With respect to the costs claim lodged by Whittlesea City Council in relation to this matter P3066/2005, the Tribunal's costs ruling is as follows:

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With respect to the Second Respondent, Mr Thomas James Harper, the Tribunal costs ruling is that Mr Harper should pay 20% of the total costs claimed by Council on a party/party basis, being the figure of $5430. Mr Harper must pay this $5,430 to Whittlesea City Council within 60 days of the date of these Orders; and

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In relation to the First Respondent, Jeffrey Graham Reading, the Tribunal's cost ruling is that Mr Reading must pay 80% of the total costs claimed by Council, on a solicitor client basis, being the total of $32,590. This figure of $32,590 must be paid by Mr Reading to Whittlesea City Council within 60 days of the date of these Orders.

1 To avoid duplication, I refer to my numerous previous decisions and directions in this matter, which date right back to the hearing of this matter on 1 March 2006 and my original orders dated 17 March 2006.

2 Suffice to say that this matter involves an Enforcement Order Application taken out by Council in relation to what was then alleged illegal dumping of materials and refuse on the land at 20-34 Mahoneys Road, Thomastown (which is accessed via an adjoining site at 27 Pelmet Crescent, Thomastown).

3 With respect to the findings in my original decision of 17 March 2006, in overview I found that Council had made out its case that illegal dumping had occurred, but I required that further procedural steps be carried out by Mr Reading prior to my making final orders. In particular, Mr Reading was required to carry out a preliminary environmental audit of the site, with a view to assisting the Tribunal to understand the extent of the illegal dumping of materials, which in turn would assist the Tribunal make fair and reasonable final orders regarding the clean up of the site.

4 In terms of the final outcome, what actually transpired was a very complicated and messy period between 17 March 2006 and my final orders (other than on the question of costs) dated 24 October 2006. In these final orders, I required (on a joint and severable basis) that Jeffrey Reading and SPI Powernet Pty Ltd carry out a clean up of the subject land, in a manner consistent with the requirements of the EPA Clean Up Notice that had by that stage been served on SPI Powernet Pty Ltd. I also made some more straightforward orders in relation to the Second Respondent, Thomas Harper and the Fourth Respondent, Ms Remeeus.

5 With respect to the question of costs, Council had indicated from an early stage that it would be claiming its costs against Mr Harper and Mr Reading if it were successful in this matter. At the final stages of the matter, Council also claimed some of its costs against SPI Powernet Pty Ltd.

6 In terms of the more detailed aspects of the costs claimed by Council, see the Maddocks costs submission dated 10 November 2006. In summary, this submission indicated that Council was claiming its costs against SPI Powernet Pty Ltd in relation to the period after 1 March 2006, on the basis that Council believed that SPI unnecessarily delayed and obstructed the enforcement application from that date onwards. In relation to any costs order with respect to Mr Harper and Mr Reading, Council claimed its full costs and also relied on previous costs submissions that it had made. The Maddocks costs submission also discusses some relevant case law.

7 The Tribunal later received a costs submission from SPI Powernet Pty Ltd which had been prepared and forwarded by Mallesons Stephen Jaques Solicitors under cover of their letter of 6 December 2006. This costs submission from Mallesons provided details as to why SPI Powernet Pty Ltd claimed it would be inappropriate, unfair and excessive for any costs order to be made against it.

8 The next step was that I then issued some "Directions/Further Orders" dated 18 December 2006. In this document, I ruled that the costs claim by Council against SPI Powernet Pty Ltd was refused, for the reasons set out in the following pages of that document. However, I also clarified that, notwithstanding any mistaken comments to the contrary in my earlier Directions of 24 November 2006, I recognised that Council was also maintaining its full costs claim against Mr Reading and Mr Harper. I confirmed that I would be dealing with same, after I have given Mr Harper and Mr Reading a final opportunity to make written submissions to me, in terms of their arguments why no costs claim should be made against them.

9 Having given Mr Reading and Mr Harper this opportunity, I then received undercover of a letter from Mr Harper dated 19 January 2007 the following documents:

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written submissions on behalf of Mr Harper why no costs order should be made; and

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virtually identical written submissions from Mr Reading why no costs orders should be made against him.

