- 2018, April 23, 24, 26, 27, 30, May 1, 2, 3, 21, 22 and December 14.

1. On 29 January 2019, I handed down detailed written reasons setting out my findings, including my findings as to damages in favour of the respondents. Final orders were not made at that time as it was necessary to first hear the parties on the question of interest. Accordingly, the matter was listed for further hearing before me on 25 March 2019.
2. By application dated 18 March 2019, the respondents sought a number of orders, including orders for interest and costs.
3. By the time the matter returned before me on 25 March 2019, Oakmont had made application to the Supreme Court to appeal the substantive decision set out in the reasons dated 29 January 2019 ('the appeal proceeding'). Oakmont sought a stay of the proceeding before me pending determination of the appeal proceeding. I determined that I should proceed only on the question of interest, following which I would make orders finalising the quantum of damages and interest payable by Oakmont.
4. On 28 March 2019 I handed down orders with written reasons whereby:
   • - Oakmont was ordered to pay the respondents $270,217. This sum was made up of:
     1. $223,852 as the primary assessed damages sum, and
        1. $46,365 as interest on the primary assessed damages sum for the period commencing 3 March 2017 (the date the respondents commenced their counterclaim) to 28 March 2019 (the date of the orders);
   • - Costs were reserved; and
   • - Oakmont's application for a stay of the proceeding, and the respondents' application for costs and other orders, were adjourned and the parties were to keep the Tribunal informed of the status of the appeal proceeding.
5. In the course of the appeal proceeding, the respondents made application for security for costs. As part of that security for costs application, affidavit material was filed, some of which exhibited financial documents relating to Oakmont. Orders were duly made by Judicial Registrar Clayton in the appeal proceeding to the following effect:
   • - the VCAT proceeding was stayed;[1]

• - Oakmont was ordered to provide security for the respondents' costs of the appeal proceeding in the sum of $133,367.29 plus GST by 4 pm on 13 September 2019;[2]
• - if Oakmont failed to provide the security sum by the due date, the appeal proceeding would be stayed and the stay of the VCAT proceeding would be lifted.[3]

1. Oakmont failed to pay the security sum with the consequence that the appeal proceeding was stayed and the stay of the VCAT proceeding was lifted. The respondents subsequently brought an application in the Supreme Court seeking dismissal of the appeal proceeding and costs orders, including a costs order as against Mr Just, the director of Oakmont. As discussed later in these reasons, Judicial Registrar Clayton made orders on that application on 4 March 2020[4], including orders as against Mr Just.
2. The respondents now pursue their application in the proceeding before me dated 18 March 2019, to the extent it has not already been dealt with. With the question of interest and the quantum of damages determined by my orders of 28 March 2019, what remains is the respondents' application for the following orders:

1. that Oakmont reimburse all fees paid by the respondents, pursuant to section 115B of the Victorian Civil and Administrative Tribunal Act 1998 ('the Act'); 2. that Oakmont pay the respondents' costs [of the VCAT proceeding], including any reserved costs, on an indemnity basis, the amount of which if not agreed by the parties to be assessed by the Victorian Costs Court. Such costs to be paid within 7 days of the agreement between the parties or, failing any such agreement, within 7 days of the assessment by the Costs Court;

1. in the alternative to costs on an indemnity basis, the respondents seek an order for costs on a standard basis in accordance with the Supreme Court Scale of Costs, or alternatively the County Court Scale of Costs, up to 18 April 2017, or alternatively up to 1 June 2017, and thereafter on an indemnity basis;

1. that Mr Just be joined as a party to the proceeding pursuant to section 60 of the Act; 2. if an order is made that Oakmont pay the respondents' costs of the proceeding, a further order be made under section 109 of the Act and/or section 53 of the Domestic Building Contracts Act 1995 that Mr Just pay such costs which are not paid by Oakmont within 7 days of: 1. the agreement between Oakmont and the respondent on the sum of costs;

1. the assessment of costs by the Victorian Costs Court;

1. that any costs order made in favour of the respondents include the costs incurred by the respondents between 7 March 2016 and 4 July 2016 in engaging solicitors and experts in relation to the dispute with Oakmont. 4 July 2016 is the date this proceeding was commenced by Oakmont.

9 Oakmont was represented by lawyers throughout the course of the VCAT proceeding up until 12 September 2019. On 12 September 2019, the Tribunal received notification from Oakmont's lawyers that they had ceased to act for Oakmont. Oakmont has since been represented by its director, Mr Just.

1. At a directions hearing before me on 16 October 2019, Mr Sedal of Counsel appeared for the respondents, and Oakmont was represented by Mr Just. Mr Just also appeared on his own behalf in respect of the orders sought against him personally. The respondents had previously filed affidavit material in support of their application which included, as exhibits, material which had been filed in the security for costs application in the appeal proceeding. At the directions hearing on 16 October 2019, orders were made requiring the respondents to file and serve written submissions and any further affidavit material by 25 October 2019, and Oakmont and Mr just to file and serve any response written submissions and affidavit material by 25 November 2019. The hearing of the respondents' application was listed for 12 December 2019.
2. On or about 15 November 2019, the respondents filed extensive written submissions. Because of the late filing of the submissions, I made orders in chambers on 15 November 2019 extending the date for the file and service of any response submissions and affidavit material from Oakmont and/or Mr Just to 6 December 2019. Oakmont subsequently made application to adjourn the 12 December hearing date and to further extended time for file and service of response submissions. The adjournment application came before me on 6 December 2019. Mr Sedal again represented the respondents. Oakmont and Mr Just were represented by Mr Brimfield of Counsel. Mr Brimfield confirmed that he was engaged directly by Mr Just. I considered it fair to grant the adjournment having regard to the fact that Mr Brimfield had only recently been engaged. I adjourned the hearing date to 19 February 2020, and I extended the date for the file and service of response submissions and any affidavit material from Oakmont and/or Mr Just to 10 January 2020. Submissions, prepared by Mr Brimfield, on behalf of Oakmont and Mr Just were duly filed, however no affidavit material on their behalf was filed.
3. On 18 February 2020, the day before the hearing, the respondents filed extensive further submissions 'in response' to the submissions filed by the Oakmont and Mr Just. These further response submissions included, as an appendix, a 'Chronology of Key Events Relevant to Costs' which included, amongst other entries, various entries as to the alleged financial status of Oakmont at various dates.
4. At the hearing before me on 19 February 2020, Mr Sedal appeared for the respondents and Mr Brimfield appeared for Oakmont and Mr Just. At the commencement of the hearing, Mr Brimfield sought an adjournment on the basis that Oakmont and Mr Just ought to be given adequate time to consider and respond to the respondent's further submissions which had been served only the previous afternoon. I considered it fair that Oakmont and Mr Just be given reasonable opportunity to examine the respondent's further submissions and to file and serve any response submissions. Accordingly, I adjourned the hearing to a date when I was next available, 21 April 2020, and ordered Oakmont and Mr Just to file and serve any further response submissions by 20 March 2020. No further response submissions were filed by Oakmont or Mr Just.
5. Before the matter returned to me on 21 April 2020, Judicial Registrar Clayton made final orders on 4 March 2020 in respect of the appeal proceeding[5]. The orders were made upon application by the respondents for orders that the appeal proceeding be dismissed, that Oakmont pay the respondents' costs of the appeal proceeding, and that Mr Just pay any unsatisfied costs liability of Oakmont. The Judicial Registrar made the orders sought. The Judicial Registrar's orders and reasons are discussed later in these reasons.
6. Because of restrictions introduced in response to the Covid 19 pandemic, the hearing listed before me on 21 April 2020 did not proceed. The Tribunal subsequently introduced video platform as an alternative means of conducting hearings. The respondents requested that the hearing proceed as soon as practicable by video platform. Mr Just, in response, submitted that the hearing should proceed by way of face-to-face hearing. Having regard to the lengthy delays in the proceeding, the uncertainty as to when the Tribunal would be able to conduct face to face hearings at the tribunal, and my view that this matter was suitable for hearing by way of video platform, I determined, by orders made 5 June 2020, that the hearing would proceed by video platform on 13 July 2020.
7. The hearing proceeded by 'Zoom' video platform on 13 July 2020. Mr Sedal of Counsel appeared for the respondents. Mr Just appeared for himself and as director and representative of Oakmont.

