Applicants v Respondents

Supreme Court of Victoria|2013-02-08|Before: EMERTON J

COSTS - Appeal against costs order made by the Victorian Civil and Administrative Tribunal - Whether proceeding was brought vexatiously - Whether joined parties can be liable for costs incurred before joined to the proceeding - Whether the Tribunal can take into account other proceedings when considering whether the proceeding was brought vexatiously - Whether the Tribunal was required to fix the amount of costs - Planning and Environment Act 1987 (Vic) s 150(4) - Victorian Civil and Administrative Tribunal Act 1998 (Vic) s 109.

1 The applicants seek leave to appeal under s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (the 'VCAT Act') against a costs order made by the Victorian Civil and Administrative Tribunal on 29 December 2011. The Tribunal's order was made in respect of an enforcement proceeding brought under s 114 of the Planning and Environment Act 1987 (Vic) (the 'enforcement proceeding'), which concerned the re-opening of a quarry in rural Victoria beside land in which the applicants have an interest. The application made in the enforcement proceeding was unsuccessful.[1]

2 By the costs order, awards of costs were made in favour of the responsible authority, Baw Baw Shire Council, and in favour of the quarry owners and operators, Casacir Pty Ltd, Mr David Jeffrey and Mr Thomas Curnow (the 'quarry parties').

3 The enforcement proceeding was originally commenced in September 2009 by the first applicant, Country Endeavours Pty Ltd, as the lessee of land adjoining the quarry. Country Endeavours is controlled by the third and fourth applicants, Mr and Mrs Giles.[2] Mr and Mrs Giles also control the second applicant, Shapher Pty Ltd,[3] which is the legal owner of the land adjoining the quarry (which I will refer to as the 'Giles land').

4 On 17 May 2010, the Tribunal ordered Shapher, Mrs Giles and Mr Giles to be joined as parties to the enforcement proceeding.

5 Because the proposed grounds of appeal make a distinction between the position of Country Endeavours, the original applicant in the enforcement proceeding, and the position of the parties that were subsequently joined by order of the Tribunal, I shall refer to Shapher, and Mr and Mrs Giles as the 'joined parties'.

6 The Council was apparently initially named as a party to the enforcement proceeding, but it was not so named in a subsequent amendment to the application. Although the Council appeared at the hearing to make brief submissions in its capacity as the responsible authority under the Planning & Environment Act, it was not treated by the Tribunal as a party to the enforcement proceeding.

7 The enforcement proceeding was heard by the Tribunal over four days in late November 2010. On 7 February 2011, the Tribunal dismissed the application and declined to make an enforcement order. Subsequently, after extensive argument and submissions by and on behalf of the parties to the enforcement proceeding and the Council, the Tribunal made the costs order that is the subject of this appeal. Country Endeavours and the joined parties were ordered to pay the costs of the quarry parties and the Council.

8 The costs order against which the applicants seek leave to appeal is in the following form:

Country Endeavours Pty Ltd, Shapher Pty Ltd, Virginia Ann Giles and John David Giles are ordered, jointly and severally, to pay the costs of the Responsible Authority and of Casacir Pty Ltd, David Jeffrey and Thomas Curnow of and in relation to this enforcement order proceeding, such costs to be agreed between the parties or in default of such agreement, to be taxed by the Costs Court on a party versus party basis and on the County Court scale 'D' for costs incurred whilst that scale was applicable and thereafter on the basis of the applicable County Court Scale including:

(a) 50% of counsel's fees for the practice day hearing on 12 February 2010;

(b) the costs of mediation conducted on 30 August 2010;

(c) the costs of the preliminary hearing held on 8 September 2010;

(d) the costs of the further mediation of 23 September 2010;

(e) the costs of the full hearing of this matter; and

(f) the costs of the application for costs heard on 13 December 2011...

9 The costs order in favour of the Council was expressed to be made under s 150(4) of the Planning & Environment Act; the costs order in favour of the quarry parties was expressed to be made under both s 150(4) of the Planning & Environment Act and s 109 of the VCAT Act.

10 Section 150(4) of the Planning & Environment Act provides:

(4) If any proceedings are brought before the Tribunal under this Act and the Tribunal is satisfied that -

(a) the proceedings have been brought vexatiously or frivolously or primarily to secure or maintain a direct or indirect commercial advantage for the person who brought the proceedings; and

(b) any other person has suffered loss or damage as a result of the proceedings -

the Tribunal may order the person who brought the proceedings to pay to that other person an amount assessed by the Tribunal as compensation for the loss or damage and an amount for costs.

11 Section 150(4) therefore enables the Tribunal to order a person to pay to another person amounts for compensation and for costs incurred by the second person where the Tribunal is satisfied that the first person brought proceedings vexatiously or frivolously or primarily to secure or maintain a direct or indirect commercial advantage and that the second person has suffered loss or damage as a result of the proceedings. The second person need not be a party to the proceedings. By implication, however, the first person will have been a party to the proceedings, having brought the proceedings for one or more of the purposes described.

