1. The first respondent must pay the applicants' costs of and incidental to the proceeding to be taxed in default of agreement by the Victorian Costs Court on a standard basis in accordance with the County Court Scale.
2. The applicants must pay the second, third and fourth respondents' costs of and incidental to the proceeding to be taxed in default of agreement by the Victorian Costs Court on a standard basis in accordance with the County Court Scale.
3. The applicant's application for costs against the second to fourth respondents is dismissed.

1. On 16 September 2021, the Tribunal handed down final orders and reasons and held the first respondent liable to pay the applicants the amount of $117,061.70 ('decision'). The proceeding against the second, third and fourth respondents ('second to fourth respondents') was struck out.
2. The first respondent appealed the decision to the Supreme Court of Victoria but discontinued the appeal in September 2023. The first respondent was ordered to pay the applicants' costs of the appeal.
3. In September 2021, the applicants applied for costs orders against the respondents. The costs application was delayed by reason of the first respondent's appeal.
4. On 28 November 2023, the Tribunal made orders in relation to costs, including the applicants file and serve submissions in support of their application for costs and the second to fourth respondents file and serve submissions in support of an application for costs against the applicants.
5. In support of their costs application, the applicants rely on submissions dated 31 September 2021 and 30 January 2024 ('Icbudak Submissions') on or around 5 February 2024, along with an affidavit of Mr Neset Icbudak dated 5 February 2024 ('Icbudak Affidavit').
6. In support of their application, the second to fourth respondents rely on submissions and affidavits sworn by Mr Taner Alinc dated 1 February 2024 ('Alinc Affidavit') and Mr Marvin Ward dated 1 February 2024 ('Ward Affidavit').

1. Section 109 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) ('VCAT Act') says 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 a proceeding.

(3) The Tribunal may make an order under subsection (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);

(iv) causing an adjournment;

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

(vi) vexatiously conducting the proceeding;

(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;

(d) the nature and complexity of the proceeding;

(e) any other matter the Tribunal considers relevant.

1. The applicants and the second to fourth respondents base their claims for costs on one or more of s.109(3)(a), (b), (c), (d) and (e) of the VCAT Act.
2. As emphasised by the Supreme Court in the matter of Vero Insurance Limited v Gombac Group [2007] VSC 117 at [20], the Tribunal should approach the question of entitlement to costs on a step-by-step basis:

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

(ii) 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; 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 (e) the Tribunal may also take into account any other matter that it considers relevant to the question.

1. By application dated 31 September 2021, the applicants claim their costs of the proceeding from the respondents, following the decision of the Tribunal on 16 September 2021.
2. The applicants claim legal costs and expenses in the amount of $60,715.72.
3. The basis for the applicants' application for costs orders against the first respondent appears to be the applicants wholly succeeded in their claim against the first respondent. From the applicants' material, the basis for the costs claim can be summarised as follows:

'Due to the respondents' negligence, I incurred significant expenses on legal and expert reports to defend my case and recover owed amounts for defects.'[1]

'I believe I am entitled to make this claim for costs against all the Respondents to this matter as the property owner, in regards to the breach of Implied Warranties under section 8 and 9 of the Domestic Building Contracts Act 1995 (DBCA).'[2]

'Considering the negligence and false information from all respondents, I assert my entitlement to all incurred costs. The VCAT member should consider Senior Member Walker's orders dated 16 September 2021, particularly paragraphs 35, 43, 47, 66, 67, 70, 84, 88, 89, and 91.[3]

1. In his affidavit dated 5 February 2024, Mr Icbudak deposes to a number of matters including the confusion he experienced when he purchased the property as to the identity of the builder and which building company carried out the work. He also deposes to matters concerning the vendor (fourth respondent) who he says was joined as a party to the proceeding because of untruthful or misleading allegations she made.
2. It is clear to me that Mr Icbudak has not received any legal assistance in preparing the affidavit and it does not contain any depositions which directly relate to or assist with the applicants' costs application against the respondents.
3. Nor do the applicants specifically refer to any of the factors in s.109(3) in support of their application for costs. However, I infer from their submissions and the Icbudak affidavit that they consider their claim against the respondents was difficult and complex in that they had a claim for numerous building defects which required extensive lay evidence and expert opinion, the hearing ran for 6 days and there was confusion about the identity of the builder and which entity carried out the building work.
4. I find that the nature of the applicants' claims against the first respondent involved a relatively high level of difficulty and complexity.