1. Section 115B of the Act makes provision for the Tribunal to order that a party reimburse another party, wholly or partly, for the fees paid to the Tribunal in a proceeding. Such fees in this case include the application fee paid by the respondents on commencing their counterclaim, and the daily hearing fees paid by the respondents throughout the course of the proceeding. Oakmont does not oppose an order that it pay to the respondents the sum of such fees. The total of such fees is $8555.35, made up of $1024.60 as the counterclaim application fee and $7530.75 hearing fees paid by the respondents. I will order that Oakmont pay the respondents $8555.35 as reimbursement of such fees.

12 Section 109 of the Act provides that each party is to bear its own costs in a proceeding, however the Tribunal may, if it is satisfied that it is fair to do so, order that a party pay all or a specified part of the costs of another party. Section 109 provides:

(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.

(4) If the Tribunal considers that the representative of a party, rather than the party, is responsible for conduct prescribed in subsection (3)(a) or (b), the Tribunal may order that the representative in his or her own capacity compensate another party for any costs incurred unnecessarily.

(5) Before making an order under subsection (4), the Tribunal must give the representative reasonable opportunity to be heard.

(6) If the Tribunal makes an order for costs before the end of the proceeding, the Tribunal may require that order be complied with before it continues with the proceeding.

(7) A power of the Tribunal under this section is exercised by any member.

1. In Vero Insurance Ltd v The Gombac Group Pty Ltd[6] Gillard J sets out the step by step approach to be taken by this Tribunal when considering an application for costs pursuant to s109 of the Act:
   1. The prima facie rule is that each party should bear their own costs of the proceeding;
   2. 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;
   3. In determining whether it is fair to do so, that is, to award costs, the Tribunal must have regard to the matters stated in s109(3).
2. Section 112 of the Act makes special provision in respect of the making of a cost order in circumstances where a party has rejected a settlement offer made by another party:

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.

(3) In determining whether its orders are or are not more favourable to a party than an offer, the Tribunal -

(a) must take into account any costs it would have ordered on the date the offer was made; and

(b) must disregard any interest or costs it ordered in respect of any period after the date the offer was received.

1. Under section 111 of the Act, where the Tribunal is minded to make an order for costs, the Tribunal may fix the amount of costs itself or it may order that the costs be assessed by the Victorian Costs Court. The Tribunal will usually identify the basis and scale upon which any assessment of the costs should proceed.
2. As to the 'basis' of costs, there are generally two alternatives, 'standard' and 'indemnity'. The 'standard' basis generally includes all costs necessary or proper for the attainment of justice or for defending the matter. The higher 'indemnity' basis generally includes all costs actually incurred save in so far as they are of an unreasonable amount or have been unreasonably incurred.
3. As to the scale of costs, the Tribunal may identify a scale operative within the Magistrates Court, the County Court or the Supreme Court. If the Tribunal does not nominate any particular scale, the applicable scale will, by virtue of rule 1.07 of the Victorian Civil and Administrative Tribunal Rules 2018, be the County Court scale.
4. As I have noted in the past,[7] an order for indemnity costs should only be made in exceptional or extreme cases such as where the conduct of a party is vexatious or particularly obstructive or where a party's case is hopeless or fanciful and with no real prospect of success or where a claim is brought for an ulterior purpose.

1. The respondents say that it is fair that an order for costs in their favour be made pursuant to section 109 of the Act.

1. I agree with the respondents' submission that the proceeding involved complex issues of fact and law, warranting the engagement of expert witnesses and experienced lawyers.
2. Some of the factual complexity arose from the unusual method employed by Oakmont in calculating and issuing progress payment claims, as discussed in some detail in my reasons handed down 29 January 2019. Oakmont produced spreadsheets, for the purpose of the proceeding, as a means of clarifying and summarising the cost of building works, in particular the 'extras' costs as allocated by Oakmont. Reconciling Oakmont's claims for 'extras' with source documentation, such as there was, was a difficult task, and the task was made more difficult by the fact that the spreadsheets purporting to present a summary of source documentation were amended several times during the course of the hearing. In my view, the documentation and spreadsheets produced by Oakmont reveal its poor organisation of source paperwork for the building works. Where, as was the case here, a large number of the building works under the contracts were specified as 'provisional sum' items, the need for good organisation of source paperwork, such as invoices and payments as between the builder and sub- contractors, is amplified. Oakmont's poor organisation in this regard contributed to the complexity of the proceeding.
3. Other complex issues of fact and/or law included:
   • - the causes of delay in the building works and the effect of delay on the parties' entitlements and obligations;
   • - the entitlement/extent of the entitlement of Oakmont to charge builder's margin in respect of provisional sum items;
   • - the nature and effect of the 'November 2015 agreement'[8] in respect of building works completion dates, liquidated damages for delay and progress claim payments;
   • - suspension of the building works and termination of the building contracts; and
   • - assessment of damages.
4. There were 20 days of the substantive hearing, with over 3000 pages of documents. There were 8 expert witnesses who between them gave evidence on the issues of delay, defective and incomplete works and quantum assessment. There were lengthy lay witness statements. There were around 335 pages of closing written submissions, and my substantive reasons of 29 January 2019 ran to 84 pages. These parameters illustrate the significant complexity of the proceeding.

1. It is apparent from my decision in the proceeding that the respondents had the stronger case. But this does not mean that the claims brought by Oakmont were without merit or were vexatious. The outcome of the proceeding was an award of a significant sum of damages in favour of the respondents. However, in reaching that outcome, I made findings as to contractual terms and variations, delay damages and unpaid contractual balances which resulted in an assessment of damages significantly lower than the sum of damages sought by the respondents.

