Applicant v Respondent

2 Notwithstanding that Mr Wilson has not appeared to resist the application for leave to appeal, I should not grant leave, or allow the appeal, unless I am satisfied that it is proper to do so.[1]

3 Ms Francis and Mr Wilson own adjoining properties in Caroline Street, South Yarra. Mr Wilson applied for a permit to do work at his property, Ms Francis objected to the grant of the permit, but, on 30 September 2020, the Stonnington City Council ('the Council') decided that it would grant a permit. In accordance with the usual practice, it issued a 'notice of decision to grant a permit' in which it stated that it would issue a permit if no appeal against the decision to grant a permit was lodged within 28 days with the Tribunal.

4 On 27 October 2020, which was within the 28 day time limit, Ms Francis lodged an objection application with the Tribunal. Her application, however, was expressed to be, and was in the form appropriate for, an application under s 87 or s 89 of the Planning and Environment Act 1987. That was the wrong form because that form and those sections relate to an application to cancel or to amend an existing permit by a person who was not given notice of the permit application or if there were a 'material mis-statement' in an application for a permit. Ms Francis should have brought an application under s 82 of the Planning and Environment Act 1987, which allows an objector to apply to the Tribunal for review of a decision of a responsible authority (in this case, the Council) to grant a permit. The application that Ms Francis made included a question as to whether she was 'asking for an order to stop development'. Ms Francis indicated that she was not_._

5 The Council issued the permit and Mr Wilson 'commenced working'. Had Ms Francis followed the processes for an application under s 82 of the Planning and Environment Act 1987, the Council would presumably have been notified of the application, and the matter would have been determined prior to the Council issuing the permits.

6 The Tribunal listed Ms Francis's application for a practice day hearing on 28 May 2021 (with 30 minutes allocated) and then for a hearing on 28 July 2021. For clarity, I will hereafter use the word 'proceeding' to refer to the application in the Tribunal. Shortly before 28 May 2021, Mr Wilson complained that he had not been served with the necessary information and submitted that the proceeding was 'misconceived' and was 'doomed to fail' including because it had been brought under the wrong provisions. At the practice day hearing on 28 May 2021, Ms Francis, through her counsel, accepted that the proceeding should have been brought under s 82 rather than s 89 of the Planning and Environment Act 1987 and applied, among other things, for an order under s 127 of the VCAT Act that the s 89 proceeding be 'converted' into a s 82 proceeding. The Member constituting the Tribunal adjourned the practice day hearing and invited written submissions. The practice day hearing was relisted for 9 July 2021 in order to determine Ms Francis's application to convert the proceeding to a proceeding under s 82 of the Planning and Environment Act 1987 and Mr Wilson's application summarily to dismiss the proceeding under s 75 of the VCAT Act.

7 On 9 July 2021, Ms Francis appeared with a different barrister. On 22 July 2021, the Tribunal published written reasons.[2] I have not been provided with a transcript of the proceedings but have proceeded on the basis that the description contained in the reasons of what occurred on 9 July 2021 is accurate. The reasons reveal that Ms Francis gave evidence and informed the Member that her previous barrister had made the application to amend without instructions, that she did not wish to amend, and that she had made a deliberate decision to bring her proceeding under s 89 of the Planning and Environment Act 1987.[3] Mr Wilson pursued his application for summary dismissal. The Member reserved.

(a) the Member refused to exercise her discretion to permit Ms Francis to amend the application to an application under s 82 because Ms Francis had made a deliberate and considered decision to apply instead under s 89 of the Planning and Environment Act 1987; and

(b) the Member summarily dismissed the proceeding because:

(i) Ms Francis had not established the criteria required to engage s 89 of the Planning and Environment Act 1987; and

(ii) the Tribunal had no jurisdiction to hear the application under s 89 of the Planning and Environment Act 1987 because the permit had not been issued at the time that that application was commenced.

9 In accordance with these reasons, on 22 July 2021, the Member summarily dismissed the proceeding and reserved costs. As noted above, Ms Francis does not apply for leave to appeal against the order that the proceeding be summarily dismissed.

10 Mr Wilson applied for indemnity costs fixed at $30,978.30, or alternatively for costs to be taxed on the County Court scale. Mr Wilson relied, among other things, on the finding that the proceeding was misconceived but was of potential seriousness to him as it sought the cancellation of his permit, the fact that Ms Francis had not provided material in a timely fashion, a 'Calderbank' offer made on 27 May 2021, that is, the day before the 28 May 2021 hearing, and on oral offers made on 9 July 2021. The Calderbank offer was that he would not seek costs if Ms Francis withdrew the proceeding. The oral offers were to accept costs in the sum of $15,000.

