//
© 2026 Zoe. All rights reserved.
Zoe is a legal information platform. Always consult the Federal Register of Legislation for authoritative text.
[2003] VCAT 447
procedural. Raschilla was ordered to pay GMAC’s costs from 15 October 2002, including the costs of the costs application, on a party/party basis at County Court Scale A; absent agreement, the Principal...
Raschilla lost his application to reopen a credit contract, but that did not automatically mean he had to pay all of GMAC's costs. VCAT considered the protective purpose of the Code and the risk that a broad costs rule might discourage debtors from bringing claims. It nevertheless concluded that, after mediation failed and documents had been exchanged, Raschilla should reasonably have recognised that his case was unlikely to succeed. It therefore ordered costs only from 15 October 2002, at the lowest County Court scale and on a party/party basis.
AI-generated legal information, not legal advice. Zoe can make mistakes. Check the cited source, and for advice about your situation consult a qualified Australian lawyer.
2,065 words · generated 29/09/2026
This is a costs decision by Deputy President C McKenzie of the Victorian Civil and Administrative Tribunal, dated 17 February 2003. The substantive dispute concerned Stefano Raschilla's application under ss 70 and 71 of the Consumer Credit (Victoria) Code to reopen a transaction. He alleged that the resulting credit contract was unjust and sought relief (para 2).
1 cited instrument linked from this judgment.
On 14 November 2002, the Tribunal dismissed that application and reserved GMAC's costs (para 3). GMAC then applied for costs. It sought solicitor/client costs, or alternatively party/party costs on County Court Scale B (para 4). Raschilla opposed the application. Among other things, he alleged that GMAC had acted unreasonably in the proceeding, asserted that its witnesses had given perjured evidence, raised the related Magistrates' Court matter and his claimed inability to pay, disputed the contract, and said his former solicitors had commenced the VCAT proceeding without authority (paras 7-8).
The order was narrower than GMAC's request. Raschilla was ordered to pay GMAC's costs only for the period commencing 15 October 2002, including the costs of GMAC's costs application. The costs were limited to a party/party basis on County Court Scale A. If the parties did not agree the amount, the Principal Registrar was to settle or assess it (order; paras 1, 24-26).
The reasons do not determine the substantive credit dispute afresh. They address the costs question after the application had been dismissed. The Tribunal expressly said the costs application was not an occasion to revisit the evidence and findings made at the hearing (para 17).
The Tribunal treated s 109 of the Victorian Civil and Administrative Tribunal Act 1998 as the governing costs provision. Its summary was that parties ordinarily bear their own costs unless the Tribunal considers it fair to order otherwise after considering the factors listed in the section (para 5). The factors it identified included the relative strengths of the parties' claims, whether a claim had no tenable basis in law or fact, the nature and complexity of the proceeding, and any other relevant factor (para 6).
A central consideration was the character of the Code. The Tribunal described it as providing protections for debtors, mortgagors and guarantors, including protections relating to disclosure, hardship, civil penalties, compensation, and relief where the circumstances at contract formation made the contract unjust (paras 9-10). It said those protections were not absolute. It nevertheless characterised the Code as more social and remedial than commercial in nature (para 12).
That character mattered to the costs discretion. The Tribunal observed that a debtor seeking one of the Code's protections would almost invariably be in default under the credit contract. If costs automatically followed the result, a debtor who lost could face both the underlying debt and the credit provider's costs. In the Tribunal's view, a blanket rule of that kind could deter debtors from accessing the Tribunal and would not promote the Code's scheme (para 11). The decision therefore does not treat dismissal of a claim as, by itself, determinative of costs.
The Tribunal also assessed the parties' conduct and the substantive strength of their positions. It rejected Raschilla's complaint that GMAC had conducted the proceeding unreasonably. The procedure had involved document exchange, evidence from Raschilla and GMAC's witnesses, and questioning by each side. The Tribunal allowed Raschilla, who was unrepresented, time to read additional documents GMAC handed up at the hearing (paras 15-16). It described his allegation that GMAC's witnesses had perjured themselves as unsubstantiated and inconsistent with the Tribunal's findings (para 17).
