Pickeriti Investments Pty Ltd ACN: 100 951 844 and Karl Andrew Nigel Pickford

Miller v Pickeriti Investments Pty Ltd (Civil Claims) [2020] VCAT 671

1. Pickeriti Investments Pty Ltd ACN: 100 951 844 and Karl Andrew Nigel Pickford shall pay Francis Miller's legal costs of the proceedings to be assessed by the Costs Court on a standard basis under the County Court Scale.
2. Pickeriti Investments Pty Ltd ACN: 100 951 844 and Karl Andrew Nigel Pickford shall pay Francis Miller the costs of his expert fixed at $3,674.00.
3. Pickeriti Investments Pty Ltd ACN: 100 951 844 and Karl Andrew Nigel Pickford shall pay Francis Miller the Tribunal fees he has incurred in the proceedings totalling $1,593.85.

1. This proceeding was heard together with the counterclaim in proceeding C2778/2018 in 2019 and 2020. It was decided on 26 March 2020, at which time the parties were invited to make any application for costs by 1 May 2020.[1]
2. On 30 April 2020 Francis Miller ('the applicant') filed an application claiming costs of the proceedings, including his legal fees, expert's expenses, Tribunal fees, and disbursements, against Pickeriti Investments Pty Ltd (ACN: 100 951 844) trading as Pickford Mustangs ('Pickford Mustangs') and Karl Andrew Nigel Pickford ('the respondents'). On 16 May 2020 the respondents filed their submissions opposing costs, and on 17 May 2020 Mr Miller emailed his written response to these submissions to the Tribunal.
3. Given the Covid-19 pandemic crisis and associated public health issues, a telephone hearing was held on 20 May 2020 in relation to Mr Miller's costs application. At the costs hearing Mr Miller was self-represented and the respondents were represented by Counsel.

1. Before turning to the Tribunal's power to order costs, it is useful to set out the following chronology[2] of the proceedings.
2. In 2015 Mr Miller engaged the respondents to convert his 1967 Ford Mustang GT500 Fastback ('motor vehicle') into a replica 'Eleanor'[3] for $15,000.00 ('the restoration work'). By July 2017 there was a dispute over the progress of the restoration work and the agreed contract price.
3. As a result, on 20 October 2017 Mr Miller commenced proceeding C6760/2017, initially seeking the return of the motor vehicle and its parts, as well as a refund of the $15,000.00 he had paid to the respondents. Mr Miller was legally represented at this time.
4. A directions hearing was held on 19 March 2018 and the respondents were ordered to file their defence and any counterclaim by 13 April 2018; they did so on 18 April 2018. On 28 May 2018 a compulsory conference was conducted, but as the parties were unable to reach settlement they were ordered to exchange documents by 2 July 2018 with the hearing scheduled for 2 August 2018.

1. Importantly, on 17 July 2018 Mr Miller's motor vehicle was stolen from the respondents' premises. The hearing was subsequently rescheduled on three occasions at the request of the parties; first, by the respondents in July 2018, and then Mr Miller made similar requests in October 2018 and December 2018. Following the theft of Mr Miller's motor vehicle, the Tribunal also ordered the parties to file amended points of claim, counterclaim and defence prior to the rescheduled hearing on 12 March 2019. Mr Miller complied with these orders, including amending his claim to include an allegation that the respondents' negligence had led to the theft of his motor vehicle. Conversely, the respondents failed to do so, filing their amended counterclaim and defence three weeks late.
2. On 12 March 2019 the respondents requested an adjournment of the hearing because their legal representative had suffered a serious injury that day. As a result, the respondents were ordered to pay Mr Miller's costs of the adjournment at the County Court Scale of Costs and the hearing was adjourned to 23 May 2019.
3. On 23 May 2019 the respondents again requested an adjournment on the basis that Victoria Police had not concluded its investigation into the theft of Mr Miller's motor vehicle, and because Mr Miller had not provided them with a copy of his insurance payout from Shannons. This request was refused. However, on 24 May 2019 the respondents made another request for an adjournment so that they could consider the large volume of documents Mr Miller had provided to them on this date. In the interests of procedural fairness, the hearing was adjourned, and Mr Miller was ordered to pay the respondents' costs thrown away on this date, fixed at $1,200.00. In addition, the parties were ordered to exchange documents, including expert reports, by 21 June 2019. Mr Miller was also ordered to prepare, in consultation with the respondents, a Tribunal book of the relevant documentary evidence by 11 September 2019.
4. Accordingly, on 11 September 2019 Mr Miller filed two copies of the Tribunal book that included two expert reports from Cuthbert Automotive Consulting dated 15 October 2018 ('the Cuthbert report') and 21 June 2019 ('the supplementary Cuthbert report'), which valued the stolen motor vehicle at $140,000.00. However, the respondents failed to provide an expert report for inclusion in the Tribunal book.
5. On 14 October 2019 the respondents sought another adjournment claiming that Mr Pickford had filed a fraud complaint with Victoria Police that was still under investigation. This request was refused and the hearing proceeded with Mr Miller and his witnesses giving their evidence on 14 and 15 October 2019.

