For Raymond Michael Sullivan & Lynette Ann Sullivan

1. This proceeding was an application by Moorabool Wind Farm Pty Ltd (Moorabool Wind Farm) under section 89 of the Planning and Environment Act 1987 to cancel five permits for the use and development of land for dwellings issued by the Moorabool Shire Council.[1] Each of the subject sites for which a permit was granted is located on the north side of the Ballan-Egerton Road, Ballan.
2. Moorabool Wind Farm is the holder of a planning permit[2] to use and develop land opposite the subject land on the south side of Ballan-Egerton Road for a wind energy facility of 107 turbines and associated infrastructure (the wind farm). The approved turbine layout of the wind farm indicates that two turbines are located in close proximity to the subject sites.
3. The application by Moorabool Wind Farm was made on the basis that:
   • It should have been given notice of the application for the permit and was not given that notice (section 89(1)(a); and
   • It has been adversely affected by a material mistake in relation to the grant of the permits (section 89(1)(b)(iii).
4. Moorabool Wind Farm also made application for a stop order under section 93 of the Act. A stop order dated 19 December 2011 was made by the Tribunal by consent of the parties. Costs were reserved. The proceeding was referred to mediation on 25 January 2012 and for a hearing on 28 February 2012.
5. The mediation on 25 January 2012 was cancelled at the request of the landowners and permit holders of the subject land (the Sullivans). A request by the Sullivans to adjourn the hearing was refused.
6. On 22 February 2012, the council filed and served a statement of grounds in which it challenged the standing of Moorabool Wind Farm to make an application to request the cancellation of the permits pursuant to section 89 of the Act. It claimed that the council (as responsible authority) was under no obligation to give notice of the permit applications to Moorabool Wind Farm.
7. At the commencement of the hearing on 28 February 2012, the parties requested time to discuss a possible settlement. The following day, they advised that they had reached agreement on a proposed settlement of the proceeding, which would involve amendment of the permits, including plans identifying the location of any proposed dwellings. With the exception of any order made by the Tribunal in relation to an application by Moorabool Wind Farm against the council for an award of costs pursuant to section 109 of the Victorian Civil & Administrative Tribunal Act 1998, the parties otherwise agreed that they would bear their own costs in relation to the proceeding. The Tribunal then proceeded to hear submissions by Moorabool Wind Farm and the council in relation to an application for costs by Moorabool Wind Farm against the council. The Tribunal made procedural orders dated 1 March 2012, which included giving notice of the proposed amendments to the permits to various people. Costs were reserved.
8. By order dated 17 May 2012, with the consent of the parties, the Tribunal ordered that the application to cancel or amend the permits was allowed. It directed that one of the permits was cancelled[3] and the other four permits[4] were amended by including new conditions. The conditions related to:
   • The requiring plans showing the building envelope for the proposed dwelling from the nearest wind turbine.
   • Ensuring that the dwellings were a minimum distance from the wind turbines.
   • Requiring a section 173 agreement relating to the proximity of the dwellings to the wind turbines.
9. Costs were reserved.

1. Moorabool Wind Farm is claiming costs against the council. No costs are being sought against other parties. Moorabool Wind Farm submits that:
   • It is appropriate to displace the usual rule as to costs and to grant all of Moorabool Wind Farms costs in bringing this matter against the council. These costs total $120,075.66.[5]
   • In the alternative, Moorabool Wind Farm should be awarded all of its costs post the mediation date of 25 January 2012, as the majority of its costs were accrued post mediation in preparation for the hearing. These costs total $84,828.43.[6]
2. The starting point for considering any application for costs is section 109(1) of the Victorian Civil & Administrative Tribunal Act 1998, which sets out the general rule that at the Tribunal each party bears their own costs. However, section 109(2) then goes on to say that 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. Section 109(3) provides that the Tribunal may make an order under sub-section (2) only if it is satisfied that it is fair to do so, having regard to a series of matters set out in sub-paragraphs (a-e). Thus, the critical issue that I must be satisfied about when considering the application for costs by Moorabool Wind Farm is whether it is fair to make such an order.
3. Section 109(3) sets out the matters to have regard to as follows:

(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 matters to have regard to under section 109(3) fall into the following categories.
   • Paragraphs (a) and (b) deal with the conduct of a party during the course of the proceeding.
   • Paragraph (c) deals with the relative strengths or weaknesses of a party's case.
   • Paragraph (d) deals with the nature and complexity of the proceeding itself.
   • Paragraph (e) is a catch all provision giving the Tribunal a broad power to consider any other matter the Tribunal considers relevant.[7]
2. I will now deal with each of the matters set out in section 109(3).

1. Section 109(3)(a) refers to whether a party has conducted the proceeding in a way that unnecessarily disadvantaged another party to the proceeding. Examples of conduct are then set out. Moorabool Wind Farm relies on sub-paragraph (ii) - failing to comply with this Act, the regulations, the rules or an enabling enactment. It says that council has conducted the proceeding in a way that unnecessarily disadvantaged Moorabool Wind Farm by failing to comply with the Planning and Environment Act 1987.
2. I disagree with this proposition. The council's alleged failures to comply with the Planning and Environment Act 1987, either with respect to the giving of notice or the proper consideration of relevant matters when determining to grant the permits, form the basis of the claims made by Moorabool Wind Farm. However, these are not matters that go to the conduct of the proceeding.
3. I do not find that the council has conducted the proceeding in a way that unnecessarily disadvantaged Moorabool Wind Farm. In my view, it is not guilty of any of the conduct set out in sub-paragraphs (i) - (vi).

Section 109(3)(b) - unreasonable delay

1. Moorabool Wind Farm contends that the council has unreasonably prolonged the time taken to complete the proceeding by failing to facilitate the development of an alternative dwelling siting plan prior to the hearing. It says that council's inaction from the time it was notified of the problem on 17 November 2011 until the hearing amounts to unreasonably prolonging the hearing. It says that the council should have been more proactive in encouraging the respondents to attend the scheduled mediation.
2. I do not find that the council has been responsible for unreasonably prolonging the proceeding. It consented to the stop order. The request to vacate the mediation was made by the respondents who had decided it was unlikely that an agreed outcome would be achieved at the mediation. I do not consider that the council's consent to vacate the mediation when a hearing date had already been scheduled in four weeks time could be said to be conduct that unreasonably prolonged the proceeding. The proceeding was completed in a timely way following the date scheduled for the hearing. In the context of section 109(3)(b), it is conduct relating to completing the proceeding that is relevant and it must be conduct that has unreasonably prolonged the time taken to complete the proceeding. I do not consider that the normal delays associated with completing a proceeding are necessarily relevant in this context.

Section 109(3)(c) - relative strengths of the claims made

1. The outcome of this proceeding was the result of a settlement by the parties. There was no need for the Tribunal to make any findings about the claims made by any party. In the normal way, in a situation where a proceeding settles by consent, I do not consider that paragraph (c) is relevant. The relative strengths of the claims made by each of the parties have not been judged and therefore no clear finding can be made about the relative strengths of the claims made by each of the parties. This does not mean that the fact that a settlement has been made and the terms of that settlement may not be relevant in considering an application for costs[8], but that is a matter which I consider arises under paragraphs (d) and (e) rather than paragraph (c). The exception to this is if the proceeding is unjustified and is disposed of under section 75 Victorian Civil & Administrative Tribunal Act 1998. In such a case, costs may be ordered under section 75(2) and section 109(3)(c) may also be relevant. But in the present circumstances, I do not rely on section 109(3)(c).

