Krongold v Thurin [2023] VSCA 191

Peter Wood  |  Jeanette Barbaro  |  Isobel Carmody  |  Joseph Xuereb

Key takeout

• Where a proceeding in VCAT involves a matter arising under federal laws, VCAT cannot hear the matter but can refer that proceeding to the Supreme Court of Victoria under s 77 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (VCAT Act).
• A referral by VCAT invokes the jurisdiction of the Supreme Court without the need for a fresh or new initiating process.
• The referral does not need to be made before the expiry of relevant limitation periods.  

Facts

This case forms part of a series of decisions regarding a claim under the Trade Practices Act 1974 (Cth) (TPA) and VCAT’s jurisdiction (or lack thereof) to hear and decide claims arising under Commonwealth laws that are matters of federal jurisdiction.  In late 2022, the Victorian Supreme Court of Appeal decided that, while VCAT did not have jurisdiction to hear and determine claims involving Commonwealth law, VCAT’s referral of the matter to the Supreme Court under s 77 of the VCAT Act was valid.

We set out the key facts in our 2022 case note: VCAT’s jurisdiction on federal laws clarified   – Construction Law Made Easy.

This latest decision addresses a number of issues regarding the effect of the referral under the VCAT Act, including the interaction of that referral with the limitation periods in the Building Act 1993 (Vic) (Building Act).

Decision

The Court of Appeal decided that:

• a referral to the Supreme Court under the VCAT Act invokes the jurisdiction of the court without the need for a fresh or new initiating process, such as the filing of a writ or a new statement of claim;
• the making of such a referral does not constitute the bringing of an action for the purposes of the time limits in sections 134 or 134A of the Building Act; and
• VCAT did not have jurisdiction to join the architect and supplier of pipes as respondents to the proceeding.  The claims against those parties in the VCAT proceeding do not form part of the matter referred to the Supreme Court under the VCAT Act.

The effect of a referral under s 77 of the VCAT Act

There was a dispute regarding the effect of a referral to the Supreme Court under the VCAT Act.  The referral order had stated that the VCAT proceeding ‘be struck out and the matter referred to the Supreme Court of Victoria’.

In summary:

• Krongold argued that a referral only brings the subject matter of the dispute that had been discontinued in VCAT to the attention of the Supreme Court. Therefore before the matter could proceed in the Supreme Court and the applicant would need to commence fresh proceedings in in that court.
• Thurin argued that the effect of the referral is to transfer the proceeding, and in doing so invokes the jurisdiction of the Supreme Court to hear and determine the referred matter. 
• The Attorney-General for Victoria (who intervened in the proceeding) submitted that the effect of the referral under the VCAT Act is to remove the proceeding from VCAT’s list, invoke the jurisdiction of the Supreme Court to hear and determine the controversy that was the subject of the VCAT proceeding and require the court to commence the process of hearing and determining the matter by taking steps to create a proceeding in the court for that purpose, without the need for the commencement of a new proceeding in the court.

The significance of these arguments in this case was that if the matter had not been transferred by the referral under the VCAT Act and a fresh action needed to be commenced , then the limitation periods in the Building Act might operate to bar the action.

In deciding that a referral to the Supreme Court invokes the jurisdiction of the court without the need for a fresh or new initiating process, the Court of Appeal:

• largely accepted the submissions of the Attorney-General for Victoria on the construction of s 77 of the VCAT Act;
• found that s 57 of the Domestic Building Contracts Act 1995 (Vic) which provides that VCAT is the primary venue for the determination of building disputes under that Act does not limit VCAT’s power to refer matters to the Supreme Court;
• found that on receipt of a referral, the first task of the court is to satisfy itself that it has jurisdiction; and
• the referral under s 77 of the VCAT Act does not have the effect of making binding any decision that VCAT may have made (as such a course would be ‘constitutionally infirm‘) or require the court to adopt any step previously taken by VCAT when the matter was before VCAT.  

The Building Act limitation periods

The Building Act provides for limitation periods applicable to the bringing of actions for building and plumbing work.  In the alternative to its argument that following the referral under the VCAT Act Thurin should be required to commence fresh proceedings in the Supreme Court, Krongold argued that the referral under the VCAT Act (which occurred outside of the relevant limitation periods) should result in the proceedings being time-barred, as the action was brought outside of the applicable limitation periods in the Building Act.

The Court of Appeal said that limitation periods (which require commencement of an action or proceeding within a certain time limit) contemplate that time stops running upon the party commencing the proceedings taking a step that is within its control. By contrast, referrals to the Supreme Court under the VCAT Act are made by VCAT itself.  This position is consistent with achieving the rationale of limitation periods, that is, by commencement of the proceedings in VCAT, the parties will have been on notice of the subject matter of the proceeding within the relevant limitation period. 

Accordingly, Thurin’s claim against Krongold was not time-barred by the limitation periods in the Building Act due to the referral to VCAT.

However, as the architect and pipe supplier were not parties to the proceedings referred to the Supreme Court, it may be that any attempt by a party to in future join the architect or pipe supplier to the proceedings referred to the Supreme Court will run into difficulty due to limitation periods.

Joinder of the architect and pipe supplier to the VCAT proceedings

In 2018, Krongold applied to have the architect and pipe supplier joined to the VCAT proceeding so as to enable its allegations that they were concurrent wrongdoers (on the basis that the architect and pipe supplier would have liability under the TPA) and sought apportionment under the Wrongs Act 1958 (Vic) or alternatively contribution.  VCAT made orders joining the architect and pipe supplier to the VCAT proceedings, before the referral to the Supreme Court was made.

In the 2022 decision the Supreme Court concluded that due to Krongold’s reliance on a claim under the federal TPA, VCAT lacked jurisdiction to hear and determine the proceeding. 

The architect and pipe supplier, who had been purportedly joined to the proceeding by VCAT in 2018 on the basis of a claim by Krongold under the TPA (being a matter in federal jurisdiction), argued that they were not parties to the proceedings as VCAT had lacked the jurisdiction to join them to the proceedings that were referred in the first place as that joinder involved the invalid exercise of federal judicial power by VCAT.

The Court of Appeal agreed that the referral under s 77 of the VCAT Act did not properly include the claims against the architect and pipe supplier.