Grand View Trading Pty Ltd v SJV Properties Pty Ltd (Costs) [2026] VCAT 166

1. Under s 109 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic), the applicant must pay the respondent's costs of and incidental to the proceeding from 22 November 2024 on a standard basis and in accordance with the scale of costs prescribed under r 1.07 of the Victorian Civil and Administrative Tribunal Rules 2018 (Vic) to be agreed between the parties, failing which to be assessed by the Victorian Costs Court.

1. On 11 June 2025, I determined an application commenced by the applicant ('the Tenant'), whereby it sought orders, partly in the form of a declaration, that the premises leased by it ('the Premises') were retail premises, within the meaning of that term as defined under s 4 of the Retail Leases Act 2003 (Vic) ('the RLA').[1] After considering several affidavits filed in the proceeding and hearing viva voce evidence, I found that the Premises were not retail premises, within the meaning of that term as defined under s 4 of the RLA. I further ordered that either party was at liberty to make application for an order that their costs be paid by the other party.
2. By this application, the respondent ('the Landlord') seeks an order that the Tenant pay its costs of and incidental to the proceeding. The Tenant opposes any such order being made.
3. By orders dated 21 July 2025, I ordered that the Landlord's application for costs be determined 'on the papers' pursuant to s 100(2) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) ('the VCAT Act'), subject to either party requesting an oral hearing to be convened in lieu thereof. No party has requested an oral hearing.
4. In accordance with further orders of the Tribunal, both parties have filed written submissions and other material either in support of or in opposition to the Landlord's claim for costs, the last of which was to be filed by 10 October 2025.

1. The power to award costs is contained in s 109 of the VCAT Act, which provides, in part:

(1) Subject to this Division, each party is to bear their own costs in the proceeding.

(2) At any time, the Tribunal may order that a party pay all or a specified part of the costs of another party in the proceeding.

(3) The Tribunal may make an order under subsection (2) only if it is satisfied that it is fair to do so having regard to -

(a) whether a party has conducted the proceeding in a way that unnecessarily disadvantage 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);

(iv) causing an adjournment;

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

(vi) vexatiously conducting the proceeding;

(b) whether a party who has been responsible for prolonging unreasonably the time taken to complete a 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;

(d) the nature and complexity of the proceeding;

(e) any other matter the Tribunal considers relevant.

1. In Vero Insurance Ltd v The Gombac Group Pty Ltd,[2] Gillard J summarised the approach to be taken by the Tribunal when exercising its discretion on the question of costs:

1. In approaching the question of any application for costs pursuant to s 109 in any proceeding in VCAT, the tribunal should approach the question 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. > > (iii) In determining whether it is fair to do so, that is, to award costs, the tribunal must have regard to the matters stated in s 109(3). The tribunal must have regard to the specified matters in determining the question, and by reason of paragraph (e) the tribunal may also take into account any other matter that it considers relevant to the question.

2. In Martin v Fasham Johnson Pty Ltd,[3] Bell J further observed that:
   1. The discretion must be exercised judicially, which means the Tribunal must act fairly, impartially and by reference to relevant considerations and not arbitrarily, capriciously or by reference to irrelevant considerations and not in a manner that frustrates the legislative intent.

1. The Landlord's written submissions dated 4 September 2025 state that the Landlord applies for an order for costs under s 109 of the VCAT Act, 'read with section 92' of the RLA. It is unclear what relevance s 92 of the RLA has to the Landlord's costs application, given my finding that the Premises were not retail premises, within the meaning of that term as defined under s 4 of the RLA and that the lease between the parties ('the Lease') was not governed by that Act.
2. Consequently, I approach the Landlord's costs application as an application solely under s 109 of the VCAT Act. In that respect, the Landlord relies upon its written submissions dated 4 September 2025 and an affidavit prepared by Andre Ong, the Landlord's legal representative, also dated 4 July 2025.
3. The Landlord submits that there are several grounds which support a finding that it would be fair to make an order that the Tenant pay its costs of the proceeding. Ignoring those submissions that focus on s 92 of the RLA, the Landlord refers to an offer of settlement dated 22 November 2024 ('the Offer of Settlement'), which was served on the Tenant prior to the hearing of the proceeding.
4. In the Offer of Settlement, the Landlord offered to vary the Lease to allow the permitted use of the Premises to include predominant retail activity, thereby allowing the RLA to govern the relationship between the parties. The Offer of Settlement set out the Landlord's position as to why it contended that the RLA did not apply, including referencing several legal authorities in support of its position. It further stated:
   1. On this basis and taking a purely commercial and pragmatic approach, and in the interest of reaching a commercial settlement without either party having to spend significant costs fighting over the retail or non-retail question in a litigious process, our client makes the following offer:-
      1. The parties enter into a Deed of Variation of Lease to vary the permitted use of the Property to allow the retail sales to take place and to make the Lease subject to the Retail Leases Act 2003, subject to the rent being increased to $... per year per annum plus GST from the commencement of the Lease for the first year and thereafter reviewed in accordance with the relevant review clauses of the Lease. We note that this is a total saving to you of $6,989.81 in the first year with similar savings in each year of the Lease.
      2. The parties sign consent orders for the VCAT Reference Number: BP1409/2024 ending the proceeding and advising VCAT that the parties have settled.
   2. This offer is a generous and commercial offer considering the above and the strength of our client's position on your breaches and the question of retail versus commercial lease.
   3. Should the Lease be found to be a commercial lease, you will not only be liable for the single holding land tax and the management fee, but our client will exercise its full right for payment of land tax at the full proportional land tax and trust surcharge rate and for management fees, of which the total amount is in the vicinity of $22,000.00.
   4. This offer is made pursuant to the principles of Calderbank v Calderbank 3 W.L.R 586 and will remain open for a period of 5 days from the date of this letter at which time it will lapse on the matter will proceed to the VCAT proceeding.
   5. Should this often not be accepted, our client intends to proceed with defending the injunction application and the VCAT matter more generally, and we will rely on this letter in any application for indemnity costs.
5. In his affidavit, Mr Ong deposed to the Tenant having rejected the Offer of Settlement. Mr Ong further stated that a mediation was facilitated by the Tribunal on 16 December 2024, where the parties reached in-principal agreement which would have resolved the proceeding. However, Mr Ong stated that on 11 February 2025, the Tenant reneged on the Mediation Agreement,[4] and the matter proceeded for hearing on the Preliminary Question.[5]
6. The Landlord submits that the Offer of Settlement made prior to the mediation and the in-principal agreement reached at mediation were both more favourable than the outcome of the proceeding. Consequently, it submitted that the Tenant's refusal to accept the offer or perform the settlement agreement has materially disadvantaged the Landlord in having to litigate the proceeding to its conclusion. In those circumstances, the Landlord contends that it would be fair to make an order that the Tenant pay all the Landlord's costs of the proceeding.