12 Section 109 of the VCAT Act provides for costs orders to be made as between parties to a proceeding. Sub-section (1) states the general rule in the Tribunal that each party is to bear his or her own costs in a proceeding. However, sub-s (2) provides that, at any time, the Tribunal may order a party to pay all or specified costs of another party to the proceeding. Sub-section (3) provides that the Tribunal may make an order under sub-s (2) only if it is satisfied that it is fair to do so, having regard to -

(a) whether a party has conducted the proceeding in a way that unnecessarily disadvantaged another party to the proceeding by conduct such as -

...

(vi) vexatiously conducting the proceeding;

(b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceeding;

(c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law;

(d) the nature and complexity of the proceeding;

(e) any other matter the Tribunal considers relevant.

13 The Tribunal's reasons for its decision to award costs in favour of the Council and the quarry parties are lengthy.[4] They focus largely on the conduct of Mrs Giles in her prosecution of the enforcement proceeding and a number of other proceedings brought in opposition to the re-opening of the quarry. The Tribunal described the enforcement proceeding as the 'culmination' of a series of proceedings brought in the Tribunal by Mrs Giles and/or Country Endeavours arising from Casacir's project to open the dormant quarry immediately to the north of the Giles land. Despite strong opposition from Mrs Giles and others, the Council granted a permit for the quarry. The Council's decision was the subject of a (14 day) review by the Tribunal following which the Tribunal confirmed the Council's decision and ordered that a permit issue. Mrs Giles and Country Endeavours then brought a series of further proceedings in opposition to the quarry.

14 These 'other proceedings' are described in the affidavit of Virginia Anne Giles sworn on 31 January 2012 as follows:

(a) an application under s 89 of the Planning & Environment Act to cancel or amend a permit;

(b) an application under s 89 of the Planning & Environment Act for a stop work order;

(d) an application under s 126 of the VCAT Act for an order to extend time within which to commence a proceeding under s 83(1)(b) of the Water Act to review the decision to grant Casacir a licence to construct works on a waterway; and

(e) a claim for damages under ss 15 and 16 of the Water Act and for an injunction pursuant to s 19(3) of the Water Act and s 123 of the VCAT Act.

15 In relation to this course of events, the Tribunal observed:

It is quite obvious from subsequent history, and subsequent proceedings, that Mrs Giles was bitterly disappointed with the result of her review before the Tribunal. She has not accepted the decision of the Tribunal to grant the permit and she has since instituted a series of proceedings aimed at reversing or frustrating the result. These subsequent proceedings may have had their ostensible purposes but when the whole series is reviewed in detail it emerges that, underlying any ostensible motives there has been this ulterior motive of reversing and frustrating the decision of the Tribunal in the initial case. This strategy has included attempts to recontest issues determined by the Tribunal. It has also included attempts to prevent, frustrate or at least delay Casacir in seeking to act on the permit granted to it.[5]

16 The Tribunal went on to tally the various proceedings, determinations and interim determinations that had been brought or made based on Mrs Giles' objection to the reopening of the quarry. The Tribunal said:

For the purposes of considering this current costs application I have reviewed the various determinations (interim and final) given by the Tribunal in relation to Casacir's quarry proposal, and I have re-read the reasons that I have given in the determinations and interim determinations that I have made, including the determination of the enforcement application where I sat with Mr Potts.[6]

17 The Tribunal observed that Mrs Giles and Country Endeavours had not been successful in any of these proceedings and expressed the view that some of them were unwarranted and unjustified.[7] It found that the other proceedings, together with the enforcement proceeding, formed a pattern of proceedings 'clearly' designed to frustrate Casacir. The Tribunal member continued:

I have concluded that the enforcement application is a vexatious proceeding. That conclusion is reinforced where the proceeding emerges as part of a campaign of unwarranted proceedings aimed at what is an ulterior purpose so far as the enforcement application is concerned.[8]

18 Having recited the central proposition that under s 109(2) of the VCAT Act, the Tribunal may only make costs orders against a party if it is satisfied that it is fair to do so, the Tribunal considered the various matters to be taken into account under s 109(3). The Tribunal referred to the lack of merit of the other proceedings, together with the existence of previous orders for costs, and warnings, both explicit and implicit, about bringing unwarranted proceedings. It observed that it was also relevant whether a party had conducted a proceeding in a way that unnecessarily disadvantaged another party, including conducting a proceeding vexatiously.[9] The Tribunal found that in this case, the initial enforcement application and supporting material disadvantaged the other parties and the Tribunal. It found that the application and supporting materials were so prolix, confusing and oppressive as to be unmanageable and said that it was 'entirely unsatisfactory' to present the Tribunal and the parties with a large volume of material and 'expect them to try and work through it to see if the applicant really had a case and what its nature might be'.[10]

19 The Tribunal also concluded that the enforcement application had the appearance of 'fishing with a broad casting net with reliance sought to be made on anything and everything dragged up thereby.'[11] The scope of the proceeding 'in concept and conduct' was not limited to any 'real actual problem', whether public or private.[12]

20 The Tribunal referred to s 109(3)(c) and concluded that, in this case, the strength of the claims made in the enforcement order application had ultimately proved to be very weak, unjustified or insufficiently investigated or understood to warrant the making or maintaining of the application.[13]

21 The Tribunal expressed itself to be satisfied, in all the circumstances, that the enforcement application was brought for an ulterior purpose, namely, to frustrate Casacir's attempts to act on the permit and re-establish the quarry.[14]

