VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
CIVIL DIVISION
BUILDING AND PROPERTY LIST	
vcat reference No. BP336/2022	
CATCHWORDS	
Procedure – order made determining liability and directing a hearing for assessment of quantum – whether the Tribunal was functus officio once it had determined liability – whether the Tribunal had the power to make the direction – Victorian Civil and Administrative Tribunal Act 1998 (Vic) s 80.
Jurisdiction - whether the order was made without or beyond jurisdiction – whether the determination was of “part of a proceeding” – whether jurisdictional facts existed - the Tribunal cannot entertain a jurisdictional challenge to the order - Victorian Civil and Administrative Tribunal Act 1998 (Vic) s 79.	

APPLICANT	Arbab Sikandar	
RESPONDENT	BAHL Enterprises Pty Ltd (ACN 118 818 152) t/as BAHL Homes	
WHERE HELD	Melbourne	
BEFORE	Senior Member A Vassie	
HEARING TYPE	Hearing	
DATE OF HEARING	24 August 2023	
DATE OF ORDER	2 November 2023	
CITATION	Sikandar v BAHL Enterprises Pty Ltd (Building and Property) [2023] VCAT 1222	

Order
1	The Tribunal finds that it is not functus officio as a consequence of the order dated 30 January 2023.
2	Subject to any further order, the hearing listed for 21 November 2023 for assessment of damages shall proceed.

A Vassie
Senior Member			

APPEARANCES:		
For Applicant	Mr J Long, project manager	
For Respondents	Mr L Wirth of Counsel	

Reasons
A Challenge to a Tribunal Practice
1	In this proceeding the applicant home owner has claimed compensation from the respondent builder for alleged breaches of the statutory warranties that the Domestic Building Contracts Act 1995 (Vic) imposes upon a builder. At directions hearings orders were made requiring the builder to file and serve Points of Defence. The builder failed to comply with the orders. At the last of the directions hearings, on 30 January 2023, the Tribunal followed a practice that it has established in its Building and Property List when a builder has failed to comply with procedural orders but the quantum of the applicant’s damages remains to be proved. Pursuant to s 78 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (“the VCAT Act”), the Tribunal made an order in the applicant’s favour on the issue of liability but directed the listing of a hearing “for the purpose of assessing the quantum of the applicant’s claim only”.
2	So far as it is presently relevant, s 78 provides:
78 Conduct of proceeding causing disadvantage
(1)	This section applies if the Tribunal believes that a party to a proceeding is conducting the proceeding in a way that unnecessarily disadvantages another party to the proceeding by conduct such as –
(a)	failing to comply with an order or direction of the Tribunal without reasonable excuse; …
(2)	If this section applies, the Tribunal may- 
…..
(b)	if the party causing the disadvantage is not the applicant- 
(i)	determine the proceeding in favour of the applicant and make any appropriate orders;…
…..
3	At the directions hearing on 5 July 2022, the Tribunal ordered the builder to file and serve Points of Defence by 23 August 2022. At the foot of the order was the following paragraph:
WARNING
The parties are warned that any party who fails to comply with these directions may be ordered to pay the other party/s’ costs, and/or an order may be made determining the proceeding against the party who has failed to comply under s78 of the Victorian Civil and Administrative Tribunal Act 1998.
4	The builder not having complied with the order by filing or serving Points of Defence, there was a second directions hearing on 11 October 2022. The Tribunal ordered the builder to file and serve by 12 December 2022 any expert reports on which it intended to rely, and extended to 12 December 2022 the time for the builder to file and serve the Points of Defence. The orders included the following paragraph:
4.	If the respondent does not file with the Tribunal and send to the applicant Points of Defence by 12 December 2022 without reasonable excuse, an order will be made in chambers without further notice under s78 of the Victorian Civil and Administrative Tribunal Act 1998, that the proceeding is determined against the respondent in favour of the applicant, and the proceeding will be listed for hearing for the purpose of determining quantum.
