When Can VCAT Refer a Claim to the Supreme Court?
11 min read
7 March 2024
In Plunkett v Portier Pacific Pty Ltd (Civil Claims) [2024] VCAT 205, VCAT considered whether a complex commercial dispute involving Uber-related companies should remain in the Tribunal or be referred to the Supreme Court of Victoria.
The applicants claimed more than $1.36 million arising from alleged misleading or deceptive conduct and unconscionable conduct connected with restaurant businesses operating through the Uber Eats platform.
VCAT concluded that the size, complexity, likely hearing duration and case-management requirements made the Supreme Court the more appropriate forum.
The proceeding was struck out under section 77(1) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) and referred to the Supreme Court under section 77(3).
What was the dispute about?
The applicants operated restaurant businesses in Sydney and Melbourne.
They alleged that representatives of the Uber-related respondents made representations concerning the service radius that would be provided through the Uber Eats application. In particular, the applicants relied on alleged representations concerning a service radius of approximately four to five kilometres.
The applicants claimed that they invested money and operated their businesses in reliance on those representations, which allegedly proved to be false.
They sought approximately $1,365,984, together with damages and interest, for alleged:
misleading or deceptive conduct; and
unconscionable conduct.
The claims were brought under the Australian Consumer Law and Fair Trading Act 2012 (Vic) and the Australian Consumer Law as it applies in Victoria.
Why did the respondents seek to move the case?
On 13 April 2023, the respondents applied under section 77 of the VCAT Act for the proceeding to be struck out and referred to the Supreme Court.
They argued that the matter was a complex international commercial dispute involving:
a claim exceeding $1 million;
multiple corporate respondents;
entities within an international corporate structure;
respondents based in the Netherlands;
contracts containing potentially relevant governing-law provisions;
complex pleadings;
potential expert evidence about the Uber Eats platform;
numerous interlocutory steps; and
a lengthy final hearing.
The respondents submitted that the Commercial Court of the Supreme Court could provide the consistent and sophisticated case management required.
Why did the applicants oppose the application?
The applicants argued that their claims fell squarely within VCAT’s jurisdiction as a consumer and trader dispute.
They maintained that:
the case involved relatively straightforward representations;
VCAT regularly determines misleading or deceptive conduct claims;
no issue of Commonwealth or Netherlands law needed to be decided;
any federal aspects of the claim would be removed;
VCAT was likely to provide a less expensive process;
the applicants were entitled to choose VCAT as their forum;
expert evidence about Uber Eats algorithms would not be required; and
the final hearing could be completed within approximately five days.
They also argued that the well-resourced respondents should not be permitted to create an exaggerated impression of complexity.
What does section 77 of the VCAT Act provide?
Section 77(1) allows VCAT to strike out all or part of a proceeding, other than a review proceeding, if it considers that its subject matter would be more appropriately dealt with by:
another tribunal;
a court; or
another person or body.
The application may be made by a party or considered on VCAT’s own initiative.
If VCAT strikes out the proceeding, section 77(3) allows it to refer the matter to the relevant court, tribunal, person or body where it considers that appropriate.
The question is not whether VCAT is incapable of hearing the dispute or is clearly an inappropriate forum. The less stringent test is whether another forum would be more appropriate.
Is there a high threshold for a section 77 application?
Justice Woodward, President of VCAT, considered earlier authorities suggesting that:
a high level of satisfaction is required;
section 77 should not be used lightly; and
the applicant bears an onus of proof.
His Honour considered that those statements should be treated with caution because they risked improperly restricting the broad discretion conferred by the legislation.
A party seeking an order must necessarily establish a proper basis for it. VCAT must also ensure that section 77 is not used tactically to delay a proceeding.
However, once the discretion is enlivened, VCAT undertakes a balancing exercise. It weighs the relevant factors and determines which way the balance falls in the particular circumstances.
Can VCAT consider its resources?
Yes.
The decision contains an important discussion about whether VCAT may consider complexity, claim value, hearing duration and pressure on Tribunal resources.
Justice Woodward concluded that those matters can properly be considered under section 77.
His Honour identified practical differences between VCAT and the courts, including:
VCAT’s registry staffing and case-management capacity;
the absence of staff equivalent to court division lawyers and judicial registrars;
members generally not having dedicated associates;
limited administrative support during hearings;
the general absence of transcripts, particularly for interlocutory hearings;
difficulty ensuring that one member manages a case throughout;
the risk of inconsistent interlocutory decisions;
the effect of lengthy hearings on VCAT’s high-volume work; and
the substantial backlogs arising from the COVID-19 pandemic.
The decision did not establish that VCAT cannot determine complex cases. It recognised that VCAT may decide, in the prevailing circumstances, that a particular dispute would be more appropriately managed by a court.
What factors may favour referral to a court?