1. On 16 October 2019 the respondents advised that their expert, Mr David Palmer, had provided them with an expert valuation report ('the Palmer report') that morning. As a result, they requested leave to tender that report as evidence. Notwithstanding Mr Miller's objections, leave was granted for the Palmer report to be tendered as evidence. The hearing was also adjourned until 17 February 2020 to allow Mr Miller an adequate opportunity to review and respond to the Palmer report, and for the respondents to arrange for Mr Palmer to give evidence at the hearing. In addition, and with the consent of the parties, a conclave of experts was ordered for 10 January 2020 so that the parties' experts could provide their recommendations to the Tribunal as to the appropriate valuation of Mr Miller's stolen motor vehicle. The parties were also ordered to provide an updated Tribunal book by 3 February 2020.
2. Importantly, on 10 January 2020 the experts were unable to provide a joint report because of qualitative differences regarding the photographic evidence each expert had relied on to support their respective findings. As a result, the parties were ordered to attend a directions hearing on 28 January 2020. However, whilst Mr Miller and his representative attended the directions hearing on 28 January 2020, the respondents did not. Accordingly, the respondents were ordered to pay Mr Miller's costs thrown away on this date, fixed at $1,250.00. In addition, the respondents were ordered to file and serve a 'List of Documents' verified by affidavit by 10 February 2020; the respondents failed to do so.
3. On Friday 14 February 2020 the respondents' representative emailed the Tribunal that he no longer held instructions to act for them. On Monday 17 February 2020 Mr Pickford requested an adjournment so that the respondents could obtain fresh legal representation. He also advised that Mr Palmer was unable to attend as a witness and that the respondents wished to call a new expert witness, Mr Banks. The adjournment was refused because the hearing had been adjourned on 16 October 2019, in part, to allow Mr Palmer to appear as an expert witness. In addition, the respondents had failed to provide Mr Miller with notice of a new expert witness, and they had also not filed any expert report from Mr Banks for inclusion in the revised Tribunal book in accordance with the orders.[4]
4. On 26 March 2020 I found that the respondents had failed to prove their claim for additional labour charges, the supply of parts and storage fees and dismissed the counterclaim in proceeding C2778/2018. In respect of proceeding C6760/2017, I found that the parties' original agreement had given rise to a bailment for reward and that the respondents were negligent in discharging their duty as bailees to keep Mr Miller's motor vehicle safe in July 2018. As a result, I found that Mr Miller was entitled to recover damages for the loss he had suffered due to the theft of his motor vehicle from the respondents' premises.
5. In addition, based on the expert evidence before me, I found that Mr Miller's motor vehicle was valued at $140,000.00 at the time of the theft in July 2018. I further accepted that by arranging insurance with Shannons for an agreed value of $70,000.00 Mr Miller had taken steps that effectively operated to minimise his loss by fifty percent. Accordingly, I found that the respondents were liable to Mr Miller for damages of $70,000.00 arising from the theft of his motor vehicle from their premises.

1. The Tribunal's power to award costs is contained in section 109 of the Victorian Civil and Administrative Tribunal Act 1998 ('the Act') and subsection 109(1) provides that, except as set out in Division 8, each party is to bear their own costs.[5] Notwithstanding, under subsection 109(2) the Tribunal retains power to award costs to a party if it is satisfied it is fair to do so having regard to the criteria specified in subsection 109(3).[6]
2. In addition, a party can seek costs under section 112 of the Act, which provides for a presumption of an order for costs in certain circumstances where a settlement offer is rejected.
3. Alternatively, a party may also seek costs on the basis of having made an offer of compromise on a "without prejudice basis" save as to the question of costs, also known as a Calderbank offer.[7]
4. Accordingly, the evidence and submissions regarding Mr Miller's application for costs are discussed as follows:

The Settlement Offers - Section 112 of the Act

1. Given the wording of section 109 of the Act, section 112 operates to confer a costs advantage to a party who can establish that they made a qualifying offer of compromise.
2. Although as an unrepresented party Mr Miller did not raise the presumption of section 112 in his costs application, his application included copies of two offers of settlement made to the respondents on 19 and 24 September 2019. The respondents did not dispute that they had rejected each of these offers of compromise.
3. Accordingly, sections 112 to 114 apply for the purposes of Mr Miller's application and they relevantly state:

Section 112 - Presumption of order for costs if settlement offer is rejected

(a) a party to a proceeding (other than a proceeding for review of a decision) gives another party an offer in writing to settle the proceeding; and

(b) the other party does not accept the offer within the time the offer is open; and

(c) the offer complies with sections 113 and 114; and

(d) in the opinion of the Tribunal, the orders made by the Tribunal in the proceeding are not more favourable to the other party than the offer.

(2) If this section applies and unless the Tribunal orders otherwise, a party who made an offer referred to in subsection (1)(a) is entitled to an order that the party who did not accept the offer pay all costs incurred by the offering party after the offer was made.

Section 113 - Provisions regarding settlement offers

(a) with prejudice, meaning that any party may refer to the offer, or to any terms of the offer, at any time during the proceeding; or

(b) without prejudice, meaning that the Tribunal is not able to be told of the making of the offer until after it has made its orders in respect of the matters in dispute in the proceeding (other than orders in respect of costs).

(4) If an offer provides for the payment of money, the offer must specify when that money is to be paid.

Section 114 - Provisions concerning the acceptance of settlement offers

(1) An offer must be open for acceptance until immediately before the Tribunal makes its orders on the matters in dispute, or until the expiry of a specified period after the offer is made, whichever is the shorter period.

(2) The minimum period that can be specified is 14 days.