The Tribunal did not accept that the related Magistrates' Court proceeding or the asserted inability to pay should affect the costs decision before it. It noted that there was no evidence of inability to pay. It said that issue might become relevant in a later enforcement context if proceedings were taken to enforce the costs order and an instalment question arose (para 18). It also found no evidence that Raschilla's VCAT application had been commenced without authority, noting his own participation in it (para 19).
The Tribunal considered Raschilla's claim weak and GMAC's strong, both in the evidence and in the application of the s 70 factors (para 20). But it did not treat Raschilla's reliance on irrelevant material as a reason to order costs. That material had not substantially prolonged the hearing, and he was a layperson trying to present his account and rely on the Tribunal to determine how the Code applied (para 21). The Tribunal also recognised that the Code's reopening provisions were complex and difficult for a layperson to address comprehensively, while noting that alleging a credit provider entered an unjust contract was a serious allegation that should not be made lightly (para 22).
The balancing led to a limited order. The Tribunal was satisfied that the application was genuine, though without proper foundation (para 23). It fixed the costs period from the point when the mediator reported that mediation had been unsuccessful. It said it did not want costs to discourage parties from attempting mediation (para 24). It then concluded that, particularly after the parties had exchanged documents, Raschilla ought reasonably to have realised his case would fail and should not have proceeded to a hearing. Given the nature of the Code, however, the Tribunal rejected solicitor/client costs and selected the lowest County Court scale, Scale A (para 25).
The decision's account of the applicable framework is limited to its summary of s 109 and the factors it considered. It states that the ordinary position is that parties bear their own costs, subject to the Tribunal's power to make a different order if it considers that fair after considering the statutory factors (paras 5-6). The judgment does not reproduce the full text of s 109, so this analysis should not be treated as a substitute for checking the section itself.
For proceedings under the Code, the Tribunal emphasised that the statutory protections have a remedial and social character and that costs can affect practical access to those protections (paras 9-12). It also noted that a person need only assert that the Code applies to begin proceedings, after which the credit provider must prove otherwise if it disputes the Code's application (para 12). These are descriptions of the Code's scheme in this judgment, not a complete account of its operation.
The decision does not announce a general rule that unsuccessful debtors should avoid costs, or that costs must begin only after mediation. Rather, it records a discretionary result reached by balancing the considerations in this particular proceeding. Its own reasoning cautions against automatic costs-follow-the-event treatment in this category, but it also recognises that an applicant's weak case and the point at which it should reasonably have been recognised as such can support a costs order (paras 11, 20, 24-25).
The supplied judgment contains no information about a change in the law after this decision. It therefore does not establish a before-and-after account of later statutory amendments or subsequent doctrine. Its contribution, on the text provided, is its explanation of how this Tribunal applied the s 109 discretion to a dismissed application under the Code.
At paragraph 5, the Tribunal says: “Parties must bear their own costs unless the Tribunal considers it fair to order otherwise after considering a number of listed factors.” In plain English, losing did not automatically make Raschilla liable for GMAC's costs. The Tribunal had to assess fairness under the statutory framework.
At paragraph 11, the Tribunal warned that an automatic rule requiring debtors to pay costs whenever they lost could deter access to the Tribunal. In plain English, the Tribunal considered the financial pressure that a costs order could add to a debtor who was already in default. This concern weighed against treating every dismissed Code application in the same way.
At paragraph 22, the Tribunal described the reopening provisions as “somewhat complex” and “hard for a layperson to address comprehensively”. It also said an allegation that a credit provider entered an unjust contract “should not be made lightly”. The passage expresses both sides of the Tribunal's assessment: it recognised the difficulty a self-represented debtor might face, but also the seriousness of the allegation.
At paragraph 23, the Tribunal said Raschilla's application was “genuinely made, albeit that I found it to be without proper foundation.” In plain English, the Tribunal did not consider the application insincere, but it still considered it unsupported on the merits.
