G L S v P L P [2013] VSCA 127

2 After a nine day hearing, the applicant, GLS, was successful in a sexual harassment proceeding brought against PLP in the Human Rights List of the Victorian Civil & Administrative Tribunal (the Tribunal). Her claim was made under ss 86(1)(b) and 87(1) of the now-repealed Equal Opportunity Act 1985 (Vic). She was awarded a very substantial amount in compensation. The President of the Tribunal, who heard and determined the claim, ordered, consonantly with s 109(1) of the Victorian Civil and Administrative Tribunal Act 1998 (the Act) that there be no order as to costs. He stated in his reasons for judgment that no party had 'made or foreshadowed an application' as to costs. He stated that costs were not ordered in proceedings of this kind except in special circumstances.

3 GLS seeks leave to appeal against the order that there be no order as to costs; and, if leave be granted, that the appeal be allowed. Today, counsel for PLP did not oppose a grant of leave, neither did she oppose the appeal being allowed, with remitter of the costs question to the Tribunal. Nonetheless, the Court must consider whether the applicant has made out a basis for grant of leave, and for an order that the appeal be allowed.

4 Under s 148(1) of the Act, a party to a proceeding may appeal on a question of law from an order of the Tribunal, if leave to appeal is given. The order having been made by the President of the Tribunal, the leave application, and the appeal, if leave is granted, are to be determined by the Court of Appeal.

5 Consideration whether leave should be granted is informed by the reasons of JD Phillips JA in Secretary to the Department of Premier and Cabinet v Hulls.[1] A question of law must be identified and 'ordinarily the applicant will be required to show that there is a real or significant argument to be put that error exists'. It will be relevant to consider also whether substantial injustice would be done if the decision is left unreversed.[2]

6 The applicant has identified as a question of law the proposition that she was denied natural justice by not being given the opportunity to make submissions as to costs before the impugned order was made. She disputes that she did not make or foreshadow a costs' application. She made such an application, she says, in the prayer for relief attached to her points of claim. She argues that there were circumstances which should have caused the Tribunal to make a costs order, referring to s 109(3)(a)(i) and (vi), (b). She acknowledges, on the other hand, that nothing was said about costs during the hearing of the proceeding.

7 The question whether the applicant was denied procedural fairness by not being given the opportunity to make a costs application does raise a question of law.[3] In my opinion, in the particular circumstances of this matter, the applicant has demonstrated not only that there is a real or significant argument that the Tribunal erred, and that a substantial injustice would be done if the costs' order was let stand - which would justify a grant of leave - but also that error has been demonstrated. I would grant leave to appeal, allow the appeal, and remit the matter to the Tribunal for its consideration of an application for costs by GLS..

8 The starting point with respect to costs in a Tribunal proceeding is set out in s 109(1) of the Act. Each party is to bear its own costs, subject to other provisions of Division 8 Part 4. An order for costs may be made if the circumstances fall within s 109(2) - which requires consideration of the matters set out in s 109(3) - or are those addressed by s 110(1) or (2). The making of a costs' order is the prima facie position if the circumstances fall within s 112(2).

9 In both the Anti-Discrimination and Human Rights Lists of the Tribunal, it has been emphasised in a number of cases that the default position set out in s 109(1) will ordinarily apply. There is a particular explanation why that should be so. See, for instance, Tan v Xenos[4] and Morros v Chubb Security Personnel Australia.[5]

10 Even so, rightly having regard to the circumstances of the particular proceeding, costs orders have been made in proceedings of those kinds in favour of one or other party. Bryce v City Hall Albury Wodonga Pty Ltd,[6] Stynes v Murray Meats Pty Ltd,[7] Tan and Morros are instances where such an order was made. In each of those matters, the costs issue was agitated, and the order made, at a hearing subsequent to the determination of the merits of the matter. In only one of them, so far as I can see, was the making of a costs' application foreshadowed before the determination of the merits. That was in Morros. There, the application was foreshadowed in correspondence between the solicitors for the parties; and also an offer of compromise had been made.