22 In expressing itself to be satisfied that the application and its prosecution were vexatious in the sense that they were made for an ulterior purpose, the Tribunal said:

There is no doubt that Mrs Giles has attempted, by the use of these and other proceedings to prevent or dissuade Casacir from proceeding with the reopening of the quarry. She has also harassed the Responsible Authority with the view to inducing support for her campaign in that respect. She has pursued that along with a further ulterior motive of seeking to induce Casacir to buy out her property and that of neighbours on what I take to be favourable terms. This is not to suggest that she would not be content with mere defeat of the project. However, the course of correspondence disclosed in relation to the enforcement application is aggressive to the point of being threatening. Dr Sadler submitted that is not illegal to offer to sell land on favourable terms to the seller. That, no doubt, is true. To seek to induce abandonment of a lawful project with the alternative of buying out property on favourable terms are purposes ulterior to the purposes to which the enforcement provisions are included in the PE Act.[15]

...taken as a whole, I am satisfied that this proceeding was not warranted, was misconceived in significant aspects and generally, lacks substance and was vexatious. It was unwarranted in the circumstances and should not have been brought. I consider that it is appropriate, both in relation to section 109 of the VCAT Act and section 150(4) of the PE Act to make orders for costs in favour of Casacir. Section 150(4) enables the Tribunal to make orders for costs and other remedies where proceedings have been brought vexatiously or frivolously.[16]

24 These matters are reflected in the Tribunal's substantive decision. In the Enforcement Reasons, the Tribunal recorded that once the permit was granted to re-open the quarry, Mrs Giles, in her own name and through the companies with which she was associated, continued to oppose the quarry project and commenced a number of different proceedings in the Tribunal which 'by her own admission had been aimed at opposing or frustrating the Casacir project in various ways'.[17] The enforcement application was the latest in that series.[18] The Tribunal also noted that the responsible authority had not commenced any enforcement proceedings and did not support the enforcement proceedings brought by Country Endeavours. Indeed, it was opposed to them and considered them to be unnecessary and unwarranted.[19] Two other authorities with responsibilities in relation to the re-opening of the quarry were also satisfied with the conduct of Casacir and neither of them supported Country Endeavours in its application for an enforcement order.[20]

25 In a lengthy section headed 'Background to this application', the Tribunal set out in large part the contents of letters written by Mrs Giles in 2006, 2007 and 2009 to one or more of the quarry parties, spelling out her opposition to the quarry and what she proposed to do to prevent its re-opening and operation in the future. In these letters, Mrs Giles placed significant emphasis on the proceedings that she proposed to bring, the complexity and expense of those proceedings for Casacir, and the fact that she and Mr Giles were 'prepared and ready for a long and tedious process: council, VCAT, courts, ... all closely followed by the media.'[21] In one or more of these letters, Mrs Giles also attempted to persuade Casacir to purchase the Giles land and surrounding land at nominated prices.

(a) Mrs Giles produced very large quantities of detailed information without being discriminating as to what was relevant and what was important. She paid no attention to the desirability of eliminating things that had been remedied and she was dependent on her own interpretation of the law, the permit conditions and the facts. Her observations, perceptions, interpretations and guesswork had sometimes been faulty; and

(b) Mrs Giles' strategy included fishing for things not known at the time the proceeding was commenced.[22] In prosecuting the enforcement proceeding, Mrs Giles searched for evidence and for opportunities to complain that would not have occurred to a person limiting their interests to actual problems.[23]

27 As a result, the Tribunal said that it was confronted with a proceeding that reached far and wide in its scope and it had been obliged to consider carefully whether any and which of the concerns had substance and might warrant the making of an enforcement order.[24]

28 The grounds of appeal are divided into four sections which challenge respectively the part or parts of the Tribunal's order by which:

(a) the joined parties were ordered to pay the costs of the Council;

(b) Country Endeavours was ordered to pay the costs of the Council;

(d) the joined parties were ordered to pay the costs of the quarry parties.

29 The first two categories raise the question of the proper construction of s 150(4) of the Planning & Environment Act, which enables the Tribunal to award compensation and order the payment of costs to a non-party as well as a party. The third and fourth categories concern the award of costs to the quarry parties, which was made principally under s 109 of the VCAT Act, but also under s 150(4) of the Planning & Environment Act.

30 The applicants' proposed notice of appeal is defective in that it identifies no questions of law as required by r 4.11(1)(b)(iv) of Chapter II of the Supreme Court (Miscellaneous Civil Proceedings) Rules 2008, but contains only lengthy and often repetitive grounds of appeal. However, in oral submissions, counsel for the applicants identified three questions of law as follows:

(a) the correct interpretation of s 150(4) of the Planning & Environment Act;

(b) whether the Tribunal erred in taking into account irrelevant considerations, namely the existence of other proceedings brought by the applicants against the quarry; and

31 The challenge to the Tribunal's order awarding costs to the Council under s 150(4) of the Planning & Environment Act is based on the following grounds:

(a) the joined parties were not the person or persons who 'brought' the enforcement proceeding;

(b) there was no evidence that the enforcement proceeding was brought vexatiously;

(c) the Tribunal, in reaching the conclusion that the proceeding was brought vexatiously, was not entitled to take into account the commencement and prosecution of other proceedings against Casacir or, more generally the commencement and prosecution of other proceedings which were not relevantly in issue before the Tribunal;

(d) it was manifestly unreasonable or illogical for the Tribunal to find that the enforcement proceeding had been brought vexatiously; and

(e) the Tribunal was not empowered under s 150(4) of the Planning & Environment Act to refer the question of the quantum of compensation or costs to another body for determination.

