Tenant seeks to overturn VCAT's exclusive jurisidiction

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In Ireland v Subway Systems Australia Pty Ltd and Subway Realty Pty Ltd [2012] VCAT 1061 a tenant contended if an agreement (which it contended was a licence) was held to be a lease then the dispute had to be determined by an arbitrator pursuant to an arbitration clause and not by VCAT.  The arbitration clause was contained in the a document separate from the lease.

VCAT held that the agreement was a lease and therefore there was a "retail tenancy dispute" which, subject to the tenant's argument about the Commercial Arbitration Act, would be governed by the dispute provisions of the RLA. If the tenant's application had succeeded the whole regime of the dispute resolutions provisions in the RLA would have been displaced. The tenant argued that the arbitration clause should be given effect to because s 10 of the Commercial Arbitration Act 2011 was pronounced after the commencement of the 2003 Act and, by implication, repealed the provisions of the RLA that gave exclusive jurisdiction  concerning retail tenancy disputes to VCAT.  

The tenant contended that the word “court”  in s 10 of the Commercial Arbitration Act included the Tribunal. At [45] the Tribunal accepted that there was authority supporting the proposition that, in some cases, the reference to a “court” will include the Tribunal. The tenant contended that to construe the word “court” in the Commercial Arbitration Act to include the Tribunal would not create inconsistency between that Act and the RLA because the Commercial Arbitration Act was a later Act of Parliament which would, by implication repeal the inconsistent provisions of the RLA.  In rejecting the tenant’s contentions the Tribunal said:

 [50]       I do not accept that submission. In Goodwin v Phillips (1908) 7 CLR 1 at 10, Barton J adopted the following statement from Hardcastle on Statutory Law:

The court must be satisfied that the two enactments are so inconsistent or repugnant that they cannot stand together, before they can from the language of the later imply the repeal of an express prior enactment, i.e., the repeal must, if not express flow from the necessary implication.

[51]       Further, in Saraswati v R (1991) 100 ALR 193 Gaudron J stated the following;

It is a basic rule of construction that, in the absence of express words, an earlier statutory provision is not repealed, altered or derogated from by a later provision unless an intention to that effect is necessarily to be implied. There must be very strong grounds to support the implication, for there is a general presumption that the legislature intended that both provisions should operate and that, to the extent that they would otherwise overlap, one should be read as subject to the other (at 204)

[53]         In my view, limiting the word court in s 10 of the Commercial Arbitration Act 2011 to mean the Magistrates’ Court, County Court or Supreme Court would not lead to any inconsistency between the two Acts and is a construction that is to be adopted, having regard to the authorities cited above. Accordingly, I do not accept the submission that the word court in the Commercial Arbitration Act 2011 includes the Tribunal. It simply cannot be the case that Parliament intended that the Commercial Arbitration Act 2011 and the RLA were to cover the same field of operation. The RLA is expressed elaborately and specifically details how retail tenancy disputes are to be resolved. The Commercial Arbitration Act 2011 says nothing about resolving retail tenancy disputes and is expressed in a general manner. In my view, that is another factor weighing against a finding that Parliament intended the provisions of the Commercial Arbitration Act 2011 to take precedence over the dispute resolution provisions of the RLA. Accordingly, I find that the word court in the Commercial Arbitration Act 2011 does not include the Tribunal and as a consequence, the Commercial Arbitration Act 2011 has no application in determining the present dispute.

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 Author: Robert Hays Barrister subject to copyright under DMCA.

The awarding of costs when Fair Trading Act claims are included in retail tenancy disputes

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VCAT recently considered whether s.92 of the Retail Leases Act 2003 applied to claims made under the Fair Trading Act 1999 (FTA) in a proceeding that also involved what was undoubtedly a 'retail tenancy dispute'. 

The effect of s.92(1) of the 2003 Act is that each party bears its own costs in a dispute governed by Part 10 (ie the dispute resolution provisions) of the 2003 Act.

In Complete Pets Pty Ltd v Coles Group Property Developments Pty Ltd [2012] VCAT 361 the head tenant was sued by a subtenant alleging that it was induced to enter into the lease by reason of misleading or deceptive conduct contrary to the FTA.

The subtenant sought an order that the sublease was void ab initio.

The guarantor of the subtenant's obligations also claimed to have been induced to enter into the guarantee by reason of misleading or deceptive conduct contrary to the FTA and sought an order the the guarantee was void ab initio.

Another applicant claimed to have been induced to invest in the business conducted at the leased premises by reason of misleading or deceptive conduct contrary to FTA and sought damages.  The head tenant counterclaimed against the guarantor for unpaid rent and outgoings. 

The head tenant's claim was the only claim that succeeded. The head tenant sought its costs under s.109 of the VCAT Act 1998.

The head tenant contended that the dispute was made up of four claims and conceded that the tenant’s claim against the landlord was a 'retail tenancy dispute' within the meaning of s.81 of the 2003 Act and therefore were caught by s.92(1).

 However, the landlord contended that the other claims were ‘consumer-trader’ disputes under the FTA as defined in s.107 of the FTA and therefore the disputes were not covered by s.92 of the 2003 Act.

The Tribunal held that it was irrelevant whether relief was being sought under the FTA and that the “critical question” was whether the parties were, pursuant to s.90 of the 2003 Act,  "parties to a proceeding before the Tribunal" on an application under s.89(1) of the 2003 Act.

If the parties were parties to a proceeding under s.89(1)  s.92 of the 2003 Act applied and s.109 of the VVCAT Act was irrelevant.  Section 89(1) of the 2003 Act provides that “The Tribunal has jurisdiction to hear and determine an application by a landlord or a tenant under a retail premises lease……seeking resolution of a retail tenancy dispute”.

The Tribunal took a purposive construction of the 2003 Act and held that the guarantor and the investors were "parties to the proceeding" within the meaning of s.90  of the 2003 Act with the consequence that s.92(1) applied and the parties had to bear their own costs. The head tenant also unsuccessfully argued that even if s.92(1) applied it was entitled to costs because the proceeding had been conducted vexatiously with the consequence that the exception to the general contained in s.92(2)(b) of the 2003 Act  applied.

The vexatious conduct alleged was a refusal to accept offers of settlement.

My clerk can be contacted via this link http://www.greenslist.com.au/ if you wish to retain my services for any legal matter which is within the gamut of my legal experience.

Author: Robert Hays Barrister subject to copyright under DMCA.