the Thurins and Casper, and between Krongold and Swan Hardware and Casper are sought to be issued but are out of time. The Thurins do not need to issue a fresh proceeding against Swan Hardware as they independently issued a proceeding against Swan Hardware in the Supreme Court in 2017.[32]
[32]David Thurin & Ors v Swan Hardware & Staff Pty Limited (ACN 005 273 165) & Ors (Supreme Court of Victoria, S CI 2017 04387 commenced 31 October 2017).

Before me, the parties discussed three classes of building cases in VCAT that potentially give rise to limitation issues if referred to a court. They are:

(a)cases such as the present where the VCAT application did not raise federal issues, but subsequently third parties were joined to the VCAT proceeding against whom the respondents in the VCAT proceeding raised federal issues;
(b)cases where the VCAT application did not raise federal issues but the respondents in the VCAT proceeding desired to raise federal issues against third parties; and
(c)cases where the VCAT application raised federal issues.

Explanatory memorandum

The explanatory memorandum for the Bill states that the substitution of s 77(4) will provide the courts with the power to extend the limitation period that applies to an application that raises or might raise a controversy involving federal subject matter which is unable to be finally determined by VCAT, where the matter is referred to a court by VCAT under s 77(3) and certain conditions are satisfied.

Second Reading Speech

The Second Reading Speech for the Bill highlights that VCAT does not have jurisdiction over cases that indirectly raise matters of federal law, and that the decision of the Court of Appeal will require the transfer of many cases intended to be heard by VCAT to the courts. The Second Reading Speech states that the proposed reforms are in response to the first referral decision and would ‘provide courts with the power to extend the limitation period for federal jurisdiction matters referred to them by VCAT’.

The Second Reading Speech describes the reforms as making critical changes to complex legal issues impacting parties, the legal profession and Victoria’s court system.

Legislative Council debate in committee

In the Legislative Council debate on 3 October 2023, in response to a question from Georgie Crozier MLC, the Attorney-General stated that the Bill ‘specifically provided for the ability of courts to extend the limitation period for the exact scenario [third parties joined to an action after federal issues are identified] that you have outlined’. The Attorney-General also stated that ‘the intention would be to allow courts to not be bound by the statute of limitations because of those technicalities’. While there may be situations where it was not appropriate to do so, the Attorney-General considered that the grant of discretion to the courts got around those concerns. Finally, the Attorney-General stated that she did ‘not want people barred from a proceeding because they initiated it in the wrong court’. Such a position was ‘an inherent unfairness’.

These matters suggest that it was Parliament’s intention to empower courts to preserve the rights of parties to a VCAT proceeding where federal jurisdiction is invoked, and not see their rights defeated by the expiration of limitation periods because a proceeding was initially issued or conducted in VCAT and not in a court, and needed subsequently to be re-issued in a court. It was understandably considered that such an outcome would be inherently unfair.

The text of the Amendment Act

The parties made submissions as to the meaning and effect of the expressions and words in s 77(4) and (5).

The first issue is as to the meaning of the word ‘matter’. I accept the submission of the Thurins and Krongold that the word ‘matter’, where twice found in s 77(4), should be construed in the same way as it was by the Court of Appeal in the second referral decision, namely, as the justiciable controversy encompassing all claims made in the scope of the controversy whether or not ultimately established. I also accept, as the Court of Appeal held, that the identification of a matter does not depend on the form taken by the proceeding in question and exists independently of the question as to where jurisdiction lies to hear and determine it.[33]
[33]Second referral decision, [64].

Finally, I accept, and it was ultimately common ground between the parties, that the matter in the form referred by VCAT to the Supreme Court did not concern Casper or Swan Hardware, as the VCAT joinder order of those parties was void and had no legal efficacy.[34]
[34]Second referral decision, [9], [93], [103].

When will an extension order be needed?

The second issue is to consider when an extension order will be needed. In the second referral decision, the Court of Appeal held that the VCAT order striking out the VCAT proceeding was consistent with the notion that the subject matter or matter would be determined by the appropriate forum. The controversy continued to exist and was not terminated without resolution. There was no need for further initiating process as the referral itself enlivened the court’s jurisdiction.[35]
[35]Second referral decision, [59], [68], [74].

As a result, no order under s 77(4) of the VCAT Act extending the limitation period is necessary where a VCAT proceeding is issued in time, does not raise federal issues and the matter is validly referred to a court under s 77(3). For this reason, the Thurins do not require an order under s 77(4) extending the limitation period for their proceeding against Krongold as they issued the VCAT proceeding against Krongold in time, and the matter referred to the court included the scope of that proceeding.

By contrast, the Thurins need an extension order against Casper, and Krongold needs extension orders against Swan Hardware and Casper, as the subject matter validly referred by VCAT to the court did not include the claims made in VCAT against those parties.

