The Tribunal may make such orders as to costs in respect of a proceeding under this Act as it thinks just, including an order requiring a representative of a party who appeared before the Tribunal to pay costs.[59]

1. The settlement offer regime in the VCAT Act was made expressly applicable to review proceedings under Transport Accident Act 1986 (Vic) under s 93 of Sch 1[60] of the VCAT Act which states for review proceedings under that Act:[61]

Despite section 112(1)(a), sections 112 to 115 apply to a proceeding for review of a decision under section 77 of the Transport Accident Act 1986.

1. In the Tribunal, a Vice President had held that s 112 of the VCAT Act did not assist TAC, because the 'offer to settle' was not one within the meaning of s 112 because it contained no actual compromise. On appeal to the Court of Appeal held that finding was an error of law, and it was overturned.[62]
2. The question of statutory construction for the Court of Appeal was whether a simple 'walk away' offer was sufficient to trigger the presumption of an entitlement to a costs order under s 112(2). As a matter of statutory construction, the Court of Appeal held it was.
3. In its analysis of the proper statutory construction of s 112, the Court of Appeal found that it applied in the same way, whether or not s 109(1) and (3) applied.
4. In examining how s 112 applied to a 'walk away' offer, Phillips JA described how the issue was argued in the appeal, which is important to give context to the substance of the Court of Appeal's finding: (emphasis in italics and underlining added)

Was s.112 called into play by the offer made?

[18] The principal submission of [TAC] ... was that the offer in writing made on 14 March 2000 was an "offer to settle" the proceeding ...before the Tribunal. That being so, the argument ran, all of the conditions laid down by s 112(1) for the application of the section were satisfied; for the respondent did not accept the offer within the time it was open, the offer complied with ss 113 and 114 (which was not in dispute), and, as the decision of the Commission was itself affirmed by the Tribunal, it must have been the case that the orders made by the Tribunal were "not more favourable to [the respondent] than the offer". It followed ... that s 112 applied and accordingly, by virtue of s 112(2) [TAC] was "entitled to an order that [Coyle] pay all costs incurred by [TAC] after the offer was made" ... [TAC] accepted that that entitlement was subject to the discretion conferred upon the Tribunal by s 12(2), to order otherwise, but the exercise of that discretion was not in issue on this appeal. If the appeal succeeded, that was for the Tribunal to consider when the application for costs was remitted to it.

[19] ... the only point at which [Coyle] took issue with ... was in the characterisation of the offer made on 14 March 2000 as "an offer ... to settle the proceeding", within the meaning of s 112(1)(a). The submission made before the Tribunal, and accepted by the learned Vice-President, was that an offer to settle within the section necessarily contained some element of compromise and that there was no such element of compromise in the offer made on 14 March, that the respondent should simply withdraw her application for review, each party paying its own costs.

1. Phillips JA noted that in the Tribunal proceeding the Vice President had referred to three competing cases in VCAT,[63] observing that in the earlier two the view was 'apparently taken' that an offer to settle within the meaning of s 112(1)(a) need contain no element of compromise but in in the third, later case the contrary view was expressed, and it was that which the Vice President had adopted.
2. Phillips JA then examined the Vice President's dilemma:

[20] So far from containing any element of compromise, as [the Vice President] saw it the offer made on 14 March was no more than "curial tactics", serving to cast [Coyle], as applicant, into a dilemma in that, upon the making of the offer, she was faced with an election either to abandon the very application for review which s 77 of the [Transport Accident Act 1986 (Vic)] ... authorised or alternatively to proceed with that application but only at the risk of an order for costs under s 112(2) (itself a very different provision for costs from that made by s 79(2) of the [Transport Accident Act 1986 (Vic)]).

[21] In elaborating upon this dilemma, [the Vice President] pointed to what he called "the unusual features of this purported offer of settlement and the context in which it was delivered".

1. Those features included that TAC had not communicated its reasons for the administrative decision under review to Coyle and 'she had had no opportunity to make submissions or indeed to be heard at all', that TAC's decision had 'contained no findings of fact or reasoning for the conclusion adverse to her' and that there was no way in which Coyle 'could make any intelligent assessment of the decision' and, in relation to the settlement offer itself, it was made in proceedings which were not an 'adversarial contest in which the commission is entitled to engage in curial tactics'.
2. The Court of Appeal held that none of this made any difference to the proper construction of s 112.
3. Noting that the last point was a quotation from the judgment of Tadgell, JA in Transport Accident Commission v Bausch [1998] 4 VR 249 at 259, Phillips JA held:

[23] ... but, with respect, what his Honour said there was not, I think, said in relation to the operation of s 112. It may well be, as Tadgell, JA indicated, that in a proceeding like this the Commission should regard itself as not simply an adversary, but one with obligations and responsibilities going beyond such a role; but that does not bear upon the entitlement or otherwise of the [TAC] to make an offer under s112 or the nature of such an offer.

[24] Nor, to my mind, do the "unusual features" to which [the Vice President] drew attention ... directly upon the nature of the offer which must be made if s 112 is to be called into play in a given case. Rather, they bear perhaps upon the exercise of the discretion which is conferred by s 112(2). Thus, if an offer within the meaning of s 112(1)(a) is made in circumstances where the party to whom the offer is made has no opportunity of weighing or assessing the offer it might be that the Tribunal, in the exercise of the discretion conferred by s 112(2), would be minded to order "otherwise", thereby denying the offeror's entitlement to an order for costs under the section (although such a decision would have to be taken only in the light of all of the relevant circumstances, not just some of them).

1. The Court of Appeal concluded that the statutory language of s 112(1) did not require any actual compromise but that the nature and circumstances of the 'settlement offer' at the time in which it is made are considerations that can properly be taken into account 'in light of all the relevant circumstances' whether to give effect to the presumption under s 112(2) or to 'order otherwise' under that section.
2. As Phillips JA explained: (italics added, bold in the original)

[25] More important ...to the argument about the nature of an offer within the meaning of s 112(1)(a) is the consideration that if one party can make an offer as was made here_, that the matter be resolved simply by the other party's withdrawing its claim on terms that each party pay its own costs, a simple means is provided, in an ordinary case, of circumventing what otherwise would be the position, laid down by s 109 in a case to which s 109 applies_. (That perhaps is one reason why in terms s 112(1)(a) applies only to a proceeding other than by way of review.) Section 109 provides that, as a general rule at least, each party is to bear its own costs; yet if the appellant is correct here, by an offer that a claimant simply withdraw its claim on terms that each party pay its own costs, the applicant can be put at risk that, if he or she proceeds with the claim and fails, the general rule in s 109 is displaced by the more particular provision made by s 112(2) in favour of the offeror. Yet nothing more would appear to have been achieved by such an offer than the reiteration by the offeror of that party's primary position - a denial that the applicant has any case.

[26] It was reasoning such as that which led the courts in New South Wales to insist, when an offer of compromise is made, that it contain a genuine element of compromise if, upon its non-acceptance, there was to be a penalty in costs as provided by the rules ... [64]

[29] It may be observed that in the cases to which I have just referred, judges sometimes used the expression "offer to settle" apparently as equivalent to "offer of compromise", and for my own part I am troubled by allowing that a party, particularly a party in the position of the [TAC], may cast upon an applicant for review the costs penalty specified in s 112(2) by such a simple means as was adopted in this instance: that is, an offer in writing, at an early stage of the proceeding, that the applicant withdraw on terms that each party pay its own costs. None the less, for the reasons I shall give I am now persuaded that that is just what Parliament has provided.

1. After observing that TAC's offer was 'not altogether free of any element of compromise' (because a withdrawal of an application could have potential costs consequences under s 74 of the VCAT Act[65]), Phillips JA concluded:

[31] What is critical ... is the use made of the word "settle" in other and neighbouring sections of the VCAT Act. As Mr. Justice Batt pointed out in the course of argument, s 83(2)(b) describes one function of a compulsory conference as being "to promote a settlement of the proceeding", and s 84 authorises the Tribunal to require the personal attendance at a compulsory conference of the party personally or "a representative who has authority to settle the proceeding on behalf of the party". In s 90, the mediator must notify the Tribunal if the parties "agree to settle a proceeding as a result of mediation", which means no more than that the mediation has been successful. By s 93, the Tribunal is authorised to make "any orders necessary to give effect to the settlement" if "the parties agree to settle a proceeding at any time". In all of these sections, it cannot be the case that the word "settle", or its derivative "settlement", is used to require some element of compromise; it would surely be enough, in any of these cases, if one party were to concede everything and the other party were to succeed wholly. And according to the dictionaries the word "settle" can wear a meaning that imports no element of compromise.[66] For example, in Black's Law Dictionary (7th ed.) the meaning of "settlement" is given as simply "an agreement ending a dispute or law suit".

[32] In context it is difficult to suppose that in s 112 the word "settle" is used with any different meaning from that with which it has in the earlier sections. If this means that a party in the position of [TAC] here can, by means of such an offer as was made on 14 March on this occasion, cast upon an applicant before the Tribunal, in a case to which s 109 applies (or as here a case to which s 79(2) of the TAA applies), a different regimen as to costs, then so be it: as Mr. Maxwell said, that is the provision made by Parliament and we are bound to give it effect. The harshness of such a result is, of course, mitigated by the very discretion which is conferred upon the Tribunal in s 112(2). As already indicated, it may be that in this instance it will be by means of that discretion that the Tribunal can give effect to such "unusual features" of the case as weighed with his Honour and to which I have referred above [at para [21]].

[36] For the reasons I have given, I think that we should accept the submission made by Mr. Maxwell, that the offer made on 14 March 2000 was an offer in writing to settle the proceeding within the meaning of s 112(1)(a). As the learned Vice-President was of the contrary view, his decision, rejecting the appellant's application for costs, is affected by appealable error; the appeal should be allowed, the order refusing costs set aside and the appellant's application for costs remitted to the Tribunal for further hearing and determination...

1. I have set out this analysis in some detail as it squarely provides the answer against one of the submissions made by Counsel for Mr Richardson and canvasses the substantive points raised by him.
2. It is simply not open to the Tribunal to depart from a binding precedent established by a decision of the Court of Appeal about the meaning and interpretation of the VCAT Act.
3. While the operation of the 'settlement offer' regime in the VCAT Act might surprise some litigation practitioners, it must be recalled that the VCAT Act is written for all parties, unrepresented and represented alike. Words like 'settlement offer' mean what they say in ordinary English and are not to be interpreted by reference to judicial doctrine that has developed in connection with costs principles applied under statutory rules of court.
4. Before leaving this important considered precedent, I note too Phillips JA's discussion (at para [33]-[34]) of competing submissions made in that appeal about the Tribunal's discretion to order costs when such an offer is made.
5. Without expressing any opinion on how the Tribunal should exercise its discretion in that particular case, Phillips JA said (emphasis added):

[35] ... the matters I have mentioned in the last two paragraphs, if relevant at all, go to the exercise of the discretion conferred upon the Tribunal by s 122(2) and as such they call for no resolution by us. If I am right in the construction I have placed upon the expression "offer to settle" in s 112(1)(a), then the exercise of the discretion conferred by sub-s (2) is perhaps the only means available to the Tribunal of relieving against any harshness in the operation of s 112, and on this appeal we are not required - or indeed invited - to express our opinion about the exercise of that discretion in this instance. Such a discretion can of course be exercised properly only in the light of all the relevant facts and circumstances and in this case the exercise of the discretion, if invoked by the respondent, remains something for the Tribunal when the application for costs is remitted to it for further hearing.

1. There was no suggestion that the discretion in s 112(2) to order otherwise was limited to cases where the operation of the presumption was harsh. To the opposite, that discretion must be and can only be exercised properly 'only in the light of all the relevant facts and circumstances' of the case_._

1. Before coming to the parties' detailed submissions on their competing cost applications, there is one last legal topic I need to discuss.
2. Calderbank 'letters of offer'[67] have had a long history of beneficial use in civil litigation, by promoting settlement through agreement and thus quelling legal controversies between parties in dispute.
3. In court proceedings they operate against the backdrop of the general rule of procedural practice that 'costs follow the event'.
4. In VCAT proceedings they can operate too, but against the backdrop of the prima facie statutory rule in s 109(1) that 'each party is to bear their own costs in the proceeding' and on the foundation that under s 109(2) the Tribunal may only order costs if it is satisfied that it is 'fair' to do so in all the circumstances of the proceeding, taking into account the relevant considerations the Tribunal must take into account under s 109(3).
5. In Tribunal decisions it is well accepted that Calderbank offers can be a relevant factor under s 109(3)(e) and can be used as an alternative to the costs regime in ss 112-114 as that regime is not exhaustive. That regime, for example, does not apply to an offer made before legal proceedings are commenced.
6. However, the discretion to order costs under s 109(2) can only be exercised if the Tribunal 'is satisfied it is fair to do so' - as s 109(3) states clearly - and must be exercised in the light of all the relevant facts and circumstances of the proceeding, including the nature and circumstances of the Calderbank offer at the time it is made.
7. In the practice and procedure of litigation conducted in courts, specific discretionary rules have been developed to assess what weight should be given to a more favourable Calderbank offer that was rejected by an offeree, be it plaintiff or defendant.
8. In the recent case of Sayers Property Holdings Pty Ltd v AIG Australia Ltd (Costs) [2024] VSC 419 ('Sayers') at [15], Garde J again summarised and applied the Calderbank offer 'relevant considerations' applicable to the exercise of the unfettered costs discretion in courts. Remembering that the general rule of practice in court proceeding is that costs 'follow the event', Justice Garde explained (emphasis added):

In Hazeldene's Chicken Farm, the Court of Appeal held that a court considering a submission that the rejection of a Calderbank offer was unreasonable, should ordinarily have regard at least to the following matters:

(a) the stage of the proceeding at which the offer was received;

(b) the time allowed to the offeree to consider the offer;

(c) the extent of the compromise offered;

(d) the offeree's prospects of success, assessed as at the date of the offer;

(e) the clarity with which the offer was expressed; and

(f) whether the offer foreshadowed an application for indemnity costs in the event of the offeree rejecting it.[68]

1. In Sayers, the Court had dismissed the plaintiff's claim. On the defendant's costs application, the parties agreed that the successful defendant was entitled to its costs (in accordance with the 'usual order as to costs' in court proceedings) on a standard basis. The question was whether, because of a settlement offer made by AIG as defendant, AIG should have its costs on an indemnity basis after its offer was not accepted by the plaintiff.
2. Garde J accepted that the defendant offeror bore the onus of persuading the Court that the plaintiff offeree's failure to accept the settlement offer was unreasonable.[69] He also referred to the need 'to articulate reasons in a Calderbank offer explaining why the offeree should accept the offer'.[70]
3. In opposing the application for indemnity costs, the unsuccessful plaintiff Sayers contended that it had not been unreasonable for it to allow AIG's settlement offer to lapse and simply for the usual order as to costs in court proceedings to be made - if it ultimately lost its case - on the standard basis only. Sayers submitted that:

(a) unreasonableness is not determined with hindsight, but the strength of the claim should be considered prospectively as at the time of the offer in the circumstances known, or reasonably anticipated, by the parties at the time the offer was made: Assets China Pty Ltd v Eastern Blue Pty Ltd (Costs) [2020] VSC 786, 8 [30] (Ierodiaconou AsJ); Hazeldene's Chicken Farm, 441 [23]

(b) unreasonableness is a matter of judgment and impression: Hazeldene's Chicken Farm, 441 [24]

(c) the defendant's offer, in substance, was an offer seeking a capitulation rather than a genuine offer of compromise: Commissioner of State Revenue v Challenger Listed Investments Limited (No 2) [2011] VSCA 398, 4 [17] (Buchanan; Tate JJA; Sifris AJA).

