1. The Tribunal's jurisdiction to award costs in this proceeding arises from s 75(2) of the VCAT Act.
2. Section 75(2) provides:

(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 109 of the VCAT Act is the general provision which applies to costs. However, the approach which has been commonly taken in the Tribunal has been to exercise the discretion pursuant to s 75(2) having regard to the provisions of s 109.[3]
2. Section 109 relevantly provides:

(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);

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

(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;

(e) any other matter the Tribunal considers relevant.

1. There was no material difference between the parties' submissions on the principles which ought to be applied in relation to costs by the Tribunal. The dispute was only in their application to the circumstances here.
2. Whilst the Tribunal's jurisdiction to award costs consequent upon an order having been made pursuant to s 75(1) arises from s 75(2) of the VCAT Act, as noted above, the approach the Tribunal has taken has been to consider exercising its discretion in accordance with the principles that have been established in relation to s 109 of the Act. Whether this is the correct approach is not directly in issue here but there ought to be recognition that the costs circumstances here arise from a determination made pursuant to s 75(1) as opposed to an application for costs brought purely pursuant to s 109.
3. To this end, I consider there is an important distinction to be made. Section 75(2) is couched in terms of compensation 'by way of costs, expenses, loss, inconvenience or embarrassment'.
4. Section 75, unlike s 78 which similarly provides an opportunity to seek costs (although against a party casing disadvantage), s 75 makes no direct reference to s 109 while s 78(2)(c) makes direct reference to the Tribunal being able to 'make an order for costs under section 109.'
5. In reality the difference may not be of consequence here as a number of the factors that are called upon by s 109 are likely to be relevant to the exercise of discretion under s 75(2).
6. Section 109 of the VCAT Act confers a broad discretion on the Tribunal. The discretion must be exercised judicially in that the Tribunal must act fairly, impartially and by reference to relevant considerations not arbitrarily, capriciously or by reference to irrelevant considerations and not in a manner that frustrates legislative intent.[4]
7. Every costs application must be determined on its own merits. It is rare to award costs in a merits review proceeding. However, the application before the Tribunal was an application made pursuant to s 87 of the P&E Act, being part of the Tribunal's original jurisdiction and ultimately determined pursuant to s 75(1) which provides for summary dismissal where in the opinion of the Tribunal a proceeding is misconceived or lacking in substance.
8. It is acknowledged that the discretion to award costs is wider under s 75(2) than under s 109; whilst the former is a compensation provision the latter is a costs provision.[5] The accepted position under s 109 is the presumption that the starting point is each party bear their own costs unless the Tribunal otherwise orders. No such presumption arises from s 75(2).
9. Although there is no 'general rule' or 'invariable rule' that costs are awarded when the Tribunal is exercising its original jurisdiction, the Tribunal has been more inclined to award costs in relation to an application where the Tribunal is exercising its original jurisdiction.[6] This has included specifically applications for an enforcement order or in considering an application under s 87 of the Act.[7] Here the determination of the application was made pursuant to s 75 and greater emphasis ought be given to this fact and that the costs provision is one which is phrased as 'compensation' rather than costs alone.
10. The parties made submissions which had regard for the factors set out in s 109. They addressed the question of costs in accordance with s 109.
11. In determining whether to award costs with reference to s 109(3) the Tribunal:
    1. must be satisfied that it is fair to do so; and
    2. in determining whether it is fair to do so must have regard to the matters listed in s 109(3)(a)-(e).
12. The factors relied upon by Fisken and the Council in support of their applications for costs included:

1. the relative strength of the claims made by each of the parties, including whether a party has made a claimant has no tenable basis in fact (s 109(3)(c)); 2. the nature and complexity of the proceeding (s 109(3)(d)); and

1. any other matters the Tribunal considers relevant (s 109(3)(e)).
2. For the reasons which follow, I am persuaded that it is appropriate to award costs in this proceeding to Fisken and the Council.