1. The respondents submit that Oakmont unnecessarily disadvantaged the respondents, within the meaning of section 109(3)(a) of the Act, by failing to give proper particulars of its various 'extras' claims. They say the numerous amendments to the spreadsheets produced by Oakmont during the course of the hearing demonstrates Oakmont is failing in this regard.
2. I do not consider the manner in which Oakmont presented its claims constitutes conduct attracting the operation of section109(3)(a) of the Act. In my view, the presentation of the Oakmont's claims reveals poor organisation of source documentation for the building works, rather than conduct (of a proceeding) intended to obfuscate or deceive.
3. The respondents say that during the course of the hearing Oakmont sought to change its case, in particular raising the new allegation that the respondents wrongfully denied Oakmont access to the building sites. The respondents say that Oakmont's conduct in raising this new allegation in the course of the hearing attracts the operation of section109(3)(a) of the Act. I do not agree. To the extent Oakmont raised, during the course of the hearing, a new contention or a shift in emphasis in respect of the termination of the building contracts, I do not consider that such conduct caused any significant 'unnecessary disadvantage' to the respondents.
4. Nor do I consider that a costs order is warranted pursuant to section 109(3)(b) of the Act. Although Oakmont's amendments to spreadsheets during the course of the hearing, as discussed above, contributed to the length of the proceeding, I do not consider such conduct prolonged unreasonably the time taken to complete the proceeding.

1. Section 109(3)(d) of the Act provides that the Tribunal may consider any other matter it considers relevant as part of its consideration under section 109 as to whether there should be a departure from the prima facie rule in respect of costs. The respondents say that settlement offers they made, discussed below, are relevant in this regard.
2. As discussed below, Oakmont concedes the respondent's entitlement, under section 112 of the Act, to an order for costs incurred after an offer of settlement made by the respondents on 18 April 2017.

1. All things considered, I am satisfied that it is fair to depart from the prima facie rule and order that Oakmont pay the respondents' costs of the proceeding. I reach this conclusion having regard to the nature and complexity of the proceeding, as discussed above. That is, it is the nature and complexity of the proceeding, rather than the strengths of the parties claims or the conduct of the proceeding by Oakmont, that leads me to conclude that it is fair to award costs under section 109 of the Act.
2. The proceeding commenced when Oakmont issued its application on 4 July 2016. As noted above, one of the orders sought by the respondents is an order that any costs order made in their favour include costs incurred from 7 March 2016. The respondents filed no submissions on this particular point, and the point was not pressed at the hearing before me on 13 July 2020.
3. I confirm later in these reasons the orders that I will make. There will be no order in respect of costs incurred prior to the commencement of the proceeding on 4 July 2016. If there is no agreement between the parties as to the sum of costs, the costs are to be assessed by the Victorian Costs Court and it will be a matter for the Costs Court to determine what is included within the respondents' 'costs of the proceeding'.
4. Before determining the level of the costs, 'standard' or 'indemnity' or a combination of the two, it is necessary to raise two offers of settlement relied on by the respondents.

1. On 18 April 2017, the respondents' lawyers sent to Oakmont's lawyers, by email, and offer of settlement made expressly 'without prejudice save as to costs'. By the offer, the respondents offered, in effect, to settle the proceeding (inclusive of costs) on the basis that Oakmont pay the respondents $150,000 within 30 days of the date of acceptance of the offer.
2. Oakmont concedes that the offer attracts the operation of section 112 of the Act, such that the respondents are entitled to an order that Oakmont pay the respondents' costs of the proceeding incurred after the offer was made. Without the concession, I would in any event have found that the offer attracts the operation of section 112.
3. Oakmont says such costs should be costs assessed on a standard basis.
4. On 1 June 2017, the respondents' lawyers sent a further offer of settlement to Oakmont's lawyers by email, again made expressly 'without prejudice save as the costs'. By this offer, the respondents offered to settle the proceeding on the basis that each party '"walk away" and bear their own costs'.
5. The phrase "walk away" is often used by lawyers in settlement negotiations and is widely understood by lawyers to mean that the parties each cease to prosecute their claims in the proceeding, with each bearing their own legal costs. In my view, the use of the phrase is unhelpful in written offers of settlement which are intended to be raised on the operation of section 112 of the Act. Despite the common usage of the phrase in settlement negotiations, it is not a legal term and its meaning, what was intended and what was understood by it, is not unambiguously clear and certain. For this reason, I am not satisfied that the 'walk away' offer of 1 June 2017 attracts the operation of section 112 of the Act. It is, however, a matter I may consider when assessing costs generally under section 109 of the Act.

1. The respondents say it is appropriate and fair that the costs be awarded on an indemnity basis. They say that Oakmont commenced and continued the proceeding in wilful disregard of known facts and established law. They cite a number of examples including:
   • - Oakmont claiming and pursuing a builder's margin in respect of provisional sum items when it ought to have known it had no such entitlement;
   • - Oakmont bringing a 'quantum meruit' claim, consequent upon suspension and termination of the contracts, when it ought to have known that the suspension was ill founded on unjustifiable 'extras' claimed, and in wilful disregard of established law;[9]
   • - Oakmont claiming payment for some items of work which it did not perform;
   • - Oakmont claiming extensions of time to which, as it should well have known, it was not entitled;
   • - Oakmont taking a 'high-handed' approach to the proceeding by claiming large sums of money to which it ought to have known it was not entitled and by failing to provide proper particulars of its claims in respect of provisional sums;
   • - Oakmont raising, during the course of the hearing, a new contention (the alleged denial of access to site) in respect of termination of the contracts.
2. Oakmont challenges the above allegations. I do not consider it necessary to discuss the allegations in detail. The allegations simply canvass some of the contentious issues raised and dealt with during the substantive hearing. There were many contentious issues and my findings in relation to them were not all one-way. The respondents' success in the proceeding, such as it was, reflects that the respondents succeeded on important contentious issues. But I do not accept that Oakmont's failure on such issues equates to wilful disregard of the law or high-handed conduct on the part of Oakmont. Oakmont was represented by experienced lawyers who presented arguable propositions on the contentious issues.
3. The respondents submit that Oakmont's rejection of the offer of settlement dated 18 April 2017 and/or the 'walk away' offer of settlement of 1 June 2017 is reason to order that the costs incurred after one or both settlement offers be assessed on an indemnity basis. They submit that to award costs on an indemnity basis would be consistent with the objective underlying section 112 of the Act to encourage settlement of disputes.
4. I reject this submission in respect of the 'walk away' offer of 1 June 2017 because, as discussed above, I have found that that offer does not attract the operation of section 112 of the Act.
5. As to the offer of 18 April 2017, I accept that the purpose of section 112 of the Act is to encourage settlement of disputes. Obviously, an award of costs on an indemnity basis is not inconsistent with such purpose. But that, of itself, does not justify an award of costs on an indemnity basis.
6. As stated by Ashley JA in Verlado & Anor v Andonov (2010) VSCA 38 at [47]:

Section 112(2) creates, on the one hand, a prima facie entitlement to payment of 'all costs' in favour of a successful offeror. Ordinarily, it appears, costs would be assessed in such a case on a party and party basis - although the tribunal would be empowered to allow costs on a more favourable basis.

