1. Princess seeks its costs in defending Bellaveau's application in C1738/2018, and in proceeding C5697/2017, its costs in defending an application brought by Bellaveau under section 75 of the Victorian Civil and Administrative Tribunal Act 1998 (VCAT Act), which was dismissed.
2. Bellaveau submits that no orders as to costs should be made against it. Bellaveau asserts that it was obliged to commence proceeding C1738/2018 because Princess did not send copies of the documents on which it intended to rely in support of its claim in C5697/2017, within 28 days of filing its application, as required by paragraph 10 of Practice Note PNCCL 1.
3. Markovic does not claim, or face any claim for costs.

1. Before turning to the submissions, it is appropriate to set out a brief chronology of the proceedings:

1. Proceeding C5697/2017 was issued by Princess on 6 September 2017. Princess attached Points of Claim to its application. Princess claimed $71,020.00 in damages, for loss and damages resulting from misleading and deceptive conduct by Bellaveau and Markovic in connection with the sale of an office suite located in Kew. At the time, Princess was represented by Morgan Legal Pty Ltd. 2. Directions for the conduct of the proceeding were made on 13 November 2017. These set out timelines for filing and serving Points of Claim and Points of Defence, and experts reports. The directions included a timeline by which Bellaveau or Markovic might file and serve an application under section 75 of the VCAT Act. The proceeding was listed for Compulsory Conference on 6 February 2018.

1. On 24 November 2017 Bellaveau filed and served an application under section 75 of the VCAT Act seeking to have the proceeding struck out. The strike out application was listed to be heard on 29 January 2018.

1. On 25 January 2018 Markovic filed an application under section 75 of the VCAT Act, also seeking to have the proceeding struck out. 2. Both applications under section 75 of the VCAT Act were dismissed at the hearing on 29 January 2018. Costs were reserved. Orders were made extending the time for filing experts reports, and the Compulsory Conference listed for 6 February 2019 was confirmed. The proceeding, and any counterclaim, were to be listed for hearing on 19 April 2018. 3. All parties were legally represented at a Compulsory Conference conducted on 6 February 2019. No settlement was reached. 4. Bellaveau initiated a Counterclaim in proceeding C1738/2018 on 6 March 2018. Bellaveau claimed $10,000 from Princess, as First Respondent, for humiliation and distress of its Director. Bellaveau also claimed costs, under an indemnity pursuant to a Special Condition of the Contract of Sale between it and Princess, for its costs in defending Princess' application, and in conducting its own proceedings. 5. Bellaveau's application in C1738/2018 was also made against Princess' lawyers, Morgan. The claim made against Morgan was that it had engaged in misleading or deceptive conduct. Morgan was also acting for Princess in proceeding C5697/2017. The action by Bellaveau against Morgan meant that Princess was obliged to engage alternative legal representation for the proceedings. 6. Bellaveau's application, as against Morgan, was withdrawn by consent on 7 June 2018, but by this time Princess had engaged different legal representation. 7. The proceeding was listed for hearing on 19 April 2019. There was a further day's hearing on 9 October 2019, following which written submissions were filed by the parties. 8. After considering the evidence, and written submissions, I made orders dismissing both proceedings. Costs were reserved in each proceeding.

1. The general rule in proceedings in the Tribunal is that, subject to Division 8 of the VCAT Act, each party bears their own costs: see section 109(1). That is, in proceedings before VCAT, costs do not follow the event.
2. The Tribunal is empowered to award costs under section 109(2) of the VCAT Act, only if it is satisfied that it is fair to do so, having regard to the criteria set out in section 109(3). Those matters include the nature and complexity of the proceeding, the relative strengths of the claims made by the parties, and the way in which the proceeding was conducted.
3. Princess asserts that it would be fair to award costs in its favour because it says Bellaveau's conduct in making an application under s 75 of the VCAT Act, and in making the counterclaim in proceeding C1738/2019, was vexatious, contrary to s 109(3)(vi) of the VCAT Act.
4. Although Princess' application for costs primarily relies on section 109(3)(a)(vi) of the VCAT Act, I am mindful that I must consider all of the matters set out in section 109(3).[2] It is the totality of all the relevant matters set out in section 109(3) that must be considered, in the context of the prima facie rule.[3]
5. I will now consider each of the matters in section 109(3) in turn.[4]

Did Bellaveau conduct the proceeding in a way that unnecessarily disadvantaged Princess? (s109(3)(a))

