Tucci v Victorian Civil and Administrative Tribunal
[2010] VSC 425
•21 September 2010
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2009 08004
BETWEEN
| MICHAEL TUCCI | Plaintiff |
| and | |
| VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL | First Defendant |
| ATHEDIUM (VIC) PTY LTD (ACN 005 713 637) | Second Defendant |
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JUDGE: | CAVANOUGH J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 13 November 2009 | |
DATE OF JUDGMENT: | 21 September 2010 | |
CASE MAY BE CITED AS: | Tucci v Victorian Civil and Administrative Tribunal & Anor | |
MEDIUM NEUTRAL CITATION: | [2010] VSC 425 | |
MATTER APPEALED FROM: | Athedium (Vic) Pty Ltd v Matchpoint Pty Ltd & Ors [2009] VCAT 1124 (1 July 2009) (Senior Member Levine). | |
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ADMINISTRATIVE LAW – Judicial review – Prohibition – Victorian Civil and Administrative Tribunal – Jurisdiction of Tribunal under Fair Trading Act 1999 – Whether Tribunal has jurisdiction to hear a claim by a landlord against a guarantor of the tenant’s obligations under the lease – Whether providing a guarantee and indemnity constitutes provision of a “service” – Held, the Tribunal has jurisdiction – Observations as to Tribunal’s jurisdiction under the Retail Leases Act 2003 – Fair Trading Act 1999 (Vic) ss 3, 107, 107A, 108, 109, 110, 111, 112, 112A, 112B – Retail Leases Act 2003 (Vic) ss 81, 87, 89, 90, 91, 92 – Victorian Civil and Administrative Tribunal Act 1998 (Vic) ss 60, 77, 109, 123(1) – Trade Practices Act 1974 (Cth) ss 4, 47.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Paul L Ehrlich | Diakou Faigen Lawyers |
| For the Second Defendant | Marcus Clarke | Dennis Raftis & Associates |
HIS HONOUR:
Overview
By a written lease executed in 2003 the second defendant, Athedium Pty Ltd (“the landlord”), leased certain premises in Victoria to a company, Matchpoint Pty Ltd (“the tenant”), for a five year period for commercial use as an indoor tennis and beach volleyball complex.
Attached to the lease was a guarantee and indemnity given to the landlord by the plaintiff, Michael Tucci, who was the sole director of the tenant.
The lease expired in 2008. Thereafter the landlord brought a civil claim in the Retail Tenancies List of the Victorian Civil and Administrative Tribunal (“VCAT”) against the tenant and Michael Tucci and also against Mr Tucci’s parents, Franco and Marie-Paule Tucci. The claim against the parents has since been abandoned. What remains, principally, is a claim that the tenant breached the lease by failing to leave the premises in good repair and by failing to deliver up certain things (namely various chattels, an insurance policy and a list of customers) specifically identified in the lease. There is also a smaller claim to the effect that the landlord owns certain additional chattels (not specifically identified in the lease) that were used in connection with the complex; and that the tenant and Mr Tucci or one or other of them has wrongfully detained those additional chattels and converted them to their own use. Finally there is a quite minor claim to the effect that the tenant and Mr Tucci or one or other of them has negligently damaged certain of the landlord’s radiator heaters located at the premises.
The landlord claims damages calculated at $263,858.45 in total against the tenant for breach of the lease, conversion or detinue and negligence. The same sum is also claimed against Michael Tucci as a debt owing by him. In the alternative, the landlord claims damages from Mr Tucci or, in the further alternative, an order that he indemnify the landlord for any loss, damage or expense suffered as a result of the alleged breaches of the terms of the lease by the tenant.
Mr Tucci made an application to VCAT for the summary dismissal of the landlord’s claims against him on the ground that VCAT did not have jurisdiction to hear them. The application came before Senior Member Levine. It failed. Senior Member Levine held that VCAT had jurisdiction under Part 9 of the Fair Trading Act 1999 to entertain the landlord’s claims against Mr Tucci.[1]
[1]See Athedium (Vic) Pty Ltd v Matchpoint Pty Ltd & Ors [2009] VCAT 1124 (1 July 2009).
Further, the Senior Member appears to have been of the view that even if the Fair Trading Act 1999 did not apply, relief could be granted against Mr Tucci under the Retail Leases Act 2003. However it seems that, in the end, the Senior Member considered that it was not necessary to determine that point, and that he did not do so.[2]
[2]See paras 57–92 of VCAT’s reasons for decision and paragraph 1 of its order.
Now Mr Tucci seeks from this Court an order in the nature of certiorari under Order 56 of the Supreme Court Rules to quash the decision and orders of Mr Levine insofar as the Senior Member determined that VCAT had the requisite jurisdiction. Mr Tucci further seeks an order in the nature of prohibition to prohibit VCAT from hearing and determining the landlord’s claims against him.
In my view, Senior Member Levine was correct in concluding that VCAT has the necessary jurisdiction under Part 9 of the Fair Trading Act 1999 to entertain the landlord’s principal claim against Mr Tucci. I consider that that matter is, as Senior Member Levine held, a “consumer and trader dispute” as defined in s 107 of the Fair Trading Act 1999 for the purposes of Part 9 of the Act. In particular, I consider that by giving the guarantee and indemnity Mr Tucci supplied to the landlord a “service” within the meaning of ss 3 and 107 of the Fair Trading Act 1999. Nor has Mr Tucci persuaded me that VCAT does not have jurisdiction under Part 9 to entertain the landlord’s other, smaller claims as against him.
In those circumstances, and for additional reasons to which I will refer at the end of this judgment, I think I should refrain from deciding, or considering in any detail, whether the Retail Leases Act 2003 also gives VCAT jurisdiction to grant the landlord the relief it seeks against the plaintiff.
The proceeding will be dismissed.
The relevant statutory provisions
Part 9 of the Fair Trading Act 1999 is headed “Functions of Tribunal”. Section 107 is the first section in the Part. It provides:
“107 What is a consumer and trader dispute?
(1)In this Part a consumer and trader dispute is a dispute or claim arising between a purchaser or possible purchaser of goods or services and a supplier or possible supplier of goods or services in relation to a supply or possible supply of goods or services.
(2)For the purposes of subsection (1), a dispute or claim includes any dispute or claim in negligence, nuisance or trespass that relates to the supply or possible supply of goods or services but (except as provided in subsection (3)) does not include a dispute or claim related to a personal injury.
(3)For the purposes of subsection (1), a dispute or claim includes a claim related to personal injury if—
(a)the claim is for an amount not exceeding $10 000; and
(b)the claim relates to a supply or possible supply of goods or services; and
(c)the supply or possible supply of goods or services is the subject of a related consumer and trader dispute.
Several of the terms used in s 107(1) are themselves defined in s 3 of the Act, to wit:
“’goods’ includes—
(a)in the definition of hire-purchase agreement, all chattels personal other than money or things in action;
(b)in any other case includes—
(i)ships, aircraft and other vehicles; and
(ii)animals (including fish); and
(iii)minerals, trees and crops, whether on, under or attached to land or not; and
(iv)gas, electricity, water, sewerage and telecommunications;
‘purchaser’ in relation to a supply of goods or services means the person to whom the goods or services have been or are to be supplied;
‘services’ includes any rights (including rights in relation to, and interests in real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce, including the rights, benefits, privileges or facilities that are, or are to be provided, granted or conferred under a contract for or in relation to—
(a)the performance of work (including work of a professional nature) whether with or without the supply of goods; or
(b)the provision of, or the use or enjoyment of facilities for, amusement, entertainment, recreation or instruction; or
(c)the conferring of rights or benefits or privileges for which remuneration is payable in the form of a royalty, tribute, levy or similar payment—
but does not include rights or benefits being the supply of goods or the performance of work under a contract of service;
‘supplier’ in relation to a supply of goods or services, means the person who has supplied or is to supply the goods or services;
‘supply’ includes—
(a)in relation to goods—supply (including re-supply) by way of sale, exchange, lease, hire or hire-purchase agreement; and
(b)in relation to services—provide, grant or confer; and
(c)in Part 3, in relation to goods—
(i)exhibit, expose or have in possession for the purpose of sale, exchange, lease, hire or hire-purchase or for any purpose of advertisement, trade or business; and
(ii)offer as a prize or reward or give away for the purpose of advertisement or in furtherance of trade or business;”
Returning to Part 9 of the Act, s 107A, 108, 109(1), 109(4) and 110 are as follows:
“107A What is a small claim?
In this Part small claim means a consumer and trader dispute in relation to—
(a)a claim for payment of money in an amount not exceeding $10 000 or other prescribed amount; or
(b)a claim for performance of work of a value not exceeding $10 000 or other prescribed amount—
that in either case arises out of a contract for the supply of goods or the provision of services other than a contract of life insurance.
108 Settlement of consumer and trader disputes or small claims
(1)The Tribunal may hear and determine a consumer and trader dispute.
(2)The Tribunal may do one or more of the following in relation to a consumer and trader dispute—
(a)refer a dispute to a mediator appointed by the Tribunal;
(b)order the payment of a sum of money—
(i)found to be owing by one party to another party;
(ii)by way of damages (including exemplary damages and damages in the nature of interest);
(iii)by way of restitution;
(c)vary any term of a contract;
(d)declare that a term of a contract is, or is not, void;
(e)order the refund of any money paid under a contract or under a void contract;
(f)make an order in the nature of an order for specific performance of a contract;
(g)order rescission of a contract;
(h)order rectification of a contract;
(i)declare that a debt is, or is not, owing;
(j)order a party to do or refrain from doing something.
Example:If the supplier has default listed the purchaser with a credit reference agency in relation to a perceived debt owing, the Tribunal, in addition to declaring that there is no debt owing, may order the supplier to contact the credit reference agency and have the default listing removed from the purchaser's credit record.
(3)In awarding damages in the nature of interest, the Tribunal may base the amount awarded on the interest rate fixed from time to time under section 2 of the Penalty Interest Rates Act 1983 or on any lesser rate it thinks appropriate.
109 Additional powers of Tribunal
(1)In addition to its powers under section 108, the Tribunal, in determining a consumer dispute or a trader-trader dispute, may make any order it considers fair including declaring void any unjust term of a contract or otherwise varying a contract to avoid injustice.
…
(4)In this section—
consumer dispute means a dispute relating to the supply or possible supply of goods or services of a kind ordinarily used for personal household or domestic purposes but does not include a dispute relating to the supply or possible supply of goods if the supply or the possible supply of the goods is for the purpose of re-supply, in trade or commerce, or for the purpose of using the goods up or transforming the goods in trade or commerce;
trader-trader dispute means a dispute between a purchaser or possible purchaser and a supplier or possible supplier in relation to the supply or possible supply of goods or services in trade or commerce which involves—
(a)a claim for payment of money in an amount not exceeding $10 000; or
(b)a claim for performance of work of a value not exceeding $10 000.
…
110 Who can ask the Tribunal to resolve a consumer and trader dispute?
The Tribunal may only make an order to resolve a consumer and trader dispute on the application of—
(a)a party to the dispute; or
(b)the Director acting on behalf of one or more of the parties to the dispute.”
Sections 111 and 112 are also relevant. Their effect, in essence, is that consumer and trader disputes must generally be heard and determined at VCAT rather than in any court, especially if a VCAT proceeding in relation to the dispute is commenced before any court proceeding is commenced. Similarly, under s 112A, if a supplier commences a court proceeding that arises wholly or predominantly from a “small claim” (see s 107A above) and, before the court hearing begins, the purchaser applies to VCAT to have the matter heard and determined at VCAT and lodges the amount sought with VCAT, the court, upon being notified of this, must dismiss the proceeding.
The relevant provisions of the Retail Leases Act 2003 are to be found in Part 10 – Dispute Resolution. In particular, ss 81, 87, 89, 90, 91 and 92 should be noted. So far as relevant, they read:
“81 Meaning of retail tenancy dispute
(1)In this Part, retail tenancy dispute means a dispute between a landlord and tenant—
(a)arising under or in relation to a retail premises lease to which—
(i)this Act applies or applied because of Part 3; or
…
(b)…
(c)…
despite anything to the contrary in this Act (apart from subsection (2) and section 119(2)).