11 Ms Francis submitted, among other things, that it was reasonable in the circumstances for her to have commenced the proceeding under s 89 of the Planning and Environment Act 1987, the proceeding was commenced for 'genuine reasons', the merits of her complaints were not determined because the proceeding had been dismissed for procedural reasons, that she had good reasons for any delays in the provision of material, that the application for costs was late, and that costs should not be ordered in the Tribunal in any event.

12 The Member reserved. On 13 October 2021, the Member ordered Ms Francis to pay Mr Wilson's costs to be taxed in default of agreement on the County Court scale on the standard basis and published detailed reasons.[4] The reasons reveal that:

(a) the Member considered first whether it was fair to make a costs order against Ms Francis. The Member had regard to the provisions relating to costs set out in s 109 and in s 75(2) of the VCAT Act. Those provisions provide, in summary, that parties to a proceeding in VCAT should ordinarily bear their own costs and that costs should be ordered only if it is fair to do so. Having done so, the Member concluded that, on balance, 'the fair outcome' was that Ms Francis pay costs to Mr Wilson; and

(b) the Member then considered the basis upon which costs should be ordered. The Member was not prepared to orders costs on the indemnity basis because she was not satisfied that that there were the 'exceptional circumstances' present that would warrant costs on that basis, and so ordered costs on the standard basis.

13 The Member reached these conclusion without relying on the Calderbank offers made. The Member concluded that it was not unreasonable for Ms Francis not to have accepted those offers because they were made late and without providing reasons for which they should be accepted and because they required an effective capitulation.

14 Ms Francis filed a notice of appeal on 12 November 2021. On 19 April 2022, Ms Francis's then solicitor emailed to Mr Wilson's solicitor an outline of submissions of that date. On 21 July 2022, Ms Francis's then solicitor emailed to Mr Wilson's solicitor a proposed amended notice of appeal dated 18 July 2022 that, the email said, Ms Francis would seek leave to file. At that time, Ms Francis's solicitor also advised Mr Wilson's solicitor that the April 2022 submissions were addressed to the proposed amended notice of appeal. On 2 August 2022, Ms Francis filed an affidavit sworn by her then solicitor that deposed to these communications between him and Mr Wilson's solicitor and exhibited the proposed amended notice of appeal together with an email from Mr Wilson's solicitor dated 25 July 2022 in which he confirmed receipt of the proposed amended notice to appeal, stated that Mr Wilson neither consented not objected to its filing, and confirmed that Mr Wilson did not intend to participate in the appeal.

15 On 8 August 2022, Ms Francis's solicitor filed a notice that he was ceasing to act for Ms Francis.

16 It seems that the proposed amended notice of appeal has not, in fact, been filed. In the circumstances, however, I will treat the proposed amended notice of appeal dated 18 July 2022 as the relevant document upon which Ms Francis wishes to apply, and to make an order that it be treated as if filed. As noted above, in April 2022 Ms Francis's then solicitor filed a written submission addressed to that document. Since then, Ms Francis has, herself, filed a document headed 'Plaintiff's Submissions' on 30 May 2023, and a document headed 'Further Submissions' on 28 June 2023.

17 The former document contains some additional submissions that I propose to consider with the April 2022 submissions.

18 The June 2023 submissions asks the Court to refer question of costs back to VCAT and to stay the appeal pending a re-determination of costs by VCAT. The document asserted that the VCAT file indicated that 'a costs hearing should have occurred'. It was implicit in the application that Ms Francis had not had a proper opportunity to argue costs before VCAT. She did not file any affidavit material that established that she had not had a proper opportunity to argue costs and the affidavit material that she did file indicated that there was proper opportunity given to argue the question of costs. Further, VCAT has made its decision on costs and signed orders dealing with costs and those orders must take effect unless they are set aside on appeal. For these reasons, I am not prepared to stay the hearing of this appeal or to refer the matter of costs back to VCAT without first determining the appeal.

19 The amended notice of appeal is expressly limited to be an appeal 'against the costs order of the Victorian Civil and Administrative Tribunal made on 13 October 2021'.

D. Should leave to appeal be granted and if so should the appeal succeed?

20 Ordinarily, an application for leave to appeal is presented on the basis that if leave is given then the appeal will be heard at the same time. In this case, the notice of appeal states that Ms Francis is seeking leave to appeal, but also states that Ms Francis is seeking an order that VCAT's order be set aside. The April 2022 submissions asks this Court to 'grant leave to appeal and to allow the Appeal.' In the circumstances, I propose to treat this application, in the usual way, as both an application for leave to appeal and the hearing of the appeal (if leave be granted).