10 In summary, to my knowledge the only remaining task for the Tribunal in this whole matter is now to make a final cost determination in relation to Mr Harper and Mr Reading, with respect to the total costs of $40,743.50 claimed by Council.

11 To clarify where I have sourced this $40,743.50 costs figure from, the annexure set out at the back of the Maddocks submission dated 10 November 2006 is a spreadsheet setting out a "Costs Summary", in terms of the various costs which Maddocks have billed to Council over the period September 2005-September 2006. Although the summary provides a month by month breakdown of the costs, the important point for the purposes here is that the total amount of the costs billed to Council over this period is $40,743.50.

Section 109 of the Victorian Civil and Administrative Tribunal Act 1998

12 The relevant statutory provision for dealing with costs claims is s.109 of the VCAT 1998. I have set out this provision below.

(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 sub-section (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.

(4) If the Tribunal considers that the representative of a party, rather than the party, is responsible for conduct described in sub-section (3)(a) or (b), the Tribunal may order that the representative in his or her own capacity compensate another party for any costs incurred unnecessarily.

(5) Before making an order under sub-section (4), the Tribunal must give the representative a reasonable opportunity to be heard.

(6) If the Tribunal makes an order for costs before the end of a proceeding the Tribunal may require that the order be complied with before it continues with the proceeding.

13 As a general rule, it is fair to say that the Tribunal has historically been more willing to make costs orders in the context of enforcement proceedings[1]. There is also authority that this pattern of the Tribunal more readily awarding costs in an enforcement action situation includes where the Applicant is a council - see Stonnington CC v Roscon Developments Pty Ltd (VCAT P2692/2003, P3145/2003 and P3260/2003).

Findings of Tribunal Regarding Costs Claims Against Mr Harper

14 In summary, I see three key issues here, being:

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whether or not I should make any costs order at all against Mr Harper;

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whether any costs order should be made on a party/party compared to a solicitor/client basis; and

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what percentage of the overall Council costs should be allocated to Mr Harper compared to Mr Reading.

15 I start with the issue of whether any costs order at all should be made against Mr Harper. In approaching this decision, I have taken into account both the various relevant submissions of Maddocks solicitors, plus the submission provided by Mr Harper under cover of his letter dated 19 January 2007.

16 In terms of the role play by Mr Harper in the history of the illegal dumping on the site, this was discussed at pages 16 and 17 on my original orders dated 17 March 2006. In this regard, Council relied on the substantial role played by Mr Harper in the running of the tip operation that led to the illegal dumping of rubbish/fill on the subject land. Some examples of this were Mr Harper playing a key role in the leasing of the of the subject land, Mr Harper's mobile phone number being commonly shown on the relevant correspondence, Mr Harper commonly answering the phone on behalf of the relevant company Development Contracting Pty Ltd and often signing letters with that company's letterhead at the top of the letter, the fact that Mr Harper had been out on site at least 10 to 12 times, and Mr Harper conceding at the hearing that he stood to gain financially if the proposed new financier which Mr Harper hoped would drive the upgrading of the facility had duly provided this finance. Mr Harper also conceded in the course of the hearing that he did receive some form of remuneration from Mr Reading for his role (albeit Mr Harper indicated that the figure involved is relatively modest).

17 At paragraph 43 of my original decision I made the following finding in relation to Mr Harper:

In terms of my findings here, I am satisfied that Mr Harper was closely enough involved in the day-to-day running of the Development Contracting materials operations on the subject land that I am satisfied that Mr Harper has significantly contributed to the abovementioned breaches of the Permit. To the extent that Mr Harper tried to paint himself at the hearing as merely trying to "play a helping role", my finding is that I am satisfied from the evidence before me that Mr Harper's role went a long way further than this and Mr Harper's view of events here is (even on a very benevolent interpretation) naïve and understates Mr Harper's true influence. Mr Dalton's sworn evidence was particularly relevant and illuminating here as to the key role which Mr Harper has played in the operation of the facility on the subject land. Mr Dalton confirmed (amongst other things) that it was Mr Harper that provided Mr Dalton with the majority of his instructions.