(2)However, retail tenancy dispute does not include a dispute solely relating to the payment of rent or a dispute that is capable of being determined by a specialist retail valuer under section 34, 35 or 37 of this Act … .
…
87 Retail tenancy disputes must first be referred for alternative dispute resolution
(1)A retail tenancy dispute may only be the subject of proceedings before the Tribunal (whether under this Act, the Fair Trading Act 1999 or any other Act) if the Small Business Commissioner has certified in writing that mediation or another appropriate form of alternative dispute resolution under this Part has failed, or is unlikely, to resolve it.
(2)This section does not apply to proceedings for an order in the nature of an injunction.
(3)This section does not affect the validity of any decision made by the Tribunal.
…
89 Jurisdiction of Tribunal
(1)The Tribunal has jurisdiction to hear and determine an application by a landlord or tenant under a retail premises lease, or by a specialist retail valuer, seeking resolution of a retail tenancy dispute.
(2)In an application under subsection (1) for forfeiture or relief against forfeiture (whether or not for non-payment of rent), the Tribunal has the same jurisdiction, including equitable jurisdiction, and powers as the Supreme Court has in relation to proceedings for forfeiture or relief against forfeiture.
(3)The Tribunal's powers under subsection (2) are subject to section 92 (which provides that each party to the application is to bear its own costs).
(4)Subject to section 23(4) (key-money and goodwill payments prohibited), a retail tenancy dispute other than—
(a)an application for relief against forfeiture; or
(b)a claim under Part 9 (Unconscionable Conduct)—
is not justiciable before any other tribunal or a court or person acting judicially within the meaning of the Evidence (Miscellaneous Provisions) Act 1958.
(5)The Tribunal also has jurisdiction to hear and determine any other application that under this Act, the Retail Tenancies Reform Act 1998 or the Retail Tenancies Act 1986 may be made to the Tribunal.
90 Parties to proceeding
The parties to a proceeding before the Tribunal on an application under section 89(1) are—
(a)the applicant; and
(b)the other party to the dispute; and
(c)any person the Tribunal considers it appropriate to join as a party to the proceeding.
91 Orders the Tribunal can make
(1)The Tribunal may, in a proceeding under this Part, make one or more orders—
(a)requiring a party to do, or not to do, anything including to provide specified facilities, services, fixtures or fittings under a retail premises lease or to return specified fixtures or fittings to another party; or
(b)requiring a party to pay money, by way of restitution or compensation or otherwise, to a specified person; or
(c)rectifying a retail premises lease or other document; or
(d)granting recovery of possession of the retail premises to the landlord; or
(e)requiring anything else to be done that it—
(i) is empowered to require to be done under this Act or the Victorian Civil and Administrative Tribunal Act 1998; or
(ii)considers necessary or desirable to resolve the matter concerned.
(2)In ordering the payment of a sum of money by a party, the Tribunal may order the payment of interest on that sum by the party at the rate fixed from time to time under section 2 of the Penalty Interests Rates Act 1983 or at any lesser rate it thinks appropriate.
92 Each party bears its own costs
(1)Despite anything to the contrary in Division 8 of Part 4 of the Victorian Civil and Administrative Tribunal Act 1998, each party to a proceeding before the Tribunal under this Part is to bear its own costs in the proceeding.
(2)However, at any time the Tribunal may make an order that a party pay all or a specified part of the costs of another party in the proceeding but only if the Tribunal is satisfied that it is fair to do so because—
(a)the party conducted the proceeding in a vexatious way that unnecessarily disadvantaged the other party to the proceeding; or
(b)the party refused to take part in or withdrew from mediation or other form of alternative dispute resolution under this Part.
(3)In this section, costs includes fees, charges and disbursements.”
The plaintiff’s arguments
As indicated above, VCAT held that the matter before it was properly to be regarded as a consumer and trader dispute within the meaning of s 107 of the (Fair Trading) Act, on the basis that Mr Tucci supplied a “service” to the landlord by giving the guarantee and indemnity. The correctness or otherwise of this analysis of the parties’ interactions was the sole focus of the detailed written submissions filed by the respective parties in advance of the hearing in this Court, insofar as those submissions related to the Act. However at the hearing I raised as possibilities certain alternative analyses whereby VCAT’s jurisdiction under the Act might also be seen to have been attracted. I did so because pronouncements by this Court as to the extent of the jurisdiction of VCAT can have public implications beyond the interests of the parties to the particular case, and because in matters of statutory interpretation this Court is not a mere selector between rival interpretations advanced by the parties. It may and does think for itself.[3] I will return to the possible alternative analyses after I have set out and dealt with the plaintiff’s arguments on the central issues.
[3]See Accident Towing & Advisory Committee v Combined Motor Industries Pty Ltd [1987] VR 529, 547 (McGarvie J), citing Saif Ali v Sydney Mitchell & Co (A Firm) [1980] AC 198, 212 (Lord Wilberforce).
In part, the plaintiff’s written submissions attacked the Tribunal’s reasons for decision. They also included some procedural complaints. During oral argument, however, it was recognised that, in those respects, the submissions were, to some extent, superfluous; that this proceeding was in substance an application for an order in the nature of prohibition on conventional jurisdictional grounds; that the real issue was whether any and, if so, which statutory provisions gave VCAT jurisdiction to entertain, and to make orders with respect to, the landlord’s claims against Mr Tucci; that this issue was to be assessed in this proceeding having regard only to the proper construction of the relevant legislation, the nature of the claims as pleaded and the terms of the lease and guarantee and indemnity; and that, though the reasoning of VCAT might be enlightening, any flaws it may have contained and any procedural errors VCAT may have made were largely beside the point.
The plaintiff also made a concession which he was constrained to make by virtue of binding Court of Appeal authority. He conceded that, altogether apart from the Retail Leases Act 2003, ss 107 and 108 of the Fair Trading Act 1999 bestow a general landlord and tenant jurisdiction on VCAT as between landlord (as supplier-trader) and tenant (as purchaser-consumer), citing the following passage from Zeus & Ra Pty Ltd v Nicolaou[4]:
[4](2003) 6 VR 606, 625–626 [75]–[76].
“75.If the words ‘purchaser’ and ‘supplier’ are to be construed as referring to the past, as well as the present and future, supply of services, the definition of the word ‘services’ contained in s 3 then provides no support for the appellant's argument. For when the definition of ‘services’ is read into s 107, the disputes covered by the Fair Trading Act include a dispute arising between a purchaser and a supplier of services (including rights and interests in relation to real property) that are provided, granted or conferred in trade or commerce. In our view there is nothing in the definition of a ‘fair trading dispute’ properly construed, which would exclude from VCAT’s jurisdiction under the Fair Trading Act a dispute arising between a purchaser and supplier under an executed contract.
76.In Humphries & Cooke Ltd v Essendon Airport Ltd Deputy President McNamara said that -
‘It appears that sections 107 and 108 of the Fair Trading Act1999 bestow a general landlord and tenant jurisdiction on this Tribunal. They give the Tribunal power to determine fair trading disputes which are defined as disputes between the suppliers and purchasers of goods and services. Services are defined in s.3 of the Act to include interests in real or personal property, and supply is defined to include grant. It follows in my view that whether or not the Retail Tenancies Reform Act applies to these premises the Tribunal has jurisdiction in a general sense to deal with a dispute between the landlord and tenant in the present circumstances’.
We agree with the Deputy-President's interpretation of ss 107 and 108, which was applied by Judge Bowman in rejecting the appellant's application to strike out paragraphs [3] and [4] of Zeus & Ra’s claim.”
The plaintiff submits that Zeus and Ra is distinguishable because it did not address the position of third parties, ie parties other than the landlord and the tenant, such as a guarantor of the tenant’s obligations. He submits that if VCAT has jurisdiction to grant the relief sought in relation to the guarantee then it would follow that VCAT would have jurisdiction to entertain any defences, including equitable defences, that the guarantor may wish to rely upon. He submits that this is unlikely to have been intended. It would also follow, he submits, that VCAT would have jurisdiction, in the case of multiple guarantors,[5] to deal with equitable rights of subrogation between them – a consequence he describes as “a remarkable proposition indeed”.[6]
[5]Joined either originally or by means of an order under s 60 of the Victorian Civil and Administrative Tribunal Act 1998.
[6]Written submissions, [31].
The question is, according to the plaintiff, whether ss 107 and 108 confer on VCAT a jurisdiction, ie an “authority to adjudicate”, in respect of such subject matter.[7]
[7]In this regard, by cross-reference to paragraph 12 of his written submissions, the plaintiff picks up the language of the High Court in Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559, [2], together with extra-curial observations thereon by Justice Allsop in ‘Federal Jurisdiction and the Jurisdiction of the Federal Court of Australia in 2002’ (2002) 23 Australian Bar Review 29, 30.
The plaintiff contends that VCAT is a creature of statute and does not have any inherent jurisdiction.[8] Neither, he says, does it have any “accrued” jurisdiction like that found in the federal courts, including the High Court and the Federal Court. In other words, according to the plaintiff, VCAT does not have jurisdiction which extends to non-jurisdictional claims on the basis that they are “inseparably connected” to a jurisdictional claim because they are all part of the same “matter”. He says that, unlike the position in the federal constitutional context, a claim which on its own would not be within VCAT’s jurisdiction will not come within jurisdiction merely because it arises out of “common transactions and facts”. There are no Fencott v Muller[9] and McCauley v Hamilton Island Enterprises Pty Ltd[10] jurisdictions in VCAT, the plaintiff submits.
[8]Citing Body Corporate Strata Plan (No 334479D) v Scolaro’s Concrete Constructions Pty Ltd [2000] VCAT 45; R.V. Walpole Pty Ltd v Rangeville Manor Pty Ltd [2000] VCAT 31; R v Perkins [2002] VSCA 132, [16]; Vero Insurance Ltd v Witherow [2004] VSC 272, [18].
[9](1983) 152 CLR 570, 610.
[10](1986) 69 ALR 270.
The plaintiff draws attention to the observation of Balmford J in Roads Corporation v Maclaw No 469 Pty Ltd[11] that VCAT’s jurisdiction “extensive though it is, is precisely defined in the various enabling enactments”. He mentions also Leonora Group (Wonthaggi) Pty Ltd v Bass Coast SC[12] where VCAT observed that s 60 of the Victorian Civil and Administrative Tribunal Act 1998 (“the VCAT Act”), which deals with the joinder of parties, “does not create an opportunity for … a person to start a proceeding where none already exists”.
[11](2001) 19 VAR 169, 174.
[12](2003) VCAT 233, [2].
Applying these observations, the plaintiff emphasises the precise words of s 107(1). He asserts that s 107(1) does not define a “consumer and trader dispute” as a dispute arising under or in relation to a supply or possible supply of goods or services. He says that it contains no reference to a guarantor of the obligations of a provider or purchaser of goods or services. Thus, he says, the jurisdictional subject matter of s 107(1) is expressly limited to a dispute or claim arising between a purchaser or possible purchaser and a supplier or possible supplier of goods or services. It does not, on its face, extend to disputes with “third parties” at all, he says. Therefore, the plaintiff says, there is no room for any expanded jurisdiction akin to a Fencott v Muller and McCauley v Hamilton Island Enterprises Pty Ltd jurisdiction.
The plaintiff contends that the words “in relation to” in s 107(1) are of no assistance to the landlord because they appear after the limiting words “dispute or claim arising between a purchaser or possible purchaser of goods or services and a supplier or possible supplier of goods or services”. Thus, he says, the words “in relation to” do not expand the permitted jurisdictional parties to the dispute; and so they do not permit the inclusion of a guarantor as a party to the claim or dispute.
According to the plaintiff, the joinder of a guarantor, whether originally or under s 60 of the VCAT Act, might render the guarantor a party to the proceeding, but not a party to the (jurisdictional) claim or dispute. The guarantor would be a “conformity party” only. By virtue of issue estoppel, a guarantor joined as a conformity party might be bound by VCAT’s findings as to the dispute between the supplier and the purchaser, but VCAT could not make any substantive orders against the guarantor pursuant to the guarantee, the plaintiff submits.
