7 Section 109(1) of the Victorian Civil and Administrative Tribunal Act 1998 (VCAT Act) establishes a default rule that each party must bear its own costs in a proceeding.

8 Sections 109(2) and (3) then give the Tribunal power to make a costs order in a proceeding if the Tribunal determines it is "fair" to do so.

9 The wording of section 109(2) of the VCAT Act provides:

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 [Tribunal emphasis].

10 I consider that a fundamental legal hurdle to Ms Grace's application for costs is that she is not a "party" to the proceeding as this term is applied in the VCAT Act or the Planning and Environment Act 1987.[3]

11 There is no indication that the legislation confers power on the Tribunal to make an award of costs in favour of a non-party (i.e. interested person).

12 The Planning and Environment Act 1987 establishes who is a party to an application for review to the Tribunal. Section 83(2) provides that:

In addition to any other party to a proceeding for review under this Act, an objector is a party to a proceeding for review if the objector -

1. is given notice of the application for review under this Act; and
2. in accordance with the Victorian Civil and Administrative Tribunal Act 1998, lodges with the Tribunal a statement of the grounds on which the objector intends to rely at the hearing of the proceeding.

13 It is clear that Ms Grace was an original objector to Council and lodged a statement of grounds with the Tribunal and became a party on that basis.

14 However, as an outcome of the preliminary determination of the Tribunal, Ms Grace was removed as a party pursuant to the power in section 60A(1)(b) of the VCAT Act, since she did not have third party rights under the relevant planning controls.

15 Her request for costs was made following that determination.

16 Notwithstanding her updated status as a non-party, I now consider the merits of the costs claim below to demonstrate that the Tribunal's reasoning would have led to the same outcome even if Ms Grace had remained a party.

17 Ms Grace seeks an award of costs against Council under section 109(3)(a) and (e) of the VCAT Act. She seeks an order against Council reimbursing her for $5,855[4] on the basis that:

• Council led her to "the logical conclusion that [she] possessed the ability to contest the decision" in advertising the proposal without providing any limitation as to what aspects of the proposal were subject to third party appeal rights;

• Council had the ability to re-assess her position after receiving her Statement of Grounds but "chose to say nothing". This was considered to reinforce her belief she held third party appeal rights;

• Council conducted the proceedings in a way that unnecessarily disadvantaged her because it did not reveal the limitations of third party appeal rights. It should have done so under its role as administrator of the planning scheme; and

• she responded in a proportionate fashion to the decisions made by Council.

18 Ms Grace does not seek costs from the permit applicant/applicant for review.

19 Council contested the award of costs sought on the basis that:

• it supported giving notice of the permit application since it formed the view it was not generally in accordance with the Structure Plan for the Heidelberg Precinct 2007 (Structure Plan) as referenced in Clause 43.02 of the planning scheme, and Ms Grace could be caused material detriment;
• the permit applicants, objectors and their representatives did not raise any question pertaining the extent of notice and review rights during the receipt, processing or assessment of the planning application;
• the matter of third party notice and review rights was subject to a hearing before the Tribunal and required some consideration; and
• Council did not believe it unfairly disadvantaged Ms Grace or any other objector party in the processes leading to the Preliminary Hearing.

20 In my determination of the issue of third party rights, I noted that Council gave notice of the application to develop the land for a six storey mixed use building. However, it did not indicate in its notification that objection or review rights were confined in any way. I explained that this could have been delineated more clearly.

21 I also observed that[5]:

In reality, there are a number of planning scheme provisions under which permission would be required for this proposal. It is clear that some do not carry rights of notice and review, but less clear whether others remain open.

22 The third party rights hinged on whether the subject land was within the prescribed distance of a Hospital (as this land use is defined in the planning scheme) and whether the proposal was generally in accordance with the Structure Plan.

23 I found that it was clear that the land was not within the prescribed distance of a hospital. However, on the latter issue, I commented:

This is a more nuanced issue, and is one of fact and degree.

Having considered the application plans which were the subject of notice by Council by reference to the Structure Plan as a whole, I find that it is not evident that proposal is 'not generally in accordance with' this plan... On this basis, the relevant exemption applies and review rights for third parties do not arise.

25 Had Ms Grace been a party, the determinative issue would have been whether Council engaged in conduct in the proceeding that caused disadvantage to Ms Grace that could be remedied by costs, or whether there were any other circumstances warranting reimbursement of her costs by Council.

26 In reality, Council supported Ms Grace's standing as a person entitled to notice and review rights and was generally aligned in its refusal of the permit application. It maintained this position throughout the proceeding.

27 Any claimed disadvantage to Ms Grace would have arisen as a result of the Tribunal's determination that she was not entitled to be a party to the proceeding.

28 If Council's actions were thought to be lacking in any way, this arguably stems from its lack of specificity in giving notice of the application as to which elements of the application could be opposed, and which could not.

29 It is not unusual for councils in applications relating to multiple planning permissions, especially where a Design and Development Overlay/Structure Plan is involved, to specify how third party objections may be limited.

30 However, as I mentioned in my original determination, the application of the planning scheme provisions to the facts of this application was not straightforward and involved questions of judgement.

31 Also, in this instance, given Council's view that the permit application was not generally in accordance with the Structure Plan, this would not have made any material difference to Ms Grace's ability to object.

32 While it could be said in broad terms that, by giving notice, Council caused Ms Grace to go to the expense of lodging an objection, this is not a direct cost in the Tribunal proceeding itself (since it pre-dates the proceeding).

33 In any case, I do not consider Council was unreasonable in giving some level of notice to third parties where the issue of 'general accordance' with the Structure Plan was open to interpretation and it decided to err on the side of caution.

34 Once the application for review was lodged with the Tribunal, Council did not have any ongoing role in advising Ms Grace about her options to lodge a Statement of Grounds. This followed standard Tribunal processes until the issue was raised by the applicant for review, apparently for the first time in the permit application process.

35 To the extent that Ms Grace pursued her objection to the Tribunal, I find that was not attributable to Council's actions per se.

36 While Ms Grace is no doubt dissatisfied that she went to the expense to engage professionals but was not ultimately able to present her case at the merits hearing (because of the Tribunal's legal ruling on her party status), I do not consider that Council engaged in behaviour that would justify an award of costs against it in this proceeding.

37 As it transpires, the final determination of the Tribunal refusing to grant a planning permit aligned with Ms Grace's interests as an objector.

38 Since Ms Grace is not a party, the Tribunal does not have the power to award costs against Council in the proceeding in her favour.

39 Even if Ms Grace remained a party for the purposes of the costs claim, it would appropriate for each party to bear its own costs in the proceeding.

[1] The submissions and any supporting exhibits given at the hearing, and the statements of grounds filed have all been considered in the determination of the preliminary issue. In accordance with the practice of the Tribunal, not all of this material will be cited or referred to in these reasons.

[2] Markos v Banyule CC [2021] VCAT 272.

[3] At least at the time of her original or subsequent costs claims.

[4] Comprising initial town planning advice, assistance formulating a Statement of Grounds, appearance at the Preliminary Hearing and preparation of costs submissions.

[5] Markos v Banyule CC [2021] VCAT 105.