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Mr A Lindeman of Counsel, instructed by Bailey Timms Hansen and Rossis, Solicitors, appeared for the Applicant.

Mr T Montebello of Maddock Lonie & Chisholm, Lawyers, appeared for the Respondents.

Mr Adrian Finanzio of Counsel, by direct brief, appeared for the Responsible Authority.

1. This is an application under section 109 of the Victorian and Civil Administrative Tribunal Act 1998 for costs resulting from the need to defend both an application for enforcement order and an application for a declaration sought pursuant to the Planning and Environment Act 1987, s.149A. The applicants for costs were successful in defending the two applications made by Mr Payton.

2. On 8 December 1999, the Tribunal dismissed Mr Payton's application for enforcement order and application for declaration. It also reserved liberty to apply for costs provided any application was made within 60 days of the date of the order. On 24 January 2000, Maddock Lonie & Chisholm on behalf of the Hartelts made an application for costs. On 25 January 2000, Maddock Lonie & Chisholm advised the Tribunal:

"We have been instructed by Kingston City Council that it also requests that the Tribunal set the matter down for hearing so that the Tribunal can determine whether an order for costs should be made and if so on what basis (ie. scale or other?). Mr Finzanzio will be briefed to appear on behalf of Kingston City Council to put forward its request and submissions and Terry Montebello of our office will appear on behalf of Mr & Mrs Hartelt".

3. At the commencement of the costs hearing on 10 March 2000, Mr Finanzio appeared for the City of Kingston and advised that the Council wished to withdraw its cost application. Mr Finanzio's application for leave to withdraw was not opposed by Mr Payton. Accordingly, the Tribunal gave the City of Kingston leave to withdraw its costs application.

4. Mr Payton lives in a double storey house with a cathedral ceiling. He was required to obtain a planning permit for the construction of his dwelling, because the second storey exceeded a height of 3.5 metres, due to the cathedral ceiling design.

5. His neighbours, the Hartelts own an existing double storey flat roofed cream brick dwelling at 3 Camp Street, Chelsea (the subject land). They obtained a building permit dated 3 September 1999, to add a pitched roof to their existing two storey dwelling. That building permit also permitted the construction of internal alterations to the dwelling.

6. The Hartelts went to the Council to enquire whether they required a planning permit for their alterations. They were advised that no planning permission was necessary.

7. Before the Hartelts were able to commence construction, Mr Payton initiated an application for interim enforcement order pursuant to the Planning and Environment Act 1987, s.120, an application for enforcement order pursuant to the Planning and Environment Act 1987, s.114 and an application for declaration pursuant to s.149A seeking:

* That works to increase the height of 3 Camp Street, Chelsea do not commence unless the required planning permit is obtained.

* That in compliance with Clause 156 of the Kingston Planning Scheme, before the second storey height of 3 Camp Street, Chelsea is increased beyond 3.5 metres, a planning permit be obtained.

8. Mr Payton initiated his applications, because he saw it as anomalous that he was required to obtain planning permission for his two storey house because of his cathedral ceiling construction, whereas the Hartelts were not so required because, as the Council saw it, a conventional ceiling between the floor of the second storey and the roof did not bring the height of "the storey" in excess of 3.5 metres. At the time that Mr Payton was required to obtain his permit, he obtained the consent of the predecessor in title to 3 Camp Street, Chelsea to build his house in accordance with his plans, and had oriented his living rooms and his balcony to take advantage of the bay views to the greatest degree possible. Having notice of the Hartelts desire to add a pitched roof which would obstruct his views towards the bay, and perhaps cause heat to bounce onto his balcony and living rooms from the expansive new hipped colorbond roof, he merely wished the opportunity to address his amenity concerns, on planning merits, to the Responsible Authority and then on appeal to the Tribunal. However, the Council always maintained that the Hartelts required no planning permission pursuant to which any merits could be argued.

9. To put it simply, using Mr Lindeman's words, the three proceedings were brought "in an attempt to apply planning justice to a development which would clearly have an adverse impact to the amenity of his family home".