‘In relation to that matter’

The third issue is as to the meaning of the words ‘in relation to that matter’ in s 77(4). Casper submitted that the words should be confined to the matter as validly referred to the Court by VCAT. The Thurins and Krongold submitted that they extended to the subject matter of the justiciable controversy between the parties.

I accept the submission made by the Thurins and Krongold for three main reasons. First, as I have set out above, the Court of Appeal in the second referral decision held that the ordinary meaning of the word ‘matter’ was the subject matter of the proceeding, namely, the controversy brought to VCAT, whether or not justiciable in VCAT. A controversy or ‘matter’ was independent of the question of where jurisdiction lies to hear and determine it.[36] It follows that Casper’s submission as to the meaning of the words ‘matter’ and ‘subject matter’ is inconsistent with the meaning of these words as determined by the Court of Appeal which is not confined in the way suggested by Casper.
[36]Second referral decision, [64].

Secondly, Casper’s submission, if accepted, would render s 77(4) nugatory. No extension of the limitation period is required where a proceeding in a matter validly commenced in VCAT is referred to a court under s 77(4). Thus, if the scope of s 77(4) is limited in the manner for which Casper contends, the power in s 77(4) will have no utility. Such a construction would be capricious and perverse given the plain intention of the Parliament. The power to extend time in s 77(4) is required precisely because the matter in the form referred to the court is necessarily devoid of federal jurisdiction. The very reason why the power is needed is to permit claims made in the federal jurisdiction to be enlivened in a court. For this purpose, an extension of time may be necessary. Parliament has provided for this to be done by a court subject to compliance with the conditions in s 77(4)(a)–(c) and the favourable exercise of discretion.

Thirdly, the submission by the Thurins and Krongold is consistent with authority as to the meaning of the phrase ‘in relation to’. I will now refer to relevant authority as to the meaning of this phrase.

In PMT Partners Pty Ltd (in liq) v Australian National Parks and Wildlife Service,[37] three members of the High Court observed that the closeness of the relationship required by the expression ‘in or in relation to’ must be ascertained by reference to the nature and purpose of the provision in question and the context in which it appears. The other two members of the court agreed with the opinion of the Court of Appeal that the expression ‘in relation to’ was ‘doubtless very wide but the essential component is that there must be two subject matters which are to some extent connected’.[38]
[37](1995) 184 CLR 301, 313 (Brennan CJ, Gaudron and McHugh JJ) (‘PMT Partners’).
[38]Ibid 328 (Toohey and Gummow JJ) (citations omitted).

In ASIC v Citrofresh International Ltd, Goldberg J reviewed the authorities dealing with the meaning of the expression ‘in relation to’, observing that a consistent theme running through the cases was that the expression gathered its meaning from the context in which it appears and the purpose for which it appears. Goldberg J held that the words ‘in relation to’ have a very wide meaning, but like the expression ‘in respect of’, do not extend to any relationship, however tenuous.[39]
[39](2007) 164 FCR 333, [66] (citations omitted).

In News Digital Media Pty Ltd v Mokbel, the Court of Appeal referred to PMT Partners and described the expression ‘in relation to’ as prima facie broad and designed to catch things which have sufficient nexus to the subject.[40]
[40](2010) 30 VR 248, [19] (Warren CJ, Buchanan JA, Byrne AJA).

The expression ‘a proceeding in relation to that matter’ requires that there be a sufficient nexus between the proceeding to be commenced and the matter. It is plain that in the present case there is a strong nexus. The proceedings for which an extension of the limitation period is sought are integral parts of the subject matter of the justiciable controversy or matter. The determination of these claims is necessary for the due administration of justice and the resolution of the dispute.

I conclude that the words ‘in relation to that matter’ found in s 77(4) refer to the justiciable controversy between the parties regardless of VCAT’s jurisdictional limitations. Casper’s construction gives little (if any) effect to the use of the expression ‘in relation to’ in s 77(4) and is not conformable with the ordinary and wide meaning of this expression.

Section 77(4)(a) of the VCAT Act

Consistently with the use of the expression ‘in relation to’ in s 77(4), s 77(4)(a) requires the proceeding for which an extension is required to ‘involve the same subject matter as a proceeding in the Tribunal that was struck out under sub-s (1)’. As I have already said, the subject matter of the VCAT proceeding is the justiciable controversy between the parties regardless of the jurisdiction in which the controversy can be determined. If the proceeding for which an extension of the limitation period is required involves this subject matter, the first part of s 77(4)(a) is satisfied.

The second part of s 77(4)(a) refers to the striking out of the proceeding under s 77(1) on the ground, or on grounds that included, that VCAT lacked jurisdiction to resolve controversies involving federal subject matter within the meaning of s 57A(1) of the VCAT Act.[41]
[41]Section 57A(1) of the VCAT Act defines ‘federal subject matter’ to mean subject matter of a kind referred to in s 75 (other than s 75(v)) or 76 of the Constitution of the Commonwealth.