1. In the outcome, Justice Garde considered that the Calderbank offer in that case did not justify any different order than the 'usual order as to costs', holding at [43]-[44]:

I am on balance not persuaded that AIG has discharged the onus of persuasion and shown that Sayers acted unreasonably in failing to accept the settlement offer.

The two main factors in arriving at this conclusion are:

(i) the amount of the offer which could not be said to be of such magnitude as to render it unreasonable for Sayers to refuse the offer, particularly having regard to the late stage of the proceeding when the offer was made, the accrual of interest by that time if the claim was successful, and the incurrence of costs and pendency of a trial which ultimately did not exceed two days; and

(ii) the statement of AIG's position in the settlement letter which did not clearly state reasons why Sayers should accept the offer. The statements made were in some respects confusing, and did not articulate in any detail the basis on which AIG was ultimately successful.

What is the relevance of Calderbank offers in VCAT?

1. The two questions in VCAT proceedings, assuming a Calderbank offer was made that was better than the outcome obtained by the offeree, are:

(a) Does s 109 of the VCAT Act necessarily mean that the Calderbank considerations should apply in the same way in VCAT, given the different manner in which courts ordinarily order that cost will follow the event in exercise of their unfettered statutory discretion?

(b) If that more favourable offer is considered relevant to the exercise of the discretion to order costs under s 109(2), what are the cost consequences - should it result in costs being awarded at a higher scale or the default scale or in some other amount?

1. I have anxiously considered that question from different angles. The only satisfactory answer I can safely give consistently with the discretionary power conferred by s 109(2) is that 'it depends on the circumstances of the case and what it is fair to do in the circumstances of each case under s 109(3)'.
2. In some cases it might justify an order for costs as being fair. In others it might not. Where an unreasonable refusal to accept a properly formulated Calderbank offer does make it fair to order costs, in some cases it might justify an award of 'indemnity costs', but generally speaking (and likely in most instances) it would simply justify costs being awarded on a 'standard basis'.
3. What to me seems to be the more critical question is examining whether the failure to accept it at the time it was made was unreasonable, and if so, how unreasonable was it? An offer to pay money to an applicant in a patently hopeless or frivolous case to make it go quickly might receive a very different and more favourable consideration to a mere 'walk away' offer in a another case, particularly where the parties require a ruling on a question of construction or other legal question, or on a finding of fact where there is much room for disagreement in the parties' dispute about what actually happened. These are not the only considerations, just examples.
4. In Stalteri v Traralgon Contractors Pty Ltd (Civil Claims) [2016] VCAT 838 at [53], [56]-[84], [85]-[86] and [93] after careful analysis, with which I respectfully agree, Deputy President Lulham expressed the view that contrary to what might be the effect of a successful Calderbank offer in court proceedings:

The Tribunal is not bound to award indemnity costs when a Calderbank offer exceeded the outcome of the case. Put another way, the Tribunal would not improperly exercise its discretion under s 109 of the VCAT Act if it did not award indemnity costs. The reason for this is that the threat of costs contained in a Calderbank offer legitimately and properly puts pressure on the offeree to seriously consider accepting the offer, by increasing the offeree's exposure to a costs order. In Court proceedings where costs follow the event, the usual basis for assessing costs is the standard basis, previously called the party/party basis. So to give the offeree an incentive to accept the offer in a Court proceeding, it is appropriate for the offeror to say it will seek indemnity costs. However in the Tribunal, s109(1) of the VCAT Act makes clear that there is no presumption that costs follow the event, and so the incentive for an offeree to accept a Calderbank offer can be the offeree's exposure to an award of costs. The incentive is not that the offeree's exposure might increase from standard to indemnity costs, because the starting point in the absence of the offer would be that the parties would bear their own costs.

1. Other than in regard to the last sentence I am in complete agreement with that view.
2. In regard to the last sentence, the reason I do not fully agree is that those are not the only two alternatives. Under s 109(2) the Tribunal 'may order that a party pay all or a specified part of the costs of another party in the proceeding'. Under s 111 the Tribunal may itself fix costs. In making its order as to costs and in fixing costs or ordering them to be 'assessed, settled, taxed or reviewed by the Costs Court' under s 111, the amount of costs or scale under which the amount is to be set, might be less than standard costs, standard costs, more than standard costs, indemnity costs or something else, such as a percentage.
3. Similarly, Senior Member Kirton (as her Honour Judge Kirton, Vice President then was) said in Waddell v JG King Project Management Pty Ltd (Building and Property) [2019] VCAT 435 at [22]-[28], in adopting the analysis of Deputy President Lulham: (emphasis added)

[22] The occasions on which the Tribunal has awarded costs on a full indemnity basis indicate that this is a "most unusual award" that is made only in "exceptional circumstances", it should be exercised only in the "rarest of circumstances" and where the conduct of a party "has been so extreme as to be quite vexatious or bloody-minded..."

[28] In respect of the submission that the rejection of the Calderbank offer should lead to indemnity costs, I do not accept that proposition. When Calderbank offers are used in the courts, the starting point for costs there is that the unsuccessful party should pay the costs of the successful party on a standard basis. The public policy position that Calderbank offers should attract some greater benefit, means that costs on a higher scale should be ordered if the offer is wrongly rejected. Since the amendment to the Supreme Court costs rules in 2014, this now means costs on an indemnity basis. However, the so-called starting point in the Tribunal is that each party should bear its own cost of a proceeding. One step up from that (i.e. the greater benefit) is an order that the unsuccessful party should pay costs on a standard basis.

1. Again, while I respectfully agree with the logic, in my own view the exercise of the costs discretion under s 109 of the VCAT Act is not a such a stepped mathematical exercise. In my own view, while I do agree that it will be infrequent in Tribunal cases and possibly comparatively rare, I would not limit the award of indemnity costs to those cases where conduct has been 'so extreme as to be vexatious or bloody minded'.
2. Sometimes, for a party to refuse a very generous settlement offer of a civil dispute might be so unreasonable at the time it was made that it would justify an award of indemnity costs as being fair, provided of course that the offeror's costs in the proceedings were incurred reasonably. By making a generous offer, its non-acceptance does not give a party licence to incur costs in VCAT proceedings. Ultimately it comes down to what is fair to award in each circumstance taking into consideration when the offer was made and what was said by way of explanation in the 'articulated reasons' in the Calderbank offer explaining why the offeree should accept it.
3. Recently in Montero v Renshaw Homes Pty Ltd (Building and Property) (Costs) [2025] VCAT 520 at [15]-[17], [18]-[24] Deputy President Lulham returned to the question about the effect of settlement offer regime in the VCAT Act: (emphasis added)

[24] In VCAT, where there is no presumption of any costs being awarded to the successful party, the incentive is that the offeree who rejects an offer but is not awarded more by the Tribunal than had been offered, can be ordered to pay the offeror's costs incurred after the offer was made [citing s 112(2)]. Put another way, the penalty to the offeree who unwisely rejects a settlement offer, is that they can be required to pay their opponent's costs on a standard basis, rather than having to pay no costs to their opponent [citing the wording of 112(2) and Velardo].

[25] As a result, it is extremely rare for VCAT to order a party to pay another party's costs on an indemnity basis when a formal offer of settlement under sections 112-114 is made. Broadly speaking, there would have to be a significant degree of misbehaviour by a litigant, causing their opponent to incur unnecessary costs, before the Tribunal would entertain awarding indemnity costs.

1. Again, 'broadly speaking', I agree with that sentiment. It is likely to be comparatively rare for VCAT to order another party's costs on an indemnity basis.
2. A recent case in the Tribunal in which that occurred demonstrates the point well.
3. In Bradley Scott Schembri Furniture Finishes Pty Ltd v Owners Corporation No. PS334220X (Owners Corporations) (Costs) [2025] VCAT 898, Senior Member Moraitis ordered costs on an indemnity basis after the date of what she characterised as 'an extremely generous' Calderbank offer. In the proceeding, the Tribunal had made orders in favour of the applicant declaring void a resolution at an owners corporation AGM, ordering the owners corporation pay the applicant lot owner $1,669.
4. In its lot owner's application for costs, its director had submitted:

[w]hile it is accepted that the rejection of a Calderbank offer does not automatically entitle a successful party at VCAT to an award of costs, such rejection is a matter that can enliven the right to costs under s 109(3)(e).

... the critical question that must be determined is whether the rejection of the offer was reasonable in the circumstances. ...[T]he Tribunal should take into consideration:

(i) The stage of proceeding the offer was made.

(ii) The extent of the compromise offered.

(iii) The offeree's prospects of success, assessed as at the date of the offer.

(iv) The clarity with which the terms of the offer were expressed.

(v) Whether the offer foreshadowed an application for indemnity costs.

... the OC's rejection of the Calderbank offer was unreasonable for the following reasons:

1. The offer was made at an appropriate stage in the proceeding, after amended pleadings were made. The parties were well aware of each other's case and the majority of costs had not yet been incurred.
2. The compromise offered ... in the Calderbank was 'akin to a complete capitulation' of Mr Schembri's claim. While the monetary amount in this proceeding was small, Mr Schembri's offer allowed the OC to keep every cent that the OC had improperly levied against [the applicant lot owner], including levies for the OC's legal costs which had also been levied against [the applicant lot owner].
3. Senior Member Moraitis accepted that those considerations in that case justified an award of indemnity costs.
4. She said in relation to the relevance of the Calderbank offer in addressing it as a relevant consideration under s 109(3)(e) (amongst other considerations):

[36] I find that the [respondent] OC's rejection of the offer contained in Mr Schembri's Calderbank letter dated 15 January 2025 ... to be highly persuasive in determining Mr Schembri's application for costs.

[36] Mr Schembri's Calderbank offer can be summarised as follows:

1. That the OC undertakes not to recover any fees, charges and other amounts relating to the works (including any future electrification of the gates), save that the OC retains the $4,000.00 already paid by Mr Schembri for the works.
2. That the OC undertakes not to recover any legal and other fees incurred by the OC in this proceeding, save that the OC may retain the $4,733.20 already paid by Mr Schembri in respect of these costs.
3. The proceeding be dismissed with no order as to costs.

[37] The Calderbank offer then proceeded to elucidate in very clear terms why the OC would be unreasonable to reject the offer ...

[41] Overall, I find that the Calderbank offer was based on a balanced and reasonable assessment of the totality of factors which were relevant in this proceeding, and I find that the OC did not act reasonably in rejecting the offer.

[42] ... in rejecting the offer, the OC did not properly assess the consequences of:

1. its failure to turn its mind to the benefit principle ...,
2. its reliance on the incorrectly recorded minutes [of AGM] ...; and
3. the inevitability of the Tribunal declaring that the purported resolution made ...to be void and of no effect.

[42] Any honest and reasonable assessment of the undisputed facts would have concluded that these failures of the OC would have made the findings that the OC fell into legal error inevitable. I consider that this highlights the reasonableness of Mr Schembri's offer and the unreasonableness of the OC's rejection.

[43] Furthermore, I find that the extent of the offer was significant. I accept Mr Schembri's submission that the offer made in the Calderbank letter was 'akin to a complete capitulation' of his claim. I agree with the assessment of the offer made by Mr Schembri's legal representatives as 'extremely generous' and I accept Mr Schembri's submission that the Calderbank offer did allow the OC 'to keep every cent that the OC had improperly levied' against Mr Schembri, 'including levies for the OC's legal costs which had also been levied against [him]'.

1. Translating the principles applicable to Calderbank offers in court proceedings to VCAT proceedings, is, as appears from the differing views of the extremely experienced members of the Tribunal to which I have just referred, not an easy translation.
2. The history of development of Calderbank principles itself has not been without its twists and turns, as Heerey J explains in Henderson v Amadio Pty Ltd and Ors [1996] FCA 1341 at [46]-[48].[71] Originally, 'rules of court' only provided for a defendant to make a 'payment into court' in compromise of a plaintiff's claim. The plaintiff's failure to accept the defendant's 'payment in' would - by the court's rules - trigger an entitlement to the defendant to be awarded its costs after the payment in if the plaintiff did not receive a more favourable outcome, but the plaintiff would get their costs before the offer if they had otherwise been successful.
3. The advent of Calderbank offers had two benefits. They did not require any 'payment in' (it could simply be an 'offer'). Second, it enabled a plaintiff to make an offer to compromise their own claim and put the defendant at additional risk on costs if the defendant obtained a less favourable outcome. But in operating outside the limits of the rules of court for offers of compromises, they did not create any presumption, instead they created a discretionary consideration to be taken into account when the court came to exercise its unconstrained statutory discretionary power to order costs at the conclusion of the court case.
4. Thus, the discretionary rule of practice developed for Calderbank offers where the offeree unreasonably rejected the offer and the offeror obtained a more favourable outcome. The costs consequences conformed to the rule of practice of the court that ordinarily costs would 'follow the event'. Thus,

(a) Where a more favourable offer was made by the plaintiff, instead of being awarded the 'usual order as to costs' on the lower 'party-party' (now called 'standard') scale of costs, it gave rise to a discretionary consideration to award costs in the plaintiff's favour on a higher 'solicitor-client' (now called 'indemnity') scale. A plaintiff's Calderbank offer thereby created a monetary incentive for a defendant to compromise or risk a higher award of costs against it.

(b) Where the more favourable offer was made by the defendant, if the defendant lost in the result but their Calderbank offer of compromise was more favourable than the outcome achieved by the plaintiff, then like the 'payment-in' (and later 'offer of compromise' procedures under the rules of court), the defendant would be entitled to their costs after the period for acceptance of the offer of compromise usually on a standard basis. If the defendant was entirely successful in the outcome of the case then they would be awarded the 'usual order as to costs' prior to the offer but not necessarily indemnity costs after the offer.

Application of Calderbank principles to VCAT proceedings

1. What is uncontroversial is that Calderbank offers are a consideration that the Tribunal may take into account as relevant under s 109(3) in proceedings in VCAT. The Tribunal has accepted in numerous cases,[72] and the Court of Appeal has endorsed the view,[73] that the 'settlement offer' regime in ss 112 to 114 of the VCAT Act does not negate the potential for a Calderbank offer to be a 'relevant consideration' when it comes to assessing whether it is fair to order costs under s 109(3)(e). As the learned authors of Pizer's Annotated VCAT Act correctly state: 'Sections 112-115 do not constitute a code'.[74]
2. In the Tribunal's 'review jurisdiction', where ss 112-115 do not normally apply, a Calderbank offer is the only way a reasonable offer of compromise can be considered under s 109(3)(e) in determining whether it is fair to make a costs order under s 109(2). However, it has also been remarked in the Tribunal's review jurisdiction, that a settlement offer that portends that if the applicant does not capitulate then costs will be sought on an indemnity basis, might be open to abuse: 'The entire costs regime in the Tribunal cannot be overset as easily as that'.[75]
3. The critical question in the Tribunal's 'original jurisdiction' in assessing the weight to be attached to a properly formulated Calderbank offer as a relevant consideration under s 109(3)(e) is what more does it add that the 'settlement offer' regime in ss 112-114 of the VCAT Act does not already do?

(a) As I have noted, that statutory regime in ss 112-114 already enables a 'settlement offer' to be made by either applicant or respondent. It spells out clearly the statutory requirements for a qualifying offer to give rise to the statutory presumption in favour of a costs order under s 112(2).

(b) For a settlement offer to qualify under s 112(2) it need not necessarily contain any 'compromise' of rights, as the Court of Appeal held in Transport Accident Commission v Coyle (2001) 3 VR 589; [2001] VSCA 236. In contrast, a Calderbank offer 'must contain a real and genuine element of compromise', and one which is not insubstantial under the third Calderbank principle.

