1. The respondent shall pay the applicant's costs of the respondent's application filed 11 March 2025 and heard on 17 June 2025, including the costs of the preparation for the hearing of those applications and the briefing of Counsel. The respondent shall also pay the applicant's costs of this costs application, which was made under paragraph 11 of that Order. Those costs are to be assessed by the Costs Court on a standard basis under the County Court Scale.

1. On 20 June 2025 I determined the respondent's applications for leave to file Amended Points of Defence and Amended Points of Counterclaim.[1] Both sides were represented by Counsel at the hearing of that application, and both foreshadowed applying for costs. In paragraph 11 of my Order of 17 June 2025, I gave each party time to file an application for costs with submissions, for each party faced with an application against them to file submissions in reply, and then for the controversy to be determined on the papers. Because of an administrative delay in sending the Order to the parties, the time limits in relation to costs were extended. The Tribunal has now received:

(a) the applicant's written submission seeking costs dated 1 July 2025, supported by an affidavit of Mr Eaton legal practitioner sworn 1 July 2025 and exhibiting an 'invoice itemisation' summarising timesheet records of the work performed by Mr Eaton's firm between 1 April 2025 and 17 June 2025 and disbursements including Counsel's fees for preparing and appearing at the hearing on 17 June 2025, and which affidavit also sets out the application for the costs of the application for costs,

(b) the respondent's written submission seeking costs dated 4 July 2025, and

(c) the respondent's written submissions in reply to the applicant's submissions dated 18 July 2025.

1. Leaving aside situations in which a formal offer of settlement has been made, the Tribunal's power to award costs lies in section 109 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (the 'VCAT Act'). Section 109(1) provides that, subject to Part 4 Division 8 of the VCAT Act, in which section 109 is situated, each party is to bear their own costs of a proceeding. Sections 109(2) and (3) provide that the Tribunal may order a party to pay 'all or a specified part' of the costs of another party, only if it is satisfied that it is fair to do so having regard listed in subsections 109(3)(a) - (e). The criteria are broadly drawn, particularly as the last, in section 109(3)(e), is 'any other matter the Tribunal considers relevant'.
2. The words 'all or a specified part' in section 109(2) enable the Tribunal to award costs arising from interlocutory applications, as well as at the end of an entire proceeding.[2]
3. In summary, the applicant seeks its costs of the application to amend, or alternatively the reservation of those costs, on the following bases:

(a) the application to amend was made late in the proceeding, and the incorporation of new issues has caused costs incurred by the applicant before the amendment to be wasted;

(b) the respondent has unnecessarily disadvantaged [see section 109(3)] the applicant by making the application late, and after previously failing to comply with the Tribunal's directions.[3] At a compliance hearing on 26 February 2025 the respondent made no mention of a potential amendment to its pleadings;

(c) the respondent's delay in making the application is, objectively, unexplained as the respondent's legal practitioner's only explanation on affidavit was that on reviewing witness statements it became apparent that key issues in dispute were not properly or fully addressed in the applicant's pleading. The applicant submits that this stated explanation cannot be correct;

(d) the granting of leave to amend was an indulgence granted by the Tribunal allowing the respondent to incorporate new issues in the proceeding [which the applicant says falls within sections 109(3)(a), (b) & (c)];

(e) those new issues could have been articulated in the original Points of Defence;[4]

(f) the respondent has had the same legal representation throughout the proceeding;

(g) the amendment has prolonged the proceeding, as it has brought about the extension of a timetable [section 109(3)(b)];and

(h) the new issues complicate the proceeding [sections 109(3)(a), (d) & (e)].

1. In summary, the respondent seeks its costs of its application to amend, and opposes the applicant's application for costs, on the following bases:

(a) whilst the respondent accepts that costs do not follow the event in the Tribunal [section 109(1)], it succeeded in its application for leave to amend, and it should be awarded its costs of appearing at the hearing on 17 June 2025 and associated preparation, but the costs otherwise should be borne by each of the parties;

1. in the Supreme Court and the County Court, the practice is not to award a party costs thrown away in respect of an adjournment. The respondent cites rule 63.17 of the Supreme Court (General Civil Procedure) Rules 2015 and rule 63.17A of the County Court Civil Procedure Rules 2018;[5]

(c) the relative strengths of the positions of the respondent (as applicant for leave to amend), and the applicant (in opposing the application) were determined by the Tribunal to lie with the respondent [section 109(3)(c)];

(d) the applicant conducted the proceeding in a way that unnecessarily disadvantaged the respondent, and prolonged unreasonably the time taken to complete the proceeding [sections 109(3)(a) & (b)], as evidenced by the fact that the applicant did not consent to the amendments. The applicant could have consented and thus avoided the final hearing being adjourned;

(e) in its reply submissions dated 18 July 2025 the respondent refers to the 'invoice itemisation' exhibited to Mr Eaton's affidavit. The respondent correctly submits that the document sets out the costs incurred by the applicant in having unsuccessfully opposed the application for amendment. It does not relate to costs wasted or thrown away by reason of the amendment or the adjournment of the hearing;

(f) it would not be fair for the Tribunal to order the respondent to pay the applicant's costs [section 109(2)], and the applicant itself does not submit that it would be fair for the Tribunal to do so;[6]