1. There must be reason, over and above the rejection of an offer of settlement made under section 112 of the Act, to award of costs on an indemnity basis. The respondents submit that the extra reason is the unreasonableness of Oakmont's rejection of the offer of settlement of 18 April 2017. I do not accept the submission.
2. It should be borne in mind that an award of costs under section 112 is not mandatory, or beyond discussion, upon a finding that the Tribunal's orders are not more favourable to a party than the offer of settlement. Section 112 (2) makes it clear that the section applies, that is that the costs order will result, unless the Tribunal orders otherwise. The Tribunal retains a discretion. In exercising that discretion, the Tribunal will consider the reasonableness or otherwise of the rejection of an offer of settlement.
3. I have noted above that if Oakmont had not conceded the respondents' entitlement to a costs order pursuant to section 112 of the Act, I would in any event have found such entitlement arising in respect of the offer of settlement of 18 April 2017. The offer was prudent and clearly it would have been prudent on the part of Oakmont to accept the offer. Much time and money would have been saved by both parties. But in saying that, I acknowledge that prudence is more easily measured in hindsight. In my view, Oakmont's rejection of the offer was not manifestly or obviously unreasonable.
4. Nor am I persuaded that Oakmont's rejection of the 'walk away' offer of settlement of 1 June 2017 was so unreasonable that an award of costs, under section 109 of the Act, on an indemnity basis is warranted in respect of the respondents' costs incurred after the date of the offer.
5. In my view, it may be said that Oakmont erred in its assessment of the strength of its case relevant to the strength of the respondents' case, having regard to the relevant law. Such judgements are, of course, always easier in hindsight. I do not consider Oakmont's rejection of both offers of settlement, or Oakmont's conduct in the proceeding both before and after the offers of settlement, to have been vexatious or motivated by an ulterior purpose. In my view, Mr Just had a genuine belief in the strength of Oakmont's claims.
6. I do not consider Oakmont's claims in the proceeding were manifestly hopeless.
7. As such, I am not persuaded that this an exceptional or extreme case warranting an award of costs on an indemnity basis. I consider the appropriate level of costs is the standard basis pursuant to the County Court scale.

1. I will order that Oakmont pay the respondents' costs of the proceeding, including any 'costs reserved', the sum of such costs if not agreed by the parties to be assessed by the Victorian Costs Court on a standard basis pursuant to the County Court scale.

1. No doubt, the costs payable by Oakmont will be a significant sum. 20-day hearings, with lawyers representing parties, are very costly. The respondents say it is clear that such costs will not be paid because Oakmont is impecunious or 'a man of straw'. For this reason, they seek an order compelling Mt Just to meet any failure of Oakmont to pay the costs. The respondents seek the joinder of Mr Just as a party to the proceeding to overcome the limitation, if it exists, to the Tribunal's power to make cost orders only as against a party in a proceeding.
2. Oakmont and Mr Just do not concede that the Tribunal has power to order a person who is not a party to the proceeding to pay a party's costs of the proceeding. Nor do they concede that the Tribunal's power under section 60 of the Act to join a person as a party to a proceeding extends to joining a person as a party for the purpose of making a costs order against that person. They leave these issues to be determined by the Tribunal.
3. Oakmont and Mr Just say that even if the Tribunal has jurisdiction to make the orders sought, the Tribunal's discretion should be exercised against making the orders because the threshold requirements for such orders are not met.
4. Both parties reference the general principles, established by the High Court, underpinning the discretionary power of a court to make a cost order against a person or entity who is not a party to a proceeding. I will discuss those general principles and the orders and reasons of the Judicial Registrar Clayton made 4 March 2020 before turning to the Tribunal's power in respect of the orders sought.

1. The High Court case, Knight v FP Special Assets Limited and Others[10] is the leading authority. The issue before the High Court was whether the Supreme Court of Queensland had the power to order the appointed receivers of two companies to pay the costs of proceedings when the receivers were not parties to those proceedings. The two companies were the plaintiffs in proceedings brought in the Queensland Supreme Court. Judgement was made against one company when it failed to pursue the action. Judgement was made against the other company following its failure to comply with procedural orders. Solicitors representing the companies took their instructions from the receivers and from the banks who had appointed the receivers. After judgement was made against the companies, the defendants sought orders that the receivers be joined as parties to the proceedings and that they be ordered to pay the defendants' costs of the proceedings. The Court considered it appropriate to make the costs orders sought without the need to join the receivers as parties to the proceedings. On appeal, the Full Court of the Supreme Court (Williams, Ryan and Dowsett JJ) held unanimously that the Supreme Court had discretionary power under section 58 of the Supreme Court Act (Qld) to make the costs orders, although Dowsett J considered the exercise of the discretionary power was not warranted. Section 58 of the Supreme Court Act (Qld) provided:

The Supreme Court shall have power to award costs in all cases lawfully brought before it and not provided for otherwise than by this section.

1. The High Court found that the Queensland Supreme Court had the power to make the costs orders, although the power derived not from section 58 of the Supreme Court Act (Qld), but rather from the rules of the Queensland Supreme Court, in particular Order 91, rule 1 which provided:

Subject to the provisions of the Judicature Act and these Rules, the costs of and incidental to all proceedings in the Court, including the administration of estates and trusts, shall be in the discretion of the Court or Judge...

1. Mason CJ and Deane J set out the considerations underpinning the exercise of the discretionary power[11]:

The conclusion that the wide words of O.91 r.1 should not be read down so as to preclude jurisdiction to make an order for costs against a non-party does not, of course, mean that a judge has an unfettered discretion to make any order that he or she chooses. The wide jurisdiction conferred by the rule "must be exercised judicially and in accordance with general legal principles pertaining to the law of costs", to take up the words of Lambert J.A. in Oasis Hotel Ltd. v. Zurich Insurance Co.[12]

Obviously, the prima facie general principle is that an order for costs is only made against a party to the litigation. As our discussion of the earlier authorities indicates, there are, however, a variety of circumstances in which considerations of justice may, in accordance with general principles relating to awards of costs, support an order for costs against a non-party. Thus, for example, there are several long-established categories of case in which equity recognized that it may be appropriate for such an order to be made[13]

For our part, we consider it appropriate to recognize a general category of case in which an order for costs should be made against a non-party and which would encompass the case of a receiver of a company who is not a party to the litigation. That category of case consists of circumstances where the party to the litigation is an insolvent person or man of straw, where the non-party has played an active part in the conduct of the litigation and where the non-party, or some person on whose behalf he or she is acting or by whom he or she has been appointed, has an interest in the subject of the litigation. Where the circumstances of a case fall within that category, an order for costs should be made against the non-party if the interests of justice require that it be made.