(c) However, the VCAT Act provides a clear statutory regime for settlement offers - by applicants and respondents. A Calderbank offer that does not qualify as a 'settlement offer' under s 112(1) of that statutory regime to give rise to the presumption under s 112(2), I apprehend would be unlikely to be capable of pulling itself up by its own bootstraps to displace the operation of the statutory rule contained in s 109(1). It will always boil down to a question of what it actually offered and what it explained to the offeree at the time? The issue about which the Tribunal would need to be satisfied for it to be relevant as a factor under s 109(3) to make it 'fair' to order costs under s 109(2) in the circumstances of the case, as with a court, is always whether it was unreasonable for the offeree to have refused it at the time it was offered as a genuine compromise. Unless it contained those extra elements, an offer by a party made in the guise of a Calderbank offer can hardly create any more favourable consideration than under the 'offer of settlement' regime prescribed by Parliament under the VCAT Act.

(d) There is nothing in the VCAT Act or purpose of the statutory 'settlement offer' regime in ss 112-114 to prevent a Calderbank offer being made at the same time (whether separately or in the same letter). But whether a Calderbank offer positively or negatively impacts the exercise of the Tribunal's discretion very much depends on what it contains and what it says, and the language it uses. If it confuses things or is construed as a threat or claim of legal right that does not arise in VCAT proceedings, that would detract from any genuine offer it might contain. But if it explains clearly why the offer is a good offer and does so in appropriate words to resolve the dispute between the parties, it might potentially add a great deal.

1. Transcribing the principles applicable to Calderbank offers made in court proceedings to conform to the idiosyncrasies[76] of costs considerations applicable in VCAT proceedings - where the starting point under the statutory rule in s 109(1) of the VCAT Act is that each party is to bear their own costs in the proceeding and the Act has its own statutory settlement offer regime requiring strict compliance with s 112(1) to create any presumption, displacing the prima facie rule in s 109(1), of an entitlement to a costs order - is somewhat of a 'Gordion knot' to be untied and then retied in civil proceedings in VCAT.
2. As the above analysis of s 109 shows, in VCAT proceedings the costs 'alternatives' are not binary in the way costs applications typically present for discretionary costs awards in court proceedings, where either the plaintiff or the defendant is ordered to pay costs of the other under general rule of practice in courts that costs usually 'follow the event'. As the High Court put it in Oshlack in 1998, the 'usual order as to costs' in court proceedings 'embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour', being a longstanding principle applied in court proceedings 'grounded in reasons of fairness and policy' on the basis that 'if the litigation had not been brought, or defended ... the successful party would not have incurred the expense which it did'.
3. In contrast, the general rule governing legal proceedings in VCAT is that 'the parties are to bear their own costs in a proceeding' under s 109(1) of the VCAT Act. That is the 'usual rule' in VCAT proceedings and it is a statutory rule. It is by exception to that 'usual rule' in VCAT proceeding that costs may be awarded as fair under s 109(2) or s 112(2). That 'usual rule' is a third alternative that does not generally feature in inter partes disputes in court proceedings, and its absence as a 'usual rule' and third alternative in court proceedings is critical to the operation of the Calderbank principles developed for court proceedings and why those principles require adjustment in carefully translating their policy and application to the discretionary statutory power given to the Tribunal to award of costs in VCAT proceedings.

Application of Calderbank principles under VCAT Act s 109

1. In assessing the relevance and weight to be attached to any Calderbank offer, the statutory starting point is of course s 109(3) and whether its non-acceptance satisfies the Tribunal that it is fair to order costs under s 109(2).
2. Adapting the Calderbank test as recently summarised by Justice Garde, when considering a submission that the rejection of a Calderbank offer was unreasonable, the Tribunal should ordinarily have regard at least to the following matters:

(a) the stage at which the offer was received;

(b) the time allowed to the offeree to consider the offer;

(c) the extent of the compromise offered;

(d) the offeree's prospects of success, assessed as at the date of the offer;

(e) the clarity with which the offer was expressed; and

(f) whether the offer foreshadowed an application for indemnity costs in the event of the offeree rejecting it.[77]

1. To be effective[78] as a Calderbank offer at all, it must have offered a genuine compromise[79] of rights.
2. The onus is always on the party who made the Calderbank offer to establish that the other party's failure to accept their more favourable offer of a compromise at the time was unreasonable in all the circumstances.[80]
3. The extent of the compromise offered is a critical factor, as the Court of Appeal has reiterated in Hazeldene's Chicken Farm.[81] If it 'amounted to more than a capitulation, but not a great deal more' (to use Justice Garde's recent expression) its weight in the evaluation of the question whether it was unreasonable for the offeree to have rejected it at the time may not be very much.
4. Both the clarity and the manner in which the offer is expressed is very important in VCAT proceedings given the Tribunal's wide jurisdiction and wide variety of participants in legal proceedings, often unrepresented. At the time it is made it needs to clearly explain to the reader (who is neither necessarily legally represented nor familiar with legal proceedings) why it would be unreasonable for them to reject the offer of compromise offered, and explain respectfully and clearly why the offer is a better outcome than what they can reasonably expect. How the offer is expressed might be relevant, not just what it offers.
5. In assessing the question of whether it was unreasonable not to accept it, it might not be unreasonable at that time for a party to reject an ultimately more favourable Calderbank offer that had been framed in an inappropriate, antagonistic or non-conciliatory manner for a VCAT proceeding. Inappropriate words might add unnecessary fuel to the parties' dispute, rather than promoting of settlement.
6. Thus, in Fasham Johnson Pty Ltd v Ware [2004] VCAT 1708 at [24]-[27], in noting that the Federal Court had observed that Calderbank offers had been recognised as 'such a useful and flexible weapon for litigants',[82] the Tribunal observed in relation to the offer before it, that 'in mentioning a Calderbank point, [it] was hardly in the form of a conciliatory letter offering a compromise ... Possibly even it was intimidatory'.[83]
7. In a given case, a Calderbank offer made in VCAT proceedings threatening that indemnity costs will be sought if the offer is not accepted, is asserting a claim to something quite exceptional. An overstated assertion of legal claims might affect the clarity of the offer itself. In a given case it might characterise it as inappropriate, antagonistic or non-conciliatory for a VCAT proceeding, denying the offer itself the beneficial treatment it might otherwise have been given under s 109(3)(e) to make it 'fair' that the offeror be awarded their costs.
8. It must always be borne in mind that the discretionary power to order costs is one exercised in the circumstances of each case. The broad jurisdiction conferred on VCAT requires a compromise offer to be considered in the light of the context of the particular application or dispute. Whether a dispute between parties is relational or transactional or something else might have a bearing in a given case. The recent owners corporation case I mentioned was relational: one between a lot owner and their owners corporation of which it was a member, and which had statutory responsibilities under the legislation governing it to have dispute resolution procedures for 'disputes involving a lot owner, manager, or an occupier or the owners corporation'.[84] Owners corporations must also act in good faith.[85] In that context the capitulation by the lot owner in circumstances where their owners corporation has statutory duties including in dispute resolution, is part of the context in which a Calderbank offer would be considered.
9. Even if an offeror shows that at the time of the Calderbank offer the failure to accept it was unreasonable at that time, for it to be a factor that actually makes it 'fair' to order costs for the period after the date for acceptance of the offer closed, will always be the thing about which the Tribunal must be satisfied, taking into account all the circumstances of the proceeding as a whole (and not just the question a court might decide when exercising its unfettered statutory discretion, of whether the Calderbank test is established). The Calderbank offer cannot be viewed in isolation from other relevant factors that s 109(3) requires that the Tribunal must take into consideration.

Under the VCAT Act, the Tribunal must be satisfied that it is fair to order costs

1. I return to what Justice Gillard said in Vero about the operation of the general costs rule in s 109(1) of the VCAT Act. These paragraphs of that early and grounding decision of the Supreme Court are not always cited, but they summarise the approach the Tribunal has been directed to take:[86] (emphasis added)

[18] ... the general rule to apply in all proceedings is that "each party is to bear their own costs in the proceeding." Despite the general rule, the Tribunal may at any time order a party to pay costs to another party. ... However, the Tribunal may not make an order unless it is "satisfied that it is fair to do so", and in arriving at that decision the Tribunal is bound to have regard to a series of matters set out in s 109(3). Despite the fact that the various matters are listed, s 109(3)(e) operates to extend the relevant matters if the Tribunal considers that some other matter is relevant. ...

[19] It follows that the general rule applies and the Tribunal may only make an order for costs if it is satisfied that it is fair to do so...

[22] Whilst it is appropriate for the Tribunal to consider each of the specified matters in s 109(3) ... in the end it is important that the Tribunal consider all the matters together and determine whether it is fair to make an order for costs. When dealt with in isolation, each of the matters may lead to the conclusion that it is not fair to make an order for costs, but when taken together, the Tribunal may be satisfied that it is fair to do so. It is the totality of all relevant matters under s 109(3) that must be considered in the context of the prima facie rule.

[23] ... it must be steadily borne in mind that whatever findings may be made, having considered the matters set out in s 109(3), an order can only be made if the Tribunal is "satisfied that it is fair to do so".

1. At the outset I mentioned that there are at least three critical differences to how the Tribunal's discretionary power is required to be exercised in VCAT proceedings. I return to the first two.
2. As the High Court recently confirmed, in the 'formulation of principles to guide the exercise of the discretion' in court proceedings, the 'guiding principle', or 'general rule' or 'ordinary course' is that costs 'follows the event' in court proceedings. As the High Court put it in 1998 in Oshlack, as between the parties to litigation in courts under their general rule of practice, 'fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful party'.
3. As Justice Gillard identifies in the passages from his judgment in Vero, in Tribunal proceedings this has been inverted by the Parliament in enacting s 109(1) for all legal proceedings in VCAT.[87] While the underlying rationale for the award of costs - namely compensation - is the same, the principles to guide the exercise of the discretion are prescribed by the provisions of the VCAT Act, not general 'rules of practice'.
4. Second, unlike in court proceedings where the grant of discretionary statutory power is unconfined, in VCAT proceedings it is impermissible for the Tribunal to adopt any rule of practice. To do so would be contrary to s 109(1) which creates a statutory prima facie rule that can only be displaced by application of the criteria in s 109(3) or by the operation of s 112.
5. Thus:

(a) Courts, applying a 'rule of practice' start from the 'general rule' that costs will be ordered to a successful party, unless there is an exception.

(b) VCAT applying the prima facie 'statutory rule' in s 109 of the VCAT Act starts with the opposite general rule that costs will not be ordered unless it is satisfied that in all the circumstances that it is fair to do so to order one party pay some or all of the other's costs.

Relevance of exceptions to general rule of practice in court proceedings

1. As I have just mentioned, in court litigation, for a court not to exercise its costs discretion to make the 'usual order as to costs' in favour of the successful party is done by exception.
2. In proceedings in VCAT, these exceptions can also be just as relevant to the question whether it is 'fair' to order costs at all or in part. In VCAT proceedings they are applied from the perspective in assessing if it is 'fair':

(a) under s 109(3) to make a costs order under s 109(2) (including in consideration of any Calderbank offer); or

(b) under s 112, whether the statutory presumption should apply or to 'order otherwise' under s 112(2).

1. Because the Tribunal's costs discretion is couched in statutory terms that costs can only be awarded if the Tribunal is satisfied that it is fair to do so, in a given case the conduct might simply disentitle them to costs they might otherwise have been fairly awarded. In another, it might also justify it as fair, to make an order for costs against them in favour of the other party under s 109(2).

1. I now turn to the application of these principles to the parties' arguments on costs in this case.
2. As I have said, through their lawyers, both parties filed extensive written costs submissions on their own and in response to each other's costs applications, which they supplemented with oral submissions at the costs hearing. They then both subsequently filed written submissions after the hearing on the actual fees claimed by Mr Richardson under his costs application.
3. I deal with the various relevant considerations raised by them in turn.

1. The final hearing of Mr Richardson's application under the Subdivision Act took place over 6 days - two in 2022 and four in 2023 - at which both parties were represented by experienced litigation solicitors and trial counsel.
2. The Tribunal's jurisdiction in the case is one that formerly lay exclusively with the Supreme Court. The parties themselves conducted the proceedings in a very adversarial way that often occurs in hard fought litigation before the courts of law.
3. Although in the 'original jurisdiction' of the Tribunal, the application was one to alter the parties' interests in land owned by them in their 2-lot subdivision affected by their owners corporation. They agreed that their owners corporation would abide by the outcome, but not much about anything else.
4. From a case management perspective, the proceeding was conducted throughout on points of claim and defence, in a manner akin to civil litigation in a court.
5. As recorded in my reasons for decision at para [338]-[339],

(a) On 20 October 2022 (day 1) the hearing was adjourned to allow pleading amendment by Mr Richardson to raise additional constructional arguments about the proper interpretation of the amended legislation. Prior to that point, Mr Richardson had not sought any order giving 'consent' of a lot owner under s 33 of Subdivision Act (as now amended).

(b) On its resumption on 12 December 2022 (day 2) the hearing was again adjourned to allow amendment by Mrs Goldstone. As explained in the Tribunal's reasons at para [492]-[497], in answer to an objection to admissibility to parts of Mr Goldstone's affidavit of 18 August 2022 - on the basis that it had not been pleaded - the Tribunal permitted Mrs Goldstone to amend her points of defence. The amended defence was subsequently filed by Mrs Goldstone on 20 December 2022, containing a new para 22(a) - (m) and para 33.

(c) The hearing resumed in early 2023 and ran over 4 more days.

1. At the hearing, evidence was presented to the Tribunal in many volumes of Tribunal Books and through witnesses, who supplemented their written evidence with oral evidence. Evidence was received from:

(a) Mr Richardson who had sworn affidavits of 9 July 22 and 13 February 2023 (the latter of which was only admitted into evidence in part),[88]

(b) Mr Graham Burns, valuer, who had prepared a report dated 28 February 2022;[89]

(c) Mr Goldstone (but not Mrs Goldstone) who had sworn an affidavit of 18 August 2022 on which objections had been taken to large parts of its admissibility;[90]

(d) Mr Anthony Rohan, valuer who had prepared a report dated 22 April 2022;

(e) Mr Nicholas Moore, a licensed surveyor whose reports of 15 March 2021 and 7 March 2022 were admitted into evidence by agreement of both parties and adopted by both parties.[91]

1. All witnesses called to give oral evidence were subject to extensive cross-examination.
2. At the conclusion of evidence, the parties filed lengthy written submissions and made oral submissions on both the evidence and the law.
3. Under s 109(3)(d) the nature and complexity of the proceedings is a highly relevant consideration in this case to which I have had regard.
4. As Gillard J noted in Vero at [23] 'in a sense the paragraph is neutral'. It can be a factor going either way in the circumstances of a case to conclude that it is fair that a costs order should be made or that no costs order should be made.
5. The complexity and nature of this proceeding would, in many cases, be a factor to justify it as fair that the ultimately successful party should have their costs of the proceeding.
6. However, in this case, it is insufficient on its own to make it ultimately fair to make an for costs of the proceeding, when other factors I am about to discuss are taken into account.

1. It is incontrovertible that Mr Richardson ultimately lost in the final result.
2. Mrs Goldstone was the successful party in defending Mr Richardson's application in the proceeding.
3. In VCAT proceedings, while that factor is a primary consideration, winning alone is insufficient on its own to justify an award of costs because of the prima facie statutory rule under s 109(1).
4. Consistently with the underlying rationale of the 'general rule of practice' in court litigation, it is also not sufficient if there is a disentitling factor present. I shall come back to that.

