Contribution claims are outside VCAT’s jurisdiction

In the recent decision of Vaughan Constructions Pty Ltd v Melbourne Water Corporation (Building and Property) [2023] VCAT 233, His Honour Justice Delany¹ has held that the Victorian Civil and Administrative Tribunal (Tribunal) lacks jurisdiction to determine claims for contribution brought under Part IV of the Wrongs Act 1958 (Vic) (Wrongs Act).

Given the Tribunal’s longstanding practice of hearing and determining contribution claims, this decision has seismic consequences for parties with cases currently before the Tribunal, and those whose hearings have recently concluded but have not yet been determined. 

Given the Victorian Court of Appeal’s recent decision in Thurin v Krongold Constructions (Aust) Pty Ltd [2022] VSCA 226 (Thurin), this latest development further limits the types of cases the Tribunal can hear, and will likely result in more cases being referred to the County and Supreme Courts of Victoria.

Background

This matter has a relatively complex history with numerous parties and proceedings on foot, but the specific legal question before Justice Delany was whether a consulting engineer (Reeds) could bring a contribution claim under the Wrongs Act against a geotechnical engineer (AS James), as part of an existing case before the Tribunal under the Water Act 1989 (Vic) (Water Act).

His Honour was required to consider:

• whether the Tribunal has jurisdiction to hear contribution claims under Part IV of the Wrongs Act
• if so, whether that jurisdiction extends to contribution claims based on breach of contract and negligence in a building dispute.

Issue 1: The Wrongs Act

Reeds argued:

• that it had a freestanding right of contribution under Part IV of the Wrongs Act
• the word “court” was not defined in Part IV of the Wrongs Act, and if a case was already before the Tribunal, then it could also hear contribution claims as part of that case
• a conclusion that multiple court and tribunal proceedings in parallel for the same subject matter is not what parliament intended
• claims under the Water Act often include contribution arguments, so the consequence of requiring separate proceedings each time this issue arose would be far-reaching.

AS James argued that when parliament amended other parts of the Wrongs Act, it introduced a specific definition for courts, which expressly included the Tribunal, but those amendments were limited to part IV of the Wrongs Act, and did not apply to contribution claims.

Issue 2: The Water Act

As an alternative, Reeds argued that the broad wording of the Water Act gave the Tribunal jurisdiction to hear all claims that arise in relation to Water Act disputes.

In response, AS James submitted neither the cause of action brought against it under Part IV of the Wrongs Act, nor the basis for the alleged liability of AS James under contract and common law, were causes of action brought under the Water Act.

The Tribunal’s decision

Delany J held that while section 23B of the Wrongs Act may create a freestanding entitlement to recover contribution, this of itself does not determine whether the Tribunal has jurisdiction and this question turns on ”…whether or not the Tribunal is a ‘court’ for the purposes of Part IV of the Wrongs Act.”

His Honour held that, unless expressly stated, the Tribunal is not a “court” on the basis that (amongst other things):

• the context in which ‘court’ must be construed, in Part IV of the Wrongs Act including references to ‘judgment’ and ‘writ’, supports a construction of ‘court’ in Part IV of the Act which does not include the Tribunal
• the history of amendments to the Wrongs Act reinforces that VCAT is not a ‘court’ for the purposes of Part IV.

In considering Reeds’ alternative argument under the Water Act, His Honour held that where the Tribunal has no accrued jurisdiction, it does have an implied incidental power to do everything necessary, to give effect to or facilitate the exercise of, its express statutory power. His Honour held that the independent cause of action in Part IV of the Wrongs Act does not ‘arise under’ any of the specified sections of the Water Act, nor does it arise at common law.

As a result, His Honour found that the Tribunal did not have jurisdiction to determine Reeds’ contribution claims against AS James and refused Reeds’ joinder application.

Implications for VCAT’s jurisdiction

There is no doubt that this decision is a significant addition to the jurisdictional issues now facing litigants when deciding in which forum to commence their claim(s). Thankfully, the Court of Appeal in Thurin confirmed that the Tribunal can refer cases like these to a more appropriate forum. As a result, contribution matters such as Reeds currently before VCAT may be remitted to a court that does have jurisdiction to hear contribution claims.

Due to this uncertain landscape, we expect to see the question of the Tribunal’s jurisdiction to be at the forefront of many decisions to come as the courts, litigants and the Tribunal itself seek to traverse the implications of this jurisdictional uncertainty.

In circumstances where the Tribunal can no longer determine contribution claims under Part IV of the Wrongs Act, practitioners and clients will have to consider carefully the best way to approach disputes that will likely involve multiple parties and claims, particularly in light of the potentially significant cost consequences of matters being transferred between different forums.

If you would like to consider these matters in more detail, please get in touch with partners Kyle Siebel, Lachlan Ingram or members of our Construction, Infrastructure & Projects team below

¹ His Honour is commissioned as a Supreme Court Judge, however sat as an Acting Member of the Tribunal in this case.

Disclaimer
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

Share this