21 Ms Francis faces the difficulty that a decision whether or not to order costs and if so the basis upon which to order the costs involves the exercise of an 'absolute and unfettered discretion'[5] and it is only in exceptional cases that leave to appeal will be granted from that type of order.[6] Her position is made more difficult because it is not contended, and nor could it be, that the Member misdirected herself as to the costs principles that apply generally at the Tribunal as set out in ss 76(2) and 109 of the VCAT Act.

22 I note, also, that there is nothing in the Member's reasons that suggests that the costs order was intended to punish Ms Francis. Rather, the reasons reflect, speaking generally, the fact that costs may be ordered not to punish but to reflect the fact that they have been incurred and must fall on one side or the other, and that there are occasions when fairness requires that the costs of a party who has succeeded in a proceeding should be borne by the party who has failed in the proceeding.

The Tribunal erred in law in finding that the Plaintiff's VCAT Application P1921/2020 was misconceived while it was capable of amendment.

24 I do not consider it open to Ms Francis to challenge the costs order on this basis. Given that she is not seeking leave to appeal against the summary dismissal of her application, the question of costs must be determined on the basis that her application was properly dismissed.

25 In any event, in my view the Tribunal did not err in law in the way alleged. Ms Francis's application, in the form it was filed, was misconceived because it sought to have a planning permit cancelled when, at the time the proceeding was filed, no planning permit had been issued. Ms Francis commenced a proceeding under the wrong section of the Planning and Environment Act 1987. Indeed, so much was conceded by her before the Tribunal. The fact that a proceeding might later be amended is no answer to the proposition that, in its unamended state, it is misconceived. The fact that Ms Francis issued a proceeding relying on the wrong section of the Act is, self-evidently, a factor to which the Member was entitled to have regard when exercising her discretion as to costs.

The Tribunal failed to apply the correct legal test for considering whether Application P1921/2020 was able to be amended to one commenced under section 82 of the Planning and Environment Act 1989 (sic).

27 Again, I do not consider that it is open to Ms Francis to challenge the costs order on this basis. Given that she is not seeking leave to appeal against the refusal of her application to have the proceeding amended, the question of costs must be determined on the basis that her application to amend was properly dismissed.

28 In any event, I am not persuaded that the Member erred in law in her dismissal of Ms Francis's application to amend her proceeding. The Member, in deciding whether to permit an amendment, was exercising a discretion. The Member accepted Ms Francis's evidence that she made a deliberate decision to commence the proceeding under s 89 of the Planning and Environment Act 1987 and not under s 82 of that Act.[7] The Member relied on the fact that Ms Francis had made that decision in order to exercise the discretion against allowing the amendment.[8]

It was unreasonable for the tribunal to find the way the Plaintiff conducted her case resulted in more time being spent in practice day hearings and that her conduct unreasonably prolonged the time taken to complete the proceeding. It was also unreasonable in such circumstances for the Tribunal to require the Plaintiff to pay the Defendant's costs from the beginning of the proceeding.

30 I assume that the contention that the Member's conclusions were 'unreasonable' in these ways is a contention that the view taken was a view that no reasonable Tribunal could have taken[9] or that they lacked an evident and intelligible justification.[10]

31 I am not satisfied that it was not open to the Member to form the view she did or that the Member's conclusions were without an evident and intelligible justification. The Member concluded that Ms Francis did not provide Mr Wilson with her written material until the morning of the first practice day hearing, which meant that Mr Wilson was 'unable to fully prepare' for that hearing.[11] A second practice day hearing then had to be held in order to deal with issues that then arose. Also, the Member sat through, and listened, to the arguments put by Ms Francis over the two practice day hearings. It was apparent that there was a need for clarification from Ms Francis as to why she issued the proceeding she did and whether or why she sought to amend it.

32 The second part of the ground of appeal assumes that the Member's decision to impose costs from the beginning of the proceeding arose only because of the findings referred to in the first part of the ground of appeal. But that is not so. When deciding what was a fair order to make, the Member also relied on the fact that Ms Francis had issued a proceeding that was misconceived. In those circumstances, once it was decided that costs should be ordered, it was open to the Member to order costs from the beginning of the proceeding.