The plaintiff further submits that the position is the same in relation to the Retail Leases Act 2003, in that ss 81(1) and 89(1) thereof both limit VCAT’s landlord/tenant jurisdiction to “a dispute between a landlord and a tenant”, and, he says, ss 90 and 91 thereof do not expand that jurisdiction.[13]
[13]Citing, principally, Roads Corporation v Maclaw No. 469 Pty Ltd (2001) 19 VAR 169, 174 and Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559, [63]-[65].
Returning to the (Fair Trading) Act, the plaintiff takes issue with the view that the giving of a guarantee in trade or commerce involves the provision of a “service” by the guarantor and the receipt of a “service” by the surety holder. The acceptance of such a view would mean, according to the plaintiff, that all guarantors in trade or commerce are “traders” and that all surety holders (from such guarantors) are “consumers”. Indeed, says the plaintiff, it would mean that VCAT would have jurisdiction over all guarantees given in Victoria in trade or commerce irrespective of their subject matter. By way of example, says the plaintiff, VCAT would on this view have jurisdiction over disputes concerning:
(a)a $500 million construction guarantee given by Westpac in favour of the AMP in respect of a skyscraper (on the basis that the AMP is a consumer under Part 9 of the Act); and
(b)billion dollar inter-bank guarantees between trading banks or even between an Australian bank and an English bank.
The plaintiff submits that it “cannot seriously be suggested that the Victorian legislature intended such a jurisdiction, let alone power under s 108 to vary the terms of such contracts, or order rescission, or order refunds”.[14]
[14]Written submissions, [50].
Further, the plaintiff says, the view in question is based on the premise that a guarantee confers a “right” and a “benefit” on the person to whom it is given and therefore falls within the definition of “services” in s 3 of the Act. According to the plaintiff, this is a simplistic and erroneous construction of the Act. It carries with it the “remarkable proposition that VCAT has jurisdiction over all contracts entered into in Victoria in trade or commerce irrespective of their subject matter and value”, because all contracts involve the conferring and receipt of ‘rights’ and ‘benefits”.[15]
[15]Written submissions, [53].
As to the applicable general principles of statutory interpretation, the plaintiff cites the following passage from the recent judgment of French CJ in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue[16] (the emphasis is the plaintiff’s):
[16][2009] HCA 41, [4]–[5].
“[4] The starting point in consideration of the first question is the ordinary and grammatical sense of the statutory words to be interpreted having regard to their context and the legislative purpose. That proposition accords with the approach to construction characterised by Gaudron J in Corporate Affairs Commission (NSW) v Yuill as:
dictated by elementary considerations of fairness, for, after all, those who are subject to the law’s commands are entitled to conduct themselves on the basis that those commands have meaning and effect according to ordinary grammar and usage.
In so saying, it must be accepted that context and legislative purpose will cast light upon the sense in which the words of the statute are to be read. Context is here used in a wide sense referable, inter alia, to the existing state of the law and the mischief which the statute was intended to remedy.
[5]The provisions of the Interpretation Act (NT) (“the NT Interpretation Act”) as they stood at the time of the relevant transactions have to be taken into account. Section 62A of the NT Interpretation Act requires a construction promoting the purpose or object underlying the statute to be preferred to a construction that does not do so.”
Picking up a footnoted reference by French CJ to CIC Insurance Ltd v Bankstown Football Club Ltd,[17] the plaintiff emphasises the following passage from that case:
“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. Moreover, 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. In particular, as McHugh JA pointed out in Isherwood v Butler Pollnow Pty Ltd, if the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance. Further, inconvenience or improbability of result may assist the court in preferring to the literal meaning an alternative construction which, by the steps identified above, is reasonably open and more closely conforms to the legislative intent.”
The plaintiff points out that there is a Victorian equivalent to s 15AB of the Acts Interpretation Act 1901 (Cth), namely s 35(a) of the Interpretation of Legislation Act 1984 (Vic).
[17](1997) 187 CLR 384, 408.
By reference to these principles and provisions, the plaintiff submits that the word “services” must not be interpreted in a vacuum but rather with proper regard to its context and the legislative purpose.[18] On that basis the plaintiff contends:
(a)that Part 9 of the Act gives jurisdiction in respect of disputes (mischiefs) that arise between consumers and traders of goods or services – not generally in respect of disputes that arise between parties to any and all contracts on the basis that all contracts confer “rights” and “benefits”; and
(b)that it is not possible to characterise a contract of guarantee, by that fact alone, as a provision of goods or services.[19]
[18]Written submissions, [57].
[19]Written submissions, [58].
The plaintiff develops his argument that a guarantee is not a “service” for the purposes of Part 9 of the Act in the following paragraphs of his written submissions, which I quote verbatim (italics, bold print and underlining as in the original):
“60.In essence, a guarantee is a binding promise of one person to be answerable for the debt or obligation of another if that other party defaults: Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245.
61.As a matter of the correct construction of the definition of services, and having regard to the obvious purpose of Part 9 (consumer protection), it is not accurate to describe the giving of a guarantee as a conferral of services under a contract.
62.The guarantor has not contracted to provide services ‘that are, or are to be provided, granted or conferred under a contract’. Agreeing to answer for a 3rd party’s debt under a contract of guarantee is not, on any proper legal analysis, the provision of rights, benefits, privileges or facilities that are to be provided, granted or conferred under a contract.
63.On its proper construction, and having regard to the plain purpose of Part 9, a contract is a contract for services only where the contract requires the supplier to perform its contractual obligation by way of the provision of some service, such as agreeing to provide legal or medical services or by granting occupancy rights over land. In other words, Part 9 is only engaged by a contract which requires one party to perform by the provision of some service. It is, with respect, ridiculous to characterise a binding promise of one person to be contingently answerable for the debt or obligation of another as a service to be performed under a contract of services.
64.A contract by which a person agrees to pay a sum of money upon a contingency (such as under an indemnity, or under a contract of insurance or under a contract of guarantee) does not involve contractual performance by way of the provision of a service. An insurer is plainly in the business of providing insurance services, but a contract of insurance is not a contract for services. It is an obligation to pay money upon a contingency. Similarly, a bank that offers construction guarantees as part of its banking service does not enter into a contract of services with [sic] when it provides a construction guarantee to a principal. It is an obligation to pay money upon a contingency.
65.The definition of services in s 3 is inclusive, not exhaustive. It therefore relevantly acts as an extension of what, at common law, might have been viewed to be a contract for services. Black’s Law Dictionary (8th ed) relevantly defines service as ‘5. An intangible commodity in the form of human effort, such as labour, skill, or advice’.
66.Obviously, the definition in s 3 extends this meaning, but there is nothing in the expanded definition of services in s 3 by which it can be concluded or inferred that the legislature intended Part 9 to regulate an agreement to pay money on a contingency, whether it be by way of a contract of insurance or a contract of guarantee.
67.This limited construction for the definition of services contended for is supported by the:
(a)inclusion of categories (a), (b) and (c) in the definition – which all import a connotation of the provision of goods or service by way of quid pro quo contractual performance; and
(b)the excluding words of the definition – ‘But does not include rights or benefits being the supply of goods or the performance of work under a contract of service’ – which carve out traditional common law contracts of employment.
68.If the Senior Member’s reasoning below is accepted, then:
(a)it must follow that all contracts made in trade or commerce are contracts for services because all contracts necessarily involve the granting or conferring by each party, on the other party, of rights and benefits. Acceptance of the Reasons would therefore mean that VCAT has a general jurisdiction to adjudicate all contractual disputes that arise in trade and commerce in Victoria[20]; and
[20]The plaintiffs here include a footnote which reads: “By way of one example only, such an interpretation would mean that VCAT has jurisdiction to adjudicate the rights and liabilities of the parties under a construction guarantee given in respect of the construction of a multi-billion dollar infra-structure project. That is because, on the applicant’s [sic] submission, that guarantee confers rights on the principal (the creditor) ‘for the performance of work’. By way of further example, an insurance contract for public liability insurance covering the MCG (which is a facility for amusement, entertainment and recreation) would be engaged by Part 9.”
(b)all of the words underlined words [sic] in the definition of ‘services’ reproduced below are superfluous and have no work to do whatsoever:
‘services’ includes any rights (including rights in relation to, and interests in real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce, including the rights, benefits, privileges or facilities that are, or are to be provided, granted or conferred under a contract for or in relation to –
(a)the performance of work (including work of a professional nature) whether with or without the supply of goods; or
(b)the provision of, or the use or enjoyment of facilities for, amusement, entertainment, recreation or instruction; or
(c)the conferring of rights or benefits or privileges for which remuneration is payable in the form of a royalty, tribute, levy or similar payment –
but does not include rights or benefits being the supply of goods or the performance of work under a contract of service’.
69.This is a preposterous proposition. … .”
The plaintiff proceeds to deal with an alternative, narrower argument by which the landlord has sought to uphold VCAT’s jurisdiction, being an argument to the effect that, because the leased premises were to be used for sporting purposes, the rights and benefits derived by the landlord under the guarantee and indemnity were rights and benefits provided, granted or conferred under a contract “for or in relation to … the provision of, or the use or enjoyment of facilities for, amusement, entertainment, recreation or instruction” within the meaning of the definition of “services” in s 3 of the Act.
According to the plaintiff, this defence, too, should be rejected. He says, in summary, that it involves a simplistic and incorrect legal characterisation of what a guarantee is; that it involves no proper legal analysis of the definition of “services”; that it leads to the capricious and arbitrary result that a contract of guarantee given in respect of a retail lease of premises used for amusement, entertainment, recreation or instruction is engaged by Part 9 of the Act, but that contracts of guarantee for retail shops (which constitute the vast majority of retail leases in Victoria) are not; and that it is at odds with the obvious purpose of Part 9, namely (according to the plaintiff) consumer protection. In this latter regard, the plaintiff observes that the idea that Part 9 was intended to protect a landlord, as a consumer, from a guarantor (of a tenant’s lease obligations) is “bizarre”.[21]
[21]Written submissions, [72].
Further, the plaintiff contends that acceptance of the suggested alternative basis for jurisdiction would imply that all contracts made in trade or commerce which relate to any of the matters specified in paragraphs (a), (b) and (c) of the definition of “services” are contracts for services (because all contracts necessarily involve the granting or conferring by each party, on the other, of rights and benefits). This in turn would mean, he says, that VCAT would have a general jurisdiction to adjudicate all disputes arising in respect of all such contracts. That could not be right, he says.
Further again, the plaintiff claims that the mere fact that the stated use of the premises is for indoor tennis and beach volleyball does not mean that the contract of guarantee is “for or in relation to … the provision of, or the use or enjoyment of facilities for, amusement, entertainment, recreation or instruction”. He says that such a view would give too much work to the connecting words “in relation to”. In this context, he says, that expression refers to a relationship that is “direct” or “direct and immediate”.[22] Here the relationship is not of that kind, he says. According to the plaintiff, there is no rational purpose served by holding that contracts of guarantee in respect of leases over facilities for amusement, entertainment, recreation or instruction relate to the provision or use of those facilities. Rather, he says, such guarantees are given to secure the financial obligations of tenants; and the use to which the premises may be put is entirely incidental to the guarantee. To include such guarantees while excluding guarantees of leases of retail shops would lack any rhyme or reason and would not serve any discernible statutory purpose, he says.[23]
[22]Citing Oceanic Life Ltd v Chief Commissioner of Stamp Duties (1999) 168 ALR 211, 224–225 (Fitzgerald JA); Technical Products Pty Ltd v State Government Insurance Office (Qld) (1989) 85 ALR 173, 175.
[23]See, generally, paragraphs 75 to 79 of the plaintiff’s written submissions.
