1. a party to a proceeding... gives another party an offer in writing to settle the proceeding; and
2. the other party does not accept the offer within the time the offer is open; and

1. the offer complies with sections 113 and 114; and

1. 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 -

1. must take into account any costs it would have ordered on the date the offer was made; and
2. must disregard any interest or costs it ordered in respect of any period after the date the offer was received.

1. The offer complies with the requirements of sections 112-114. Accordingly, the first question for determination is whether I am of the opinion that the orders made in the proceeding are not more favourable to the respondent than the offer. The amount of the offer ($40,000 plus costs on the standard basis on the County Court scale) will certainly be more favourable than the amount ordered ($79,153.67) if I were to order costs under s109 on top of the $79,153.67. On the other hand, if I were to determine that each party should bear their own costs until the date of the offer, in accordance with s109(1), I would not be able to assess whether the offer was more or less favourable, as I am not aware of the amount of costs incurred by the applicant prior to 1 November 2019.

Costs under s109

1. Having said that, I am satisfied that the Tribunal would have ordered costs as at the date of the offer, pursuant to s109(2). Section 109 provides relevantly:

s.109:

(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.

1. As emphasised by the Supreme Court in the matter of Vero Insurance Limited v Gombac Group Pty Ltd[2], the Tribunal should approach the question of entitlement to costs on a step-by-step basis:

(i) The prima facie rule is that each party should bear their own costs of the proceeding.

(ii) 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.

(iii) In determining whether it is fair to do so, that is, to award costs, the Tribunal must have regard to the matters stated in s.109(3). The Tribunal must have regard to the specified matters in determining the question, and by reason of (e) the Tribunal may also take into account any other matter that it considers relevant to the question.

1. I am particularly persuaded by the factors in ss(3)(a)(vi), (b), (c), (d) and (e) and discuss each of these in turn.

The nature of the proceeding - s109(3)(d)

1. As for the nature of the proceeding (per ss(3)(d)), I am satisfied that while the dispute was a domestic building dispute within the meaning of the Domestic Building Contracts Act 1995, in reality it was in the nature of a commercial dispute between two corporate entities.
2. Of course, the mere fact that the proceeding was a commercial inter-partes dispute does not support the conclusion that there is some rule of practice that costs will routinely be awarded in a domestic building proceeding and it would be improper to simply award costs to the winning party, merely because the proceeding was a commercial inter-partes dispute.[3]
3. However in this case, both parties conducted their business as if this were a commercial building project, with their original disputes being referred to adjudication under the Building and Construction Industry Security of Payment Act 2002 ('the SOPA'). Subsequent proceedings were then issued and concluded in the County Court and the Magistrates Court, where costs routinely follow the event.
4. The proceeding before this Tribunal involved four outstanding issues, following two years of inter-partes commercial litigation under the SOPA and in the courts. The evidence of each witness established that both companies were in the business of building large scale developments and that each was able to address the risks and profits. Each party had as much bargaining power as the other. For example, when the works were delayed, the parties met and renegotiated the terms of the contract and the delay clauses, which benefited the respondent (by reducing the amount of delay damages payable) and benefited the applicant (by having the respondent carry out further work at a reduced cost).[4]
5. Further, the relationship between the parties and the various proceedings were conducted in adversarial manner. For example, Mr Gulenc for the respondent admitted that he had held on the applicant's overpayment, to "let them hang for a little while and wait before we have to return the money".[5]

1. I am satisfied that the proceeding was complex. This was conceded by the respondent. It involved a number of factual complexities and legal arguments, including the nature of the works, the interpretation of the contract and the variations, an assessment of the evidence about delays, an understanding of the litigation prior to this proceeding (including the adjudicator's determination and other court orders), and a consideration of the law relating to estoppel.
2. It was necessary and reasonable for each party to engage solicitors and Counsel to advise and represent them in this proceeding. The Tribunal was assisted by the experienced and skilled legal representation to present the evidence and address the various factual and legal arguments, including preparing pleadings, witness statements, the Tribunal Book, applications to amend the pleadings, written submissions and submissions in reply.