In the first referral decision, the Court of Appeal held that the VCAT proceeding involved a matter arising under a law of the Parliament within the meaning of s 76(ii) of the Constitution and was a matter in the federal jurisdiction.[42] In making the order striking out the VCAT proceeding, Quigley J, as VCAT President, held that the Supreme Court of Victoria was the more appropriate forum to deal with the matter. Under the heading of ‘Remarks’, Quigley J referred to the orders and reasons of the Court of Appeal in the first referral decision, holding that the Supreme Court of Victoria was the more appropriate forum to deal with the matter ‘In light of this decision’. It is plain that the VCAT proceeding was struck out on the ground that VCAT lacked judicial power to resolve a controversy that involved federal subject matter within the meaning of s 57A(1) of the VCAT Act. There was no other ground or reason why the VCAT proceeding was struck out.
[42]First referral decision, [26] (Questions 3 and 4), [165].

The final aspect of s 77(4)(a) is to observe that the proceeding for which an extension of time is sought must involve the same subject matter as a proceeding in VCAT that was struck out. As before, the expression ‘subject matter’ or ‘matter’ refers to a justiciable controversy, regardless of whether or not the controversy is capable of resolution in VCAT.

Section 77(4)(b) of the VCAT Act

Section 77(4)(b) of the VCAT Act requires that the late commencement of the proceeding is attributable to the additional steps the person commencing it was required to take to have it determined by the court. The Thurins and Krongold submitted that this provision was consistent with their construction and inconsistent with Casper’s construction of s 77. Thus, it was necessary for the person seeking the extension of the limitation period to commence a new proceeding in the court because that person’s claim in VCAT could not proceed after the federal jurisdiction was invoked in the VCAT proceeding. The step that the person was required to take was to issue a fresh proceeding in the court to which the matter was referred. The late commencement of a proceeding in the court was attributable to the steps required to be taken to have the new proceeding determined by the court whose jurisdiction had been invoked to hear and determine the referred matter.

Casper’s suggested construction of s 77 leaves no work for s 77(4)(b) to do. If s 77(4) is confined to the referred matter exclusive of any claims in the federal jurisdiction, there will be no late commencement of a fresh proceeding. As was held in the second referral decision, the jurisdiction of the court is enlivened by the referral under s 77. No fresh initiating process need be filed.[43]
[43]Second referral decision, [59].

The final aspect of s 77(4)(b) relates to the words ‘because the Tribunal proceeding was struck out’. Casper submitted that the reason why the Thurins and Krongold needed to take steps now is because they improperly joined Casper to the VCAT proceeding when VCAT had no power or jurisdiction to do so.

In response, the Thurins and Krongold submitted that the words ‘because the Tribunal proceeding was struck out’ are used in a circumstantial and not causative way. They submitted that s 77(4)(b) would be senseless if the expression was used in a causative way.

In my opinion, the expression ‘because the Tribunal proceeding was struck out’ is used in a descriptive or circumstantial manner. Plainly, a new proceeding is required because the rules of the relevant court require that this be done. What is intended by the legislature in enacting s 77(4)(b) is for the party seeking the extension to show that the late commencement of a new proceeding in the court resulted from the fact that the VCAT proceeding was or became incompetent when matters of federal jurisdiction were raised. This resulted in the strike out of the VCAT proceeding and the referral of the matter to a court for determination.

Section 77(4)(c) of the VCAT Act

Section 77(4) is discretionary, empowering but not requiring the court to exercise the jurisdiction conferred by it. A party seeking an extension of the limitation period under s 77(4) must satisfy each of the requirements in s 77(4)(a)–(c). Section 77(4)(c) requires that party to show that it is fair and reasonable to extend the limitation period.

Purpose of the Amendment Act

The purpose of a statutory provision is always an important consideration in construing that statutory provision. In the present case, the purpose underpinning s 77(4) is a powerful and compelling consideration.

The purpose of s 77(4) is to confer on courts jurisdiction to extend limitation periods so as to preserve the rights of parties to a VCAT proceeding where federal jurisdiction is invoked. In the absence of such a provision, the rights of parties in a VCAT proceeding might be defeated or lost by jurisdictional objection in VCAT followed by limitation defences in the court when court proceedings are commenced.

Parliament was concerned to remedy this mischief through s 77(4), which provides a court with jurisdiction to make orders which preserve the position and rights of parties where federal jurisdiction is invoked subject to satisfying certain conditions. It would be unjust and unfair if the parties to a VCAT proceeding were to lose, or be adversely affected in their rights because of the expiration of limitation periods in these circumstances. The case that triggered the enactment of the Amendment Act was this case.

Construction of s 77(4) of the VCAT Act

For these reasons, I reject Casper’s submissions and accept the submissions made by the Thurins and Krongold as to the construction of s 77(4) of the VCAT Act.