1. There was no dispute between the parties that Mr Miller had emailed the respondents written offers on 19 and 24 September 2019 on a "without prejudice" basis to settle the claim for $35,000.00 plus party/party costs to be taxed in default of agreement. In order to receive the benefit of the costs presumption in section 112, at least one of the settlement offers Mr Miller made on 19 or 24 September 2019 must strictly comply with the requirements of sections 113 and 114.[8]
2. At the costs hearing, Mr Miller accepted that the settlement offer he had made to the respondents on 19 September 2019 stated that it was "open for acceptance for a period of 7 days". Given this, I find that this offer was not open for acceptance for the minimum period of 14 days specified in subsection 114(2). I am also satisfied that this offer failed to specify by when the $35,000.00 was to be paid, as required by subsection 113(4). Accordingly, I find that the settlement offer Mr Miller made on 19 September 2019 does not comply with sections 113 and 114 and, thus, it does not meet the requirements of paragraph 112(1)(c). As a result, I am satisfied that subsection 112(1) does not apply to the written settlement offer Mr Miller made to the respondents on 19 September 2019.
3. Similarly, Mr Miller accepted that the settlement offer he had made to the respondents on 24 September 2019 did not specify when they should pay to him the specified $35,000.00. Accordingly, I find that this settlement offer was not made in accordance with subsection 113(4) and, thus, it too does not comply with section 113 and the requirements of paragraph 112(1)(c).
4. Therefore, I find that Mr Miller cannot rely on either of the settlement offers he made to the respondents on 19 and 24 September 2019 in relation to the presumption for an order for costs set out in section 112 of the Act.

Power to award costs - Section 109 of the Act

1. Even though Mr Miller cannot rely on the presumption under section 112 of the Act, the Tribunal retains power to award costs under section 109 of the Act, which states:

(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.

30 The power under section 109 to award costs only arises where a party to the proceeding has incurred costs[9], as any order for costs is intended to be compensatory and not punitive.[10] In addition, in Vero Insurance Limited v Gombac Group[11] ('Vero's case'), the Supreme Court emphasised the Tribunal should approach the question of entitlement to costs on a step-by-step basis:

(i) The prima facie rule is that each party should bear their own costs of the proceeding.

(ii) The Tribunal should 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 subsection 109(3). The Tribunal must have regard to the specified matters in determining the question, and by reason of (e) the Tribunal may also take into account any other matter that it considers relevant to the question.

1. In this case Mr Miller sought the costs of the proceedings under section 109 of the Act. The respondents opposed the application on the basis that Mr Miller had failed to make any submissions regarding why it would be fair for

the respondents to pay his costs. In addition, they submitted that subparagraph 109(3)(a)(iv), which relates to causing an adjournment, was the only criterion relevant in subsection 109(3).

1. However, during the course of the costs hearing the respondents accepted that, as Mr Miller was self-represented at this hearing, the Tribunal had a positive duty to give him such assistance as was necessary to ensure that the proceeding was fair.[12] They also endorsed the approach in Vero's case to the Tribunal's task in respect of section 109.[13] Consequently, the respondents agreed that this meant that the Tribunal had to consider all of the factors set out in subsection 109(3) including, but not limited to, subparagraph 109(3)(a)(iv).[14]
2. Accordingly, the issue and evidence in respect of the factors set out in subsection 109(3) are discussed as follows:

Paragraph 109(3)(a) - were the proceedings conducted in a way that unnecessarily disadvantage another party?

1. Paragraph 109(3)(a) focuses on the steps that the parties took in progressing the proceedings before the Tribunal. It is not enough that another party was disadvantaged; they must have been unnecessarily disadvantaged.[15] Further, in assessing whether either of the parties conducted the proceedings in a way that unnecessarily disadvantaged another party, paragraph 109(3)(a) sets out a non-exhaustive list of examples in subparagraphs 109(3)(a)(i) - (vi) of the kind of conduct that may come within the scope of this provision.[16]

Subparagraphs 109(3)(a)(i), (iii) and (iv) - non-compliance with a Tribunal order without reasonable excuse, asking for or causing an adjournment :

1. Although the parties made several applications for adjournments during the course of the proceedings, the existence of such requests does not necessarily mean it is fair to award costs to Mr Miller. For example, the proceedings were adjourned on three occasions from July to December 2018 because the parties filed signed minutes of proposed consent orders for this purpose. In that sense, I find that the parties were equally responsible for the delay

caused by these adjournments to the conduct of the proceedings. In addition, even though the parties were legally represented at that point in time, I am further satisfied that the adjournments that occurred from July to December 2018 provided each party with the time they needed to clearly articulate their respective claims. Accordingly, I am not satisfied that the conduct that resulted in these adjournments unnecessarily disadvantaged Mr Miller or the respondents.

