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[2008] VCAT 2074
plaintiff. Respondents ordered to pay Applicant's costs in respect of the s 75 applications dismissed on 18 August 2008, to be taxed on County Court Scale D in default of agreement; counsel certificates for...
Naylor sued his former lawyers in VCAT. The lawyers tried to strike out the claims under s 75, arguing for immunity and other points. The Tribunal dismissed the strike out attempts. Naylor then sought his costs of those strike out applications. The Tribunal held that the general costs power in s 109 applies to unsuccessful s 75 applications because s 75(2) only deals with successful strike outs and does not exclude s 109. Having regard to s 109(3) factors (complexity, relative weakness of the respondents' applications, adversarial conduct), the Tribunal ordered the respondents to pay Naylor's costs, taxed on County Court Scale D, and granted counsel certificates.
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9 cited instruments linked from this judgment.
2,009 words · generated 17/06/2026
The applicant, Mr Cedric Naylor, commenced proceedings in the Victorian Civil and Administrative Tribunal against his former solicitors, Oakley Thompson & Co Pty Ltd (OTC), and his former barristers, Messrs Richard B Phillips and Anthony G Southall QC, alleging negligence, breach of contract and contraventions of the Fair Trading Act 1999 arising from work and decisions in two Supreme Court proceedings in 2001–2002 ([1]–[2]). The respondents each brought summary dismissal (strike out) applications under s 75 of the VCAT Act. OTC sought dismissal of particular paragraphs of the Amended Points of Claim; the barristers sought dismissal of the proceedings against them. Those s 75 applications were grounded primarily on advocates' immunity and, in the case of the barristers, also on the contention that alleged conduct did not amount to conduct 'in trade or commerce' for Fair Trading Act purposes ([3]–[6]).
On 18 August 2008 Vice President Ross dismissed both s 75 applications, holding that he was not persuaded the challenged claims were manifestly unsustainable in law or bound to fail ([6]). The applicant then applied for costs of those s 75 applications. The respondents contended (a) that ss 103(4) and 162 of the Legal Practice Act 1996 were the relevant provisions; and (b) more centrally, that s 75(2) of the VCAT Act (a provision relating to compensation where a proceeding is dismissed or struck out) operated as an exclusive code, so that the Tribunal's general costs power under s 109 could not be used to order costs against an unsuccessful applicant in a s 75 application. The applicant argued that s 109 provided the power and that it was fair to award costs in his favour having regard to the factors in s 109(3) ([8]–[9], [12]).
Vice President Ross rejected the respondents' construction. The Judge held that s 75(2) makes specific provision for the (broad) award of compensation to a party when a proceeding is dismissed or struck out, but it is silent as to costs orders where a s 75 application is unsuccessful. That silence does not displace the general costs power in s 109; the maxim generalia specialibus non derogant cannot be invoked because there is no irreconcilable inconsistency between s 75(2) and s 109. Except where Parliament has expressly excluded s 109 in particular contexts, the general costs power should not be read down by implication. On this basis (and having regard to s 109(3) factors, complexity, relative strength of the parties' positions, adversarial conduct), the Tribunal ordered the respondents to pay the applicant's costs of the s 75 applications, taxed on County Court Scale D, and granted counsel certificates as claimed ([14], Reasons generally).
There are two linked strands to the decision: (A) statutory construction as to whether the Tribunal had power to award costs under s 109, and (B) the discretionary exercise of that power.
A. Statutory construction: general vs specific provisions
The respondents advanced the maxim generalia specialibus non derogant: a specific provision (s 75(2)) must prevail over a subsequent general one (s 109) in respect of costs in s 75 proceedings. The Judge accepted the rule in principle but emphasised its limited application: the maxim only operates where there is an irreconcilable inconsistency such that the two provisions cannot be reconciled on ordinary principles of interpretation (citing English and Australian authorities for that limitation) ([15]–[18] in the judgment's numbering for that section).
The Tribunal carefully examined s 75(2). It noted four features: (i) it only arises after a summary order dismissing or striking out a proceeding; (ii) it confers a wide discretion; (iii) the order can be made only in favour of a party other than the applicant in the proceeding which has been dismissed; and (iv) the relief is expressed in terms of compensating the successful party for costs, expenses, loss, inconvenience and embarrassment ([21]–[22]). Crucially, s 75(2) is silent about the converse circumstance in which a strike out application is unsuccessful.
The Judge concluded that s 75(2) is best seen as making specific provision for successful s 75 applications, indeed, in certain contexts (for example, when a proceeding is withdrawn or dismissed for lack of jurisdiction) it may be necessary to give the Tribunal an express power to make costs or compensation orders that would otherwise be in doubt. That explanatory reading is supported by s 74(2)(b) (which expressly empowers costs orders where an application is withdrawn) and by Victorian Court of Appeal authority (Transport Accident Commission v Coyle) ([24]–[27]).
Because s 75(2) does not speak to unsuccessful s 75 applications, and because s 109 is a broadly expressed general power, there is no irreconcilable inconsistency. In the absence of express parliamentary exclusion, s 109 must stand. The Judge reinforced that Parliament knows how to exclude s 109 expressly when it wants to (citing items in Schedule 1) and that it would be unlikely Parliament intended to render unmeritorious s 75 applications immune from risk of costs ([31]–[34]).