The Thurins’ application to extend the limitation period for a proceeding against Casper

The limitation periods in ss 134 and 134A of the Building Act for a proceeding by the Thurins against Casper expired on 7 September 2018 for the building works, and on 19 November 2018 for the plumbing works.[44]
[44]Second referral decision [76].

For the reasons that I have set out above, I am satisfied that the Supreme Court has jurisdiction under s 77(4) of the VCAT Act to extend the limitation periods for a proceeding by the Thurins against Casper provided that the requirements of s 77(4)(a), (b) and (c) are met, and provided that the court is persuaded that it should exercise its discretion to extend the limitation period.

I now consider whether that jurisdiction should be exercised in this case.

Section 77(4)(a) of the VCAT Act

On 6 September 2018, the Thurins filed Further Amended Points of Claim in the VCAT proceeding (‘points of claim’). Casper was the second respondent to the VCAT proceeding. The points of claim refer to and repeat claims previously made by Krongold against Casper in Points of Defence to Amended Points of Claim and Points of Counterclaim (‘points of defence’) filed in the VCAT proceeding on 3 August 2018.

Essentially the claims made by the Thurins against Casper were for breach of contractual and tortious duties as the architect and project administrator. The relevant tort was the tort of negligence. The substantive allegation against Casper was that it failed to inform the other parties that the pipe selected for the works did not meet the required description and did not serve a notice of defect.

The Thurins proposed statement of claim in this proceeding is also for breach of contract and negligence. It alleges that the architect failed to assess the pipe material actually used as against the pipe material specified in the construction contract, or seek advice from the hydraulic engineer as to its suitability. While there is more detail in the form of claim intended to be filed by the Thurins, the claims intended to be made by the Thurins against Casper in this proceeding are the same as or similar to those made in the VCAT proceeding.

I am satisfied that the proceeding that the Thurins wish to commence in this court involves the same subject matter as the VCAT proceeding. It concerns the same allegations that defective pipes were installed in the same building work at the same property. There is a very close nexus between the claim that is intended to be prosecuted against Casper and the claim that was brought in VCAT and could not proceed because the federal jurisdiction had been invoked. I find that the Thurins satisfy the requirements of s 77(4)(a) of the VCAT Act.

Section 77(4)(b) of the VCAT Act

It is informative to set out a brief history of the matter from 2019. With effect from 1 October 2019, Riordan J was appointed to hear and determine the VCAT proceeding under s 29(1) of the VCAT Act. On 4 October 2019, Riordan J directed that the 2017 proceeding be heard and determined together with the 2019 proceeding and the VCAT proceeding. New and substituted pleadings were to be filed and other steps taken.

Under the active oversight of Riordan J, the proceedings were prepared for trial with the filing of expert evidence, and a joint conference of six experts dealing with project and construction management facilitated by the Honourable Wayne Martin AC QC on 18 February 2022. A second expert conference of eight experts dealing with polymer and hydraulics issues was held on 21 February 2022. The proceedings were set down for trial on 30 May 2022.

On 17 May 2022, 13 days before the trial, Krongold filed a summons in the VCAT proceeding and in the 2019 proceeding challenging VCAT’s jurisdiction. Six questions of law were referred to the Court of Appeal by Riordan J on 22 June 2022. On 20 October 2022, the Court of Appeal published the first referral decision.

Following an application by the Thurins on 1 December 2022, Quigley J made orders on 13 December 2022 striking out the VCAT proceeding and referring the matter to the Supreme Court.

After further directions hearings, on 24 March 2023 Stynes J reserved various further questions for the consideration of the Court of Appeal. This gave rise to the second referral decision published on 17 August 2023.

Section 67 of the Amendment Act came into force on 11 October 2023. The next day, the Thurins issued their summons now returnable before me. Krongold issued its summons on 21 November 2023.

Casper submitted that the late commencement of the Thurins’ claim against Casper was due to the Thurins’ mistaken decision in August 2018 to claim against Casper in VCAT in circumstances where VCAT had no jurisdiction to hear and determine the claims. They submitted that the Thurins could have taken steps to join Casper as a party to a proceeding in the Supreme Court, or have commenced a separate proceeding against Casper in a court of competent jurisdiction to adjudicate the claim.

I am satisfied that the late commencement of the application for joinder of Casper in this proceeding is attributable to the additional steps that the Thurins were required to take to have their claim against Casper determined by the Court. If it were not for the fact that federal jurisdiction was invoked in the VCAT proceeding, the Thurins’ claim against Casper would have been heard and determined in that jurisdiction. Because the VCAT proceeding was struck out for lack of jurisdiction, the Thurins have had to take additional steps in the Supreme Court so that their claim against Casper can be heard and determined. I find that the Thurins have satisfied the requirements of s 77(4)(b).

Section 77(4)(c) of the VCAT Act

Casper submitted that it would not be fair and reasonable to extend time to allow the Thurins to commence a proceeding against Casper.