5	Although the builder did not file and serve Points of Defence or any expert reports by 12 December 2022, no order was made “in chambers” as a consequence. Instead, there was a third directions hearing on 30 January 2023, when the Tribunal made the order which is the subject of challenge. Paragraph 1 of the order was:
1.	Having regard to the respondent’s failure to comply with previous orders in relation to filing and serving Points of Defence and expert reports, and on the application of the applicant, the proceeding is determined against the respondent in favour of the applicant pursuant to s.78 of the Victorian Civil & Administrative Tribunal Act 1998. The proceeding will be listed for hearing for the purpose of assessing the quantum of the applicant’s claim only.
The order further directed that the proceeding was listed for hearing, by video conference, on 23 August 2023.
6	The builder had not appeared or been represented at any of the three directions hearings. On 23 August 2023, when the hearing began before me, Mr Wirth of Counsel appeared for the builder. He did not say that the builder had been unaware of the directions hearings or of the orders. Instead, he submitted that the Tribunal should not and could not proceed with the hearing to assess the quantum. After he made the submission orally I reserved my decision upon it, set a timetable for each party to file and serve a written submission about the effect of paragraph 1 of the order made on 30 January 2023, and adjourned the hearing.
7	Each party filed and served a written submission in accordance with the timetable.
The Submissions
8	I endeavour to summarise the very lucid written submissions for the builder as follows.
9	First, the order purportedly made under s 78 of the VCAT Act was made without jurisdiction, because it was an order determining part of a proceeding: it purported to determine the issue of liability – that issue being “part of the proceeding” – then listed the issue of quantum of damages – the remaining part of the proceeding – for hearing separately. Section 78 does not confer upon the Tribunal any power to determine part of a proceeding.
10	Secondly, the order was made without jurisdiction because s 78 did not empower the Tribunal to make directions after the determination of the proceeding, yet that is what the Tribunal purported to do when it went on to direct a hearing upon the issue of quantum. The directions power that s 80 of the VCAT confers upon the Tribunal is limited to the making of directions prior to the determination of the proceeding.
11	Thirdly, there had been jurisdictional error in the making of the order, because the Tribunal did not express findings about the elements of s 78 that are necessary to be established before the power to determine the proceeding can be exercised. 
12	Fourthly, and alternatively, if the order had been made within jurisdiction and without jurisdictional error so that it was effective, its effect was to render the Tribunal “functus officio”: the Tribunal had exhausted the power that s 78 made available once it stated that it has determined the proceeding in favour of the applicant. There was no power to assess quantum separately.
13	Fifthly, the Tribunal’s exercise of its discretion under s 78 miscarried because it failed to consider the pitfalls that a fragmentation of the hearing would create.
14	The builder submitted, I think with justification, that whenever the Tribunal had made orders in the terms of the one now under challenge there had been no analysis by the presiding member of how s 78 empowered the Tribunal to decide against a respondent summarily on the issue of liability but to direct an assessment of damages on a later date. That is not surprising, because usually the respondent had not appeared at the hearing when the order was made and had not otherwise resisted the making of the order.
15	The applicant, by solicitors who are now acting for him, has submitted that the limited powers that the Tribunal has to review its own determinations do not enable it to decide that an order had been made without jurisdiction or in jurisdictional error: such an order can only be disturbed upon appeal to the Supreme Court. The applicant does not argue, however, that the Tribunal cannot decide whether as a consequence of an order it is “functus officio”.
16	The applicant has submitted that the Supreme Court has tacitly approved of the practice of determining liability under s 78 but leaving quantum of damages to be assessed later. There had been an appeal from a Tribunal order under s 78 dismissing an applicant’s claim, determining liability on the respondent’s Points of Counterclaim and directing that the assessment of damages counterclaimed should occur on a later date. The appeal was dismissed. I consider that the decision did not go as far as the applicant has submitted as an approval of the practice. The appellant’s grounds of appeal in relation to the orders made about the counterclaim did not include any of the matters raised by the builder in this proceeding about jurisdiction or “functus officio”. So there was no occasion for the presiding justice, Kaye JA, to say anything about those matters. The most that can be said about the case’s relevance to the parties’ submissions in this proceeding is that if his Honour had thought that the orders appealed from were obviously beyond the Tribunal’s jurisdiction he probably would have said so.
