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[2003] VCAT 1340
procedural. The respondents and the non-party each bear their own costs.
VCAT refused a non-party's claim for legal costs arising from a summons to produce documents and declined to award costs to the respondents against that non-party. The Tribunal held that s 109's costs power is discretionary, likely refers to parties, and does not clearly authorise legal-cost awards to non-parties; fees under s 104 are distinct and limited. Given Absolute's obstructive conduct and the statutory scheme, the Tribunal ordered that each side bear their own costs.
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1,636 words · generated 25/06/2026
This is a costs ruling delivered by Vice President (Judge) Bowman in VCAT’s Anti-Discrimination List following the settlement of a discrimination claim by Jag Rewal against IBM Australia Ltd and one of its employees, Ron Stanton. The respondents had issued summonses to various non-parties to obtain documents relevant to their defence, including a summons to Absolute Electronics Pty Ltd (Absolute) for documents concerning commercial relationships with the complainant (see [4]–[6]).
No linked legislation citations have been extracted yet.
Absolute applied to set aside the summons. Deputy President Urquhart adjourned the summons sine die, reserved costs and gave Absolute liberty to apply for costs (see [6]). Extensive correspondence followed about the scope of production and the payment of costs. Absolute argued that any production should be preceded by an agreement to indemnify its legal costs (see [11]).
The substantive matter settled on 19 May 2003. The summons to Absolute was struck out, with costs reserved (see [8]). Absolute later applied for an order for its legal costs; the respondents opposed that claim and sought costs against Absolute. The costs application was argued before Judge Bowman on 31 July (initial hearing) and again on 15 September 2003, with substantial affidavits and exhibits exchanged (see [9]–[10]). On 1 October 2003 Judge Bowman ruled that each side should bear its own costs (see Orders and [25]).
Two legal and practical strands underpinned the decision.
Statutory construction and the Tribunal’s costs discretion. Judge Bowman emphasised that s 109 of the VCAT Act confers a discretionary power about costs which must be exercised judicially. He distinguished s 104, which provides for fees and allowances for attendance at a summons, from legal costs under s 109 (see [15], [22], [23]). On textual and scheme grounds he expressed serious doubt that s 109 plainly extends to the making of orders for legal costs in favour of a non-party. He observed the wording of s 109 “refers only to parties” and noted the Anti-Discrimination List’s character as a broadly no-cost jurisdiction (see [19], [23]).
The exercise of discretion against Absolute on the facts. Even leaving open the question whether s 109 could, in some circumstances, support costs to a non-party, the Tribunal considered Absolute’s conduct and concluded it did not warrant an award. The reasons included: Absolute’s initial application to set aside the summons rested only on the unavailability of its principal; Absolute then attempted to unilaterally select what documents it would produce; it conditioned production on receiving a full indemnity for legal costs; it did not pursue the setting aside or have the scope of production resolved before the hearing; and it ultimately produced no documents before settlement (see [16]–[18], [20]). Taking these facts together, Judge Bowman exercised his discretion against Absolute (see [19], [20], [24]).
Judge Bowman also noted the attractiveness of conceptual approaches such as treating summons litigation as “a proceeding within a proceeding” (citing Cheney v Spooner), but he declined to rely on that analysis to justify ordering a non-party to pay costs under the VCAT Act without clearer statutory footing (see [21]–[24]).
The practical effect was to deny Absolute’s application for legal costs and to refuse to make an award in favour of the respondents against Absolute. The Tribunal left open the question of fees and allowances under s 104, suggesting that any such payments would likely be minimal (see [25]).
Before this ruling, a split of practice existed in VCAT and other jurisdictions. Some VCAT decisions (Buffalo/Bufalo and Cabouret) had awarded costs to non-parties in discovery contexts. Federal Court decisions were cited as demonstrating that, in other jurisdictions, non-party cost awards had been made in appropriate circumstances (see [13]).
Judge Bowman did not overrule those VCAT decisions, and explicitly stated he would be reluctant to conclude they were wrong without hearing further argument (see [19]). Nevertheless, his ruling emphasises a more cautious approach within VCAT, grounded in a textual reading of s 109 and the Tribunal’s institutional posture as a largely no-cost forum for anti-discrimination disputes. The practical after-state is that VCAT practitioners should not assume that an order for a non-party’s legal costs will be readily available; any such claim will face two hurdles: a statutory construction hurdle (does s 109 permit such an award) and, even if it does, a discretionary hurdle that will consider the conduct of the non-party and the broader public policy of the list (see [15], [19], [23]).