Casper submitted that:

(a) the proposed proceeding is well out of time.

(b) the Thurins have not acted with dispatch to bring a proceeding against Casper;

(c) the onus of showing that it is fair and reasonable to extend time is on the Thurins; and

(d) where a trial is conducted long after the events which gave rise to the dispute, the risk to justice becomes greater.

Casper’s main points were:

(a) it is almost 15 years since a certificate of occupancy was issued concerning the Thurins’ residence;

(b) the failure of the pipework occurred in 2012 and 2015 which were four and seven years after the certificate of occupancy was issued;

(c) the Thurins issued court proceedings in October 2017 against Swan Hardware;

(d) the Thurins did not issue proceedings against Krongold until 22 May 2018;

(e) Krongold raised the alleged contribution of Swan Hardware and Casper in their points of defence;

(f) the Thurins did not progress the VCAT proceeding against Casper after the joinder order in August 2018 but progressed claims against Krongold to enforce an expert determination; and

(g) no explanation for the Thurins’ delay has been given.

The Thurins provided a procedural chronology of Casper’s involvement in the dispute, and submitted:

(a) they were not responsible for any delay or misstep in the conduct of the matter;

(b) Casper was at all times aware that claims were advanced against it and did not raise any concern or objection to the resolution by VCAT of the enforceable dispute resolution process;

(c) a large component of the delay associated with the expert determination dispute resolution process was the time it took for VCAT to decide the submissions put to it;

(d) Casper actively participated in the VCAT proceeding and sought to vigorously defend the allegations made against it;

(e) the Thurins initiated the first referral with a view to the resolution of all jurisdiction issues as expeditiously as possible; and

(f) the issues considered and ruled upon by the Court of Appeal in the first and second referral decisions justify the course taken.

I am satisfied that it is fair and reasonable to extend the time for the Thurins to claim against Casper under s 77(4)(c) in this proceeding for the following reasons:

(a) the parties (including Casper) are well prepared for trial with expert reports and witness statements prepared and filed;

(b) expert witness conclaves have been conducted and tender bundles collected and prepared for trial;

(c) Casper fully and actively participated in the VCAT and court proceedings;

(d) Casper is a necessary and proper party to the court proceeding;

(e) the jurisdictional challenges and resulting delays that have occurred are not the fault of any party;

(f) VCAT is the jurisdiction principally responsible for the resolution of domestic building disputes.[45] It is not surprising that the Thurins made their claim in VCAT;
[45]Domestic Building Contracts Act 1995 (Vic), s 57.

(g) while time has passed, Casper has not shown that it has suffered any particular prejudice as a consequence of delay;

(h) the Thurins have acted promptly in bringing the application for an extension of the limitation period and the joinder of Casper since the VCAT proceeding was struck out and the Amendment Act commenced; and

(i) it is highly desirable and in the interests of justice that those parties against whom claims are made by other parties remain involved in the dispute.

Exercise of discretion

I am of the view for the reasons that I have given that I should exercise my discretion under s 77(4) of the VCAT Act in favour of the Thurins. It is in the interests of justice to do so.

Conclusion as to s 77(4) of the VCAT Act

I am satisfied that an order should be made under s 77(4) of the VCAT Act extending the time within which the Thurins may commence a proceeding against Casper, and that Casper should be joined to the proceeding as a defendant.

Does s 77(4) of the VCAT Act apply to building actions?

Casper next submitted that s 77(4) of the VCAT Act did not apply to building actions because of the language of ss 134 and 134A of the Building Act which provide for a 10 year limitation period in building actions and are expressed to apply ‘Despite anything to the contrary in the Limitation of Actions Act 1958 (Vic) or in any other Act or law’.

Casper submitted that the wording of s 134(1) and the similarly worded s 134A applied a 10 year limitation period for building actions despite any other law to the contrary.

In Moorabool Shire Council v Taitapanui, the Court of Appeal considered the operation of s 134 of the Building Act and said:

Section 134 sets up a limitation period in respect of building actions. Such an action, despite anything to the contrary in the Limitation of Actions Act –
…cannot be brought more than ten years after the date of issue of the occupancy permit…or…the date of issue…of the certificate of final inspection.

Section 134, then, creates a particular limitation period in respect of building actions – whether they be founded in tort or contract. Any claim for pure economic loss, necessarily being the subject-matter of a “building action,” is thus strictly limited in time. There appears to be no prospect of the operation of any of the extension provisions in the Limitation Act. That bears, we think, upon the indeterminacy aspect of the policy considerations to which we earlier referred.[46]

[46](2006) 14 VR 55, [140]-[141] (‘Moorabool’) (Ormiston and Ashley JJ); Maxwell P relevantly agreeing).