32 The challenge to the award of costs to the quarry parties under both s 150(4) of the Planning & Environment Act and s 109 of the VCAT Act is based on similar grounds, namely that:

(a) it was not open to the Tribunal to find that the enforcement proceeding was brought vexatiously;

(b) it was manifestly unreasonable or illogical for the Tribunal to find that the enforcement proceeding had been brought vexatiously; and

(c) the Tribunal, in reaching the conclusion that the proceeding was brought vexatiously, was not entitled to take into account the commencement and prosecution of other proceedings by Country Endeavours against Casacir, the commencement and prosecution of other proceedings against Casacir by persons other than the joined parties, the commencement and prosecution of other proceedings against Casacir and not the responsible authority, and the commencement and prosecution of other proceedings which were not relevantly in issue before the Tribunal.

33 In respect of the order that the joined parties pay the costs of the quarry parties, it is further contended that the Tribunal erred in respect of costs incurred prior to the date the joined parties were joined to the proceeding.

34 Generally speaking, costs orders are discretionary orders to which the principle in House v R[25] applies, so that in the absence of an error of principle, an appeal can only succeed if the court or tribunal has acted on a clearly erroneous view of the facts or the order is clearly unreasonable. This is a high threshold.[26]

35 Although s 109 of the VCAT Act is more prescriptive than the broad discretionary power given to the Court by s 24(1) of the Supreme Court Act 1986 (Vic), it nonetheless confers a broad discretion once the Tribunal has satisfied itself that it is fair to make an award of costs, having regard to the matters specified in s 109(3). In Transport Accident Commission v O'Reilly,[27] the Court of Appeal said of s 50(2) of the Administrative Appeals Tribunal Act 1984 (Vic), which also contained a 'prerequisite' to the exercise of the power to award costs, as follows:

Section 50(2) imposes a prerequisite to the exercise of the power that it confers, namely that the tribunal should be satisfied that there are circumstances justifying a party's receiving an order for costs rather than bearing its own. I derive from s 50(2) ... no inhibition, however, in the exercise of the power. That is to say, if and when the tribunal makes an order for costs under s 50(2) - the prerequisite to the exercise of the power having been met - the exercise carries a wide discretion.[28]

36 It is well established that a court sitting on appeal will not readily interfere with the exercise of the discretion to award costs by the court or tribunal below unless there are strong reasons to do so.[29] This is because the decision-maker below is better placed to determine the question of costs as they have a greater familiarity with the facts, having heard all of the evidence and seen the manner in which the trial was conducted.[30] The test to be applied is not whether the court on appeal would make the same order as the decision-maker below, but whether it was reasonably open for the decision-maker below to make the order that it did.[31]

37 The award of costs in favour of the quarry parties was made under s 109 of the VCAT Act.

38 The applicants submit that to the extent that the Tribunal relied upon s 109(2) of the VCAT Act, it found, not that the proceeding was conducted vexatiously, but rather that the proceeding itself was vexatious. This enabled the costs order to be made having regard to s 109(3)(e): 'any other matter the Tribunal considers relevant'.

39 The applicants contend that it is unreasonable and irrational to lay the responsibility for bringing a vexatious proceeding at the feet of the joined parties, because they were joined late in the proceeding and against their wishes. It was not open to the Tribunal to make the joined parties responsible for bringing the proceeding, whether the proceeding was vexatious or not. Moreover, it could not logically be said that the joined parties demonstrated any purpose in bringing the proceeding, as they opposed being joined. The motive for bringing the proceeding, as opposed to the manner in which the proceeding is conducted, defines whether the proceeding is vexatious and there was no evidence of any particular motive by any of the joined parties.

40 Further, the applicants submit that the 'other proceedings' that the Tribunal took into account in determining that the enforcement proceeding was brought for an ulterior purpose, were not relevant, and the Tribunal was not entitled to have regard to them when deciding whether a costs order should be made against them in the enforcement proceeding. The purpose of the enforcement proceeding and the conduct of that proceeding had to be separately assessed.

41 In respect of the 'other proceedings', the applicants submitted that:

(a) each of the other proceedings, save for the 'cancellation' and 'stop work' applications, were commenced after the enforcement proceeding had been commenced;

(b) Shapher and Mr Giles played no role at all in bringing the enforcement proceeding or any of the other proceedings;

(d) some of the other proceedings did not involve the responsible authority at all (for example, the proceedings brought under the Water Act), yet they were relied upon to support an order for costs in favour of the responsible authority.

42 Finally, the applicants say that the enforcement proceeding was commenced as a result of a recommendation by the Tribunal member that alleged failures to comply with permit conditions be removed from the cancellation proceedings and that a new enforcement application be made. In bringing the enforcement proceeding, Country Endeavours simply did what had been suggested by the Tribunal.