17	As far as I can see, therefore, this proceeding is the first occasion on which the legality of the relevant practice arises for decision.
Limits upon the Tribunal’s Power of Review
18	I accept the applicant’s submission that the Tribunal has no power to decide that one of its own orders has been made without jurisdiction or in jurisdictional error. The order is effective unless and until, on appeal, the Supreme Court sets it aside.
19	The only provisions of the VCAT Act that enable the Tribunal to review its own orders are s 119, which permits the Tribunal to amend an order to correct a mistake in it that led to it not reflecting the order that the Tribunal intended to make, and s 120, which enables a party who did not appear or was not represented at the hearing when an order was made to apply for a review of the order and for revocation of the order if there had been a reasonable excuse for not having appeared or not having being represented.
20	In a case when a party to a consent order of the Tribunal asked the Tribunal to set it aside because of alleged misrepresentation by the other party, the Supreme Court dismissed an appeal from the Tribunal’s refusal of the request. Ginnane J, who heard the appeal, rejected a submission that the Tribunal has “an inherent power to strike out and subsequently correct a wrong decision, even if it has identified an error”; the Tribunal cannot make a collateral review of the decision’s validity. The orders that the Tribunal made “remain in operation unless and until a Court in an appropriate proceeding sets them aside.”
21	So, even if I were to agree with the first, second and third submissions of the builder summarised above, which all allege errors of a jurisdictional nature, it would not be open to me to revoke, vary or disregard the order of 30 January 2023. The fourth submission, that once the Tribunal stated that it determined the proceeding against the respondent in favour of the applicant it was “functus officio”, does not challenge the jurisdictional validity of the order so does not invite a collateral review. The fifth submission also attempts a collateral review of the order.
22	The Tribunal has the power to decide whether in a proceeding it is “functus officio”. The applicant has not argued to the contrary.
23	Although a decision of mine about the other submissions will have no effect because it would amount to a collateral review beyond power, the matters have been argued fully and the parties deserve to have my views on them.
24	I propose to deal first, however, with the “functus officio” submission, which involves the Tribunal examining the legal effect of the order, not its validity. I do so even though logically the decision as to whether or not the Tribunal was “functus officio” depends on whether the order of 30 January 2023 is to be taken as never having been made because of jurisdictional error.
“Functus Officio”?
25	The builder’s submission is that once the Tribunal had decided on 30 January 2023 that “the proceeding is determined against the respondent in favour of the applicant” it had done everything that s 78 of the VCAT Act empowered it to do, so could proceed no further; it had exhausted its jurisdiction to determine the proceeding and could not go on to direct a further hearing for assessment of quantum.
26	I do not accept the submission. The order did not amount to a final determination of the proceeding. The Tribunal had not finally performed the duty to determine the claim for damages.
27	In stating that “the proceeding is determined against the respondent in favour of the applicant” the Tribunal was doing no more than characterising the determination it was going to make, in words that echoed the words of s 78 that described one permitted characterisation. The uttering of the word “determined”, orally or in writing, does not necessarily bring the proceeding to an end or bring the Tribunal’s function in the proceeding to an end. The Tribunal still could “make any appropriate orders”, as s 78 permitted it to do.
28	The submission can be readily tested. Suppose a different case, where there had been a building contract between an applicant and a respondent builder and that the contract provided for liquidated damages to be paid by the builder for delay in completion. Suppose that in that case too the builder had failed to comply with the Tribunal orders for Points of Defence and the applicant was seeking an order under s 78 for a determination in the applicant’s favour. Suppose finally that the claim was for liquidated damages only and that they could be readily calculated at $10,000. If the Tribunal were to make an order that “the proceeding is determined in favour of the applicant and orders the respondent to pay to the applicant and orders the respondent to pay to the applicant $10,000”, it could not seriously be contended that once the order contained the words “the proceeding is determined in favour of the applicant” the Tribunal was functus officio and could not order the payment of the liquidated sum. So why should there be any different outcome if the Tribunal, not being able to assess and award the damages immediately, directed that they be assessed at a further hearing on a later date? Again, in the example just given the Tribunal first would characterise the order in terms of one that it was permitted by s 78 to make, and the final determination would follow.