Moorabool was followed by the Court of Appeal in Brirek Industries Pty Ltd v McKenzie Group Consulting (Vic) Pty Ltd.[47]Both decisions noted that s 134 governed claims in both contract and tort. In both Moorabool and in Brirek, the Court of Appeal fully examined extrinsic materials as well as the legislation itself in order to discern the purpose or object of the Act.
[47][2014] VSCA 165, [127]-[128] (Redlich, Whelan and Santamaria JJA) (‘Brirek’).

In Lendlease Engineering Pty Ltd v Owners Corporation No 1 PS 526704E, the Court of Appeal considered whether the limitation period began where multiple occupancy permits were issued on the date an occupancy permit was first issued in respect of the work, or on the date of the final occupancy permit.[48]
[48][2022] VSCA 105 (‘Lendlease Engineering’).

The Court of Appeal held:

In construing s 134 it is necessary to commence with the ordinary and grammatical meaning of the words used, taking into account both context and legislative purpose. Consideration of context must be ‘in its widest sense’, including taking into account the surrounding statutory provisions, as well as the ‘mischief’ the statute is intended to remedy. Importantly, however, as highlighted in the passage from Brirek, above, the task of the court is to identify the solution that recommended itself to Parliament.[49]
[49]Ibid, [63] (Beach, Niall and Kennedy JJA) (citations omitted).

Section 35 of the Interpretation Act

In addition to the general principles of statutory construction that I have noted above,[50] s 35 of the Interpretation Act has particular relevance, and provides:
[50]Above [32]-[36].

In the interpretation of a provision of an Act or subordinate instrument—
(a)a construction that would promote the purpose or object underlying the Act or subordinate instrument (whether or not that purpose or object is expressly stated in the Act or subordinate instrument) shall be preferred to a construction that would not promote that purpose or object; and
(b)consideration may be given to any matter or document that is relevant including but not limited to—
(i)all indications provided by the Act or subordinate instrument as printed by authority, including punctuation;

(ii) reports of proceedings in any House of the Parliament;
(iii)explanatory memoranda or other documents laid before or otherwise presented to any House of the Parliament; and
…

Remedial legislation and mischief

The Amendment Act is remedial legislation intended by Parliament to empower courts to preserve the rights of parties to VCAT proceedings where federal issues are invoked. The mischief with which s 77(4) is concerned is that parties may find when proceedings in VCAT are struck out because federal issues are invoked that subsequent court proceedings are out of time. Parliament intended that courts be able to remedy this mischief by exercising the jurisdiction afforded by s 77(4).

The Second Reading Speech for the Bill contains compelling indications to this effect. First, the heading of the relevant part of the Second Reading Speech refers to the various legal and procedural issues in VCAT’s jurisdiction outlined in the first referral decision. The first referral decision concerned this very case which is, of course, a domestic building case.

Secondly, the Second Reading Speech refers to the reforms as ‘In response to Krongold’. Plainly, the Amendment Act will not respond to the first referral decision if this case and building actions generally are exempted from its operations. It would be capricious and perverse if a construction of s 77(4) were adopted which left untouched the very case which gave rise to the first and second referral decisions and triggered remedial legislation by the Parliament.

Thirdly, in the Second Reading Speech the Minister stated that the Bill would support efficiencies by empowering the courts to continue to hear domestic building matters that would otherwise be transferred to VCAT, where an assessment has been made that the action may raise a controversy involving federal subject matter in the future. It is plain beyond doubt that the Minister intended the Bill to apply to domestic building matters.[51] There is nothing in the Second Reading Speech that suggests that building actions were to be exempted from the ordinary operation of s 77(4) once enacted.
[51]Second Reading Speech, 2917.

The debate in committee in the Legislative Council on 3 October 2023 makes this doubly clear. Georgie Crozier MLC referred to this very case, a building action, and sought confirmation from the Attorney-General that the Bill for the Amendment Act would address the position of third parties in this case.

In response, the Attorney-General referred to the present matter, and expressed confidence that the amendments proposed would cover the position of third parties in the present case. The third parties in the present case include Casper and Swan Hardware.

The Attorney-General then said:

We have specifically provided for the ability of courts to extend the limitation period for the exact scenario that you have outlined.

Shortly later, the Attorney-General said:

The intention would be to allow courts not to be bound by the statute of limitations because of those technicalities.

The Attorney-General added:

I do not want people barred from a proceeding because they initiated it in the wrong court. that is an inherent unfairness, and we think that this amendment should get around that.[52]
[52]Victoria, Parliamentary Debates, Legislative Council, Tuesday 3 October 2023, 3014 (Jaclyn Symes MLC, Attorney-General).

The text of the Amendment Act

The text of the Amendment Act is general and unqualified. There is no indication in the language of s 77 that it does not apply to this case or to building actions generally. Rather the notion underlying s 77(4) as amended is that it will potentially apply to all justiciable controversies where VCAT strikes out a proceeding after federal matters are invoked, and a party wishes to issue fresh proceedings in a court.