Thus, while the decision does not categorically bar non-party cost orders in VCAT, it imposes a conservative interpretative approach and underlines the need for clear statutory or precedent support to depart from the starting point that parties bear their own costs (see [15], [23], [24]).
Each quotation reflects Judge Bowman’s statutory and discretionary reasoning: interpret s 109 restrictively in context, assess conduct, and preserve the Anti-Discrimination List’s low-cost orientation.
This decision is directly applicable to contests over costs arising from non-party discovery in VCAT, particularly where:
It is especially relevant where the non-party’s conduct includes tactics such as conditioning production on an indemnity for legal costs, attempting to elect which documents to produce, or failing to pursue a formal determination of the summons promptly. In such circumstances, the Tribunal is likely to scrutinise the non-party’s conduct and may refuse a costs award even if some prior decisions have permitted non-party cost orders (see [16]–[20]).
Within the decision text, Judge Bowman identifies conflicting VCAT authorities (Bufalo and Cabouret) and federal authorities (ACCC v Boral, Waiviata) that have been treated differently. He expressly did not overrule earlier VCAT decisions but flagged doubt about their correctness without further argument (see [19]). The decision therefore should be read as persuasive authority within VCAT emphasising restraint and statutory constructional caution. It invites later tribunals to address the statutory question expressly if they wish to follow Bufalo/Cabouret or depart from them.
Practitioners should watch for subsequent VCAT decisions that either: (a) follow Bowman’s cautious approach and decline non-party cost awards; or (b) squarely address the question of whether s 109 authorises costs to non-parties and explicitly adopt or reject Bufalo/Cabouret. This ruling will be relied on by respondents and by tribunals wishing to preserve the no-cost character of the Anti-Discrimination List unless stronger reasons exist to award non-party costs.
Do the words of s 109 definitively permit a non-party to be awarded legal costs, either in favour of the non-party or against the non-party? Judge Bowman expressed doubt but did not decide the statutory point definitively (see [19], [24]). A clear, square ruling on statutory power remains open.
If s 109 does permit awards to or against non-parties, what principles should govern that exercise of discretion? Judge Bowman applied conduct-focused considerations here; future cases may elaborate a more structured test (necessity of protection of non-party interests; reasonableness of complying with summons; proportionality).
What is the precise scope of fees and allowances under s 104? The Tribunal noted they are distinct and likely minimal (see [22], [25]), but the boundary of what can be recovered under s 104 compared with full legal costs could be clarified.
How does the policy and structure of particular VCAT lists (for example, Anti-Discrimination List’s no-cost character) affect the general application of costs powers across VCAT? Judge Bowman treated the Anti-Discrimination List’s characteristics as important (see [23]); whether the same approach applies in other lists remains to be clarified.
Will higher courts or future VCAT panels adopt a uniform approach, overruling or confirming the earlier decisions (Bufalo, Cabouret)? Until that alignment occurs, divergent practice may continue.
Practitioners confronting non-party summonses in VCAT should:
VCAT ACT 1998 - costs - ss.104 and 109 - costs of non-party related to discovery - costs of party as against non-party
The respondents and the non-party each bear their own costs.
1. In this matter I am asked to provide a ruling in relation to costs. The dispute in relation to such costs arises in a somewhat unusual context. The argument is between the respondents, IBM Australia Pty Ltd ("IBM") and Ron Stanton, and a non-party, Absolute Electronics Pty Ltd ("Absolute"). Each seeks costs form the other.
2. The background to this dispute could be summarised as follows. The original application was issued in the Anti-Discrimination List. The complainant, Jag Rewal, claimed that he had been discriminated against by IBM and by Ron Stanton, an employee of IBM. The complainant is originally from Kenya. He was also employed by IBM and was in an area or department headed by Stanton. His complaint was, in essence, that he had been poorly treated in his employment, investigated, and ultimately dismissed from that employment, and that, at the core of such treatment and dismissal, was racial discrimination.
3. As would be expected, the respondents presented a united front - hereafter I shall refer to them collectively as "the respondents" - and vigorously denied that there had been any discrimination against the complainant. The particulars of defence entered on behalf of the respondents are quite lengthy, and the relevant particulars basically allege that the complainant's removal from his particular position within IBM was because he breached its Business Conduct Guidelines, and in particular that he had financial or other interests which placed him in a position of conflict of interest with IBM.
4. Without going through the somewhat tortuous history of this particular piece of litigation, ultimately the respondents issued a series of summonses to produce documents. These summonses were addressed to various persons or entities with whom the respondents suspected the complainant may have been in a financial relationship which could have constituted a conflict of interest. It was thought that they might possess some documentation in that regard.
