Solarino Holdings Pty Ltd must from within 60 days of the date of these orders make a $1800.00 contribution towards the legal costs of Califam Pty Ltd in relation to the October 2008 hearing of this matter.

1. I will not repeat the general background to this matter, as this is already covered in my previous various orders. Suffice to say that this matter involves an enforcement proceeding involving the restaurant at 240 Lygon Street in Carlton. The owner of the restaurant is Califam Pty Ltd. The current tenant is Solarino Holdings Pty Ltd. It is common ground that the lease signed by Solarino Holdings Pty Ltd includes a special condition essentially providing that Solarino Holding Pty Ltd will take responsibility for dealing with the enforcement proceedings that have arisen from various non-compliance in the front appearance of the property, notably a large unlawful awning. This has been one of those enforcement proceedings where the issue has not so much been whether or not the relevant improvements are unlawful (ie. this was conceded), but more who is culpable in the situation and what is a reasonable course of action in terms of dealing with the unlawful structures.
2. In terms of the final result with what needs to be done to deal with the unlawful structures, see my earlier orders of 5 November and 12 December 2008.
3. Turning now to the costs aspects of this proceeding, a costs claim has been made by both the owner of the subject land Califam Pty Ltd, together with the Responsible Authority Melbourne City Council.
4. Califam Pty Ltd put forward the following costs claims in its written submission presented to me at the hearing of this matter on 15 October 2008:
   • a claim for $428.00 in relation to the appearance of Califam's lawyer at the 2 July 2008 hearing for this proceeding; and
   • a claim for $2750.00 in relation to the appearance by the barrister Ms Adele Patterson at the 15 October 2008 hearing.
5. With respect to Melbourne City Council, it has claimed $5700.00 for its legal fees and $3019.50 for fees arising from its heritage consultant Meredith Gould. In response to my request, I was provided by Council with copies of the relevant invoices Council is relying on.
6. I see the keys issues hear to be as follows:
   • should any costs order at all be made against Solarino Holdings Pty Ltd, in all the circumstances?;
   • if so, what time period should be applicable?;
   • what is a reasonable quantum of costs to be paid?;
   • should the costs order be made on a full indemnity compared to a party/party basis?
7. I shall deal with each of these points in more detail.
8. In terms of the keys statutory provision here, is it obviously Section 109 of the Victorian Civil and Administrative Tribunal Act 1998. In simple terms, Section 109 provides that the normal position is that each party bears their own costs in proceedings before this Tribunal, but Section 109(3) sets out various grounds which the Tribunal can rely upon in potentially making a costs order against any party, including a broad ability for the Tribunal to rely upon "...any other matter the Tribunal considers relevant" under Section 109(3)(e).
9. In making the findings which I have set out below, I have had regard to the various correspondence provided to me regarding this costs issue, including the written response Wilder, Moses and Bengasino on behalf of Solarino Holdings Pty Ltd.

Should any costs order at all be made against Solarino Holdings Pty Ltd?

1. My finding here is that, having regard to the relevant criteria under Section 109 of the VCAT Act 1998, it is fair and reasonable that Solarino Holdings Pty Ltd be required to make some form of contribution towards the costs incurred by the other two parties. In particular, I am satisfied that:
   • Solarino Holdings Pty Ltd unnecessarily prolonged these proceedings as per Clause 109(3)(b) of the VCAT Act 1998, in terms of its failure to properly comply with the Tribunal's previous directions/orders and what appears to be either a "head in the sand" approach or a wish to rely upon the unlawful structures of other nearby restaurants (or a combination of both);
   • with respect to the Tribunal's general discretion under Section 109(3)(e), it is also significant that Solarino Holdings Pty Ltd has signed a lease which expressly provides that it is Solarino's responsibility to comply with any planning enforcement orders - see Clause 19.3.11 of the Lease. I think it is reasonable for the Tribunal to assume that any responsible person/business wishing to operate a significant commercial undertaking such as running a Lygon Street restaurant should properly inform themselves regarding the contents of the proposed lease, including as necessary obtaining legal advice on any special conditions such as Clause 19.3.11. I think it is rather disingenuous for Solarino Holdings Pty Ltd to now try to effectively rely on its own lack of due diligence at an earlier stage, in seeking to avoid a responsibility to make a costs contribution.

What is the relevant time period in relation to which costs should be payable?

1. In the costs submission made by Wilder, Moses and Bengasino Lawyers provided under cover of their letter of 19 December 2008, it is argued that Solarino Holdings Pty Ltd should not have to pay any costs in relation to the earlier Tribunal hearing held on 2 July 2008, given that Solarino Holdings Pty Ltd had not at that stage been joined as a party to this proceeding.
2. I agree with this proposition, and hence have excluded the earlier costs being claimed by both Melbourne City Council and Califam Pty Ltd. Rather, I see the relevant issue here as being what costs should reasonably be paid in relation to the costs incurred by both of the other parties in the lead up to the Tribunal hearing on 15 October 2008.