1. The first respondent opposes the applicants' application for costs against it on several grounds.
2. Firstly, it submits that the applicants should not be awarded their costs because the applicants conducted the proceeding in a way that unnecessarily disadvantaged the first respondent (s.109(3)(a)). The applicants caused an adjournment of the March 2020 hearing which resulted in an order that the applicants pay the first respondent's costs thrown away fixed in the amount of $7,000. The costs order remains unpaid. Further, The applicants caused an adjournment of the March 2021 hearing to September 2021. It is unclear from the first respondent's submissions if this conduct resulted in a further costs order against the applicants.
3. I do not accept the submission. The conduct has been partly addressed by an order for costs against the applicants. In my opinion, the fact that the costs order has not been paid by the applicants is not a relevant factor in assessing whether or not the applicants are entitled to their costs of the proceeding under s.109 of the VCAT Act.
4. Secondly, the first respondent submits that the applicants should not be awarded costs because the applicants prolonged unreasonably the time taken to complete the proceeding (s.109(3)(b)). The first respondent relies on the same conduct as set out in paragraph 18 above and contends that the hearing was unnecessarily adjourned for about 1.5 years.
5. Again, I do not accept the submission. The conduct has been partly addressed by an order for costs against the applicants.
6. Thirdly, the first respondent submits that many of the applicants' submissions in support of their application for costs are factually erroneous or irrelevant to the factors to be considered under s.109 of the VCAT Act. For example, the applicants submit that the second and third respondent built the house. The Tribunal did not accept this evidence and held that the contract between the second and third respondents and the first respondent was to build the entire house. I agree with the first respondent's submission. It does not assist the applicants' costs application.
7. The first respondent also submits that the applicants are not assisted by their submission in relation to the first respondent 's appeal to the Supreme Court. I agree. The appeal and the first respondent's reasons for the appeal are not relevant to the issue of costs of the Tribunal proceeding. The costs of withdrawing the appeal have been ordered against the first respondent in the applicant's favour.

1. For the above reasons and having considered the relevant factors under s.109(3) (particularly, the nature and complexity of the applicants' claims), I am satisfied it is fair and appropriate to award costs against the first respondent under s.109(2) of the VCAT Act.
2. Accordingly, I will order the first respondent must pay the applicants' costs of and incidental to the proceeding to be taxed by the Victorian Costs Court ('VCC') on a standard basis in accordance with the County Court Scale, in default of agreement.
3. The first respondent further submits that a substantial amount of the legal costs claimed by the applicants relate to their defence of the second to fourth respondents' application to dismiss the claims against the second and third respondent. These costs relate to charges from Goldsmith Lawyers.
4. As the applicants wholly failed against the second to fourth respondents, it submits that these costs ought not be allowed. Further, the applicants ought not be allowed to claim the costs of the expert report by Harry Liden dated March 2020. The report was filed late and led to an adjournment of the proceeding, which caused unnecessary delays and costs to all respondents.
5. In my view, these are matters which the first respondent can argue at any taxation hearing before the VCC, if the applicants and the first respondent cannot agree on the applicants' costs of the proceeding.
6. As the applicants were unsuccessful in their claims against the second to fourth respondents and for the above reasons, I will dismiss the applicants' application for costs against them.

SECOND TO FOURTH RESPONDENTS' COSTS APPLICATION

1. The second to fourth respondents claim their costs of the proceeding from the applicants, to be taxed in default of agreement. Although liability was determined against the first respondent, the proceeding against the second to fourth respondents wholly failed. On that basis and by reason of the following submissions, the second to fourth respondents seek an award of costs against the applicants.
2. Alternatively, if the fourth respondent is not awarded her costs, the second and third respondents seek an award of their costs for the same reasons and because they informed the applicants by nine offers of settlement that they should not be parties to the proceeding.
3. I note the applicants have not filed any submissions in reply to the second to fourth respondents' costs application.