1. In response to the Landlord's written submission and affidavit, the Tenant filed a written submission dated 1 October 2025. In section [B] of that document titled REASONS FOR REFUSAL TO PAY THE LEGAL FEES OF THE LANDLADY, the Tenant sets out a short submission in opposition to any order for costs made against it. I note that the remainder of the Tenant's written submission appears to be a fresh application, titled COUNTERCLAIMS, dealing with matters which are unconnected with the Landlord's application for costs.
2. The Landlord contends, and I accept, that those parts of the written submissions which deal with foreshadowed COUNTERCLAIMS or other matters unconnected with the Landlord's application for costs, are irrelevant to that application. To the extent that the Tenant makes unrelated claims, it should prosecute those claims either through a fresh application in this Tribunal or a court of competent jurisdiction. In that respect, I am of the view that the Tenant would benefit by obtaining independent legal advice as to how best to pursue that course.
3. In the Tenant's written submission, it states:
   1. VCAT was established to provide a low-cost, accessible, and informal forum for resolving civil and administrative disputes. I chose to self-represent in accordance with this principle, while the Landlady elected to retain legal counsel.
   2. Under Section 109 of the Victorian Civil and Administrative Tribunal Act 1998, VCAT may only award costs if it is fair to do so, considering factors such as:
      • The conduct of the parties
      • The complexity of the matter
      • Whether a party caused unnecessary delay or expense
   3. I submit that:
      • My decision to self-represent was made in good faith and in alignment with VCAT's ethos.
      • The Landlady's choice to engage legal representation was voluntary and should not impose a financial burden on me.

1. I accept the Tenant's submission that an order for costs can only be made if it is fair to do so having regard to one or more of the factors set out under s 103(3) of the VCAT Act. However, the factors identified by the Tenant are not exhaustive. Indeed, s 109(3)(e) of the VCAT Act expressly provides that the Tribunal can consider any other factor that it considers relevant.
2. I also accept that succeeding in an application before the Tribunal does not mean that the successful party will be awarded costs in its favour. The presumption against awarding costs must always be the starting point in the exercise of the Tribunal's discretion, notwithstanding that the party seeking an order for costs in their favour may have been successful in the proceeding.
3. The factors set out under s 109(3) of the VCAT Act guide the Tribunal when determining whether it is fair to make an order for costs - and by extension, depart from the general rule against doing so. What is clear from an examination of those factors is that there must exist some circumstance which justifies departing from the general rule that costs will not be ordered in matters before the Tribunal.
4. The Tenant principally relies on the fact that there is a presumption against ordering costs in a proceeding before the Tribunal. It also points to the fact that it was unrepresented, a decision that it made in good faith. Implicitly, the Tenant contends that any criticism levelled against it in the way in which it conducted the proceeding should take that factor into consideration.
5. I accept that the circumstance of a party being unrepresented may, sometimes, weigh against ordering costs against that party, especially where the criticism levelled against that party relates to whether it conducted the proceeding efficiently or proficiently. In those circumstances, it is sometimes the case that the conduct of a party who is not favoured with legal representation could cause the time taken to complete the proceeding to be prolonged - a factor which could give rise to an order for costs. For example, where a claim or a defence to a claim may not have been articulated with precise legalese. That circumstance might require additional intervention by the Tribunal to assist the self represented litigant in narrowing the issues in dispute. However, given that the Tribunal is mandated to conduct each proceeding with as little formality and technicality as the requirements of the VCAT Act and the enabling enactments permit, some assistance and latitude needs to be afforded to the self represented litigant. Therefore, an overzealous scrutiny of the points of claim or points of defence might not always be warranted or justified.[6]
6. However, this case is different. Here, the Landlord submitted that a genuine Offer of Settlement was made which, if it had been accepted, would not only have ended the litigation but would have given the Tenant the very outcome that it sought. Specifically, that the permitted use under the Lease be varied to allow the Premises to be used predominantly for retail purposes and critically, ensure that the relationship between the parties was governed by the RLA. The net effect of that outcome would be that the Tenant would not be liable to reimburse the Landlord for land tax or pay other outgoings which are prohibited under the RLA. In other words, the Offer of Settlement, if it had been accepted, would have legitimised the proposed (or actual) use of the Premises, while at the same time affording a financial advantage to the Tenant.
7. There is no evidence or any submission made by the Tenant as to why it did not accept the Offer of Settlement. Importantly, there is no evidence or submission before me to contradict the Landlord's submission that the Offer of Settlement was more favourable than the outcome of the proceeding.
8. In my view, had the offer been accepted, the litigation would have ended at that time and the Tenant's position would certainly have been better than it is now. I am also of the view that this is a relevant factor to take into consideration when determining whether it would be fair to order that the Tenant pay the Landlord's costs of the proceeding.
9. In Peet v Richmond (No 2),[7] Hollingworth J stated, in the context of an application for a special or enhanced costs order:

[121] As a matter of principle, if one party has drawn the futility of the case to the attention of the losing litigant, and the losing litigant has wilfully ignored that, those may be circumstances supporting a special costs order. But it does not follow that a special costs order can only be made if the successful party has drawn the futility to the other sides attention.

1. Later, in her Honour's judgment, she expressed the following:

[170] However, an imprudent refusal of an offer of compromise may be sufficient to justify an award of costs on a special basis. The question must always be whether the particular facts and circumstances of the case, as they existed at the time the offer was refused, justify an award other than on a party-party basis.

1. In Hazeldene's Chicken Farm Limited v Victorian WorkCover Authority (No. 2),[8] the joint judgment of Warren CJ, Maxwell P and Harper AJA discussed the circumstances that might lead a court to determine whether the rejection of an offer was unreasonable:

[25] The discretion with respect to costs must, like every other discretion, be exercised taking into account all relevant considerations and ignoring all irrelevant considerations. It is neither possible nor desirable to give an exhaustive list of relevant circumstances. At the same time, a court considering a submission that the rejection of a Calderbank offer was unreasonable should ordinarily have regard at least to the following matters:

(a) the stage of the proceeding at which the offer was received;

(b) the time allowed to the offeree to consider the offer;

(d) the offeree's prospects of success, assessed as at the date of the offer;

(e) the clarity with which the terms of the offer were expressed;

(f) whether the offer foreshadowed an application for indemnity costs in the event of the offeree's rejecting it.

1. In my view, it was unreasonable for the Tenant not to have accepted the Offer of Settlement. This is because the Offer of Settlement was more favourable than the outcome of the proceeding, made relatively early in the proceeding and went into some detail highlighting weaknesses in the position adopted by the Tenant juxtaposed against the strength of the position adopted by the Landlord. Moreover, the Offer of Settlement foreshadowed that indemnity costs would be sought if the offer was rejected.
2. Further, I find that the fact that the Tenant was not legally represented does not militate against an order for costs being made in the proceeding. In that regard, the Tenant gave evidence during the substantive hearing that it operated a successful commercial enterprise, both importing and manufacturing specialised equipment. That business was long standing, albeit that it had previously operated from different premises. In my view, it ill behoves the Tenant to now say, albeit implicitly, that it was disadvantaged by the fact that it did not have legal representation. Clearly, the matters which were the subject of this proceeding were significant and materially affected the business operations of the Tenant, insofar as those business operations were conducted from the Premises. In those circumstances, a reasonably prudent corporate business operator would have sought some advice or guidance if it did not fully understand the nature of the Offer of Settlement and the consequences of rejecting it.
3. Therefore, I find that it would be fair to order that the Tenant pay the Landlord's costs of and associated with the proceeding from the date that the Offer of Settlement was served. However, I do not accept that the Tenant's conduct was so egregious to justify costs being ordered on an indemnity basis, especially in circumstances where the Tribunal's starting point on the question of costs is that no costs will be ordered in a proceeding before it. In my view, costs should be assessed on a standard basis and in accordance with r 1.07 of the Victorian Civil and Administrative Tribunal Rules 2018.

[1] Grand View Trading Pty Ltd v SJV Properties Pty Ltd (Building and Property) [2025] VCAT 545.

[2] [2007] VSC 117.

[3] [2007] VSC 54.

[4] Affidavit of Andre Ong, 4 July 2025, [30]-[32].

[6] Santamaria v Secretary to Department of Human Services [1998] VSC 107.

[7] [2009] VSC 585.

[8] [2005] VSCA 298.