1. I note that the Tribunal made orders on 12 March 2019 and 24 May 2019 awarding costs of the day to Mr Miller and the respondents respectively and I do not seek to interfere with these orders. However, the conduct that led to these adjournments remains relevant when assessing Mr Miller's current application for costs of the proceedings and whether any non-compliance with a Tribunal order occurred without reasonable excuse for the purposes of subparagraph 109(3)(a)(i).
2. In this case, I am satisfied that the respondents had a reasonable excuse for the adjournments they requested on 12 March 2019 and 24 May 2019. I note that the Tribunal accepted that the respondents' legal representative was unable to attend the hearing on 12 March 2019 because he had sustained a serious injury and adjourned the hearing accordingly. Correspondingly, on 24 May 2019 I granted the respondents' request for an adjournment in the interests of procedural fairness. I also note that, whilst this adjournment delayed the hearing of the evidence, it also resulted in the preparation of the Tribunal book, which streamlined the subsequent conduct of the hearing. Accordingly, I am not satisfied that respondents' conduct in requesting the adjournments on 12 March 2019 and/or 24 May 2019 unnecessarily disadvantaged Mr Miller in any way.
3. In addition, each of these adjournments resulted in a specific order for the costs thrown away by the affected party. On 12 March 2019 the Tribunal ordered the respondents pay Mr Miller's costs because the adjournment was caused by their legal representative's unavailability. Likewise, on 24 May 2019 I ordered Mr Miller to pay the respondents' costs fixed at $1,200.00 because of the late provision of a large volume of loose leaf documents. Notably, the party that was adversely affected by the adjournment and/or non-compliance with a Tribunal order on 12 March 2019, 24 May 2019 and 28 January 2020, received the benefit of a costs order in their favour. As a result, it would not be appropriate to make an additional costs order in Mr Miller's favour on the same factual basis relating to these orders.
4. In considering subparagraph 109(3)(a)(i) I am not satisfied that the respondents had a reasonable excuse for their failure to comply with the Tribunal order to attend a directions hearing scheduled for 28 January 2020, which was ordered because the parties' experts were unable to provide a joint export report at the conclusion of the conclave on 10 January 2020. Notably, the respondents did not seek an adjournment of that directions hearing or otherwise advise of their inability to attend. Consequently, the respondents were ordered to pay Mr Miller his legal costs of the day fixed at $1,250.00. At the hearing on 17 February 2020 Mr Pickford sought to explain the respondents' non-attendance on the basis that they were not aware of the order dated 10 January 2020 for the directions hearing on 28 January 2020. However, given the respondents were legally represented throughout January 2020, I do not find this explanation persuasive and I do not accept that they had a reasonable excuse for their non-compliance with the Tribunal orders in this instance. Nevertheless, I am mindful that Mr Miller was awarded his legal costs of the day on 28 January 2020.
5. However, in terms of subparagraph 109(3)(a)(i) I am satisfied that since June 2019 the respondents failed to comply with the Tribunal's orders on more than one occasion without reasonable excuse with the result that Mr Miller was unnecessarily disadvantaged as a party to the proceedings.
6. It is not in dispute that the respondents' request for leave to tender the Palmer report into evidence on 16 October 2019 resulted in an adjournment of the proceedings. Similarly, the respondents have not denied that the consequential adjournment resulted in an order in Mr Miller's favour for his legal costs of the day fixed at $2,500.00. However, I disagree with the respondents' submission that that this meant that there was no other basis for Mr Miller to be entitled to his costs.[17]
7. I note that the respondents' request to tender the Palmer report on 16 October 2019 arose precisely because they, firstly, failed to comply with the Tribunal order to exchange their expert report with Mr Miller by 21 June 2019 and, secondly, because they failed to provide this evidence for the purposes of the Tribunal book by 11 September 2019.
8. In assessing the respondents' non-compliance with these orders I have considered their explanation that they were unable to do so because they did not receive the supplementary Cuthbert report until 21 June 2019. However, despite Mr Pickford's claim that he had repeatedly asked Mr Palmer for the report from June 2019 until October 2019, I do not accept that the respondents had a reasonable excuse for failing to comply with the order for the inclusion of their expert evidence in the Tribunal book by 11 September 2019. This occurred in circumstances where the respondents were legally represented and in possession of the supplementary Cuthbert report for more than 3 months before the hearing resumed on 14 October 2019. Given this, it would be reasonable to expect the respondents' legal representative to have taken appropriate steps to find another suitably qualified expert witness, if required, before the hearing was due to resume. I find that the respondents had ample time in which to do so. Accordingly, I am not satisfied that the reasons put forward by Mr Pickford establish a reasonable excuse for the respondents' failure to comply with the Tribunal orders at that time.

1. In addition, the respondents' tendered the Palmer report on 16 October 2019 after Mr Miller's expert evidence had been concluded. The respondents' actions meant that the proceedings had to be adjourned to ensure that Mr Miller had a fair and reasonable opportunity to respond to this new evidence, including instructing Mr Cuthbert to revisit his expert opinion to take into account the contents of the Palmer report, potential discovery of additional documents, the preparation of a new Tribunal book and recalling Mr Cuthbert for the hearing scheduled to resume on 17 February 2020.
2. Further, the respondents did not address in their written submissions, or at the costs hearing, the impact the respondents' conduct had on the conclave of experts held on 10 January 2020 ('the conclave'). The conclave was ordered to facilitate the provision of a joint expert report regarding the issues on which the experts agreed and disagreed, and if possible, their recommendations as to the appropriate valuation of Mr Miller's stolen motor vehicle.
3. Although Mr Cuthbert and Mr Palmer attended the conclave as expert witness for Mr Miller and the respondents respectively, they were unable to come to a joint expert report. This was because they did not have an agreed set of photographic evidence to form the basis of their respective valuation opinions. In particular, whilst the Cuthbert report relied on two colour photographs of Mr Miller's motor vehicle, the Palmer report relied on poor quality monochrome reproductions of those coloured photographs, as well as additional photographs that had not been provided to Mr Cuthbert. Notably, the respondents' legal representative was in possession of Mr Cuthbert's reports[18] as well as the additional photographs that the respondents asserted were of Mr Miller's stolen motor vehicle. Yet, they failed to provide these photographs to Mr Miller's expert, Mr Cuthbert, prior to the conclave. In the circumstances, I find that the respondents were responsible for the experts being unable to provide a joint expert report at the scheduled conclave. Consequently, I am also satisfied that the respondents' conduct of the proceeding in this respect unnecessarily disadvantaged Mr Miller.
4. Accordingly, having regard to the evidence as a whole, I am satisfied that the respondents failed to comply with the Tribunal's orders on more than one occasion after 24 May 2020 without reasonable excuse. I also find that this non-compliance caused the proceedings to be adjourned.
5. As a result, and in terms of the factors set out at subparagraphs 109(3)(a)(i), (iii) and (iv), I am satisfied that the respondents have conducted the proceedings in a way that unnecessarily disadvantaged Mr Miller.