In his written submissions, the plaintiff referred briefly (and mainly for a purpose no longer pursued) to the judgment given by the Full Court of the Federal Court in 1981 in Queensland Aggregates Pty Ltd v Trade Practices Commission[24] and also to the later decision of Gillard J in Cash Resources Australia Pty Ltd v Bentley[25] in which Queensland Aggregates was discussed. The landlord did not refer to either case at all in his written submissions in reply. Neither case had been cited (by either party) to Senior Member Levine, although the Senior Member did refer to them in passing in his reasons for decision.[26] Before this Court, however, both Queensland Aggregates and Cash Resources loomed large in the oral arguments on both sides. The plaintiff contended that both cases supported his position, asserting that they were authority for the proposition that a simple promise to pay money on a contingency does not amount to a “service” as defined in the Act; and that that was the situation in this case. The landlord argued to the contrary. It seems to me that Queensland Aggregates and Cash Resources are indeed important cases for present purposes and I will return to them in due course.
[24](1981) 38 ALR 217.
[25][2002] VSC 271.
[26][2009] VCAT 1124, [45]–[49].
Neither side paid much attention (in either written or oral submissions) to the conversion and negligence claims. Between then, they comprise only a small fraction of the landlord’s total claim. However, in short, the plaintiff argues that nothing in s 107 gives VCAT a conversion jurisdiction; and that, although s 107(2) refers to negligence, it does not apply because the plaintiff is a third party, not a “supplier” of a “service”.
VCAT’s jurisdiction under the Fair Trading Act1999 over the landlord’s principal claim against the guarantor
I turn first to the question whether VCAT has jurisdiction under Part 9 of the Act to entertain the landlord’s principal claim against the plaintiff. I will address the plaintiff’s arguments in that regard substantially in the order in which they are referred to above.
I accept that Zeus & Ra Pty Ltd v Nicolau[27] did not deal with the position of “third parties”, in the sense of parties other than the landlord and the tenant (in connection with a dispute relating to leased premises). However, parts of the plaintiff’s submissions wrongly assume in his own favour that a guarantor of a lease is necessarily a third party in the sense of being neither a “supplier” nor a “purchaser” within the meaning of s 107(1) of the Act. To that extent, of course, the plaintiff’s submissions beg the question. A guarantor of a lease will himself, herself or itself be a party to a “consumer and trader dispute” (and not merely a third party in relation to it) if it can properly be said that he, she or it is relevantly a “supplier” or “purchaser” of “services” within the meaning of s 107(1) (as affected by the definitions in s 3). So far as relevant, “supplier” means simply the person who has supplied or is to supply the services and “purchaser” means simply the person to whom the services have been or are to be supplied. As the plaintiff conceded at the hearing, a “purchaser” need not have given any consideration for the supply of the services. On the other hand, it is necessary that the services have been, or are to be, supplied “in trade or commerce”.[28] In Sigma Constructions (Vic) Pty Ltd v Maryvell Investments Pty Ltd[29] it was held by the Court of Appeal that the question whether “services” are provided “in trade or commerce” for the purposes of the provisions in question should be considered, at least principally, from the point of view of the supplier. Thus, the Court said, the sale of a purely domestic dwelling by its owner to a developer or trader in real estate might not involve the provision in trade or commerce of rights in relation to real property, whereas if the parties were reversed it almost certainly would. In the present case, the context was entirely commercial on all sides and the plaintiff was the sole director of the tenant. In those circumstances the plaintiff properly conceded at the hearing that if in this case any “services” were supplied by or to him they were supplied “in trade or commerce”.
[27](2003) 6 VR 606.
[28]See the definition of “services” in s 3 of the Act. Strangely, in the case of a supply of goods, it is apparently not necessary that the goods have been, or are to be, supplied in trade or commerce: see the definition of “goods”.
[29](2004) 22 VAR 279, 287–288 [22].
I turn to the plaintiff’s arguments concerning equitable defences and remedies. I am not persuaded by them. It is true that VCAT, being a creature of statute and not being an ordinary court (much less a superior court), does not have a general equitable jurisdiction.[30] However it is open to Parliament to clothe VCAT, to such extent as Parliament sees fit, with the power, or indeed the duty, to recognise and apply equitable doctrines, defences and remedies or to proceed in accordance with, or by analogy with, equitable principles. Parliament might do this expressly or by implication. Sub-section 89(2) of the Retail Leases Act 1999, which is set out above, is an example of an express conferral of equitable jurisdiction. It provides that in an application for forfeiture or relief against forfeiture VCAT has the same jurisdiction, “including equitable jurisdiction”, and powers as the Supreme Court would have. Paragraph 91(1)(c) of that Act empowers VCAT to make an order “rectifying a retail premises lease or other document”. The purely equitable doctrine of rectification appears to be imported here by implication. Moreover, turning to the (Fair Trading) Act itself, s 108(2)(h) thereof empowers VCAT, in relation to a consumer and trader dispute, to “order rectification of a contract”. A corresponding comment may be made. Other provisions of s 108(2) appear to pick up various other equitable doctrines and remedies. Thus subparagraph 108(2)(b)(iii) empowers VCAT to order the payment of a sum of money by way of “restitution”, arguably picking up the principles applicable to restitution in equity. Paragraphs 108(2)(d) and (i) respectively empower VCAT to “declare” that a term of a contract is or is not void and to “declare” that a debt is or is not owing, thereby arguably picking up all those equitable doctrines which might render a contractual term void or a debt owing or not owing, as well as apparently picking up the equitable remedy of the declaration and the equitable principles surrounding it. Paragraph (f) empowers VCAT to make an order “in the nature of an order for specific performance of a contract”. Specific performance is, of course, a purely equitable remedy, governed by equitable principles. Paragraph (g) empowers VCAT to “order rescission of a contract”. This seems to be a reference to rescission in equity and to the corresponding equitable principles. More generally, it would be a remarkable thing if VCAT could not have regard to trusts (trusts being entirely creatures of equity) or to equitable estates in land.
[30]Herald and Weekly Times Pty Ltd v State of Victoria (2006) 25 VAR 124, 134 [26]. See also Pizer, Victorian Administrative Law ¶VCAT.40.40 and cases there cited.
By virtue of s 123(1) of the VCAT Act, the Tribunal may “by order grant an injunction, including an interim injunction, in any proceeding if it is just and convenient to do so”. Originally the injunction was a creature of equity, although many statutes now confer powers to grant injunctions. In Herald and Weekly Times Pty Ltd v State of Victoria,[31] the Court of Appeal observed that s 123(1) does not enlarge VCAT’s jurisdiction, but operates in aid of whatever jurisdiction VCAT already has. However the Court also observed that, had a certain related dispute been within VCAT’s jurisdiction, VCAT would have had the power under s 123(1) to grant an injunction in relation to it and “to do so in conformity with equitable principles”.[32] A slightly earlier passage in the Court’s judgment records that it had been submitted to the Court that VCAT would have been “required” (as distinct from merely entitled) to apply equitable principles when exercising the power to grant an injunction.[33] The tenor of the Court’s abovementioned observations indicate that the Court may have accepted that submission. On the other hand, it was ultimately not necessary for the Court to decide the point. Pizer comments that VCAT is “influenced” by the principles governing the award of injunctions at common law when determining whether it is just and convenient “to grant an injunction under s 123”.[34]
[31](2006) 25 VAR 124, 134 [27].
[32]Ibid.
[33]Ibid, [26].
[34]Citing State of Victoriav Bradto Pty Ltd [2006] VCAT 99, [2] and paragraph 27 of Herald and Weekly Times Pty Ltd v State of Victoria (2006) 25 VAR 124.
In addition to the various apparent references in s 108(2) of the Act to particular equitable doctrines and remedies, the subsection confers a broad range of other powers on VCAT in relation to a consumer and trader dispute, including the power to “order a party to do or refrain from doing something”.
In 1975, in R v Small Claims Tribunal and Syme; Ex parte Barwiner Nominees Pty Ltd[35] and again in Walsh v Palladium Car Park Pty Ltd,[36] this Court held that the then Small Claims Tribunal, whose jurisdiction has since been subsumed into the jurisdiction of VCAT, was required to hear and determine claims not as an arbitrator or according to its own lights but in accordance with the general law (except as to procedure), including, where relevant, the provisions of the Goods Act 1958 concerning the sale of goods. Equity was not mentioned expressly in the judgments, but, even though the statutory powers of the Small Claims Tribunal at the time were limited, the tenor of the judgments does not indicate that it would have been inappropriate for the Small Claims Tribunal to have had regard to the principles of equity.
[35][1975] VR 831 (Gowans J).
[36][1975] VR 949, 955 (Gowans, Menhennitt and Dunn JJ).
Given the breadth of the powers conferred by s 108 of the Act together with the conditional exclusion (by ss 111, 112 and 112A of the Act) of the jurisdiction of the courts (including the Supreme Court) to entertain a consumer and trader dispute, I consider that, notwithstanding that for most purposes VCAT is not a court,[37] VCAT was intended to have, and would have, the power to recognise and give effect to any equitable defence that the plaintiff might conceivably wish to rely upon in this case.[38] I do not accept the plaintiff’s submission to the contrary.
[37]See Kracke v Mental Health Review Board [2009] VCAT 646, [275]–[276] (Bell J, President). The overruling of Kracke by R v Momcilovic [2010] VSCA 50 in relation to the effect of the Charter of Human Rights and Responsibilities Act 2006 (Vic) with respect to statutory interpretation does not touch the correctness of Justice Bell’s observations in Kracke at [275]–[276].
[38]I note that from time to time in various lists VCAT has recognised or applied equitable doctrines without query or hesitation: see, eg Walpole Pty Ltd v Rangeville Manor Pty Ltd [2000] VCAT 11 (fiduciary obligation found); Lampard v Bayside City Council [2005] VCAT 234 (equitable defence of laches applied); Eckberg v Wharington [2009] VCAT 1899 (effect of the law of subrogation on a claim by a landowner against a builder with respect to defective construction considered); Verve 501 Pty Ltd v Owners Corporation 1 Plan 512424P [2009] VCAT 2400 (jurisdiction to entertain a claim for breach of fiduciary duty not doubted).
If I am wrong in this regard, and if VCAT would be unable to recognise or give effect to equitable defences on which the plaintiff might wish to rely, still, in my view, VCAT would not lack jurisdiction to hear and determine the landlord’s principal claim against him. VCAT has jurisdiction under ss 107 and 108 of the Act to hear and determine all consumer and trader disputes, as defined. Equitable principles and defences would potentially be relevant in many kinds (perhaps all kinds) of consumer and trader disputes, not only in disputes relating to guarantees. The posited inability of VCAT to have regard to equitable principles or defences surely could not have the effect that contracts of guarantee, alone amongst all contracts, are taken outside the notion of “services” and outside the definition of “consumer and trader dispute”. It seems to me that it is all or nothing. It cannot be nothing. So contracts of guarantee are not excluded from VCAT’s jurisdiction merely because, if the same claim were being heard in a court, equitable defences or principles might be relevant.
There is no need to express a concluded view as to whether or not VCAT would be able to hear and determine a dispute or claim based on subrogation between multiple guarantors of a tenant. As at present advised, I acknowledge that such a dispute or claim may be relevantly distinct from any dispute or claim as between the landlord and a guarantor or guarantors. It may not constitute a dispute or claim “arising between” a purchaser and a supplier of services in relation to a supply of services. Hence, although (consistently with the plaintiff’s own argument) the multiple guarantors could all be joined as conformity parties in the landlord’s claim against the tenant at VCAT, and although, in my view, VCAT could make orders against the guarantors individually at the behest of the landlord, any issues as between the multiple guarantors themselves may have to be heard and determined elsewhere. On the other hand, VCAT might be persuaded to exercise its power of transfer under s 77 of the VCAT Act in such a case. In any event, jurisdictional lines have to be drawn somewhere. I do not view this scenario as indicating, much less as demonstrating, that VCAT does not have jurisdiction to hear and determine the landlords’ principal claim against Mr Tucci.
I am prepared to assume in the plaintiff’s favour, without deciding, that VCAT has no “accrued” jurisdiction of the kind referred to in Fencott v Muller[39] and McCauley v Hamilton Island Enterprises.[40]
[39](1983) 152 CLR 570.
[40](1986) 69 ALR 270.
