Princess Chloe Pty Ltd v Bellaveau Pty Ltd [2020] VCAT 106 | Case summary

What happened

Princess Chloe Pty Ltd commenced VCAT proceeding C5697/2017 claiming about $71,020 in damages, alleging misleading and deceptive conduct and related statutory claims arising from an asserted misrepresentation about the area of a small commercial office (see the Outline and Chronology). The sale involved Bellaveau Pty Ltd and Peter Markovic Pty Ltd (Markovic). After hearing, the Tribunal found that Markovic had made the misleading representation in trade or commerce, Bellaveau was not liable for that representation, and that Princess' reliance on the representation was not reasonable. The substantive claims were dismissed and costs were reserved.

Bellaveau then applied for an order for costs in respect of proceeding C5697/2017 seeking $10,000. The application relied on two avenues: first, the Tribunal’s general power to award costs under s 109(2) of the VCAT Act having regard to the factors in s 109(3); and second, the statutory presumption created by s 112 where a compliant settlement offer is rejected. Bellaveau relied on several settlement communications (including a Calderbank-style letter) and argued Princess’ claim was untenable such that costs should follow. Member L. Johnson conducted a costs hearing and dismissed Bellaveau’s application, concluding there was no basis under s 109(3) to depart from the usual rule that each party bears its own costs, and no s 112 presumption because the offers relied on did not satisfy ss 113/114 or otherwise the Tribunal’s orders were more favourable to Princess than the offers (see the Tribunal's Reasons).

Why the court decided this way

The decision is driven by two interrelated statutory frameworks in VCAT:

The default rule: s 109(1), each party bears its own costs in VCAT proceedings, subject to Division 8.
The Tribunal’s discretionary power: s 109(2), the Tribunal may award costs if it is fair, having regard to the matters in s 109(3) (which lists specific factors such as conduct creating unnecessary disadvantage, unreasonable delay, relative strengths of claims, complexity, and any other relevant matter).
The settlement-offer presumption: s 112, a specific statutory path to a presumption of entitlement to costs if a compliant written offer is rejected and the Tribunal’s orders are not more favourable to the offeree than the offer.

Member Johnson proceeded methodically:

He assessed each s 109(3) factor in turn (conduct; delay; relative strengths; nature/complexity; other relevant matters). The Tribunal found no failure to comply with orders, no deception, no vexatious conduct, no unreasonable delay attributable to Princess, and no evidence that Princess’ conduct unduly disadvantaged Bellaveau (s 109(3)(a)-(b)). Because summary dismissal applications by Bellaveau and Markovic had been dismissed earlier, the Tribunal found that Princess' claim was contested and not plainly untenable in prospect (s 109(3)(c)). The court emphasised that s 109(3)(c) must be assessed prospectively and not with the benefit of hindsight (see 'The relative strengths' discussion).
As to offers, the Tribunal observed that s 112 imposes statutory compliance requirements (notably s 114’s 14-day minimum). Several offers Bellaveau relied upon (for example the 26 February 2018 Calderbank-style offer, the 16 January 2019 offer, the 8 July 2019 offer and the 2 January 2020 offer) failed the s 114 minimum period and therefore could not engage the s 112 presumption. The one offer that did comply in period (10 March 2018) was construed by the Tribunal as not producing a final orders outcome less favourable to Princess, because ultimately no monetary orders were made for Bellaveau; the Tribunal’s orders were more favourable to Princess than that offer. Given that none of the offers met the s 112 threshold, s 112 provided no presumption entitling Bellaveau to costs.
The Tribunal also treated the Calderbank-style offer as a factor under s 109(3)(e) but concluded that the offer was made at an early stage, did not identify important information (the section 32 statement), was only open for a short period and therefore Princess’ rejection was not unreasonable.

Taken together, the Tribunal concluded the circumstances did not warrant departing from the ordinary rule that each party bear their own costs and therefore dismissed Bellaveau's application for costs.