43 In my view, the applicants' focus on whether or not the joined parties commenced the enforcement proceeding and whether the enforcement proceeding was commenced vexatiously is misplaced. The Tribunal based its costs order on the conduct of the applicants more generally, having regard to the matters in paragraphs (a), (c) and (e) of s 109(3) of the VCAT Act, including the way in which the enforcement proceeding was conducted and whether it was unwarranted, misconceived or lacking in substance.

44 Hence, the Tribunal found, among other things, that the applicants' supporting material disadvantaged the other parties and the Tribunal, that the presentation of the case before the Tribunal involved a fishing exercise, and the claims advanced in support of an enforcement order lacked merit.[32] The Tribunal concluded that that the claims were weak, and that they were unjustified or insufficiently investigated or understood to warrant the making or maintaining of the application.[33]

45 On a fair reading of the Tribunal's reasons, therefore, the costs order made under s 109 of the VCAT Act was made for a range of reasons and not simply because the proceeding was commenced for purposes that the Tribunal considered to be vexatious. The matters relating to the conduct of the enforcement proceeding and its lack of substance referred to above provided a basis on which the Tribunal could reasonably form the view that it was fair to make a costs order against the applicants, including the joined parties.

46 Furthermore, it is highly artificial to treat the joined parties as entirely divorced from the commencement of the enforcement proceeding. Mrs Giles wrote to the quarry parties in August 2006 and April 2007 on behalf of herself and Mr Giles[34] to make it clear that the quarry proposal threatened their retirement plans, that she and Mr Giles had 'rights' and that she would fight the quarry proposal by going to 'whatever means I can legally go'. Country Endeavours was subsequently used as the vehicle for the exercise of those rights.

47 Although there was limited argument about the merits of the joinder of the joined parties, it is tolerably clear that the Tribunal joined Mrs and Mr Giles and Shapher as parties to the enforcement proceeding not only because it was desirable that they be bound by the Tribunal's decision, but also because they would become liable pay costs, if it was fair for such an order to be made. Rather than making an order for security for costs against Mr and Mrs Giles, the Tribunal decided that it would order that they be joined as parties.

48 Unsurprisingly, given the nature of the threats made by Mrs Giles to use legal processes to generate delay and costs for the quarry parties, the joined parties strongly resisted being joined. However, there has been no challenge to the Tribunal's decision to join the joined parties to the proceeding. Once they became parties, the Tribunal was able to look to the joined parties to pay the respondents' costs of the enforcement proceeding if it was satisfied that it was fair to do so.

49 In my view, there was evidence upon which the Tribunal could find that the enforcement proceeding was brought for an ulterior purpose and was vexatious. The correspondence referred to by the Tribunal, apparently authored by Mrs Giles, expressed her intention (and that of Mr Giles) to bring proceedings in any number of forums in order to dissuade the quarry parties from re-opening the quarry or, alternatively, in order to persuade the quarry parties to buy them out at the price that they had nominated.

50 Moreover, in considering whether the enforcement proceeding was brought for an ulterior purpose, the Tribunal was entitled to look to matters outside of the enforcement proceeding itself, including the number and nature of other proceedings brought, in effect, by Mr and Mrs Giles to prevent the re-opening of the quarry. The existence of the 'other proceedings', which were also identified as lacking substance or merit, was relevant to the purpose for which the enforcement proceeding was prosecuted.

51 It is important to bear in mind that the Tribunal's inquiry into the 'other proceedings' took place in the context of its finding that the enforcement proceeding itself lacked substance, and was misconceived and unwarranted. Had the enforcement proceeding had some merit, it may have been more difficult for the Tribunal to make an award of costs having regard to the conduct of other, albeit related, proceedings. However, the finding that the enforcement proceeding lacked merit, combined with the existence of the other unmeritorious proceedings, formed a basis upon which the Tribunal could reasonably conclude that the enforcement proceeding was brought for the ulterior purpose of frustrating the permit and preventing the re-opening of the quarry by causing expense and delay.

52 In this context, it matters not whether the 'other proceedings' were commenced before or after the enforcement proceeding. They form part of a larger picture involving the use of legal proceedings to cause delays and expense to the quarry operators in the hope that they might abandon the project or, alternatively, buy out the surrounding landholders.

53 The argument that the enforcement proceeding could not have been brought for an ulterior purpose because it was brought on the recommendation or suggestion of the Tribunal has no substance. When Country Endeavours brought proceedings seeking the cancellation of the permit because of alleged breaches of permit conditions, the Tribunal did no more than to point out that alleged breaches of permit conditions were usually the subject of enforcement rather than cancellation proceedings, at least initially. At no point did the Tribunal invite the applicants to bring a proceeding that had no merit.

54 I do not accept the argument that it was not was open to the Tribunal to find that the joined parties brought the enforcement proceeding for an ulterior purpose, because none of them was named as an applicant when the proceeding was instituted. Although the joined parties were unwillingly joined as applicants some time after the enforcement proceeding was instituted by Country Endeavours, the Tribunal was entitled to proceed on the basis that Mrs Giles was the person principally prosecuting the proceeding, and that she did so on behalf of Country Endeavours and the other joined parties. The original applicant, Country Endeavours, and the superannuation trustee, Shapher, were not capable of commencing or prosecuting the enforcement proceeding independently of their directing mind or minds, those of Mrs and Mr Giles.