Relative strengths of the parties' claims - s109(3)(c)

1. The applicant relies on the Tribunal's finding that it was entitled to all its claims against the respondent in full without any set off, and the rejection of all the various defences run by the respondent, in support of a conclusion that the applicant's claims were strong and the respondent's defences were weak, untenable and hopeless. The applicant sets out examples from the Reasons in its submissions.
2. The respondent submits that although the Tribunal found that respondent's case was weak, it should not infer that its defence was untenable in fact or law. While the Tribunal found the respondent's witnesses lacked credibility, and that the Anshun estoppel defence was "superficial", this does not give rise to an inference that the defences were untenable in fact or law. Further, while the Tribunal rejected the respondent's other defences, it was not critical of them. The respondent sets out examples from the Reasons in its submissions.

1. As set out in the Reasons, I found that the applicant was entitled to payment of the full amount of its claim and that the respondent's defences failed completely. I was satisfied that the respondent's defences and set off had little merit.[6] To adopt the wording of ss(3)(c), I am satisfied that the respondent's defences and its claims for set off largely had no tenable basis in fact and law.
2. That is clearly a relevant and persuasive factor in considering fairness under ss(2). In Samaras v Housing Guarantee Fund,[7] Senior Member Young observed:

... I consider in cases where it is an inter-partes commercial dispute the most significant criteria under sub- section 109(3) is the relative strengths of the cases; whereby, if one party's position is clearly upheld by the Tribunal's decision the relative strength of its claim is much greater than that of the losing party. Therefore, under the criteria of subsection 109(3) the successful party can have a reasonable expectation that its party/party costs would be met by the losing party.

Straightline was responsible for prolonging unreasonably the time taken to complete the proceeding - s109(3)(b)

1. The applicant submits that the respondent unreasonably prolonged the time taken to complete the proceeding by making allegations without any justification of substantiation, by pleading defences without any merit, by amending its defences and evidence during the conduct of the hearing to raise new allegations and claims which had no merit, and by failing to resolve or abandon its defences which had no merit or proofs to substantiate them or contradict the applicant's claims.
2. On the other hand, the respondent contends that it was the applicant which prolonged the proceeding, by making an application on the first day of trial for the member to recuse herself (thus losing one day of trial) and then by making an application to substantially amend its Points of Claim on the second day of trial, despite the proceeding having been on foot for many months.

1. I am not satisfied that the respondent unreasonably prolonged the time taken to complete the proceeding. Although its defences and counterclaim were not accepted, the proceeding and the hearing itself were not delayed by the respondent acting unreasonably. The interlocutory steps do not appear to have been any more frequent or complex than is usual in similar proceedings. Moreover, both parties sought indulgences during the hearing to file amended pleadings and evidence late.

Vexatiously conducting the proceeding - s109(3)(a)(vi)

1. The applicant submits that I should infer from the respondent's conduct that its defence of this proceeding was to place commercial pressure on the applicant so as to cause it to incur substantial costs and either settle the proceeding at a discount or abandon its claims in part or wholly. It relied on conduct which it said included the failure to return the overpayment (which was conceded by Mr Gulenc to be childish behaviour), the two applications it made for summary dismissal of the applicant's claims, the commencing and abandoning of an application for leave to appeal in the Supreme Court, and the failure to comply with orders to make complete and proper discovery.
2. Further, the applicant contended that "it is apparent from the Reasons and from the manner in which the respondent conducted its defence that it made allegations without any proper proofs and it ran untenable defences which relied upon unsatisfactory and untrustworthy evidence from its witnesses".
3. In response, the respondent disputes that it conducted the proceeding in a vexatious manner. It disputes the facts alleged by the applicant, and says that it only brought one application for summary dismissal, not two, and brought no other interlocutory applications. A single interlocutory application cannot support an inference that the respondent's objective was to use the proceeding as a device to place commercial pressure on the applicant.
4. Further, the applicant has not pointed to any other failures by the respondent to comply with orders or directions of the Tribunal, or causing any adjournments as a result of any failures to comply.
5. Second, the applicant was also deficient in making complete and proper discovery. As both parties failed to discover photographs tendered during the hearing, that failure should not be given any weight when exercising the discretion as to costs.
6. Third, while the Tribunal made adverse credibility findings in relation to the respondent's witnesses, such findings are common in litigation where there are inconsistent testimonies and do not amount to vexatious conduct.
7. Fourth, the conduct of the respondent in the Magistrates Court proceeding is not relevant to the Tribunal's discretion under s109(2). That discretion is limited to the parties' conduct in this proceeding.