10. When the first application for interim enforcement order came before Deputy President Bruce, she held, inter alia:

"I do not accept the argument that the space between the upper floor ceiling and the roof, as proposed, is a "storey"; nor that there is any ambiguity about the relevant part of Clause 146-1 requiring a benevolent construction that would impose an overall height limit where the plain words provide none. I therefore do not consider that there is a serious issue to be tried .......

I regard this as a separate procedure from the s.114 application, although no doubt there will be some common material. Although under s.109 of the Victorian Civil and Administrative Tribunal Act 1998, the primary rule is that each party bears its own costs, the Tribunal retains a discretion. One of the matters it must be satisfied on, before making an order for costs in favour of one party or another, is the nature of the proceeding. Another is where the party who made the claim has no tenable basis for it in fact or law. In this case, the Respondents were proceeding with a development that they had every reason to suppose was perfectly lawful and did not need any planning permit, and has had to go to the expense and inconvenience of defending their position from the Applicant's attack. To this point, Respondent's position is justified. In fairness, the Applicant should contribute to the costs incurred by the successful Respondents. I am therefore prepared to order the Applicant to pay the Respondent's party/party costs of this application on County Court Scale D".

11. Mr Montebello for the Hartelts made it clear that his application for costs was being made pursuant to the Victorian Civil and Administrative Tribunal Act 1998, s.109(3)(c) and (e) which reads:

"(3) the Tribunal may make an order under subsection (2) only if satisfied that it is fair to do so, having regard to:

(c) the relative strength of the claims made by each of the parties........

(e) any other matter the Tribunal considers relevant".

12. Mr Montebello argued that the two influencing factors which ought to be exercised in favour of an award of costs for his clients were:

(a) on a balancing of "relative strengths" - the particular findings of Deputy President Bruce in the interim enforcement application, the final finding I made on 8 December 1999 as well as the particular facts of this case; and

(b) this was a defence of enforcement proceedings as well as declaration proceedings and therefore outside of the run-of-the-mill "planning review" cases.

13. Apropos the need for his client to defend the enforcement and declaration applications, Mr Montebello highlighted:

(i) the serious nature of an enforcement order application;

(ii) the serious consequences that flow from the making of an enforcement order which necessitates such proceedings to be carefully defended;

(iii) the intermediate delays experienced by his clients who had obtained a building permit but did not act upon it by commencing construction because of the litigation risks inherent once Mr Payton had commenced his two applications;

(iv) the legal costs incurred by the Hartelts in defending the proceeding.

14. Mr Montebello sought costs of $5,361.00 incurred by the Hartelts after the decision on the interim enforcement application handed down by Deputy President Bruce on 5 October 1999, and incurred on a solicitor/client basis, excluding the costs of his appearance on 10 March 2000. In the alternative he sought party/party costs on Scale D, being the same scale awarded by Deputy President Bruce on 5 October 1999, when she dismissed the Payton application for interim enforcement order. Scale D applies to matters over $50,000 and Mr Montebello argued that his clients' costs of alterations to their dwelling, which included adding a pitched roof, involved in the order of $100,000.

15. Mr Montebello made it clear that, in relying on s.109(3)(c) and (e), he was not arguing that Mr Payton had "made a claim that has no tenable basis in fact or law", nor that Mr Payton's application was frivolous or vexatious.

16. Mr Lindeman, for Mr Payton stressed that his client "has bought a legitimate planning grievance to this Tribunal on the interpretation of a planning control which in any view has been applied inconsistently and is in many respects illogical".

17. I agree with the prima facie principle outlined by Mr Lindeman that:

The prima facie principle is that costs are not awarded. In Re D&R Carlin Pty Ltd and Motor Car Traders Guarantee Fund Claims Committee (unreported, VCAT, Levine DP, 29 January 1999) the Tribunal observed that parties should not expect VCAT to adopt any policy or guidelines that rebuts the clear intent of s.109 and each party should start from the position that VCAT will decline to make an order as to costs unless argument convinces VCAT that the particular circumstances warrant the making of such an order. Accordingly, no party should expect that costs will necessarily follow the event. See also Re Stellridge Pty Ltd and Hand Bags International Pty Ltd [1999] VCAT RT8 (unreported, VCAT, Judge Davey, VP, 25 March 1999).