Justice Woodward identified several circumstances that would ordinarily prompt consideration of a section 77 referral:
claims and counterclaims substantially exceeding the Magistrates’ Court’s jurisdictional limit;
claims exceeding the County Court’s historical jurisdictional limit of $500,000;
an estimated hearing of 10 days or longer;
multiple parties, third-party claims, counterclaims or apportionment claims;
a history of frequent interlocutory applications;
a need for regular management by one judicial officer;
novel questions of law; or
particularly complex and detailed factual issues.
These are not fixed rules. Each application must be decided on its own merits and prevailing circumstances.
Why was this proceeding referred?
VCAT identified several factors favouring referral.
The value of the claim
The applicants sought more than $1 million. The size of the claim supported the conclusion that the Supreme Court was the more appropriate forum.
Factual and corporate complexity
The respondents formed part of a complex international corporate structure. VCAT considered that identifying the relevant corporate relationships and contractual obligations would create substantial factual complexity.
The proceeding had already involved seven versions of the points of claim, and the applicants accepted that an eighth version was required. They also proposed discontinuing against several respondents.
VCAT was not persuaded that these amendments would resolve the pleading and case-management difficulties.
The Uber Eats platform
The applicants argued that expert evidence would not be required to explain the algorithms underpinning the Uber Eats platform.
VCAT was doubtful that the claim could be resolved without a proper understanding of the programming and algorithms governing the platform. His Honour considered that expert evidence would almost inevitably be required.
The likely hearing length
The applicants estimated a five-day hearing. VCAT considered that estimate optimistic and found that a hearing closer to 10 days was more likely.
Previous interlocutory proceedings
The matter had already followed a difficult and protracted interlocutory path.
VCAT considered that its progress demonstrated the need for regular case management by a single judicial officer. The Supreme Court was better placed to provide that continuity.
The nature of the dispute
The subject matter involved commercial dealings, contractual relationships and alleged misleading or deceptive and unconscionable conduct.
VCAT was satisfied that the dispute fell squarely within the Supreme Court’s jurisdiction and that the Court had the power to grant the relief sought.
Did the possibility of a federal matter affect the decision?
No.
The respondents argued that the proceeding might raise a federal matter because it involved:
conduct in New South Wales;
respondents based in the Netherlands; and
contracts containing Netherlands governing-law provisions.
Justice Woodward accepted that the submission had some force but considered the ultimate form of the proceeding too uncertain.
The possibility of a federal matter was therefore considered speculative and was not relied upon in deciding the section 77 application.
His Honour nevertheless observed that, in another case, a sufficiently strong likelihood of a federal matter arising could support striking out and referral.
What did VCAT order?
VCAT ordered that:
the whole proceeding be struck out under section 77(1);
the proceeding be referred to the Supreme Court under section 77(3); and
VCAT’s Principal Registrar convey the Tribunal file to the Prothonotary of the Supreme Court.
Following the Court of Appeal’s decision in Krongold Constructions (Aust) Pty Ltd v Thurin [2023] VSCA 191, the referred proceeding could continue in the Supreme Court based on the documents that had constituted the VCAT proceeding.
The decision concerned only the appropriate forum. It did not determine whether the respondents had engaged in misleading or deceptive or unconscionable conduct.
What did VCAT decide about costs?
VCAT made no ruling on costs.
Justice Woodward noted that the Civil Claims List is ordinarily a no-cost jurisdiction and saw no reason to determine costs on the section 77 application.
Any future costs ruling, including one concerning the progress of the proceeding while it was at VCAT, was left to the Supreme Court.
What does this decision mean for VCAT litigants?
The decision demonstrates that:
VCAT’s section 77 discretion is broad and unfettered;
the question is whether another forum is more appropriate, not whether VCAT is inappropriate;
legal complexity, factual complexity, substantial value and lengthy hearings are relevant;
pressure on VCAT’s resources and its case-management limitations may be considered;
no single factor automatically determines the application;
complex pleadings and repeated interlocutory applications may favour referral;
VCAT may both strike out and refer a proceeding to a court;
the receiving court must first determine whether it has jurisdiction;
the referral does not decide the underlying merits; and
costs relating to the VCAT proceeding may be left for the receiving court.
Should a commercial claim be commenced in VCAT or a court?
Before commencing a substantial commercial claim, parties should consider:
the amount in dispute;
the number and location of the parties;
the complexity of the corporate and contractual relationships;
whether expert evidence will be required;
the likely hearing length;
the need for discovery and subpoenas;
the likelihood of interlocutory disputes;
the remedies required;
whether federal jurisdiction may arise;
the costs rules in each forum; and
the case-management processes available.
Choosing an unsuitable forum may cause delay, additional costs and procedural disputes before the merits are considered.
Speak with a Melbourne litigation lawyer
Choosing the correct forum can materially affect the cost, timing and conduct of a commercial dispute.
Bastion Legal assists clients with VCAT proceedings and civil litigation in Victorian courts. Contact us before commencing a claim, or if another party has applied to strike out and refer your VCAT proceeding under section 77.
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