5. One of these summonses was addressed to The Proper Officer at Absolute. He or she, along with others, was summoned to appear at this Tribunal on 16 April 2003 and to produce any documents disclosing a relationship between Absolute and Jag Rewal, including documents dealing with commercial transactions, payment of income, office diaries and the like.
6. On the morning of 16 April 2003 the solicitors for the respondent received a letter from Collins House Legal, formerly Tuckers Lawyers, solicitors for Absolute. That letter indicated that Absolute would apply to have the summons set aside and enclosed an affidavit from Mr Tucker, solicitor, to the effect that the principal of Absolute, Mr Grish Rewal, was not in Melbourne, and that limited instructions only had been obtained. At the return of the summons, Absolute sought that it be set aside. Deputy President Urquhart made a series of orders including an order that the summons directed to Absolute be adjourned sine die, with costs reserved, and a further order granting Absolute liberty to apply for costs relating to the summons to appear.
7. There then followed a series of correspondence between the solicitors for the respondents and the solicitors for Absolute. I shall return to that correspondence.
8. The matter was listed for hearing on the merits before me on 19 May 2003. It was anticipated that the matter would be a lengthy one, having some eight days allocated to it. The respondents agreed, following a request from the solicitors for Absolute, to have the summons to Absolute called on at 2.15 pm on 20 May. However, the principal action settled on 19 May. By consent, the summons directed to Absolute was struck out, with all costs of and incidental to the summons and any applications associated with it reserved, and with liberty to apply in respect of any reserved costs. Leave to file amended particulars of defence was also granted at that time. By letter dated 20 May, the solicitors for the respondents informed the solicitors for Absolute of the relevant orders.
9. After some delay, the solicitors for Absolute indicated that they would be making an application for costs in relation to the summons. The solicitors for the respondents and for Absolute prepared affidavit material, with a considerable number of exhibits. The application for costs came on before me on 31 July last. On that occasion there was considerable legal argument. A substantial affidavit with exhibits was filed and served by the respondents, and Ms Knights, counsel for Absolute, requested some time in order to consider it, and to give Absolute the opportunity to file and serve any answering material. This request was granted. Ultimately the matter came on before me again on 15 September last, when there was further legal argument. Absolute had served further material by this time.
10. Detailed submissions were made on behalf of the respondents and Absolute. I mention the steps that were taken in relation to this costs application, and the large amount of work that was put into it, in order to indicate that this was no casual or incidental argument concerning costs. It was conducted as if it were itself a proceeding of some substance.
11. Having given a general background as to how this somewhat unusual application evolved, I will now turn to some of the individual items of correspondence which are relevant:-
(a) On 16 April 2003, following the hearing before Deputy President Urquhart, the solicitors for the respondents wrote to the solicitors for Absolute attaching copies of the particulars of complaint and the particulars of defence, and requesting contact after such documents had been reviewed, so that a discussion could be held concerning documents to be produced by Absolute.
(b) On 24 April 2003, the solicitors for Absolute replied to the effect that any documents sought were not relevant; requested, by way of an open letter, an amended list of documents and an explanation as to how they were relevant; and sought costs on a full indemnity basis, seeking confirmation of this in an open reply.
(c) By letter of 29 April 2003, the solicitors for the respondents in turn replied, setting out some further information; requesting essentially the same documents previously sought pursuant to the summons; refusing to give an indemnity in relation to Absolute's legal costs, but pointing out the entitlement to fees or allowances payable pursuant to s.104(4) of the Victorian Civil and Administrative Tribunal Act 1998; and alleging that any application for legal costs was misconceived, whilst stating a preparedness to pay such fees and allowances.
(d) By letter dated 2 May 2003, Absolute's solicitors set out some information; suggested limitations concerning the categories of documents that should be produced; confirmed that payment of legal costs was sought; and stated that agreement to meet such legal costs and expenses was required "prior to production of any documents".
(e) By letter dated 6 May 2003, the solicitors for the respondents replied. Again further information was set out. It was alleged that the documents sought were central to the respondents' defence. There was a further refusal to indemnify in respect of legal costs, and it was pointed out that Absolute could make an application for costs if it so chose when the matter came on for hearing. The documents were again sought, with the respondents this time raising the question of their costs.
(f) By letter dated 7 May 2003, the solicitors for Absolute maintained their position in relation to costs, and stated that they were prepared to produce two limited categories of documents, stating that there was no justification for providing any other documents.