18 Turning to my overall findings regarding whether it would be fair and reasonable (having regard to the criteria set out in s.109 of the VCAT Act 1998 for any costs claim at all to be made against Mr Harper, on the one hand I accept that Mr Harper's role is relatively innocuous with respect to a number of the relevant criteria under s.109. In other words, I agree with a number of the basic propositions put forward in Mr Harper's costs submission provided under cover of his letter dated 19 January 2007.

19 On the other hand, the Tribunal's discretion under s.109 includes the ability for the Tribunal to take into account under s.109(3)(e) "any other matter the Tribunal considers relevant".

20 In this regard, I consider the following facts as highly relevant to my general discretion to award costs here:

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Mr Harper played a key role in the establishment and running of the unlawful operations on the subject land;

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Mr Harper was either aware of the unlawful nature of these operations or recklessly "put his head in the sand" in relation to these unlawful activities; and

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Mr Harper was involved in the negotiations with Council and the Environment Protection Authority ("EPA") prior to Council lodging its Enforcement Order Application, and I am not satisfied that Mr Harper provided full cooperation and assistance to these authorities in the way he could have. If such full assistance and cooperation had been provided, there would have been more potential to avoid (or at least shorten) the very drawn out and expensive Tribunal proceedings that followed.

21 For these reasons, and relying on my discretion under s.109(3)(e) of the VCAT Act 1998, my overall finding is that it is fair, reasonable and appropriate that Mr Harper play at least some proportion of the overall costs claim by Council. I also note here that Mr Harper might be seen by some as having been fortunate to avoid any liability for the likely $750,000 plus clean up of the subject land, bearing in mind that my original decision dated 17 March 2006 held that (unlike Mr Reading) Mr Harper had not played a sufficiently fundamental role in the overall circumstances to justify any clean up order being made against him.

22 I turn now to the second issue of whether any costs order against Mr Harper should be made on a party/party versus a solicitor/client basis. The Tribunal has consistently followed a pattern in most situations of only making party/party costs orders, which has the practical effect of requiring any successful costs applicant to still bear some proportion of their total costs.

23 A common "rule of thumb" is for a party/party costs order involves a one-third discount on the total actual costs incurred by the person making the costs claim. The relevant philosophy here is that if the Tribunal started making solicitor/client costs orders on any regular basis, this would have the negative effect of unduly encouraging speculative litigation at the Tribunal.

24 In summary, I do not see any exceptional circumstances in relation to Mr Harper which justify any costs order going beyond party/party costs. In other words, while Mr Harper's role in this matter reflects poorly on him and clearly Mr Harper has exacerbated problems which would have existed anyway with Mr Reading, I consider that Mr Harper nevertheless has played a sufficiently secondary role in this matter (ie. compared to Mr Reading) that I am not satisfied that a solicitor/client costs order should be made against him.

25 I now deal with the final matter here of the question of what percentage of the overall costs claims should be allocated to Mr Harper, compared to Mr Reading. As already indicated, I see the starting point here as being that Mr Harper should only have to bear a minority of the overall costs being claimed, due to Mr Harper having played a more secondary role in this whole matter compared to Mr Reading. The question then becomes what percentage of the overall costs would be a fair thing in terms of the degree of culpability of Mr Harper.

26 Having considered this matter carefully, the Tribunal's finding is that it seems and fair and reasonable for Mr Harper to have to bear 20% of the total costs claimed by Council. With the total costs claimed by Council over the period September 2005 to September 2006 inclusive is $40,743.50, the figure which represents 20% of these overall costs is around $8,148.

27 Given that I am only making this costs order on a party/party basis and in light of the fact that I regard a one-third discount as being an appropriate way forward to reduce the actual costs involved down to a party/party situation, this has the end result that the actual costs I consider should be paid by Mr Harper rounded down is $5,430. This amount must be paid by Mr Harper within 60 days of the date of these orders.

Findings of Tribunal Regarding Costs Claimed Against Mr Reading

28 On the same basis as I have dealt with above, I shall now deal with the issues of whether any costs order at all should be made against Mr Reading, whether any such orders should be made on a party/party versus a solicitor/client basis, and the relevant percentage figure.

