The Baw Baw Shire Council must pay the respondents, Zorro Produce Pty Ltd, Giuseppe La Bozzetta and Lena La Bozzetta, their party-party costs of the enforcement proceedings No. P2892/2003 until 14 November 2003 and their solicitor-client costs of the enforcement proceedings (including those pertaining to the costs application and hearing) after 14 November 2003, to be assessed on County Court Scale C, to be taxed by the Registrar in default of mutual agreement - such costs to be paid no later than 21 days following taxation by the Registrar.

Mr M Barrett of counsel instructed by Portelli & Co.

1 On 30 July 2004, I dismissed council's enforcement proceedings against the respondents, who now seek from council their legal costs of $16,192.00, to which must be added their costs of today's appearance and drawing submissions on costs.

2 That enforcement hearing was joined with council's s.149A application no. P552/2004 for a declaration in respect of the respondents' planning application for use of the subject land for retail premises.

3 During that enforcement hearing the respondents withdrew their planning permit application, so the parties did not use their submissions on the s.149A issue.

4 Council now seeks their costs of their s.149A proceeding amounting to $4,825.00

5 The normal s.109 VCAT 1998 rule that parties bear their own costs should apply in respect of the s.149A application, for each of the parties, as:

i planning applications (and reviews) normally do not attract costs awards;

ii once council sought to enforce its planning scheme and permits, it was reasonable for the respondents to lodge a planning application for a use that the council alleged fell outside the scope of the respondents' permits;

iii It was efficient for the council to use the listed enforcement hearing to test the definitions pertaining to retail sales or shop resulting from the respondent's planning application, and the respondents should not be punished for withdrawing their permit application;

iv had this permit application not been made at the same time as the enforcement proceedings were on foot (for the sake of efficiency) but later, that proceeding is unlikely to have had costs awarded against a party.

6 Council's enforcement proceeding was dismissed because it did not prove its case. I discussed this at paragraphs 17 - 20 inclusive of my 30 July 2004 decision.

7 Council referred me to paragraphs 14 of my 30 July 2004 decision and seeks to use this admission by Mr Drendel, together with my analysis of the law on dominant/ancillary uses, to sustain its argument that it should not be liable for the successful respondents' costs, as the case was complex and capable of argument. That is not the point. The point is that:

i Enforcement applications are often an exception to the ordinary s.109 rule that parties bear their own costs[1];

ii the onus lay upon council to prove its case, and it should accept that responsibility with the forethought of the consequences that result from not doing so[2 ]. Council could have called witnesses that would have been subject to testing by cross examination, but chose not to;

iii Respondents called upon to defend such enforcement applications should, if successful, not have to bear the costs burden, as they had no choice but to defend themselves.

8 The fact that the respondents made an open offer to the council to settle the matter justifies their receiving their legal costs on a solicitor client basis from the date of the offer because:

b An offer that the council merely adjourn their enforcement application sine die, the effect of which would have been that it still hung, like the sword of Damocles, over the respondents' head if they breached their undertaking or the permit;

ii This offer was made on 14 November 2003, and as soon as council requested clarification on 19 November 2003, the respondents replied with details on 20 November 2003, which council refused to accept on 24 November. In other words, there was no prevarication on the respondents' part. They responded to council promptly with a clear and express offer to settle.

iii The council did not achieve a better outcome at the hearing.

9 I award the respondents their costs pursuant to the VCAT Act 1998, s.109(3)(c)(d) & (e) for all the above reasons.

10 I award them their solicitor client costs, also under s.109, as I have the power and discretion to do so, and I do so for the reasons expressed above. I do not make the solicitor client award pursuant to ss. 112, 113 & 114 of the VCAT Act 1998, and for that reason I do not go into the complexities discussed arising from those sections.

11 I make the award however, for the public policy reasons expressed by Gillard, J in MT Associates v Aqua-Max PL & Anor (No.3) [2000] VSC 163.

Courts should encourage litigants and that means litigants on both sides of the record to make offers to comprise the litigation. The communication should be made without prejudice save as to the question of costs to that the communications can be placed before the court at the end of the trial. It is in the interests of the administration of justice that litigation should be compromised as soon as is reasonably possible. It is in the public interest to do so.

In this day and age litigation in this court is expensive. The advent of the dictating machine, the photostat machine and the costing on a six minute unit of time results in litigation being very expensive. Lawyers have an interest in the length of litigation and as professional people they should guard against the temptation of lengthy and expensive litigation. They should be encouraged to reduce costs.

12 Accordingly the Tribunal will make an order in the above terms, on County Court Scale c, being a median scale often adopted in planning cases.

[1] Re Hobsons Bay CC & Haouli (2001) 7 VPR 249

[2] Payton v Kingston cc [2000] VCAT 667 (31 March 2000)