1. In the alternative, the Applicant also submitted that:

(a) the position taken by the Respondent was 'untenable' and the Respondent's 'position was so weak it would be appropriate to make an order for cost on this basis';[5] and

(b) the Applicant was 'required' to bring the proceeding and, if she had not done so, 'works would likely have proceeded with insufficient protection works ... because the Respondent failed to understand the scope of the protection works...'.[6]

therefore, the Respondent should be ordered to pay her costs.

1. In the further alternative, the Applicant submitted that the Interested Party ought to be ordered to pay the Applicant's costs because:

from 7 February 2024 she sought to engage with the interested party to seek to come to a protection works agreement to avoid a hearing before this Board.

1. More particularly, the Applicant says:
   1. The [respective] solicitors had a telephone discussion on 7 April 2024;
   2. On 8 February 2024, the interested party's solicitor asked the applicant's solicitor to "set out in an email exactly what [the applicant] requires in order to alleviate [her] anxiety about the proposed protection works";
   3. The applicant's solicitor provided a detailed response by email on 15 February 2024 identifying 2 issues she was concerned about, vibration monitoring and management and amended drawings to show bored piers to be constructed at least 75mm from the boundary, and concluded by saying that:

the Building Appeals Board is unlikely to list an initial directions hearing for several weeks and [the applicant] would like to make good use of this time to resolve these 2 matters with your client in the meantime and come to a protection works agreement thereby rendering the appeal unnecessary;

1. The interested party's solicitor did not respond to the email sent to him on 15 February 2024 and so the applicant's solicitor sent another email to him on 6 March 2024 identifying that the applicant would incur significant costs by having to lodge a statement of contentions by 8 March 2024 and seeking an urgent response to her solicitor's earlier email;
2. On 6 March 2024, the interested party's solicitor responded that the interested party "is not a party to this appeal" and that "any proposal your client has to resolve the appeal should IMMEDIATELY be addressed to and forwarded to the lawyers for the respondent to the appeal";
3. On 7 March 2024, the applicant's solicitor emailed the interested party's solicitor pointing out that she was a party to the appeal and that the proposal for protection work was prepared for the interested party, not the respondent, concluding with a request for an urgent response.,

and, in reliance on s 109(3)(e) of the VCAT Act, submitted that:

(a) the Interested Party's refusal to engage with the Applicant was unreasonable;

(b) an agreement in relation to vibration monitoring and management was a distinct possibility if the Interested Party had engaged in discussions with the Applicant; and

(c) as a result of the Interested Party's refusal to engage, the Applicant 'was required to continue her appeal and incur the costs of doing so'.

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

(b) The Tribunal should 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.

(c) In determining whether it is fair to do so, that is, to award costs in favour of a successful litigant, the Tribunal must have regard to the matters stated in s 109(3).

1. The Respondent submitted that, before the BAB made the substantive determination in respect of his determination that the protection work was appropriate, he:

was firmly of the view that the Protection Works were appropriate in all of the circumstances, and that the Applicant had been provided with sufficient information and/or assurances regarding the matters raised in the Protection Work Response Notice.

1. And claimed, on the basis of correspondence that passed between the Interested Party's agent and the Applicant, that he:

was of the view (and was entitled to form the view) that sufficient information regarding the Applicant's queries had been provided to the Applicant (via her agent).

1. The Respondent characterised the 'offer' relied on by the Applicant as merely 'a request for the Respondent (and Interested Party) to concede the Proceeding' and submitted that it was not a 'genuine offer'.
2. The Respondent denies that his position was 'untenable', submitting that the Applicant is conflating 'the success of one party with the "untenability" of the other's (conflicting) position'.
3. The Respondent also highlights the fact that the Applicant was wholly unsuccessful in relation to one aspect of the appeal and submits that:

there is nothing to suggest that the Respondent has:

(a) acted in a way which has disadvantaged the Applicant;

militates against the prospect that a costs order should be made.

1. The Interested Party has not made any submissions or filed any material.

1. While the VCAT Act provides useful guidance about things that may be relevant to consider, ultimately the touchstone is justice - we must make our decision on the basis of what we consider to be just.
2. And, what is 'just' will be 'fair'. In Mornington Peninsula SC v Mattieson Pty Ltd,[7] VCAT observed:

The Tribunal has often confirmed that the purpose of an award of costs is to compensate a party who has incurred costs in circumstances where it would be unfair to require them to be liable for these costs.

1. In this case, in determining what is fair, we consider the starting point to be the context in which the proceeding occurred.
2. This was an appeal concerning protection work where it was identified that the carrying out of building work by the Interested Party had the potential to cause damage to the Applicant's property, thereby triggering the protection work 'regime' of the Act, under which, the Interested Party was required to:

(a) specify the nature of protection work proposed to be undertaken;

(b) serve a notice outlining the proposed protection work;

(c) cause a survey to be carried out to identify any pre-existing damage;

(d) meet the Applicant's costs of assessing the proposed protection work;

(e) arrange insurance cover to protect the Applicant's interests;

(f) meet the Applicant's costs of supervising the protection work;

(g) carry out the protection work; and

(h) compensate the Applicant for any loss or damage suffered by the Applicant 'in connection with'[8] the 'carrying out of protection work'.[9]

1. Furthermore, the Act anticipates neighbours reaching agreement[10] on protection work, providing for determination by the relevant building surveyor (and review of those determinations by the BAB) as an alternative course of action when agreement cannot be reached.
2. In this context, we think it would be unfair to require the Applicant to remain liable for (all of) the costs she has incurred.
3. The next question we need to resolve is who should be ordered to pay the Applicant's costs.

