Delays in VCAT and VCAT’s ability to perform its function and role

In August 2021, the County Court of Victoria provided sobering commentary regarding how the under resourcing of the Victorian Civil and Administrative Tribunal (VCAT) has effectively resulted in VCAT being ‘prevented from being able to perform its function and role’.?

I published a short case note on LinkedIn in September 2021 regarding that decision:?Impresa Construction v Oxford Building?[2021] VCC 1146 (Impresa v Oxford).

In the months that followed the County Court of Victoria handed down a further relevant decision in relation to VCAT’s capacity to hear domestic building disputes, in the case of?Uber Builders and Developers Pty Ltd v MIFA Pty Ltd & Anor?[2021] VCC 1677 (Uber v MIFA).

In this article, I summarise the Court’s key findings in the Uber v MIFA decision and provide an update on the current state of the VCAT Building and Property List.

Background

In December 2020, Uber commenced its proceeding in the County Court of Victoria.?

On 1 October 2021, the defendants filed an application pursuant to section 57 (Section 57) of the?Domestic Building Contracts Act 1995 (Vic) (DBC Act) to stay the proceeding.

Section 57 provides vests power in VCAT to hear domestic building disputes, subject to a few important exceptions. That section provides that the Court must stay a proceeding if:

(a)???the proceeding arises “wholly or predominantly from a domestic building dispute” in the County Court?(s 57(1));

(b)??the action could be heard by VCAT under subdivision 1 of?Part 5?of the DBC Act?(s 57(2)(a)); and

(c)???the Court has not heard any oral evidence concerning the dispute itself?(s 57(2)(b)).

Uber and MIFA agreed that the dispute is a domestic building dispute within the meaning of Section 57. That being the case, the primary issue for the Court to determine is whether the proceeding ‘could be heard by VCAT’ under subdivision 1 of?Part 5?of the DBC Act.

The Court’s decision

In dismissing the defendant’s application to stay the proceeding under Section 57, the Court determined that:

• (at [19]): the use of the word “must” in section 57(2) indicates that section once subsections 57(1), 2(a) and 2(b) are satisfied, the Court has no discretion and must grant a stay;
• (at [23]-[24]): the key issue in dispute is whether the test in section 57(2)(a) imports case management considerations of the kind identified in Impresa v Oxford. Those case management concerns involve the timely and cost-effective resolution of disputes – concerns which VCAT cannot effectively address in the COVID-19 era (due to the VCAT’s delays and backlogs);
• (at [29]): … the reasoning in Impresa v Oxford is applicable to this proceeding. Accordingly, case management considerations are imported into a construction of section 57(2)(a). Courts ought not be restrained in using the full force and effect of the powers contained in the?Civil Procedure Act 2010?(Vic);
• (at [37]): VCAT has acknowledged on its website and newsletters due to an increasing workload and the difficulties imposed by the COVID-19 pandemic, the Building and Property List (BPL) at VCAT is no longer able to offer hearing dates in a timely manner. Currently, the BPL has vacated or may have to vacate a number of hearings due to the lack of available members. The next available date for a multi-day hearing is approximately 14 months away. Indeed, the delays in the BPL are likely to remain significant for some time. To assist with a “blitz” of the backlog of their already adjourned and not reached matters, VCAT has referred tranches of BPL cases to Judges of the Commercial Division of the County Court who are Vice Presidents of VCAT to hear and determine complex proceedings which will be fixed for hearing from February 2022 onwards; and
• (at [40]): The interpretation in Impresa v Oxford is preferable, and case management concerns are imported into a construction of section 57(2)(a). Accordingly, this proceeding could not be heard in VCAT under subdivision 1 of Part 5 of the DBC Act.

Current state of the VCAT Building and Property List

As at May 2023, being more than 18 months after the Court’s decisions in Impresa v Oxford and Uber v MIFA, the situation in VCAT appears to have only marginally improved.

VCAT still has a backlog of cases awaiting resolution.?VCAT’s website explains that a number of measures have been put in place to reduce the backlog, but the current timeframes to get to a hearing after VCAT receives an application are:

(a)???to get to mediation - 17 weeks

(b)??to get to a compulsory conference –?37 weeks

(c)???to get to a directions hearing?–?22 weeks

(d)??for a small claim dispute –?42 weeks

(e)???for a 2-day to 4-day hearing –?48 weeks; and

(f)???for a 5-day or more hearing – no estimate provided.

Notwithstanding the indications on VCAT’s website, it is important to note that these timeframes are estimates only and the actual wait time may be longer.?I am aware of several matters in VCAT where the delay has been longer than this indication, including one matter that was commenced in February 2022, has taken 30 weeks to get to a directions hearing and, due to the lack of available members, is not due to proceed to a compulsory conference until approximately 80 weeks after it was commenced.

Key takeaways

While the wait time for a multi-day final hearing in VCAT may have improved since the decision in Uber v MIFA was handed down in 2021, there are still significant delays in the BPL and case management considerations of the kind identified in Impresa v Oxford will continue to be relevant until the backlog is further reduced.

As the backlog is reduced there will come a time when VCAT will again have capacity to hear and determine domestic building disputes.?At that point in time, I expect that an application made under Section 57 will be more likely to succeed, however, in light of the ongoing delays it is impossible to predict when that point in time will occur.

Parties wanting to bring a claim arising out of a domestic building dispute will need to continue to be careful when selecting the forum in which to bring a claim.?

More information

For information on this case or advice please contact me on (03) 8600 8851 or?[email protected].

Note:?This?article contains general information only and is a guide which is not intended to constitute, and is not a substitute for obtaining, legal advice.