1. As Counsel for Mr Richardson submitted, the legal ground shifted underfoot during the running of the complicated proceeding, after Mr Richardson commenced it. That was not his doing.
2. As the Tribunal's reasons for decision found, Mr Richardson's application raised a complex question of statutory construction of the _Subdivision Ac_t and Owners Corporations Act. The complexion and complexity changed after he commenced his application by changes in the prevailing interpretation of the relevant law and then of the content of the law itself.

(a) On 25 June 2021, the Supreme Court interpreted the legislation in a profoundly different manner to what had been the prevailing interpretation applied by the Tribunal since 2015, which otherwise might have governed the determination of his application;[92]

(b) On 1 December 2021, amendments to the relevant provisions of the Subdivision Act itself - the enabling enactment under which the application was brought - then came into force to potentially affect the determination of his application;

(c) By the time the case was listed for final hearing in late 2023 there was no clear judicial authority on how the amended legislative text was to be construed or applied. There was also no authority at all on the application of those provisions under which he applied to a 2-lot subdivision within the meaning of the Owners Corporations Act.

1. Mr Leaman, in his oral submissions on costs, forcefully argued that Mrs Goldstone's position, at the time of final hearing, was that the Tribunal's power to make an order under the Subdivision Act was not enlivened because of the binding decision in Real Estate Victoria Pty Ltd v Owners Corporation No 1 PS332430W [2021] VSC 373 ('REV') (and VCAT decisions that had applied it following the Act's amendment) and also because of the effect of the amendments themselves. They had changed the way the test worked under the relevant provisions of the Subdivision Act. He submitted there was never more than a majority in favour or against (depending on which side of 1 December 2021 one looks), and that Mr Richardson could never make his case factually based on the 50:50 lot entitlement of the parties.
2. Against that, Mr Jones of Counsel for Mr Richardson forcefully argued that the proper construction of the amended provisions of the Subdivision Act at the centre of this case remained uncertain. How the amended provisions of the Subdivision Act actually applied when, because of the allocation of lot entitlement of a subdivision, it would never be possible to have a majority in favour or against, was completely unclear. He submitted that when the application was commenced there was a clear path home based on the Tribunal's earlier decision in Conroy v Owners Corporation Strata Plan 30438 [2014] VCAT 550 ('Conroy'). That decision had been routinely followed by the Tribunal. While the Supreme Court's decision in REV changed that, the Supreme Court had not been asked to consider the effect of the amended legislation and thus it remained an open question of statutory construction.
3. I accept Mr Jones's submissions on that. It must be observed that despite the Tribunal's decision in this case and other cases all raising questions about how to apply the amended provisions, their construction had not, and still has not, been settled by any Supreme Court authority.
4. That uncertainty is a factor that is relevant to costs. Without a determination by the Tribunal on the meaning and application of the amended legislative provisions to the facts of this case, it could not be said that either party could necessarily predict its outcome, despite being legally advised at all times by very experienced solicitors and Counsel.
5. Against that however, in this case, the Tribunal found that the uncertainty of how the amended provisions might apply to other subdivisions was, in the end, not determinative in relation to the 2-lot subdivision affected by an owners corporation in this case. Despite the parties being invited by the Tribunal to do so, neither party sought to advance constructional arguments based on the express provision in the Owners Corporations Act that governs the meaning of the phrase 'unanimous resolution' as it relates to a 2-lot subdivision under the Owners Corporations Act and in all Victorian Acts.
6. That constructional issue had never been considered or determined previously by any published decision of this Tribunal or any court.
7. On balance, these considerations therefore also militate against either party being entitled a departure from the general rule in s 109(1) in relation to the costs of the proceeding as a whole. Neither was successful on that constructional issue that ultimately determined the outcome.
8. In this case the law to be applied was not merely complex, it was clearly uncertain in its application.

Was Mrs Goldstone's reservation of rights to bring a Subdivision Act application herself relevant?

1. A factor I have considered in this case to be highly relevant under s 109(3)(e) in this case is something to which I have referred earlier.
2. In my reasons for reserving costs, I expressly made mention that:

[521] It cannot escape attention that there is, within the evidence filed with the Tribunal, material that may well lead to a conclusion that the conduct of both parties brought about this application because of the disharmonious relationship between the lot owners and occupiers of this 2-lot subdivision. The evidence also points to it having been precipitated by the lawyer's letter reserving Mrs Goldstone's rights to bring this very application, sent by her husband's law firm on his instructions.

[522] I would also need to hear submissions on the application of the principle - recently confirmed by the High Court in Bell Lawyers v Pentelow [2019] HCA 29 - to the circumstances of this proceeding in which Mrs Goldstone has been represented throughout by her husband's law firm in which he is a principal.[93]

1. Despite Mr Leeman's valiant submission inviting the Tribunal to relegate his firm's letter to a mere statement of reservation made in the past, and of no substantive consequence, I consider Mrs Goldstone's express and unretracted reservation of rights to be of real substance and very relevant to the exercise of the Tribunal's costs discretion in this case. In substance her reservation of rights in her solicitors' legal letter made Mrs Goldstone a putative protagonist herself.
2. That factor would disentitle her to costs to which she might otherwise have been entitled in court proceedings and is a factor making it unfair to award costs in her favour as the ultimately successful party in this proceeding.
3. As I found in my reasons for decision, the neighbours do not like each other and do not get along. They had been disputing constantly about things above and below ground, and things occurring out the front in the street and in the driveway and in the lift. That intractable enmity between the upstairs and downstairs property owners made legal proceedings in some shape or form inevitable.
4. Even though Mr Goldstone was not the lot owner of his and his wife's home and had not been appointed by Mr Richardson to manage the owners corporation affecting the land subdivision, Mr Goldstone had been acting as the de facto manager for the owners corporation: organising work on the common property, paying its bills and apportioning expenses and receiving the money paid to the owners corporation by Mr Richardson and Mrs Goldstone. During the ongoing unpleasantness between neighbours, which continued during the COVID-19 pandemic and the ongoing public health restrictions, the sparring neighbours resorted to communicating through solicitors. The lawyers' letters passed back and forth between the lot owner residents, each taking points against the other. Sadly, for both neighbours in their beautiful apartment homes, it had become a matter of who reacted or blinked first.
5. For Mrs Goldstone she had available to her a lawyer husband who, as a partner in a law firm, could instruct his own firm on her behalf to communicate for her through solicitors' correspondence.
6. For Mr Richardson, a retired engineer, to communicate through lawyers required him to incur the cost of engaging an independent law firm.
7. In para [7] - [9] of my reasons for decision I made the following observations about the evidence before the Tribunal:

[7] Before the hearing both Mr Richardson and Mr Goldstone had provided affidavits about all the unpleasantness between the neighbours. Both also gave oral evidence at the hearing and were cross-examined. This case does not turn on the credibility of either witness as there is no dispute that the neighbours' relationship is acrimonious and that disputes have occurred.

[9] One topic in particular, about which Mr Goldstone argued, related to one of the many letters Mr Goldstone's law firm had written to Mr Richardson, and which, on behalf of his wife, he personally had approved. That letter, read objectively by a lay person such as Mr Richardson, foreshadowed a threat to bring this very application now brought by Mr Richardson under the Subdivision Act 1988. In it, Mr Goldstone's law firm had expressly reserved the right for Mrs Goldstone to apply to the Tribunal to seek an alteration of lot entitlement and lot liability. That reservation of legal rights which Mr Goldstone argued in his oral evidence was simply a reservation of rights that had never been acted on, was - he eventually conceded - also never retracted.

1. Since making those observations in my reasons for final decision in which I reserved the costs of the proceeding, I have re-read Mrs Goldstone's solicitors' letter in light of the submissions made at the costs hearing. Three objective things can be said about that lawyer's letter that had reserved to her the right to bring an application under the Subdivision Act:

(a) First, there was no reason to reserve her rights expressly other than to make it clear that Mrs Goldstone, through her lawyers, regarded an application under the Subdivision Act as a legal avenue validly available for her to take against Mr Richardson as a way to resolve the issues between them about the ongoing governance and management to their two-lot subdivision affected by an owners corporation in which they both held a 50:50 vote.

(b) Second, after receiving it, Mr Richardson (as I have said), got in first after his lawyers had written before action in response to say that Mr Richardson would be quite amenable to an alteration to lot entitlement, even if it meant his lot liability increased due to the larger size of his upstairs apartment which occupied two floors.

(c) Third, Mrs Goldstone never retracted what her solicitors' letter had reserved to her, even when there was plenty of opportunity to do so before him taking action and during the proceeding.

1. I accept it was always open for Mr Richardson to discontinue his proceeding. But by him commencing it after Mrs Goldstone's solicitors letter had raised the threat first, and in circumstances where she never retracted her legal right to bring the exact same application and left the spectre hanging, when it comes to the question of whether it is 'fair' to order costs of the proceedings in her favour because he continued with them and lost, in such circumstances it significantly colours the costs consideration that is normally attributed to the factor of who is the 'successful party' and it diminishes the discretionary weight to be attached to it.
2. In the circumstances of this case, acting fairly towards both the neighbouring parties, it does not justify any departure from the prima facie position directed by s 109(1) such as to make it fair in all the circumstances to order that Mr Richardson pay all of Mrs Goldstone's costs of the proceeding that she claims.
3. But as I shall come to, I think it is fair in all the circumstances that Mr Richardson should properly pay some of Mrs Goldstone's costs where his own conduct in running his case caused her to incur wasted costs. I shall return to that shortly.
4. Staying with this point, one might never know whether Mr Richardson would have brought his application otherwise. But the very idea of it having been presented to him by Mrs Goldstone's lawyers and raised against him by her express reservation of rights, it is wholly unsurprising that he took it up himself as a legitimate course that might offer a legal solution to the problem he was trying to solve about the ongoing management and governance of their owners corporation in this 2-lot subdivision. It is also relevant that at all times in the proceeding he was represented by independent lawyers, including Counsel.
5. This is therefore a strong consideration to which I have had regard, against it being fair under s 109(3)(e) to order Mr Richardson pay the costs Mrs Goldstone claims for the proceeding generally. As I have noted in my earlier discussion of the legal principles to be applied, this factor in court proceedings is one that can actually cause the ordinary presumption that costs 'follow the event' not to apply in court proceedings when a court exercises its statutory costs discretion. As the High Court observed in Northern Territory v Sangare [2019] HCA 19; (2019) 265 CLR 164 at 172-173 (in the passaged cited earlier):

a successful defendant may be refused its costs on the ground that its conduct induced the plaintiff to believe that he or she had a good cause of action.

1. In 1998, the High Court had made the same observation in Oshlack at [69], in dealing with the 'traditional exceptions to the usual order as to costs' in court proceedings that 'focus on the conduct of the successful party which disentitles it to the beneficial exercise of the discretion'. It observed that 'misconduct' (in the sense used by Devlin J in Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873 at 874):

... means misconduct relating to the litigation, or the circumstances leading up to the litigation. Thus, the court may properly depart from the usual order as to costs when the successful party by its lax conduct effectively invites the litigation; [or] unnecessarily protracts the proceedings ....

1. The High Court had also framed the application of that exception against the grounding rationale for courts making the 'usual order as to costs' in the first place.[94]
2. In VCAT proceedings, where the prima facie statutory rule in s 109(1) that each party is to bear their own costs of a proceeding unless the Tribunal finds it otherwise to be 'fair' to award costs, the position is a fortiori (persuasively stronger).
3. In this case, I consider that such a statement in lawyers' correspondence that, read objectively by a lay person, has the capacity to be received by its intended recipient as a future threat to sue, is a relevant factor that weighs against the party making it. It effectively invited Mr Richardson to litigate and gave credence to the claim he brought through legal proceedings in the Tribunal. Whether it was an actual threat to sue and that it was never acted upon - as Mr Goldstone had argued in his evidence and Mrs Goldstone through Mr Leaman submitted in his costs submissions - is simply not to the point. There was no need to write it unless it was intended to mean something. As a letter coming from solicitors bound by ethical professional obligations, what it meant was that Mrs Goldstone's solicitors considered that the possibility of their client making such an application herself was a legitimate legal option in this 2-lot subdivision and was one of such importance that she should reserve to herself expressly the right to bring it herself, if she decided to choose to do so. The statement in her lawyers' letter not only raised the spectre of bringing the claim it gave legitimacy to that potential legal avenue that Mr Richardson then took.
4. Another and related reason why this factor does not make it 'fair' for Mr Richardson to be ordered to pay all the costs claimed by Mrs Goldstone simply because she is the ultimately successful party in the result of the proceeding, is that the actual result of Mr Richardson's application resolved that legal question that had been an issue in dispute between both parties as affecting their very valuable land ownership rights in their 2-lot Toorak subdivision.
5. While Mrs Goldstone never actually withdrew her reservation of legal right to bring the same application herself, the practical likelihood of it being successful,[95] would now be slim to say the least. As the Tribunal's reasons for decision found, if either lot owner wishes to change their plan of subdivision both must consent to the alteration proposed by way of unanimous resolution for a 2-lot subdivision under the Owners Corporations Act.
6. Therefore, I regard this factor to weigh significantly against Mrs Goldstone in her claim for her costs of the proceeding.

Relevance of Mr Richardson's amendment on day 1?

1. Mr Richardson had originally run his case on a confined basis that the Tribunal could and should distinguish the Supreme Court decision in REV because of the amendments to the legislation coming into effect after that decision, contending that it was open to the Tribunal to revert to the Tribunal's earlier interpretation in Conroy that had prevailed prior to that Supreme Court decision.
2. After his Counsel opened the case on that confined basis on day 1, the Tribunal indicated that it was unlikely to be persuaded that the decision in REV was not binding or inapposite to the proper construction of amended provisions of the Subdivision Act when their structure remained unaltered by the amendments made to s 34D.
3. Mr Richardson was given permission to amend his application to explore constructional arguments that had not been explored in REV in relation to the specific amended provisions as now in force, on the basis that he was not introducing any further evidence. He elected to take that opportunity.
4. The parties in this case were far from unsophisticated. They had engaged independent Counsel. Strategic decisions were being taken as to the points to be taken and the evidence to be called, and choices made.
5. While I regard it to have been proper for Mr Richardson to elect to take that course and amend his points of claim if he sought to continue with his application, the fact of the matter is that by doing so it resulted in Mrs Goldstone having costs thrown away.
6. Her original trial Counsel was unavailable at the resumed hearing. That was not her fault. She therefore had to brief alternative trial Counsel who was required to then read into the evidence and prepare the case for hearing again, duplicating some of Mrs Goldstone's costs incurred by her initial trial Counsel.
7. In these circumstances, Mr Richardson's conduct did cause Mrs Goldstone to unreasonably and unnecessary incur wasted costs which were 'thrown away' because of Mr Richardson's decision to amend at trial given that he could have run that alternative constructional argument from the outset.
8. In circumstances where she was ultimately successful on his amended application run to conclusion at trial, I consider it to be 'fair' that she be awarded her costs thrown away by reason of that amendment and the need to adjourn the hearing after day 1.
9. Below I have identified the costs thrown away properly allowable as 'fair'. When it comes to the assessment of the costs to be allowed, there are two issues:

(a) Those items which are properly allowable;

(b) The quantum assessed for the item.