B. Discretionary exercise under s 109
Having found jurisdiction under s 109, the Judge applied s 109(2)–(3). He noted the general rule is each party bears their own costs, and s 109(2) permits a costs order if it is 'fair to do so' having regard to s 109(3) factors. The Judge identified complexity, the relative strength of competing positions, and adversarial conduct as the determinative considerations in the present matter ([35]–[37]).
On the merits of the strike out applications, the Judge emphasised the high threshold for summary dismissal: the proceeding must be manifestly unsustainable, with no real question to be tried (the Fancourt principle). Given conflicting authority on whether advocates' immunity applies where the controversy was resolved without adjudication on the merits, and the fact respondents were effectively asking the Tribunal to regard a recent High Court or Supreme Court authority as plainly wrong, the strike out applications were not shown to be clearly strong. The Judge characterised them as optimistic rather than likely to succeed. That assessment, combined with complexity and adversarial conduct (including instructing counsel), made it fair to award costs to the applicant ([38]–[42]).
Before: There was no binding Victorian VCAT decision that s 109 could not be used to award costs against an unsuccessful s 75 applicant. The statutory text of s 75(2) stands as a specific empowerment for successful strike outs, previously used and considered (and comparable to s 74(2)(b) when leave to withdraw).
After: The judgment clarifies that s 109 is available where a s 75 strike out application fails. The Court rejects an implied exclusion of s 109 by s 75(2) absent irreconcilable inconsistency or express Parliamentary intent. The decision therefore affirms the Tribunal's ability to deter unmeritorious strike out applications by making costs orders under s 109 where appropriate.
Practical consequence: Respondents in VCAT should assume they may be exposed to costs if they bring s 75 applications that are unsuccessful; conversely, prospective applicants can seek indemnity or costs against respondents whose strike out applications were unmeritorious, where s 109(3) factors favour an award.
Quotation: "On 18 August 2008 I dismissed both s 75 applications because I was not persuaded that the challenged claims were manifestly unsustainable in law or bound to fail." ([6])
Plain English: The Tribunal decided the respondents did not show the applicant's claims were hopeless, so the strike out attempts were dismissed.
Quotation: s 75(2) text reproduced by the Tribunal (see Reasons).
Plain English: If the Tribunal strikes out a proceeding under s 75, it may order the applicant (the person who started the proceeding) to pay compensation to other parties for costs and other losses that resulted from that proceeding. Importantly, that provision speaks to outcomes when the proceeding is struck out, not when a strike out application is made and fails.
Quotation: "For the reasons given I am satisfied that s 109 of the VCAT Act provides a jurisdictional basis for the costs order sought in these proceedings."
Plain English: The Tribunal has the general statutory power to make costs orders (s 109), and that power can be used to order costs against respondents who unsuccessfully tried to strike out the proceeding.
This decision is consequential in fact patterns where:
If those elements are present, Naylor supports the proposition that s 109 can be used to order costs against unsuccessful strike out applicants.
The immediate judgment itself reasons from established authority (Fancourt principle on strike out; authorities on statutory construction such as Barker and related High Court decisions). The decision is a VCAT (Vice President) determination; as such, it is persuasive precedent for subsequent VCAT panels and may be treated as persuasive by Victorian courts on the issue of interpreting the VCAT Act's costs provisions. The judgment explicitly relies on Court of Appeal authority (Transport Accident Commission v Coyle) and High Court principles about reading general and specific statutes together. Practitioners should treat Naylor as authoritative within VCAT and persuasive elsewhere on the narrowly framed proposition that s 109 applies to unsuccessful s 75 applications unless Parliament has expressly stated otherwise.
(If using the reasoning beyond VCAT, later courts would evaluate the decision's reasoning and statutory interpretation in the particular context; Naylor does not purport to depart from established High Court authorities on statutory construction.)
Scope of 'compensation' in s 75(2) vs 'costs' in s 109: Vice President Ross emphasised s 75(2)'s compensatory language is broader than s 109's costs framing and explained why s 75(2) is necessary for successful dismissals. There remains a question in edge cases as to whether, and to what extent, overlapping remedies might arise after a successful strike out, for example, whether a damages style award under s 75(2) might be constrained by s 109 principles in practice. The judgment explains the functional difference, but finer boundary issues could arise.
Advocate's immunity and the proper vehicle for resolution: The judgment reiterates the high threshold for resolving novel or conflicted legal authority on a strike out application. Where the legal question is genuinely contested, strike out is inappropriate. What remains uncertain is the precise circumstances in which a court or tribunal should treat recent authority (for example, Frances v Bunnett) as plainly wrong on a strike out. Naylor suggests caution where there is conflict, but future fact patterns will test how readily tribunals will resolve such conflicts on striking out.