Subparagraph 109(3)(a)(ii) - non-compliance with the Act or relevant legislation:

1. In considering subparagraph 109(3)(a)(ii), I note that paragraph 98(1)(d) of the Act requires the Tribunal to conduct each proceeding with as little formality and technicality as a proper consideration of the matters before it permits. Mr Miller did not identify in his costs application or at the costs hearing any particular examples of non-compliance with the Act, the regulations, the rules of any enabling enactment.
2. Given this, and apart from the respondents' failure to comply with the Tribunal's orders as discussed previously in respect of subparagraph 109(3)(a)(i), I am not satisfied that subparagraph 109(3)(a)(ii) is applicable in this case.

Subparagraph 109(3)(a)(v) - attempt to deceive another party or the Tribunal:

1. As regards paragraph 109(3)(a)(v), I have taken into account Mr Miller's concerns at the costs hearing that Victoria Police had investigated and dismissed Mr Pickford's fraud complaint.[19] I acknowledge that Mr Miller felt personally aggrieved by this complaint. On the other hand, the respondents presented limited evidence of this claim to the Tribunal on 14 October 2019. They also did not actively pursue it during the substantive hearing when their request for an adjournment on this basis was refused.
2. Accordingly, taking into account these factors, I am not satisfied that the fact that the respondents raised the fraud complaint on 14 October 2019 amounts to an attempt to deceive of the kind contemplated by paragraph 109(3)(a)(v).[20]

Subparagraph 109(3)(a)(vi) - vexatiously conducting the proceeding:

1. The reference to "vexatiously conducting the proceeding" in subparagraph 109(3)(a)(vi) is concerned with the manner in which the proceeding was conducted.[21] In addition, the relevant test requires some element of ulterior purpose[22] or conduct that is "seriously and unfairly burdensome, prejudicial or damaging".[23]
2. In this case, Mr Miller did not specifically claim costs on the basis that the respondents had been vexatiously conducting the proceeding as envisaged under subparagraph 109(3)(a)(vi). I accept that the respondents' conduct of the proceedings caused Mr Miller a degree of frustration at a personal level.
3. However, given the legal test in subparagraph 109(3)(a)(vi) sets a relatively high threshold for finding that a party has engaged in such conduct, on balance, I am not satisfied that the respondents' behaviour constituted vexatiously conducting the proceeding in the manner envisaged by this provision.

1. Accordingly, after taking into account each of the matters set out in subparagraphs 109(3)(a)(i) - (vi) and the evidence as a whole, I am satisfied that the findings set out above in relation to paragraph 109(3)(a) favour Mr Miller in his application for costs.

Paragraph 109(3)(b) - Prolonging unreasonably the time taken to complete the proceeding

1. The focus of paragraph 109(3)(b) of the Act is on the time between the commencement and the completion of the proceeding, rather than any events that took place before the proceeding was commenced.[24] In addition, requiring a party to prove their claim does not, of itself, constitute prolonging unreasonably the time taken to complete the proceeding. [25]
2. As noted previously, having filed signed minutes of proposed consent orders to adjourn the proceedings during the period July to December 2018, I find that the parties were equally responsible for the time taken from October 2017 to March 2019 to advance the proceeding. In addition, Mr Miller was responsible for the adjournment of the hearing on 24 May 2019 because of the manner in which he presented his documentary evidence to the respondents and the Tribunal on this date.
3. On the other hand, following these orders I am satisfied that responsibility for the time taken to complete the proceeding largely rests with the respondents. I give weight to the fact that the respondents failed to comply with the orders of the Tribunal on several key dates. For example, the respondents failed to take steps to ensure compliance with the order for the inclusion of their expert report in the Tribunal book by 11 September 2020. This failure and the late provision of the Palmer report led to the adjournment of the hearing on 16 October 2020.
4. In addition, the respondents failed to ensure that the experts had a common set of photographs for the purposes of the conclave on 10 January 2020. In turn, this resulted in the need for a directions hearing on 28 January 2020 that they then failed to attend without reasonable excuse. The respondents were also aware that the hearing was adjourned to 17 February 2020 to allow Mr Palmer to attend and give evidence as their expert witness. In addition, given what had transpired at the hearing on 16 October 2019, the respondents knew that Mr Miller had advised he would recall Mr Cuthbert to give expert

evidence in reply to Mr Palmer's report. Yet, despite this, the respondents did not produce Mr Palmer at the hearing on 17 February 2020, claiming that he was unavailable. The result was that the hearing concluded shortly thereafter on 17 February 2020 and there was no need for Mr Cuthbert to attend and give evidence at the hearing on this date. Importantly, given the limited number of the witnesses called by the respondents and the nature of their evidence, this meant that the hearing could effectively have been completed on 16 October 2019 rather than adjourned to 17 February 2020.

1. Accordingly, having regard to the evidence before me, I am satisfied that that this was a case where the cumulative effect of the respondents' actions since 21 June 2019 unreasonably prolonged the time taken to complete the proceeding.
2. Therefore, I am satisfied that I should find in favour of Mr Miller in relation to paragraph 109(3)(b) of the Act.

