1. Owners Corporation 6514's application that the respondent reimburse the applicant for a fee for the applicant's manager to prepare the application in this proceeding and appear at a hearing in this proceeding on 17 November 2008 ($385.00) and associated parking costs ($25.00) is dismissed.

1. On 10 October 2008, VCAT received an application under the Owners Corporation Act 2006 (the OC Act) from Owners Corporation 6514 against Mr Carlson for recovery of fees and penalty interest of $1,102.70, plus costs.
2. This application came before me for hearing on 17 November 2008_._ Mr Neville Sanders, then of R E Appleby Pty Ltd, Owners Corporation Manager represented the Owners Corporation. Mr Carlson did not appear and was not represented.
3. I ordered Mr Carlson to pay the Owners Corporation $1,033.10, as set out below.
4. While Mr Sanders did not describe it as such, he sought an order that Mr Carlson pay costs, being fees the Owners Corporation Manager will charge to the Owners Corporation for preparing for and appearing at the hearing. He based his submission on the power of VCAT to order the payment of a sum of money by way of "restitution" under section 165(1)(c)(iii) of the OC Act.
5. I reserved my decision to consider his submission.
6. By orders and reasons dated 23 December 2008 (not published except to the parties as they were interim orders), I:
   1. ordered the respondent to pay to the applicant $1,033.00 being body corporate fees owed of $949.40, interest of $48.40 and the VCAT application fee of $35.20;
   2. did not then allow the claim a fee for the applicant's manager to prepare this application and appear at today's hearing ($385.00) and parking costs ($25.00), but allowed the applicant to make further application on this point, which it did.
7. I held a further hearing on 15 April 2009 and heard further submissions from the applicant. By this time, Mr Sanders was employed by Teys Strata Pty Ltd, which had taken over R E Appleby Pty Ltd. Mr Carlson did not appear.
8. The applicant sought an order for the fee Mr Sanders to prepare this application and appear ($385.00) and parking costs ($25.00) related to the hearing on 17 November 2008. No orders were sought about the costs of the hearing on 15 April 2009. Mr Sanders acknowledged he was raising general points and Mr Carlson should not be expected to pay the associated costs of the second hearing.
9. The following reasons repeat my earlier reasons on the issue of "restitution" and deals with the claims for damages under the OC Act and, alternatively, for costs under the Victorian Civil and Administrative Tribunal Act 1998 (the VCAT Act).

1. Mr Sanders submitted that I should order Mr Carlson to pay:
   1. $385.00 being 2 hours preparation and 1.5 hours to attend the hearing at $110 an hour; and
   2. $25.00 parking costs.
2. His central submission was that is fair that in proceedings for fee recovery under the OC Act that where orders are made against a lot owner, the lot owner should pay costs because:
   1. Section 28(1) of the OC Act creates a statutory liability to "to pay any outstanding fees, charge, contribution or amount owing to the owners corporation in respect of that lot". He submitted that liability places a far greater responsibility on lot owners to meet obligations compared to "mere contractual obligations"[1]. One reason for this greater responsibility is that lot owners do not choose who the other lot owners in their owners corporation will be. This is very different to a contractual relationship where the parties choose to enter the relationship;
   2. When a lot owner buys a lot he, she or it is or should be aware of the liability to pay those fees;

Annual fees as calculated by professional managers of owners corporations do not usually include a component for costs of legal proceedings. Schedules of fees charged by professional managers usually include a separate hourly rate for appearing at VCAT. This is because it is only necessary in the small minority of matters. It would be unfair for the annual levy to have a component related to applications to VCAT.

By way of example, Mr Sanders said the company which employs him manages 450 owners corporation with an average of eight lots. He expects unpaid fees will result in between six and ten applications to VCAT a year.

1. It is unfair that other lot owners pay these fees if a fellow lot owner fails to pay fees and the matter goes to VCAT.

1. He cited a decision of Deputy President Steele in Owners Corporation No. 3011 v Adams VCAT (C8285/2008), which is unreported. Mr Sanders said, "This case was a debt collection case heard on two mornings and involved a counter claim. The amount awarded by Deputy President Steele was based on $400 per morning for damages and $200 costs. I represented the Applicant."

In oral submissions, Mr Sanders said Deputy President Steele referred to a scale of witness costs used in the County Court of Victoria of $500 a day. He also cited a counter claim by the lot owner, which was heard at the same time, and presumably contributed, to the length of the hearing.

