More changes at VCAT provide clarity

In late 2022 and early in 2023 a number of decisions raised issues significantly impacting the extent of VCAT’s jurisdiction and the conduct of proceedings including that:

1. Limitation periods imposed by the Limitations of Actions Act 1958 (Vic) (LAA) did not apply to certain statutory claims in VCAT
2. VCAT lacks jurisdiction to determine claims for contribution under Part IV of the Wrongs Act 1958 (Vic) (the Wrongs Act)
3. VCAT did not have jurisdiction to hear matters involving federal law.

Read our article on these decisions.

Legislative changes have now been made to address those issues with the Justice Legislation Amendment Act 2023 (the Amendment Act) that came into effect on 10 October 2023.

The Amendment Act addresses the issue created by the decision of Steedman v Greater Western Water Corporation [2023] VCAT 128, which found that limitation periods imposed by the LAA did not apply to statutory claims brought in VCAT because it was not a ’court‘ for the purposes of s.3(1) of the LAA.

The Amendment Act resolves this issue by a simple amendment to the definition of ‘action’ in s.3(1) of the LAA to include any proceeding in a court of law or in VCAT.

The amendment applies to causes of action whether accruing before, on or after 10 October 2023.

However, the Amendment Act does not address the further issue raised as obiter in Steedman, that the LAA may not apply to claims under s.157 of the Water Act on the basis that it was not claim in contract or tort under s.5(1)(a) of the LAA and was not an action to ‘recover any sum recoverable by virtue of an enactment’ under s.5(1)(d).

Consideration will need to be given to the particular statute pursuant to which the claim is brought.

In Vaughan Constructions Pty Ltd v Melbourne Water Corporation (Building and Property) [2023] VCAT 233 the Tribunal held that VCAT lacks jurisdiction to determine claims for contribution under Part IV of the Wrongs Act.

By way of a refresher, Section 23B(1) of Part IV of the Wrongs Act provides that a person liable in respect of any damage suffered by another person may recover contribution from any person liable in respect of the same damage. By section 24(2) the amount of contribution recoverable from the wrongdoer is the amount found by a ‘court’ or jury to be just and equitable having regard to the extent of the person’s responsibility for the damage. The word ‘court’ was not defined in part IV.

Whilst not the subject of that proceeding, the definition of ‘court’ in Part V of the Wrongs Act relating to contributory negligence also did not include a tribunal.

This issue has been resolved by relatively simple amendments to the definitions contained in ss. 23A and 25 of the Wrongs Act so that the provisions of Part IV relating to contribution and Part V relating to contributory negligence will also apply to proceedings in VCAT.

The Amendment Act also inserts new sections 24ADA and 28AAB in the Wrongs Act to retrospectively validate any contribution claims and claims for contributory negligence decided by VCAT prior to 10 October 2023

The Act also addresses procedural uncertainties following the Court of Appeal’s decision in Thurin v Krongold Constructions [2022] VSCA 226 that VCAT lacked jurisdiction to hear matters considering federal legislation.

The Amendment Act provides a clear mechanism for parties with a claim involving federal law to commence a proceeding in a Court. In particular, section 77(1) of the Victorian Civil and Administrative Tribunal Act 1998 (VCAT Act) provides that the tribunal can strike out all or part of a proceeding if it considers that the subject-matter of the proceeding would be more appropriately dealt with in another forum and under s77(3) can refer the matter to that forum.

The Amendment Act also amends s.77(4) of the VCAT Act so that if VCAT refers a matter to a Court, the Court may extend any limitation period that applies to the commencement of that matter if the Court is satisfied that:

• the proceeding involves the same subject matter as a proceeding in VCAT that was struck out under s.77(1) on the ground that VCAT lacked jurisdiction relating to federal subject matter
• the late commencement of the proceeding is attributable to additional steps the person commencing it was required to take because the VCAT proceeding was struck out
• it is fair and reasonable to extend the limitation period.

The Amendment Act also extends the definition of ‘invalid Tribunal decision’ in s57A(1) so that tribunal decisions made prior to 10 October 2023 relating to federal law are validated decisions of the Tribunal (unless an appeal has been commenced but not determined).

If a decision of the Tribunal has previously been set aside on jurisdictional grounds because it involved federal subject matter, the Amendment Act extends the procedure by which parties could commence a substituted proceeding in the Magistrates Court to include such matters.

For proceedings commenced in the Tribunal after 10 August 2021 but not yet determined by 10 October 2023, consideration should be given as to whether those proceedings should be transferred to a court or a substituted proceeding commenced in the Magistrates Court.

Where proceedings involving a domestic building dispute are commenced in a court, section 57(2) of the Domestic Building Contracts Act 1995 previously required the court to stay the action if the action could be heard in VCAT.

The Act inserts a new section 57(2A) which provides that the court is not required to stay the action (such that the matter would be passed back to VCAT) if the court is satisfied that the action raises, or there are reasonable grounds to consider it may in the future raise, a controversy involving federal subject matter.

The changes provide a clearer path for parties to progress their claims. Limitation periods are also now largely consistent with other courts, and parties can pursue claims for contribution and contributory negligence.

Practitioners need to understand the legislative amendments and their implications for their clients and review all current proceedings in VCAT to determine whether:

• a claim may now be statute barred if it was commenced more than six years after the cause of action arose in reliance upon the decision in Steedman. If acting for a Respondent in these circumstances, a limitations defence can now be pleaded. However, practitioners should be aware that it still remains unclear whether claims against a statutory authority under s157 or comparable claims under s16 of the Water Act are subject to the LAA
• practitioners should review pleadings to determine if any should be amended to include claims of contribution under Part IV of the Wrongs Act or contributory negligence under Part V if appropriate
• a further proceeding should be commenced if any previous VCAT proceedings were dismissed on jurisdictional grounds.

This article was prepared by Caroline Dew, Partner from Moray & Agnew.