1. Section 109(3)(a) of the VCAT Act sets out six examples of conduct that may create unnecessary disadvantage for a party. That list of examples is not exhaustive.[6] Further, the tests to be applied in relation to the factors set out in s 109(3)(a) of the VCAT Act are twofold. I must consider both whether there was unreasonable conduct[7] and, if so, whether Princess was "unnecessarily disadvantaged" by that unreasonable conduct.[8]
2. I am satisfied that no party failed to comply with an order or direction of the Tribunal without reasonable excuse,[9] nor did any party fail to comply with the Act, the regulations or the rules.[10] There was neither a request for an adjournment, nor an adjournment caused by such a failure.[11] There was no attempt to deceive another party or the Tribunal.[12]
3. Princess asserts that it was disadvantaged by the manner in which Bellaveau conducted the proceedings, on two grounds. First by the fact that Bellaveau made a claim directly against Morgan, thereby necessitating Princess engaging alternative legal representation. Second, by bringing the application made under s 75 of the VCAT Act, which was dismissed.
4. The proceeding against Morgan was withdrawn by consent. As a consequence, the Tribunal has not heard and determined the merits of the application against Morgan. In the absence of a determination of the merits of the claim, I am unable to form a view about whether Bellaveau's conduct in commencing action against the lawyers representing Princess was "unreasonable conduct" of the kind falling within s 109(3)(a) of the VCAT Act.
5. Even if I had found that Bellaveau conducted the proceeding unreasonably by making a claim directly against Morgan, any disadvantage suffered by Princess was not suffered unnecessarily, because Bellaveau was merely seeking to exercise its right to bring a proceeding in this Tribunal.

1. Princess asserts that the application brought by Bellaveau under s 75 of the VCAT Act amounted to vexatiously conducting the proceedings as contemplated by s 109(3)(a)(vi) of the VCAT Act.
2. The criterion set out in section 109(3)(a)(vi) is "whether a party has conducted the proceeding in a way that unnecessarily disadvantaged another party to the proceeding by conduct such as ...(vi) vexatiously conducting the proceedings."
3. Princess referred the Tribunal to the observations in Yarra CC v Kubic Pty Ltd,[13] where it was said, in relation to section 109(3)(a)(vi), that "various kinds of improper motive may invoke this ground or an intention to embarrass/annoy, as well as a claim that was obviously untenable or manifestly groundless." I note that, in that case, the Tribunal also observed that the ground in section 109(3)(a)(vi) "is a difficult ground to substantiate".[14]
4. I note that it has been said that "pressing on with a hopeless case could be separately regarded for the purposes of a costs application as vexatiously conducting a proceeding"[15] .
5. The assessment to be made is not whether it was vexatious to conduct the proceedings.[16] The issue is whether a party has been unnecessarily disadvantaged by the manner in which the proceedings were conducted. The two elements must be considered: whether there was unnecessary disadvantage to a party; and whether that disadvantage was as a result of conducting the proceedings in a vexatious manner.
6. Proceedings will be said to have been conducted in a vexatious manner where they are "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".[17]
7. The application made by Bellaveau for proceeding C5697/2017 to be struck out pursuant to section 75 of the VCAT Act asserted that Princess' application was misconceived, lacking in substance and without a proper basis.
8. Section 75(1) of the VCAT Act provides that VCAT may dismiss or strike out all or part of a claim that is frivolous, misconceived, lacking in substance or otherwise an abuse of process.
9. The contentions put forward in support of Bellaveau's application were, in summary, that Princess had not proved it had suffered any loss, that Princess had an opportunity to check the measurements of the property prior to settlement, and that the valuation relied on by Princess was "unsuitable", because it did not comply with VCAT Practice Note PNVCAT 2.
10. It is well established that the power to dismiss or strike out a proceeding, or a part of a proceeding, summarily should be exercised only where it is obvious that the proceeding cannot possibly succeed or where it is obvious that the proceeding is an abuse of process for other reasons. Otherwise an applicant is entitled to have the case fully heard and adjudicated upon at a final hearing. It must be very clear indeed that the proceeding is absolutely hopeless or so clearly untenable that it cannot possibly succeed.[18] It is a high threshold that must be met before VCAT can summarily dismiss or strike out all or part of a proceeding.[19]
11. As a result, it is well settled that VCAT should not order summary dismissal in circumstances where the outcome of the case might depend on findings of fact based on contested evidence.[20] These authorities mean that, in determining an application under section 75 of the VCAT Act, the Tribunal is required to take the case at its highest, that is, the Tribunal must assume that the applicant will be able to prove each of the facts contended in its application.
12. Section 75 of the VCAT Act establishes a high bar for summary dismissal or strike out. An application brought by a respondent under s 75, which is made on the grounds that the applicant could not prove their case is, necessarily, doomed to fail. And this was the case with the s 75 application brought by Bellaveau.
13. However, although Bellaveau did not succeed in its s 75 application, an unsuccessful application under s 75 does not, of itself, amount to conducting proceedings vexatiously. I do not consider, in this case, that the material before me supports a finding that Bellaveau conducted the proceeding vexatiously.