1. A proceeding is conducted in a vexatious way "if it is conducted in a way productive of serious and unjustified trouble or harassment, or if there is conduct which is seriously and unfairly burdensome, prejudicial or damaging".[8]
2. The reference to "vexatiously conducting the proceeding" in subsection (3)(a)(vi) is concerned with the manner in which the proceeding was conducted, not with whether the proceeding itself was vexatious.[9]
3. In Risi Pty Ltd v Pin Oak Holdings Pty Ltd,[10] Senior Member Riegler (as he then was) discussed the meaning of "vexatious" in the context of s92 of the Retail Leases Act which is similar in its terms to s109. He referred to Cabot v City of Keilor[11], where Gobbo J referred to the test for vexatiousness expressed by Roden J in Attorney-General (Vic) v Wentworth[12] at 491:

"It seems then that litigation may properly be regarded as vexatious for the present purposes on either objective or subjective grounds. I believe that the test be expressed in the following terms:

1. proceedings are vexatious if they are instituted with the intention of annoying or embarrassing the person against who they are brought;

2. they are vexatious if they are brought for collateral purposes, and not for the purpose of having a Court adjudicate on the issues to which they give rise;

3. they are also properly to be regarded as vexatious if, irrespective of the motive of the litigant, they are so obviously untenable or manifestly groundless as to be utterly hopeless".

1. Having considered the submissions of both parties, and the relevant authorities, I am not satisfied that the respondent's conduct in this proceeding has been vexatious. While its defences and evidence were weak relative to the applicant's claims, I do not agree it was patently untenable or unconscionable or so obviously untenable or manifestly groundless as to be utterly hopeless.
2. Further, there is no evidence before me that the proceeding was defended for a collateral purpose or that the defence was an abuse of process. I disagree with the respondent's contention that I cannot take into account its conduct in the Magistrates Court proceeding, because that conduct (withholding the repayment of the overpayment) was directly relevant to matters that had to be decided in this proceeding.[13] Nevertheless, that conduct alone does not make the majority of this proceeding vexatiously defended.

1. Weighing up the considerations discussed above, I am satisfied that the Tribunal would have considered it fair to depart from the presumption that each party bear their own costs, and would have awarded costs to the applicant as at 1 November 2019, under s109(2) of the Act. While I am not satisfied that the respondent's conduct was vexatious or that it unreasonably prolonged the proceeding, I am satisfied that based on the relative strengths of the parties' claims and the nature and complexity of the proceedings, it is fair that costs be ordered.
2. As a result, I am satisfied that the offer of compromise served on 1 November 2019 was less favourable to the respondent than the order made on 30 November 2020. Under s112(2) this leads to a presumption that the applicant is entitled to their costs from that date onwards.
3. The respondent contends that the presumption in s112 should not apply as it was not unreasonable for the respondent to reject the offer when it did. At the time the offer was made, the claim was for $57,185 plus interest and costs. The offer was for $40,000 plus costs. It was not until the second day of trial that the claim was increased to $79,153 plus interest and costs. Accordingly, when the respondent rejected the offer, it understood the offer as representing around 70% of the claim. Had it been made at the time of the subsequently amended claim, it may well have accepted it, as the offer would have represented about 50% of the claim.
4. I do not accept that contention. I consider that even if the claim had not been amended, the offer of settlement was reasonably made and should have been accepted. It discounted the claim by approximately 30%. It forewent the claim for interest. It limited the costs to those incurred prior to the hearing. Accordingly, I am satisfied there is no reason to depart from the presumption in s112(2).
5. By reason of my findings discussed above that costs should be awarded by reason of s109(2) and (3) prior to 1 November 2019, and my finding that costs should be awarded from then by reason of s112(2), I am satisfied that the applicant is also entitled to their costs of the proceeding.