(g) the applicant's submissions amount to an argument that because the respondent applied for leave to amend late, the applicant was entitled to oppose the application;

(h) the purpose of making an award of costs is to compensate a party, not to punish its opponent. The applicant's submissions seek punishment;[7]

(i) the respondent says, correctly in my view, that some of the applicant's submissions in support of its application for costs are almost an attempt to repeat submissions made in opposing the application for amendment. I consider those aspects of the applicant's submissions to be irrelevant rather than being matters which ought lead to costs being awarded against the applicant; and

(j) the respondent says, correctly in my view, that the 'invoice itemisation' does not contain enough information to enable the Tribunal to award the amount set out in that document, if it is minded to award costs against the respondent.[8]

1. Having considered these submissions and the plain words in section 109 of the VCAT Act, I am persuaded that it is fair to order the respondent to pay the applicant's costs of the application for leave to amend, having regard to the following criteria in section 109(3):

(a) 109(3)(d): the nature and complexity of the proceeding. This proceeding is a piece of commercial litigation between corporations, both of whom have engaged legal practitioners throughout the proceeding. The proceeding is sufficiently complex to warrant the parties engaging legal practitioners. Put another way, it would not be open to the respondent to suggest that the applicant 'should' be representing itself. It was also appropriate for the applicant to brief Counsel to appear at the hearing on 17 June 2025.

(b) 109(3)(a)(i) & (iv): whilst the provisions do not speak expressly of a party seeking an indulgence as one of the criteria to be considered, objectively the respondent applied for leave to make significant amendments to its Defence and Counterclaim quite late in the litigation. The applicant was under no obligation to consent to the application. The respondent could have included the new issues in its original pleadings, or at least made the application to amend earlier. It is possible to read section 109(3)(a)(i) as meaning that by putting itself in the position of having to amend its pleadings the respondent failed to comply with the previous Order to file and serve pleadings. The granting of leave to amend did result in the vacation of a hearing date and the relisting of the final hearing on a later date, which fall within the criterion in section 109(3)(a)(i).

(c) 109(3)(c): it would be a misapplication of this sub-section to say that the respondent succeeded in obtaining leave to amend, and that it followed that the relative strengths of the parties' positions in relation to amendment lay with the respondent. To analyse the situation in that way would be to ignore section 109(1). Additionally, paragraphs 12 - 19 of the reasons for the Order made 20 June 2025 granting the respondent leave to amend sets out the chequered history of the respondent's counterclaim, including the facts that the original Points of Counterclaim was served out of time without leave, and that the version of the Amended Points of Counterclaim dated 22 May 2025 was also served without leave, and was not marked up to show how they differed from the original version. It could not be said that the relative strengths of these irregularities lay with the respondent.

1. I do not take the applicant to be seeking the amount of costs set out in the invoice itemisation exhibited to Mr Eaton's affidavit. Even if that was the applicant's intention, I would not be prepared to assess the costs on the basis of that document.
2. In conclusion, for the reasons set out above I order the respondent to pay the applicant's costs of the respondent's applications heard on 17 June 2025, including the costs of the preparation for the hearing of those applications and the briefing of Counsel. The respondent shall also pay the applicant's costs of this costs application, which was made under paragraph 11 of the Order made 17 June 2025. Those costs are to be assessed by the Costs Court on a standard basis under the County Court Scale.

[1] [2025] VCAT 547.

[2] In the Supreme Court (General Civil Procedure) Rules 2015 the Court's power to do this is expressed in rules which deal with specific applications and situations, for example, rule 63.14 on an application for an extension or abridgement of time and rule 63.17 on an application to amend a pleading. By using the words "unless the Court otherwise orders" rule 63.14 sets out a presumption that the party who applied for the extension or abridgement must pay their opponent's costs, whereas rule 63.17 creates a presumption that the costs of the application to amend are 'the parties' [plural] costs in the proceeding'.

[3] The applicant submits that a compliance hearing was also held in 2023 as a result of the respondent's tardiness.

[4] This is essentially a repetition of the submission that the granting of leave to amend was an indulgence.

1. [5] This submission is factually incorrect. Rule 67.17 says, 'Where a pleading is amended (whether with or without leave) the costs of and occasioned by the amendment and the costs of any application for leave to make the amendment are the parties' costs in the proceeding, unless the Court otherwise orders'.

[6] The submission is ambitious, apparently relying on the literal absence of the word "fair" in the applicant's submissions, but ignoring the substance of that submission.

[7] Even though the applicant's submissions contain some extraneous and almost emotive text which arguably alludes to punishing the respondent for its dilatory conduct, I do not accept the submission because I consider that text to focus on concepts within section 109(3)(a)(i) & (iv)

[8] I agree with this submission, but I do not take the applicant to have sought the amount set out on that 'invoice itemisation'. I think the document was exhibited to Mr Eaton's affidavit to indicate the level of expense which the applicant is incurring to its own legal practitioners. Certainly the 'invoice itemisation' does not seek to address the distinction between indemnity costs and standard costs. Rule 63.42 of the Supreme Court (General Civil Procedure) Rules 2015 sets out the level of detail which must be contained in a bill of costs submitted for taxation, and the 'invoice itemisation' falls well short of meeting those requirements.