55 In any event, as discussed, the award of costs against the joined parties was open on the basis of the way in which the enforcement proceeding was conducted. According to the Tribunal, it was Mrs Giles who produced material that was voluminous and disorganised, who entered the quarry land without permission in order to gather evidence and who generally embarked on a 'fishing expedition' in an attempt to find problems with the quarry.

56 In this regard, I note that although the joined parties resisted being joined to the enforcement proceeding, counsel for Country Endeavours is recorded as having appeared for them at the hearing and to have made submissions and led evidence on their behalf. The joined parties did not choose to simply abide the decision of the Tribunal. Plainly, Mrs Giles in particular played an active and important role in the preparation for and at the hearing of the proceeding: the enforcement proceeding and the 'other proceedings' appear to have been driven by her resolute opposition to the re-opening of the quarry and determination to see the project abandoned. There is no indication that Mr Giles took a different view of the matter or in any way attempted to curtail or moderate Mrs Giles' use of legal processes to achieve her objective.

57 The discretion to award costs against parties under s 109 of the VCAT Act is a broad one. The Tribunal must be satisfied that it is fair to do so. Although s 109(3) requires regard to be had to certain matters, they are broad in nature and include 'any matter the Tribunal considers relevant'. The joined parties were joined in the proceeding having regard to the fact that they had a real interest in its outcome and ought to be bound by the orders of the Tribunal. Once joined, the Tribunal could have regard to their role in the proceeding to determine whether it was fair to make costs orders against them under s 109 of the VCAT Act.

58 There is nothing to be made of the fact that some of the costs that the joined parties have been ordered to pay were incurred before they were joined as parties. Once they were joined as parties, they became amenable to costs orders under s 109 of the VCAT Act. The Tribunal was empowered to make costs orders against them if satisfied that it was fair to do so. That power is not circumscribed by a requirement that a party against whom or which costs are ordered was a party at the time the costs were incurred. It was open to the Tribunal to decide that it was fair in all of the circumstances for the joined parties to be liable for costs incurred before they were joined.

59 I see no error in the Tribunal's reasons for the award of costs in favour of the quarry parties in the exercise of its power to award costs under s 109 of the VCAT Act.

Costs under s 150(4) of the Planning & Environment Act

60 The order for costs in favour of the Council was made exclusively under s 150(4) of the Planning & Environment Act. The Tribunal observed that the commencement of the enforcement proceeding had occasioned the Council trouble and expense, including the incurring of legal costs, and that the Council had sought an order for its costs. The Tribunal expressed itself to be 'faced with the question as to whether [the Council], and thus its ratepayers, should bear this expense or whether it is fair to make an order against Country Endeavours and its associates.'[35] It concluded that it was appropriate to make an order in favour of the Council.

61 Pursuant to s 150(4) of the Planning & Environment Act, the Tribunal may order an award of compensation and payment of costs by 'the person who brought the proceedings' if the Tribunal is satisfied that 'the proceedings have been brought vexatiously or frivolously or primarily to secure or maintain a direct or indirect commercial advantage for the person who brought the proceeding'.

62 The joined parties contend that it cannot logically be said that they brought the enforcement proceeding vexatiously: they did not 'bring' the proceeding in the sense that they did not commence it or agitate forensically for its pursuit, and it cannot be said that they brought a proceeding to secure any purpose at all, as they were added as parties by an order of the Tribunal which they opposed. They say that as a proceeding must be commenced vexatiously for the purposes of s 150(4), the person bringing the proceeding must be found to have the requisite purpose at the time the proceeding be brought (that is, commenced) and the vexatious purpose must be the sole or dominant purpose for commencing the proceeding. If there is a legitimate purpose in bringing a proceeding, the proceeding cannot be said to have been brought for an improper or ulterior purpose.

63 I do not consider that s 150(4) should be read so restrictively. In Cabot v City of Keilor,[36] Gobbo J considered the operation of s 150(4) in the context of a costs order made by the Administrative Appeals Tribunal against objectors who had not initiated the proceeding in the tribunal but had continued it when the initiating party (the applicant for a permit) withdrew. His Honour held that as the appeal or proceeding would have terminated if the objectors had not lodged their own notice, it could properly be said that either the original proceeding was kept going by the objectors or that their notice resulted in a new proceeding. In either event, it was the intervention of the objectors which produced the result.[37] His Honour said:

In my view, this is capable of falling within the meaning of bringing forward the dispute for disposition by the tribunal, a dispute that otherwise would not have moved beyond the point contemplated by the operation of s 34(2)(e) [of the Planning Appeals Board Act 1980]. It is a conclusion I reach with some hesitation, having regard to the wording of s 150 but here there is what might be fairly described as an ambiguous statutory provision where two interpretations are reasonably open. In my view, I should adopt that interpretation which accords with the total context and obvious purpose of the provision. Here there is no logical or policy reason evident in the legislation why this provision should not apply where the original appeal is not commenced by the person who caused the loss or damage.

