When VCAT Isn’t an Option: The Interstate Respondent Problem

When VCAT Isn’t an Option: The Interstate Respondent Problem

It’s an easy mistake to make.

You have what looks like a straightforward claim. It fits within VCAT’s usual jurisdiction, so you prepare and file your application. Only afterwards do you realise the respondent is based outside Victoria.

At that point, the real issue is no longer the strength of your claim. It is whether VCAT can hear it at all.

The Constitutional Catch

Where a dispute is between residents of different States, it falls within federal jurisdiction under section 75(iv) of the Constitution. That matters because only courts that meet the requirements of Chapter III can exercise that jurisdiction.

VCAT is not one of them.

That position was confirmed in Burns v Corbett (2018) 265 CLR 304; 353 ALR 386; 92 ALJR 423; [2018] HCA 15. The High Court made it clear that State tribunals cannot determine matters that fall within federal jurisdiction.

The effect is subtle but significant. A claim that would ordinarily proceed in VCAT may become constitutionally incapable of being heard there, simply because one party is interstate.

Why VCAT Cannot Hear These Matters

The answer lies in institutional independence.

Courts exercising federal judicial power must meet strict constitutional standards. Those standards include security of tenure and independence from the executive.

VCAT does not meet that threshold. Its members are appointed for fixed terms and may be reappointed, creating a structure that does not provide the level of independence required of a Chapter III court.

This was reinforced in Meringnage v Interstate Enterprises Pty Ltd (2020) 386 ALR 588, where the Court of Appeal confirmed that VCAT is not a “Court of a State”.

Earlier authority, including Director of Housing v Sudi, also emphasises the limits of VCAT’s role. As an administrative tribunal, it has no inherent jurisdiction and cannot exercise powers reserved to courts, including broader forms of judicial review or collateral challenge.

Taken together, these decisions draw a clear boundary around what VCAT can and cannot do.

The Practical Consequence

The practical outcome is often unexpected.

A dispute that would ordinarily be brought in VCAT, whether a building claim, consumer dispute or residential matter, may fall outside its jurisdiction simply because one party is located interstate.

The claim itself remains intact. But the forum disappears.

Where the Matter Goes Instead

To address this gap, legislative amendments introduced a pathway to the Magistrates’ Court.

Where a matter would otherwise have been brought in VCAT but involves federal subject matter, it can instead be commenced in the Magistrates’ Court. That court has the constitutional status required to determine the dispute.

Why It Matters

The lesson is a practical one.

Jurisdiction is not just about the nature of the dispute. It also turns on who the parties are.

Before commencing proceedings, it is worth checking whether any party is based outside Victoria. If so, what appears to be a routine VCAT matter may need to start somewhere entirely different.

This article was first published on March 31, 2026 and was written by Julia Moroz, Partner and Brodie Dyer, Solicitor in our Melbourne office.

© Bugden Allen Group Legal Pty Ltd. This is general information only and not legal advice. You should not rely on this information without seeking legal advice tailored to your specific circumstances.