Paragraph 109(3)(c) - The relative strengths of the claims made by each of the parties

1. The respondents' counterclaim in proceeding C2778/2018 ultimately failed due to a lack of sufficient evidence to prove their claims. However, this is not the same as finding that the respondents' claims were completely without merit in fact or law from the outset. In addition, the fact that Mr Miller was successful in his claim does not automatically mean that the respondents' counterclaim was so weak that it attracts the operation of paragraph 109(3)(c).[26]
2. In this case, I find that the parties' respective claims regarding the contractual terms of their agreement and the bailment issues following the theft of Mr Miller's motor vehicle could not be determined until the evidence was examined in its entirety. I therefore find that there were genuine questions of fact and law to be determined when the parties filed their respective claims with the Tribunal.
3. Accordingly, I am satisfied that there was a tenable basis in fact or law for the respondents' counterclaim and, thus, find in their favour for the purposes of paragraph 109(3)(c) of the Act.

Paragraph 109(3)(d) - The nature and complexity of the proceeding

1. There are several factors that point to the complexity of the combined proceedings in C6760/2017 and C2778/2018. The combined proceedings involved consideration of a large volume of documentary evidence and oral testimony from nine witnesses. In addition, there were several complex legal issues that required determination. These included the relevant terms of the parties' original oral agreement for the restoration work and the issue of bailment, including the application of the complex reverse onus where the respondents were alleged to have breached their duty of care following the theft of the motor vehicle. The proceedings also required consideration of the principles regarding mitigation of loss having regard to the concept of subrogation under insurance law. Moreover, some of these complex and intertwined issues only emerged after the theft of Mr Miller's motor vehicle in July 2018. Finally, the amounts claimed in both proceedings were not insubstantial given that Mr Miller claimed the stolen motor vehicle was valued at $140,000.00, and the respondents' counterclaimed for $30,111.00. I am satisfied that the nature of each of the claims brought by each party were sufficiently complex to make it appropriate for them to engage legal practitioners and experts. As a result, I find that paragraph 109(3)(d) of the Act favours Mr Miller in his application for costs.

Paragraph 109(3)(e) - Any other matter the Tribunal considers relevant

1. Paragraph 109(3)(e) confers a broad discretion on the Tribunal to consider any other matter it considers relevant.[27] Accordingly, the making of a Calderbank offer is a factor which can be taken into account in determining whether to make an order for costs under section 109 of the Act.[28]
2. Generally, in Court proceedings costs usually follow the event, namely, they are awarded to the successful party, and are assessed on a "standard basis". This means that the successful party can only recover the costs that were necessarily and reasonably incurred. Accordingly, the wording of a Calderbank offer requires a warning that, if the settlement offer is rejected, the party making the offer will seek indemnity costs if the final decision in the proceeding is not more favourable than the offer. As such, a Calderbank offer acts as an incentive to the other party to accept the offer. In Tribunal proceedings, as there is no presumption that costs follow the event, the prospect of the offeree having to pay the offeror's costs on a standard basis provides the relevant incentive to settle.
3. In his costs application Mr Miller included copies of the two settlement offers he had made to the respondents on 19 and 24 September 2019 as evidence of his attempts to resolve the matter. Each of these letters stated the following:

We advise that should the above offer not be accepted and your client fails to obtain a judgment more favourable than the offer made above, then this letter shall be used on the issue of costs with an application being made for solicitor and client costs from the date of this letter. Such application will be in accordance with the principles applied in Calderbank v Calderbank (1975) 3 ALL ER 333 and Cutts v Head [1983] EWCA Civ 8; (1984) 1 ALL ER 597 and adopted in MT Associates Pty Ltd v Aqua-Max Pty Ltd No. 3 [2003] VSC 163.

1. On 19 and 24 September 2019 Mr Miller emailed these letters to the respondents offering to settle the proceedings if the respondents paid him $35,000.00 plus party/party costs.[29] The first offer was expressed to be open for a period of 7 days; the second was open for a period of 14 days. As shown, each offer included a statement that it was made in accordance with the principles in Calderbank v Calderbank.[30]
2. It is also well established that there is no presumption in favour of the award of indemnity costs in Court proceedings simply because a Calderbank offer is rejected.[31] In addition, an entitlement to indemnity costs will only arise in court proceedings where such an offer has been "unreasonably rejected"[32] taking into account the following factors:
   • the stage of the proceeding at which the offer was received;
   • the time allowed to the offeree to consider the offer;
   • the extent of the compromise offered;
   • the offeree's prospects of success, assessed as at the date of the offer;
   • the clarity with which the terms of the offer were expressed;
   • whether the offer foreshadowed an application for an indemnity costs order in the event of the offeree's rejecting it.[33]
3. In this case, the terms of the offers Mr Miller made to the respondents on 19 and 24 September 2019 were clear in stating that he was willing to settle if paid the sum of $35,000.00 plus party/party costs. Each of the settlement offers respectively provided the respondents with 7 and 14 days to consider the offer, and they also foreshadowed an application for costs in accordance with the Calderbank principles if rejected.
4. In assessing whether the respondents unreasonably rejected these offers I note the parties were ordered to consult in the preparation of and file the Tribunal book by 11 September 2019. Significantly, each of Mr Miller's settlement offers was made after this deadline had passed. They were also made at a point in the proceedings where the respondents were well aware that they had not provided, and did not have, any expert report regarding the value of Mr Miller's stolen motor vehicle, and that Mr Cuthbert had valued it at $140,000.00. Further, having received a copy of the insurance payout on 24 May 2019, the respondents knew that Mr Miller's offer to settle for $35,000.00 represented half the balance of his claim for the outstanding $70,000.00.
5. Given the information the respondents had by 19 and 24 September 2019 regarding the evidence that would be presented to the Tribunal, on balance, I am satisfied that the respondents acted unreasonably in rejecting the offers of settlement Mr Miller made at that time. The principles that apply to Calderbank letters reinforce my view that it is fair to award Mr Miller the costs of the proceedings. As a result, I am satisfied that the two settlements offers Mr Miller made in September 2019 are relevant matters to consider under paragraph 109(3)(e) and that they point to the positive exercise of the Tribunal's discretion for an award of costs in Mr Miller's favour.