1. Section 109(3)(d) enables the Tribunal to have regard to the nature and complexity of the proceeding. I do not consider that complexity is an issue here, but I do consider that the nature of the proceeding is relevant.
2. The Tribunal must consider the individual facts of each case when deciding if an order for costs should be made. Just because a proceeding is a particular type of proceeding, such as an enforcement order application or an application to cancel or amend a permit, does not mean that an award of costs will automatically be made. Nevertheless, these types of proceedings are ones where an order for costs is more likely to be made in favour of an applicant who succeeds because they are frequently of a type that is required to be brought, either by reason of a statutory duty or by reason of some unlawful or improper conduct by another party that warrants redress.[9] Equally, in these types of proceedings, the Tribunal has been willing to award costs against an unsuccessful applicant because the consequences of the respondent not contesting such a proceeding may be significant, either in terms of having an enforcement order made against them or having their permit cancelled or amended.
3. In the present case, Moorabool Wind Farm is the holder of a permit for a wind energy facility on land directly opposite the subject land. Two of the approved wind turbines will be located approximately 250 metres from the building envelopes of the dwellings approved by the council. All of the proposed dwellings would be within an area subject to noise exceeding 40 dB(A) and subject to shadow flicker. This was not disputed by the council.
4. The wind energy permit has conditions setting out noise and shadow flicker standards for existing dwellings. Because the proposed dwellings on the subject land are not existing dwellings in terms of the wind energy permit, the standards are not required to be met for the dwellings approved by the council. However, the proposed dwellings are likely to suffer from adverse amenity impacts from the wind energy facility. Moorabool Wind Farm is concerned that the adverse amenity impacts the proposed dwellings are likely to suffer would lead to complaints and potential claims of nuisance against it.
5. Moorabool Wind Farm is also concerned that conditions 20 and 21 of the wind farm permit in relation to visual screening for dwellings, which is not confined to existing dwellings but may include the proposed dwellings, would be unable to be complied with. It is concerned that this may open the way for legal proceedings.
6. When Moorabool Wind Farm learnt about the grant of the permits, it wrote to the council requesting the council to institute action to cancel or amend the permits. The council refused, but advised that Moorabool Wind Farm had "a right to appeal the decision made by council under the following section [section 87] of the Planning and Environment Act 1987."
7. I disagree with council's submission that compliance with section 52 of the Planning and Environment Act 1987 is not relevant in terms that it may provide a basis for a section 87 application but is not a basis for costs.
8. The obligation to give notice under section 52(1) of the Planning and Environment Act 1987 is an important aspect of the planning framework established by the Act. Objectives of the planning framework established by the Act as set out in section 4(2) of the Planning and Environment Act 1987 include:

(i) to ensure that those affected by proposals for the use, development or protection of land or changes in planning policy or requirements receive appropriate notice;

(j) to provide an accessible process for just and timely review of decisions without unnecessary formality;

1. Whether the council was obliged to give notice under section 52(1)(a) or should have given notice under section 52(1)(d) are not matters that I need to make a finding about. They were challenged by the council in its statement of grounds. However, it is not denied that no notice was given and, as a result, Moorabool Wind Farm did not have an opportunity to lodge an objection with the council or, if necessary, lodge an application for review with the Tribunal or to otherwise have the permit applications considered on their merits. By choosing not to give notice of the permit applications, the council created a situation whereby the permits could be challenged under section 87, as indeed they were. I consider it is fair that Moorabool Wind Farm should be compensated for the costs associated with this challenge. It is a proceeding that the council could have avoided if it had given notice or if it had itself instituted action under section 87 when invited to do so by Moorabool Wind Farm.
2. I also note that the failure to give notice was just one ground relied upon. There was also the ground relating to material mistake.
3. In all these circumstances, I find that it was reasonable for Moorabool Wind Farm to take the view that it had no other option to protect its interests than by lodging this application to cancel or amend the permits for dwellings on the subject land.
4. The outcome of the proceeding is that Moorabool Wind Farm succeeded in its application to cancel or amend the permits. One permit has been cancelled and the other four have been substantially amended in a way that protects the interests of Moorabool Wind Farm. This is evidenced by its willingness to consent to the orders made. In my view, the need for the proceeding was occasioned by the council's conduct so that Moorabool Wind Farm had little option left but to institute the proceeding to protect its interests[10]. The proceeding was a type that was required to be brought by reason of the conduct of the council that warranted redress. The proceeding succeeded. In my view, these factors make it fair to make an order for costs against the council.