18. In Svanosio v Shire of Strathfieldsaye (1989)2AATR 26 @ 30, an enforcement order case, the Tribunal adverted to the different nature of enforcement proceedings:

"In considering the issue of costs, the Tribunal would not wish that this issue becomes a deterrent to applicants legitimately seeking the enforcement of a planning scheme, a planning permit or a section 173 agreement. However, as the Tribunal has been at pains to point out in those determinations it has made on enforcement orders, they are different in nature to a planning appeal and the making of an enforcement order carried with its serious consequences for a respondent...... Each case must be judged upon its own merits. However, in many instances, it will be reasonably apparent whether or not the activities complained of are in breach of a planning scheme, permit or agreement. Where a party has acted in a blatant or cavalier way, and has ignored proper requests and warnings, the Tribunal is more likely to make an order for costs than in a situation where there is reasonable dispute about whether or not a contravention has occurred. In these circumstances, the Tribunal would not wish the threat of an order for costs to act as a deterrent to parties or Responsible Authority's making a reasonable and legitimate application for an enforcement order".

19. This case differs from the "run-of-the-mill" enforcement applications. The "run-of-the-mill" enforcement applications usually concerns past actions which the proceedings will decide were either authorised or not authorised. This case is different. It concerns a simple building matter, that of constructing a modest pitched roof construction to an existing double storey house. The Council deals with many double storey house with pitched roof constructions in the municipality of Kingston. It advised both parties that no planning permission was necessary. Council's position was supported by Deputy President Bruce in her interim enforcement decision and by myself in the enforcement decision. Although the arguments raised and maintained by Mr Lindeman were valiantly and thoroughly put, and required detailed and thorough analysis, the facts of this particular case and the simple construction it revolved around, did not raise the same type of issues that run-of-the-mill blatant breaches of planning schemes, permits or the like raise.

20. I acknowledge that Mr Payton genuinely believed there were anomalies in the planning scheme and had a genuine argument about its application and the "double standard" which he says he has experienced. I am also conscious of the position experienced by the Hartelts, who have had to incur costs in order to defend the Payton applications and to maintain their position and Council's advice that they needed no planning permission.

21. Without revisiting my analysis of the six detailed Payton arguments, all of which I disallowed, I must say looking at the "relative strengths of the claims made by each of the parties" the Payton arguments were weak, relying on exotic legalism and absurd consequences.

22. My mandate is not to award costs in favour of a party unless I am "satisfied that it is fair to do so". I am satisfied that the Hartelts are entitled to be indemnified against the costs that they have unavoidably occurred to defend the Payton applications, on the basis of the following facts:

(i) The Hartelts have suffered costs but have not done anything more than pursue ordinary house alterations;

(ii) the Hartelts were building nothing more than an unremarkable roof, like so many other roofs in the municipality;

(iii) the Council advised Mr Payton the Hartelts did not require planning permission;

(iv) The Hartelts have been forced to defend their right to construct he roof without planning permission;

(v) The Hartelts have been forced to defend enforcement proceedings which affected them;

(vi) There was no reasonable apprehension of a breach of planning scheme;

(vii) Deputy President Bruce found that there was no "serious issue to be tried";

(viii) Notwithstanding repeated advice from the Responsible Authority and confirmed by Deputy President Bruce in this Tribunal on 5 October 1999, that no planning permission was required, Mr Payton persisted in maintaining his enforcement application.

23. I accept that a legitimate planning issue was debated by Mr Payton. But applicants for Enforcement Orders and Declarations that affect others must be considerate of the impact of their actions on other parties. The effects on the Hartelts were grave. They were subject to delay. They were subject to uncertainty. They were subject to unavoidable solicitor-client costs. They were entitled to defend any application being made concerning them. Although valiantly maintained and subjectively genuinely believed, I think the Payton arguments were weak. Because I believe Mr Payton was genuinely aggrieved by what he saw as anomalies in the planning scheme clause, I will not order him to pay the Hartelts solicitor-client costs. But I do believe that the same scale as was awarded by Deputy President Bruce should be maintained in the s.114 application as was handed down in the s.120 interim enforcement decision, rather than the Scale B debated by Mr Lindeman. Accordingly, I make an order in the terms set out above.