1. Accordingly, based on the evidence before me and considering all of the above issues under paragraphs 109(3)(a) - (e), on balance, I am satisfied that it would be fair to make an order for costs in favour of Mr Miller.

1. Mr Miller sought to recover the costs of the proceedings in the amount of $39,506.80. This included the costs associated with the preparation of Mr Cuthbert's expert reports and his attendance at the conclave and as a witness at the hearing of $3,674.00; legal fees of $35,535.15; and Tribunal fees of $297.65. In addition, Mr Miller requested an order from the Tribunal that the costs ordered in his favour on 12 March 2019 be fixed at $4,676.00.
2. In relation to the costs of Mr Miller's expert, I note that Mr Cuthbert prepared an expert report dated 15 October 2018 and a supplementary report dated 21 June 2019 addressing issues raised by the respondents regarding the vehicle identification number. He also prepared another expert report dated 29 November 2019 in reply to the Palmer report tendered by the respondents in October 2019. In addition, Mr Cuthbert attended the Tribunal to appear as an expert witness at the hearings conducted in October 2019 and February 2020, as well as the conclave conducted in January 2020. Accordingly, I am satisfied it is appropriate to order the respondents to pay Mr Cuthbert's fees.
3. As regards the issue of legal costs in terms of the fees of Mr Miller's legal practitioners, the Tribunal made three orders for the respondents to pay Mr Miller's costs during the proceedings. Notably, whilst orders were made fixing a specific amount for the costs thrown away on 16 October 2019 ($2,500.00) and 28 January 2020 ($1,250.00), no such order was made by the Tribunal on 12 March 2019. Rather, on 12 March 2019 the Tribunal ordered the respondents to pay Mr Miller the costs of the adjournment of the hearing on the County Court scale. Given the wording of this particular order, I am

satisfied that the Tribunal intended for these costs to be paid on a standard basis in accordance with the County Court Costs Scale, and where the parties could not agree, for these costs to be determined by the Costs Court. Mr Miller gave evidence that he had been unable to reach agreement with the respondents to pay him $4,676.00 in respect of the costs of the adjournment on 12 March 2019. Accordingly, taking this and the wording and underlying intention of the order made on 12 March 2019 into account, I consider it is more appropriate for these legal costs to be assessed by the Cost Court alongside any other claim for legal costs Mr Miller may make.

1. As noted previously, given the operation of section 109 of the Act, the Tribunal's approach to the award of legal costs differs from that of the courts where costs are generally awarded to the successful party. So, where the Tribunal makes an order for legal costs under section 109 it generally does so on a standard basis. This concept refers to the costs that are 'reasonably incurred and of reasonable amount' rather than costs on an indemnity basis, which includes all costs except insofar as they are of an unreasonable amount or have been unreasonably incurred.[34] In addition, given the requirements of section 109, in general, the Tribunal will only make an order for costs on an indemnity basis in the most exceptional circumstances; for example, where a party has engaged in "contumelious or high handed conduct".[35]
2. In this case, the respondents argued in their written submissions that any costs awarded to Mr Miller must be in accordance with the County Court Costs Scale and not on an indemnity basis.[36] Mr Miller responded via email on 17 May 2020 that he had not asked for all his costs, but only the portion the Tribunal deemed fit. Mr Miller also stated that he was satisfied with any costs awarded at the County Court scale; both these points were reiterated by Mr Miller at the costs hearing.
3. Accordingly, in addition to the fixed costs orders made in October 2019 and January 2020, the respondents are ordered to pay Mr Miller's legal costs on a standard basis in relation to the costs he incurred after the Tribunal orders dated 24 May 2019. In addition, the appropriate scale of costs is the County Court Costs Scale and, in the absence of agreement between the parties, it is appropriate for the costs to be determined by the Costs Court.
4. Finally, in his costs application Mr Miller also claimed the fees he had paid to the Tribunal, which he mistakenly wrote as $297.65, when they totalled $1,593.85. In circumstances where it is fair to make an order for costs under section 109, it is appropriate for the respondents to pay Mr Miller $1,593.85 in respect of the fees he incurred in the proceedings.

1. In conclusion, for the reasons set out above I will order that the respondents pay Mr Miller's costs of the proceeding, including any reserved costs and the costs of the conclave of experts, to be assessed on a standard basis under the County Court Scale by the Costs Court. Whilst those 'costs' would include the fees of Mr Cuthbert totalling $3,674.00 and the Tribunal filing fees of $1,593.85, I see no point in deferring the assessment of them to the assessment by the Costs Court. Mr Miller is entitled to be reimbursed in full for both and I will order that the respondents immediately pay them to Mr Miller.
2. The Order made 12 March 2019 awarded costs of the adjournment on that day to Mr Miller, to be assessed on a standard basis under the County Court Scale by the Costs Court, and that assessment can take place when the costs awarded to Mr Miller under this Order are assessed. Those costs will obviously include the fees of Mr Miller's barrister for the appearance on that day but may extend to other costs wasted as a result of the adjournment, and the Costs Court will make that assessment.
3. The Order made 23 May 2019 awarded costs of $1,200.00 to the respondents and there is nothing to be said about that in this Order.
4. The Order made 28 January 2020 awarded costs of that day to Mr Miller, fixed at $1,250.00. There is nothing to be said about that in this Order.