Further, I am prepared to assume, without deciding, that the plaintiff is correct in his submission that VCAT can gain no additional power to make substantive final orders under the Act against a guarantor merely because the guarantor has been joined under s 60 of the VCAT Act.
However, the question remains whether the provision of the guarantee and indemnity in this case amounted to the supply by Mr Tucci (and the receipt by the landlord) of a “service” within the meaning of Part 9 of the Act, as affected by the definitions in s 3.
Contrary to Mr Tucci’s submissions, the purposes of Part 9 of the Act are not limited to consumer protection. It is true that one of the declared main purposes of the Act as a whole is “to protect consumers”: s 1(aa). However, another such purpose is “to promote and encourage fair trading practices and a competitive and fair market”: s 1(a). The use of the expression “consumer and trader dispute” in various places (including in headings) in Part 9 is merely a relic from previous versions of the Act. Nowhere in the operative provisions of Part 9 (as distinct from the headings) is the word “consumer” used as a noun to designate a particular party to a relevant transaction or interaction. The word is no longer the subject of a definition in the Act for the purposes of Part 9 or at all. In the operative provisions of Part 9 it has been replaced completely by “purchaser”, a word which has quite different connotations in itself and which is defined in s 3 in a very broad way.
I do not accept Mr Tucci’s submission that Parliament could not have intended that VCAT would have jurisdiction to hear and determine claims or disputes arising from any and all guarantees given in trade or commerce in Victoria. Nor do I accept that VCAT was not intended to be authorised to hear and determine very large claims or disputes, whether concerning guarantees or otherwise. Nor does the rather surprising conferral on VCAT by s 108(1)(c) of the Act of the apparently unguided power to “vary any term of a contract” tell against jurisdiction in respect of guarantees in particular or in respect of any other discernable class of subject matter.
These and similar submissions made by the plaintiff seem to be based mainly on professed incredulity that VCAT could be given such broad jurisdiction as the Act appears to give it. But that is not a proper basis for reading down the language of the Act. It has been accepted for quite some time now that VCAT’s civil jurisdiction is very great. In a paper delivered in 2004,[41] the then President of the Tribunal observed that it had become clear that VCAT “has now emerged as the principal jurisdiction for the resolution of mainstream civil disputes in Victoria”. The President proceeded to emphasise[42] that when VCAT has exclusive jurisdiction it has unlimited jurisdiction. As an example, he noted that in a field such as domestic building, which includes apartment buildings, disputes can rival Supreme Court actions in both the quantum in dispute and the complexity of the dispute. He then turned to areas where VCAT shared its powers with the courts. As to the Civil Claims List, he observed[43] that the (Fair Trading) Act generated the majority of the work in the list. In relation to jurisdiction under Part 9 of the Act, he said:
“The word services is defined very widely, but would appear to be confined to things that are, or are to be, provided, granted or conferred in trade or commerce. The width of the definitions are [sic] such they can cover a wide array of disputes, even including the sale and leasing of land and the granting of a mortgage.[44]”
The President went on to say:
“Once again, I must emphasise that in consumer disputes [sic] the tribunal’s jurisdiction is unlimited in quantum.”
[41]Justice Morris, ‘Civil Litigation: VCAT and the Courts’ [2004] 4 Victorian Judicial Scholarship 1.
[42]Ibid, 3.
[43]Ibid, 4.
[44]His Honour cited Pricom Pty Ltd v Sgarioto (1994) V Conv R ¶54-408, 65,852 and Cash Resources v Bentley [2002] VSC 271.
There are additional clear indications in Part 9 of the Act itself that VCAT’s jurisdiction under that Part extends beyond small claims and beyond disputes involving consumers and consumer protection. Small claims are defined in Part 9 as claims not exceeding $10,000 or other prescribed amount: s 107A. Small claims are treated as a mere sub-set of consumer and trader disputes: ss 107A, 112A, 112B. Similarly, Part 9 makes special provision for “consumer disputes” and “trader-trader disputes”. A “consumer dispute” is defined in a way reminiscent of the conventional or historical understanding of such a dispute. It is confined to disputes relating to the supply of goods or services intended to be used by the acquirer for personal household or domestic purposes: s 109(4). A “trader-trader dispute” is confined to a dispute in relation to the supply of goods or services in trade or commerce involving a claim for $10,000 or less: s 109(4). VCAT has broad additional powers in determining a consumer dispute or a trader-trader dispute, including a power to make any order it considers fair: see s 109(1) and (2). The obvious implication of these provisions is that the jurisdiction of VCAT with respect to a “consumer and trader dispute” (as defined) is unlimited in relation to quantum and not confined by any notion of consumer protection.[45]
[45]Compare, in relation to consumer protection provision of the traditional kind, Begbie v State Bank of New South Wales Ltd (1994) ¶ATPR 41-288, 41 898; National Australia Bank Ltd v Sproule (1989) 98 ALR 570, 572–576 (Rogers CJ).
Nor can I accept that VCAT’s jurisdiction under Part 9 in relation to “services” is limited in the next way suggested by the plaintiff, namely that the dispute or claim must arise out of a “contract for services” in the sense of a contract which requires the supplier to perform its contractual obligation by the provision of some service, such as legal or medical services or the granting of occupancy rights over land.
In the first place, although I assume (without deciding) that Judge Bowman was correct in Macleod v Marina Operations Aust Pty Ltd[46] in holding that for s 107 of the Act to apply there must be, or have been, an underlying contract of supply between the parties, I consider that the actual dispute or claim need not be contractual at all. Subsection 107(2) provides so far as relevant that for the purposes of s 107(1) a dispute or claim includes any dispute or claim in negligence, nuisance or trespass that relates to the supply of goods or services.[47] The expression “contract for services” does not appear in s 107 or in the definition of “services” in s 3 or in any other relevant provision of the Act.
[46][2006] VCAT 2537, [19].
[47]Even without express provisions of that kind, previous corresponding Victorian legislation has been interpreted so as to allow that a claim arising in tort may nonetheless be a claim “arising out of” a contract for the provision of services: Walsh v Palladium Car Park Pty Ltd [1975] VR 949, 960.
The plaintiff’s present argument, which might be classified under the maxim of maxim of statutory interpretation noscitur a sociis,[48] suffers from the defect that, even in its own terms, it does not identify any common factor by reference to which a coherent, relevantly limited class of “services” might be discerned. The argument sows the seeds of its own destruction by throwing legal or medical services in with the granting of occupancy rights over land. But in any event the argument is doomed to failure by the great breadth and variety of the possible meanings of the word “services” in ordinary parlance and the extraordinary width of the (inclusive) definition of the word in s 3 of the Act.
[48]See Denton v Transport Accident Commission [2000] VSCA 221, [19]. Alternatively the argument might be classified under the ejusdem generis heading, with no different result.
The particular definition of “service” (singular) cited by the plaintiff from Black’s Law Dictionary, namely “5. An intangible commodity in the form of human effort, such as labour skill or advice”, represents, as the very citation reveals, but one sense in which the word is used. It is not the meaning at common law, as the plaintiff would have it. In IW v City of Perth,[49] the High Court held, by majority, that the consideration and disposition by a municipal council of an application for planning approval was the provision of a “service” within the meaning of the inclusive definition of “services” in the Equal Opportunity Act 1984 (WA). Speaking of the meaning of the word “services” apart from any definition, Gummow J said:[50]
“The term ‘service’ and its variants are of wide and varied meaning”.
Kirby J said:[51]
“The Macquarie Dictionary defines ‘service’ as meaning ‘an act of helpful activity’; ‘the supplying … of any … activities, etc., required or demanded’; ‘the providing … of some accommodation required by the public, as messengers, telegraphs, telephones, or conveyance’; ‘the organised system of apparatus, appliances, employees, etc., for supplying some accommodation required by the public’; ‘the supplying … of water, gas, or the like to the public’; and ‘the performance of any duties or work for another’. The Oxford English Dictionary is to like effect: ‘work done to meet some general need’; ‘the action of serving, helping or benefiting’; ‘conduct tending to the welfare or advantage of another’. The concept of ‘services’ is therefore an extremely wide one. It is by no means confined to the provision of tangible things. Its meaning is to be derived from the context.”
[49](1997) 191 CLR 1.
[50]Ibid, 41.
[51]Ibid, 69–70. Compare Walsh v Palladium Car Park [1975] VR 949, 956.
In advancing his submissions on this point, the plaintiff was constrained to identify a class of “services” that included the granting of occupancy rights over land because s 3 of the Act defines the word “services” so as to include “any rights (including rights in relation to, and interests in real or personal property) …”.[52] But the abovementioned observations of the Court of Appeal in Sigma[53] indicate that VCAT’s jurisdiction under ss 107 and 108 extends not only to disputes concerning occupancy rights over land (such as disputes about leases or licences) but also to disputes about the sale of land or interests in land.[54] That would be consistent with longstanding Federal Court authority to the effect that the relevantly similar definition of “services” in the Trade Practices Act 1974 (Cth) (“TPA”) covers the sale of rights and interests in real property.[55] In Cash Resources Australia Pty Ltd v Bentley[56] it was held by Gillard J that, as s 107 of the (Fair Trading) Act stood in 2002, the execution of a mortgage of land constituted the supply of services within the meaning of the section.
[52]Indeed, even in its ordinary meaning, the word “services” has been held to extend to the execution of a disclaimer by a person of his interest under a will in a house property, done in order to allow the person’s brother to continue to live in the house after the death of their mother: Tucker v Guardian Trust and Executors Company of New Zealand Limited [1961] NZLR 773, 776, cited recently with apparent approval by the Court of Appeal of New Zealand in Samuels v Atkinson [2009] NZCA 556, [46]–[48].
[53](2004) 22 VAR 279, 287–288 [22].
[54]Counsel for the landlord informs me that VCAT commonly hears and determines disputes arising from contracts for the sale of land, although counsel was not able to say whether or to what extent Part 9 of the Act (as distinct from other provisions of the Act) was relied on for jurisdiction in such cases.
[55]Henderson v Pioneer Homes Pty Ltd (No 2) (1980) 29 ALR 597, 610.
[56][2002] VSC 271, [35].
The proposition that s 107 is restricted to disputes about “contracts for services”, ie contracts under which the supplier is required to “perform by the provision of some service”, cannot easily be reconciled with the proposition (apparently endorsed by the Court of Appeal in its abovementioned observations in Sigma) that the mere sale of a piece of land, in itself, constitutes the provision by the vendor of “services”. By merely entering into a contract of sale, the vendor ipso facto confers rights on the purchaser, usually comprising an equitable interest in the land. According to the Court of Appeal, that in itself represents the supply of a “service” within the meaning of the definition in s 3. Similarly, in Cash Resources Gillard J viewed the mere granting of a mortgage as the supply of a “service”. It is difficult to see any correspondence between those views and the plaintiff’s contention that the case before VCAT must involve a “contract for services”.
It is true that the definition of “services” includes a reference to “the rights, benefits etc … provided etc under a contract for or in relation to … the performance of work (including work of a professional nature) …”. However I agree with the landlord that this is merely an illustrative example which does not demonstrate that the class to which it belongs is confined in the way suggested by the plaintiff (ie a class consisting exclusively of “contracts for services”). Nor is the same demonstrated by paragraph (b) or (c) of the definition of “services”. Indeed, in my view, the very disparateness of the matters referred to in paragraphs (a), (b) and (c) points to the opposite conclusion. Contrary to the plaintiff’s submission, to uphold jurisdiction for VCAT under the (Fair Trading) Act in relation to guarantees of leases does not mean that all of the words between “trade or commerce” and the end of paragraph (c) of the (inclusive) definition of “services” have no work to do. They can readily be seen as non-exhaustive illustrations of the subject matter intended to be covered by the main clauses or as having been included out of an abundance of caution, or both.[57] Thus in Sigma[58] Batt JA (with whom Vincent and Nettle JJA agreed) was content to quote only the main clauses of the definition of “services” and to treat those clauses as the only clauses material to the issue whether the grant of the licence over the land in question constituted a “service”.
[57]See and compare Corporate Affairs Commission (SA) v Australian Central Credit Union (1985) 61 ALR 236, 239.