Before and after state of the law

Before this decision, it was already established that:

VCAT follows a different default on costs from courts: costs do not automatically follow the event (s 109(1)).
The Tribunal’s discretion under s 109(2)-(3) is broad but must be exercised having regard to the enumerated factors.
Calderbank offers in court proceedings can support an award of indemnity costs if unreasonably rejected, but VCAT’s statutory regime imposes separate rules (notably s 112 and s 114).

This decision reinforces and clarifies several practical points within the VCAT context:

Strict compliance with the procedural requirements of s 112 (including the 14-day minimum under s 114) is necessary for a party to rely on the statutory presumption. Shorter offers, even if labelled Calderbank or indicating indemnity costs, will not activate s 112.
The existence of a Calderbank-style offer does not itself displace s 109(1): such offers are a factor for the Tribunal but their impact is evaluated in context (timing, content, whether the offeree had sufficient information to assess prospects, and other s 109(3) matters).
A party cannot establish an entitlement to costs merely by pointing to ultimate success; the tenability of a claim for the purposes of s 109(3)(c) must be assessed prospectively and is not proven by hindsight.

Thus the decision confirms and applies settled principles while emphasising the importance of technical compliance with VCAT’s statutory settlement-offer regime.

Key passages with plain-English translation

"The general position 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)." Translation: VCAT does not award costs automatically to winners; the usual rule is each pays their own legal expenses unless particular statutory reasons exist.
"Section 112(2) creates a presumption of entitlement to an order in favour of the offeror, in respect of any costs incurred after the date of the offer. It does not create a presumption of entitlement to an order in relation to costs in the cause generally." Translation: If a settlement offer meets s 112 conditions, the offeror may recover costs incurred after the offer date; s 112 does not automatically cover earlier costs.
"The offer did not comply with s 114 of the VCAT Act, which requires offers to be open not less than 14 days. Accordingly, the offer does not satisfy the requirements of s 112 of the VCAT Act." Translation: If a settlement offer is not left open for at least 14 days, it fails the statutory test and cannot trigger the s 112 presumption.
"I do not consider there to be any reason to depart from the general position that each side bears their own costs, on the grounds of the relative strength of the claims made by Princess." Translation: Although the Tribunal dismissed Princess' claim, that outcome alone did not prove Princess' claim was hopeless at the time it was brought; costs should not automatically follow.

Each of these passages is used by the Tribunal to explain why costs were refused and to guide future conduct around settlement offers and costs strategy in VCAT.

What fact patterns trigger this precedent

This decision is directly applicable where:

A party seeks costs in VCAT under s 109 after dismissal of substantive proceedings and relies upon settlement offers (including Calderbank-style offers) to support its claim.
Settlement offers were not open for the s 114 minimum period (14 days) and thus fail the s 112 presumption.
A party argues that the opponent’s claim had no tenable basis, relying on correspondence or earlier statements that a defence would succeed.
Offers are made at an early stage before the offeree has had an opportunity to examine key documents (for example, a section 32 statement) and the offeree declines.

Practitioners should expect this decision to be followed where the offers relied upon do not strictly meet the statutory requirements in s 112, or where the circumstances justify a prospective assessment of tenability rather than using the final outcome as proof of lack of prospect.

How later courts have treated it

As this is a VCAT Member decision from January 2020, it is an authoritative application of VCAT procedures by that Member and cites earlier VCAT and court authorities. Its treatment of s 112 compliance and the role of Calderbank offers is consistent with prior Victorian authorities that emphasise statutory compliance and the discretion under s 109. Subsequent VCAT members and practitioners should treat it as persuasive guidance on technical compliance with s 114 and the limited role of Calderbank letters in VCAT cost applications. Where parties seek to rely on offers, later courts/tribunal members will scrutinise offer periods, clarity of terms and whether the tribunal’s eventual orders were more or less favourable than the offer.

