1. This proceeding has had a long and tortuous history. It was commenced in October 2005 in the Domestic Building List, three months after the commencement of the separate, but related proceeding, W38/2005. It was subsequently transferred to the Real Property List.
2. Both claims arise out of flooding and water ingress caused by a severe storm on 3 December 2003. The applicant ('the body corporate') has amended its Points of Claim numerous times. The most recent amendments, in November 2007, included claims that were subsequently abandoned during the hearing. The Body Corporate's total claim was $808,062 inclusive of margin, contingencies and GST. The claim can be summarised as follows:

The windows and miscellaneous items (as described by the parties) which included windows/doors defects, other defects set out in the Scott Schedule, flood gates and further road contouring:

Roof plumbing (although the Scott Schedule provided as part of the Applicant's opening has an amended figure of $310,750

Tennis Court and sump pits - defective construction

20% loading on 40% of $479,005.00 (to take account of skilled labour shortage)

42% contingencies, overhead, profit margin and supervision

1. The respondent builder ('Brady') joined three parties seeking contribution in the event it was found liable to the Body Corporate or alternatively apportionment of responsibility under Part IVAA of the Wrongs Act 1958. The substantive issues have been resolved between the Body Corporate and Brady, and between Brady and the joined parties. The Body Corporate, Brady and the first joined party, AHW Consulting Engineers (Vic) Pty Ltd ('AHW'), all apply for their costs. For the reasons which follow there is no merit in the Body Corporate's application for costs and it will be dismissed. Costs orders will be made in favour of Brady and AHW.
2. Mr Kincaid of Counsel instructed by Dibbs Abbott Stillman ('Dibbs') appeared on behalf of the Body Corporate. Mr Schlicht of Counsel instructed by Corrs Chambers Westgarth ('Corrs') appeared on behalf of Brady, and Mr Hellyer of Counsel instructed by Tress Cox Lawyers appeared on behalf of AHW.
3. On the first day of the hearing (26 February 2008), having identified that this was essentially an 'experts' case', I proposed there be a conclave of experts chaired by Senior Member Young. In discussion with counsel it was agreed that the 'roof items' should be referred to a conclave of the plumbing experts the following day, and that the internal drainage design claims would be referred to a conclave the following week. Following the conclave attended by the Body Corporate's expert, Mr Wenning, and Brady's Expert, Mr Quick, Senior Member Young ordered the experts to file a joint report.
4. I heard openings from counsel for the Body Corporate and Brady during what remained of the first week of the hearing. In his opening, Counsel for Brady made some incisive observations about the veracity and reliability of the Body Corporate's expert evidence in relation to the drainage claim. Over the course of the weekend the Body Corporate resolved to abandon the internal drainage design claims, and it reached a settlement with Brady in relation to the miscellaneous items. Brady also withdrew its claim against AHW. The following orders were made, by consent, on 3 March:
   1. The following allegations and/or heads of claim as referred to in the applicant's Third Further Amended Points of Claim dated 12 December 2007 and in the Further Amended Scott Schedule annexed thereto and referred to therein are withdrawn by the applicant and as a consequence those allegations and/or heads of claim are hereby struck out:

(a) Paragraphs 9(k)(ii), (iv), (l)(i) and (ii) and 15(i) of the Third Further Amended Points of Claim; [relating to the internal drainage design claims]

(b) Items 129, 130(b) and 131 of the Further Amended Scott Schedule. [relating to the internal drainage design claims]

1. The respondent's claim against the first joined party is withdrawn and as a consequence the respondent's claim against the first joined party is struck out.
2. The questions of costs in relation to the allegations and/or heads of claim by the applicant against the respondent as referred to in paragraph 1 above and in relation to the claim by the respondent against the first joined party are reserved and are to be heard and determined on a date to be fixed following determination of the remaining issues as between the applicant, the respondent and the second joined party.
3. At least 7 days prior to the costs hearing referred to in order 3 the parties must file and exchange submissions.
4. The respondent shall pay to the applicant the sum of $31,750.00 in full and final satisfaction in respect of all claims relating to items 1 to 82, 125 to 128, 130(a) in the Further Amended Scott Schedule [the windows and miscellaneous items]. Such amount is to be taken into account in the event of assessing and determining the respective parties' liability as to costs.
5. Paragraph 5 of these orders is stayed pending final orders being made in this proceeding.
6. For the avoidance of doubt the parties continue to be bound by the order of Senior Member Young dated 27 February 2008.
7. The hearing is adjourned to 10.00 a.m. on 7 April 2008 at 55 King Street Melbourne before Deputy President Aird - allow 3 days. Upon receipt of the joint experts' report pursuant to the orders of Senior Member Young dated 27 February 2008 liberty to the parties to apply for the roofing issues to be referred to a compulsory conference before Senior Member Young.
8. The experts' conclave scheduled for 5 March 2008 is cancelled. It is the parties' responsibility to advise their experts accordingly.
9. I direct the Principal Registrar to release the documents provided by Mr Lechelt in response to the Subpoena into the custody of the solicitors for the applicant who are to return them to Mr Lechelt. (The Tribunal notes these were released at the conclusion of the hearing on 3 March 2008).
10. Costs otherwise reserved. (emphasis added)
11. The 'roofing experts' filed their joint report on 11 March in which they agreed on a scope of rectification works in which the experts effectively agree that the less costly method suggested by Mr Quick in his earlier reports would provide an appropriate solution. Mr Wenning's estimate of the cost of the agreed works is $140,448.85. Mr Quick's estimate is $129,127.40 - the difference essentially relates to the calculation of the cost of the work to the box gutters. Mr Wenning's estimate is $1,391.80 per gutter and Mr Quick's is $1,200.00 per gutter. There are 54 gutters - a difference of $10,357.20 in total. Mr Quick's estimates the cost to change the box gutter outlets and replace rainheads at $700.00 and Mr Wenning's estimate is $717.35 per gutter - a difference of $936.90 in total. Although the experts generally agreed on scope of works, and signed a joint report including costings, Mr Wenning qualified his opinion:

Disclaimer: The quantities and prices in the above cost estimates are based upon brief inspections and plans provided. The costs are only a guide, and must not be used in part or in whole for estimating, pricing or completing the work required. No person should rely on the above costs for any purpose other than a basis for a claim. We recommend that any works to be completed should be subject to competitive pricing by experienced and qualified contractors '