The Thurins and Casper debated whether or not s 77(4) was the more specific power applying as it does to all of VCAT’s jurisdictions, or whether ss 134 and 134A of the Building Act were the more specific because they applied to building actions generally. They addressed the maxim of interpretation that a general provision does not impliedly repeal a specific provision.[53]
[53]Goodwin v Phillips (1908) 7 CLR 1, 14 (O’Connor J); D Pearce, Statutory Interpretation in Australia (LexisNexis Butterworths, 10^th ed, 2024) 7.23 – 7.27 and the cases cited therein.

I do not consider that there is any inconsistency between ss 134 and 134AA of the Building Act and s 77(4) of the VCAT Act save in a small class of cases where limitation periods are extended by courts. Sections 134 and 134A impose a limitation period generally on building actions. Section 77(4) operates to empower a Court in specified and limited circumstances to extend the limitation period. Both provisions can operate conformably together.

Finally I accept the authorities as to ss 134 and 134A of the Building Act that the parties have cited. They were all decided in regard to the legislation with which they were concerned. I am concerned with the Amendment Act in its individual context, which concerns this very case and the need to give effect to the plain intention of Parliament to prevent injustice.

Interpretation presumptions

In submissions filed on 2 February 2024, Casper submitted that in general in the absence of express words, an earlier statutory provision is not repealed, altered or derogated from by a later provision unless an intention to that effect is necessarily to be implied. Casper further submitted that there was a general presumption that both provisions should operate and that to the extent that they would otherwise overlap one should be read as subject to the other,[54] with the consequence that s 77(4) should be read as subject to ss 134 and 134A which took precedence.
[54]Saraswati v R (1991) 172 CLR 1, 17 (Gaudron J).

In submissions also filed 2 February 2024, the Thurins submitted that s 77(4) should be construed to give effect to its purpose and that s 35(a) of the Interpretation Act should be applied. The Second Reading Speech and the Parliamentary debates make it clear that Parliament did intend that s 77(4) apply to building matters. The very mischief to which the amendments to the VCAT Act including s 77(4) was directed arose in the context of domestic building matters. They are the class of VCAT matters likely to be most affected due to the high likelihood of federal jurisdiction being invoked.

The Thurins submitted that the principle of construction to deal with the apparently inconsistent provisions is to subordinate the general provision to a more specific provision dealing with the same subject matter.[55] The rule was not a technical rule but a reflection of common sense and ordinary usage.[56] If the legislature can be seen to have provided for the specific kind of factual circumstances that have occurred, its ‘special’ provision for them will prevail over an inconsistent general provision within which those circumstances also fall.[57]
[55]Ombudsman v Loughton (2005) 64 NSWLR 114, [19] (Spigelman CJ).
[56]Effort Shipping Co Ltd v Linden Management SA (‘The Giannis NK’) [1998] AC 605, 627.
[57]Hoffman v Chief of Army (2004) 137 FCR 520, 570-571 [215] (Lindgren J).

In my opinion, s 77(4) of the VCAT Act is plainly the more specific provision. It is also the more recent. Section 134 of the Building Act has wide application, as it imposes a limitation period on building actions of all types including domestic building matters. Section 77(4) of the VCAT Act applies only if VCAT refers a matter to a court on grounds that include that VCAT lacked jurisdiction to resolve federal matters, and only then when other conditions are satisfied, and the court’s discretion is favourably exercised.

The purpose of the Amendment Act

I have already discussed the purpose of s 77(4) and the intention of Parliament. As I have said, there are the clearest indications that the provision was intended to apply to the current matter and to others like it. In my opinion, it is plain beyond dispute that s 77(4) was intended by Parliament to apply to building matters such as the present case. To adopt the words of Lendlease Engineering, this is the solution that recommended itself to Parliament. Section 77(4) should be applied in accordance with its own language. It is not rendered nugatory by s 134 and 134AA of the Building Act.

Krongold’s application to extend the limitation period for proceedings against Swan Hardware and Casper

On 22 May 2018, the Thurins commenced the VCAT proceeding against Krongold. By its points of defence, Krongold claimed contribution from Swan Hardware and Casper. On 20 August 2018, Krongold applied to join Swan Hardware and Casper as respondents to the VCAT proceeding. Following a hearing on 29 August 2018, Swan Hardware and Casper were joined as respondents to the VCAT proceeding.

On 6 September 2018, Krongold filed amended points of defence in the VCAT proceeding including claims for the breach by Casper of its contractual and tortious duties in relation to the works. Krongold claimed that Swan Hardware and Casper and certain other persons were concurrent wrongdoers under Part IVAA of the Wrongs Act, and that Krongold’s liability was limited to the proportion of loss and damage claimed that VCAT considered just having regard to the respective responsibilities of Krongold, Swan Hardware, Casper and others. Krongold also claimed contribution under Part IV of the Wrongs Act from Swan Hardware and Casper in the amount that VCAT found to be just and equitable having regard to the respective responsibilities of Krongold, Swan Hardware, Casper and others.