11 The volume of work which the Tribunal must hear and determine is a good reason why multiple hearings should not take place except if absolutely necessary. That said, there can be situations where it will not be possible to say whether a costs application will be made until the Tribunal has delivered its reasons. For instance, an offer of compromise might have been made. Its significance or otherwise will depend upon the Tribunal's findings. The same may be said in a planning case, in which an objector's motives are alleged to be purely commercial. In such matters, it would at least be wise for a party with a prospect of seeking costs to put the Tribunal on appropriate notice rather than risk the Tribunal dealing with costs by reference to the default position in the course of resolution of the merits dispute.

12 On the other hand, in many instances, if a costs' application is to be made, I see no reason why it should not be agitated at the merits hearing; and practical reason why it should be. The basis for the application, not dependent upon the Tribunal's findings on the merits, could be explained. Making the application at this stage might well avoid the need for a further hearing.

13 In the present case, having regard to the nature of the proceeding which was before it, the Tribunal acted upon the basis, in the absence of a costs' application being 'made or foreshadowed' orally, that no such application was to be made. For his part, applicant's counsel appears to have assumed that, if any application was to be made, it should be made after the Tribunal published its reasons upon the merits of the matter. Certainly there were earlier cases justifying a belief that this was the appropriate course. In the result, the Tribunal and applicant's counsel were at cross-purposes. Although the Tribunal did not intend to deny the applicant a chance to be heard about costs, its misapprehension of the applicant's position resulted in there being such a denial. By reason of the misapprehension, the applicant was deprived of the opportunity of submitting, as she might have done, that the respondent had engaged in conduct which was contrary to s 109(3)(a)(i) and (vi) and (b) of the Act and should result in a costs' order under s 109(2); and also, probably, see Tan v Xenos,[8] that the award of damages would be swallowed up by her legal costs if she did not have some order in respect of her costs. It cannot be said that such submissions would inevitably have been rejected.

14 It is highly undesirable that a situation such as occurred here should be repeated. These reasons should make it clear that a party who or which does not either make or foreshadow a costs' application, where that is in prospect, during the course of the merits hearing, is in the future unlikely to persuade this Court, or a judge of the Trial Division, that it has been denied natural justice if the Tribunal proceeds to make a costs order reflecting the default position established by s 109(1) of the Act.

15 I respectfully agree. I wish only to add that I can well understand how the learned President may have been led to make the mistake that the applicant did not wish to put submissions as to costs. I recall from my own experience in the Tribunal, albeit that it is now some considerable time ago, that it was commonplace for all submissions both as to substance and costs to be made in the course of one hearing and, if submissions as to costs were not made in the course of that hearing, it was assumed that no submissions as to costs were to be made.

16 Accordingly, I wish expressly to associate myself with Ashley JA's observations as to the importance of counsel making perfectly clear to the member who hears a case in the Tribunal, that it is the wish of counsel to make submissions as to costs lest otherwise that preference be overlooked.

17 Accordingly, the orders of the Court will be as follows:

1. The application for leave to appeal is allowed.

1. The appeal is treated as instituted and heard instanter and is allowed.
2. Order 4(f) of the orders made by the Victorian Civil and Administrative Tribunal herein on 13 March 2013 is set aside.
3. The question of costs of the proceeding in the Victorian Civil and Administrative Tribunal hearing herein is remitted to the tribunal for decision according to law.
4. The respondent shall pay the applicant's costs of the application for leave to appeal and of the appeal.
5. The respondent is granted a certificate under s 4 of the Appeal Costs Act 1998.

[1] [1999] VSCA 117; [1999] 3 VR 331, 335-336.

[2] The second limb of the Niemann propositions. Niemann v Electronic Industries Ltd [1978] VicRp 44; [1978] VR 431.

[3] Luck v Renton [2005] VSCA 210, [17].

[4] [2008] VCAT 1273, [16]-[22], [24].

[5] [2009] VCAT 1845, [17]-[19].

[6] Judge Dove, Vice President, 9 August 2004.

[7] Ms McKenzie, Deputy President, 22 September 2005.

[8] [2008] VCAT 1273 [1]-[3].