1. On Friday 4 April the Body Corporate applied for an adjournment of the hearing due to recommence the following Monday and referral of the 'roofing issues' to a compulsory conference, which was opposed by Brady and AHW. The Body Corporate relied on a quotation from a builder Longbow Constructions for $314,000 (obtained after the Joint Expert Report was filed), Mr Schreuder of the builder having indicated he would not be prepared to carry out the agreed scope of works. The adjournment was refused with liberty granted to the Body Corporate to apply again on the Monday when, for reasons which were not explained, Counsel indicated the Body Corporate was no longer relying on the Longbow quotation.
2. Later that morning (7 April) the following orders were made by consent:
   1. Subject to Mr Patone of AHW Consulting Engineers (Vic) Pty Ltd [the First Joined Party] providing, within 7 days, a written report:

(a) providing details of the proposed bracing method to be applied to the 63 affected rafters, and

(b) providing opinion that such method will provide the necessary structural integrity to the rafters, the Respondent shall pay to the Applicant the sum of $125,936.00.

1. The hearing is adjourned to 30 April 2008 before Deputy President Aird at 10.00 a.m. at 55 King Street Melbourne, at which time the Applicant, the Respondent and the First Joined Party will be heard on the question of costs.

4. Stay on the payment referred to in Order 1 until further order.

The effect of the orders of 3 March and 7 April is that Brady is to pay the Body Corporate a total of $157,686 of its original claim totalling $808,062.00 ($479,005 exclusive of 'on costs' and GST or $734,602 inclusive of 'on costs' but exclusive of GST). This is 19.51% of its total claim or 32.92% of its base claim (the claim exclusive of 'on costs' and GST).

Of its total claim for the windows and miscellaneous items of $71,386 ($107,079 inclusive of 'on costs') it accepted $31,750 which is 44.74% of its base claim.

Of its claim for the roofing items of $308,750 ($463,126 inclusive of 'on costs') it accepted $125,936 which is 40.79% of its base claim.

1. The Body Corporate 'abandoned' the following claims totalling $101,619 (not including 'on costs') or 12.58% of its total base claim. My calculations of the amount inclusive of 'on costs' but exclusive of GST appears in brackets after each amount

Defective construction of tennis court and sump pits

1. Although it has agreed to accept less than 20% of its claim, counsel for the Body Corporate contended that it had been successful; that this justified the bringing of the claim and supports an order for costs in its favour.

1. The Body Corporate, Brady and AHW all apply for their costs and seek to rely on various offers.
2. I will discuss the applications for costs by the Body Corporate and Brady in the context of the offers, which I will consider in chorological order before turning to a consideration of AHW's application for costs. I note that the settlement offers set out in the letters from Corrs to Dibbs have been expressed to be by Brady and the joined parties but I will refer to them as 'the joint offer/s'.

1. The Body Corporate seeks orders that:
   1. Brady pay its costs on an indemnity basis from:
      • (a) 14 December 2005 - the date of its 'first offer'; alternatively
      • (b) 20 February 2007 - the date of its 'second offer'; alternatively
      • (c) 7 March 2007 - the date of its 'third offer'
   2. Alternatively to 1, Brady pay its costs (other than those costs the subject of previous orders) on County Court Scale 'D' unless otherwise agreed.
   3. No order is made for Brady's costs of joinder of AHW ('the First Joined Party') and the Second Joined Party.
   4. If an order is not made that AHW bear its own costs that Brady pay AHW's costs on County Court Scale 'D' unless otherwise agreed.

1. Brady seeks orders that the Body Corporate pay its costs:
   • (a) on and from 21 February 2007 [the date of the first joint offer] on an indemnity basis; or
   • (b) on and from 7 February 2008 [the date of the second joint offer] on an indemnity basis and between 21 February 2007 to 6 February 2008 on a party/party basis.

14 December 2005 - the Body Corporate's 'first offer'

1. On 14 December 2005, approximately two months after the application was lodged, Dibbs wrote to Corrs:

...We are currently finalising our client's points of claim, however in order to give your client the opportunity to resolve this matter as quickly and expeditiously as possible without unnecessary legal fees being incurred we advise that the basis of this action is primarily a claim against your client seeking rectification of the defective building work to the property ... We refer in particular to the expert evidence of MVS Group and Reburg Roofing. In relation to the expert's reports served upon you under separate letter dated 14 December 2005 ... there are particular defects of concern to our client's as follows which must be addressed as a matter of urgency: (sic)

In the interests of resolving this matter we wish to give your client the opportunity to make good defects to the satisfaction of our clients' independent expert or alternatively a third party as agreed between us as a matter of urgency.

If these works are not completed as a matter of urgency, now that we are aware of the magnitude of the problems our client must mitigate any further loss, therefore we have no choice but to recommend to our clients to arrange for urgent works to be completed immediately .... We therefore request that you seek your client's urgent instructions and advise whether these works will be completed by your client. We request you advise your client's attitude within the next 7 days so that at the very least mitigation works can be completed promptly and ideally commenced before Christmas/New Year.

1. It is difficult to conceive how this might be considered as a settlement offer. It clearly does not comply with ss112-115 of the Victorian Civil and Administrative Tribunal Act 1998 ('the VCAT Act') nor is it expressed to be a Calderbank offer. It seems to me to be more properly described as a Letter of Demand. It lists 16 items which the Body Corporate states require urgent attention but the list is lacking in detail and particularity. There is simply a reference to the expert reports. There was no suggestion that there be any discussion about the scope and extent of works to be carried out or that if the items were rectified this would lead to a settlement of the proceeding.

20 February 2007 - the Body Corporate's 'second offer'

We refer to the above proceedings and in particular the offer made by the Applicant at the compulsory conference. Our client has instructed us to remake its formal offer that is that it agrees to discontinue proceeding W803/2005.

A formal offer is attached, which our client intends to rely upon on the question of costs should that offer not be accepted.

In confirmation of or in the alternative to the attached offer our client confirms that it will resolve W803/2005, being the domestic building dispute on the following basis:

The Respondent (and/or any parties joined by it) rectify the defects to the common property at...as set out in the reports of:

And the Respondent pay the sum of $50,000 towards costs of the Applicant.

Should the Respondent intend to accept this offer we confirm that the scope of works can be further detailed should this be necessary.

Alternatively as previously offered our client will accept the sum of $450,000 in full and final settlement of its claim.

