Mr H.R. Hassan of counsel, instructed by Indemnity Legal Pty Ltd

For Ronald John Craig & Mary Kathleen Stewart-Craig

Mr J.D. McKay of counsel, instructed by D.S.McKay & Associates, solicitors

1. On 12 February 2014, pursuant to s 75 of the Victorian Civil and Administrative Tribunal Act 1998 (VCAT Act), the Tribunal struck out an application by the applicants on the basis that it was misconceived. Both respondents have now made application for costs.
2. Following a costs hearing on 4 April 2014, I indicated that an award of costs would be made, but I reserved reasons and quantum. All three parties had provided written submissions in relation to the costs applications, and were given the opportunity to elaborate on them at the costs hearing. It is therefore unnecessary to restate all matters in these reasons, save to say that I have generally preferred the detailed submissions and arguments of the respondents over those of the applicant. My reasons therefore deal only with the key elements that underscore my award of costs to each respondent.
3. The costs applications were variously made under ss 75, 78 and 109 of the VCAT Act. Given that the main proceeding was struck out under s 75(1) of the VCAT Act, the costs applications can be dealt with under s 75(2), and I consider it unnecessary to resort to ss 78 or 109 as a foundation for an award of costs. Section 75(2) of the VCAT Act provides as follows:

(2) If the Tribunal makes an order under subsection (1), it may order the applicant to pay any other party an amount to compensate that party for any costs, expenses, loss, inconvenience and embarrassment resulting from the proceeding.