The expression traditionally used when awarded costs are taxed in the costs court, is that the costs allowed on assessment are those expenditures 'necessary or proper' for the attainment of justice.[96]

1. The items I consider should properly awarded and assessed as fair are 80% of Mr Parncutt's fees charged to Mrs Goldstone in preparation for final hearing (but not work done before) and 80% of his fee for the first day of hearing. Those costs were clearly 'thrown away' as a result of the amendment, and the fees as Counsel acting at the hearing were necessary and proper for the attainment of justice.
2. Mr Parncutt's other fees charged to Mrs Goldstone would have been incurred by her in any event. She was always required to prepare her evidence and opening submissions on the balance of the case. Further, as I shall come to, those that related to the evidence of Mr Goldstone to which objection was taken, Mrs Goldstone ultimately comprehensively lost on that discrete issue and so those costs cannot properly be characterised as 'thrown away' by Mrs Goldstone as a result of the amendment or at all.
3. Having allowed Mr Parncutt's cost thrown away, the costs of Mr Schlicht of Counsel who appeared for the balance of the hearing, were not thrown away as a result of the amendment.

Relevance of Mr Richardson's own conduct seeking to narrow the dispute?

1. Mr Jones submitted that Mr Richardson at all times acted reasonably in bringing his application, including actively seeking to reduce the costs and time associated with this legal proceeding by making application for a hearing on a preliminary point of law about these constructional issues, which would have avoided the costs of the final hearing. Mrs Goldstone had opposed that more efficient course, and in doing so brought the additional costs of the final hearing on the merits of the application upon herself.
2. Specifically he submitted[97] that the parties' cost applications 'should be considered in the context of amendments to the Subdivision Act having come into effect on 1 December 2021' and that Mr Richardson had sought to narrow the dispute and even avoid any need for an extensive final hearing on evidence by making an interlocutory application in late 2021 for the matter to be listed for a hearing on the following preliminary point of law 'question':

Can the Tribunal make an order on the application made in this proceeding under s 34D(1)(a), by the owner of Lot 2 of the two-lot subdivision, in the absence of a further application and further order being made under s 34D(1)(b) consenting on behalf of the owner of Lot 1?

Because Mrs Goldstone opposed that application at an interlocutory hearing on 10 December 2021 the Tribunal did not make an order for hearing on a preliminary point. Therefore, he submits that ultimately 'this matter could properly have been determined' as a hearing on a preliminary point of law, which he submits is demonstrated by the Tribunals ultimate findings at [489].[98]

1. I accept that Mr Richardson did what he could to limit the costs with the changing legal landscape underfoot. In December 2021 he raised with Mrs Goldstone and her lawyers the benefits of addressing the legal question of the proper construction of the amended provisions as an initial issue, submitting at the time:

8.2 if the answer to the Question is "yes", directions could thereafter be given for the further conduct of the proceeding based on it being a s 34D(1)(a) application, without the necessity to establish the s 34D(1)(b) elements;

8.3 if the answer to the Question is "no", our client's application (under s 34D(1)(a)) could not succeed, there would be substantial savings in terms of costs and the matter would be dealt with more expeditiously than would be the case if such finding had to wait until a final hearing; ....

1. As a consequence, Mr Richardson submits that he:[99]

does not seek costs occasioned by the matter not proceeding by way of a preliminary hearing (for example, the costs occasioned by it being necessary to call expert witnesses). [He], does, however, submit that it is relevant to questions related to the manner in which the parties have conducted the proceeding (s 109(3)(a)), responsibility or otherwise for prolonging the time take to complete the proceeding (s 109(3)(b)), the nature and complexity of the proceeding (s 109(3)(d)) and s 109(3)(e)).

1. I agree that it is relevant to these questions.
2. Mr Richardson had clearly tried to limit costs by narrowing the issues while Mrs Goldstone had resisted. That additional factor therefore also militates against it being 'fair' for Mrs Goldstone to receive the costs of the proceeding she claims.
3. It is also quite inconsistent for Mrs Goldstone to now submit on the question of costs in as a relevant factor in her favour under s 109(3)(c):

8. As to s 109 (3)(c) ..., we note that the application made by the Applicant had no tenable basis or fact in law. This was maintained by the First Respondent throughout the proceedings ...

After summarising and referring to the Tribunal's findings in para [96] and [108] she then continues:

9. Further, the Applicant continued to make submissions concerning the applicability of the decision in REV notwithstanding the number of cases that were decided by the Tribunal post that decision confirming the Tribunal's attitude that Real Estate Victoria Pty Ltd v Owners Corporation No.1 [2021] VSC 373 (Justice Richards) (REV) should apply over The Concept Developer Pty Ltd v Conroy [2015] VSC 464 (Conroy). The Tribunal agreed and acknowledged that it was bound by REV.[100]

10. The Applicant conceded that s 34D (3) (c) (iii) could not be established even if s 34D jurisdiction could be invoked.

11. The Tribunal has determined that no argument raised by the Applicant was able to give rise to the Tribunal amending the lot liability and lot entitlements of the parties.

12. It follows that each of the claims made by the Applicant were more than merely weak and were so weak as to be unarguable[101] and not capable of being maintained against a contradicting argument or 'tenuous'[102], such that s 109(3)(c) of the VCAT Act was not satisfied, but rather, it never had any reasonable prospects of success[103] and was incapable of being maintained against argument[104] because the Tribunal has determined, effectively, that he was, at law, unable to obtain the relief he sought. The final orders received support this position, however, we further say for the Tribunal to award costs on the basis of s 109(3)(c) of the VCAT Act, it does not need to be satisfied that the claim by the Applicant was completely baseless, but rather, can award costs as a result of the relative weakness of the application and its general lack of merit[105] leading to it having no real prospect of success.

In relation to the relative strengths and weaknesses of the parties cases, we further note that relative to the defence raised by the First Respondent, the claims made by the Applicant were able to be disposed of briefly with reference to their rights, obligations and powers under Owners Corporations Act 2006 (Vic)...

1. Apart from the inconsistency in Mrs Goldstone's costs submission I make a further observation.
2. While the Tribunal found against Mr Richardson, it is not correct at all that his case was unarguable and incapable of being maintained against contradictory argument or never had any reasonable prospects of success. The case required legal argument to enable the complex issues of construction to be determined by the Tribunal in its final decision.
3. A similar point was raised in Commissioner of State Revenue v Challenger Listed Investments Limited (No 2) [2011] VSCA 398. In that case, the winning party claimed that the Commissioner's prospects of success were very low in light of a recent and considered decision of the Court and that it was very difficult to convince the Court it was wrong. The Court of Appeal (Buchanan; Tate JJA; Sifris AJA) agreed with the Commissioner that it was 'entitled to run the argument, that submissions were made that were not made in [that recent case] and that an alternative construction was presented'. It said at [20]:

Although the Commissioner faced substantial obstacles, it cannot be contended that the appeal was hopeless or conducted in bad faith.

1. In this case, it was always open for Mrs Goldstone to have instructed her lawyers to join in Mr Richardson's application to the Tribunal for a hearing on a preliminary point of law in an effort to reduce costs if the question of statutory construction was so clear cut as she contends in her submissions on costs.

Relevance of Mrs Goldstone's allegation of improper motive?

1. In his cross application for costs, Mr Richardson seeks the costs of his solicitors and Counsel wasted because of the allegedly unnecessary points taken by Mrs Goldstone, which disadvantaged him in his attempts to conduct the proceeding with as much efficiency as possible.
2. As found by my reasons for decision, Mrs Goldstone raised a wholly unsuccessful defence by alleging that Mr Richardson had an improper motive in bringing an application under the Subdivision Act. It is indisputable that this specific part of her defence prolonged the hearing and caused an adjournment.
3. I agree with Mr Richardson's Counsel that this particular issue[106] was discrete, and that the costs relating to it within Mrs Goldstone's claim for costs against Mr Richardson, are largely capable of separate identification. Their identification within Mr Richardson's crossclaim for costs against Mrs Goldstone, however, are more difficult to identify.
4. In the Tribunal's determination of what it is 'fair' to order under Pt 4, Div 8 of the VCAT Act, in the circumstances of this case, there are three alternative potential costs orders.

(a) Were it otherwise 'fair' - on Mrs Goldstone's costs application - for a costs order to be made in Mrs Goldstone's favour for her costs of the proceeding, it would be unfair to allow Mrs Goldstone her legal costs on this discrete issue for which she was responsible for prolonging the time taken to complete the proceeding on an issue which she comprehensively lost. Thus, even were Mrs Goldstone awarded her costs of the proceeding, she would be disallowed legal costs incurred by her (in this case, of her Counsel) for this discrete issue on which she was wholly unsuccessful.[107]

(b) On the other side of that costs coin, again, were it otherwise 'fair' to make an order in Mrs Goldstone's favour for the costs of the proceeding that she claims, it might also make it 'fair' - on Mr Richardson's separate costs application - to order Mrs Goldstone to pay Mr Richardson his costs (in this case, of solicitors and Counsel) as the successful party on that discrete issue.[108]

(c) That irrespective of the outcome of Mrs Goldstone's costs application, that it is fair that Mr Richardson have his costs - on his separate costs application - for the disadvantage and expense caused to him in having to address the unsuccessful defence at the hearing.

1. For the following reasons, what is fair in the whole of the circumstances of this case is the first.
2. I find that by electing to raise the serious allegation of improper motive, and continuing to press it at the final hearing, Mrs Goldstone caused an adjournment and thus prolonged the time taken to complete the proceeding which is a factor under s 109(3)(a)(iv) but only if it 'unnecessarily disadvantaged another party', and also under s 109(3)(b) but only if it 'prolonged unreasonably the time taken to complete the hearing'.
3. I accept Mr Richardson's submissions that:

(a) Mrs Goldstone chose to press the argument that Mr Richardson had brought the Subdivision Act application for an improper motive. That serious allegation of bad faith was entirely unsuccessful and the evidence on which she relied in support of it was rejected completely in the Tribunal's findings at final hearing. None of the highly selective passages, some of which were removed from the context of Mrs Goldstone's own solicitors' letters to which they responded, rose to the level asserted. The making of the allegation in defence prolonged the litigation, including causing the adjournment on day two.

(b) By her making and pressing that unsuccessful allegation, it put Mr Richardson to additional expense before and during the hearing.

(i) The parties' lengthy written objections about the admissibility of large parts of Mr Goldstone's affidavit evidence, were addressed orally in submissions on at the hearing. Those objections became obsolete and wasted when, after being given leave to amend her defence to properly raise them. On filing that amended defence that otherwise objectionable and inadmissible made the evidence admissible as relevant (at least) to an issue in dispute.

(ii) Mr Goldstone's previously objectionable affidavit evidence and exhibits were then admitted, and he was cross examined on his evidence. Evidence about it was led from Mr Richardson and he was cross examined on it too.

(iii) Despite the allegation including assertions about what allegedly took place in passing conversation between her and Mr Richardson, Mrs Goldstone elected not to give any evidence herself or call any witness who heard the conversation. That was a forensic decision made by trial Counsel acting on instructions of his solicitors.

(iv) In the outcome, the single issue pressed by Mrs Goldstone to conclusion at final hearing resulted in reams of additional evidence which Mr Richardson was required to address by challenging the evidence through his own evidence, and through written and oral closing submissions.

1. In my view, Mrs Goldstone's serious allegation that Mr Richardson had an improper motive was unhelpful and a distraction. It only served to add more fuel to the fire of the neighbours' dispute.
2. It was also done in the context that her husband's law firm acting for her had previously written to Mr Richardson expressly reserving to her the right to bring the very same application under the Subdivision Act. It therefore does not sit at all well for Mrs Goldstone to then assert as respondent that Mr Richardson as the applicant had an improper motive when she had instructed her own solicitors to reserve to her the legal right to make the same application.
3. But ultimately, I cannot be satisfied that it amounted to (in the language of s 109(3)(a)) conducting a proceeding 'in a way that unnecessarily disadvantaged another party' or (in the language of s 109(3)(b)) a party being responsible 'for prolonging unreasonably the time taken to complete the hearing'.
4. Nor, in my view having heard all the evidence, does the forensic decision to take such a defence - which was an available one to argue were the Tribunal to have found that it had the discretion to make the order sought by Mr Richardson on his Subdivision Act application -make her 'guilty of some sort of misconduct'[109] by 'prosecut[ing] the [defence] solely for the purpose of increasing the costs recoverable'.
5. This, this was hard fought litigation with experienced solicitors and independent Counsel engaged by both sides.
6. It was an available and legitimate forensic choice made by Mrs Goldstone's Counsel engaged for the hearing.
7. He had not been responsible for the drawing of the original defence. While the point was known and the written and affidavit evidence about it had been filed, the point had not been properly 'pleaded', which was the procedural and evidentiary point made by Mr Richardson's objections to its admissibility. If it was to be made, it needed to be clearly put how it was to be made so as to give Mr Richardson fair opportunity to know how to respond, and to elicit the evidence that he might wish to elicit in response. When the amended points of defence were filed, oral evidence in chief was still to be given and there had necessarily been no cross-examination on the material.
8. As trial Counsel, he and his instructing solicitor from Mr Goldstone's law firm, Mr Leaman, conducted themselves in the proceeding - as the Tribunal would always expect of practitioners given leave to appear in Tribunal proceedings to represent a party under s 62 of the VCAT Act - respectfully and appropriately, and well within the bounds of their ethical obligations to the Tribunal.
9. As independent Counsel, acting to advance the interests of his client, it was an available point to take.
10. Fundamentally, it was well within Mrs Goldstone's Counsel's independent professional role acting in her interests to take the point. Of course, he could only deal with the evidence that he had, and it fell short of establishing any improper motive, despite his own courageous change of course in final submissions.
11. Given the history of disagreement between upstairs and downstairs neighbours, while by raising and pursuing her unsuccessful allegation of improper motive in the legal proceeding before the Tribunal it did nothing to ameliorate the underlying dispute between them as lot owners in their 2-lot subdivision, each party gave as good as they got in this robust case.
12. And it must be recalled, that although the case was heard after the fear and disruption and uncertainty of the pandemic had largely subsided, the tensions and disharmony that had had led to the difficulty between these neighbouring land owners within a tightly owned 2-lot subdivision single building, occurred during that time in our modern history when people's behaviours were challenged and people sometimes did do things that before the pandemic they might never have imagined themselves or others doing.
13. Taking all this into consideration, had it otherwise been fair for Mrs Goldstone to be awarded her costs of the proceeding, she would have been disentitled those costs relating to that issue. However, I do not consider that it makes it fair that she be ordered to pay Mr Richardson's costs of this unsuccessful single issue, despite it causing an adjournment. That adjournment, as I have said, was merely to enable Mr Richardson to be able to properly respond to the allegations that were eventually put by the amended points of defence. It caused no additional witnesses and no new evidence. Experienced trial Counsel are well adapted to deal with this sort of material, sometimes on the run.
14. That the parties relationship had fallen to the level that they completely mistrusted each other was what it had become.
15. In making that finding in the circumstances of this case I do not wish to suggest that another case might not result in a different outcome on its own facts and circumstances. Where a land subdivision in Victoria is affected by an owners corporation, that entity is an entirely statutory entity created by the creation of the plan of land subdivision as 'body corporate' for the members of the owners corporation who are lot owners of the land in subdivision affected by it. As such it is governed by the Owners Corporations Act 2006 (as the finding the Tribunal made in this proceeding made clear). That legislation governs the duties and functions of the statutory entity in a way that is quite different from a conventional 'corporation' or 'company' that is privately owned by its shareholders. It might appear to be a private entity but it is in its legal creation and its functions, an entirely statutory entity.
16. One of the main purposes of the Owners Corporations Act 2006 is to provide 'appropriate mechanisms for the resolution of disputes relating to owners corporations' as statutory entities: see s 1(b). I have referred earlier to the statutory duties of owners corporations and of their committees and managers and the requirements of the model rules. Simply because a 2-lot subdivision might be exempt[110] from the current statutory requirement to have formal 'rules' for dispute resolution does not mean that the members of the body corporate of the owners corporation, the lot owners themselves, are free to carry on without regard to the statutory purposes of the Act that governs their rights and obligations attached to the ownership, use and occupation of their land.
17. In this case, both parties' approach to dispute resolution about what, in the end, is a quite solvable issue of governance and management in accordance with the statutory framework of the Owners Corporations Act 2006, hardly demonstrated a desire to quell their legal controversy affecting their owners corporation and was hardly consistent with the objects of that Act.
18. Had they approached the problem with that statutory object in mind, perhaps a different mindset might have emerged to enable them to resolve it more easily. Clearly the manner in which they tried to do that during the period of this dispute had not worked well for either of them.
19. Having observed your struggle through hearing the complex legal dispute brought to the Tribunal for legal determination, may I say sincerely, that I hope you can resolve things simply and sensitively to the needs of you both as the members of the owners corporation, and that you can move through this difficult time.

