1. The respondent must pay the applicants' costs of and incidental to the proceeding to be taxed in default of agreement by the Costs Court on a standard basis in accordance with the default scale of costs in Rule 1.07 of the Victorian Civil and Administrative Tribunal Rules 2018 (the applicable scale of costs is the County Court costs scale as defined in Rule 1.13 of Chapter I of the Rules of the County Court as in force on 31 December 2024, being a fee, charge or amount that is 80 per cent of the applicable rate set out in Appendix A to Chapter I of the Rules of the Supreme Court as in force on 31 December 2024).

1. On 11 June 2025, the Tribunal handed down final orders and reasons, holding the respondent liable to the applicant in the amount of $67,023.20.
2. On 26 June 2025, the applicants filed an application for their costs against the respondent.
3. On 31 July 2025, the applicants filed submissions in support of the costs application.
4. The respondent has not filed any submissions in response.

1. Section 109(3) of the Victorian Administrative and Civil Tribunal Act 1998 (Vic) ('VCAT Act') provides:

(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. The approach of the Tribunal to the question of costs was summarised by Gillard J in the case of Vero Insurance Ltd v Gombac Group Pty Ltd [2007] VSC 117 at [20]:

(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.

1. The prime requirement is that the costs order be fair, which has been said to require that the order be "just and appropriate in the circumstances".[1]

1. The applicants seek an order for costs against the respondent on the basis that a substantial award for damages was made, the respondent failed to file any expert reports to support its defence and failed to comply with several Tribunal orders, including failing to attend the final hearing.
2. The applicants submit the proceeding was 'fairly ordinary' up to the mediation stage. On 25 September 2023, Member Marks made orders for the filing and service of further expert reports and extended the date for the respondent to file and serve an expert report to 17 October 2023. On 13 November 2023, the solicitor for the respondent attended the mediation and advised that the respondent was difficult to contact, had no email and often travelled interstate and overseas. The respondent was informed and made aware of the mediation and had given instructions. The dispute was not resolved at mediation.
3. On 15 May 2024, Acting Senior Member Nash made procedural orders to provide for filing and service of any further expert reports and witness statements. The respondent failed to comply with these orders and, on 7 November 2024, the applicants informed the Tribunal via email of the respondent's non-compliance.
4. On 26 November 2024, the respondent attended a directions hearing before Senior Member Farrelly and the time for filing and service of his witness statement was extended to 19 December 2024 and a final hearing date fixed for 11 June 2025. This witness statement was filed late on 23 December 2024.
5. The Tribunal's orders also required the Tribunal Book to be prepared in consultation between the parties' solicitors and filed and served by 9 May 2024. On 7 May 2025, the applicants' solicitors forwarded a draft index to the respondent's solicitors but received no response and filed the Tribunal Book on 13 May 2024.
6. On 6 June 2025, the respondent's solicitor sought an adjournment of the hearing until 30 June 2025 as they could not get in contact with the respondent for the last month and may have to cease to act. The adjournment request was not consented to and, on 11 June 2025, the hearing proceeded undefended as the respondent's solicitors did not attend.
7. The applicants submit, pursuant to s 109(3)(a), the respondent has failed to comply with several of the Tribunal's orders and requested an adjournment because of his own default or neglect. Therefore, the respondent conducted the proceeding in a way that unnecessarily disadvantaged the applicants by unreasonably prolonging the proceeding.

1. Further to their application for costs, the applicants submit that the claim involved technical issues relating to drainage and property damage requiring expert evidence. The applicants filed several expert reports in support of their claim and called Mr Ben Wood of Landa Consulting Pty Ltd to give expert evidence at the hearing. The applicants were self-represented at the hearing.
2. Accordingly, the applicants contend that the factors set out in s 109(3)(d) are enlivened.

1. The applicants submit that the respondent did not initially file any Points of Defence despite being ordered by the Tribunal to do so and the timeframe being extended.
2. In his defence, the respondent admitted that the landscaping works he carried out had changed the surface levels on his property and that there was a flow of water onto the applicants' land but otherwise did not admit the applicants' claim. Instead, the respondent alleged that if a flow did exist, it was reasonable and that the local council inspected and approved the drainage and landscaping work performed.

1. The applicants note that their fencing claim was not successful. However, it was a minor part of their claim compared to the costs of rectification caused by the unreasonable flow of water.

1. I accept the applicants' submissions in relation to the factors in ss 109(3)(a) and (d). That is, the respondent failed to comply with several orders made by the Tribunal and failed to attend and defend the claim at the final hearing. As a result, the respondent's conduct unnecessarily disadvantaged the applicants by unreasonably prolonging the hearing. Further, I find that the proceeding was of a complex nature, requiring expert evidence to be adduced.
2. Accordingly, I am satisfied that it is fair to order the respondent to pay the applicants' costs of the proceeding under section 109(2) of the Act.
3. In circumstances where the Tribunal is satisfied a costs order should be made, the Tribunal has fixed costs in some cases where the amount of costs claimed is relatively small or certain and ordered costs be assessed by the Costs Court, in cases where the amount of costs being sought is substantial or uncertain.
4. In this case, because the amount of costs being sought by the applicants is uncertain and significant, the relevant jurisdiction with the expertise to assess such costs is the Victorian Costs Court. I will order the respondent pay the applicants' costs of and incidental to the proceeding to be assessed by the Costs Court on a standard basis in accordance with the County Court costs scale.

[1] Filippou Management Pty Ltd v MREEF Project Company No 11 Pty Ltd [2010] VCAT 1261 at [20].