Interaction with other statutory regimes: Naylor points to Schedule 1 examples where Parliament has expressly excluded s 109. It remains open how aggressively parties can and will rely on express exclusions in other statutory lists to argue s 109 is inapplicable; conversely, Parliament may yet act to clarify the interaction in particular domains, leaving open legislative response.
Quantification and taxation: The Tribunal awarded costs on County Court Scale D and granted counsel certificates. While this is a common VCAT outcome, litigants may litigate further as to appropriate scale and certificates where counsel were briefed for interlocutory applications only.
In sum, Naylor v Oakley Thompson & Co Pty Ltd & Ors is a focused, pragmatic decision about the Tribunal's power to order costs in interlocutory strike out proceedings: it preserves s 109 as a live, general costs mechanism unless Parliament expressly provides otherwise, and it reaffirms that s 75 strike out powers are to be used cautiously and not as a vehicle for resolving contentious legal issues at interlocutory stage.
CIVIL DIVISION - LEGAL PRACTICE LIST VCAT REF: J199/2006
Victorian Civil and Administrative Tribunal Act 1998 - jurisdiction to award costs in unsuccessful dismissal/strike out applications - s 75(2) does not deal with such a circumstance - generalia specialibus approach does not apply - s 109 power available - costs awarded.
Naylor v Oakley Thompson & Co Pty Ltd & Ors (Legal Practice) [2008] VCAT 2074
Mr Richard Antill of Counsel, instructed by Kliger Partners.
75. Summary dismissal of unjustified proceedings
(1) At any time, the Tribunal may make an order summarily dismissing or striking out all, or any part, of a proceeding that, in its opinion -
(a) is frivolous, vexatious, misconceived or lacking in substance; or
(2) If the Tribunal makes an order under sub-section (1), it may order the applicant to pay any other party an amount to compensate that party for any costs, expenses, loss, inconvenience and embarrassment resulting from the proceeding.
"The general maxim is 'Generalia specialibus non derogant'. When the legislature has given its attention to a separate subject, and made provision for it, the presumption is that a subsequent general enactment is not intended to interfere with the special provision unless it manifests that intention very clearly. Each enactment must be construed in that respect according to its own subject matter and its own terms."[2]
"Respectful of the law made by Parliament, courts will not readily assume that words of apparent general application are to be narrowly confined ... It is for the party seeking to confine such words to show that this is necessary to avoid an irreconcilable inconsistency or repugnancy between the statutory duties said to be in conflict."[5]
"(2) If an applicant withdraws an application or referral -
... (b) the Tribunal may make an order that the applicant pay all, or any part of, the costs of the other parties to the proceeding; ..."
"... it seems to me that s 74(2)(b), rather than dealing with the content of a costs order, it is an empowering provision, authorising the Tribunal to award costs against an applicant after an application has been withdrawn, an order the authority for which might otherwise have been in doubt."[6]
Nothing in section 109 applies to a proceeding under the Land Acquisition and Compensation Act 1986."
"... the proposition that an enactment in affirmative words appointing a course to be followed usually may be understood as importing a negative, namely, that the same subject matter is not to be done according to some other course."[8]
[1] Giannarelli v Wraith (1988) 165 CLR 543
[3] Perpetual Executors and Trustees Association of Australia Ltd v FCT [1948] HCA 24; (1948) 77 CLR 1 at 29; White v Mason [1958] VicRp 16; [1958] VR 79
[4] Purcell v Electricity Commission of New South Wales [1975] HCA 38; (1975) 133 CLR 45 at 53; Fonteio v Morando Bros. Pty Ltd [1971] VicRp 81; [1971] VR 658 at 663
[5] Royal Automobile Club of Australia Incorporating Imperial Service Club v Sydney City Council (1992) 27 NSWLR 282 at 293.
[6] [2001] VSCA 236; (2001) 3 VR 589 at 600
[7] Fullager J in Butler v Attorney General for the State of Victoria [1961] HCA 32; (1961) 106 CLR 268 at 276
[8] R v Wallis; Ex parte Employers Association of Wool Selling Brokers [1949] HCA 30; (1949) 78 CLR 529 at 550; Anthony Horden and Sones Ltd v The Amalgamated Clothing and Allied Trades Union of Australia [1932] HCA 9; (1932) 47 CLR 1
[9] Fancourt v Mercantile Credits Pty Ltd [1983] HCA 25; (1983) 154 CLR 87 at 99; Lay v Alliswell Pty Ltd [2001] VSC 385 at [14]
[10] State Electricity Commission of Victoria v Rabel [1998] IVR 102; Forrester v Aims Corporation [204] VSC 506 (8 December 2004)
Naylor
Oakley Thompson & Co Pty Ltd & Ors
(1988) 165 CLR 543
(1948) 77 CLR 1
(1975) 133 CLR 45
(1992) 27 NSWLR 282
(2001) 3 VR 589
(1961) 106 CLR 268
(1949) 78 CLR 529
(1932) 47 CLR 1
(1983) 154 CLR 87
Respondents ordered to pay Applicant's costs in respect of the s 75 applications dismissed on 18 August 2008, to be taxed on County Court Scale D in default of agreement; counsel certificates for Applicant granted in specified amounts; liberty to apply.