1. Finally, I turn to the three offers of settlement made by Mrs Goldstone. I shall deal with them as briefly as possible.
2. In Velardo v Andonov [2010] VSCA 38 ('Velardo') at [42] - [48] the Court of Appeal discussed the requirements for a settlement offer under s 112:

(a) First, s 114(1) and (2) set out the requirements for the offer itself.[111]

(b) Second, it disagreed that s 114(1) does not require - if no shorter period is specified - that the offer must actually state that it is open for acceptance until immediately before the Tribunal makes its orders on the matters in dispute.[112] Rather, to comply with s 114(1), the offer must either state:[113]

1. that it is open for acceptance until immediately before the Tribunal makes its order; or
2. a 'specified period' when the offer expires, and the 'minimum period that can be specified is 14 days': see s 114(2).[114]

(c) Third, it held that 'the purpose of a s 112(1) offer is to attract the cost consequences mentioned in s 112(2)'. Thus, it held at [45]:

If those consequences are remote from the costs consequences which a particular offer is seeking achieve, it is ... a powerful indication that, on objective analysis, the offer is not one which meets the statutory description - even if there is otherwise enough in the offer to literally satisfy ss 113-114.

(d) Fourth, 'an offer's self-description cannot be determinative whether an offer was one meeting the s 112(1) description'.[115]

1. In summary, Mrs Goldstone submitted[116] that costs should fairly be awarded in her favour against Mr Richardson because of letters of offer she made during the course of this proceeding. She relied on them as relevant to the question of whether it is 'fair' to award costs in two distinct ways, namely:

(a) Under s 112 - on the basis of the presumption in favour of entitlement to a costs order contained in s 112(2) after they were made because Mr Richardson did not obtain any more favourable outcome under s 112(1)(d).

(b) Under s 109(3)(e) - on the basis that it is fair to receive her costs after making those offers, based on Calderbank principles.

1. The issue under both these grounds is whether Mrs Goldstone's offers that Mr Richardson capitulate on his application on the basis that she would not seek an order for costs meet the criteria in s 112(1) and if they do, justify effect being given to the presumption in s 112(2); or whether they otherwise justify it as fair under s 109(3) in all the circumstances of this case to make an order in her favour under s 109(2).
2. There were three settlement offers made by Mrs Goldstone, each on a walk away basis. While I was not taken to each letter during the hearing (other than the third in April 2022), I have read them all, closely.
3. At the costs hearing no submission was made on behalf of Mrs Goldstone that any order for costs would necessarily have been made at the time of each offer, being the comparison required by s 112(3). Not having received any submission about that I am not prepared to find that any costs order would necessarily have been made in her favour at the time of each offer in 2022. The matters to which I have already referred were present then and in all likelihood no order as to costs would have been made in her favour then. As I shall explain, the first offer in March 2021 was not more favourable and was actually a worse result than Mr Richardson obtained in the final outcome. It was also somewhat incendiary.

1. Mrs Goldstone's 31 March 2021 solicitors' letter made an 'Offer' to Mr Richardson that she would agree to him having a greater lot liability than 50:50 as provided in their plan of subdivision because of his large lot area but that they keep lot entitlement the same at 50:50 and he pay for the costs of altering the plan of subdivision. If he did that, she would not seek her legal costs. Far from being conciliatory,[117] it was not an offer of settlement at all, but in substance a request by her to amend their plan of subdivision in their two-lot Toorak subdivision, as she had reserved to herself the right to do. It neither satisfies s 112(1)(d) nor offers any compromise at all under Calderbank principles or address all of the Calderbank factors.[118]
2. If anything, the solicitor's letter, written on her husband's instructions to his law firm, invited Mr Richardson to bring on his application if he would not agree to settle on the basis of her 'Offer' in the letter. It displayed no desire to reconcile their differences in the ongoing management of their owners corporation.
3. Furthermore, Mrs Goldstone's 31 March 2021 offer was not only made prior to Mrs Goldstone being joined (because at that time, only the owners corporation itself was a party), it was before a defence had been filed, before the Supreme Court decision in REV on 25 June 2021 that overruled the Tribunal's earlier decision in Conroy, and before the amendments to the Subdivision Act came into effect on 1 December 2021.
4. The 31 March 2021 letter ended with the statement:

... if this offer is not accepted, we are confident that our client would have very good prospects of obtaining an order that your client pay our client's costs of successfully defending the application on the County Court Scale of Costs on a standard basis from the date of this offer onwards pursuant to s 109 and/or s 112 to 114 of the VCAT Act.

If the offer is not accepted, our client proposes to seek to be joined as an interested party noting that our client does not consent to the proposed variation and your client has made no attempt to call a meeting of the Owners Corporation to discuss the matter.

1. The second solicitor's letter of offer of 29 March 2022 responded to a letter of 22 March 2022 from Mr Richardson's solicitors. It offered a walk away settlement.
2. It was a short letter making the simple assertion that 'Having regard to the contents of your letter, and the fact that our client considers your client's claim to be weak' that Mrs Goldstone would be put to 'considerable expense with regard to the engagement of valuers and surveyors' if the offer was not accepted.
3. As I have said, no claim was made by Mrs Goldstone for valuers' fees. The surveyor whose report was tendered and received into evidence was engaged by Mr Richardson.
4. As she was a 'party' by that time, technically the offer met the requirements of s 112(1). But it did not satisfy the Calderbank elements despite being made on that alternative basis.[119] For one it contains no clear explanation of why his application would be unsuccessful at that time.
5. While technically triggering the 'presumption' in s 112(2) of an entitlement to a costs order, as I have said in discussing the costs principles earlier, it would only relate to those costs necessary to attain justice and not costs that she would be disallowed because of her later conduct during the proceeding. Under s 112(2) the Tribunal retains a discretion to order otherwise if satisfied that that is fair.
6. The letter of offer while technically falling within the costs regime for offers of settlement does not, in all the circumstances, make it 'fair' to make an order for costs of the proceeding after that date based on that walk away offer. In the circumstances of the dispute between the members of the owners corporation, I do consider that it was not unreasonable for Mr Richardson not to have accepted that tactical offer at that time. He had been attempting to contain the costs of his application by seeking a hearing on a preliminary point by making an interlocutory application in late 2021 which Mrs Goldstone had resisted. Mrs Goldstone had reserved her rights to bring the same application and had not retracted it. The underlying issue between the lot owners about their ownership rights and over the management and governance of their owners corporation remained unresolved.

1. At the costs hearing, understandably the focus of the discussion and submission was on the 23 June 2022 letter from Mrs Goldstone's solicitors. Mr Richardson's Counsel again submitted it contained no 'compromise' at all being merely a walk away offer.
2. This offer did add some Calderbank considerations about the effect of REV and that its construction of the _Subdivision A_ct had been followed by VCAT decisions referred to in my reasons for decision in this case.
3. It specifically said and offered:

We refer to the case of [REV] [2021] VSC 373 and [RN Saines] [2022] VCAT 441. We also refer to the most recent case, [Pacific Rim] [2022] VCAT 657 which was a decision of Vice President Judge Marks. This new decision makes it clear that the Tribunal requires a vote to have been called and for there to be a majority of lot owners voting against the resolution for the Tribunal to have any power [in an application] under Section 34D(1)(a). The Tribunal has been clear that they [sic] will not make an order under Section 34D(1)(a) without making an order consenting on behalf of each member who did not vote in favour under Section 34D(3)(c). In this case, no vote was called and there is no majority against the vote. Therefore, the Tribunal's jurisdiction is not invoked.

We note that the application of section 34D ... is now settled land and it is clear that the Tribunal will follow the [REV] case as opposed to the Conroy case. We do not believe there is any basis to distinguish the cases on the basis that there is a 2 lot subdivision.

It is our view that your client's application is doomed to fail as it does not pass the threshold questions which evoke [sic] the Tribunal's jurisdiction under Section 34D. In our view the matters raised in RN Saines by Acting Deputy President Warren and the decision of Vice President Judge Marks are sound and apply to all owners corporations. If Parliament had intended for there to be special rules to apply to 2 lot subdivisions then it would have made provision for such.

It is noted that the changes taking effect from 1 December 2021 to the Subdivision Act were primarily concerned with trying to limit a developer who controls the majority of the lots from making a change to the plan of subdivision.

Our client therefore, makes the following offer of settlement:

1. The proceeding is dismissed.
2. No order as to costs.

Notwithstanding that our client's husband is a partner of a law firm, our client is nevertheless incurring legal cost and the costs of a barrister. Given this, the offer which is put on the basis that each party bear their own costs is a generous one, particularly given your client has now had the opportunity to recast his claim based on the [REV] case and amendments to the Subdivision Act occurring. If our client is successful, our client is likely to obtain an order for costs that are substantial.

The above Settlement Offer will expire in 14 days from the date of this letter and after that time, shall no longer be open for your client's acceptance.

The above Settlement Offer is made in accordance with sections 112 to 115 (inclusive) of the [VCAT Act] or alternatively, in accordance with the principles of Calderbank v Calderbank ... and Hazeldene's Chicken Farm ... and is intended to resolve your client's VCAT Application and the inherent risks, delays and uncertainties of the proceeding.

If the offer is not accepted and the proceedings continues, our client will be using this and previous offers on the question of costs in an application for indemnity costs to be paid by your client.

1. At the costs hearing on 7 November 2024, Mr Leaman who had also been a principal of the law firm (Tisher Liner LC) acting for Mrs Goldstone before and during the course of the proceedings, informed the Tribunal that:

(a) He was appearing for Mrs Goldstone in place of Mr Schlicht of Counsel, who very sadly, had recently passed away;[120]

(b) Although there is a costs agreement between Tisher Liner and Mrs Goldstone, he (i.e. Tisher Liner LC) had not billed her any solicitors' fees. Counsel's fees had been paid and that was all that was being sought;

(c) He did not know why Mr Schlicht had discounted his fees. It was not something the law firm had requested and Mr Leaman inferred it was a gesture of goodwill.

1. Mr Leaman pressed the submission that the presumption under s 112 was triggered by Mrs Goldstone's offer and alternatively that because Mr Richardson should have accepted it was fair under s 109(3) that Mr Richardson pay Mrs Goldstone's costs of the proceeding because of them.
2. For Mr Richardson, Mr Jones of Counsel - as with the earlier offers - submitted that no relevance or weight should be attached to this offer for several reasons.

(a) First, whether an offer is a statutory settlement offer under s 112, or a Calderbank offer, to be effective it must offer a genuine 'compromise of rights' and not simply that if a party capitulates costs will not be sought. The 22 June 2022 settlement offer (and the two offers preceding it) sent by Tisher Liner FC were not really offers to 'compromise' at all but simply offers telling Mr Richardson to capitulate and allowing him to walk away. They, therefore neither comply with basic Calderbank principles nor with the requirements of s 112;

(b) Second, a single offer cannot be both a 'settlement offer' under s 112 and a Calderbank offer at the same time. If it the offer does not satisfy s 112, it cannot be repurposed as a Calderbank offer.

(c) Third, addressing specifically the offer made in the 22 June 2022 letter, Mr Jones submitted it had to be read in the light the statement made on Mrs Goldstone's behalf, which stated:

Notwithstanding that our client's husband is a partner of a law firm, our client is nevertheless incurring legal costs and the costs of a barrister. Given this, the offer which is put on the basis that each party bear their own costs is a generous one, particularly given your client has now had an opportunity to recast his claim based on the [REV case] and amendments to the Subdivision Act occurring. If our client is successful, our client is likely to obtain an order for costs that are substantial.

1. Mr Jones submitted that the statement 'our client is nevertheless incurring legal costs and the costs of a barrister' was not accurate in light of what Mr Leaman had said to the Tribunal at the costs hearing. He also submitted the way it was expressed in the letter was intended to create the impression that there were solicitors' fees actually being incurred by Mrs Goldstone for which Mr Richardson may become liable under a costs order made by the Tribunal if he did not accept the offer to walk away from his application.

1. I have already dealt with Mr Jones's first point in my analysis of the law.
2. The settlement offer made does comply with the wording of s 112(1)(d). The language of s 112 is 'offer of settlement' rather than offer of compromise and on the language of s 112(1)(d):

the orders made by the Tribunal in the proceeding are not more favourable to the other party than the offer.

1. However, while the final orders made are not more favourable to Mr Richardson than that offer, the real issue is whether it is fair under s 112(2) that an order for costs be made based on it where, in its substance, it is no different to the respondent's defence denying the claim.
2. Had this been the only offer and had it not sought to incorporate all the other offers, this offer might have had more weight. As a Calderbank offer, it certainly gave a more neutral and a much more clear and concise explanation (although not ultimately the one on which the case was decided) for why Mr Richardson would lose. That element of legal explanation adds to its weight under s 112(2) whether it is fair to give effect to the presumption under that sub-section (assuming the offer qualified under the regime).
3. What troubles me a little about this third offer is that it makes an assertion of entitlement to indemnity costs without any real foundation, particularly given the past views expressed by various members of the Tribunal on this specific topic. That unexplained element somewhat colours its otherwise more genuine tenor to resolve the application brought by Mr Richardson'.
4. What troubles me more is that despite having the opportunity to do so at this juncture, Mrs Goldstone does not retract her own reservation of rights to make her own application. All her offer addresses on its careful lawyer's wording sent on her husband's instructions, is that it is 'intended to resolve your client's VCAT Application'. The legal dispute itself about whether the plan of subdivision might be amended on another application brought by her remained unresolved.
5. It offered nothing of substance to Mr Richardson other than an opportunity to withdraw and lick his own costs wounds from the ongoing unresolved legal battle of wits between the land-owners in their 2-lot subdivision affected by an owners corporation.
6. As I have also said, Mrs Goldstone did not establish that any costs order should fairly have been made at any of the times of this or any of her earlier offers, so as to displace the prima facie statutory rule in s 109(1) of the VCAT Act that 'each party is to bear their own costs in the proceeding'. Nor did this offer extend any substantive olive branch to compromise at all or in any way attempt to resolve the underlying dispute about the management of their statutory owners corporation that still festered away.
7. While the presumption in s 112(2) might technically arise as a matter of language of s 112(1)(d), substantively it did not seek to resolve the substance of the dispute between the neighbouring lot owners. In that circumstance, it was not unreasonable for Mr Richardson at the time to press on with his legal application on the basis that the costs discretion might go against him if he ultimately lost in the faint hope that it might somehow bring about a solution to the underlying dispute over management, expenditures and services of the owners corporation.
8. In Velardo, the Court of Appeal held that the offer did not meet the requirements of s 112(1) for the following reasons: (emphasis added)[121]

[47] In the present case ... consideration of the terms of the offer show that it was not an offer meeting the s 112(1) description. Thus:

(1) The offer was not only in name, but also in substance, a Calderbank offer. A key feature of such an offer is that it is not an offer to which offer of compromise provisions - whether imposed by statute or rules of court - apply;

(2) The offer foreshadowed an application for solicitor and own client costs. Such an order is the frequent, but by no means the inevitable, concomitant of a successful Calderbank offer.[9] Section 112(2) creates, on the other hand, a prima facie entitlement to payment of 'all costs' in favour of a successful offeror. Ordinarily, it appears, costs would be assessed in such a case on a party and party basis - although the Tribunal would be empowered to allow costs on a more favourable basis.[10]

(3) There was another distinct contrast between the remedy sought by the respondent and the situation under the Act. The respondent offered an 'all in' amount. But under s 112(3)(a) the Tribunal, in considering whether its orders are more favourable to the offeree than the offer, 'must take into account any costs it would have ordered on the date the offer was made'. It is well-understandable that an offeror, as it did here, would seek to avoid the uncertainty of such a speculative exercise.[11]

1. To the same effect in relation to Calderbank offers of settlement, in Commissioner of State Revenue v Challenger Listed Investments Limited (No 2) [2011] VSCA 398 at [17] (Buchanan; Tate JJA; Sifris AJA) the Court of Appeal found that whether, in substance, the offer sought a capitulation rather than a genuine offer of compromise, was highly relevant to the critical consideration that is applied of whether the rejection of an offer was unreasonable, holding:

The offer, in effect an offer to walk away, in our opinion amounts to a demand to capitulate. A reduction of $5000 from a costs order may realistically be regarded as de minimis in the circumstances. The offer does not represent (in financial terms) a serious endeavour to resolve the proceeding. It was, given the amount involved in the case, no more than a token offer.