1. In summary, the threshold requirements for the making of a costs order against a non-party are:

(a) is the party to the litigation (against whom costs are ordered) insolvent or a man of straw;

(b) has the non-party against whom the further cost order is sought played an active part in the conduct of the litigation;

(c) does the non-party have sufficient personal interest in the subject of the litigation; and

(d) do the interests of justice require that the order be made?

Orders of Judicial Registrar Clayton 4 March 2020

1. As noted earlier in these reasons, Judicial Registrar Clayton made orders in the appeal proceeding on 4 March 2020.[14] Those orders are:
   1. The proceeding is dismissed pursuant to Rule 62.04 of the Supreme Court (General Civil Procedure) Rules 2015 ('the Rules').
   2. The applicant [Oakmont] is to pay the respondents' costs of the proceeding, including previous orders for costs in the cause or in the proceeding, and any reserved costs, pursuant to section 24 of the Supreme Court Act 1986 (Vic).
   3. Mr Stephen Andrew Just is joined to the proceeding pursuant to Rule 9.06(b) of the Rules.
   4. If the applicant [Oakmont] fails to pay part or all of the respondents' costs of the proceeding within seven (7) days of the costs being assessed by the Victorian Costs Court or agreed by the parties, Mr Stephen Andrew Just is to pay the unsatisfied costs liability that the applicant has incurred to the respondents, pursuant to section 24 of the Supreme Court Act 1986 (Vic).
2. Section 24(1) of the Supreme Court Act 1986, referenced by the Judicial Registrar in the above orders, provides:

Unless otherwise expressly provided by this or any other Act or by the Rules, the costs of and incidental to all matters in the Court, including the administration of estates and trusts, is in the discretion of the Court and the Court has full power to determine by whom and to what extent the costs are to be paid.

1. Rule 9.06(b) of the Supreme Court (General Civil Procedure) Rules 2015, referenced by the Judicial Registrar in her order number 3, provides:

At any stage of a proceeding the Court may order that -

(b) any of the following persons be added as a party -

(i) a person who ought to have been joined as a party or whose presence before the Court is necessary to ensure that all questions in the proceeding are effectually and completely determined and adjudicated upon; or

(ii) a person between whom and any party to the proceeding there may exist a question arising out of, or relating to, or connected with, any claim in the proceeding which it is just and convenient to determine as between that person and that party as well as between the parties to the proceeding;

1. The Judicial Registrar's orders were accompanied by her findings/reasons, produced in full below:

1. This is an application made on summons for the following orders:
   1. That the applicants [Oakmont's] claim is dismissed pursuant to Rule 62.04 of the Supreme Court (General Civil Procedure) Rules 2015.
   2. The applicants [sic] to pay the respondents costs of the proceeding including any reserved costs

1. Mr Stephen Andrew Just is joined to the proceeding pursuant to Rule 9.06.
   1. If the applicant fails to pay part of all of the respondents costs of the proceeding within 7 days of the costs being assessed by the Victoria Costs Court or agreed, Mr Just is to pay the unsatisfied costs liability that the applicant has incurred to the respondents.

1. The orders that Mr Stephen Andrew Just be joined as a party to the proceeding and that in the event that the applicant fail to pay the costs of the respondents, that those costs be paid by Mr Just, are opposed.

1. The applicants today, respondents in the proceeding, say that the principles expounded by the High Court in the case of Knight v FP Special Assets Limited and Other [1992] 174 CLR 178 are made out in this case:

1. Oakmont Properties Pty Ltd (' Oakmont') is a person of straw; 2. Mr Just played an active role in the conduct of the litigation;

1. Mr Just has an interest in the subject of the litigation; and

1. It is in the interests of justice to require Mr Just to pay the costs.
2. The respondents to the application, and the applicants [sic] in this proceeding, Oakmont, oppose the orders on the following bases:
   1. That Mr Just was acting as a director of the company. He is entitled to the protection afforded by that legal structure. Everything that Mr Just has done in this case is consistent with, and does not go beyond, his obligations as a director of Oakmont.

1. There is no evidence that the fruits of litigation would have flowed to Mr Just.

1. There is no basis for assuming that Oakmont is insolvent, or a person of straw.

1. The Courts have been rightly reluctant to make orders against directors of companies in these circumstances.

1. I am satisfied of the following matters:
   1. Oakmont is impecunious or a man of straw.

I made findings in my earlier decision that Oakmont was impecunious. Indeed it was urged upon me that I make those findings, in support of a submission that Oakmont' s impecuniosity meant that, were security ordered, it would stultify the litigation.

Before me on that occasion was evidence about Oakmont's financial circumstances which satisfied me that the company was impecunious. I was not required, and did not find that the company was insolvent. The company had signed tax returns attesting to their solvency and these were noted in the submissions of Oakmont in relation to this application. It was also put to me in submissions that Oakmont continues to trade. However, what is not known is how it is that Oakmont is solvent or how it is that it continues to trade - again there has been a lack of candour and clarity about the financial position of Oakmont which does not support the submission that it is impecunious.

It may be open to the Court infer that Oakmont is insolvent, but I do not believe I am required to make that finding. It is sufficient if I make a finding that Oakmont is a man of straw, is impecunious and has no real prospect of meeting a costs order against it. Having submitted its own impecuniosity in support of one application, it is incumbent upon Oakmont, in opposing this application on the basis that it is not impecunious or a man of straw, to, at the least, put on some evidence by which I could be satisfied that its financial position has changed. Nothing has been put and therefore there is no reason to disturb my previous finding as to Oakmont's financial circumstances.

1. I am satisfied that Mr Just was an active participant in the litigation.

This is not just in relation to the litigation at the Victorian Civil and Administrative Tribunal ('VCAT'), but in the proceeding in this Court where Mr Just has sworn three affidavits.

I am satisfied that his role has gone beyond what one would expect of any director pursing litigation on behalf of a company. He has given evidence in this proceeding of the personal and financial toll that this litigation has had on him, the many hours he has expended instructing solicitors and preparing for, and attending court, and the stress this has caused him. He has testified that he has lent large sums to Oakmont since the litigation began. He has funded the litigation to such an extent that his personal resources are exhausted. He has experienced stress which has left him unable to pursue other business projects and depleted his desire and energy for other projects. He has been unable to operate at much beyond subsistence levels for the duration of the trial and its aftermath.

It has been at his direction, on his instructions and, at least in part through his personal funding, that the litigation has proceeded to this point. He, not Oakmont, would have been the person putting up the security had his application for more time to do so been allowed. This is conduct one would expect of a party to the litigation, rather than someone who is just the director of the company.

I am satisfied that Mr Just's role was not just that of prime decision-maker. It was something more. I accept the proposition propounded in Carter v Caason Investments Pty Ltd [2016] VSCA 236 that the Court is not piercing the corporate veil but rather considering the justice of the case and does not let the corporate structure swamp all other considerations.