(Users should check subsequent VCAT decisions and any appellate treatment for developments after the decision date.)

Still-open questions

The precise interaction between Calderbank offers and s 112 remains practically significant. While the Tribunal treated Calderbank letters as relevant under s 109(3)(e), there remains practical uncertainty about when a Calderbank-style offer can realistically generate an award of indemnity costs within VCAT given statutory constraints. This decision indicates Calderbank letters are relevant but insufficient when s 114 is not met.
The decision emphasises prospective assessment of tenability under s 109(3)(c). There remains room for litigants to argue more strongly that particular forms of correspondence (with sufficient particularity) should convert into a costs sanction where a party was plainly on notice of inevitable failure. The line between sufficient particularity and ordinary advocacy is fact sensitive.
The application of s 112(3)(a), the Tribunal must take into account any costs it would have ordered on the date the offer was made, raises practical issues when offers cover multiple proceedings or both substantive and costs outcomes. This case illustrates the complexity when offers encompass multiple proceedings (C5697/2017 and C1738/2018), and ambiguity as to apportionment can undermine reliance on s 112.
Finally, the decision signals the need for meticulous drafting of settlement offers to ensure compliance with VCAT rules (period, clarity, specification of matters settled and monetary apportionment). The consequences of failing to meet s 114 are stark; more litigants may take steps to ensure offers are compliant, but disputes will persist where offers are ambiguous or multi-proceeding.

Practical takeaway: if seeking to rely on s 112 in VCAT, ensure strict compliance with ss 113 and 114 (notably 14-day minimum), be clear about which proceedings and costs are covered and the apportionment; if relying on a Calderbank letter, appreciate it is primarily a discretionary factor unless statutory requirements are met.

Judgment (58 paragraphs)

[1]

For the reasons provided in writing, Bellaveau Pty Ltd's claim for costs is dismissed.

[2]

On 31 January 2019, the Tribunal's Order and Reasons[1] were issued to the parties in relation to the substantive decision in proceedings C5697/2017 and C1738/2018. Each of those proceedings was dismissed, with costs reserved.
On 28 November 2019, the Tribunal's Order and Reasons[2] were issued to the parties in relation to the costs applications made by the parties in C1738/2018 and in relation to the costs application made by Princess Chloe Pty Ltd (Princess) in C5697/2017.
I conducted a further hearing into the costs application made by Bellaveau Pty Ltd (Bellaveau) in proceeding C5697/2017 on 22 January 2020.

[3]

In proceeding C5697/2017, Princess claimed some $70,000 in damages against Bellaveau and Peter Markovic Pty Ltd (Markovic) on the grounds of a misrepresentation as to the area of a small commercial office which Princess purchased from Bellaveau. Princess made its claims under sections 18 and 236 of the Australian Consumer Law 2012 (ACL); sections 12(d) and 48A of the Sale of Land Act 1962 (SLA); and section 217 of the Australian Consumer Law and Fair Trading Act 2012 (ACLFTA). I found that there had been a misrepresentation about the area of the office, but that it was not reasonable for Princess to have relied on that misrepresentation.

[4]

Bellaveau's claim for costs in proceeding C5697/2017

[5]

Bellaveau seeks $10,000 in costs. Bellaveau's application is made under ss 109 and 112 of the Victorian Civil and Administrative Tribunal Act 1998 (VCAT Act).
Princess submits that there are no grounds for departure from the general approach in VCAT proceedings of this kind that each side should bear its own costs. Princess asserts that none of the offers relied upon by Bellaveau satisfies the requirements of s 112 of the VCAT Act, and for that reason there is no presumption of an entitlement to costs under that provision.
Markovic has not claimed, or faced any claim for costs.