Conducting the proceeding in a way that unnecessarily disadvantaged another party to the proceeding: s.109(3)(a)

1. The second to fourth respondents submit the applicants conducted the proceeding in a way that unnecessarily disadvantaged the respondents in numerous ways.
2. Firstly, the applicants filed a new expert report on 11 March 2020, which was 6 days prior to the commencement of the hearing.[4] The filing of this report caused the original hearing to be adjourned to 9 March 2021 - a delay of approximately one year.[5] By reason of that adjournment, the Tribunal ordered the applicants to pay the costs of the respondents thrown away in the amount of $7,000.[6] The applicants have failed to pay those costs despite the second to fourth respondents requesting payment on many occasions.
3. No excuse has ever been provided by the applicants for that failure.[7] The order has been registered in the Magistrates' Court and remains unpaid.[8]
4. Secondly, during the final hearing, Mr Icbudak referred to a critical video that was not discovered, despite discovery orders having been made 5 months earlier.[9] It was only produced after its production was called for by counsel for the respondents.[10] By reason of the late production of the video, the final hearing was again adjourned.[11] This subsequent adjournment caused a further delay of approximately 6 months.[12]

Prolonging unreasonably the time taken to complete the proceeding: s 109(3)(b)

1. The second to fourth respondents submit the applicants unreasonably prolonged the time taken to complete the proceeding by reason of the matters set out in paragraphs 34 to 36 above. The hearing was unnecessarily adjourned for a period of approximately 1.5 years.

Relative strengths of the claims made by each of the parties: s 109(3)(c)

• 38 Under this ground, there must be, "a substantial disparity between the strength of one claim and the weakness of its competitor ... before an order for costs will be fair".[13]
• 39 The second to fourth respondents submit that while the applicants succeeded in their claim against the first respondent, they wholly failed against the second to fourth respondents. Further, the second and third respondents put the applicants on notice in correspondence that they should not have been joined to the proceeding because they were not parties to the relevant construction contract and performed none of the building works under that contact.[14]

1. Moreover, Mr Icbudak acknowledged in correspondence that Symmetric was "technically/legally respondent for the defects" at the Property.[15] The Tribunal's determination that all building work at the Property was carried out by the first respondent was consistent with this correspondence to the applicants by the second and third respondents. Thus, the claim against the fourth respondent was unlikely to succeed, while the claims against the second and third respondents were bound to fail.
2. I accept the submission. The applicants' claims against the second to fourth respondents were weak and the applicants acknowledged the lack of merit in their claims against these respondents before final hearing.

Nature and complexity of the proceeding: s 109(3)(d)

• 42 The second to fourth respondents submit the nature and complexity of the proceeding is relevant to whether costs should be awarded to a successful party.[16] In considering this factor, the Tribunal may have regard to the way in which this type of proceeding has been dealt with historically.[17]

1. The claims and defences in the proceeding were complex such that they necessitated a 5-day hearing, which was adjourned several times, with several lay and expert witnesses called to give evidence.
2. I accept the submission. The building dispute was made more complex by the alleged uncertainty of the respondents' role, and the extent of their involvement, in the building process. Therefore, I agree that this factor has been enlivened.

1. For the above reasons and having considered the relevant factors under s.109(3), I am satisfied it is fair and appropriate to award costs against the applicants under s.109(2) of the VCAT Act. I will order the applicants must pay the second to fourth respondents' costs of and incidental to the proceeding to be taxed by the VCC on a standard basis in accordance with the County Court Scale, in default of agreement.
2. As I have found that the applicants are liable to pay the second to fourth respondents' costs of the proceeding, I do not have to determine the alternative claim by the second and third respondents for their costs of the proceeding, based on numerous offers of settlement by the respondents in the course of the proceeding.

[1] Applicant's submissions - 30 January 2024.

[2] Applicant's submissions - 30 September 2021)

[3] Applicant's submissions - 30 January 2024)

[6] Alinc Affidavit, [17]-[18]. 7 Alinc Affidavit, [18].

[9] Orders dated 19 October 2020 (Alinc Affidavit TA-2 pages 30 to 32)].

[13] Beasley v Victoria [2006] VCAT 2044, [20].

[17] Alphapointe Pty Ltd v Streamline Partitioning (Aust) Pty Ltd [2000] VCAT 398, [16]; Pure Capital Investment Pty Ltd v Fasham Johnson Pty Ltd [2002] VCAT 1761, [28].