Deputy President Steele's order dated 11 March 2009 orders the respondent to "pay part of the Applicant's costs and damages fixed at a total of $1,035.00". As is the usual practice in such cases, she did not give written reasons.

1. Mr Sanders based his submission on the power of VCAT to order the payment of a sum of money by way of
   1. "damages" and "restitution" under sections 165(1)(c)(ii) and 165(1)(c)(iii) respectively of the OC Act (he noted the section says VCAT may make any order it considers fair).
   2. on VCAT's powers to make costs orders under section 109 of the VCAT Act.

1. Section 165 relevantly says.
   1. What orders can VCAT make?

(1) In determining an owners corporation dispute, VCAT may make any order it considers fair including one or more of the following - ...

(i) found to be owing by one party to another party;

(ii) by way of damages (including exemplary damages and damages in the nature of interest);

1. In my view, section 165 as a whole and sections 165(1)(c)(ii) and 165(1)(c)(iii) specifically do not empower me to make the order sought.
2. The claim is in the nature of costs. Unless legislation indicates otherwise[2], VCAT's power to make costs orders is governed by section 109 of the VCAT Act. Section 165 gives no indication otherwise.
3. I have noted Deputy President Steele's decision discussed above. In the absence of written reasons, the basis for making the order is not clear to me. Accepting Mr Sanders' evidence that she referred to a scale of witness costs, the award may have related to Mr Sanders as a witness. Therefore, I have not treated the decision as supporting Mr Sanders' submission.

1. The use of the term "damages" in section 165(1)(c)(ii) does not empower me to make the orders sought because in my view, "damages" does not include "costs".
2. At law, the term "damages" is treated as different to the term "costs".
3. By way of example, section 108(2)(b)(ii) of the Fair Trading Act 1999 empowers VCAT to order the payment of damages. The issue of whether VCAT may award costs is dealt with as a separate issue, usually under section 109 of the VCAT Act.
4. Similarly, in proceedings under the OC Act, the issue of whether VCAT may award costs is a separate issue, to be dealt with under the VCAT Act.

1. Similarly, at law, the term "restitution" is also treated as different to the term "costs".
2. The logic set out above about "damages" applies. Again, by way of example, section 108(2)(b)(iii) of the Fair Trading Act 1999 deals with "restitution" and again costs is dealt with as a separate issue, usually under section 109 of the VCAT Act.
3. Similarly, in proceedings under the OC Act, the issue of whether VCAT may award costs is a separate issue, to be dealt with under the VCAT Act.
4. Further, the term "restitution" in section 165(1)(c)(iii) is a technical legal term.
5. In _'_Statutory Interpretation in Australia', Pearce and Geddes say[3],

Most statutory interpretation is concerned with the meaning to be ascribed to general words, but the courts are also frequently concerned with technical words and phrases. The cases relating to technical words fall into two categories. One group deals with the interpretation of legal technical words and the other with non-legal words that have a technical meaning. As far as the interpretation of technical legal phrases is concerned, the approach followed is best stated by O'Connor J in Attorney-General (NSW) v Brewery Employees Union of New South Wales [1908] HCA 94; (1908) 6 CLR 469 at 531:

Where words have been used which have acquired a legal meaning it will be taken, prima facie, that the legislature has intended to use them with that meaning unless a contrary intention clearly appears from the context. To use the words of Denman J in R v Slator (1881) 8 QDB 267 at 272; 'but it always requires the strong compulsion of other words in an Act to induce the Court to alter the ordinary meaning of a well known legal term'.

1. The term "restitution", is described in 'Contract Law' by Willmott, Chistensen and Butler as,

A person may claim compensation in restitution for a benefit provided to another person where it would be unjust for the other person to retain the benefit ... Restitution in its modern form as based on unjust enrichment is relatively new to the Australian context[4].

1. They give examples such as recovery of monies paid under a mistake and recovery of compensation for work done in anticipation of a contract.
2. This application for costs cannot be described as a claim in restitution.

(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 described 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 a reasonable opportunity to be heard.

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

Is Mr Sanders a 'professional advocate' within the meaning of the VCAT Act?