The Tribunal erred in law in finding the need for a permit holder to defend his permit against an application under section 89 of the Planning and Environment Act was sufficient to justify a cost order being made against the Plaintiff under section 75(2) of the Victorian Civil and Administrative Tribunal Act 1998, without any finding of frivolous or vexatious conduct, commercial gain seeking, abuse of process or similar ill-motive on the part of the plaintiff.

34 This ground of appeal assumes that a costs order may not be made unless a party has engaged in frivolous or vexatious conduct, commercial gain seeking, abuse of process or similar ill-motive. There is no legal principle that costs may only be ordered against a party in those circumstances. The question must ultimately be, as the Member noted, whether, in all the circumstances, it is fair to order costs. That was the test that the Member applied. In making this assessment, the effect on Mr Wilson was obviously relevant. The Member did not, however, decide that it was fair to order costs only for that reason, but properly had regard to all the circumstances. Accordingly, this ground of appeal is not made out.

The Tribunal erred in law by failing to take into consideration submissions and evidence put to it including an expert report supporting heritage arguments, that the Plaintiff had legitimate planning concerns to raise against the issue of planning permit 454/2020.

36 The Member did not, when determining costs, err in law by failing to consider whether Ms Francis had 'legitimate planning concerns to raise'. This is because the issue as to costs arose only once the Member had determined not to allow any application for an amendment and had decided summarily to dismiss the proceeding.

37 Accordingly, it was open to the Member to limit her considerations to the circumstances that gave rise to the orders that she made in the proceeding and to the conduct of the proceeding before her generally.

The Tribunal erred in law in failing to take into consideration the unusual circumstances facing the Plaintiff at the time she had to lodge her application, and the inordinate and unexplained delay of the Tribunal between 27 October 2020 and 3 May 2021 in issuing and processing it; which delay effectively rendered her efforts to challenge the issue of planning permit 4534/2020 futile (sic).

39 The 'unusual circumstances' referred to is the fact that Ms Francis made her application during the COVID-19 pandemic and so was required to operate 'on-line', and that she had difficulty communicating with the Tribunal.

40 It was not shown by Ms Francis that those difficulties led to the difficulties that arose with the proceeding. On the contrary, Ms Francis contended that the proceeding she issued was not issued by mistake, and it was not said that it was issued out of time. Equally, the 'delay' of the Tribunal between October 2020 and May 2021 is to be seen in a context where the proceeding issued was not a proceeding to stop a permit from being issued, which application might be thought to have been urgently communicated to the Council, but was an application to cancel a permit that had already been issued, and which was not said to include an application to cease works being done pursuant to that permit.

41 I will order that the amended notice of appeal dated 18 July 2022 be treated as if filed.

43 The usual order would be that the costs of this proceeding follow the event and that the applicant pay the respondent's costs of the application to be taxed in default of agreement on the standard basis. If either party seeks an order other than that, I direct that party to file and serve a written submission on costs not exceeding three pages on or before 4pm on 21 July 2023, and, if the order sought is opposed, I direct the other party to file and serve a written submission on costs not exceeding three pages on or before 4pm on 26 July 2023. If no submissions are received by 4pm on 21 July 2023, I will make an order that the applicant pay the respondent's costs to be taxed in default of agreement on the standard basis. If submissions are received, I will determine the issue of costs on the papers and notify the parties of my decision in due course.

[1] See, eg, Telstra Corporation Ltd v Minister for Broadband, Communications and the Digital Economy (2008) 166 FCR 64, 74-75 [40], 77 [51] (French, Weinberg and Greenwood JJ); Newton v Geelong Ethnic Communities Council Inc [2011] VSCA 59, [16]-[17] (Weinberg JA); Melbourne Water Corporation v Caligiuri (2020) 60 VR 462, 468-469 [19] (Whelan, Niall and Emerton JJA).

[2] Francis v Stonnington CC [2021] VCAT 804.

[4] Francis v Stonnington CC (Costs) [2021] VCAT 1192.

[5] Gray v State of Victoria [2000] VSC 342, [14] (Beach J).

[6] 24 Hour Fitness Pty Ltd v W & B Investment Group Pty Ltd [2015] VSCA 216, [53] (Hansen, Ferguson and McLeish JJA).

[7] Francis v Stonnington CC [2021] VCAT 804, [44].

[9] Minister for Immigration and Citizenship v Li [2012] HCA 61; (2013) 249 CLR 332, 347 [22], 350 [28] (French CJ), 376 [108] (Gageler J).

[10] Ibid 367 [76] (Hayne, Kiefel and Bell JJ).

[11] Francis v Stonnington CC (Costs) [2021] VCAT 1192, [24(a)(ii)].