At paragraph 24, it limited costs to the period from the unsuccessful mediation because it did not want a costs order to discourage mediation. At paragraph 25, it explained that the later point at which the documents had been exchanged altered the assessment: Raschilla ought reasonably to have realised his case would fail. The resulting order reflects both ideas, protecting the opportunity to attempt resolution while allowing costs for continuing to the hearing after that point.
The decision is most directly relevant to costs applications following a debtor's unsuccessful application under the Consumer Credit (Victoria) Code to reopen a transaction alleged to be unjust. The Tribunal's reasoning specifically concerns a proceeding of that kind and the risk that costs might deter debtors from using the Code's protections (paras 9-13).
The fact pattern also includes a self-represented applicant, a genuinely made but unsuccessful claim, a Tribunal assessment that the respondent's case was substantially stronger, and a point after document exchange when the applicant ought reasonably to have recognised that the claim would fail (paras 20-25). The Tribunal's decision to order costs only after mediation failed depended on those circumstances, as well as its desire not to discourage mediation (para 24).
The judgment does not establish that the same costs period or scale must apply in other proceedings. Nor does it say that every self-represented applicant, every unsuccessful Code claim, or every matter involving mediation should receive the same treatment. It illustrates a balancing approach under the costs provision described by the Tribunal. Whether another case is materially similar would depend on its statutory setting, evidence, conduct, procedural history, and the specific costs application.
The supplied judgment includes no discussion of later cases, and no later judicial treatment can be established from its text. It cites no other decisions in the reasons reproduced here. Accordingly, this source alone cannot show whether later courts or tribunals followed, distinguished, applied, or criticised Raschilla.
The decision does state its own reasoning and outcome: a discretionary costs order was made from the date associated with the unsuccessful mediation, at Scale A and on a party/party basis. It should not be represented, on the material provided, as a later-court rule or as a principle subsequently adopted across Australian jurisdictions.
The reasons do not reproduce the full text of s 109 or set out each statutory factor in full. The judgment's summary identifies relative strength, tenability, nature and complexity, and other relevant matters, but a complete account of the section would require the statutory text, which is not included here (paras 5-6).
The judgment also does not explain in detail why 15 October 2002 was the relevant date beyond linking the costs period to the mediator's report that mediation was unsuccessful (para 24; order). It does not provide the date on which the parties exchanged documents, the precise contents of those documents, or the full basis on which the underlying application was dismissed. Those limits make it difficult to identify precisely what information changed the assessment of the claim.
The Tribunal says the Code's reopening provisions were complex and difficult for a layperson to address, but it does not specify which aspects were especially difficult in this case (para 22). It also does not explain how it would weigh inability to pay if evidence of that inability had been presented. Instead, it says inability to pay was not before it on evidence and might become relevant in a later enforcement proceeding (para 18).
Finally, the decision does not disclose later treatment, subsequent statutory changes, or the amount of costs ultimately assessed. Those matters cannot be resolved from the judgment provided.
This is general legal information, not legal advice. Zoe can make mistakes. Before acting on this, relying on it, or using any draft, have a qualified Australian lawyer check it.
Consumer Credit - Costs applied for where Application to re-open transaction dismissed - Relevant principles -Victorian Civil and Administrative Tribunal Act s109
Medium Neutral Citation [2003] VCAT 447
Pursuant to section 109 of the Victorian Civil and Administrative Tribunal Act 1998 this Tribunal orders-
1. That the Applicant must pay the Respondent's costs in this proceeding in respect of the period commencing on and from 15 October 2002 (including the costs of the Respondent's application for costs). Those costs are on a party/party basis on Scale 'A' of the County Court Scale. In default of agreement they are to be settled or assessed by the Principal Registrar. They are to be paid on or before an agreed date, or, in default of agreement, on or before a date fixed by the Principal Registrar.
[1] I am now in a position to hand down this decision as to costs. My decision is that Mr Raschilla will pay GMAC's costs but only in respect of a very limited part of the application which GMAC has made. The costs which he has to pay will be costs in respect of this proceeding commencing from the period 15 October 2002 onwards and only on a party/party basis and only on Scale 'A' of the County Court Scale. In default of agreement the costs are to be assessed by the Principal Registrar.