Moreover, if policy considerations not explicit in the specific legislation were to be taken into account, then one would wish to see courts and tribunals taking a wide rather than unduly restrictive view of their power to award costs as a means of discouraging frivolous and costly litigation.[38]

64 A purposive construction of s 150(4) would, as Gobbo J said in Cabot, be one that took a wide rather than unduly restrictive view of the Tribunal's power to award costs as a means of discouraging frivolous and costly litigation under the Planning & Environment Act.[39] Accordingly, the word 'brought' ought not be confined to the meaning 'commenced'. In my view, to 'bring' a proceeding for the purposes of s 150(4) includes to prosecute the proceeding once it has been commenced.

65 Although the position here is different from the situation in Cabot, in that the original applicant, Country Endeavours, continued to be willing and able to bring the proceeding before the Tribunal for disposition, it was open to the Tribunal to find that the joined parties also brought the enforcement proceeding. The joined parties were represented by counsel at the hearing before the Tribunal and submissions were made and evidence was led on their behalf as well as on behalf of Country Endeavours. Mrs Giles was actively involved in preparing for and in instructing at the hearing. Indeed, the proceeding could not and would not have been brought without the active involvement of either of Mr or Mrs Giles, whose actions were causative of the loss suffered by the Council.

66 The applicants further submit that s 150(4) of the Planning & Environment Act requires the proceeding to have been commenced for solely for a vexatious purpose: they say that if there was a legitimate purpose in bringing the proceeding, then they cannot be said to have brought the proceeding vexatiously.

67 This submission is not supported by authority. As Roden J said in Attorney-General v Wentworth,[40] a proceeding may be commenced for a legitimate purpose but become vexatious later in its life.[41] For the reasons I have given, it was open on the evidence for the Tribunal to find that the enforcement proceeding was prosecuted for an ulterior purpose, and to conclude that it was conducted in a way that was vexatious. The Tribunal found that the applicants had burdened the Tribunal with unnecessarily voluminous and disorganised material which they expected the Tribunal to filet so as to identify any real points in issue, and used the process of the Tribunal to carry out a fishing expedition. Overall, the Tribunal found that the applicants had brought and/or maintained a proceeding that was not warranted, was misconceived and was lacking in substance.

68 Thus, the grounds based on arguments to the effect that the joined parties did not 'bring' the proceeding and that they cannot therefore be said to have had any purpose at all in bringing the proceeding, let alone a vexatious purpose, must fail. Likewise, the submissions that the vexatious purpose had to be the sole purpose for bringing the proceeding and that there was no evidentiary basis for finding that the proceeding was vexatious must be rejected, along with the arguments about the lack of relevance of the 'other proceedings'.

69 That leaves the question of whether s 150(4) of the Planning & Environment Act permitted the Tribunal to make a costs order general form, leaving it to the Costs Court to determine the actual amount of costs.

70 In respect of the Council's costs, the Tribunal said:

It is true that the Responsible Authority has not itemised or quantified the costs that it seeks. In the circumstances I am not in a position to fix a sum for those costs. Rather, unless costs are agreed between the parties, it would appear necessary for the Responsible Authority to itemise and quantify its legal costs of and in relation to this proceeding and, if necessary, to have those costs taxed by the Costs Court.[42]

71 The costs order relevantly provides for the applicants to pay the costs of the Council and the quarry parties of and in relation to the enforcement proceeding, 'such costs to be agreed between the parties or in default of such agreement, to be taxed by the Costs Court on a party versus party basis and on the County Court scale 'D' for costs incurred whilst that scale was applicable and thereafter on the basis of the applicable County Court Scale'.

72 It is clear from the foregoing that the Tribunal intended only to make an order in respect of legal costs incurred by the Council. It did not involve itself in the business of assessing compensation for the trouble and expense suffered by the Council; rather, it sought to order the payment of an amount for the legal costs that the Council had incurred as a result of responding to various issues raised in the proceeding. The order can properly be characterised as an order for costs.

If the Tribunal makes an order for costs, the Tribunal -

(a) may fix the amount of costs itself; or

(b) may order that costs be assessed, settled, taxed or reviewed by the Costs Court.

74 In Housing Guarantee Fund v Ryan,[43] Mandie J held that the Tribunal's power to make an order under an earlier version of s 111 of the VCAT Act[44] for costs to be assessed by the principal registrar arose only when the Tribunal had made an order for costs under s 109 of the VCAT Act. His Honour was concerned with a claim for legal costs and expenses arising under an insurance policy and was asked to determine whether the Tribunal had power under the VCAT Act or otherwise to order that the question of the amount of the indemnity to which the defendants were entitled in respect of legal costs and expenses be determined by the principal registrar instead of a member of the Tribunal. Counsel for the insurer argued that the registrar's power to assess costs under s 111(1) and (2) of the VCAT Act did not extend to questions of costs said to arise under a contract of insurance or any other contract. Justice Mandie held that the Tribunal could not order the principal registrar to assess those costs because the principal registrar had no power to assess costs of that kind. In this context, his Honour held that the power to assess costs under s 111 of the VCAT Act related only to an order for costs made under s 109 of the VCAT Act.