1. Sweetvale Pty Ltd v Minister for Planning[8] is often quoted to identify some of the factors which make it more likely that the nature and complexity of the proceeding or make it fair to make an order for costs. These include:

1. the proceeding was in the Tribunal's original jurisdiction, not its review jurisdiction; 2. the proceeding involved a large number of issues or a small number of particularly complex issues

1. the proceeding involved a large sum of money or a major issue affecting the welfare of a party or the community;

1. the proceeding succeeded and was a type which was required to be brought, either by reason of a statutory duty or by reason of some unlawful or improper conduct by another party warranted redress; 2. the proceeding failed and was a type where a party had asserted a right which is new, or ought to have known, was tenuous; 3. a practice has developed the costs originally awarded in a particular type of proceeding, thus making an award of costs more predictable for the proceeding in question.
2. I accept that it is more likely that a party might recover its costs if it is successful in bringing a summary dismissal application pursuant to s 75(1). This is particularly so if the application is brought in the Tribunal's original jurisdiction, as was the case in this proceeding.
3. An application brought pursuant to s 87 is an application which can have significant and serious consequences for a permit holder. This may also have significant implications for the Council as there is a potential for compensation under s 94(2) of the P&E Act.
4. Whilst it may not be sufficient to demonstrate that the nature of the proceeding has a strong resemblance to inter partes litigation in a court there are some proceedings which are of a character that are of a character which enables the Tribunal to be satisfied that an order should be made in respect of costs.
5. This application was argued by very experienced senior counsel and the issues fully explored. The Tribunal was satisfied that this was a case where the failure to establish an essential element of the application entitled the Tribunal to dismiss the application pursuant to s 75(1) on the basis that it was misconceived. There being no standing to bring the cancellation request, the proceeding was bound to fail and was appropriately dismissed pursuant to s 75(1). However, I observe that success or failure, even in a matter brought pursuant to the Tribunal's original jurisdiction, is not determinative of whether costs ought to be awarded applying s 109 alone. I am of the view that in this case that the nature and complexity of the issues which were raised in establishing standing were complex and of some considerable significance.
6. I note that both the nature and complexity of proceedings are considerations in the exercise of discretion to award costs under s 109.[9] To that end, this matter was one not only with serious consequences arising in the Tribunal's original jurisdiction, but was also of sufficient complexity, in light of the forensic manner in which MBC sought to argue its case.
7. As Fisken identified in the substantive proceeding, the application brought by MBC was one which was known to be inconsistent with the line of authority established at the Tribunal. The argument put on behalf of MBC was done on the basis that it sought to challenge the underlying analysis which had hitherto been the approach taken by the Tribunal. This was acknowledged by MBC in its submissions.[10]
8. Section 109(3)(c) refers to the relative strengths of the parties' claims, not only to whether or not the argument was untenable. Notwithstanding, that the line of authority sought to be challenged by MBC was not binding on the Tribunal, it clearly was persuasive and contained an analysis which was decided and carefully set out by very senior and experienced members of the Tribunal including Deputy Presidents and a former President. This proceeding was in fact a high-stakes and risky approach but not without its consequences.
9. Insofar as I am required to do so in respect of s 109 (rather than s 75(2)) I consider the following factors in s 109(3) relevant to the fairness of making an order against MBC.

1. I note also that a proceeding had also been issued in the Supreme Court as an alternative to the proceeding brought pursuant to s 87 seeking to judicially review substantially the same question which was before the Tribunal. 2. The application was one which was required to be heard before a Presidential member.

1. Both the Council and Fisken were compelled to participate fully to defend, in Fisken's case, its valuable permit and in the Council's case, any prospect of the permit being undermined and thus opening it to a claim for compensation pursuant to s 94(2) of the P&E Act.

1. The respective positions of both Fisken and MBC were that they both sought to protect valuable and important commercial property and real estate. In this regard the litigation was of a sophisticated commercial nature akin to that which would otherwise be heard in the Supreme Court. In fact, as previously noted parallel proceedings were issued in the Supreme Court by MBC. 2. The matter was argued by senior practitioners, in particular the applicant and respondent being represented by senior and junior counsel. 3. Whilst ultimately the issue was determined on the question of standing, the argument was a complex one.
2. In these circumstances for each of these reasons in combination I am of the view that the relative strength of the claims as referred to in s 109(3)(c) and the nature and complexity of the proceeding as referred to in s 109(3)(d) persuade the Tribunal that an order for costs is in this proceeding appropriate. I do not consider the factors set out in s 109(3)(a)-(b) to be of any weight in my consideration as to costs.
3. I consider the factors set out above as being applicable and persuasive to the favourable exercise of discretion for compensation by way of costs under s 75(2).