[2] I now briefly give my reasons. Mr Raschilla applied to this Tribunal for orders under ss.70 and 71 of the Consumer Credit (Victoria) Code ("the Code") to reopen the transaction which he alleged had resulted in a credit contract which was unjust and for the granting of various forms of relief to him.
[3] On 14 November 2002 I dismissed his application and reserved the Respondent's, that is GMAC's costs. GMAC has now applied for those costs. The parties have made written submission on the application.
[4] GMAC asks first for its costs on the solicitor/client basis and in the alternative asks for its costs on Scale 'B' of the County Court Scale on a party/party basis.
[5] The provision of the Victorian Civil and Administrative Tribunal Act ("the VCAT Act") which relates to the Tribunal's power to order costs and applies to this proceeding is s.109. Its effect is this. Parties must bear their own costs unless the Tribunal considers it fair to order otherwise after considering a number of listed factors. Those factors are set out in s.109(3).
[6] They include the relative strengths of the party's claims, including whether a party has made a claim that has no tenable basis in law or fact, the nature and complexity of the proceeding and any other factor that the Tribunal considers relevant. (See s.109(3)(c) to (e).)
(A) Mr Raschilla's case had no tenable basis, in fact or law. The Tribunal preferred the evidence of GMAC's witnesses to Mr Raschilla's evidence on all material questions of fact. It considered all the factors which, under s.70 of the Code, is required to consider and found against Mr Raschilla on each of them. GMAC has been put to the expense of defending a claim which had no proper foundation.
(B) It was unreasonable of Mr Raschilla to institute and pursue this proceeding in circumstances where the Tribunal found that at the time he entered into the relevant transaction, he failed to disclose to GMAC important information concerning his illness and other debts. This conduct was unreasonable given that an important basis for his claim was that GMAC knew or ought to have known of his illness and of his inability to pay the loan in respect to the contract which he entered into.
(C) Mr Raschilla's conduct at the proceeding was unreasonable in that he relied to a great extent on material irrelevant to the factors which the Tribunal is required to consider under s.70 of the Code.
[8] Mr Raschilla opposes GMAC's application for these reasons.
(A) GMAC's conduct of the proceeding was unreasonable. It produced documents at the hearing which had not previously been served on Mr Raschilla. GMAC did not provide Mr Raschilla, before the hearing, with a list of the names of the witnesses it was going to call at the hearing.
(C) These costs applications should not be determined until the finalisation of the related proceeding in the Magistrates' Court by GMAC against Mr Raschilla.
(D) Mr Raschilla's only income is a disability pension. He could not pay any costs ordered against him.
(E) There is no valid contract under which Mr Raschilla has a liability to GMAC.
(F) Mr Raschilla's solicitors brought this case to VCAT without his knowledge or authority.
[9] In deciding whether or not to award costs, I must balance a number of factors. The first relates to the nature of the proceeding. This is an application by a debtor to re-open a transaction and set aside a credit contract as unjust. It is made under the Code, the scheme of which is to provide various protections to mortgagors, debtors and guarantors to whom the Code applies. These protections are not absolute.
[10] They relate to the disclosure by credit providers of important contract related information, relief of debtors from hardship, civil penalties and compensation to debtors for breaches of the Code by credit providers and relief to debtors where the circumstances existing when the credit contract was entered into make that contract unjust.
[11] Almost invariably when a debtor seeks to rely on one of these protections and comes to this Tribunal, the debtor will be in default under the relevant credit contract. To make any blanket rule that costs will automatically follow the event in an application such as this one, would in my view, deter debtors accessing the Tribunal for fear that if they lost their financial position would become worse because they would then have to pay not only their debt but the credit provider's costs. This would not promote the scheme of the Code.