1. The usual order for costs in the Tribunal is for them to be assessed on the County Court scale on the standard basis,[14] although of course the Tribunal retains the discretion to determine how costs are to be assessed.

1. The applicant submits that costs should be ordered on an indemnity basis. They rely on the following factors and authorities to say this is a matter where such an order would be appropriate.
2. The respondent, properly advised, should have known that he had no chance of success, leading to a conclusion that it must be presumed that the respondent continued the proceeding "for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law".[15]
3. The Tribunal should be satisfied that the respondent's evidence and the conduct of its defence had elements of culpability or mala fides.
4. Full indemnity costs are "typically awarded where the conduct of the respondent is seen to be particularly vexatious, cavalier or bloody-minded". [16]
5. The applicant contends that each of the factors referred to in the Supreme Court decision of Balmford J in Scholl Nicholson Pty Ltd v Chapman (No 2)[17] arise here. They include:

1. the applicant had to commence proceedings because the respondent refused to pay its claims for damages as a result of the respondent's wrongful conduct; 2. the respondent conducted its defence vexatiously;

1. the respondent ran unmeritorious defences based on baseless allegations without proper proofs. The allegations should never have been made, alternatively withdrawn. They were untenable in fact and law and disregarded the known facts and documentary evidence; examples provided above;

1. the respondent's witnesses gave inconsistent evidence changing their evidence at the hearing. Their evidence was contradicted by contemporaneous documents and was inaccurate. Their evidence lacked credibility and was untrustworthy. On all critical issues, none of their evidence was accepted or preferred; 2. it rejected a generous offer to settle the proceeding. In Arapoglou tas Tech-Line Homes v Shkolyar,[18] Senior Member Riegler observed that indemnity costs could be awarded "where a party is shown to have acted vexatiously or there are other special or unusual features in the case to justify the Tribunal exercising its discretion in that way." One such factor relevant to the order for solicitor/client costs was the rejection of the offer to settle; 3. the respondent's conduct of the proceedings was analogous to its conduct of the Magistrates Court proceedings. Additionally, orders for discovery and calls for documents were ignored.
2. The applicant contends that this case is similar to Mardel Constructions Pty Ltd v Sinha,[19] where Senior Member Walker awarded indemnity costs against the respondent because the litigation was provoked by the wholly unreasonable conduct of the respondent during the course of the construction works and after the disputes first arose, the proceeding was lengthened by the manner in which the respondent's witnesses gave evidence, the respondent's case was untenable and it must have been known to them to be untenable, and the case was based upon false evidence.
3. In response, the respondent submits that there is nothing contained in or arising from the Tribunal's reasons to support a submission that the respondent was "particularly vexatious, cavalier or bloody-minded", that it commenced the proceeding for an "ulterior motive" or wilfully disregarded known facts or the clearly established law. They contend that the proceeding, and its conduct, was entirely unexceptional, for the following reasons:[20]

1. there is nothing that may be inferred from the Tribunal's decision to suggest that the respondent, at the time of commencement of the proceeding, believed its conduct was wrongful and nevertheless commenced proceedings; 2. the respondent did not conduct its defence vexatiously for the reasons discussed above;

1. the Tribunal did not find the respondent's defence to be untenable in fact or law;

1. the Tribunal did not make a finding that the respondent's witnesses were untrustworthy. It did make adverse credibility findings, but such findings are common where there are contested versions of fact; 2. it was not unreasonable to reject the offer, for the reasons discussed above; 3. there is no basis in evidence or on the Tribunal's reasons to assert that the respondent's conduct was similar to its conduct in the Magistrates Court proceeding. Importantly, in relation to the respondent's defence to the $22,000 variation claim, the Tribunal was very careful not to make a finding that the respondent knowingly withheld payment, finding that the "likely explanation" was that the respondent misunderstood the claim; 4. and the submission as to the respondent's failure to make discovery must be seen in light of the applicant's own failure to make discovery.