29 Starting with the issue of whether any costs order at all should be made against Mr Reading, I note that at paragraph 53 of my original decision dated 17 March 2006 I indicated that there was a clear ability for me to make enforcement orders against Mr Reading, given that he was the occupier of the subject land under the relevant Lease, and also the person whom the evidence indicated to me was the owner of the "Development Contracting" business operating on the subject land.

30 In my directions dated 5 June 2006 at paragraph 3 and 4, I made the following comments:

The Tribunal considers that it has "bent over backwards" to seek to progress this matter in a fair manner to all parties by having the benefit of more comprehensive information regarding the condition of the site, before making final orders. With this aim, the Tribunal made comprehensive initial directions/orders on 17 March 2006. On the numerous occasions since then that the Tribunal has had to issue supplementary directions, the Tribunal has responded immediately to any further correspondence, to avoid delaying the whole process.

In this context, the Tribunal finds it very disappointing that the net result of this process since 17 March 2006 appears to be that no real progress has been made. The Tribunal finds bizarre the suggestion in the letter of Mr Reading dated 30 May 2006 that somehow Mr Diomides' letter of 26 May 2006 satisfies my initial directions (the "bottom line" of this 26 May letter is that Mr Diomides has made no real start to preparing the environmental audit due to a lack of instructions from Mr Reading and the non-payment by Mr Reading of his initial invoice). Clearly Mr Reading has not even "got to square one" with satisfying the requirements of my initial directions/orders of 17 March 2006 other than simply engaging Mr Diomides.

31 I note that Mr Reading did not make any appearance either at the original hearing of this matter in March 2006, nor did he appear at the further hearing on 15 August 2006.

32 In relation to the relevant contents of my final orders in this matter (apart from the question of costs) dated 18 December 2006, I made the following comments regarding Mr Reading at paragraphs 44 to 46:

The Tribunal finds very disturbing the huge extent of the waste that Mr Reading allowed to be brought on the subject land, in blatant disregard of Mr Reading's obligations under his Lease with SPI, the requirements of his planning permit and his legal obligations under the Environment Protection Act 1970. The extent of the flouting of these various controls is highlighted by the fact that the initial estimates of the likely clean up cost range from about $750,000 to $1.25 million.

I look very seriously on the fact that Mr Reading provided the Tribunal with an unconvincing reason for his non-attendance at the first hearing day for this matter on 1 March 2006, and then failed to attend the final hearing on 15 August 2006 without any apology or warning to the Tribunal. In addition, Mr Reading made barely any progress with complying with the Tribunal's interim orders requiring him to procure an environmental audit of the site and then circulate same by the relevant deadline, despite the Tribunal allowing an extension of that deadline. This situation is highly disrespectful to the Tribunal and quite unacceptable.

I find that despite my comments elsewhere relating to the role and conduct of SPI, Council and the EPA, Mr Reading has at all times been the key culpable figure in this matter.

33 I rely on the various comments and findings which I have made in my earlier decisions (notably paragraphs 44 to 46 of my decision dated 24 October 2006) in finding that it is proper, fair and reasonable that Mr Reading pay the majority of Council's costs claim in this matter. In other words, having regard to the relevant criteria under s.109 of the VCAT Act 1998, I am satisfied that Council has made out its costs claim against Mr Reading in relation to the majority of the costs being claimed.

34 In particular, I am satisfied pursuant to s.109(3)(b) of the VCAT Act 1998 that Mr Reading has been responsible for "prolonging unreasonably the time taken to complete the proceeding", in terms of Mr Reading not appearing at either of the two hearing dates for this matter, and also failing to go close to meeting his obligations pursuant to my original orders to procure the preparation of a preliminary environmental audit of the subject land.

35 In addition, I am satisfied pursuant to cl.109(3)(c) of the VCAT Act 1998 that Mr Reading would have had real difficulty establishing any tenable basis in fact or law to raise any serious defence against the enforcement application, even if he had attended and participated in the relevant hearing date.

36 Finally, pursuant to my discretion under s.109(3)(e) of the VCAT Act 1998, I consider that Mr Reading had ample opportunity during the early stages of this overall matter to avoid the need for an Enforcement Order Application (or at least narrow the scope of any such application), if Mr Reading had sensibly taken advantage of the earlier discussion/negotiation period. However, what has emerged is that Mr Reading even on a benevolent interpretation took a "head in the sand" approach to the unlawful aspects of his facility and the efforts of the statutory authorities to deal with same. On a less benevolent interpretation, Mr Reading had a predetermined strategy of consciously evading any efforts by any of the regulatory authorities to make him take responsibility for the illegal dumping of waste on the subject land[3].