[58](2004) 22 VAR 279, 287.
The next part of the plaintiff’s submission - to the effect that there is nothing in the expanded definition of “services” in s 3 “by which it can be concluded or inferred that the legislature intended Part 9 to regulate an agreement to pay money on a contingency, whether it be by way of a contract of insurance or a contract of guarantee”[59] - is, at least in the particular way in which it is expressed,[60] misconceived. The very similar definition of “services” in the TPA has been judicially described as a definition of “extravagant width”.[61] If the definition of “services” in s 3 of the (Fair Trading) Act be read literally, there is no need to draw conclusions or inferences about what it covers. In ordinary parlance, to provide insurance cover or to provide a guarantee is plainly to provide, grant or confer “rights” or “benefits”. The result sought by the plaintiff could only be reached by reading down significantly the literal meaning of the definition of “services”. A reasonable question does arise as to whether the definition should indeed be read down so as not to cover a mere agreement to pay money on a contingency, but that question arises principally because of certain observations made by the Full Federal Court in Queensland Aggregates (which were in turn picked up by Gillard J in Cash Resources and which have echoes in certain other cases), and I will come to those matters shortly.
[59]Written submissions, [66].
[60]But see the discussion of the Queensland Aggregates case below.
[61]Roberts v Murlar Pty Ltd (1986) 68 ALR 62, 72; National Australia Bank Ltd v Sproule (1989) 98 ALR 570, 575–576 (Rogers CJ); South Sydney District Rugby League Football Club Ltd v News Ltd (2000) 177 ALR 611, 655 [182] (Finn J).
However, it can be said at once that it does not assist the plaintiff to equate guarantees with contracts of insurance for present purposes. Quite the contrary. So far as immediately relevant, s 107A of the Act provides in substance that in Part 9 “small claim” means “a consumer and trader dispute” in relation to a claim for a small amount (as defined) arising out of a contract for the supply of goods or the provision of services “other than a contract of life insurance”. This clearly implies that contracts of insurance are otherwise to be seen as contracts for the provision of services for the purposes of the definition of “consumer and trader dispute” in s 107 of the Act. On the other hand, I acknowledge that a contract of insurance is a contract of indemnity, whereas a simple, true guarantee is not;[62] and that the proceeding before this Court has been argued on the basis that it is necessary to decide whether a claim on a simple, true contract of guarantee falls within VCAT’s jurisdiction, notwithstanding that the actual contract in question includes elements of both guarantee and indemnity, and contains quite elaborate provisions generally.
[62]See, generally, O’Donovan and Phillips, Modern Contract of Guarantee, ¶1.300–1.320 and ¶1.1100–1.1130; Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245, 254–255.
Turning to the plaintiff’s submissions concerning the landlord’s reliance in the alternative on paragraph (b) of the definition of “services” (which paragraph refers to the provision of or the use or enjoyment of facilities for, amusement, entertainment, recreation or instruction), it is sufficient to say that if it were the case that for some reason guarantees in general do not fall within the opening clauses of the definition, then I would agree that it would be anomalous, arbitrary and wrong to bring them in in cases where they happen to relate to a subject matter covered by paragraph (b) (or (a) or (c)) of the definition. I would not uphold the landlord’s alternative submission in this regard.
This brings me to what I regard as the plaintiff’s last and best point (albeit ultimately an unsuccessful one) concerning the (Fair Trading) Act. The plaintiff’s submission in this regard is that the provision of a guarantee falls outside the concept of the “supply” of “services” because it gives rise to no more than an obligation to pay money on a contingency. The submission is based mainly on certain observations of the Full Court of the Federal Court in Queensland Aggregates Pty Ltd v Trade Practices Commission,[63] a case which turned on similar language in the TPA. In Queensland Aggregates, the respondent Commission alleged that the appellants had engaged in exclusive dealing in contravention of s 47(1) of the TPA. The conduct alleged was an offer of supply by the appellants of cartage contracting work to a person on condition that he acquire a Ford truck from a third party, being allegedly third line forcing within the meaning of s 47(6) of the TPA. The appellants had contended below (before Sheppard J) that this conduct, if established, was merely an offer to make a subsequent offer or an offer to pay money as consideration for services to be performed on the acceptance of this subsequent offer and was not an offer of “services” within s 47(6) of the TPA. The trial judge had dealt with this contention as a preliminary question of law and ruled that the alleged offer as pleaded and particularised would, if established, constitute an offer of services in the defined sense. The Full Court dismissed the appeal, holding, in short, that the subject matter of the alleged offer constituted “benefits” or “privileges” within the meaning of those words as used in the definition of “services” in the TPA. That definition was expressed as follows:
[63](1981) 38 ALR 217.
“includes any rights (including rights in relation to, and interests, in, real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce, and without limiting the generality of the foregoing, includes the rights, benefits, privileges or facilities that are, or are to be, provided, granted or conferred under—
(a)a contract for or in relation to—
(i)the performance of work (including work of a professional nature), whether with or without the supply of goods;
(ii)the provision of, or of the use or enjoyment of facilities for, amusement, entertainment, recreation or instruction; or
(iii)the conferring of rights, benefits or privileges for which remuneration is payable in the form of a royalty, tribute, levy or similar exaction;
(b)a contract of insurance;
(c)a contract between a banker and a customer of the banker entered into in the course of the carrying on by the banker of the business of banking; or
(d)any contract for or in relation to the lending of moneys,
but does not include rights or benefits being the supply of goods or the performance of work under a contract of service;”
It may be noted that this definition is very similar to the definition in the (Fair Trading) Act, except that paragraphs (b), (c) and (d) have no Victorian equivalent.
The salient parts of the Full Court’s reasons were as follows (my emphasis):
“It is said that if such offers constitute supply then it would follow, logically, that in every contract for supply of services or sale of goods the customer supplies a service. He contracts to pay and he pays. It would make ‘supply’ and ‘acquire’ interchangeable. It is contended that this could not have been the legislative intention and that the definitions should in some way be read down. No particular formulation is put forward indicating how this might be done.
For the Commission, it is argued that, if the allegations in the amended statement of claim, as pleaded and particularized, were established, the conduct of the first appellant would constitute an offer to supply services to Mr Ahlquist on the consideration that he acquire goods (a Ford truck) from another person (Denmac Ford Pty Ltd). In particular, it is argued that the opportunity to earn income from the first appellant which is specifically particularized as having been offered to Mr Ahlquist was an offer of a ‘benefit’ or ‘privilege’ within the meaning of those words as used in the definition of ‘services’ in s 4 of the Act. In this regard, senior counsel for the Commission placed particular reliance upon the decision of the Court of Appeal in Chaplin v Hicks [1911] 2 KB 786.
There is plainly considerable force in the arguments advanced on behalf of each side of the contest. As a matter of literal construction, the alleged offer, as pleaded and particularized, would, if it were established, prima facie constitute an offer of services — ‘benefits’, ‘privileges’ — within the definition of services contained in s 4 of the Act. On the other hand, the repeated use, in the operative sections of the Act, of the words ‘goods or services’, the content of operative sections of the Act and the ordinary meaning of the word ‘services’, combine to raise real doubt as to whether it was the legislative intent, to be derived from the statute, that the word should be given the full extended meaning which the definition contained in s 4 of the Act would prima facie ascribe to it.
Sheppard J reached the conclusion that the alleged offer, as pleaded and particularized, would, if established, constitute an offer of services in the defined sense. His Honour considered that what was alleged to have been offered came, prima facie, within the word ‘benefits’ as used in the definition of ‘services’ and that there was no warrant for reading down the effect of that definition to the extent necessary to exclude the subject of the alleged offer from the defined meaning of the word.
In the view we take, the sweepingly general provisions of the definition of services contained in s 4 of the Act should not be given an expansive construction. Thus, for example, we would, in the context of the repeated use in the Act of the words ‘goods or services’, exclude from references to the supply of ‘services’ in the defined sense, the supply of goods, even though the supply of goods would ordinarily involve the granting of ‘rights in relation to, and interests in, … personal property’. Again, as at present advised, we would exclude from the scope of the words ‘supply of services’, a simple payment of money even though, in one sense, money might be regarded as coming within the word ‘benefits’. Even accepting that the definition of ‘services’ should not be given an expansive construction, however, we are unable to discern any valid or logical basis on which the definition can properly be constricted so as to exclude the subject matter of the alleged offer in the present case. In our view, the subject matter of the alleged offer constituted ‘benefits’ or ‘privileges’ within the meaning of those words as used in the definition of services. It follows that, substantially for the reasons which he gave, we agree with the conclusion of Sheppard J that the point of law which was argued as a preliminary point should be decided adversely to the appellants.
It must be stressed that the views we have expressed are based on the assumption, inherent in an argument on a preliminary point of law, that what is relevant is an offer to the precise effect of the offer pleaded and particularized. In this regard, it should be mentioned that no criticism was advanced, on the appeal, of the meaning which Sheppard J gave to the word ‘work’ as used in the statement of claim. Ultimately, it may be established on the trial that there was an offer which, by reason of differences in terms or the effect of context, varies from the offer pleaded and particularized to an extent which would make inapplicable the conclusions which we have stated. The desirability of giving an immediate decision and the range of possible findings of fact within the general area of the amended statement of claim have led us, however, to conclude that, as this appeal involves a preliminary question of law only, we should not endeavour to state or develop broad principles or guidelines which would cover variations from the precise offer which has been pleaded and particularized.
In the result, the appeals should be dismissed with costs.”
In favour of the plaintiff, I accept that the judgment of the Full Court in Queensland Aggregates, and in particular the two sentences emphasised above, should be regarded as strongly persuasive authority in relation to the proper construction of the expression “services” in the (Fair Trading) Act. The definitions in the respective Acts are strikingly similar. Moreover the Full Court felt able to discern an implied exclusion for a simple payment of money notwithstanding that the TPA definition expressly includes banking contracts and lending contracts,[64] whereas the definition in the Victorian Act does not. It is true that the Full Court’s remark about a simple payment of money is introduced by the qualification “as at present advised” and that it was not necessary to the actual decision in the case and that it was expressed in the course of an ex tempore judgment in which the Court also said that it was not purporting “to state or develop broad principles or guidelines”. However it was not an isolated remark. Observations on the same point had been made by the trial judge, Sheppard J,[65] who also referred to previous observations of his own on the point in SWB Family Credit Union Ltd v Parramatta Tourist Services Pty Ltd.[66] A citator search of Queensland Aggregates reveals twelve subsequent cases in which it has been cited, referred to, considered, applied or distinguished, but never disapproved. Indeed, the High Court refused leave to appeal from the Full Court’s judgment.[67]
[64]Compare SST Consulting Services Pty Limited v Rieson (2006) 225 CLR 516, 521–2 [13].
[65](1981) 36 ALR 236, 239–240.
[66](1980) 32 ALR 365, 383–384. Sheppard J was dissenting on the point in that case.
[67]See the account of the litigation to that stage given by Morling J in Trade Practices Commission v Queensland Aggregates Pty Ltd (No 3) (1982) 44 ALR 391, 400.