All of these steps were taken within the limitation period for claims by Krongold for apportionment or contribution under the Wrongs Act. The contrary was not suggested.

Parties’ submissions in relation to the Krongold application

Krongold submitted that the time within which Krongold must bring an action in the Court for apportionment or contribution has now expired, unless the court extends the limitation period. Krongold stated that the claims that it sought to bring in the Supreme Court would be in the same terms as those previously brought by it against Casper in VCAT.

Casper renewed the submissions that it had made in relation to the Thurins and additionally submitted that it would not be fair and reasonable under s 77(4)(c) to extend the limitation period for Krongold’s claims. Casper also submitted that Krongold had not provided evidence as to why it was fair and reasonable to extend time, or explain delay. It had not proven that it was fair and reasonable to extend time or provided a draft of its proposed proceeding, and the nature of the relief sought against it.

Ruling on Krongold application

Dealing first with the last two points, it is true that Krongold has not filed an affidavit as have the other parties. However I have the benefit of the affidavit filed by the Thurins’ solicitor setting out a detailed account of the litigation since it was initiated in 2017 together with almost 2,000 pages of exhibits. I also have the benefit of an affidavit by Casper’s solicitor and further exhibits, and the court files. I consider that I have ample information and material on which to determine Krongold’s application.

I also have the benefit of Krongold’s claims for contribution and apportionment including the most recent version in VCAT. The claims sought to be made in this Court would be very similar.

Section 77(4)(a)-(c) of the VCAT Act

I am satisfied that the proceeding that Krongold wishes to commence in this court involves the same subject matter as the VCAT proceeding and renews the claims for contribution and apportionment that Krongold made in the VCAT proceeding. There is a very close nexus between the claims that are intended to be made against Swan Hardware and Casper and the claims brought in VCAT that could not proceed because the federal jurisdiction was invoked. I find that Krongold has satisfied s 77(4)(a) of the VCAT Act.

I am also satisfied that the late commencement of the application by Krongold for joinder of Swan Hardware and Casper in this proceeding is attributable to the additional steps that Krongold was required to take to have its claims against those parties determined by the Court. If it were not for the fact that federal jurisdiction was invoked in the VCAT proceeding, Krongold’s claim against those parties would have been heard and determined years ago. Because the VCAT proceeding was struck out, Krongold has had to take additional steps in this Court against Swan Hardware and Casper so that their claims against these persons can be heard and determined. The additional steps are necessary because the VCAT proceeding was struck out for lack of jurisdiction. I find that Krongold has satisfied the requirements of s 77(4)(b).

I also find that it is fair and reasonable to extend the time under s 77(4)(c) for Krongold to bring its claims for contribution and apportionment against Swan Hardware and Casper for reasons similar to those that I have already given in relation to the Thurins, namely:

(a) the parties (including Swan Hardware and Casper) are well prepared for trial with expert report and witness statements prepared and filed;

(b) expert witness conclaves have been conducted and tender bundles collected and prepared for trial;

(c) Swan Hardware and Casper fully and actively participated in VCAT and court proceedings to which they were a party;

(d) Swan Hardware and Casper are necessary and proper parties to the court proceeding;

(e) the jurisdictional challenges and resulting delays that have occurred are not the fault of any party;

(f) VCAT is the jurisdiction principally responsible for the resolution of domestic building disputes. It is not surprising that proceedings were undertaken in VCAT;

(g) while time has passed, Swan Hardware and Casper have not shown that they have suffered any particular prejudice as a consequence of the delay;

(h) Krongold has acted promptly in bringing the application for an extension of the limitation period and the joinder of Swan Hardware and Casper since the VCAT proceeding was struck out and the Amendment Act commenced; and

(i) it is highly desirable and in the interests of justice that those parties against whom claims are made by other parties remain involved in the dispute.

Discretion

I am of the view that I should exercise my discretion under s 77(4) of the VCAT Act in favour of Krongold. For the reasons I have earlier given, it is in the interests of justice to do so.

It is not necessary to consider Krongold’s alternative submissions as to how relief might be granted.

Krongold application conclusion

I am satisfied that orders should be made under s 77(4) of the VCAT Act extending the time in which Krongold may commence proceedings against Swan Hardware and Casper, and that Swan Hardware and Casper should be joined to the proceeding as defendants.

Conclusion

The orders that I will make will effectively restore the position of the parties as it was at VCAT including the federal issues. This will permit this court to determine the dispute according to law and consistently with fairness and justice. The rights of all parties will be preserved.

I will make orders accordingly.

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CERTIFICATE

I certify that this and the 43 preceding pages are a true copy of the reasons for judgment of Garde J of the Supreme Court of Victoria delivered on 16 February 2024.
DATED this 16^th day of February 2024.

Associate