These offers are open to be accepted for 14 days from the date of this letter. This offer will automatically expire at 4pm on Wednesday 7 March 2007.

[the letter then confirms it is a Calderbank offer]

Kindly acknowledge receipt of this offer within 3 business days of the date of this correspondence.

1. In the 'formal offer' the Body Corporate offered to settle the proceedings on the following basis:
   1. The Applicant offers to accept from the Respondent (and/or the Joined Parties) the sum of $50,000 for costs on the basis that the defects contained in the following reports are rectified to the satisfaction of the authors of those reports, or an independent third party agreed between the parties:

1. A copy of the relevant scope of works is attached to these terms.
2. This offer is in settlement of all issues in dispute between the Applicant and the Respondent (and Joined Parties) in this matter.
3. For the sale of clarity this offer does not relate to the separate proceeding W38/2005.
4. This offer is inclusive of costs and interest.
5. This offer is made on a without prejudice basis save as to costs.
6. The sum of $50,000 is to be paid by the Respondent to the Applicant within 14 days of acceptance of this offer and the Works are to be completed within 2 calendar months of acceptance of this offer, or within such other reasonable time as agreed between the parties.
7. This offer is open for acceptance by the Respondent and the Joined Parties jointly or severally until the expiration of 14 days from receipt of this offer.
8. This offer is made in accordance with sections 113, 114 and 115 of the VCAT Act.
9. If this offer is not accepted by the Second Respondent and the Joined Parties and in the event the Applicant receive an award in the hearing of these proceedings which is as or more favourable to the Applicant than had the Respondent and/or the Joined Parties accepted this offer, then the Applicant will rely on section 112 of the VCAT Act in seeking to have VCAT exercise the presumption of an increased order for costs in favour of the Applicant from the date that this offer was made. (sic)
10. Clearly the Body Corporate has not achieved a more favourable result than the offer set out in this letter. The 'offer' contemplated payment of $50,000 for costs on the basis that all the works, including rectification of the internal drainage works were carried out by Brady or payment of the sum of $450,000 'all in'.

1. On 21 February 2007 Corrs wrote to Dibbs setting out a joint offer to settle W38/2005 by payment of $60,000 plus $10,000 in costs, and W803/2005 by payment of $200,000 plus $40,000 costs. The offers to settle each proceeding were on the basis that there be mutual releases. The offer in each proceeding was conditional upon the acceptance of the offer in the related proceeding. Brady contends that there was no impediment to these offers being accepted independently of each other as evidenced by the settlement of W38/05 for $70,000. In the final paragraph Corrs confirms that it is a Calderbank offer and:

...In the event that these offers are not accepted and the applicants are less successful at trial than the terms offered, we will rely upon this letter as the basis for an application that the applicants pay Brady's and the joined parties' costs on an indemnity basis.

1. On 7 March 2007 Dibbs wrote to Corrs with an offer that the Body Corporate would accept '$60,000 plus $10,000 in costs in full and final settlement of all claims made in proceeding W38/2005' [the related proceeding] indicating that this offer could be accepted independently of the offer made in W803/2005. That proceeding subsequently settled on terms negotiated between the parties which are not relevant here.
2. It is helpful to set out the relevant extracts from Dibbs' letter of 7 March:

We acknowledge receipt of your letter of 21 February 2007 containing an offer made on behalf of your clients and its joined parties in relation to the above proceeding. [W803/05]

We confirm that our clients' property is subject to defects which will cost in excess of $700,000 to rectify and has incurred over $100,000 in legal and associated fees as a result of this litigation.

Accordingly, the offer made in paragraph 4.3 [the offer relating to W803/05] of your letter of 21 February 2007 has not been accepted by our clients.

We again confirm that our client would be prepared to settle this proceeding on the basis that the defects set out in the Lechelt and Wenning reports are completed together with a $50,000 payment towards our clients' legal costs upon the terms set out in the attached Terms of Settlement. This is a considerable reduction as they will agree to attend to any ground based defects themselves.

However, as your client has repeatedly refused to complete necessary rectification works at the property, including failing to respond to our request of December 2005 in this regard we are also instructed to make the following alternative offer in proceeding W803/2005:

The Applicant is also willing to resolve proceeding W803/2005 on the basis that your client (with or without a contribution from its joined parties) make payment of the sum of $350,000 plus $40,000 towards legal costs upon the terms set out in the attached Terms of Settlement.

Terms of Settlement in confirmation of each of the alternate offers is attached. Acceptance of either offer is by way of signature of the relevant Terms of Settlement by your client and all the Joined Parties.

So as to ensure there is no confusion, either of these offers may be accepted. Either offer can be accepted independently of W38/2005 as that is a separate proceeding.

[in the final paragraph the letter is stated to be a Calderbank offer] (emphasis added)

1. I cannot agree with Brady that this was an acceptance of the joint offer of 21 February 2007. The offers set out in the letter of 21 February 2007 were conditional upon acceptance of both offers. Whilst confirming that the quantum of the offer of $70,000 to settle W38/05 was acceptable to the Body Corporate, Dibbs' letter of 7 March 2007 clearly contained counter offers to settle each case independently of the other.

7 February 2008 - Brady and the joined parties' second offer

1. On 7 February 2008 Corrs wrote to Dibbs enclosing a formal joint offer under ss113 and 114 of the VCAT Act to settle this proceeding by payment of $300,000 - $250,000 in damages and $50,000 in costs, with Brady and the Joined Parties to bear their own costs of the proceeding. This included not enforcing the costs order made on 4 December 2007 [that the Body Corporate pay Brady's costs and the costs of the third Joined Party of 13 November and 4 December 2007]. Corrs advised that in the event the offer was not accepted and Brady was ordered to pay moneys to the Body Corporate it, and the Joined Parties, would seek an order that payment be offset against any order for costs in their favour, or otherwise stayed pending payment of their costs. In this regard they relied on the principles set out by Habersberger J in Danindale Pty Ltd v Abigroup Contractors Pty Ltd (No 2) [2007] VSC 552

Are the orders made by the tribunal more favourable to the Body Corporate than any of its three 'offers'?