29	I reject the submission that the Tribunal was “functus officio” once it made the order of 30 January 2023.
30	I proceed to express views about the other submissions relating to jurisdiction, even though those views can bind neither party.
Determination of “Part of a Proceeding”?
31	The submission that s 78 of the VCAT Act does not empower the Tribunal to determine part of a proceeding is correct. The section is a contrast to other sections within Part 4 Division 4 of the VCAT Act that expressly empower the Tribunal to dismiss or strike out “a proceeding, or any part of a proceeding.” Those sections are s 75 (if the proceeding, or part of the proceeding, is frivolous, vexatious, misconceived, lacking in substance or otherwise an abuse of process), s 76 (where there has been a want of prosecution) and s 77 (which confers a power to strike out when another court or body is a more appropriate forum).
32	I do not, however, accept the premise of the submission that the Tribunal went beyond its jurisdiction when making paragraph 1 of the order of 23 January 2023. The premise is that what the Tribunal did was to determine part of a proceeding.
33	Striking out of “part of a proceeding” is an apt description of a striking-out of Points of Claim, or of some paragraphs in Points of Claim. The description reflects the distinction between a proceeding and Points of Claim in a proceeding. A proceeding in this Tribunal begins when the applicant files a written application. The filed written application creates a superstructure for the applicant’s claim. It can be filled by Points of Claim that give more substance to the claim. If the Points of Claim, or parts of the Points of Claim, are struck out the proceeding remains on foot. Only if the proceeding is struck out, or dismissed, is there a determination of the proceeding against the applicant. “[T]he power [conferred by s 75] to dismiss or strike out part of a proceeding extends to dismissal or striking out of one or more claims in the points of claim or some other document which articulates the applicant’s claim in lieu of points of claim.”
34	Whether the power to dismiss or strike out part of a proceeding extends beyond dismissal or striking out of Points of Claim, or parts of them, does not appear to have been decided. Perhaps when in a proceeding the Tribunal determines it against one of several respondents but allows it to remain on foot against the others it is determining part of the proceeding.
35	I do not accept that an order determining the question of liability in a proceeding is an order dealing with “part of a proceeding.” The order under challenge in this proceeding affected the whole of the proceeding, not a part of it, notwithstanding that the issue of quantum of damages was to be assessed separately.
The Direction for Assessment of Quantum
36	The builder has correctly submitted that s 78 does not confer upon the Tribunal the power to make directions, but s 80 of the VCAT Act does confer that power. The builder has gone on to submit that the power to make directions exists only before the Tribunal determines the proceeding; in this proceeding once the Tribunal expressed the determination of it there was no longer a power to make directions, and by doing so the Tribunal exceeded its jurisdiction.
37	Section 80, so far as it is presently relevant, provides: 
80 Directions
(1)	The Tribunal may give directions at any time in a proceeding and do whatever is necessary for the expeditious or fair hearing and determination of a proceeding.
38	I accept that what the Tribunal did, when stating that there would be a hearing listed for the assessment of the claim, was making a direction and that s 80, not s 78, was the available source of the power. I do not, however, accept that because the words “the proceeding is determined” preceded the words of direction the power conferred by s 80 to make directions had ended. Frequently, applications for costs orders in a proceeding are made after the determination of the proceeding, and they involve the Tribunal making directions for the hearing and determination of the application for the costs order. It has never been suggested, let alone decided, that the Tribunal cannot make those directions. At all events, the order under challenge simultaneously expressed a determination and a direction “at any time in a proceeding” as permitted by s 80.
39	So I do not accept that second submission as to why the order was made without jurisdiction.
Jurisdictional Facts
40	The builder has submitted that the order made on 30 January 2023 revealed jurisdictional error because it did not contain findings of facts that would bring s 78 into operation.
41	For s 78 to operate in the circumstances of this proceeding there needed to be:
[1]	a failure of the respondent to comply with an order or direction of the Tribunal;
[2]	no reasonable excuse for the failure;
[3]	a belief of the Tribunal that the non-compliance unnecessarily disadvantaged the applicant.