Was Bellaveau responsible for prolonging unreasonably the time taken to complete the proceeding? S109(3)(b)

1. Section 109(3)(b) of the VCAT Act is concerned with the time between the commencement and the completion of the proceeding, and not to matters that took place before the proceeding was commenced.[21]
2. Merely putting a party to prove its claim does not, of itself, constitute prolonging unreasonably the time taken to complete the proceeding.[22]
3. Whether Bellaveau brought an application under s 75 of the VCAT Act, or made an interlocutory application for discovery based on the lack of material supporting Princess' claim, the impact on the time taken to complete the proceeding would have been much the same. In any event, the s 75 application had no impact on the time taken to complete the proceeding, as it was able to be heard and determined without interfering with the timing of the compulsory conference.
4. Princess does not allege, and the chronology does not disclose, any other action by Bellaveau that prolonged unreasonably the time taken to complete the s 75 application.

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 in law. (s109(3)(c))

1. It is long established in this Tribunal that the fact that one party was successful "does not automatically mean that the strength of the claim of the other party was so weak as to attract the operation of s109(3)(c)".[23]
2. Further, this question has to be considered prospectively, not with the benefit of hindsight after VCAT has made its decision.[24]

The nature and complexity of the proceeding (s109(3)(d))

1. I am satisfied that nature of each of the claims brought by each party and their complexity were such as to have warranted each engaging legal representation for the proceedings.

Any other matter the Tribunal considers relevant (s109(3)(e))

1. It has been long recognised that the discretion given to the Tribunal by s 109(3)(e) of the VCAT Act is "a broad one".[25]
2. In this proceeding, I consider the following further matters to be relevant to the question of costs in this proceeding.
3. As I said in my decision in [2019] VCAT 154, Princess was provided with a copy of the section 32 statement prior to making its final offer on the property. The section 32 statement included a copy of the Plan of Subdivision, which contained sufficient detail to determine that the office area was approximately 38.4m2. The contract of sale included the usual clause providing that the purchaser acknowledges and declares that it has purchased the property as a result of its own inspection and inquiry, such inquiry necessarily including inspection of the section 32 Statement and its attachments.
4. Bellaveau's strike out application asserted that Princess had an opportunity to satisfy itself of the measurements of the office suite, and that Princess had not proved it had suffered a loss. Although the s 75 application was dismissed because it relied on matters which had to be the subject of evidence and proof, nevertheless, the arguments put forward by Bellaveau in the s 75 proceeding put Princess on notice about deficiencies in its claim. Ultimately, I determined that Princess could not rely on the representations about the area of the office, because of the information contained in the s 32 statement, and I determined that Princess had not suffered any loss.
5. Having regard to the factors in section 109(3) discussed above, I am satisfied that the circumstances do not warrant departure from the general rule that each party bear their own costs in the proceeding. Bellaveau did not conduct the s 75 application in a way that unnecessarily disadvantaged Princess. The proceeding was not unreasonably prolonged by Bellaveau's conduct of the s 75 application. While Bellaveau's s 75 application was not successful, the arguments Bellaveau put served to put Princess on notice of potential deficiencies in its claim.
6. I am of the view that, in relation to the s 75 application brought by Bellaveau, it would not be fair to depart from the general rule that each party bear its own costs.