1. While the Respondent had the task of making a determination as to whether the proposed protection work was appropriate, it was not his responsibility to design, or describe, the protection work, or any improvements or alterations to the originally proposed 'package' of protection work.
2. While the Respondent erred in making a determination that the protection work was adequate, we agree with the Respondent's summary:

The Board's finding was ultimately founded in the fact that vibration monitoring was not referred to in the initial Form 7 submitted by the Respondent, and the subsequent correspondence which shaped the Respondent's belief, did not change the substance of the Form 7.

1. It was the Interested Party who was responsible for the design of the protection work, including ensuring that the protection work 'package' was appropriately updated to set out, in sufficient detail, who was going to do what, when (and in what way, and to what standard) to address the requirement for vibration monitoring and management and to present that material to the Respondent in a manner that made it clear that he was then considering an amended version of the protection work 'package'.
2. And, while the Respondent fell into error, seemingly considering the 'subsequent correspondence' to have amended the package in relation to which the Respondent was required to make a determination, we note that it was the Interested Party's responsibility to design and undertake the protection work, and agree with the Applicant's submissions that the Interested Party could, and should, have engaged with the Applicant. We also consider it highly likely that doing so would have avoided the need for a hearing.
3. Instead, the Interested Party rejected the notion that she had any role to play in resolving the dispute:

(a) claiming not to be a party to the proceeding;

(b) suggesting that to engage in discussions with a view to resolving it would 'influence or impugn the independence of' the Respondent; and

(c) refusing to enter into any discussions to determine whether the issue could be resolved.

1. We find that, in the context of this proceeding, and with no submissions having been made to persuade us otherwise, these matters override the general rule in relation to costs and find that it would be just for us to order the Interested Party to pay (a portion of) the Applicant's costs.

How much should the Interested Party be ordered to pay?

(a) legal costs of $14,078.80 plus GST ($15,486.68);

(b) costs paid to McFarlane Engineering to prepare expert report and attend hearing ($5,665.00); and

(c) the filing fee paid to the BAB ($366.34).

1. At paragraph 18 of our determination, we observed:

... the Applicant advanced a case in relation to only two of those issues:

(a) the proximity of the bored piers to the property boundary; and

1. And we ultimately set the Respondent's decision aside only on the basis that we found that the protection work package did not include vibration monitoring and management.
2. In other words, the Applicant was not wholly successful.
3. We find it would be reasonable to reduce the legal fees by 25 per cent to account for work done in relation to the bored piers argument.
4. In K.S.J.A.D Nominees Pty Ltd v Goubran & Ors,[11] the BAB[12] observed:[13]

There is no scale of costs applicable to proceedings before the Board. Determining the appropriate quantum of costs is at the discretion of the Board, which will consider what is just in the circumstances. In rare cases, full indemnity costs might be ordered. However, there would need to be some egregious or contumelious conduct to warrant such an order...

1. While we have found that costs are justified, we do not think that it is appropriate to order the Interested Party to pay the remainder[14] of the Applicants' legal costs on an indemnity basis.
2. In all of these circumstances, we find that it is fair to order the Interested Party to pay (approximately)[15] 60 per cent of the remainder of the legal fees.
3. Accordingly, we will order the Interested Party to pay legal fees fixed in the amount of $7,000.00.

1. As noted above, s 97 of the Act requires the Interested Party to pay to the Applicant:

all costs and expenses necessarily incurred ... in assessing proposed protection work...

1. In this context, we find that it is fair to order the Interested Party to pay the engineers' fees.
2. Accordingly, we will order the Interested Party to pay the engineers' fees fixed at $5,665.00.

1. We will order the Interested Party to pay the BAB filing fee ($366.34).

1. We will order the Interested Party to pay the Applicants costs fixed in the total amount (that is, including the figures mentioned above) of $13,031.34.

[1] Stewart v Building Practitioners Board and Anor [2001] VSC 349.

[2] Martin v Fasham Johnson Pty Ltd [2007] VSC 54.

[3] See, for example, Railway Ave Pty Ltd v Leahy & Anor [2022] VBAB 6, Levinson v Trevena [2021] VBAB 152, Davison v Guerillot (No 2) [2021] VBAB 185 and Georgiou v Leone & Anor (No 2) [2023] VBAB 72.

[4] Relying on s 109(3)(c) of the Victorian Civil and Administrative Tribunal Act 1998.

[6] Relying on s 109(3)(e) of the Victorian Civil and Administrative Tribunal Act 1998.

[7] [2011] VCAT 1169.

[8] Which the BAB has held to be a 'broad term, that should be interpreted in a practical manner', Wilkins & Anor v Malsons International Pty Ltd [2021] VBAB 60, Barbato v Nguyen & Anor [2023] VBAB 75, Yan v IP Brothers Investment Pty Ltd [2022] VBAB 170.

[9] Which the BAB has held should be 'interpreted in a holistic manner, which has regard to the work that is undertaken, and the work that is not undertaken', Wilkins & Anor v Malsons International Pty Ltd [2021] VBAB 60, Barbato v Nguyen & Anor [2023] VBAB 75, Yan v IP Brothers Investment Pty Ltd [2022] VBAB 170.

[10] Building Act 1993, s 86.

[14] That is, after the 25 per cent reduction referred to above.

[15] We think it is appropriate to 'round off' the result.