1. Accordingly, as a matter of fairness in this dispute between land-owners (assuming the offer qualified under the regime), the presumption in s 112(2) should not be applied other than to make it fairer that Mrs Goldstone have her costs thrown away by the adjournment on day one.

1. I do not agree with Mr Jones's second submission that the 'settlement offer' satisfying s 112(1) cannot also be a Calderbank offer.
2. Velardo concerned a different issue. The respondent offered an 'all in' amount which made the offer one incapable of satisfying s 112(1)(c) and (3).[122] In that case, 'the offer was in name a Calderbank offer' and was found to be one in substance.[123]
3. With the greatest respect to others who might have read more into it, I do not read the judgment of Ashley JA as standing for the proposition contended for by Mr Jones or forming part of the actual ratio decidendi in that case.
4. In VCAT proceedings, under the settlement offer regime under the VCAT Act the offer must be in 'writing' but need not be in any 'court form' or particular form. Section 112 is headed 'Presumption of order for costs if settlement offer is rejected' and s 112(1)(a) states that a requirement for s 112 to apply is that 'a party to a proceeding ... gives another party an offer in writing to settle the proceeding'. As I have discussed, and as the Court of Appeal has found, in contrast to the 'offer of compromise' procedure in the rules of court,[124] the terminology used in s 112 of the VCAT Act is 'settlement' and 'offer to settle'.[125]
5. As a matter of statutory construction, there is nothing in the wording or statutory purpose of the settlement offer provisions in Part 4, Div 8 - Costs, ss 112-114 that leads to any necessary inference that 'an offer in writing to settle the proceeding' cannot separately engage Calderbank principles and enliven the Tribunal's discretion under s 109(3)(e) to award costs. An offer of compromise would need to be carefully worded to comply with both s 112 and Calderbank principles.
6. A separate Calderbank offer could be made at the same time as a settlement offer under ss 112-114 of the VCAT Act, with the letter containing the offer covering the additional matters necessary for it to be considered as relevant under s 109(3)(e). I do not see why the two offers need be in separate letters.
7. But as I have said, if the same substantive offer is made as a 'settlement offer' under ss 112-114 and as a Calderbank offer, it is difficult to see how it can have different costs consequences. It is, after all, the same offer. Potentially, what a 'same' Calderbank offer might add, if properly worded, is to show that it was unreasonable for it not to have been accepted at the time which might then make it fair to order costs or to award them in a different manner.
8. In this case, even if construed as Calderbank offers (as its terms of state it to be in the alternative), the 22 June 2022 letter adds nothing to the costs outcome in this case, for the same reasons that s 112 itself does not assist Mrs Goldstone in this case, apart from making it more fair that Mrs Goldstone have her costs thrown away from the adjournment on day 1.

1. In relation to Mr Jones's third point, I reject his submission that the offer made in the solicitors' letter of 22 June 2022 was misleading.
2. That, in itself, is a serious allegation and requires cogent proof to a high level of satisfaction on the balance of probabilities.
3. Mr Leaman, who said he drafted that letter, openly informed me at the costs hearing that at the time he wrote it he had anticipated rendering an account to Mrs Goldstone for the significant professional fees he was recording as the solicitor on the file.
4. I accept that. There is no reason to doubt it.
5. I am also satisfied and find that Mr Leaman never intended to mislead Mr Richardson or his solicitors. I doubt very much that he even considered that what he had written at that time might have been construed as misleading.
6. In making his frank disclosure to the Tribunal at the costs hearing that he had not actually rendered fees, Mr Leaman informed me that there was a written costs agreement in place between his firm and Mrs Goldstone. Although it was not produced by Mr Leaman, Mr Jones did not call for it. Not being in evidence, I have no reason at all to question that it made proper disclosure of the rates and method solicitors fees would be charged. While, under the indemnity principle, for a lawyer's fees to a client to be recoverable by way of a 'costs' order against a party the costs agreement must create an actual or contingent 'liability'[126] to pay the law firm's charges (unless there exists a rule of court[127]), no issue was raised by Mr Jones that the indemnity principle was not satisfied.
7. It is possible that Mrs Goldstone's costs agreement was contingent on a costs order being made in her favour. That may be why no fees had been rendered at the time of the costs hearing. Perhaps there was some other reason. Whatever may have been the reason, there is simply no basis for the Tribunal to conclude that Mr Leaman ever intended to mislead Mr Richardson and there is simply no foundation to draw an inference on such a serious allegation.

1. Mr Jones raised another point in his written submissions that the third letter of offer was short served under s 114(2) and therefore did not meet the requirements of s 112(1) to give rise to any presumption under s 112(2).
2. It is well established that to qualify under s 112(1) the offer must offer a minimum period of 14 days for acceptance from when it is 'given' under s 112(1)(a) and s 114(2).
3. It was accepted that the letter was served on its date and that it stated it was open for 14 days from its date.
4. Mr Jones's submission was that the letter was served on 29 March 2022 by email at 4:52pm. In stating that it expired 14 days from the 'date' of the letter it therefore expired by its terms on 12 April 2022. Under s 114(2) - unless the offer is open to be accepted up until the time of VCAT's order - the minimum period an offer must be open for acceptance is 14 days: see Velardo at [44]. The offer therefore did not comply because s 141(1)(c) of the VCAT Act provides that if a document is delivered after 4:00pm on a business day it is 'taken to have been given' on the next business day following delivery. Therefore, it needed to have been expressed to be open for acceptance until 13 April 2022.
5. I agree and accept Mr Jones's submission on that point.
6. That offer did not comply with the minimum 'specified period' required by the offer of settlement regime in the VCAT Act. Section 112(1)(c) requires that a settlement offer must comply with s 113 and s 114. That is prescribed statutory element that is necessary to give rise to any presumption under s 112(2) so as to displace the general rule in s 109(1).
7. Had it been 'given' to Mr Richardson before 4:00pm on that business day it would have complied with s 114(2) of the VCAT Act when read with s 141(1)(c).[128] But because it was sent after 4:00pm on that business day it needed to be open for acceptance for longer.
8. In the modern era of instantaneous email communication this might seem to be an overly technical interpretation of that legislative prescription. I do not think it is for a number of reasons. A settlement offer in litigation sent late in the day or over a weekend or on a public holiday will not enable a party to have the full 14 days allowed by the VCAT Act to consider it or obtain the advice they may need or wish to receive about it in legal proceedings affecting their legal rights. If the offer is sent to a law firm or agent representing a party (such as an owners corporation manager), it may not give the law firm or agent for the party sufficient time to contact the client or assemble the information or advice the 'party' to litigation may request or need.
9. It was noted in Velardo that the section should also be read and applied in a manner 'compatible with a jurisdiction where often enough, parties are not represented'. Any alternative construction would result in offers made during public holiday periods creating problems for parties whose solicitor or agent might not have seen the email until they return to work. Parties themselves might not be able to access the legal or other advice they may need to consider the offer within the 14 day period must be open for acceptance after it is given to them under s 112(1)(a).
10. Therefore, I accept Mr Richardson's submission that the 14 day period in the third letter expired on 12 April 2022 but that to comply with the 'minimum period that can be specified' under s 114(2), the period the offer must be open for acceptance must allow 14 days from its delivery to the offeree (or their solicitor or agent) and if it is not delivered before 4:00pm on a business day, the 14 day period must run from the next business day per force of s 141(1)(c)(iii) of the VCAT Act.
11. There is one final point that I will add, which I have considered to be relevant to the question of fairness.
12. Assuming for the moment that Mrs Goldstone's offers were compliant with s 112(1) to give rise to the presumption in her favour under s 112(2), in my view it would be unfair to make an order for costs to give effect to that presumption without also taking into consideration that Mrs Goldstone's conduct during the hearing put Mr Richardson to considerable unnecessary expense dealing with her unsuccessful allegation of improper motive.
13. A rejected offer of settlement, even if qualifying under s 112(1) to give rise to the presumption in s 112(1), does not remove the possibility of no order being made or, in a given case, an adverse cost order being made against a party making the offer.[129] It gives no immunity for conduct of the offeror that prolongs litigation unnecessarily.
14. In this case, while I have not made an adverse costs order against Mrs Goldstone, I have taken into consideration as relevant the delay and expense to which her unsuccessful allegations put Mr Richardson in my determination of what costs it is fair to order in her favour.
15. Mrs Goldstone's amended points of defence dated 20 December 2022 contained a new para 22(a)-(m) and para 33. When the hearing resumed the parts of Mr Goldstone's (previously objected to) affidavit evidence were then admitted as relevant to the allegation of improper motive now squarely pleaded by her. However, in the result that allegation of improper motive was not established, the Tribunal expressly rejecting the allegation made of the applicant having 'engaged in a campaign of abuse and bullying' and 'riding roughshod over the interests' of Mrs Goldstone,[130] allegations which (as Mr Richardson's cost submissions point out) were never put to Mr Richardson in cross-examination.[131]

Did Mr Richardson conduct the proceeding vexatiously?

1. In her cost submissions Mrs Goldstone contended that Mr Richardson conducted the proceeding vexatiously, raising again his motive.
2. The submission was pressed and I reject it.
3. Quite apart from the fact that I found that he was not motivated by anything improper in bringing his application, there was an unresolved and complex constructional question at the heart of his application.
4. The law in this area is complex and still uncertain. Since the decision in this case the Tribunal has considered it again in other cases. How the most recent legislative amendments are to be interpreted and applied harmoniously with their apparent legislative intent, still remains unclear and unsettled by any decision of a superior court. I explained the then state of play at the time of the hearing in my reasons for decision: see Richardson v Goldstone (Owners Corporations) [2024] VCAT 582 at [504]-[517].
5. As is clear from what I said at the time, the subject matter of the case involved novel and complex issues of law, and the legal landscape changed under foot after Mr Richardson had commenced the proceeding.
6. That Mr Richardson faced considerable legal obstacles and was unsuccessful, does not come close to being vexatious.

1. By his written costs submissions Mr Richardson also sought his costs relating to the additional issue raised by Mrs Goldstone about whether a ballot was necessary.
2. I find that that issue was quite a proper argument for her to raise. The Tribunal said at para [471] of its reasons that 'conducting a vote will usually be required, and necessary in almost all cases for several reasons', however in this case it was not fatal that no ballot had been conducted.
3. The fact that that argument was raised by Mrs Goldstone by no means makes it vexatious as Mr Richardson's costs submissions assert.
4. Lastly, in para 24 of her amended defence, Mrs Goldstone had pleaded that Mr Richardson had placed his unit on the market which was another issue that went to his motive and that it had required additional evidence.
5. I do not consider that meets the threshold under s 109(3)(a)(vi) or (b) and it is not otherwise a factor I consider to be relevant on costs under s 109(3).

1. In all these circumstances assessed together, I am not satisfied that it is fair to make an order under s 109(2) or s 112(2) that Mrs Goldstone, as the successful party in the result of this Tribunal proceeding, be awarded her costs other than those thrown away by reason of the adjournment on day one of final hearing.
2. Even if Mrs Goldstone's settlement offers complied with s 112(1), I am satisfied under s 112(2) that it is appropriate in the circumstances of this case to make an 'order otherwise'.

1. Mrs Goldstone applied for an order for her two Counsels' fees, in an amount totalling $44,500.[132]

(a) Mr Phillpott of Counsel - who drew Mrs Goldstone's original points of defence, and appeared at a directions hearing on 12 May 2023 and the first day of final hearing on 20 October 2023. He rendered four invoices, the final one of which comprised two days of preparation fee and a fee for appearing on 20 October 2023.

(b) Mr AT Schlicht of Counsel - who appeared for Mrs Goldstone for the remainder of the hearing - tragically died suddenly on 1 October 2024. Mr Schlicht appeared at the hearings on 12 December 2022, 21, 22 and 28 February 2023 and 6 March 2023.

1. Total Counsels' fees claimed by Mrs Goldstone are as follows:

1. The invoices are exhibited to an affidavit of Mr Phillip Leaman, sworn 24 July 2024. In his affidavit he states:

I am instructed that the invoices referred to above have been paid in full by the First Respondent.

1. This evidence was not challenged at the costs hearing and I accept it. While the retainers of her Counsel were not put into evidence, from the fee slips rendered by Counsels' clerks, each of which were addressed to Mr Leaman at Tisher Liner FC Law, it is evident that they were engaged by her solicitors. The documents signed by her Counsel also record them being filed through Tisher Liner FC Law.[133] There is no issue that both her Counsel acting in the proceeding for Mrs Goldstone, were instructed by Tisher Liner FC Law who were solicitors on the record.
2. The particular invoices claimed by Mrs Goldstone for Counsels' fees relate to separate items of legal work at different times. It is convenient to set them out based on how they are described in the invoice sent by their barristers' clerks.
3. In his challenge to the amounts claimed by Mrs Goldstone for her counsels' fees, if Mrs Goldstone is awarded her claimed costs in the proceeding, Mr Richardson challenges various items which he says should be disallowed because of the hearings (or parts thereof) for which he claims he is entitled to his costs.[134] Based on the percentages he claims Mrs Goldstone's costs should be reduced, he then seeks a reduction in Mrs Goldstone's claim for appearances at hearings for preparation and legal paperwork.[135] The items Mr Richardson challenges are shown in the right hand column below:

Particulars of legal work as per clerk's invoice

Drawing Points of Defence, including review of experts reports obtained - 1 day

Preparation and appearance at directions hearing (Hours Worked: 1h 0m)

Preparation for trial including conferring with witnesses - 1 day

Further preparation and review of transcript (4 hours)

1 & 2 December - Defence to Amended Points of Claim and further submissions (4 hours))

Reviewing affidavit of Richardson and further submissions, drawing and settling Submissions in Reply (5 hours)

1. While Mr Schlicht charged a higher daily and hourly fee than Mr Phillpott, he discounted his single invoice for work performed over several months (from 17 November 2022 to 6 March 2023) by $7,320, to a 'total payable' of $30,000, without ascribing that deduction to any date or particular work done. It is therefore not possible to relate that discount to any specific item or day of work.
2. I also observe for completeness that while Mrs Goldstone's submissions on costs dated 24 July 2024 were prepared by Tisher Line FC Law, her submissions in reply to Mr Richardson's costs application were prepared and signed by Mr Schlicht on 12 September 2024 but no claim for Counsel's fees was made for those submissions.
3. In his own costs application against Mrs Goldstone, Mr Richardson claims a total (adjusted for variations in the applicable scale of costs) of $38,171.19,[140] to which Mrs Goldstone raises objections about each item, also claiming an offset should be allowed for costs of adjournment of the trial so he could amend his claim on day one of hearing and in responding to the amendment,[141] which are encapsulated in her total claim for costs of the proceeding.