1. The occasions on which the Tribunal has awarded costs on a full indemnity basis indicate that this is a "most unusual award" that is made only in "exceptional circumstances", it should be exercised only in the "rarest of circumstances" and where the conduct of a party "has been so extreme as to be quite vexatious or bloody-minded".[21]
2. In Pacific Indemnity Underwriting Agency Pty Ltd v Maclaw No. 651 Pty Ltd & Anor_[22]_ Ormiston JA held at 33:

"It should further be noted that under s.111 of the Act, if the Tribunal makes a costs order, then the Tribunal "may fix the amount of costs itself or order that costs be assessed or settled by the principal registrar". Unlike the rules applicable in the Supreme Court and other courts the Act contains no provision whereby scales of costs are or can be laid down, so that the quantum is clearly left to the Tribunal's discretion. For present purposes what is significant is that there is no suggestion that such an order for costs would ordinarily be by way of full indemnity in proceedings such as the present, or indeed, would be other than in accordance with the usual practice that costs are awarded on a party- party basis, unless a specific reason exists for giving a greater right to costs."

"Of course there may be occasions when it is appropriate to award costs in favour of a successful claimant in Domestic Building List proceedings on an indemnity basis. But those occasions will be exceptional and, broadly speaking, circumscribed by the same criteria as govern the award of indemnity costs pursuant to Rule 63.28(c) of the Supreme Court (General Civil Procedure) Rules 1996."

1. In 24 Hour Fitness Pty Ltd v W & B Investment Group Pty Ltd[23] the Court of Appeal made the following observations about the making of "special costs orders":

"Ordinarily, where costs are awarded they are awarded on a standard basis. However, in some circumstances, it is appropriate to make a special costs order. In Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189 ('Ugly Tribe'), Harper J identified the following circumstances as warranting a special costs order, noting that the categories of circumstances are not closed:

1. the making of an allegation, known to be false, that the opposite party is guilty of fraud;

b. the making of an irrelevant allegation of fraud;

1. conduct which causes loss of time to the court and to other parties;

1. the commencement or continuation of proceedings for an ulterior motive;
2. conduct which amounts to a contempt of court;
3. the commencement or continuation of proceedings in wilful disregard of known facts or clearly established law; and
4. the failure until after the commencement of the trial, and without explanation, to discover documents, the timely discovery of which would have considerably shortened, and very possibly avoided, the trial."

1. The grounds relied on by the applicant for indemnity costs fall particularly within subparagraphs (c), (d) and (f) above. These circumstances were described more fully in Munday v Bowman,[24] where Holden CJ gave examples of circumstances which would warrant the ordering of indemnity costs, which included where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts.
2. In the present case, I am not prepared to make that presumption. While I have found that the respondent's position was very weak compared with the applicant's, it would be a step too far to presume the action was defended for some ulterior motive or because of some wilful disregard of the known facts or law.
3. Similarly, although I did not accept the evidence of the respondent's witnesses, I am not prepared to say that the defence had no chance of success, such that it falls within one of the categories set out in Ugly Tribe above. The respondent produced lengthy witness statements from several witnesses and tendered a significant number of documents. The unconvincing nature of the evidence was only apparent following the cross-examination of each witness.
4. In respect of the submission that the rejection of the offer should lead to indemnity costs, I do not accept that proposition. As I said in Waddell v JG King Project Management Pty Ltd:[25]

When offers are used in the courts, the starting point for costs there is that the unsuccessful party should pay the costs of the successful party on a standard basis. The public policy position that Calderbank offers should attract some greater benefit, means that costs on a higher scale should be ordered if the offer is wrongly rejected. Since the amendment to the Supreme Court costs rules in 2014, this now means costs on an indemnity basis. However, the so-called starting point in the Tribunal is that each party should bear its own cost of a proceeding. One step up from that (i.e. the greater benefit) is an order that the unsuccessful party should pay costs on a standard basis.