1. Only two of the offers comply with the regime set out in ss113-115 of the VCAT Act (the Body Corporate's offer of 20 February 2007, and the joint offer of 7 February 2008), and two are expressed to be Calderbank offers (the joint offer of 21 February 2007 and the Body Corporate's offer of 7 March 2007). For the reasons discussed above I do not consider the 'first offer' dated 14 December 2005 to be anything other than a letter of demand. I am not satisfied that the Body Corporate has 'bettered' its offers of 20 February or 7 March 2007.
2. Section 112 of the VCAT Act provides:

(a) a party to a proceeding (other than a proceeding for review of a decision) gives another party an offer in writing to settle the proceeding; and

(b) the other party does not accept the offer within the time the offer is open; and

(c) the offer complies with sections 113 and 114; and

(d) in the opinion of the Tribunal, the orders made by the Tribunal in the proceeding are not more favourable to the other party than the offer.

(2) If this section applies and unless the Tribunal orders otherwise, a party who made an offer referred to in sub-section (1)(a) is entitled to an order that the party who did not accept the offer pay all costs incurred by them offering party after the offer was made.

(3) In determining whether its orders are or are not more favourable to a

(a) must take into account any costs it would have ordered on the date the offer was made; and

(b) must disregard any interest or costs it ordered in respect of any period after the date the offer was received.

1. Whether the reference to orders made by the Tribunal in s112(1)(d) includes orders made by consent is not before me in this proceeding. The parties have agreed that for the purposes of determining the question of costs, I should have regard to the Consent Orders made on 3 March and 7 April 2008 as orders to which s112 applies.
2. Where s112 does not apply, s109 of the VCAT Act provides that each party should bear its own costs of a proceeding unless the Tribunal is minded to exercise its discretion under s109(2) having regard to the matters set out in s109(3) which provides:

(3) The Tribunal may make an order under sub-section (2) only if 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 -

(i) failing to comply with an order or direction of the Tribunal without reasonable excuse;

(ii) failing to comply with this Act, the regulations, the rules or an enabling enactment;

(iii) asking for an adjournment as a result of (i) or (ii);

(v) attempting to deceive another party or the Tribunal;

(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;

(e) any other matter the Tribunal considers relevant.

1. The approach to be taken by the Tribunal in considering whether to exercise its discretion under s109(2) was considered by Gillard J in Vero Insurance Ltd v The Gombac Group Pty Ltd [2007] VSC 117 where he said at [20]:

"the Tribunal should approach the question [of costs] on a step by step basis, as follows -

(i) The prima facie rule is that each party should bear their own costs of the proceeding.

(ii) The Tribunal may make an order awarding costs, being all or a specified part of costs, only if it is satisfied that it is fair to do so. That is a finding essential to making an order.

1. In determining whether it is fair to award costs, the Tribunal must have regard to the matters stated in 109(3), and by reason of paragraph (e) the Tribunal may also take into account any other matter it considers relevant.
2. The costs hearing proceeded over four days and a significant part of the hearing time was consumed in submissions concerning the Body Corporate's reasonable costs as at the date of the various offers. In considering any application for costs under s112 the Tribunal must taken into account the costs it would have ordered at the date the 'complying' offers were made. The costs as at the date of the Calderbank offers are also relevant.
3. The Body Corporate seeks to rely on cost estimates prepared by Paul Grant Linsdell, Costs Lawyer and a director of Blackstone Legal Costing Pty Ltd. Although three affidavits sworn by Mr Linsdell were filed he was not called to give evidence.

1. As clearly demonstrated during the costs hearing Mr Linsdell's estimates are unreliable. In his first affidavit sworn on 30 April 2008 Mr Linsdell states that he has 'excluded work non-common to this proceeding relating to the connected proceeding W38/2005'[1] and:

I have been instructed to assess the Applicant's costs as at 20 February 2007 to ascertain whether those costs exceed $50,000 at that point in the proceeding. On my assessment, the Applicant's professional costs and disbursements as at this date comfortably exceed the sum of $50,000. In the event a bill in taxable form were prepared and these costs were taxed, the Applicant's entitlement would exceed that amount.[2]

1. He assessed the Applicant's costs as at 7 February 2008 at:

and further, that in his opinion if the costs were assessed at VCAT they would tax in the range of $157,000-$166,300[3].

1. The 'Certificate of Assessment' exhibited to his first affidavit is headed 'Loretta Holmes - Family Law' and certifies it has been prepared on a 'solicitor/client basis' in accordance with County Court Scale 'D'. Not only does it refer to the 'wrong' proceeding, and to 'solicitor/client' costs, as identified by counsel for Brady and AHW, and as will be discussed, this certificate includes a number of other discrepancies.
2. A second affidavit was sworn by Mr Linsdell on 30 April exhibiting a Certificate of Assessment headed 'VCAT Proceeding Ref: D803/2005' and confirming the assessment was on a party/party basis on County Court Scale 'D'. This was the only change from his first affidavit - both Certificates simply included $125,740.00 for Professional Costs without any itemisation or other particulars. The disbursements were itemised and totalled $59,077.33.
3. A further Affidavit was sworn by Mr Linsdell on 15 May 2008 in which he attempted to explain and correct a number of the discrepancies in the Certificates exhibited to the 30 April affidavits.
4. Where costs are common to both proceedings, for instance attendance at a Compulsory Conference or a Directions Hearing, it seems there has been no apportionment of the costs as between the two proceedings but rather they have been 'allocated' to this proceeding. In assessing what costs I would have ordered as at the date of the 21 February 2007 offer, I must have regard to what would have been a reasonable assessment for the costs of this proceeding, not the costs for so-called 'common work'
5. A third Certificate of Assessment was exhibited to the May affidavit which increased the sum assessed for Professional Costs as at 7 February 2008 to $127,728, again without itemisation or particulars, and reduced the disbursements to $55,154.55 - a total of $182,882.33.
6. In the May affidavit Mr Linsdell deposes to having reviewed the file and identifies eight appearances which were included in the 'April Certificates' which he concedes are not recoverable - two of which relate to directions hearings which did not occur; another where there was no appearance by or on behalf of the parties; and a further two where he concedes counsel did not appear but for which he says he has included an appearance fee, for the solicitor who appeared, in the adjusted lump sum for Professional fees. However, he does not provide any explanation as to how those mistakes occurred.
7. Further, he identifies and corrects a number of what he refers to as 'typographical' errors which generally relate to the incorrect spelling of experts' names.
8. In relation to the assessment of the Body Corporate costs to 7 February 2008 he provides the following explanation:

(ii) This period includes all work preparatory to the matter proceeding to Hearing in 2008 including completion of interlocutory steps, obtaining and reviewing discoverable documents, preparing expert reports and considering their contents, attendances at Compulsory Conferences together with comprising instructions for brief which would attract a loading for skill, care and attention.