[6]

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

[7]

Proceeding C5697/2017 was issued by Princess on 6 September 2017, claiming $71,020 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. The misleading and deceptive conduct alleged consisted of a false representation about the area of the office suite contained in promotional material. 2. Both Bellaveau and Markovic made applications under section 75 of the VCAT Act for the proceeding to be struck out. Those applications were heard and dismissed on 29 January 2018, and costs reserved.

[8]

All parties were legally represented at a Compulsory Conference conducted on 6 February 2019. No settlement was reached.

[9]

Bellaveau initiated a Counterclaim in proceeding C1738/2018 on 6 March 2018, claiming $10,000 from Princess, as First Respondent, for humiliation and distress of its Director arising from the litigation; and costs, under an indemnity pursuant to a Special Condition of the Contract of Sale between it and Princess. Bellaveau's application in C1738/2018 was also made against Princess' lawyers, Morgan, and as a consequence, Princess was obliged to engage alternative legal representation for the proceedings. Bellaveau's application, as against Morgan, was withdrawn by consent on 7 June 2018, but by this time Princess had engaged different legal representation. 2. After hearing proceeding C5697/2017, I found that Markovic had made a misleading and deceptive representation in trade or commerce. On the evidence before me, I found that the representation was made by Markovic alone, and that Bellaveau was not liable for the representation. I found that it was not reasonable for Princess to have relied on the representation because Princess was supplied with information about the dimensions of the office suite in the form of a section 32 statement prior to settlement. I dismissed the proceeding. I dismissed proceeding C1738/2018 on the basis that the claims made were not tenable. Costs were reserved in each proceeding.

[10]

The general position 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.
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.
Bellaveau asserts that it would be fair to award costs in its favour, in the amount of $10,000, because, it says that Princess' claim in proceeding C5697/2017 was untenable in fact and law. That assertion relies on s 109(3)(c) of the VCAT Act. Bellaveau also claims an entitlement to costs through the operation of s 112 of the VCAT Act.
Although Bellaveau's application for costs primarily relies on section 109(3)(c) of the VCAT Act, I am mindful that I must consider all of the matters set out in section 109(3).[3] It is the totality of all the relevant matters set out in section 109(3) that must be considered.[4]

[11]

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

[12]

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.[5] 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[6] and, if so, whether Bellaveau was "unnecessarily disadvantaged" by that unreasonable conduct.[7]
I am satisfied that no party failed to comply with an order or direction of the Tribunal without reasonable excuse,[8] nor did any party fail to comply with the VCAT Act, the regulations or the rules.[9] There was neither a request for an adjournment, nor an adjournment, caused by such a failure.[10] There was no attempt to deceive another party or the Tribunal.[11] It was not argued before me that Princess conducted the proceeding vexatiously.[12]
Bellaveau made no submission that it was disadvantaged by the manner in which Princess conducted the proceedings. I find there is no basis, under s 109(3)(a) of the VCAT Act to depart from the general position that each party bears its own costs.

[13]

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

[14]

Section 109(3)(b) of the VCAT Act is concerned with the time between the commencement and the completion of the proceeding, and not with events that took place before the proceeding was commenced.[13] Merely putting a party to its proof does not, of itself, constitute prolonging unreasonably the time taken to complete the proceeding.[14]
The evidence before me, including the chronology set out above, does not disclose any action by Princess that prolonged unreasonably the time taken to complete the proceeding.

[15]

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))

[16]

Bellaveau relies in part on the Tribunal's finding that Bellaveau's conduct in the sale of the office suite was not in trade or commerce. Bellaveau says that Princess acknowledged, in correspondence in February 2018, that Bellaveau had put that contention to Princess. Bellaveau asserts that, having put that contention to Princess, Princess was on notice that its claim had no tenable basis in fact or law. Bellaveau says that such notification is accepted as a relevant factor in the awarding of indemnity costs. Bellaveau referred the Tribunal to comments of Justice Lindgren in NMFM Property Ltd v Citibank Ltd (No 11), where he said

[17]