[12] From the credit provider's point of view, matters related to credit contracts are commercial matters but the nature of the protections provided by the Code make it, in my view, legislation more of a social and remedial nature than of a commercial nature. Indeed the Code includes provisions designed to make it easier for a debtor, mortgagor or guarantor to commence proceedings under the Code. A debtor, mortgagor or guarantor does not have to prove that the Code applies before beginning such proceedings. He or she need only assert that it does and then the onus is on the credit provider if the credit provider says that it does not apply to prove that this is a case.
[13] I should also add that from a debtor's point of view the Code deals only with transactions of a personal, domestic or household nature and not with transactions of a commercial nature.
[14] The second set of factors relates to the conduct of this proceeding.
[15] In my view GMAC has not conducted the proceeding unreasonably as Mr Raschilla argued. The Tribunal adopted a simple method for the conduct of the proceeding. It directed the parties to exchange documents before the hearing but did not require them to prepare witness statements.
[16] At the hearing Mr Raschilla gave evidence and then the witnesses for GMAC gave evidence. Each side asked questions of the witnesses of the other side. Each party was allowed to hand to the Tribunal and relied upon additional documents at the hearing. The additional documents were not lengthy but since Mr Raschilla was unrepresented at the hearing, I allowed him an adjournment to read the additional documents which GMAC handed up.
[17] In my view Mr Raschilla's unsubstantiated allegations that GMAC's witnesses perjured themselves is unreasonable conduct and is totally inconsistent with the Tribunal's finding. This application for costs is not the time to revisit the evidence and findings made at the hearing.
[18] Third, I do not accept Mr Raschilla's submissions that I should take into account the state of the Magistrates' Court proceeding against him or that he may be unable to pay costs which the Tribunal might order against him. These are matters irrelevant to this costs application. His inability to pay costs was not the subject of evidence before me. That inability may become relevant if Mr Raschilla does not pay the costs which I have ordered and if GMAC then takes proceedings to enforce the Tribunal's order in the Magistrates' Court and then if a question arises as to any instalment orders that might be made.
[19] I also do not accept Mr Raschilla's submissions that this proceeding was commenced without his authority. There is no evidence that this was so and indeed his participation in this proceeding is an indication to the contrary.
[20] Fourth, I take into account that it became apparent at the hearing that Mr Raschilla's claim was very weak and GMAC's very strong, both from the point of view of supporting evidence and when the various factors under s.70 of the Code came to be considered.
[21] Fifth, I do not regard Mr Raschilla's reliance on irrelevant material as a reason to justify a costs order against him. That reliance did not, to any substantial extent, prolong the hearing. Mr Raschilla appeared without legal representation. He did what he could which was to tell his story in the way he could and to rely on the Tribunal to decide how the Code might apply.
[22] The re-opening of a transaction provisions in the Code are somewhat complex and in my view hard for a layperson to address comprehensively. However, they represent a very serious allegation against a credit provider. The allegation is that the credit provider entered into a contract which was unjust when it was entered into. Such an allegation should not be made lightly.
[23] Sixth, I am satisfied that Mr Raschilla's application was genuinely made, albeit that I found it to be without proper foundation.
[24] After balancing all the factors I have mentioned, I conclude that it is fair that Mr Raschilla should pay GMAC's cost but only from the date when the mediator to whom the Tribunal referred this matter, reported that the mediation was unsuccessful. I do not wish any order for costs to have the effect of discouraging parties from attempting to mediate a matter of this kind.
[25] In my view, particularly once the parties had exchanged documents before hearing, Mr Raschilla ought reasonably to have realised that his case would fail and should not have proceeded with it to hearing. Taking into account the nature of the Code, it is my view that solicitor/client costs should not be ordered. The costs should be on a party/party basis and should be on the lowest of all the County Court Scales, namely Scale 'A'.
[26] In default of agreement the bill of costs should be settled or assessed by the Tribunal's Principal Registrar.
Raschilla
General Motors Acceptance Corporation [2003] VCAT 447
Raschilla was ordered to pay GMAC’s costs from 15 October 2002, including the costs of the costs application, on a party/party basis at County Court Scale A; absent agreement, the Principal Registrar was to settle or assess them.