(i) I refer to paragraph 4 of my first and second Affidavits where I state that in assessing party/party costs I have excluded work non-common to this proceeding relating to the connected proceeding W38/2005. By this, I mean I have excluded work which is specific to that unrelated proceeding. This includes correspondence and attendances which did not deal in any way with the current proceeding.[4]

1. Again it seems that there has been no allowance or adjustment to the cost estimate where work related to both proceedings. For instance, the compulsory conferences held on 31 August 2006 and 2 February 2007 clearly concerned both proceedings, and the one held on 31 May 2007 was concerned with W38/2005 only.
2. Further, in his third Certificate Mr Linsdell certifies Professional Costs at $127,728. This is clearly incorrect. In his 15 May affidavit Mr Linsdell deposes to the initial Certificate of Assessment providing a lump sum of $125,740 for professional costs. Taking into account the two adjustments for appearance by a solicitor instead of counsel of $248 and $714 respectively, he deposes to the adjusted professional cost figure being $127,728. However, he has made an arithmetical error and the correct figure is $126,702. This is a further indication of a lack of attention to detail and accuracy and reinforces my view that the assessment as a whole cannot be relied upon with any confidence as to its accuracy.

Should the Body Corporate have accepted the offers of 21 February 2007 or 7 February 2008?

1. On the face of them the consent orders are clearly not more favourable than the joint offer of 21 February 2007 to pay the Body Corporate $200,000 plus $40,000 costs. The offer of $200,000 is approximately $42,000 more than the Body Corporate has recovered on the claim - $157,686. If considered as a 'lump sum' offer the February 2007 offer was $240,000.
2. The Body Corporate contends that it was appropriate for it to have rejected this offer because the costs offered were unreasonable. However this must be considered in context of its offer of 20 February 2007 when it indicated it was prepared to accept $50,000 for costs, and more significantly its alternative offer of 7 March 2007 to accept payment of $350,000 plus $40,000 towards its legal costs.
3. However, this is academic. Irrespective of whether the offer of 20 February 2007 is considered as a 'lump sum' offer or a substantive offer plus costs, the Body Corporate has not 'bettered' that offer. As an offer of $200,000.00 plus costs of $40,000.00, being satisfied that $40,000.00 is and was a realistic estimate of the Body Corporate's costs in relation to this proceeding only as at 20 February 2007, the Body Corporate has fallen short of the offer of $200,000.00 by $42,314.00. If considered as a lump sum offer of $240,000, even if I were satisfied that $50,000.00 was a realistic estimate of its costs, the Body Corporate has fallen short by $32,314.00. If considered as a lump sum offer and Linsdell's revised estimate of the Body Corporate's costs of $74,550.63 is accepted (and for the reasons set out above I have no confidence in its reliability, and neither, apparently has the Body Corporate, its counsel having conceded that its party/party costs as at 20 February 2007 were 'about $50,000') the Body Corporate has fallen short by $9,764.37.
4. On every analysis the 'result' achieved by the Body Corporate is not more favourable than the joint offer of 21 February 2007.

1. As discussed above, Brady and the Joined Parties made an offer under the regime set out in s113 and s114 of the VCAT Act on 7 February 2008 to pay the Body Corporate $250,000.00 on the claim plus $50,000.00 costs. The Body Corporate does not dispute that this offer complies with ss113 and 114.
2. Should the offer be considered as an offer of $250,000 plus costs of $50,000 or an all-in offer of $300,000 as suggested by the parties, who did not refer me to any authorities which might assist. Section 112(1)(d) requires the Tribunal to decide whether in its opinion the orders made are not more favourable than the offer. In my opinion, it would be most unfair if a party making an offer of compromise under the Act did not to have the benefits afforded by the regime set out in ss113-115 because, although having bettered the amount ordered by way of damages, the amount offered for costs was less than the costs the Tribunal 'would have ordered on the date the offer was made'.
3. Whether the consent orders are more favourable to the Body Corporate than the offer of 7 February 2008 depends on whether its costs at that date exceeded $142,314. Mr Linsdell has assessed the Body Corporate's costs as at 7 February 2008 at $182,882.33. However, for the reasons above I have serious concerns and reservations about the reliability of Mr Linsdell's assessment of the Body Corporate's costs.
4. As noted above the Body Corporate amended its claim on a number of occasions. The latest amendments in November 2007 included claims which were subsequently abandoned. Obviously, the costs incurred by the Body Corporate of its various amendments should not be included as they would not be recoverable if the Body Corporate were to obtain a costs order in its favour. In the absence of any particularisation and noting the discrepancies in the Certificate as identified by Counsel I cannot be satisfied that $126,702 [the arithmetically correct figure] is a reasonable assessment of the Body Corporate's professional costs as at 7 February 2008.
5. Counsel for the Body Corporate conceded that its costs on a party/party basis as at 20 February 2007 were in the order of $50,000 - approximately one third less than Mr Linsdell's assessment of $74,550.63. If Mr Linsdell's assessment of the Body Corporate's professional costs as at 7 February 2008 of $126,702 is similarly discounted the revised figure is $84,468. If the disbursements are allowed in full, and for the reasons set out above I am not persuaded they should be, the revised figure is $139,622.55 (not including a further deduction for the costs the Body Corporate was ordered to pay on 4 December 2007 but which it agreed not to enforce as part of the offer of 7 February 2008). Irrespective of whether the professional costs should be discounted by as much as a third, they also include the costs of the internal drainage system design claim which was abandoned by the Body Corporate (and which I will discuss in more detail later in these Reasons), as do the disbursements insofar as they relate to the cost of the expert reports.
6. Counsel for the Body Corporate submitted that the portion of its party/party costs relating to the 'design' claim as at 20 February 2007 were $3000. I understand this is an estimate of the costs incurred by the Body Corporate following the amendment to its Points of Claim in November 2007, when it contends the drainage claim was first formally made in its pleadings.
7. I do not accept that this is a genuine estimate of those costs. This issue was identified by the Body Corporate's experts as early as August 2006 and was alluded to in various iterations of the Points of Claim before the amendment in November 2007. The costs relating to the internal drainage design claim are patently greater than $3,000.