No doubt ... where a party puts with sufficient particularity to the opposing party the reasons why the latter must fail yet the latter does not recognise the inevitable, this will be a factor pointing to an award for indemnity cost.[15]

[18]

By analogy, Bellaveau contends that, having placed Princess on notice, there are grounds for the Tribunal to make an award of costs in Bellaveau's favour.
I note that Justice Lindgren went on to note

[19]

The requirements of "sufficient particularity" and "inevitability of failure" are important. In their absence, it would be open to parties to put their respective cases to the opposing party urging it to recognise the merit of what is put in the hope that if it ultimately finds favour with the Court, an award of indemnity costs will follow.[16]

[20]

As I have not been provided with Bellaveau's letter to Princess, but only with Princess' letter in reply, I am unable to be satisfied that Bellaveau's correspondence met the requirements of "sufficient particularity" contemplated by Justice Lindgren. Ultimately, even though the question of whether Bellaveau was acting in trade or commerce was a matter which had to be assessed on the evidence, it was not the sole determinative issue in the proceeding.
Bellaveau also submits that, when Markovic chose not to pursue an indemnity claim against Bellaveau, Princess was effectively on notice that its claim against Bellaveau was untenable. Bellaveau makes that submission on the basis that Princess' claim against Bellaveau acknowledged that the publication of the alleged misrepresentation was made by an employee of Markovic.
I do not place great weight on the decision of Markovic not to pursue an indemnity claim against Bellaveau. Such a decision may be informed by many considerations. Princess' claim was expressed broadly, asserting that Bellaveau had either directed Markovic to make the representation, failed to require Markovic to correct the representation knowing that it was false, or, in the alternative, that Bellaveau was liable for the representation made by Markovic. Those alternative pleas reflected the fact that the claim was made under the ACL, the SLA and the ACLFTA. As it transpired, the fact that Markovic was solely responsible for the representation became apparent only after Markovic's representatives had given evidence.
Finally, Bellaveau submits that, because the Tribunal dismissed the application brought by Princess in proceeding C5697/2017, there was in effect a finding that the claim brought by Princess had no tenable basis in fact or law.
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)".[17]
Further, this question has to be considered prospectively, not with the benefit of hindsight after VCAT has made its decision.[18]
In effect, Bellaveau's argument in relation to this ground is an argument for costs to follow the event. The Tribunal dismissed the applications brought by Bellaveau and by Markovic under s 75 of the VCAT Act for summary dismissal of Princess' claims. In doing so, the Tribunal effectively determined that there was a claim that should be determined on the evidence.

[21]

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

[22]

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.

[23]

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

[24]

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".[19]
The making of a Calderbank offer is a factor which can be taken into account in determining whether to make an order for costs under section 109 of the VCAT Act. [20] Bellaveau relies on an offer made to Princess by letter emailed on 26 February 2018 to settle the proceedings on payment by Princess of $4995.00. The offer was expressed to be open until 2 March 2018, a period of 4 days. Bellaveau says that the offer was open for this short period because time was critical, as Bellaveau's defence was due to be filed the following Tuesday, 6 March 2018. The offer included a statement that it was made in accordance with the principles in Calderbank v Calderbank.[21]
The usual wording of a Calderbank offer in a Court proceeding gives a warning that, if the settlement offer is rejected, the party making the offer will seek indemnity costs if the final decision in the proceeding is not more favourable than the offer. Because costs in a Court proceeding usually follow the event and are assessed on a "standard basis", meaning that only the costs necessarily and reasonably incurred are recoverable, a Calderbank offer warns of costs on an "indemnity basis" to provide an incentive to the other party to accept the offer. In proceedings in this Tribunal there is no presumption that costs follow the event, and so the prospect of the offeree having to pay the offeror's costs on a standard basis provides that incentive.
It is well established that there is no presumption in favour of the award of indemnity costs simply because a Calderbank offer is rejected.[22] An entitlement to indemnity costs will only arise in court proceedings where such an offer has been "unreasonably rejected".[23]
I turn now to whether the offer was "unreasonably rejected". The factors relevant to determining whether rejection was unreasonable include:

[25]

the stage of the proceeding at which the offer was received; 2. the time allowed to the offeree to consider the offer;

[26]

the offeree's prospects of success, assessed as at the date of the offer; 2. the clarity with which the terms of the offer were expressed; 3. whether the offer foreshadowed an application for an indemnity costs (order) in the event of the offeree's rejecting it".[24]
The terms of the offer were clear, and the offer foreshadowed an application for indemnity costs if it was rejected. The offer was made at a relatively early stage in the proceeding. The offer set out an analysis of the offeree's prospects of success, asserting that Princess was bound to fail, but made no reference to the information contained in the section 32 statement. The offer indicated that the amount sought was approximately half of Bellaveau's costs to date.
At the time the offer was made, Bellaveau had not yet filed its defence. Princess had not had an opportunity to assess the strength of Bellaveau's case against it. In all the circumstances, I do not consider Princess acted unreasonably in rejecting the offer.
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's application for costs in that proceeding is dismissed.

[27]

Bellaveau relies on a number of offers to settle which it says were offers that complied with s 112 of the VCAT Act. Section 112 of the VCAT Act creates a presumption in favour of an award for costs if a compliant settlement offer is rejected. Section 112 states
- (1) This section applies if -
  - (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.
Section 112(2) creates a presumption of entitlement to an order in favour of the offeror, in respect of any costs incurred after the date of the offer. It does not create a presumption of entitlement to an order in relation to costs in the cause generally.

[28]

The first offer relied upon by Bellaveau is the Calderbank offer referred to above. That offer did not comply with s 114 of the VCAT Act, which requires offers to be open not less than 14 days. Accordingly, the offer does not satisfy the requirements of s 112 of the VCAT Act.

[29]

The second offer relied upon by Bellaveau was made to Princess on 10 March 2018. That offer was expressed to be open for 18 days. It therefore complied with s 114 of the VCAT Act. The offer made was that Princess pay Bellaveau $12,500 within 30 days of accepting the offer, and that, otherwise, each party should bear their own costs. That amount was said to equate to 50% of the costs incurred by Bellaveau to the date of the offer. That description was merely an explanation of the basis on which the amount had been calculated. Unlike a Calderbank offer, no assessment need be made by the Tribunal of whether the rejection of an offer made under s 112 was unreasonable. The assessment to be made by the Tribunal of an offer made under s 112 is whether it complied with ss 113 and 114 and whether the orders ultimately made by the Tribunal in the proceeding were not less favourable than the offer.
The offer was expressed to be made in settlement of both proceeding C5697/2017 and proceeding C1738/2018. In proceeding C1738/2018, which had been filed and served 4 days before the settlement offer, Bellaveau had claimed damages of $10,000. In proceeding C5697/2017 Bellaveau faced a claim of $71,020. The offer was described as seeking payment of a sum equivalent to 50% of the costs incurred by Bellaveau to the date of the offer. In that regard, the offer might be interpreted as an offer to withdraw proceeding C1738/2018 as part of the settlement, but this is not clear.
In any event, as I have noted above, the substantive proceedings were each dismissed. No monetary orders were made in favour of Bellaveau. The Tribunal's orders were therefore more favourable to Princess than the offer. Accordingly, the offer made on 10 March 2018 does not give rise to a presumption in favour of a costs order under s 112 of the VCAT Act.

[30]

The offer made on 16 February 2019 was made after the Tribunal had determined the substantive disputes, but before any costs applications had been determined. It was expressed to be made "towards settling the costs between the parties in both matters fully and finally". It was therefore an offer in respect of the costs applications in both proceeding C5697/2017 and proceeding C1738/2018.
The offer made was that Princess pay Bellaveau $17,500. The offer was expressed to be open from 16 February 2019 to 22 February 2019, a period of 6 days. The offer did not comply with s 114 of the VCAT Act which requires that offers of settlement made under s 112 of the VCAT Act to be open for a minimum of 14 days. Accordingly, the offer made on 16 February 2019 does not give rise to an entitlement to costs under s 112 of the VCAT Act.