What is the appropriate quantum of costs to be paid? - should costs be paid on a full Indemnity compared with a party/party basis?

1. Starting with the costs claimed by the owner Califam Pty Ltd, if one excludes the $428.00 being claimed in relation to the July 2008 hearing, the issue becomes what is a reasonable quantum of costs that can be claimed by Califam Pty Ltd in relation to the October 2008 hearing, and whether these costs should be paid on a full indemnity compared to a party/party basis.
2. Putting to one side at this stage the question of whether the costs should be paid on a full indemnity compared to a party/party basis, I am satisfied that the $2750.00 claimed by Califam Pty Ltd in relation to the October 2008 hearing is reasonable. This cost relate to the appearance by Ms Adele Patterson of Counsel. I consider that Ms Patterson was an appropriate choice of barrister to represent Califam Pty Ltd at this hearing, and that the issues involved are serious enough for Califam Pty Ltd to wish to use a barrister per se. Furthermore, I consider Ms Patterson's charge of $2750.00 to be very reasonable for a lawyer of her experience.
3. Turning now to whether the $2750.00 should be assessed on a full indemnity compared to a party/party basis, it is fair to say that in most situations the Tribunal will apply a party/party approach, in the interests of avoiding speculative litigation by parties before the Tribunal. Putting this another way, the Tribunal normally will not award costs on a full indemnity basis unless the conduct of the culpable party has been so extreme as to be quite vexatious or bloody minded.
4. In the situation here, I do not see the relevant conduct of Solarino Holdings Pty Ltd as being so extreme as to fall within this category. Accordingly, it is appropriate that I do apply a party/party basis discount on the sum claimed of $2750.00. As I normally use a one-third discount as an appropriate rule of thumb, in the finally result I consider it fair and reasonable that Solarino Holdings Pty Ltd make a $1800.00 contribution towards the legal costs incurred by Califam Pty Ltd at the October 2008 hearing.
5. Turning now to the costs claim by Melbourne City Council in relation to the October 2008 hearing, the same issues apply as I have outlined above. My findings here are as follows:
   • I similarly accept that the Council's use of Mr Matthew Townsend as a barrister representing Council at the hearing was appropriate and that the fee charged by Mr Townsend of $3135.00 is in order for a barrister of his level of experience;
   • with the respect to the costs incurred by the expert witness Meredith Gould who gave evidence in the course of the October 2008 hearing, the key invoice here is her invoice dated 17 October 2008 claiming $1097.25. Again I consider it reasonable that Council utilised this type of consultant at the hearing, and I consider the fee charged here to be in the type of range that I would have expected;
   • however for the same reasons as outlined above, I consider it fair and reasonable to apply a party/party discount to the fees of Mr Townsend and Ms Gould rather than a full indemnity situation. Accordingly, I have applied approximately one-third discount to each of these sums.
6. In summary then, in relation to the costs being claimed by Council, I consider it fair and reasonable that Solarino Holdings Pty Ltd make a $2000.00 contribution towards the legal costs of the barrister Matthew Townsend, together with a $700.00 contributions towards the expert witness costs of Meredith Gould.

1. In summary, for the reasons set out above, I consider it appropriate (pursuant to Section 109 of the Victorian Civil and Administrative Tribunal Act 1998) that Solarino Holding Pty Ltd does make a costs contribution in relation to both Califam Pty Ltd and Melbourne City Council. See my orders above in this regard.
2. I note that at the end of the costs submission made by the solicitors for Solarino Holdings Pty Ltd, their solicitors seek the opportunity to make further oral submissions to the Tribunal on the question of costs. This is rejected for the following reasons:
   • this whole proceeding has already been running for many months, and Solarino Holdings Pty Ltd had the opportunity at a much earlier stage to engage legal representation. The other parties should not be unreasonably disadvantaged in resolving this costs issue by Solarino Holdings Pty Ltd choosing to only engage lawyers at the eleventh hour;
   • I consider that in any case Solarino Holdings Pty Ltd has had substantial submissions made on behalf of it regarding this costs issue, in the form of the eight page costs submission provided to me by its lawyers; and
   • it needs to be remembered that if there was any further hearing to deal with this costs issue, presumably all parties would need to be represented at this further hearing, which would in itself incur substantial further costs, which surely is something all the parties including Solarino Holdings Pty Ltd is seeking to avoid.
3. I also note that the costs submission by the lawyers for Solarino Holdings Pty Ltd seems to continue a theme that Solarino Holding Pty Ltd has been hard done by, in terms of Council taking enforcement action against this property in a situation where other unlawful structures obviously exist in this section of Lygon Street. The obvious response here is that "two wrongs do not make a right", and the reality is that Solarino Holdings Pty Ltd needs to deal with its legal obligations under the Melbourne Planning Scheme and as a tenant of this property.
4. The parties are reminded that an administrative mention for this matter is scheduled on 20 February 2009.