The Body Corporate's reliance on 109(3)(a), (b) and (d)

1. The Body Corporate otherwise relies on s109(3)(a), (b) and (d) of the VCAT Act_._ Counsel for the Body Corporate submitted that as it has been successful in recovering what he described as a 'considerable amount of money´ costs ought to follow the event and I should exercise the Tribunal's discretion under s109(2). Whilst Brady has agreed to pay it the sum of $157,686, when considered in the context of its total claim of $808,000, the Body Corporate has settled for 19.5% of its claim. Although this was a large claim involving complex legal and technical questions I am not persuaded that there should be an order for costs in favour of the Body Corporate.
2. It maintains that its own conduct since the commencement of the proceedings has been reasonable and that it has attempted to achieve a resolution at every opportunity as demonstrated by its three 'offers'. For the reasons set out above I do not consider that any of the three offers is reflective of a reasonable approach to settlement. Further, I note that at the time of the joint offer of 21 February 2007 the Body Corporate had already amended its Points of Claim twice - Points of Claim were filed on 23 January 2006, Amended Points of Claim were filed on 16 February 2006 and Further Amended Points of Claim were filed on 19 May 2006.
3. Incomprehensibly the Body Corporate contends that it has been disadvantaged by Brady 'sticking its head in the sand' and making a number of interlocutory applications. This is despite a respondent needing to know and have confidence that it is dealing with a duly authorised representative of all parties to the litigation. That the matters raised in Brady's interlocutory applications had merit is confirmed by their being successful and costs orders being made in its favour.
4. I am not satisfied that there is anything in Brady's conduct of this proceeding which would make it 'fair' to order that it pay the Body Corporate's costs.

1. The conduct of the proceeding by the Body Corporate and/or its solicitors leaves much to be desired as demonstrated by the following examples. The proceeding was initially commenced by the Body Corporate on its behalf and on behalf of the 93 unit holders. Subsequently, the Tribunal found the Body Corporate did not have authority to institute the proceeding on behalf of the unit holders and they were struck out as applicants on 27 March 2006.
2. Further, not only has the Body Corporate sought and obtained leave to file and serve no less than five versions of its Points of Claim, during the hearing it made application to file Fourth Further Amended Points of Claim This application was made on very short notice to the other parties and hearing of the application adjourned to enable the parties to consider it. It was subsequently overtaken by other events.
3. Orders were made on 13 November 2007 for an index to the Tribunal Book to be served by 31 January 2008, and for the Tribunal Book to be filed by 21 February 2008 - the Thursday before the date scheduled for the commencement of the hearing. A compulsory conference was conducted on the day the hearing was scheduled to commence, and the Tribunal Book was not delivered until the morning of the first day of the hearing - Tuesday 26 February 2008. The Tribunal Book comprised some five volumes with a further two volumes of additional documents. The index was incomplete, and pages were missing from the Tribunal Book. The hearing was adjourned after a short time on the first day to enable counsel and the Tribunal to read it. When the hearing resumed an updated index and a number of missing pages were provided.

1. For the reasons set out above, it is patently obvious that the Body Corporate should have accepted both the 21 February 2007 and the 7 February 2008 joint offers, and its conduct in failing to do so was unreasonable. Although counsel for the Body Corporate conceded that it should have been aware of the limitations of the internal drainage design claim when it received Mr Morse's Outline of Evidence on 31 January 2008, not because of the evidence he would give about the issue, but because of its silence on the issue, it seems that it failed to properly assess the merits of its claim in relation to the internal drainage design claim until after the opening by Counsel for Brady.
2. Its reluctance to properly assess the merits of the roofing claim are demonstrated by its initial apparent reticence to accept the joint report filed after the expert conclave - where its expert essentially accepted the method of rectification recommended by Brady's expert. Rather than accepting the report, it referred the joint report to a builder, obtained an affidavit deposing to difficulties with its own expert's expert opinion, sought an adjournment of the hearing and when that was refused abandoned reliance on the builder over the weekend.
3. As Gillard J commented in MT Associates Pty Ltd v Aqua-Max Pty Ltd (No. 3) [2000] VSC 163 at [67]

'any offer made in litigation should be carefully considered and a party and his solicitor ignores or rejects the offer at his peril'

'the fact is that in litigation experienced counsel and litigation solicitors have a very good idea during the course of a trial as to what their client should receive or be expected to pay. It is not difficult in most cases to make an assessment of the risks involved and what is a fair compromise to the client ...If a proposal is put forward a litigant and his advisor receiving the proposal ignores that proposal at his peril'.

1. Insofar as the 21 February 2007 Calderbank offer is concerned I am not persuaded that there should be an order for indemnity costs. The VCAT Act sets out a regime for settlement offers in ss113-115. Unlike the courts where costs follow the event, s109 of the VCAT Act provides that each party should bear their own costs unless the Tribunal is minded to exercise its discretion under s109(2) having regard to the matters set out in s109(3) and only then if it is satisfied 'it is fair to do so'. Calderbank offers can be considered under s109(3)(e) - 'any other matter which the Tribunal considers relevant' in deciding whether to exercise the discretion under s109(2). In MT Associates Pty Ltd v Aqua-Max Pty Ltd (No. 3) Gillard J also said:

In my opinion if the offer could be made in accordance with the rules it should be. The rules [about offers of compromise] are there to be followed. In addition the rules set out in detail the procedure to be followed and the consequences which flow from the happening of a particular event.

But if the offer is not made in accordance with the rules when it could have, it is still a relevant matter to take into account on the question of costs

1. Where a party chooses not to make an offer under s113-115 it seems to me that any order for costs should be on a party/party basis unless there are exceptional circumstances. As Nettle JA said in Pacific Indemnity Underwriting Agency Pty Ltd v Maclaw No 651 Pty Ltd [2005] VSCA 165:

'I also agree ... that where an order for costs is made in favour of the successful party in domestic building list proceeding, the costs should ordinarily be assessed on a party/party basis ... Of course there may be occasions when it is appropriate to award costs in favour of the successful client in domestic building proceedings on an indemnity basis. Those occasions would be exceptional ...' [91-92]

1. For the reasons discussed above, I am satisfied this is an appropriate case for the exercise of the discretion under s109(2) should be exercised and I will therefore order that the Body Corporate pay Brady's costs from 21 February 2007 to 6 February 2008 on a party/party basis. I consider County Court Scale 'D' to be the appropriate scale.
2. The joint offer of 7 February 2008 does comply with s113-115 of the VCAT Act. I am satisfied the Body Corporate has not bettered that offer and that it should pay Brady's costs from that date. Does the phrase 'all costs' mean party/party costs, solicitor/client costs or indemnity costs? Because under s112(2) the Tribunal has an unfettered discretion 'unless the Tribunal orders otherwise' the basis for an order for costs should be considered according to the circumstances of each case.
3. I am satisfied that the Body Corporate should pay Brady's costs on an indemnity basis from 7 February 2008. As noted above, counsel for the Body Corporate conceded that it should have realised that the internal drainage design claim was without merit when it received Mr Morse's Outline of Evidence on 31 January 2008. Its only response was to serve an inflated, entirely unrealistic Calderbank offer on 18 February 2008 to accept $550,000 plus costs on County Court Scale 'D'.