1. Both Fisken and the Council have identified a quantum of costs which they respectively claim. The costs incurred by Fisken in seeking summary dismissal of the proceeding are said to be $84,840.92 as at 21 May 2020. Fisken's principal position was that it should be entitled to an award of costs reflecting the sum but reduced to reflect an assessment on a party-party basis, resulting in a 20% reduction of the amount actually incurred by Fisken, amounting to costs fixed at $67,872.36.
2. The Council made a more modest claim for costs in the sum of $16,797.50 which included costs up to and including the hearing on 9 December 2019 and the preparation of the application for costs submissions.
3. The authorities suggest that the Tribunal should generally exercise caution in ordering costs in a fixed amount.[11]
4. Whilst I recognise that the words of s 75(2) refer to the Tribunal being entitled to order 'an amount to compensate that party for any costs, expenses, loss, inconvenience and embarrassment resulting from the proceeding', I am not of the view that this translates to an award of costs by way of an indemnity but rather costs which are appropriate in the circumstances.
5. MBC argued that if there was to be any award of costs the quantum ought to be in accordance with the Victorian Civil and Administrative Tribunal Rules 2018 (Vic). There is no independent scale of costs applicable to VCAT. However, the Rules provide that if an award of costs is made it is on a County Court scale as defined in r 1.13 of Chapter 1 of the Rules of the County Court of Victoria, unless otherwise ordered.[12]
6. I am of the view that in the circumstances it is fair to award costs in favour of Fisken and the Council.
7. It is not appropriate to award costs on an indemnity basis but rather on a standard basis. However, given the nature and complexity of the matter, the subject matter involved and the serious consequences for Fisken and the Council, the fact that this costs application is based on s 75(2) and is made in proceedings which are parallel to commercial or judicial review proceedings in the Supreme Court, an award of costs is appropriate and costs will be awarded in accordance with the County Court scale to be taxed in default of agreement.

[1] Maddingley Brown Coal Pty Ltd v Moorabool SC [2020] VCAT 555.

[2] Fisken Bacchus Marsh Pty Ltd, 'Submissions in Support of Application for Costs' filed in P1179/2019, 21 May 2020; Moorabool Shire Council, 'Submission on Behalf of Responsible Authority in Relation to Costs' filed in P1179/2019, 21 May 2020; Maddingley Brown Coal Pty Ltd, 'Outline of Submissions on Costs in Reply', filed in P1179/2019, 5 June 2020.

1. [3] Nikolic v NOH Legal Pty Ltd and others (Costs) (Human Rights) [2020] VCAT 271, [14]-[15];

Walsh v Cannon & Ors (Legal Practice) [2008] VCAT 2409, [6].

[4] Martin v Fasham Johnson Pty Ltd [2007] VSC 54, [27] (Bell J).

[5] Gelman v Kenny & Anor (Civil Claims) [2013] VCAT 117, [31].

[6] Sweetvale Pty Ltd v Minister for Planning [2004] VCAT 2000, [19]; Haouli v Hobsons Bay CC [2001] VCAT 433, [24].

[7] See e.g. Haouli & Ors v Hobsons Bay CC [2001] VCAT 433.

[8] [2004] VCAT 2000, [19].

[9] Frugtniet v Law Institute of Victoria Pty Ltd [2012] VSCA 178, [38]-[40].

[10] Maddingley Brown Coal Pty Ltd, 'Outline of Submissions on Costs in Reply', filed in P1179/2019, 5 June 2020, [32]. See Colonial Range Pty Ltd v Minister for Planning Ltd [2015] VCAT 196 (Justice Garde P) and Cardoso v Greater Bendigo City Council [2006] VCAT 2043 (DP Gibson).

[11] Haouli & Ors v Hobsons Bay CC [2001] VCAT 433, [29]-[30].

[12] Victorian Civil and Administrative Tribunal Rules 2018 (Vic) r 1.07.