(g) In reply, the respondents' solicitors again sought the documents, and agreed to pay a reasonable amount in relation to such costs as photocopying expenses, and also made a modest open offer in relation to any legal and administrative costs, whilst maintaining their position that no such entitlement existed and certainly not agreeing to any indemnity in relation to costs. There was again a request for the full range of documents.
(h) By letter dated 16 May 2003, the respondents' solicitors indicated that, as the documents had still not been produced, the summons would be made returnable on 20 May 2003.
(i) By letter also dated 16 May 2003, the solicitors for Absolute effectively maintained their position.
12. The above represent relevant items of correspondence forwarded prior to the making of the orders.
13. The submissions made on behalf of Absolute by Ms Knights could be summarised as follows. There is a power in the Tribunal to order a party who has requested non-party discovery to pay the costs of that non-party on a solicitor/client basis. Authority for this proposition can be found in the decisions of Bufalo Corporation Pty Ltd v Bulla Road Pty Ltd (26 May 2000) and Cabouret v Reward Insurance Pty Ltd and Matthews [2002] VCAT 1493. Further, this practice is adopted in other jurisdictions - see ACCC v Boral Ltd [1999] FCA 663 and Waiviata Pty Ltd v New Millenium Publications Pty Ltd [2002] FCA 481. Absolute acted fairly and reasonably at all times, and offered to produce documents which it considered relevant. The respondents continued to seek production of irrelevant documents. Absolute has incurred significant expense in responding to the summons. It was and is entitled to seek an indemnity in relation to its costs. It should now be receiving payment of those costs, rather than having to pay any costs of the respondents.
14. The submissions of Mr Bourke, on behalf of the respondents, could be summarised as follows. This was a perfectly valid summons to produce documents. An essential element of the defence of the respondents related to potential conflicts of interest. These were set out in the particulars of defence, and expanded upon in the amended particulars of defence, which were conveyed to the solicitors for Absolute. Deputy President Urquhart had adjourned the summons so as to enable the parties to have discussions concerning the production of documents. At all times, Absolute was obstructive in this regard. Originally it applied to have the summons set aside, when the only supporting material was, in essence, an affidavit stating that its principal was not available. Thereafter, it was not the right of Absolute to determine which documents were and were not relevant. Its obligation was to comply with the summons if agreement could not be reached, or to revive the application to set aside the summons, or otherwise contest it at or prior to the hearing. It had no right to impose, as a condition precedent to the production of documents, consent to a full indemnity in relation to its legal costs. Ultimately it produced no documents in any event. Further, the respondents have placed before the Tribunal a large amount of material establishing that there was a foundation for their suspicions concerning financial and trading activities carried on by the applicant. This was not a summons issued capriciously. Whatever the ultimate outcome might have been had the matter not settled, there was a valid and relevant reason for seeking production of the documents. Alternatively, the decisions in Bufalo and Cabouret are wrong in law, bearing in mind the provisions of the VCAT Act. The common law approach concerning a party bearing the costs of a non-party is not applicable. Further (and this submission does not seem to me to sit comfortably with the immediately preceding submission) Absolute should in fact be paying the costs of the respondents. The whole argument concerning the summons is in fact a "proceeding within a proceeding" and, despite the fact that Absolute is a non-party, an order for costs can and should be made against it. Reference is made to the decision of the Federal Court of Australia in Commonwealth of Australia v Construction, Forestry, Mining and Energy Union [2003] FCAFC 115.
15. My ruling in relation to this application is as follows. I preface it by saying that, pursuant to s.109 of the VCAT Act, all question of costs are clearly discretionary. I also appreciate that such a discretion must be exercised in a judicial way. There also seems to me to be a clear distinction between the fees and allowances payable pursuant to s.104 of the Act, and legal costs payable pursuant to s.109.
16. In applying the Act and in exercising my discretion, I have no hesitation in saying that Absolute is not entitled to any costs. I say that for a number of reasons. They are not listed in order of importance.
17. Firstly, on the basis of the material placed before me, in my view Absolute was obstructive. Without making any apparent endeavour to comply with the summons, it applied to have it set aside when the only affidavit material which it could present was that its principal was out of the country, and would return at a time when the obtaining of instructions would be difficult. It then opted to determine which documents it would or would not produce in response to the summons. Further, it required as a condition precedent to the production of any documents that there be a full indemnity in relation to any legal costs which might be incurred.