42	The order recorded the failure to comply with previous orders for the filing and service of Points of Defence. There has been no dispute that the failure had occurred. While the order referred to previous orders about expert reports, the respondent builder had not been ordered to file or serve expert reports; the orders imposed then extended a deadline for the filing and serving of expert reports, but did not compel the respondent to file and serve any. So there was no “failure to comply” in that regard. The relevant failure to comply, as the order recorded, was with orders to file and serve Points of Defence.
43	Ordinarily, the existence or non-existence of facts that might amount to a reasonable excuse for the non-compliance will be within the knowledge of the defaulting party, and not within the knowledge of the party which is seeking the order under s 78. For that reason, the onus is on the defaulting party to prove the existence of the reasonable excuse. When, as in the present case, the defaulting party does not appear at the hearing at which the order is sought and does not otherwise offer any proof of a reasonable excuse, the conclusion that there is no reasonable excuse is inevitable. The builder has made no point about the order not having expressed a finding that there was no reasonable excuse for the failure to comply.
44	The builder does however, make the point that there was no expression in the order of a belief that the failure to comply had unnecessarily disadvantaged the applicant.
45	The unnecessary disadvantage to the applicant as a consequence of the failure to comply is obvious. He would be going to a hearing without knowing what defence the builder would put forward if it appeared at the hearing. He would be at risk of walking into an ambush. If the builder were granted the indulgence of being allowed to defend the proceeding despite its non-compliance, the applicant might well need to seek an adjournment of the hearing in order to meet whatever the builder’s case was, and suffer the delay that the adjournment would cause.
46	Nevertheless, the order did not express the belief of unnecessary disadvantage. 
Fragmentation of the Hearing
47	The builder has submitted that, before exercising the discretion to make at all any order that summarily determines the issue of liability but directs a separate assessment of quantum, the Tribunal ought to have considered the pitfalls that the making of such an order might create. The submission cited authorities for the proposition that a court should not, without exercising considerable caution, accede to any request for there to be a preliminary hearing on an isolated issue but a deferring of a decision on all other issues until a later final hearing. There is always a risk of the preliminary hearing being aborted when it becomes apparent that the one issue cannot properly be decided in isolation. 
48	The present proceeding is not comparable to those that illustrate the risk involved in an attempted isolation and preliminary hearing of one issue. The directions hearing on 30 January 2023, if it can be regarded as a preliminary hearing, involved no such risk. The issue of liability could be decided as it was because of the builder’s non-compliance with previous orders, without the need for any evidence going to the merits of the proceeding which might conflict with evidence given at a subsequent assessment of quantum.
49	In one Tribunal proceeding the presiding Deputy President expressed the view that, in order to afford procedural fairness to the party against whom summary determination has been made in the party’s absence, “once a proceeding is determined adversely the absent party must then be given a further opportunity to be heard on quantum, interest and costs and that appropriate order may be made for the hearing of those matters on some subsequent occasion.” The context shows that the Deputy President was speaking of a case where unliquidated damages were being sought.
50	In the present proceeding, the order made on 30 January 2023 afforded procedural fairness to the builder, which is able to contest the assessment of damages at a later hearing. That is another reason for the practice of making a summary determination of liability, when the circumstances allow and directing a later hearing for the assessment of damages.
Other matters
51	In the written submission the builder has criticised the reports of an expert witness that the applicant has filed and served and which go to the issue of liability. It is too late to make such criticism. The issue of liability has been decided.
52	Pursuant to the order made on 30 January 2023, and to the order made on 23 August 2023, the hearing for the assessment of damages has been fixed for 21 November 2023 before me.
53	What I have said in the previous paragraph is subject to any other order that may be made before or at the hearing on 21 November 2023.
Conclusion
54	There will be a finding that the Tribunal is not “functus officio” as a consequence of the order made on 30 January 2023 and an order that, subject to any other order, the hearing for assessment of damages will proceed as listed.

A Vassie
Senior Member