1. Princess has applied for a costs order in its favour in proceeding C1738/2017. The grounds for that application are that both claims made by Bellaveau in that proceeding were dismissed as misconceived.
2. Princess asserts that Bellaveau's conduct was "vexatious" within the meaning of section 109(3)(a)(vi). As I have set out above, s 109(3)(a)(vi) is concerned with the manner in which proceedings are conducted.
3. Again, I must consider all of the matters set out in s 109(3) of the VCAT Act. I am satisfied that there was no failure to comply with an order or direction of the Tribunal without reasonable excuse, and no failure to comply with the Act, the regulations or the rules. There was neither a request for an adjournment, nor an adjournment caused, and no attempt to deceive another party or the Tribunal.
4. The claims made by Bellaveau were, ultimately, dismissed because they were misconceived. Was it unreasonable for Bellaveau to bring its claims? I consider that it was, however, costs do not follow the event. The question is, did that conduct unnecessarily disadvantage Princess?
5. Bellaveau, in its costs submissions, submits that Princess did not file a separate defence in proceeding C1738/2018. Instead, it sought to adopt the defence that had been filed by Morgan before discontinuance of the proceeding against it. Bellaveau says Princess therefore incurred little or no cost in preparing for the hearing in proceeding C1738/2018.
6. I note that comparatively little time was spent, in the hearing, on the claims by Bellaveau. The greater part of both hearing time, and submissions, was concerned with the claim brought by Princess. I am unable to conclude, in the context that Princess was already running its own proceeding, that Princess was unnecessarily disadvantaged by the claim brought by Bellaveau.
7. Bellaveau makes no claim for costs in either proceeding. It submits that the Tribunal should make orders, consistently with the general rule in s 109 of the VCAT Act, that each party should bear its own costs. Bellaveau submits that, in proceeding C1738/2018, none of the factors set out in s 109(3) of the VCAT Act have been satisfied. I agree.
8. In substance, Princess' applications for costs are really asserting that costs should follow the event. It is not open to the Tribunal to award costs on that basis.
9. For the reasons set out above I am not satisfied that it would be fair, in proceeding C1738/2018, to depart from the general rule in VCAT, that each side bear its own costs.

[1] [2019] VCAT 154.

[2] Fitzgerald v Holiday Concepts management lt [2008] VCAT 573 at [18].

[3] Vero Insurance Ltd v Gombac Group Pty Ltd [2007] VSC 117 at [22].

[4] Of course, it is well established that it would be "most unlikely" that all of the factors set out in section 109(3) would be relevant in any particular case, and that the weight to be attributed to particular considerations (where they are relevant) will vary from case to case.5

[6] Sharp v The Cononical Administrators of St Monica's College Ltd [2003] VCAT 42; Brown v Morning Peninsula SC [2004] VCAT 1140; Arrow International Australia Ltd v Indevelco Pty Ltd [2007] VCAT 811 at [18].

[7] Tower Rise Apartments Pty Ltd v Manningham CC [2003] VCAT 1431 at [15].

[8] Falconbridge Pty Ltd v Yarra CC [2005] VCAT 2449 at [18].

[9] Section 109(3)(a)(i) of the VCAT Act.

[10] Section 109(3)(a)(ii) of the VCAT Act.

[11] Sections 109(3)(a)(iii) and (iv) of the VCAT Act.

[12] Section 109(3)(a)(v) of the VCAT Act.

[13] [2013] VCAT 80 at [15].

[15] Clifford Hallam Healthcare Pty Ltd v Price [2010] VCAT 117 at [35].

[16] The reference to "vexatiously conducting the proceeding" in section 109(3)(a)(vi) is concerned with the manner in which the proceeding was conducted, not with whether the proceeding itself was vexatious; see: Straw v Proctor [2004] VCAT 464.

[17] 24 Hour Fitness Pty Ltd v W&B Investments Group Pty Ltd [2015 VSCA 216 at [4], citing with approval Victoria v Bradto Pty Ltd [2006] VCAT 1813 at [67]. See also Oceanic Sea Line Special Shipping Co v Fay [1988] HCA 32; (1988) 165 CLR 197 at 247, where Deane J said that "'vexatious' should be understood as meaning productive of serious and unjustified trouble and harassment".

[18] Forrester v AIM Corporation [2004] VSC 506.

[19] Towie v Victoria [2008] VSC 177 at [9].

[20] Campagnolo v Benalla and District Football League Inc [2009] VSC 228 at [41].

[21] Colac-Otway SC v Tenth Cemalux Pty Ltd [2003] VCAT 280 at [54].

[22] Sherwood v Sherwood (No 3) [2014] VCAT 1037 at [18].

[23] Kafetanis v Bookmakers & Bookmakers' Clerks Registration Committee [2008] VCAT 577 at [23]; Fasham Johnson Pty Ltd v Ware [2004] VCAT 1708 at [12].

[24] Cooper v Boroondara CC [2001] VCAT 2429 at [31]; Sixty-Fifth Eternity Pty Ltd v Boroondara CC [2010] VCAT 310 at [7].

[25]Kafetanis v Bookmakers & Bookmakers' Clerks Registration Committee [2008] VCAT 577 at [23].