1. In the written submissions filed in support of its application for costs the following orders were sought by AHW:
   1. the Body Corporate and/or Brady pay all of AHW's costs of the proceeding including reserved costs on an indemnity basis except insofar as they are of an unreasonable amount or have been unreasonable incurred, alternatively on a solicitor client basis;
   2. alternatively the Body Corporate and/or Brady pay AHW's costs including reserved costs:
      • (i) prior to 21 February 2007, alternatively 7 February 2008 on a party party basis such costs to be assessed by reference to the Supreme Court Scale of costs; and
      • (ii) thereafter the Body Corporate pay all of AHW's costs on an indemnity basis, except insofar as they are of an unreasonable amount or have been unreasonably incurred, alternatively on a solicitor client basis.
2. At the costs hearing Counsel indicated that AHW's primary submission was that Brady should pay its costs of the proceeding. Whilst I am satisfied for the reasons which follow that Brady should pay AHW's costs, and that the Body Corporate should indemnify Brady for AHW's costs, I am not persuaded that those costs should be paid on an indemnity basis for the period up to 7 February 2008.
3. AHW's relies principally on s74(2)(b) of the VCAT Act in support of its application for costs:

If any applicant withdraws an application or referral-

(b) the Tribunal may make an order that the applicant pay all, or any part of, the costs of the other parties to the proceeding;

1. In my view s74(2)(b) should be regarded as a separate power to that afforded to the Tribunal in s109(2)[5]. The power to make an order for costs is discretionary and I consider it appropriate that the matters set out in s109(3) be taken into account in determining whether to exercise that discretion, and that orders for costs may also be made in exercise of the Tribunal's discretion under s109(2)[6]. Section 74 specifically concerns the withdrawal of an application by an applicant. Although Brady is not 'the applicant' on the record, it is an applicant as defined in s3(a) of the VCAT Act being a person who has made an application - seeking contribution from, alternatively an apportionment of responsibility against, the joined parties.
2. Brady joined AHW and upon abandonment of the internal drainage claim by the Body Corporate, withdrew its claim for contribution against AHW. The power to make an order for costs under s74(2) is entirely discretionary. There is no presumption that an order for costs will be made after a claim is withdrawn. Brady joined AHW because of the claims made against it by the Body Corporate which were subsequently abandoned. The joint offers discussed above were made on behalf of Brady and the Joined Parties. I am not privy to the negotiations and arrangements between Brady and the Joined Parties enabling those joint offers to be made.
3. Having regard to s109(3)(c) I am satisfied that AHW are entitled to their costs of the internal drainage system design claim. However, I am not persuaded that these should be ordered on an indemnity basis for the period prior to 7 February 2008, nor am I satisfied that the Supreme Court Scale is the appropriate scale. Although it joined in the joint offers with Brady (and the other joined parties) I am not aware of any offers it made to Brady seeking to protect itself on the question of costs which might give rise to an order for indemnity costs as against Brady prior to 7 February 2008.
4. In relation to the period on and from 7 February 2008 I refer to my reasons above in relation to Brady's claim for costs. As I have found Brady should recover its costs on an indemnity basis from 7 February 2008, so too should AHW.
5. There seems to be a perception that where a claim has little chance of success costs should be ordered on an indemnity basis, but this is just one of the matters to be taken into account by the Tribunal when deciding whether it is fair to exercise the discretion under s109(2) as set out in s109(3)(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 (emphasis added).

1. Although there will clearly be instances where Supreme Court scale is appropriate I agree with the recent observations of Macnamara DP in Transpacific Cleanaway Pty Ltd v South East Water Limited [2008] VCAT 2179 where considering whether an order for costs should be made in accordance with the Magistrates' Scale of Costs he said:

...the existence of Section 109 suggests that the Tribunal is generally to be a no costs jurisdiction and even where costs are to be awarded it should be a low costs jurisdiction. That means that when I look at the more senior courts in the State and consider as between their scales, which scales should be applied, I find myself directed to the County rather than the Supreme Court. Generally I have resisted applications for uplifted costs orders based on Supreme Court scales on that score.

In the result therefore I believe these considerations as well as the practice which has been hallowed by the years of the Tribunal generally being guided by the County Court scales should lead me to make the costs orders in the form sought by the applicant. [9-10]

Should the Body Corporate pay AHW's costs or indemnify Brady for them?

1. Initially AHW sought orders that the Body Corporate or Brady pay its costs. However, upon becoming aware of the call by the Body Corporate on the unit holders in January 2008 for additional funds on account of legal costs, counsel for AHW submitted that Brady pay AHW's costs. I consider this to be the appropriate order in any event. Brady joined AHW and must be responsible for payment of its costs but is entitled to be indemnified by the Body Corporate. AHW would not have been joined as a party but for the conduct of the Body Corporate
2. Counsel for AHW addressed me at length about what he identified as deficiencies, and what he described as fundamental flaws in the expert reports relied upon by the Body Corporate. I was referred to two authorities in support of the proposition that it was appropriate for me to make an assessment about the strengths of the Body Corporate's case after considering the expert evidence. In Champagne View Pty Ltd v Shearwater Resort Management Pty Ltd [2000] VSC 214 Gillard J made an assessment based on legal principles when he found the plaintiff could have established a claim in nuisance against the defendant and obtaining injunctive relief.
3. I was also referred to ONE.TEL Ltd v Deputy Commissioner of Taxation [2000] FCA 270 where Burchett J made the following observations at [5]