75 In the present case, the Tribunal was asked to make an award of costs in favour of a non-party that had incurred legal costs by reason of its involvement in the proceeding. The costs ordered to be paid were costs in the proceeding before the Tribunal.[45] As legal costs incurred in the proceeding, such costs would normally be amenable to assessment, review or taxation by the Costs Court. Section 17D(1)(d) of the Supreme Court Act confers jurisdiction on the Costs Court, relevantly:

... to hear and determine the assessment, settling, taxation or review of costs in proceedings in ... VCAT ... in which -

(i) there is an entitlement to costs by or under any Act , the Rules of ... VCAT or arising from an order of ... VCAT; and

(ii) the amount of those costs has not been fixed by ... VCAT.

76 The Tribunal has made an order under s 150(4) of the Planning & Environment Act that the applicants pay the Council's legal costs in the proceeding. It has not fixed the amount of those costs but has referred the costs to the Costs Court to be taxed in default of agreement. The Costs Court plainly has jurisdiction to assess and/or tax the Council's legal costs incurred in the proceeding.

77 In my view, to construe s 150(4) so as to require the amount of costs to be fixed by the Tribunal in every case is to impose on the Tribunal a task for which it is ill-equipped in circumstances where the legislature has made available to the Tribunal a specialist court to which the task of fixing costs can be referred. It is not an easy task for the Tribunal to fix the amount of costs where costs have been incurred throughout the life of a lengthy proceeding. It is appropriate and convenient for that task to be undertaken by the Costs Court.

78 Section 150(4) is to be construed liberally consistently with its purpose of discouraging frivolous and costly litigation. In my view, the phrase 'an amount for costs' in s 150(4) should not be construed restrictively to mean only a 'fixed sum'. An order for 'an amount for costs' may include an order in general form for the costs of the proceeding or part thereof.[46]

79 I see no material error in the Tribunal's reasons for the award of costs in favour of the Council under s 150(4) of the Planning & Environment Act.

80 The applicants seek leave to appeal. The nature of the application made it convenient to give detailed consideration to the grounds of appeal.

81 The criteria for the grant of leave to appeal are set out in Secretary of the Department of Premier and Cabinet v Hulls.[47] Relevantly, the applicant must identify a question of law arising out of the Tribunal's decision, but need not establish that the Tribunal erred. Rather, the applicant must establish that the Tribunal's decision is attended by sufficient doubt to justify the grant of leave. The public or general importance of a question may also be a relevant consideration. However, whether leave should be granted must always depend on the justice of the particular case.

82 I have concluded that the Tribunal made no error of law in ordering the applicants to pay the costs of the quarry parties and the Council. It correctly applied s 109 of the VCAT Act and s 150(4) of the Planning & Environment Act, and it was open to the Tribunal on the evidence and in the circumstances of the enforcement proceeding to make the costs order.

83 I have therefore concluded that the Tribunal's decision is not attended by sufficient doubt to justify the grant of leave. Moreover, the justice of the case does not require the grant of leave.

[1] Country Endeavours Pty Ltd v Baw Baw SC [2011] VCAT 147 ('Enforcement Reasons').

[2] Mr Giles is the sole director; Mrs Giles is the company secretary.

[3] Mr and Mrs Giles are both directors of Shapher.

[4] Country Endeavours Pty Ltd v Baw Baw SC (No 8) [2011] VCAT 2403 ('Costs Reasons').

[26] Knight v Hastings [2012] VSCA 315, [15].

[29] Elkington v Costaexchange Ltd [2012] VSCA 10, [7]; Victorian WorkCover Authority v Kagan Bros Consolidated Pty Ltd [2011] VSCA 91; (2011) 31 VR 386, [11]; Spotless Group Ltd v Premier Building and Consulting Pty Ltd and North Suburban Properties Pty Ltd [2008] VSCA 115, [10]; McFadzean v Construction Forestry Mining and Energy Union [2007] VSCA 289, [150].

[30] Hanlon v Brookes (1997) 15 ACLC 1626, 1632; Pirrotta v Citibank Ltd (1998) 72 SASR 259, 269.

[31] House v R [1936] HCA 40; (1936) 55 CLR 499, 504-5; Spotless Group Ltd v Premier Building and Consulting Pty Ltd and North Suburban Properties Pty Ltd [2008] VSCA 115, [11]

[34] Albeit on the letterhead of Shafer in the first case.

[44] At the relevant time, s 111(1) provided that if the Tribunal made an order for costs, the Tribunal could fix the amount of costs itself or order that costs be assessed or settled by the principal registrar.

[45] The Tribunal had before it a table prepared by the Council setting out correspondence, attendances and other events in the proceeding in which the Council participated or was involved and in respect of which it incurred costs. Affidavit of Christine Fontini Albanis sworn 2 May 2012, Exhibit CFA:C.

[46] The costs order that was made in favour of the Council by reference to the costs of the two mediations, the preliminary hearing and the full hearing of the enforcement proceeding was an order for an amount of costs.

Environment Act 1987

Civil and Administrative Tribunal Act 1998

Court (Miscellaneous Civil Proceedings) Rules 2008

Appeals Tribunal Act 1984

Appeals Board Act 1980

At a glance

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Judgment (140 paragraphs)

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Legislation Cited (6)

Cases Cited (4)