[31]

The offer made on 8 July 2019 was also expressed to be made "towards settling the costs between the parties in both matters fully and finally". The offer was in the following terms:

[32]

"[the parties] both withdraw their claims for costs against the other in the respective matters ("drop hands basis") (sic) in full and final settlement of any related claims each as against the other in these matters."

[33]

The offer made on 8 July 2019 was expressed to be open until noon on 22 July 2019. That is a period of 13.5 days.[25] The offer did not comply with s 114 of the VCAT Act, and does not give rise to an entitlement to costs.

[34]

The offer made on 2 January 2020 was an offer that Princess pay Bellaveau the sum of $8,800 before 21 January 2020. The offer was expressed to be open until 3pm on 17 January 2020. The offer of settlement was again expressed to be an offer to settle the costs claims in the two proceedings. In those circumstances I am unable to infer whether the offer related 50:50 to each proceeding, or whether sum requested related only or primarily to proceeding C5697/2017 or to C1738/2018.
As the Tribunal's orders in C5697/2017 involved no monetary award, I am unable to conclude that the order made by the Tribunal in C5697/2017 was not more favourable than the offer made on 2 January 2020. Accordingly, the requirements of s 112 of the VCAT Act are not satisfied, and the offer made on 2 January 2020 did not give rise to a presumption of an entitlement to costs in Bellaveau's favour.
Finally, I note that Bellaveau tendered a copy of a further email dated 21 January 2020, the day before the hearing. The email expressed a number of views about the desirability of a settlement but did not contain a further settlement offer.
I find that there is no presumption of an order for costs in Bellaveau's favour arising under s 112 of the VCAT Act in respect of any of the offers relied upon by Bellaveau.

[35]

Accordingly, I dismiss Bellaveau's application for costs.

[36]

[1] [2019] VCAT 154

[37]

[2] Princess Chloe Pty Ltd v Bellaveau Pty Ltd (Costs) (Civil Claims) [2019] VCAT 1885

[38]

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

[39]

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

[40]

[5] 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].

[41]

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

[42]

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

[43]

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

[44]

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

[45]

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

[46]

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

[47]

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

[48]

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

[49]

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

[50]

[15] [2001] FCA 480 at [87].

[51]

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

[52]

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

[53]

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

[54]

[20] Kerkofs v Abdallah (Human Rights) (Costs) [2019] VCAT 753 at [37]; Williams v Monash University [2005] VCAT 958.

[55]

[21] [1995] EWCA Civ 48; (1995) 3 All ER 333.

[56]

[22] Aljade and MKIC v OCBC [2004] VSC 351, approved of in Hazeldene Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) [2005] VSCA 298 at [19].

[57]

[23] Hazeldene Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) ibid at [23]

[58]

[25] Rule 4.32 of the Victorian Civil and Administrative Tribunal Rules 2018 provides that, in calculating time in accordance with the VCAT Act, the commencement day is not included in that calculation.

Princess Chloe Pty Ltd v Bellaveau Pty Ltd

At a glance

Result

Key principles

Issues before the court

Plain English Summary

Cited legislation

Deep Dive

What happened

Why the court decided this way

Before and after state of the law

Key passages with plain-English translation

What fact patterns trigger this precedent

How later courts have treated it

Still-open questions

Judgment (58 paragraphs)

Parties

Legislation Cited (4)

Cases Cited (1)

Princess Chloe Pty Ltd v Bellaveau Pty Ltd (Costs) (No. 2) (Civil Claims) [2020] VCAT 106 (30 January 2020)

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