1. Section 75(2) operates independently of s 109, and is broader than the power to award costs under s 109. It does not operate from a starting presumption that each party ordinarily bear its own costs but, equally, it does not create a presumption that costs should automatically follow the event. There is a general discretion, which should be exercised having regard to the particular circumstances of the proceeding.
2. Here, the applicant's application was struck out as misconceived. The award of costs under s 75(2) is to fairly compensate the successful party rather than to penalise an unsuccessful party, although the unsuccessful party's conduct in the proceeding may be relevant. That said, in terms of the discretion to award costs, the striking out of a misconceived application might perhaps be considered a matter less likely to lead to an award of costs than the striking out of a claim that was clearly frivolous or vexatious. Had the applicant been self-represented and had merely issued the wrong proceeding in the wrong forum, and this had been quickly rectified, I would probably not have awarded costs. Had the applicant responded promptly when the Tribunal first raised the question of jurisdiction, and clearly articulated a claim capable of being transferred to another VCAT List, I would probably not have awarded costs. Had the issue of jurisdiction been resolved at the first practice day hearing, through a striking out at that early time in the proceeding, I would probably not have awarded costs.
3. However, none of these circumstances were the case here. Unfortunately, the applicant embarked on a course of conduct that was unmeritorious, that inconvenienced the respondents, and that forced the respondents to incur costs in responding to the proceeding. In particular, as the reasons that accompanied my order of 12 February 2014 reflect:
   • the question of jurisdiction, the availability of the remedies sought, and the correctness of the applicant's initial claim under under s 41 of the Subdivision Act 1988 in VCAT's Planning and Environment List, were all flagged early by the Tribunal. An initial practice day hearing was listed, but the applicant's counsel had not prepared himself to deal with the issues at that hearing despite the other parties and Tribunal being ready to do so. That hearing was essentially wasted, and the matter was adjourned to a further preliminary hearing. By consent, further pleadings were filed in the intervening period.
   • through an amended Points of Claim, the applicant purported to recast its claim, referring instead to different sections of the Subdivision Act 1988, or different legislation, as a purported basis for jurisdiction. Indeed, the whole initial basis for the originating claim under s 41 of the Subdivision Act 1988 changed.
   • on the morning of the preliminary hearing, the applicant sought to file and serve a Reply to each of the first and second respondents' Points of Defence, referring to further different legislation as purportedly providing the basis for jurisdiction.
4. In colloquial terms, the applicant kept 'moving the goalposts'. Despite this, the amended pleadings still failed to establish jurisdiction within VCAT's Planning and Environment List where the application had been initiated.
5. Again, as my earlier reasons reflect, the Tribunal will occasionally amend applications and/or transfer applications between VCAT Lists, when it is appropriate to do so to facilitate a hearing under a correct Act and in the correct VCAT List. It will not do so where the underling cause of action, enabling enactment and/or jurisdiction is unclear, as to do so may simply transfer a potentially misconceived application into an administrative and legal merry-go-round within the Tribunal, creating additional costs and uncertainty, and without dealing with its underlying flaws. In such cases, it is better that the application be struck out or dismissed. This is what I did in this case. Here, even after three versions of pleadings and a preliminary hearing, and with the applicant represented by a solicitor and counsel, she was still unable to articulate a clear underlying cause of action and/or clear remedies within the jurisdiction of the Tribunal.
6. The respondents were forced to respond to this increasingly scattergun and unmeritorious approach in a manner that I consider warrants an award of costs under s 75(2) of the VCAT Act. They were required to consider and address complex issues, and an ever-increasing variety of complex pieces of legislation, in order to satisfy the Tribunal that they were either fundamentally misconceived as a basis for the applicant's claim, or at least misconceived as a basis for a claim within VCAT's Planning and Environment List. The applicant failed to comply with directions and orders of the Tribunal, in being not ready to deal with the matter at the first practice day hearing (despite the jurisdiction issue being raided in the Notice of Hearing), causing an adjournment, and failing to file a Reply within the time stipulated in a consent order (and doing so only at the further hearing after the Tribunal had itself chased up the matter). The applicant failed to properly consider the allocation of different matters to different VCAT Lists under the Tribunal's rules and practice notes. The time taken to deal with the jurisdiction issue was therefore unnecessarily prolonged. As reflected in my earlier reasons, but without finally deciding the merits, much of the applicant's claims also appear weak - particularly its claim to the effect that the second respondent should be somehow vicariously liable (and have the indefeasibility of its title challenged) due to the alleged negligence of the first respondent some years earlier. It was necessary for both respondents to engage counsel, and the applicant was in any event represented by counsel.
7. In her written submissions on costs, which were not elaborated upon at the costs hearing, the applicant sought to re-argue some of the substance of her grievances, rather than directly address factors relevant to the discretion to award costs. Although the applicant states that the underlying substance of her claim has yet to be considered or adjudicated upon by the Tribunal or in another jurisdiction, that argument itself misconceives the position in relation to the costs of this proceeding. Even if the applicant is ultimately able to found some form of future action against either respondent (about which I do not need to finally decide), it remains that this proceeding was misconceived, and was pursued in a manner disadvantageous to the respondents, and in a manner that warrants an award of costs.
8. Both respondents, to varying degrees through their legal representatives, put the applicant on notice that costs would be sought if the applicant continued to pursue untenable or misconceived claims. Both respondents relied upon affidavit evidence at the costs hearing, which the applicant did not materially contest save in one respect. The second respondent relied upon an offer it had made pursuant to s 112 of the VCAT Act, in circumstances where it has arguably done better in the final result than what was offered. The applicant contests the application of s112, and contends that an undertaking given by the second respondent in relation to car parking on common property partly vindicates its proceeding. Whilst I am more sympathetic to the second respondent's arguments on this issue, it is unnecessary to finally decide this, or to rely upon s 112 as a foundation for costs.
9. I am satisfied that both respondents are entitled to an award on a solicitor-client basis under s 75(2) of the VCAT Act to properly compensate them (as s 75(2) provides) for their costs, expenses, loss and inconvenience resulting from the misconceived proceeding.
10. The first respondent sought solicitor-client costs of $19,529.80 (detailed in exhibits to the affidavit of Mr Gibbons), including counsel's fees at the three hearings before me. The first respondent preferred to have the Tribunal fix costs rather than incur further costs through an application to the Costs Court for a taxation. In order to achieve this, it offered to discount its claim to $15,000.00. This was also, in part, to respond to a query I had raised as to whether the first respondent should properly recover costs for its own initial pleadings that it had consented to undertake before jurisdiction was determined. Whilst the applicant generally opposed costs, her solicitor did not address quantum nor, although invited to do so, did the applicant address the Tribunal fixing costs.
11. I consider the sum of $15,000.00 to be reasonable given the nature of the matters I have discussed above, and to which the first respondent was forced to respond.
12. The second respondent sought solicitor-client costs of $11,302.69 (detailed in exhibits to the affidavit of Mr McKay), including counsel's fees at the two hearings before me at which the second respondent was represented. Again, the second respondent preferred to have the Tribunal fix costs, and for similar reasons offered to discount and round its claim to $10,000.00. Again, the applicant generally opposed costs, but did not address quantum.
13. I consider the sum of $10,000.00 to be reasonable given the nature of the matters I have discussed above, and to which the second respondent was forced to respond.
14. It follows that costs are awarded respectively in the amounts of $15,000.00 and $10,000.00. I consider 60 days is an appropriate time for payment.