37 All in all, I consider Mr Reading's conduct in this matter to have been quite unacceptable and a disgrace.

38 Turning to the issue of whether any costs order against Mr Reading should be on a party/party compared to a solicitor/client basis, I have already indicated above the Tribunal's normal approach to this issue. In all the circumstances, I am satisfied that there are suitable exceptional circumstances here for a solicitor/client order to be made against Mr Reading. In terms of what constitutes "exceptional circumstances" here, I refer to the various passages regarding Mr Reading which I have quoted above from my earlier decisions. In particular, I note that Mr Reading did not attend either of the hearing dates for this matter and barely made any progress in preparing a preliminary environmental audit, despite this being an express requirement of my initial orders.

39 I now deal with final issue of what proportion of the overall costs should be paid by Mr Reading. Given my earlier finding that is fair and reasonable for Mr Harper to pay 20% of the costs in question, and as I have already made a ruling that SPI Powernet Pty Ltd is not required to make any costs contribution, it follows that the remaining 80% of the total costs being claimed must be paid by Mr Reading.

40 Given that this 80% figure must be payable on a solicitor/client basis, what we are talking about here is Mr Reading having to pay 80% of the total costs claimed of $40,743.50, which (on a rounded down basis) comes to $32,590. This liability of $32,590 must be paid by Mr Reading to Council within 60 days of the date of these orders.

41 To remove any doubt, reaching the various findings I have made above regarding Mr Reading, I have taken into account the costs submission which he has apparently signed, which were forwarded to the Tribunal undercover of Mr Harper's letter of 19 January 2007. However, I regard Mr Reading's costs submissions as in most respects as lacking any credibility, and not deserving of being given any weight. In particular:

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Mr Reading's costs submissions have been prepared in a very generic form, and mirror those of Mr Harper;

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some of the assertions made in Mr Reading's costs submission are ludicrous, and I am surprised Mr Reading has had the nerve to even put them forward. For instance, notwithstanding that a key source of delay in this matter has been Mr Reading's failure to procure the necessary preliminary environmental audit, cl.8 of Mr Reading's costs submissions state that M Reading "... has not unnecessarily prolonged the time taken to complete the proceeding". To use another example, cl.7(a) of Mr Reading's costs submission is simply wrong in fact, as it is alleged that Mr Reading has complied with all orders and directions of the Tribunal, whereas clearly Mr Reading failed to comply with my relevant orders requiring him to procure the preparation of a preliminary environmental audit;

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I note that paragraph 14 of Mr Reading's costs submission alleges that it would be inappropriate for me to make any solicitor/client costs orders unless the person involved has "... committed seriously inappropriate conduct in the course of the proceeding". In terms of the general principle here, I entirely agree with Mr Reading, but find on the facts that Mr Reading has committed seriously inappropriate conduct (perhaps better described as disgraceful conduct) in the course of this proceeding.

42 In terms of the situation to date where Mr Reading has largely failed to comply with any orders or directions of the Tribunal, together with any potential future situation where Mr Reading is in breach of my above orders to pay the necessary sum of $32,590 to Council within 60 days of these orders, Mr Reading is reminded that a person failing to comply with the orders of the Tribunal is potential in contempt of the Tribunal pursuant to s.137 of the VCAT Act 1998. Pursuant to that section, a person that is found to be guilty of being in contempt of the Tribunal faces a penalty of up to 5 years in jail and/or a fine of up to $100,000.00

Philip Martin

Member

[1]2 See Bayside CC v Campbell [1999] VPR 79

[3] The sworn evidence of the planner involved in the original permit application for the use of the subject land as a recycling facility (Mr Philip Dalton) included the following evidence. Mr Dalton (whom I consider gave credible evidence) recalled a conversation with Mr Reading, where Mr Reading indicated that he would continue the illegal dumping on the subject land for as long as practicable and then "cut and run" if enforcement steps were taken against Mr Reading.