18. Next, at no stage did it press on in order to obtain a ruling that either the summons be set aside or that there be some limitation imposed upon the number or category of documents which should be produced. Nor did it produce any documents. As at the date of the commencement, and settlement, of the hearing, the question of which, if any, documents should be produced had not been argued or resolved.
19. Thirdly, despite the rulings in Bufalo and Cabouret, I am not convinced that the provisions of s.109 of the Act extend to the ordering of costs in favour of a non-party. The wording of that section seems to me to militate against such a conclusion. It refers only to parties. I am also far from convinced that the wording of s.104 permits more than the payment of fees and allowances which, to my mind, is clearly distinguishable from costs. Bearing in mind the principles of comity between coordinate divisions of the same jurisdiction, without hearing further argument I would be reluctant to rule that the decisions in Bufalo and Cabouret were wrong. In some circumstances, the awarding of costs to a non-party in a discovery situation may well seem appropriate. That would still be discretionary. All I can say in this regard is that, in the present situation, I am far from totally convinced that, pursuant to the VCAT Act, a non-party is entitled to legal costs. In the present case, even if such power exists, it would be discretionary, and I have no hesitation in exercising that discretion against Absolute's present application.
20. Were a costs order to be made, I would be minded to make it in favour of the respondents against Absolute. As indicated, I am of the view that Absolute was obstructive initially, and then did not avail itself of the opportunity to set aside or otherwise challenge the summons. Unilaterally, it attempted to elect which documents it might or might not produce, and even then made such production subject to the condition precedent that its full indemnity costs be paid. It has continued to pursue those costs. Overall, I find its conduct in this application to be devoid of merit, and there is some attraction in the proposition that costs, particularly in relation to the pursuit of this costs application, should be awarded against it.
21. Mr Bourke has presented an argument that all matters concerning the summons, including the uncompleted argument to set it aside and the subsequent costs arguments, are in fact "a proceeding within a proceeding". I am mindful of the decision in Cheney v Spooner [1929] HCA 12; (1929) 41 CLR 532, and of the joint judgment of Isaacs and Gavan Duffy JJ at pp.536-7 wherein it is stated that a proceeding "...is merely some method permitted by law for moving a court or judicial officer to some authorised act, or some act of the court or judicial officer". The application of that approach would lead me to the temptation to order costs in favour of the respondents.
22. However, whatever reservations I might have in relation to the ordering the costs of a non-party to be paid by a party, that reservation exists to the same, if not greater, extent in relation to the proposition that a non-party should pay a party's costs. Of course, I make this observation in the context of the VCAT Act. I note that in "Pizer's Annotated VCAT Act" at paragraph 4038, the author, apart from referring to the decision in Bufalo, also refers to the decision in re Thwaites and Department of Human Services (1998) 14 VAR 347, where doubt was expressed concerning whether s.109 empowered VCAT to order a non-party to pay the costs of an applicant. The author expresses the view that such doubts were well-founded. With respect, I agree.
23. I am also conscious of the scheme of the Act generally in relation to costs. Pursuant to s.109 of the Act, the starting point is that each party should bear its own costs. I am conscious of the fact that the Anti-Discrimination List, out of which the principal complaint is issued, is, broadly speaking, a no-cost jurisdiction - see paragraph 4039.2 of "Pizer". Of course, there will be instances when an order for costs is appropriate. However, a dispute between a party and a non-party concerning the production of documents does not seem to me to be such an instance. Further, s.109 should be read in conjunction with s.104 of the Act. The latter section specifically refers to the fees and allowances which are payable in relation to the attendance in answer to a summons.
24. In summary, I have distinct reservations as to whether I can order a non-party to pay the costs of a party and, in any event, in the exercise of the discretion which I possess, I am not prepared to make such an order in the present case.
25. The conclusion at which I have arrived in relation to this application is that there should be no order as to costs in favour of either the respondents or Absolute - costs should lie where they fall. Whether any fees or allowances are payable is not something which I am asked to determine, but, given the sequence of events and the apparent unavailability of the principal of Absolute at the time of the directions hearing before Deputy President Urquhart and the fact that there was no subsequent attendance or production of documents, I would have thought that such fees and allowances would be minimal. Hopefully, if it has not already been agreed, this can be resolved between the parties. I certainly do not interpret such fees and allowances as being anything like the equivalent of legal costs, much less full indemnity costs.
26. Accordingly, my order in this matter is that the respondents and Absolute each bear their own costs.
Rewal
IBM Australia Ltd [2003] VCAT 1340
(1929) 41 CLR 532
The respondents and the non-party each bear their own costs.