Section 109(3)(e) - any other relevant matter

1. Section 109(3)(e) enables the Tribunal to consider any other matter the Tribunal considers relevant. In this context, Moorabool Wind Farm alleges that the conduct of the council in this application and generally has demonstrated a lack of good faith in its dealings and bias against wind farms, which is clear from its continued public opposition to wind farms in the Moorabool Shire.
2. In this respect, Moorabool Wind Farm submitted that the Tribunal should consider the council's campaign of public opposition to wind farms. This continual public opposition to wind farms in the Moorabool Shire amounts to bias and has motivated the approval of the five permits, particularly given the council's technical knowledge of wind farms as a result of its participation in a number of planning panels associated with wind energy proposals within the municipality. Council has opposed all wind farm proposals applied for within the Shire and individual councillors have also opposed wind farm proposals. Moorabool Wind Farm drew attention to the council's criticism of turbines located in close proximity to dwellings and the council's policy that there should be a 2 kilometre separation distance between sensitive uses (dwellings) and wind turbines entirely within a proponent's land.[11] Moorabool Wind Farm submitted that when viewed against the backdrop of council's public criticism of wind farms, particularly their perceived amenity impacts within close proximity to dwellings, approval of the five permits for dwellings as close as 226m to turbines is extremely difficult to justify.
3. I accept the evidence put forward by Moorabool Wind Farm that the council does have a stated public opposition to wind farms and is especially concerned about the proximity of dwellings to wind turbines. However, I am reluctant to make any findings that there was any bias on the part of the council against the applicant and its wind farm which motivated its decision to grant the permits without requiring notice of any kind under section 52(1). These sorts of issues may be relevant in a Wednesbury context, but in a situation where there has been no determination on the merits, I have not placed any weight on these submissions.
4. Nevertheless, I consider it is relevant that in deciding to grant the permits, the council disregarded the planning officer's recommendation that they should be refused, and in particular his advice that:

Adjacent on the southern side of Ballan-Egerton Road is a Planning Permit (No. 2009012877) for Use and Development of a 107 Wind Turbine facility and associated buildings and works as approved by the Minister for Planning in October 2010. Whilst the current policy places an onus on the wind farm applicant to avoid turbines within 2 kilometres of a dwelling, the practical effect of allowing dwellings to establish within 2 kms of a wind turbine undermines the intent of the policy to keep these conflicting uses separated.

1. The rest of the officer's report dealt with the inconsistency of the permit applications with state and local planning policies relating to agriculture and the lack of nexus between the agricultural use of the land and the need for a dwelling on the land.
2. There is nothing in the officer's report or the minutes of council to indicate why no notice of the permit applications were given.
3. Responsible authorities are not obligated to accept the recommendations of their planning officers regarding permit applications. They can, and sometimes do, resolve to grant or refuse permits contrary to officer recommendations. If the decision is made to refuse to grant a permit, then the permit applicant has a right of review to the Tribunal. If no notice has been given of the permit application, the Tribunal will usually direct such notice to be given. This process enables the council's decision to be tested on its merits. However, in the case of a decision to grant a permit when no notice has been given and there are no objectors, the opportunity to have the council's decision tested on its merits is removed. In these circumstances, the only means of challenging the council's decision by a person who says it should have been given notice and was not given that notice, or who believes they have been adversely affected by any material mistake in relation to the grant of the permit[12], is by way of an application to cancel or amend the permit under section 89 of the Act.
4. Put simply, Moorabool Wind Farm was forced to institute this proceeding to protect what it saw as its interests in circumstances where the council failed to require any notice to be given of the permit applications and where the decision to grant the permits was contrary to the officer's recommendations. The proceeding was instituted only after the applicant requested the council to take action and the council refused. In my view, Moorabool Wind Farm was left with no other choice. Whether or not the proceeding would have been successful if the Tribunal had been called upon to make a determination is not relevant because the proceeding was settled by consent. However, the settlement resulted in the proceeding succeeding and the applicant achieving its objectives to cancel or amend the permits.
5. Overall, I consider these matters are relevant in deciding whether it is fair to make an order for costs and they reinforce my findings in respect of section 109(3)(d) that the nature of the proceeding is relevant. Having regard to the matters I have addressed in the context of both sections 109(3)(d) and (e), I consider it is fair that the council should compensate Moorabool Wind Farm for its costs associated with this proceeding.