1. For costs to be awarded for Mr Sanders appearance at VCAT, he must first satisfy me that he is a 'professional advocate' within the meaning of the VCAT Act.
2. This is because, as discussed in 'Pizer's Annotated VCAT Act'[5], VCAT has often held that costs are confined to money paid or liabilities incurred for professional legal services (my emphasis). This approach follows the High Court of Australia decision in Cachia v Hanes [1994] HCA 14; (1994) 179 CLR 403.
3. Pizer also says[6], VCAT has held that section 109 extends to the costs of non-lawyers who are 'professional advocates' under section 62(8)(d) of the VCAT Act. These decisions mostly concern proceedings heard in VCAT's Planning and Environment List. He describes this as "a conflict in the authorities" as to whether costs may be awarded under section 109 of the VCAT Act to a professional advocate (as discussed above) who is not a lawyer.
4. However, the authorities agree that costs may only be awarded to a professional advocate. Therefore, I need only consider the "conflict" if I am satisfied Mr Sanders is a professional advocate under section 62(8)(d).
5. While respecting Mr Sanders' ability as an advocate, I have decided he is not a professional advocate as defined under section 62(8)(d).
6. Section 62 relevantly says,

(a) a person who is or has been a legal practitioner; or

(b) a person who is or has been an articled clerk or law clerk in Australia; or

(c) a person who holds a degree, diploma or other qualification in law granted or conferred in Australia; or

(d) a person who, in the opinion of the Tribunal, has had substantial experience as an advocate in proceedings of a similar nature to the proceeding before the Tribunal.

1. Section 62(h)(d) says that a person (other than a legal practitioner, articled clerk or law clerk) is only a professional advocate, as defined by the VCAT Act, if he or she has substantial experience as an advocate in proceedings of a similar nature to the proceeding before the Tribunal.
2. According to Mr Sanders' written submission:

1. he appeared as an advocate in: 1. over 30 cases in the Residential Tenancies Tribunal, in the 1980's (which pre-dated VCAT) (an estimate); 2. two cases in VCAT's Planning and Environment List on behalf of residents; and 3. six cases under the OC Act. 2. presented evidence: 1. in about ten cases in the Magistrates' Court of Victoria under the Landlord and Tenant Act 1958 and the Subdivision Act 1988; 2. as a qualified valuer (an expert) in a well known case before the Administrative Appeals Tribunal of Victoria, Planning Division; and 3. as a body corporate manager (an expert) in two cases before VCAT's Civil Claims List

1. has significant other related professional experience including; 1. acting as administrator of an owners corporation under orders of the Supreme Court of Victoria; 2. co-authoring the new chapter of the Law Handbook 2009 about owners corporations; 3. delivering two courses about owners corporations for the Real Estate Institute of Victoria; and 4. representing that institute in consultations with Consumer Affairs Victoria in the lead up to the introduction of the OC Act.
2. VCAT's jurisdiction under the OC Act began on 1 October 2008. It began hearing cases some months after that. Unless body corporate managers had relevant experience other than at VCAT very few, if any, may at this stage be able to demonstrate substantial experience in proceedings of a similar nature.
3. In my view, while Mr Sanders has much experience in the field of owners corporations, he does not have substantial experience as an advocate in proceedings of a similar nature to this proceeding.
4. "Substantial" is relevantly defined in the Shorter Oxford English Dictionary as "of ample or considerable amount, quantity or dimensions".
5. I am not satisfied that Mr Sanders experience as an advocate amounts to substantial experience as an advocate. I do not regard his experience as an expert witness and in the field of owners corporation management as experience as an advocate. An expert witness does not appear as an advocate for a party. While I am impressed by his other extensive experience, it also does not equal relevant experience as an advocate.
6. I stress that after two encounters with Mr Sanders, I have a very high regard for his ability as an advocate. His presentations were exemplary and persuasive. He also seems to be a leader in his professional.
7. It follows from what I have decided, if Mr Sanders continues to appear in proceedings under the OC Act, at some future point he can expect to be found to be a professional advocate.
8. At that point, if at a hearing he makes an application for costs on behalf of an owners corporation, the Tribunal will have to decide the application for costs. It will no doubt take into account all relevant considerations, including the considerations set out above.

[1] Mr Sanders written submission dated 15 April 2009.

[2] Eg. section 92 of the Retail Leases Act 2003 excludes the operation of section 109 with respect to certain proceedings under that Act and clause 91 of Schedule 2 of the VCAT Act says that section 109 does not apply to proceedings under the Transport Accident Commission Act 1986

[3] DC Pearce and RS Geddes, 6th Ed, 2006 Butterworths Page 126.

[4] L Willmott, S Chistensen and D Butler, 2nd Ed 2005, Oxford University Press, pg 807

[5] J. Pizer, Pizer's Annotated VCAT Act , 3rd Ed, 2007 JNL Nominees Pty Ltd, Pg 417