It is accepted that, in a case which terminates before there has been a hearing, the Court should not resolve the issue of costs by engaging in something in the nature of a hypothetical trial: Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201_; Re The Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin;_ [1997] HCA 6, (1997) 186 CLR 622 at 624. But this does not mean that the Court can never make an order for costs. Often, it will be unable to do so; but in other cases an examination of the reasonableness of the conduct of the parties, respectively, may provide the basis of an order, or "a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried", as McHugh J put it in Ex parte Lai Qin at 625

1. This was essentially an 'experts' case'. As indicated during the hearing it is impossible for me to comment on or make any findings about the evidence that would have been given by the experts. No expert evidence was heard. The experts' evidence has not been tested as they have not been cross-examined. Further, in the absence of cross examination of the experts, it would be unfair for me to have any regard to counsel's submissions as to the credit of the expert witnesses including the alleged conflict of interest of Mr Dando.
2. The Body Corporate contends that as Brady had an absolute defence to this claim there was no need for it to join AHW, and that accordingly Brady must be responsible for AHW's costs. Counsel for AHW submitted that as Brady was the builder and as it had no part in the design of the internal drainage system, it could not have had any liability for the design. Brady's claim against AHW, as set out in the Points of Claim against the joined parties dated July 2006, is founded in negligence and a breach of the duty of care Brady alleges AHW owed to current and future owners and occupiers of the property. Brady sought orders that AHW indemnify it pursuant to s23B of the Wrongs Act 1958, or alternatively a declaration that AHW was a concurrent wrongdoer and that its liability to the Body Corporate should be limited after an apportionment of responsibility under Part IVAA of the Wrongs Act. In my view, even if Brady had an absolute defence to any 'contractual' claim it was entirely appropriate for it to make a claim under Part IVAA, the merits of which I make no comment about here.
3. I agree that if the Body Corporate had indicated it was not pursuing a claim against Brady in respect to the design of the internal drainage system AHW may not have been joined, and the question of its costs would not have arisen. Whether it was clearly pleaded or not, it was reasonable for the Body Corporate to believe at the time it applied to join AHW, that a claim was being made in relation to the design of the internal drainage system. It was identified as being inadequate in the expert reports which formed the basis of the Body Corporate's demands that works be carried out to rectify the items identified in those reports, and I accept that although the precise nature of the allegations being made by the Body Corporate may be unclear, on a review of the various iterations of its Points of Claim, these should not be considered in isolation. For instance in sub-paragraph (ii) on page 15 of the Further Amended Points of Claim dated 19 May 2006 the Body Corporate alleges:

'The internal pipe network is insufficient to disperse the stormwater generated to less than a 1 in 1 year storm event'.

By cross-referencing this to the expert reports of Mr Biagioni-Froudist of Van Der Meer Consulting ('Van der Meer') and Trevor Dando of Sinclair Knight Merz Pty Ltd ('Dando'), which is appropriate, I find that this allegation relates to the design of the internal drainage system.

1. All demands and settlement offers by the Body Corporate were predicated on the contents of its expert reports - that the defects identified in those reports, which included the design of the internal drainage system, were to be rectified.
2. The Body Corporate could have saved Brady and AHW considerable expense, if it had simply said or clarified in July 2006, when the application for joinder of AHW was made by Brady, that it was not making a claim in relation to the design of the internal drainage system. Its failure to do so reinforces the view that even if the extent of its claim in relation to the internal drainage system was not entirely clear from its pleadings, that its intention was to make a claim against Brady for the design. It was, in my view, unreasonable for it to allow Brady to continue with its application for joinder in the absence of it carrying out its own assessment of this claim. Although the onus is on an applicant to prove its claim, it is apparent that the Body Corporate was waiting for Brady and/or AHW to obtain expert reports to assist it in the assessment of its claim, which it subsequently abandoned and it is therefore fair that it indemnify Brady for the costs it has been ordered to pay AHW.

1. Brady seeks a stay of the orders made on 3 March and 7 April 2008 the effect of which is that Brady will pay the Body Corporate $157,686.00 until completion of taxation of its costs. It relies on Danidale where at [48] Habersberger J said:

Whilst a party is normally entitled to receive the fruits of its victory by being paid the judgment sum without any stay, in the special circumstances of this case I consider that Danidale is, in reality, an unsuccessful party and that it would not be just to expose Abigroup to the risk, however remote, that having paid the judgment sum to Danidale it could find itself unable to recover what will undoubtedly be the large amount of costs awarded to it.

1. As I understand it, Brady (and AHW) is concerned about the Body Corporate's capacity to pay any costs order, particularly in light of its 'Special Correspondence to all Owners' regarding a 'Legal Action Levy' dated 25 January 2008 for $150,000 for legal costs. The following extracts from that correspondence are pertinent:

The case is yet to be resolved however is due for hearing in February. The committee of the Owners Corporation have been watching over the claim and are confident of a positive outcome in favour of the Owners' Corporation.

The committee are concerned about the blow out in costs for the matter and have done everything in their power to obtain a settlement from the developer/builder putting forward several reasonable offers all of which have been declined. ...

The Owners Corporation has drawn on its cash reserves extensively to fund this claim rather than raise levies against the members. This was done as the committee was confident of a settlement, however this has not yet eventuated. Sadly all funds have been exhausted and the Owners Corporation has no other option than to raise further levies. Currently the Owners Corporation owes approximately $120,000 in costs to the solicitors, $28,000 to the barrister and some other costs to experts of a much lesser amount.

The committee have now agreed that a further levy is simply unavoidable as we move towards trial with no settlement thus far in sight. The committee have authorised the raising of a levy immediately. The levy being for a totalof $150,000 that is to be raised to clear accounts on hand. A further levy may be necessary as we move closer to hearing to cover the trial costs.

The committee is doing everything in their power to see a desirable commercial outcome that ensures the complex is compliant with Australian Standards, maintains the overall property value and meets the insurer's requirements.

As accounts are on hand your urgent payment of this account will assist greatly and be appreciated.

1. Noting that this levy was struck well before the hearing so that accounts that had been rendered could be paid, and before the offer of 7 February 2008, it must be cold comfort indeed for the unit holders that the settlement sum seemingly falls short of its costs of this litigation.
2. I will grant the stay on condition that Brady and AHW take all reasonable steps to arrange for their costs to be assessed by the Principal Registrar in default of agreement.

Note: The applicant has been referred to in these Reasons as the 'Body Corporate' consistent with the description used by the parties.

[5] Philtom Developments Pty Ltd v Vero Insurance Limited [2005] VCAT 751

[6] Smythe v Vero Insurance Limited [2005] 2714