1. Moorabool Wind Farm has applied for indemnity costs in the sums that I have set out earlier.
2. I do not consider this is a case that justifies an order for costs on an indemnity basis. I consider that normal party/party costs are appropriate. Indemnity costs would effectively 'punish' the council. That is not the purpose of an award of costs: rather, it is to compensate a party for the cost of a proceeding when it is fair to do so.
3. There was some question about whether costs should be awarded for the proceeding as a whole or only in respect of costs incurred after the mediation was cancelled up to the hearing on 28 - 29 February 2012.
4. Having decided that it would be fair to make an order for costs, I see no reason why they should not be costs in respect of the proceeding as a whole. On the other hand, if they are to be the costs of the proceeding, I do not consider that costs incurred by Moorabool Wind Farm prior to the proceeding being prepared and lodged on 6 December 2011 should be awarded. The costs ordered are therefore the costs of and incidental to the proceeding.

1. Just because a proceeding has been settled but the parties have been unable to agree about costs does not mean that the Tribunal may not make an order for costs if it is far to do so.
2. The Tribunal will need to carefully consider the matters set out in section 109(3). Some factors, such as section 109(3)(c) - the relative strengths of the parties' grounds - may not be open to be considered because there has been no deliberation or ruling on them. But that does not mean the Tribunal may not look to other factors such as the nature of the proceeding, the nature of the settlement in terms of its substance and outcomes, or the circumstances leading up to the commencement of the proceeding in deciding if an order for costs is fair.
3. In the present case, I have found that the proceeding was unavoidable in order to remedy the dispute. The fact that the parties were able to settle without the hearing proceeding to consider the merits does not mean that the council should not be liable for costs. Without the application being made, the planning permits would not have been amended or cancelled in such a way that satisfied Moorabool Wind Farm that its interests were being protected. I conclude that an order for costs is fair and should be made in this case.

[1] Planning Permit Nos PA2010126, PA2010132, PA2010133, PA2010134 and PA2010135 all issued on 24 October 2011

[2] Planning Permit No 2009012877 issued by the Minister for Planning in October 2010

[4] Planning Permit Nos. PA2010126, PA 2010132, PA2010133 & PA2010134

[5] Full costs from 15 November 2011 - 29 February 2012: Freehills $69,834.93; counsel $35,100.00; expert witnesses $15,140.93. Total including GST $120,075.66.

[6] Costs from 25 January 2012 - 29 February 2012 after schedule mediation date; Freehills $43,587.50; counsel $26,100.00; expert witnesses $15,140.93. Total including GST $84,828.43.

[7] Martin v Fashion Johnson Pty Ltd [2007] VSC 54 at [33]

[8] See Colac Otway SC v Tenth Cemalux Pty Ltd [2003] VCAT 280

[9] See Sweetvale Pty Ltd v Minister for Planning [2004] VCAT 2000 at [19]. See also Hobsons Bay CC v Haouli [2001] VCAT 433 at [24]; Baw Baw SC v Zorro Produce PL [2004] VCAT 2198

[10] See Springer v Glenelg SC [2009] VCAT 1114

[11] Moorabool Shire Council Wind Energy Facility Policy (November 2011). This is an informal policy which is not part of the Moorabool Planning Scheme.

[12] Or other matters set out in section 89(1)(b) Planning and Environment Act 1987