However, in the end, Queensland Aggregates does not assist the plaintiff sufficiently. Read in its context, the Full Court’s remark does not imply that the provision of a guarantee stands outside the concept of a supply of services, as defined. I think that the Full Court was moved by aspects of the submission made to it and recorded by it to the effect that if offers of the kind in question constituted supply then it would follow, logically, that in every contract for the supply of services or sale of goods the customer supplies a service. As the submission (as recorded) put it: “He contracts to pay and he pays. It would make ‘supply’ and ‘acquire’ interchangeable”. It seems to me that the Court accepted that the definition must have been intended to be read down to avoid such a result. Accordingly, and taking into account the repeated use in the Act of the words “goods or services”, the Full Court said that it would exclude from references to the supply of “services” in the defined sense, the supply of goods,[68] even though the supply of goods would ordinarily involve the granting of “rights in relation to, and interests in … personal property”. It was immediately thereafter that the Full Court added that it would exclude “a simple payment of money” even though, in one sense, money might be regarded as coming within the word “benefits”. In my view the Full Court did not mean to exclude from the definition of “services” the granting of every right that might eventually be satisfied by the payment of money or the assumption of every obligation that might eventually be discharged by the payment of money. The Full Court could hardly have meant that, because the definition of “services” in the TPA expressly included rights under contracts of insurance. (Similarly, the abovementioned implicit inclusion of contracts of insurance as potential subjects of “consumer and trader disputes” under Part 9 of the (Fair Trading) Act means that the Victorian Act cannot be read in the suggested manner either.) Rather, it seems to me that in the critical sentence the Full Court meant to convey only that a person did not himself or herself become a supplier of services merely because he or she had come under an obligation to pay money for some service supplied or to be supplied to him or her. Reading the critical sentence together with what the Full Court had said immediately before, and having regard to the judgment as a whole, I consider that the Full Court was intending to convey, overall, that a simple payment of money as quid pro quo for goods or services supplied is not itself a service. That appears to be the way in which Queensland Aggregates was understood in Yang v American International Assurance Company (Australia) Ltd,[69] being, as far as I am aware, the only case in which the proposition that a simple payment of money does not itself comprise a supply of services under the TPA has actually been applied. In Yang, the subject matter was remuneration for the provision of insurance agency services on contract. With respect, I think that this is a completely logical and understandable way in which to read the legislation. Unfortunately for the plaintiff, it does not take him far enough. When he gave the guarantee, he did not thereby become obliged to pay money as quid pro quo for the supply to him of some good or service. In fact, he would only become liable at all if the specified contingency (default on the part of the tenant) eventuated.[70] Similarly, he would only become liable under the indemnity provisions of the guarantee and indemnity if and when the landlord suffered a relevant loss. There is no need for me to consider or express a view on the question whether Queensland Aggregates might also be distinguishable on the basis that the reference to a “simple payment of money” was intended to be confined to payment of a debt or liquidated demand. A claim under a guarantee might be for a debt or for a liquidated demand or for unliquidated damages, depending on the terms of the particular guarantee and the circumstances.[71] As it happens, it may be that the landlord’s principal claim against the plaintiff in the present case would properly be characterised as a claim for unliquidated damages. But, on any view, the giving of the guarantee and indemnity in this case is not taken outside the scope of the definition of “services” in the (Fair Trading) Act on the basis that it simply created an obligation to pay money on a contingency, ie on the basis that it involved “a simple payment of money” in the sense in which that expression was used in Queensland Aggregates.
[68]This particular observation in Queensland Aggregates was noted by French J (as his Honour then was) in Australian Competition and Consumer Commission v Thorn Australia Pty Ltd [2004] FCA 157, [34]. The dichotomy between the supply of goods and the supply of services for the purposes of the TPA was also important to the reasoning of the High Court in Castlemaine Tooheys Ltd v Williams and Hodgson Transport Pty Ltd (1986) 162 CLR 395, esp 402 (Toohey J). See also, in relation to comparable provisions in the Small Claims Tribunal Act 1973 (Vic), Walsh v Palladium Car Park Pty Ltd [1975] VR 949, 956.
[69][2008] FCA 39, [138]. Yang appears to be the most recent case in which Queensland Aggregates has been referred to.
[70]And then only if the guarantee responded: compare, for example, Yerkey v Jones (1939) 63 CLR 649.
[71]Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245, 255 (Mason CJ) and 272–273 (per Gaudron J); Nangus Pty Ltd v Charles Donovan Pty Ltd (in liq) [1989] VR 184, 188–190; Zaknic Pty Limited v Svelte Corporation Pty Limited [1996] FCA 1704, [62] (Lehane J).
The use of the word “simple” by the Full Court reinforces this conclusion. It is to be remembered that in Queensland Aggregates itself both Sheppard J and the Full Court on appeal were satisfied that the offer to supply cartage contracting work was an offer of “services” in that it was not “simply” an offer to pay money for the work. In the earlier Full Court case of SWB[72] mentioned above, it was held by majority (Sheppard J dissenting) that an offer by a credit union to credit the accounts of its members with rebates if the members made travel bookings through a particular travel agent amounted to a supply of “services” by the credit union, notwithstanding that the benefit was in the form of money.
[72](1980) 32 ALR 365.
Later, in South Sydney District Rugby League Football Club v News Ltd,[73] Finn J needed to consider whether the provision of funding to professional rugby league clubs by competing organisers of rugby league competitions constituted the supply of “services” as defined in the TPA. His Honour said:[74]
“[184] It is unsurprising that it has been suggested that the s 4 definition ‘should not be given an expansive meaning’: Queensland Aggregates Pty Ltd v Trade Practices Commission (1981) 57 FLR 314 at 318; and that ‘a simple payment of money’ should be excluded from the scope of the words ‘supply of services’.
[185]Nonetheless, when one has regard not merely to [the] fact and dimensions of the funding provided by Super League and ARL/NSWRL but also to the purposes of the payments (one of which was, in the case of clubs, to secure their player base), the provision of funding itself can, in the very distinctive circumstances that obtained in this case, properly be characterised as a service provided by Super League and by ARL/NSWRL. It involved more than ‘a simple payment of money’. Mr Macourt and Mr Frykberg correctly characterised funding as being the subject of competition in 1997.”
[73](2000) 177 ALR 611.
[74]Ibid, 655 [184]–[185].
In Cash Resources Australia Ltd v Bentley,[75] Gillard J quoted certain passages from Queensland Aggregates, including the sentences emphasised in the extract above, immediately after making the following statement concerning the (Fair Trading) Act:
[75][2002] VSC 271, [28].
“’Services’ are defined in wide and general terms. Despite the width and generality of the definition, the term should not be given an expansive construction.”
However, as indicated earlier, Gillard J found that a “fair trading dispute” (as defined by the Act as it stood in 2002) was in existence. Mrs Bentley had given both a mortgage and a guarantee to Cash Resources. His Honour said:
“[31] Going back to the meaning of ‘fair trading dispute’, it was submitted on behalf of Mrs Bentley that she in fact was the supplier of the services to the plaintiff in the form of the execution of various security documents.
[32]By reference to the definition of ‘services’, it was submitted on behalf of Mrs Bentley that she had in fact "provided, granted or conferred in commerce rights in relation to an interest in real property". It was submitted therefore that she was a supplier of services within the meaning of s 107.
[33]I did not understand Mr Dixon to disagree with that proposition.
[34]In my view, the execution of the mortgage and guarantee resulted in Mrs Bentley granting rights to the plaintiff, and the mortgage on registration resulted in the Bentleys granting an interest in the land – see s 74(2) of the Transfer of Land Act 1958.
[35]No reason has been advanced to restrict the meaning of ‘services’, and the execution of the mortgage constituted the supply of services within the meaning of s 107(1) of the Act.”
The plaintiff submitted that while Gillard J regarded the execution of the mortgage by Mrs Bentley as a “service”, his Honour did not treat the execution of the guarantee in the same way. My reading of his Honour’s reasons is to the contrary. Although no mention of the execution of the guarantee is made by Gillard J in paragraph [35], it appears to me from the above passage as a whole, and especially from paragraph [34], that Gillard J did regard the execution of the guarantee as the supply of a service for the purposes of the Act. The plaintiff submitted in the alternative that if I reached that view I should distinguish Cash Resources on the basis that the guarantee given by Mrs Bentley was secured by a mortgage which gave an interest in land. In my view that is a distinction of no significance. There is nothing to indicate that the guarantee given by Mrs Bentley itself gave an interest in land.
The plaintiff did not submit that the amendments to the Act since 2002 were a basis for distinguishing Cash Resources. However he did submit, in the further alternative, that I should decline to follow Cash Resources. I could only do that if satisfied that Cash Resources was clearly wrong.[76] I am by no means so satisfied. Indeed I see nothing in Queensland Aggregates, as I have sought to explain that decision, that would conflict with Cash Resources.
[76]Tomasevic v Travaligni (2007) 17 VR 100, 104–105 [20]–[24].
I accept that the meaning of the word “services” in s 107 of the Act is not limitless. I accept that, as Bennion says in relation to statutory definitions in general, it is “impossible to cancel the ingrained emotion of a word merely by an announcement”.[77] I accept that Parliament could have, but did not, say expressly and clearly that VCAT has jurisdiction under s 107 and s 108 over all claims and disputes in Victoria relating to any and every kind of contract. And, clearly, VCAT’s jurisdiction under those sections is not as wide as that. For example, it does not extend to cases involving the supply of a service where the supply is not in trade or commerce. A “simple payment of money”[78] is not a service. There is an express exception for personal injury claims[79] and for claims concerning the performance of work under a contract of service. Other inherent and implicit limits may exist. But, plainly, the expression “services” in ss 3 and 107 of the Act covers much territory. It brings in a very broad range of rights, benefits, privileges and facilities. There is no limit in relation to quantum. There need be no element of consumer protection. I cannot see why an exception should be recognised for contracts of guarantee as a class. Contracts of guarantee confer rights and benefits on the surety holder. Generally, they provide financial comfort. It would not be an abuse of language to describe financial comfort as a “service” to the surety holder. In any event, in my view, to provide a guarantee in trade or commerce is to supply a service to the surety holder within the meaning of the legislation. There is no reason to exclude guarantees of leases in particular. Accordingly, in the present case, the provision of the guarantee and indemnity in question amounted to the supply of a service by the plaintiff to the landlord. The landlord’s principal claim against the plaintiff clearly relates to the supply of that service.
[77]FAR Bennion, Statutory Interpretation: A Code (3rd ed, 1997) 434, citing Richard Robinson, Definition (1952) 77.
[78]In the sense intended in Queensland Aggregates.
[79]I gave some consideration to the scope of that exception in American International Assurance Company (Australia) Limited v Skewes [2010] VSC 307.
It follows that VCAT has jurisdiction under the (Fair Trading) Act to entertain the landlord’s principal claim against the plaintiff.
This conclusion may make it strictly unnecessary to consider the two possible alternative analyses of VCAT’s jurisdiction under the Act which are foreshadowed above. However I will deal with each of them briefly.
First, it is noteworthy that the guarantee and indemnity recites that the lease (to which it is attached) was granted to the tenant at the request of the party giving the guarantee and indemnity, namely Mr Tucci. He was, as mentioned above, the sole director of the tenant company. The guarantee and indemnity was executed as a deed, so consideration was unnecessary. However, investigation might be expected to show that Mr Tucci stood to gain personally from the grant of the lease to the company. If so, the situation might possibly be analysed as representing a supply by the landlord of a “service” to Mr Tucci, namely the provision of a benefit to Mr Tucci comprising the fulfilment of his request that a lease be granted to the tenant. Further, it might possibly be said that the present dispute arises “in relation to” the supply of that service. On this analysis, the obligation of the “supplier” (the landlord) could not even arguably be characterised as a mere obligation to pay money on a contingency.
I raised this possible analysis of the jurisdictional issue with counsel. Counsel for the landlord adopted it. Counsel for Mr Tucci disputed it. He submitted that it was only the tenant company that obtained any “rights” or “benefits” (within the meaning of the definition of “services”) from the granting of the lease. As indicated above, I am not at all sure that that is correct. On the other hand, Mr Tucci might argue that the present dispute does not arise “in relation to” the specified “service”, namely the granting of the lease to the company (at Mr Tucci’s request). He might say that no controversy has arisen in relation to that, in itself. Rather, he might say, the controversy has arisen in relation to alleged breaches of, or failures to comply with, the guarantee and indemnity. On the other hand, such a distinction might be thought somewhat artificial. After all the principal claim under the guarantee and indemnity is squarely based on alleged breaches of the lease.
Ultimately I do not think it is necessary or desirable to decide this point. It was not raised at VCAT. It may require or involve factual investigations that have not been undertaken. I consider that VCAT has jurisdiction under the Act anyway, as I have indicated. On the other hand, I regard the point as arguable. Even if I had not otherwise been satisfied of VCAT’s jurisdiction under the Act, I would not have prohibited VCAT from entertaining the landlord’s principal claim but would have set aside its orders and remitted the question of jurisdiction to VCAT for this possible basis of jurisdiction to be explored and ruled upon. It is usually desirable that an inferior court or tribunal have an opportunity to consider and rule upon all questions relating to its jurisdiction before a supervising court does so.[80]
[80]See R v Small Claims Tribunal and Dean; Ex parte R.A.C.V. General Insurance Pty Ltd [1981] VR 602, esp 607–610 (Gobbo J).