1. I am satisfied Mr Just would benefit from the litigation.

I made findings in my earlier decision that Mr Just was a person who stood to benefit from the litigation and stood behind Oakmont. There is no evidence before me which would cause me to disturb those findings.

Mr Just is a creditor of Oakmont in a substantial amount and has invested personal funds in the litigation. He is the sole shareholder of Oakmont. It is no answer to say that the lack of material before the Court about the true financial position of Oakmont, which I have previously found lacked candour, precludes the Court from being satisfied that Mr Just would benefit from the litigation.

The role that the court must play in this application is to apply the principles to the circumstances of this case. In this case, having been satisfied of the other matters, I must consider whether it is in the interests of justice to allow the application. I am satisfied that it is. Oakmont was a person of straw at the time that this proceeding was commenced. It was commenced in circumstances where the dispute between the parties had been ventilated at length at the VCAT. At the time of instituting these proceedings, Oakmont had liabilities that significant exceeded its assets and could not pay its solicitors.

Mr Just knew that Oakmont would not have the capacity to comply with an adverse costs order. The rules of court provide that a successful party, in the ordinary circumstances, would be awarded its costs. In the circumstances of this case, particularly where it is an appeal and the issues have already been ventilated below, it would be unjust for costs not to follow the event.

The conduct of the proceeding in this court by the applicant has increased the costs incurred by the respondents. In this regard I rely on the matters set out in the submissions of the respondents.

For the reasons set out at paragraph 64 - 72 of the submissions of the respondents, I am satisfied that it is in the interests of justice to allow the application and to make the orders sought.[15]

1. It is not clear from the Judicial Registrar's orders, or the accompanying reasons, whether the Judicial Registrar considered it necessary or, rather, prudent to join Mr Just as a party to the appeal proceeding. In any event, there is no doubt that the Supreme Court may, under section 24(1) of the Supreme Court Act 1986, order a person who is not a party to a proceeding to pay the costs of the proceeding.[16]

1. The Tribunal's power to make cost orders is not as broad as the power set out in Section 24(1) of the Supreme Court Act 1986. The Tribunal's power is found in Division 8 of Part 4 of the Act, which comprises sections 109 to 115.
2. Section 109, set out earlier in these reasons, sets out the Tribunal's general power in respect of costs orders.
3. Section 110 makes provision in respect of costs that may be ordered to be paid by a party who is given leave to intervene in a proceeding.
4. Section 111 gives the Tribunal power, when it makes a costs order, to fix the amount of costs or to allow for settlement of the sum between the parties or assessment of the sum by the Costs Court.
5. Section 112, set out earlier in these reasons, provides for the making of a costs order in circumstances where a party has rejected an offer of settlement.
6. Sections 113 and 114 set out the requisite parameters of settlement offers to enliven the power under section 112.
7. Section 115 makes provision in respect of the failure of the party to comply with its obligations under an accepted settlement offer.
8. For completeness, sections 115A to D make provision for orders for the payment/reimbursement of fees, such as application fees and hearing fees, paid to the Tribunal.
9. In short, the Tribunal's power to make costs orders under the Act is contained in sections 109 and section 112 of the Act, and there is special provision under sections 115A-D for the order of payment (as reimbursement) of fees. In my view, the language of these sections presents a clear intention to limit, with one exception, the Tribunal's power such that the Tribunal is not empowered to make an order against a person or entity who is not a party in the proceeding.
10. The one exception is found in section 109(4) which provides that if the Tribunal considers the representative of a party to be responsible for the conduct described in subsections 109(3)(a) or (b), the Tribunal may order that a representative of a party, rather than the party itself, compensate another party for costs incurred unnecessarily. The respondents do not submit that a costs order be made against Mr Just pursuant to section 109 (4) of the Act. In any event, to the extent it might be said that Mr Just is the 'representative' of Oakmont for the purpose of section 109 (4) (a matter not canvassed before me), I have found, as discussed above, that a costs order against Oakmont pursuant to subsections 109(3)(a) or (b) is not warranted.
11. What the respondents do submit is that the meaning of the words 'a party' under section 109 is not entirely clear, such that a broad interpretation maybe employed to include a person or entity who is not a named party in the proceeding. I do not agree. In my view section 109, read as a whole, is intended to limit the power as I have said. The Tribunal has previously expressed this view, for example, as stated by Bowman J in State of Victoria v Bradto Pty Ltd [2006] VCAT 685 at [24]:

Pursuant to s.109(2) of the Act, "... the Tribunal may order that a party pay all or a specified part of the costs of another party in a proceeding." The word "party" is used throughout s.109, and the only exception specified where costs can be ordered against someone other than a party is to be found in s.109(4), which gives the Tribunal power to make a costs order against the representative of a party. Even that provision does not go so far as to authorise the making of a costs order against the representative of a party in favour of a non-party, and indeed s.109(4) takes one back to sub-section (3) and thence to sub-section (2). Thus, the power to order costs is specifically confined to the ordering of costs against one "party", and in favour of another "party" in a "proceeding".

1. I find that the Tribunal has no power to make a costs order as against Mr Just if he is not a party to the proceeding.

1. The Tribunal's power to join a party to a proceeding, set out in section 60 of the Act, is broad. The section relevantly provides:

(1) The Tribunal may order that a person be joined as a party to a proceeding if the Tribunal considers that -

(a) the person ought to be bound by, or have the benefit of, an order of the Tribunal in the proceeding; or

(b) the person's interests are affected by the proceeding; or

(c) for any other reason it is desirable that the person be joined as a party.

(2) The Tribunal may make an order under subsection (1) on its own initiative or on the application of any person.

1. The power of the Tribunal, under section 60 (1)(c) of the Act, to join a person as a party to the proceeding 'for any other reason it is desirable that the person be joined as a party' could hardly be expressed in broader terms.
2. As a guiding principle, to join a party to a proceeding the Tribunal must be satisfied that the claim sought to be brought against the proposed further party is open and arguable.[17]
3. The respondents submit that there is nothing in the Act limiting the stage of a proceeding when the Tribunal might join a party to the proceeding. In support of the submission, the respondents refer to a decision of Justice Stewart Morris, then President of VCAT, in Sweetvale Pty Ltd v Minister for Planning [2004] VCAT 2000. In that case Justice Morris added a party to a proceeding in the course of an application for costs brought by the respondent in that proceeding after the hearing and determination of the substantive application in the proceeding. In the substantive application, the applicant was unsuccessful in seeking review of a decision in respect of the grant of a planning permit. The named respondent was the architect who had filed the original planning permit application, and not the relevant landowner who had engaged the architect. The respondent's application for costs was met with a submission by the applicant that costs should not be ordered because it was not the named respondent, but rather the landowner, who had incurred the costs of the proceeding. The respondent sought to overcome the issue by seeking the substitution of the landowner as the named respondent in the proceeding. Justice Morris noted that the architect had commenced the permit application in its name [not an uncommon occurrence], and although it would have been appropriate to name the landowner as a party in the ensuing proceeding, this was simply not done. Justice Morris determined that, as a matter of fairness, he would add, rather than substitute, the landowner as a respondent:

I believe justice would be served by adding, not substituting, Mayfair Collins Pty Ltd [the landowner] as a party to the proceeding. I see nothing in section 60 of the VCAT Act which prevents this at this stage of the proceeding. In my opinion, the tribunal should not allow a technical issue of this nature to stand in the way of a fair outcome.[18]

1. Justice Morris went on to make a costs order in favour of the respondents.
2. I am not aware of any other decision in this Tribunal where a person has been joined as a party to the proceeding after the determination of the substantive application in the proceeding, and solely for the purpose of a costs order against the joined party.
3. I accept the submission, supported by Sweetvale, that there is no limitation in the Act as to the stage in a proceeding when the Tribunal may join a party to the proceeding.
4. It is also my view that Sweetvale is clearly distinguishable from the matter before me. In Sweetvale, Justice Morris considered it fair to join the landowner as a respondent in order to overcome the technical oversight that the landowner had not been included as a named respondent in the proceeding. The landowner was a real party to the issue in dispute in the proceeding, and it was a technicality or oversight that the landowner had not been named as a respondent.
5. The issue before me is quite different. It was no technicality or oversight that Mr Just was not named as a party in the substantive proceeding. Oakmont was the named builder in the subject building contracts with the respondents, and that is why the claim against the respondents was brought by Oakmont, and not by Mr Just, and that is also why the respondents' counterclaim was brought against Oakmont, and not as against Mr Just.
6. The question is whether I should join Mr Just as a party to the proceeding for the sole purpose of making the orders sought by the respondents whereby Mr Just would be liable to meet any default by Oakmont in meeting its costs liability. For the reasons set out below, I am satisfied that I should not do so.
7. Naturally, the respondents say I should reach the same conclusion as Judicial Registrar Clayton in the appeal proceeding. However, the appeal proceeding before the Judicial Registrar was not the proceeding before me, and the Tribunal's powers are not as broad as the powers of the Supreme Court.
8. As noted earlier, pursuant to section 24 (1) of the Supreme Court Act 1986 the costs of and incidental to all matters in the Court is in the discretion of the Court and the Court has full power to determine by whom and to what extent the costs are to be paid. The Tribunal's power, found (for the purpose of the issue before me) in section 109 of the VCAT Act, is more limited. As discussed above, the Tribunal can make a costs order only against a party in the proceeding, and then only if the Tribunal considers it would be fair to do so having regard to the matters set out in section 109(3).
9. Mr Just is not a party in the proceeding. In my view, this presents a very significant hurdle.
10. It is not satisfactory to suggest that the hurdle is overcome simply by joining Mr Just as a party to the proceeding.
11. The Tribunal has the power to make costs orders, but the power is limited. It cannot be exercised against a non-party. The Tribunal has a further power, a wide power, to join a person as a party to a proceeding. It does not follow that the Tribunal should readily exercise one of its powers to overcome the limitation of another of its powers.
12. The respondents refer to following commentary of Dawson J in Knight v FP Special Assets Limited:

The wording of O.91, r.1 does not confine the discretion to award costs to the parties to the proceedings. The circumstances in which it would be appropriate to award costs to a non-party would necessarily be confined, but that is a question of discretion, not jurisdiction. I should add that the discretion to award costs is to be exercised judicially so that a person against whom costs may be awarded must, if not a party, be brought before the court. In many cases the convenient method of bringing him before the court would be to make him a party whereupon, even upon the appellants' argument, any problem of lack of jurisdiction would disappear.[19]

1. In my view, Dawson J is speaking of the logistics, or practicality, involved in making an order for costs against a non-party, such that a non-party might be made a party to facilitate the making of the order. But the precondition is that the person is a person against whom costs may be awarded. As discussed above, the power of a court to make cost orders is different to the power of the Tribunal.
2. The position of Mr Just, in respect of the powers of the Tribunal, is that, as a non-party, he is not a person against whom costs may be awarded under section 109 of the VCAT Act.
3. The respondents' submission, in essence, is that the Knight criteria are met in this case, and if there is a hurdle in that the Tribunal cannot order costs against a non-party (as I have found is the case), then it is desirable that the Tribunal exercise its power to join Mr Just as a party to the proceeding so that the Tribunal may, as a matter of fairness, then exercise its power to make a costs order against him.
4. I do not accept the submission.
5. Mr Just is not a party to the proceeding. That is not an oversight, or a mistake, or a technicality that should be rectified. It simply reflects the fact that Oakmont and the respondents were the parties to the contractual disputes forming the subject matter of the substantive proceeding. As 'the builder' under the building contracts, Oakmont was the appropriate party, the real party, to the disputes and the ensuing litigation.
6. I am not satisfied that I should exercise the Tribunal's power to join a party to the proceeding under section 60 of the Act for the sole purpose of overcoming the limitation to the Tribunal's power in respect of costs orders under section 109 of the Act. I am not satisfied that such reason, on its own, constitutes a desirable reason for joinder of a party under section 60 (c) of the Act.
7. If I am wrong, I am in any event not satisfied that all of the Knight criteria are met.
8. I am satisfied that the first 3 limbs of the Knight criteria are met:

(i) There is little doubt that Oakmont is now impecunious, with no real prospect of meeting the costs order that I will make against it. On the affidavit material submitted in the appeal proceeding, including affidavit material of Mr Just himself, Judicial Registrar Clayton found that Oakmont was impecunious. There is no further affidavit material submitted before me upon which I might find otherwise.

(ii) There is no question that Mr Just played an active part in the conduct of the litigation. He was present throughout the course of the 20 days hearing, during which he provided instructions to Oakmont's lawyers. He was the sole lay witness called by Oakmont. At all relevant times he has been the sole director of Oakmont. It was very clear to me, during the course of the proceeding, that Mr Just controlled Oakmont and was Oakmont's driving force in the litigation.

(iii) Clearly, Mr Just has an interest, a financial interest, in the litigation. Up until around 2 April 2019, Mr Just held 50% of the 50,200 shares in Oakmont, and his wife Lisa held the remaining 50%. On around 2 April 2019, all shares were transferred to 'Cassiobury Park Pty Ltd', and Mr Just holds 100 of the 500 shares in that company, with his wife Lisa holding the remaining 400.[20] Affidavit material filed by Mr Just in the appeal proceeding also confirms that he has loaned money to Oakmont and that the balance of the loan account as at 27 June 2019 was $760,704, of which $350,367 had been lent since 1 July 2015.[21]

1. However, I am not satisfied that the final limb - that the interests of justice require that the order be made - is met.
2. It seems to me that the hopeless financial position of Oakmont as at the commencement of the appeal proceeding was a very significant factor in Judicial Registrar Clayton's finding that the final limb of the Knight criteria was met. Repeating what the Judicial Registrar stated (as set out above) in this regard:

In this case, having been satisfied of the other matters [the first 3 limbs of the Knight criteria], I must consider whether it is in the interests of justice to allow the application. I am satisfied that it is. Oakmont was a person of straw at the time that this proceeding was commenced. It was commenced in circumstances where the dispute between the parties had been ventilated at length at the VCAT. At the time of instituting these proceedings, Oakmont had liabilities that significant exceeded its assets and could not pay its solicitors.