1. This view was expressed by Deputy President Lulham in Stalteri v Traralgon Contractors Pty Ltd as follows:[26]

In Court proceedings where costs follow the event, the usual basis for assessing costs is the standard basis, previously called the party/party basis. So to give the offeree an incentive to accept the offer in a Court proceeding, it is appropriate for the offeror to say it will seek indemnity costs. However in the Tribunal, s.109 (1) of the VCAT Act makes clear that there is no presumption that costs follow the event, and so the incentive for an offeree to accept a Calderbank offer can be the offeree's exposure to an award of costs. The incentive is not that the offeree's exposure might increase from standard to indemnity costs, because the starting point in the absence of the offer would be that the parties would bear their own costs.

1. Accordingly, I will order that the respondent must pay the applicant's costs of the proceeding, the sum of such costs if not agreed to be assessed by the Victorian Costs Court on the standard basis pursuant to the County Court scale.
2. The applicant has asked me to certify counsel's fees for the hearing. I agree to certify Counsel's daily rate of $4,250 including GST. This is significantly less than the County Court scale of costs and I consider it reasonable given the nature and complexity of the proceedings and the seniority and experience of Counsel engaged by the applicant.

1. As the applicant has been substantially successful in their claim, they are entitled under sections 115B and 115C of the Act to an order that they be reimbursed by the respondent the fees paid.

1. The applicant also seeks an order for interest calculated at the penalty interest rate, pursuant to s.53(2) and (3) of the Domestic Building Contracts Act 1995. The respondent submits that it would not be fair for the Tribunal to order the payment of damages in the nature of interest, or if it does so, then interest should be payable only on the amount claimed prior to amendment on the second day of trial, being the claim for damages in the sum of $57,185.67.
2. The applicant relies on the comments of SM Walker in Hummel Homes Pty Ltd v Mitchell, citing Quinlan v. Sinclair[27] where he observed:

10. ... There is no guidance in the Act as to the circumstances in which such damages should be awarded, apart from s.53(1) which indicates that it must be "fair" to do so_._

1. ... Before awarding damages in the nature of interest the Tribunal should satisfy itself that it is appropriate as a matter of law to do so in order to compensate the other party, wholly or partly, for loss and damage suffered as a result of the offending party's breach of the contract. Damages in the nature of interest are damages suffered because the successful party has been deprived of the use of the money but whether an award of such damages is "fair" must be determined in each case.
2. In Khan v Kimitsis trading as Quest Building_[28]_ SM Walker held as follows:

Interest is awarded to compensate the aggrieved party for having been deprived of the amount awarded from the date that it should have been paid until the date of judgement.

1. Gillard J in Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (No.3)[29] described the main objectives of interest as follows:

There are three main objectives of the award of interest. First, as compensation to the judgement creditor for being out of the funds from the date of commencement of the proceeding until judgement; secondly, to deter judgement debtors from delaying proceedings and thereby having the use of the money for a longer period; and finally, to encourage defendants to make realistic assessments of their liability in a case and to take bona fide steps to compromise the claim.

1. Following the comments of Gillard J, I am satisfied that it is fair to award interest on the judgment sum. I do not accept the respondent's submission that interest should only be allowed on the original claim amount. The applicant was "out of funds" in the amount of $79,153.67 even if it did not realise that was the amount until the hearing commenced. Even if the applicant was mistaken about the amount it was deprived of, this does not provide the respondent with an excuse for failing to pay either the amount originally claimed or any other sum. Had the respondent made a bona fide attempt to settle the claim by paying the originally claimed amount, they may have had a stronger argument to avoid interest. However they did not.
2. Further, I have had regard to the rationale for awarding interest in proceedings under the Supreme Court Act 1986 (now s60 in a proceeding for debt or damages). In Braeside Bearings Pty Ltd v HJ Brignell & Assocs (Boronia)[30], Callaway J explained the development of the sections of the relevant sections of the Supreme Court Act 1986.
3. His Honour noted that the Law Reform Committee members originally recommended that a section should be added to the Supreme Court Act 1986 conferring jurisdiction "to award interest for the period from the commencement of proceedings until the entry of judgement". The committee originally suggested that by "the commencement of proceedings" they meant "the date of service or dispensation with service on the party to pay interest, or the date of appearance by him, whichever first happens, or, in the case of interest on a claim introduced by amendment, the date of amendment" (emphasis added).
4. However, that suggestion was not accepted by the drafters of the Act, and the final version refers only to the date of issue of the writ:

s.60(1) The Court, on application in any proceeding for the recovery of debt or damages, must, unless good cause is shown to the contrary, give damages in the nature of interest at such rate not exceeding the rate for the time being fixed under section 2 of the Penalty Interest Rates Act 1983 as it thinks fit from the commencement of the proceeding to the date of the judgment over and above the debt or damages awarded.

1. Obviously an award for interest under the Domestic Building Contracts Act 1995 is not the same as an award for interest under the Supreme Court Act 1986. However as s53 of the Domestic Building Contracts Act does not give any guidance about how it is to be implemented, other than that I must consider it "fair", I see no reason to depart from the analysis and consideration that has been given to this question by various esteemed law reform committees and the Parliament.
2. I allow interest in the nature of damages at the penalty interest rate on $79,153.67 from the commencement of the proceeding to the date of judgment, being 30 November 2020, at $21.6637 per day, being $19,367.38.[31]

[1] Platinum Construction (Vic) Pty Ltd v Straightline Contractors Pty Ltd [2020] VCAT 1339

[2] [2007] VSC 117 at [20]

[3] Yan v Brown Bros Cabinet Works Pty Ltd (No2) [2014] VCAT 177

[6] For example see paragraphs 29-38, 50-52, 61, 68, 70, 73-81, 89-95, 99-101, 108-110 of the Reasons

[7] [2001] VCAT 661

[8] Victoria v Bradto Pty Ltd [2006] VCAT 1813 at [67], which was cited with approval in 24 Hour Fitness Pty Ltd v W & B Investment Group Pty Ltd [2015] VSCA 216 at [4]; Wharington v Vero Insurance Ltd [2007] VCAT 124 at [11]

[9] For example, Straw v Proctor [2004] VCAT 464 at [16]; 1IQ Pty Ltd v Delaney Associates Pty Ltd [2011] VCAT 2056 at [24]

[10] [2017] VCAT 95 at [31]

[11] [1994] VicRp 14; [1994] 1 VR 220

[12] (1988) 14 NSWLR 481

[14] Victorian Civil and Administrative Tribunal Rules 2018 r.1.017 and V_elardo v Andonov_ [2010] 24 VR; [2010] VSCA 38 at [47] which held that "all costs" would ordinarily mean party-party (now standard) costs, but that it would be open to the Tribunal in an appropriate case to award costs on a more favourable basis.

[15] Fountain Selected Meats (Sale) Pty Ltd v International Produce Merchant Pty Ltd [1988] FCA 202; (1988) 81 ALR 397 at 400 - 1

[16] Southern Grampians SC v Superior Selection Pty Ltd [2020] VCAT 1208; Milankovic v Binyun Pty Ltd & Ors [2010] VCAT 538 at [26]

[17] [2001] VSC 462

[18] [2012] VCAT 46 at [15]

[19] [2009] VCAT 1532

[20] Respondent's submission paragraph 38

[21] See the summary of decisions at paragraph [VCAT.111.80] of Pizer's Annotated VCAT Act, 6th edition

[22] [2005] VSCA 165

[23] [2015] VSCA 216 at [9]

[25] [2019] VCAT 435 at [28]

[26] [2016] VCAT 838 at [93]

[27] [2019] VCAT 1960 and [2006] VCAT 1063

[28] [2009] VCAT 912

[29] [2003] VSC 244 at [60]

[30] [1996] VSC 348; [1996] 1 VR 17

[31] The calculation is contained in exhibit SC2 to the affidavit of Stefan Andrew Chelper affirmed 29 January 2021.