Second, it will be recalled that the document on which the landlord sues at VCAT is not only a guarantee, but also an indemnity. It expressly provides that Mr Tucci is liable as a principal in respect of all of the tenant’s obligations under the lease. Those obligations are not restricted to obligations to pay money to the landlord. They include obligations to keep the property in good repair, to keep it insured, to return it in good condition and to provide the landlord with an accurate record of the customers of the business at the end of the lease. As it happens, the landlord’s claim at VCAT is based mainly on alleged breaches by the tenant of these particular provisions of the lease and on alleged breaches by Mr Tucci of his corresponding obligations under the guarantee and indemnity. It might be argued that Mr Tucci’s agreement to be principally liable in respect of these particular obligations involved the “supply” or the “possible supply” of a service or services by Mr Tucci to the landlord, even if his guaranteeing of rental or other moneys due to the landlord under the lease did not. Once again, counsel for the landlord adopted this analysis (in the alternative) and counsel for Mr Tucci disputed it.
On reflection, I have similarly concluded that it is neither necessary nor desirable to decide this further point. Once again, VCAT has not considered it. Factual investigations might possibly be needed. The point draws more heavily on the “indemnity” aspects of the contract than on the “guarantee” aspects, whereas Senior Member Levine did not make this distinction. He referred to Mr Tucci as a guarantor, not as an indemnifier. He found jurisdiction on that broad basis. If correct, his decision would draw in all lease guarantees given in trade or commerce, whether or not accompanied by indemnities. This Court has addressed that broader proposition. If it is good, as I think it is, then there is no need to decide the narrower point. On the other hand, once again, I regard this further point as arguable. Again, had I not otherwise been satisfied that VCAT has jurisdiction under the Act, I still would not have prohibited VCAT from entertaining the landlord’s principal claim but rather I would have remitted this point, too, to VCAT for consideration and determination.
The result so far is that the plaintiff’s application for certiorari and prohibition fails insofar as it challenges VCAT’s jurisdiction under the (Fair Trading) Act to entertain the landlord’s principal claim against him for alleged breach of or failure to comply with the contract of guarantee and indemnity.
VCAT’s jurisdiction under the Fair Trading Act to hear the claims in conversion, detinue, and negligence
The landlord’s claims in detinue, conversion and negligence all relate to the items described in the statement of claim as the “additional chattels”. The landlord seeks an unspecified amount against the tenant and/or against the plaintiff as the cost of replacing the additional chattels. The amount sought in this regard appears to be relatively low: certainly less than, and probably much less than, $20,000.[81] As the plaintiff’s counsel himself commented, in the context of the issues arising in this case generally (the total claim being $263,858.45), the issues in respect of “the additional chattels are not really big issues”.[82] Practically nothing was said about them by either side in oral submissions.
[81]See paragraphs 11 and 13 of the statement of claim.
[82]Transcript, 52.
In its written submissions, the plaintiff noted that s 107(2) of the Act refers to negligence, nuisance and trespass but makes no mention of conversion or detinue. He submits that nothing in s 107 gives VCAT a conversion or detinue jurisdiction. The landlord, on the other hand, submits that the references to negligence, nuisance and trespass in s 107(2) are not exhaustive and that, in any event, conversion is a form of trespass and is covered by the word “trespass” in s 107(2).[83]
[83]Citing John G Fleming, The Law of Torts (9th ed, 1998) 62–63.
I do not accept the plaintiff’s submission. Subsection 107(1) is the principal provision. It operates by reference to a “dispute or claim arising between a purchaser or possible purchaser of goods or services and a supplier or possible supplier of goods or services in relation to a supply or possible supply of goods or services”. It does not refer to the name of any pre-existing cause of action or to any other pre-existing legal classification or heading. Contract is not mentioned in either sub-section (1) or sub-section (2), but the plaintiff could not and did not suggest that a claim in contract is beyond VCAT’s jurisdiction under ss 107 and 108.[84] Although I do not accept the landlord’s submission that the word “trespass” in s 107 covers conversion,[85] I consider that the provision in subsection 107(2) to the effect that for the purposes of subsection (1) a dispute or claim “includes any dispute or claim in negligence, nuisance or trespass” is not intended to be exhaustive or prescriptive in terms of causes of action. Plainly, other causes of action are not implicitly excluded. Indeed, the test for jurisdiction is not cause of action based at all. Rather, it is based on the characteristics of the parties and the subject matter of the dispute or claim between them.
[84]There are, of course, many references to contract in s 108.
[85]They are distinct torts. See FA Trindade and Peter Cane, The Law of Torts in Australia (3rd ed, 1999) 129 and following. There is nothing to the contrary in Fleming, above n 83.
Even in the days when the corresponding provisions of the Small Claims Act 1973 required that the claim be one that “arises of out of a contract for the supply of goods or the provision of services” claimants were not confined to claims in contract. In Walsh v Palladium Car Park Pty Ltd[86] it was held that a claim in tort for damages for negligence brought against a car park company by the owner of a car allegedly damaged in the car park was a claim that arose out of the contract of bailment of the car.
[86][1975] VR 949, 960.
The plaintiff did not advance any alternative arguments on this aspect of the case. So I need not inquire, for example, whether the dispute or claim about the alleged conversion or detinue of the additional chattels (in particular) is a dispute between the landlord and the guarantor in relation to a relevant supply of services by one to the other. Had such an issue been raised, it may have been necessary to consider not only the supply of services from the guarantor to the landlord in the form of the guarantee but also both of the alternative possible formulations as to the flow of “services” discussed above. It might also have been relevant to consider whether it was only by giving the guarantee that Mr Tucci was able to be in a position to detain or convert the goods as alleged.
As to jurisdiction over the claim for negligent damage to the landlord’s radiator heaters, the only argument advanced by the plaintiff was to the effect that s 107(2), on its proper construction, refers only to a negligence claim prosecuted as between purchaser and supplier, and that the landlord and he did not stand in that relation. It may be accepted that s 107(2) refers only to a negligence claim as between purchaser and supplier, but, as I have already held, the landlord and the plaintiff did stand in that relation, at least in one respect. Once again, the plaintiff did not advance any alternative argument (such as an argument that the dispute or claim as between the landlord and him in their respective capacities as purchaser and supplier of services was not, insofar as it concerned the alleged negligent damage to the radiator heaters, a dispute or claim in relation to the supply of those particular services.)
Accordingly, the plaintiff’s claim must fail insofar as he seeks an order in the nature of prohibition in relation to the landlord’s claims in conversion, detinue and negligence.
Retail Leases Act 2003
As mentioned above, it seems to me that Senior Member Levine did not, in the end, determine whether VCAT had jurisdiction or power under the Retail Leases Act 2003 (as distinct from the (Fair Trading) Act) to make substantive orders against Mr Tucci as guarantor of the lease.[87]
[87]Compare, in particular, paragraphs 66 and 93 of VCAT’s reasons: [2009] VCAT 1124, [66] and [93].
Counsel’s written submissions were directed in part to that question, but I consider that I should refrain from deciding it, or considering it in any detail, for the following main reasons:
(a)If VCAT did not decide the point and if the matter is not reflected in VCAT’s orders, then there is no proper subject for an order in the nature of certiorari; and, arguably, it would be premature to make any order in the nature of prohibition or to make a declaration.[88]
(b)The landlord has not submitted that VCAT’s jurisdiction and powers under the (Fair Trading) Act would or might be insufficient to authorise the granting of all of the relief it seeks against Mr Tucci.
(c)Nor has the landlord submitted that it would be disadvantaged in relation to costs or otherwise if confined to the (Fair Trading) Act.[89]
(d)The question is a difficult one, and the answer to it may have very important implications for the rights and obligations of parties in other cases and other kinds of cases, whereas apparently that would not be so in this case.
(e)Little was said about the question by either counsel in oral submissions. Indeed counsel for Mr Tucci made the following comment at the outset: “The nub of this case comes down, Your Honour, as Your Honour will well appreciate, to the definition of services”.[90]
(f)Neither side referred me to the extensive and possibly quite significant legislative history of the Retail Leases Act 2003 (as affected by numerous decisions of this Court); or to the relevant parts of the leading commentary on the Retail Leases Act 2003, namely Justice Croft and Robert Hay, Retail Leases Victoria;[91] or to what seems to be the seminal (albeit, ex tempore) VCAT decision in this area, namely the decision of Deputy President Macnamara in Sandra Newton (T/A Flower Manor) v Opsymoulis (T/A Bronby Pty Ltd)[92] or to Deputy President Macnamara’s subsequent reconsiderations of that decision in Sensyn Australia Pty Ltd v United Colours on Collins Pty Ltd (No 1)[93] and Sensyn Australia Pty Ltd v United Colours on Collins Pty Ltd (No 2)[94]; or to Deputy President Macnamara’s more recent observation in Brislugan Pty Ltd v Young[95] as follows: “The Tribunal has jurisdiction to deal with disputes between landlord and tenant it does not have jurisdiction to deal with disputes between landlords and valuers … “.
[88]Compare R v Small Claims Tribunal and Dean; Ex parte R.A.C.V. General Insurance Pty Ltd (1981) VR 602, 607–610.
[89]VCAT’s power to award costs in relation to proceedings covered by s 92 of the Retail Leases Act 2003 appears to be more constrained than its general power to award costs under s 109 of the Victorian Civil and Administrative Tribunal Act 1998.
[90]Transcript, 5.
[91]Esp at ¶240,010–240,020.
[92](1999) V Conv R 58-529.
[93](2000) V Conv R 58-544; [2000] VCAT 2010, [9]–[14].
[94][2000] VCAT 2643, [31]–[33].
[95][2009] VCAT 317 (21 February 2009) [16], referred to in Croft and Hay, above n 91, ¶240,020.
However, lest silence otherwise be taken as approval, I would indicate that I have serious misgivings about the correctness of the view that Senior Member Levine seems provisionally to have adopted, namely that by virtue of s 90 of the Retail Leases Act 2003 or s 60 of the VCAT Act 1998 or both, VCAT has or may gain jurisdiction in relation to lease guarantees and has or may gain power to make orders under s 91 of the Retail Leases Act 2003 against guarantors of leases and diverse others not being parties to a “retail tenancy dispute” as defined in s 81 of the Retail Leases Act 2003. My present inclination is to the contrary. In other words, my tentative view at present is that while a guarantor of a lease or other relevant third party could properly be named originally in, or later joined to, a proceeding under the Retail Leases Act 2003 as a conformity party, VCAT would have no jurisdiction under the Retail Leases Act 2003 to determine any substantive issues other than those arising as part of the retail tenancy dispute and therefore could not make substantive orders against a guarantor or other third party under s 91 of the Retail Leases Act 2003; and that as against such parties VCAT would be limited to such jurisdiction and powers as may be conferred on it by the Fair Trading Act 1999 or by some other relevant source of jurisdiction. One reason for adopting such a view might be that the Retail Leases Act 2003 does not appear to supply any criteria for deciding what issues, other than the issues arising in the retail tenancy dispute, can be determined in the proceeding. Contrary to what appears to have been assumed in several VCAT cases, mere convenience may not be enough to ground jurisdiction.[96] But I reiterate that these are matters for another day.
[96]See the reference to Obacelo Pty Ltd v Taveraft Pty Ltd (1985) 5 FCR 210, 218 (Wilcox J) in Sensyn Australia Pty Ltd v United Colours on Collins Pty Ltd (No 1) (2000) V Conv R 58-544, 68,233; [2000] VCAT 2010, [11]; cf Davidson v Victorian Institute of Teaching [2006] VSCA 193, [11] (Neave JA with whom Maxwell P and Chernov JA agreed).
Conclusion
The proceeding will be dismissed. I will hear the parties as to costs.
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