The Limitation of Actions Act 1958 (Vic) in VCAT Part 2

Justice Quigley, sitting as the President of VCAT, sitting with Deputy President Wilson confirmed on Friday that VCAT is bound by the decision of Lanigan v Circus Oz & Ors [2022] VSC 35, in which McDonald J held that proceedings in VCAT were not an ‘action’ for the purposes of s 5 of the Limitation of Actions Act 1958 (Vic)(Limitation Act).  

The President and Deputy President’s decision is available at Steedman v Greater Western Water Corporation[2023] VCAT 128. 

For a discussion of the earlier decision in Lanigan and its implications for the leasing community, refer to my earlier post here.

The upshot of the Tribunal’s recent decision in Steedman is that, in the absence of a successful appeal or a statutory amendment, limitation periods imposed by s 5 and other sections of the Limitation Act will not apply to proceedings in VCAT.

However, there was another interesting development in the decision.  The issue arose out of a claim for damages under s 157 of the Water Act 1989 (Vic).  In addition to holding that it was bound by the decision in Lanigan v Circus Oz & Ors [2022] VSC 35, the Tribunal held that the claim under the Water Act was neither: 

1. a claim in contact or tort for the purposes of the limitation period under sub-s 5(1)(a) of the Limitation Act (see paragraphs [99] to [111]);  or 
2. a claim for the recovery of any sum by virtue of an enactment for the purposes of sub-s 5(1)(d) of the Limitation Act (see paragraphs [112] to [117]).  

Critically, the Tribunal found that that a claim for compensation or damages under statute was not a claim for the recovery of a sum of money, so was not subject to a limitation limited even if the Limitation Act applied at VCAT.

I suspect that this is not the last we will hear on this topic.  In addition to finding that the Tribunal was bound by the decision in Lanigan, the President and Deputy President also indicated that they were inclined to the view that the limitation periods imposed by the Limitation Act do apply at VCAT, but that the Tribunal was bound the decision Lanigan until there was either a successful appeal or statutory intervention (see paragraph [78]). Consequently, practitioners should keep an eye out for either an appeal on this question or a statutory amendment.

In the meantime, I think the application of the Limitation Act is likely to affect only a small number of retail leasing disputes for the following reasons.

First, most leasing litigation starts with a landlord making a claim for rent arrears.  A claim for rent in a court usually has a 6 year limitation period under s 19 of the Limitation Act.  However, it is unusual for a landlord to allow rent arrears to accrue for more than 6 years before taking action, so the decision will not affect many rent cases.

Secondly, the issue is more likely to arise when a tenant seeks to press an old counterclaim as a way to defend a rent arrears claim.  However:

1. many counterclaims arise by operation of the lease deed which generally has a 15 year limitation period under s 5(3) of the Limitation Actions Act 1958 (Vic);
2. many counterclaims arise under the Australian Consumer Law (eg for pre-contractual misrepresentations or unconscionable conduct by the landlord).  The ACL usually has its own limitation periods that do not rely on the Limitation Act; and
3. other common counterclaims arise from alleged dilapidations to the leased premises.  However, these claims are generally brought under either or both of ss 52 and 54 of the RLA 2003.  Both of those sections take the form of an implied covenant in a retail premises lease, which probably has a 15 year limitation period.

Thirdly, the limitation periods from the Limitation Act may be applied in circumstances where one party to a retail tenancies dispute claims breach of an agreement to lease (as opposed the terms of a lease deed), or trespass, nuisance or other tort, either by the landlord or the tenant.  Although these types of claims are not unheard of in retail leasing disputes and would usually have a six-year limitation period under sub-s 5(1)(a) of the Limitation Act, they are quite rare.

Fourthly, it is unclear whether a claim for a retrospective rent review under either s 37 or sub-s 35(7) of the RLA 2003 would be construed as a claim for the recovery of a sum of money that would otherwise be limited by sub-s 5(1)(d) the Limitation Act.  It is difficult to see how it could in circumstances where the amount to be recovered or paid is not known until the rent review is completed.  However, so far as I am aware, the question currently untested.

Fifthly, it is also unclear whether a claim for restitution for land tax paid by mistake would otherwise have been limited by either sub-s 5(1)(a) or 5(1)(d) of the Limitation Act.  

In one sense, the claim is a claim for recovery of a sum of money under a statute, so would normally have a 6-year limitation under sub-s 5(1)(d) of the Limitation Act.

However, a claim for money had and received used to be treated by the courts as a form of implied contract wit a 6-year limitation period under sub-s 5(1)(a) of the Limitation Act.  A claim for money had and received is now based in restitution rather than contract, and the courts have applied the 6-year limitation period by analogy and because that limitation period was already established by precedent.  It is unclear whether this limitation would continue to be applied at VCAT in light of the decisions in Lanigan and Steedman.

No doubt, we will see these and new issues evolve from cases as they unfold. 

In the meantime, I will try to write a post on this blog about any significant developments in this area.