1. Mr Just knew that Oakmont would not have the capacity to comply with an adverse costs order. The rules of court provide that a successful party, in the ordinary circumstances, would be awarded its costs. In the circumstances of this case, particularly where it is an appeal and the issues have already been ventilated below, it would be unjust for costs not to follow the event.
2. On the material before me, I cannot draw the same conclusions as to the financial position of Oakmont at the time this proceeding was commenced in the Tribunal on 4 July 2016.
3. As I have said, Mr Just controlled Oakmont and was the driving force behind Oakmont in the proceeding before me. It was plainly Mr Just's decision to commence the proceeding on behalf of Oakmont. There is nothing particularly unusual about that. In many proceedings brought by corporate builders in this Tribunal, it is the sole director of the company, who is also often the registered building practitioner, who drives the litigation on behalf of the company.
4. As discussed above in these reasons, I do not consider the proceeding was brought or conducted by Oakmont vexatiously or for an ulterior purpose. I consider Mr Just had a genuine belief in the validity of the claims brought by Oakmont. On behalf of Oakmont, he engaged experienced lawyers who presented arguable propositions on contentious issues. I do not consider that the proceeding was pursued recklessly by Oakmont. And it is important to remember that, quite apart from prosecuting its claim against the respondents, Oakmont was defending a substantial counterclaim brought by the respondents, and in the end the sum of damages awarded to the respondents was significantly less than the sum of damages they claimed.
5. In these circumstances, I am not satisfied that the interests of justice require an order for costs, in respect of the VCAT proceeding, as against Mr Just.
6. For completeness I confirm that in reaching this decision, I have considered the circumstance that on 8 June 2017, 11 months after the proceeding was commenced and several months prior to the commencement of the substantive hearing, the respondents put Oakmont and Mr Just on notice that in the event the respondents succeeded in the proceeding, they would seek the orders they now seek as against Mr Just in accordance with the Knight principles.[22] Perhaps the giving of such notice, or warning, was considered tactically astute at that time, particularly in view of the fact that the 'walk away' offer of settlement, discussed above in these reasons, had been made on 1 June 2017. Whatever its purpose, I consider the giving of such prior notice or warning to be a matter carrying very little weight in the weighing of whether the interests of justice require the order sought as against Mr Just.

Section 53 Domestic Building Contracts Act

1. For completeness I turn to the respondents' submission that the costs order sought as against Mr Just might be made pursuant to the Tribunal's wide power under section 53 of the Domestic Building Contracts Act 1995 ('DBC Act'). Section 53 (1) of the DBC Act provides:

VCAT may make any order it considers fair to resolve a domestic building dispute.

1. Section 53 (2) of the DBC Act goes on to set out a non-exhaustive list of various orders the Tribunal may make, without limiting the operation of section 53 (1).
2. 'Domestic building dispute' is defined in section 54 of the DBC Act. In this proceeding, the 'domestic building dispute' was the dispute between Oakmont and the respondents that was the subject of the substantive hearing before me. Mr Just was not a party to that dispute.
3. In my view, section 53 (1) of the DBC Act does not offer an alternative route, that is an alternative to section 109 of the VCAT Act, to obtaining a cost order following the substantive hearing of a proceeding involving a 'domestic building dispute.'
4. In any event, however broad the Tribunal's power to make orders under section 53 (1) of the DBC Act may be, I am satisfied that the section does not empower the Tribunal to make an order that a person, who is not a party to the proceeding in the Tribunal in which a 'domestic building dispute' is ventilated, pay another party's costs of the proceeding.
5. And even if I was satisfied that section 53 (1) of the DBC Act does empower the Tribunal to make the order sought as against Mr Just, I would not make such order because, for the reasons canvassed above in these reasons, I am not satisfied that it would be fair to do so.

1. For the reasons set out above, I will order that:

1. Oakmont pay the respondents $8555.35 as reimbursement of fees paid by the respondents; 2. Oakmont pay the respondents' costs of the proceeding, including any costs reserved, the sum of such costs if not agreed by the parties to be assessed by the Victorian Costs Court on a standard basis pursuant to the County Court scale; and

1. the respondents' application for the joinder of Mr Just as a party to the proceeding, and for orders as to costs as against Mr Just be dismissed.

[1] order of Judicial Registrar Clayton made 17 July 2019

[2] orders of Judicial Registrar Clayton made 29 August 2019

[4] Judicial Registrar Clayton's orders were authenticated on 18 March 2020.

[5] the orders made by Judicial Registrar Clayton on 4 March 2020 were authenticated 18 March 2020

[6] [2007] VSC 117 at [20]

[7] Taylor v Trentwood Homes Pty Ltd [2012] VCAT 1125 at para 34

[8] paragraphs 63 to 74 of my reasons dated 29 June 2019

[9] the claim was brought and the substantive hearing before me was completed before the High Court decision in Mann v Paterson Constructions Pty Ltd [2019] HCA 32

[10] [1992] 174 CLR 178

[12] (1981) 124 DLR (3d) 455, at p 462. In that case, an order for costs as between solicitor and client was made against a director and principal shareholder of the insolvent plaintiff company, notwithstanding that he was a non-party, on the ground that he had instigated an action which sought to make the court an instrument of fraud.

[13] See the discussion in Oasis Hotel, ibid., at pp 458-459.

[14] the Judicial Registrar's orders were authenticated 18 March 2020

[15] Oakmont Properties Pty Ltd v Duan Lan Zhang and Ling He, findings/reasons accompanying the orders of Judicial Registrar Clayton made 4 March 2020 and authenticated 18 March 2020

[16] See, for example, Ipex ITG Pty Ltd v Melbourne Water Corporation (No 6) [2009] VSC 571 where Bryne J made a costs order against a non -party, such decision subsequently upheld by the Court of Appeal in Ipex ITG Pty Ltd and others v Melbourne water Corporation [2012] VSCA 169.

[17] Zervos v Perpetual Nominees Limited [2005] VSC 380 per Cummins J at [11].

[18] [2004] VCAT 2000 at [10]

[20] ASIC searches of Oakmont and Cassiobury Park Pty Ltd confirm the shareholdings.

[21] paragraph 9 in the affidavit of Mr Just sworn 27 June 2019, that affidavit exhibited as exhibit MZX - 5 to the affidavit of Minc Zhi Xian sworn 14 October 2019 and filed in this proceeding

[22] email letter from the respondents' lawyers to Oakmont's lawyers dated 8 June 2017, being exhibit MZX-5 to the affidavit of Minc Zhi Xian sworn 14 October 2019 filed in this proceeding.