[1] Miller v Pickeriti Investments Pty Ltd (Civil Claims) [2020] VCAT 358

[2] The relevant background to proceedings C6760/2017 and C2778/2018 is set out in full in Miller v Pickeriti Investments Pty Ltd (Civil Claims) [2020] VCAT 358 at [5]- [38]

[3] An 'Eleanor' is the motor vehicle that featured in the 1974 film "Gone in 60 Seconds."

[4] See Miller v Pickeriti Investments Pty Ltd (Civil Claims) [2020] VCAT 358 at [28]-37

[6] Subsections 109(2) and (3) of the Act

[7] A Calderbank offer is a special kind of settlement offer made "without prejudice save as to costs" based on the English Court of Appeal decision in Calderbank v Calderbank [1976] Fam 93

[8] Maiden trading as MJM Excavations v Simmons (Civil Claims) [2011] VCAT 1828

[10] See Martin v Fasham Johnson Pty Ltd [2007] VSC 54 at [34] per Bell J: "The purpose of a costs order is usually to compensate the party whose costs must be paid for the expenses incurred by reason of the litigation or proceeding, not to punish the party who must pay those costs for conduct giving rise to the order"

[11] [2007] VSC 117 at [20]

[12] Macdiggers Pty Ltd v Dickinson [2008] VCS 576 (17 December 2008) at [55]; Forster v Legal Services Board [2011] VCAT 2216 (8 December 2011) at [7]; Seachange Management Pty Ltd v Bevnol Constructions & Developments Pty Ltd [2008] VCAT 1479 at [35]; Tomasevic v Travaglini (2007) 17 VR 100; [2007] VSC 337

[13] See the Respondents' costs submissions dated 16 May 2020 at [12]

[14] Frugtniet v Law Institute of Victoria Ltd [2012] VSCA 178

[15] Falconbridge Pty Ltd v Yarra CC (Costs) [2005] VCAT 2449 at [18]; Green v Ballarat CC [2006] VCAT 2535 at [17]

[16] See Sharp v The Canonical Administrators of St Monica's College Ltd [2003] VCAT 42; Brown v Mornington Peninsula SC (2004) LGERA 11; [2004] VCAT 1140 at [34]; Arrow International Australia Ltd v Indevelco Pty Ltd [2007]VCAT 811 at [18]

[17] Respondent's costs submissions dated 16 May 2020 at paragraph [14]-[16]

[18] Dated 18 October 2018, 21 June 2019 and 29 November 2019

[19] See Miller v Pickeriti Investments Pty Ltd (Civil Claims) [2020] VCAT 358 at [18]

[20] To make a finding of intentional deception for the purposes of s 109(3)(a)(v) has been described as "a very strong thing": Jordan v Vuletic [2007] VCAT 1068 at [12]

[21] See Straw v Proctor [2004] VCAT 464 at [16]; Clifford Hallam Healthcare Pty Ltd v Price [2010] VCAT 117 at [35]; Country Endeavours Pty Ltd v Casacir Pty Ltd [2013] VSC 22

[22] Country Endeavours Pty Ltd v Casacir Pty Ltd [2013] VSC 22 at [49]

[23] 24 Hour Fitness Pty Ltd v W&B Investment Group Pty Ltd [2015] VSCA 216 at [4]

[24] Colac-Otway SC v Tenth Cemalux Pty Ltd [2003] VCAT 280 at [54]

[25] Sherwood v Sherwood (No 3) [2014] VCAT 1037 at [18]

[26] See Kafataris v Bookmakers & Bookmakers' Clerks Registration Committee [2008] VCAT 577 at [23]

[27] Kafetanis v Bookmakers & Bookmakers' Clerks Registration Committee [2008] VCAT 577 at [23]

[28] Kerkofs v Abdallah (Human Rights) (Costs) [2019] VCAT 753 at [37]; Williams v Monash University [2005] VCAT 958

[29] "Party/party" costs refer to what is now referred to as costs on a "standard basis", which the respondents, being legally represented, would have understood.

[30] [1995] EWCA Civ 48; (1995) 3 All ER 333

[31] Aljade and MKIC v OCBC [2004] VSC 351, approved of in Hazeldene Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) [2005] VSCA 298 at [19]

[32] Hazeldene Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) VSCA 298 at [23]

[33] Hazeldene Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) VSCA 298 at [25]

[34] Southage v Vescovi [2014] VSC 176 at [41] per Macaulay J

[35] Seachange Management Pty Ltd v Bevnol Constructions & Developments Pty Ltd [2011] VCAT 1406 at [13]. This is reinforced by the fact that the courts generally only award costs on an indemnity basis where the unsuccessful party has engaged in conduct that has unreasonably prolonged the proceedings, or unreasonably refused an offer of compromise: see Colgate Palmolive v Cussons [1993] FCA 536; (1993) 46 FCR 225, at 233

[36] See the Respondents' costs submissions dated 16 May 2020 at [17]-[23]