1. For the reasons given, I have found it fair to award costs to Mrs Goldstone for her costs 'thrown away' by reason of Mr Richardson's amendment to his points of claim on day one of the final hearing that resulted in an adjournment.
2. Otherwise, the costs of the parties in the proceeding to lie where they fall under s 109(1).
3. It is therefore only necessary to assess Mrs Goldstone's costs 'thrown away'.
4. None of Mr Schlicht's costs were 'thrown away'. It was necessary for Mrs Goldstone to meet the amended claim in any event.
5. Nor were any of Mr Philpott's fees for work prior to when he commenced preparing for final hearing in October 2023 'thrown away' by reason of the amendment or adjournment. And not all of his preparation for day one was wasted, because only part of his time on that day was actually wasted.
6. While it is a matter of impression to some degree, having presided at the hearing I consider it fair to allow 80% of Mr Philpott's appearance fee of $3,300 on day one and 80% his preparation fee of $6,600 for final hearing as 'thrown away'. After that Mrs Goldstone was required to retain Mr Schlicht and he had to do his own preparation to appear for the remainder of the resumed hearing.
7. I therefore award Mrs Goldstone $5,280 for 80% of Mr Philpott's preparation for final hearing and $2,640 for 80% his daily fee for appearance on day 1 of the final hearing, a total of $7,920.

1. As Mrs Goldstone has been partially successful in her costs claim, it is fair in all the circumstances under s 115B(3) that she be entitled under s 115B(1) of the VCAT Act to an order that she be reimbursed by Mr Richardson the filing fees paid. [142]
2. I therefore also order Mr Richardson to reimburse Mrs Goldstone the VCAT filing fee paid for her costs application but make no further order as to costs of the parties' costs applications themselves.

1. In this case, apart from Mrs Goldstone's costs thrown away by reason of the adjournment on day one of the final hearing, costs should fairly lie where they fall.
2. To otherwise award costs in this case would not serve the legal rationale for which costs are awarded legal proceedings and would in my view be quite unfair. The Tribunal must always be satisfied that there are circumstances justifying a party's receiving an order for costs rather than bearing its own under s 109(1).

[1] Richardson v Goldstone (Owners Corporations) [2024] VCAT 582.

[2] Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at 96-97 [67] (discussed below).

[3] See Plunkett v Portier Pacific Pty Ltd (Civil Claims) [2024] VCAT 205 at [49] (Justice Woodward, President).

[4] There are also certain cases where the power to award costs is curtailed or further circumscribed by other statutory provisions, some of which I mention below.

[5]This point was made by the Tribunal in Patsuris v Gippsland & Southern Rural Water Corporation (Real Property) 2014 VCAT 41 at [9] (Senior Member E Riegler, as the Deputy President then was). It was also the issue decided in Vero Insurance Limited v Gombac Group [2007] VSC 117 at [28]-[60] where after a comprehensive review of the authorities the Supreme Court held that the Tribunal had fallen into error by applying a guideline rule that costs in an administrative review proceeding were less likely to be awarded than in an inter partes commercial dispute. The Supreme Court held that the application of the Tribunal's guideline was not supported by authority and was contrary to the statutory provisions of s 109. Justice Gillard made the point at [28] - [34]:

When a decision making body is exercising authority to reach a discretionary decision, it is open to the body to establish or rely upon an established guideline with respect to the exercise of the discretion. However, it must be emphasised that the rule is a guideline and only a guideline ... it is important that the decision-making body concerned bears in mind that the guideline is nothing more than a guideline, and must give way if circumstances dictate.

... it is open to the Tribunal, based upon past experience with similar applications, to lay down guidelines in respect to the exercise of a discretionary judgment; not rules of law or rules of principle that must be applied, but rules that guide and which may have to give way where circumstances are different.

[6] See current Rule 1.07 Default scale of costs.

[7] Although not relevant to this application, the VCAT Act sch 1 modifies the discretion to award costs under s 109 in various ways. See e.g., sch 1, Part 15ADA (owners corporation fee or charge recovery proceedings); Part 2AB s 4I ('small claims' as defined); Part 6 s 12B and 12C (domestic building work disputes). Other legislation also modifies the VCAT's power to order costs in particular types of case over which jurisdiction is conferred on the Tribunal by the Parliament under an enabling enactment: e.g. s 92 of the Retail Leases Act 2003 (Vic).

[8] In this proceeding, the case is in the original jurisdiction of the Tribunal but as I discussed in Richardson v Goldstone (Owners Corporations) [2024] VCAT 582, the Tribunal likely exercises administrative rather than judicial power in the application before the Tribunal under the Subdivision Act in this case.

[9] Goldstone cost submissions dated 24 July 2024, prepared by Tisher Liner FC Law seeking $44,520.

[10] Northern Territory v Sangare [2019] HCA 19; (2019) 265 CLR 164 at 172-173 at [25].

[11] Affidavit of Mr Phillip Leaman, sworn 24 July 2024, exh PL1.

[14] Goldstone cost submissions dated 24 July 2024, para 2.

[15] Ibid, para 3 and sections B - H addressing relevant factors under s 109, s 112 - s 114 and s 115B.

[16] This is a summary only. Mr Richardson filed submissions in reply to Mrs Goldstone's costs application dated 30 August 2024 (of over 80 paragraphs and subparagraphs with a table breaking down the costs he submitted Mrs Goldstone should be disallowed, also containing its own submissions). He had also filed earlier submissions in support of his own costs application dated 16 August 2024 which covered some of the same ground. See below.

[17] Again, this is my summary. As noted above, Mr Richardson's submissions in support of his own costs application dated 16 August 2024 contained over 40 paragraphs and subparagraphs. On 13 November 2024, with leave of the Tribunal, he then filed a 'Tabulated Statement of Costs Claimed, seeking $57,303.76.

[18] Goldstone cost submissions in reply 12 September 2024, prepared by Mr Schlicht of Counsel, para 8 and 21.

[22] In their lists of authorities dated 6/11/24, Mrs Goldstone refers to 15 cases and Mr Richardson refers to 27 cases. I refer below to those I regard as most relevant.

[23] Section 112 only applies to cases that are not in the Tribunal's 'review jurisdiction': see s 112(1)(a) and the VCAT Act's description of 'What is review jurisdiction?' in s 42(1). As I shall discuss, this limitation is subject to statutory exception under any enabling enactment, which can make it somewhat complicated where parties are not legally represented.

[24] See above. See also Northern Territory v Sangare [2019] HCA 19; (2019) 265 CLR 164 at 172-173 [24] (discussed below).

[26] i.e. one that meets the qualifying criteria of s 112(1), so that the 'section applies'.

[27] As Pizer puts it at [VCAT.112.100]: 's 112(2) confers a discretion on ... VCAT to make what it considers to be the appropriate costs order in all the circumstances' and 'in exercising the discretion, ... VCAT must have regard to all the circumstances of the case before it: Transport Accident Commission v Coyle (2001) 3 VR 589; [2001] VSCA 236 at [31] ... [I]f an offer meets the criteria in s 112(1) then the offeror is entitled to a favourable costs order, unless ... VCAT is persuaded to order otherwise: Taylor v Trentwood Homes Pty Ltd [2012] VCAT 1125 at [25]. It follows that the party who failed or refused to accept the offer bears the onus of persuading ... VCAT that it should exercise the discretion to 'otherwise order': Paleka v Suvak [2000] VCAT 58 at [19].'

[28] Transport Accident Commission v Coyle (2001) 3 VR 589; [2001] VSCA 236 (discussed below).

[29] Differentiating it from the 'offer of compromise' provisions under rules of court.

[30]The statutory power to award costs under s 109 arises even after proceedings are withdrawn, as is made clear by s 74(2)(b): see Transport Accident Commission v Coyle [2001] VSCA 236; (2001) 3 VR 589 [34] (Batt JA) applied recently in Vorchheimer v Bandt (Human Rights) [2025] VCAT 954 at [66] - [67], [70] (Judge Tran, Vice President). As noted earlier, the VCAT Act modifies the discretionary power to award costs under s 109 in various ways in sch 1. Part 6 s 12C(2) states expressly that the power to order costs after withdrawal is under s 109.

[31] Traditionally, Counsels' fees are treated as a disbursement of the solicitor engaged by the client.

[32] Kowal v Zoccoli (2002) 4 VR 399; [2002] VSCA 110. I do not interpret Cachia v Hanes (1994) 179 CLR 403 as confining the meaning of the word 'costs' as used in the VCAT Act. The VCAT Act contemplates representation through 'professional advocates' who have no right of appearance before courts of law. See Justice Morris's observations sitting as President in Aussie Invest Corporation Pty Ltd v Hobsons Bay CC (2004) 22 VAR 212; [2004] VCAT 2188 at [11]. N.B. VCAT Act, Sch 1, Pt 15AB - Owners Corporations Act 2006, s 51ADA, (inserted by No 63/2010, s 80), which expands the types of 'costs' that may be recovered in an application relating to the recovery of fees and charges imposed by an owners corporation under Pt 3 Div 1 of that Act, and expressly stating that they are 'not limited to costs incurred by a professional advocate under s 62': see s 51ADA(2).

[33] See generally, Law of Costs, 7.29, noting that out of pocket expenses that may be recoverable, provided always that they are necessarily and reasonably incurred, include fees to bring a legal proceeding (such as application and hearing fees), transcript costs, expenses in serving documents, fees paid for freedom of information or register searching, binding of hearing books, witness fees for a witness giving evidence, incidental expenses of photocopying and postage. Excluded, however, are a party's lost wages or other opportunity costs because of being involved in the legal proceeding, as well as a litigant's costs relating to travelling, parking and meals and compensation for time spent collating material in preparation for giving evidence (or instructions to lawyers), reading affidavits of other witnesses or attendances in court for other witnesses' evidence.

[34] Such as per item or job performed or time taken to perform it.

[35] See Victorian Civil and Administrative Tribunal Rules 2018 (SR No 77/2018). Rule 1.07 was substituted by SR No 133/2024 to accommodate changes in the scale of costs in the County Court and now provides:

Unless the Tribunal otherwise orders, if the Tribunal makes an order as to costs, the applicable scale of costs is the County Court costs scale as defined in Rule 1.13 of Chapter I of the Rules of the County Court as in force on 31 December 2024, being a fee, charge or amount that is 80 per cent of the applicable rate set out in Appendix A to Chapter I of the Rules of the Supreme Court as in force on 31 December 2024.

[36] The VCAT Act contains other provisions on the topic of 'costs'. For example, s 75(2) frames the Tribunal's power to make an order in terms not of an order for 'costs' per se, but rather an order to 'pay compensation' that might include 'costs, expenses, loss, inconvenience and embarrassment resulting from a proceeding' that is 'summarily dismissed' or 'struck out' as 'frivolous, vexatious, misconceived or lacking in substance' or 'otherwise and abuse of process' under s 75(1). See East St Falls Pty Ltd v L.U Simon Builders Pty Ltd (Building and Property) (Costs) [2025] VCAT 1073 at [71], [74] - [81] (Senior Member Edquist) noting that the exercise of that separate power, while not governed by s 109(2) is, like s 109, governed by s 97.

[37]See VCAT Act, Sch 1 - Variations from Parts 3 and 4 for various proceedings. For example, in Sch 1 Part 15AB - Owners Corporations Act 2006, s 51ADA expands the power to award costs in an application to the Tribunal relating to the recovery of fees and charges imposed by an owners corporation under Pt 3 Div 1 of that Act to the costs of 'professional and volunteer managers' of the owners corporation, that are not limited to 'costs incurred by a professional advocate' within the meaning of s 62 of the VCAT Act. By Sch 1, Part 2AB, Australian Consumer Law and Fair Trading Act 2012 (Vic), s 4I, for 'consumer and trader disputes' that are 'small claims' the Tribunal's power to award costs is confined. Other examples in Sch 1 are Part 2B - Building Act 1993 (Vic), s 4JA, and 4L; Part 6 - Domestic Building Contracts Act 1995 (Vic), s 12B, s 12C, s 12D.

[38] For example, the legislation under consideration in Coyle.

[40] See Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at 96: (emphasis added, footnotes omitted)

[63] At common law, courts had no jurisdiction to award costs. The jurisdiction is statutory and has evolved gradually. It was regarded as necessary in order to avoid injustice. In modern times, the statutory language typically confers on the court a broad discretion to award costs, rather than declares that costs automatically follow the event. The origin of this broad statutory discretion is O 55 of the Rules of Court in the First Schedule to the Supreme Court of Judicature Act (UK) which commenced with the words:

"Subject to the provisions of the Act, the costs of and incident to all proceedings in the High Court shall be in the discretion of the Court".

The discretion was later encased, in amended form, in s 5 of the Supreme Court of Judicature Act 1890 (UK) ...

[41] Cachia v Hanes (1994) 179 CLR 403; Bell Lawyers Pty Ltd v Pentelow [2019] HCA 29.

[42] As noted above, Pt 4 of the VCAT Act is modified in relation to a range of proceedings by VCAT Act, Sch 1: see generally Pizer [VCAT.109.660]. Different enabling enactments themselves might also alter the operation of s 109 and VCAT's power to order costs in particular legal proceedings.

[43] The High Court also observed that by balancing the private interests between the parties in the litigation by making a compensatory order for costs, there was a public policy benefit that arose as a by-product of such orders:

[68] As a matter of policy, one beneficial by-product of this compensatory purpose may well be to instil in a party contemplating commencing, or defending, litigation a sober realisation of the potential financial expense involved. Large scale disregard of the principle of the usual order as to costs would inevitably lead to an increase in litigation with an increased, and often unnecessary, burden on the scarce resources of the publicly funded system of justice.

[44] Following the Second Reading Speech (Legislative Assembly, 09/04/1998, WADE (Attorney-General)) the Victorian Civil and Administrative Tribunal Bill was debated. On 20/05/1998 ASHER (Minister for Small Business) noted that 'the overriding principle is that parties to a hearing bear their own costs' and that the Tribunal had the power to make costs orders if satisfied about matters listed. The view was expressed (at 1219) that it was 'inappropriate to bind the discretion of the tribunal in respect of costs', an obvious reference to the unfettered discretion given to courts.

[45] See Endnotes to the VCAT Act, Interpretation of Legislation Act 1984 (ILA), Interpretation, Headings. Although the VCAT Act is a pre 1 January 2001 enactment, such that pre-existing headings do not form part of the Act under s 36(1A) and (2A) of the ILA, they are nevertheless a contextual guide to its construction: Queen v A2 [2019] HCA 35 at [40] (Kiefel CJ and Keane J, with whom Nettle and Gordon J (at 148 and 155) and Edelman J at [162] agreed on this point, Edelman J regarding the heading in that case as an immediate matter of 'context' and Nettle and Gordon JJ describing the heading as 'reinforcing' the construction intended by Parliament).

[46] Martin v Fasham Johnson Pty Ltd [2007] VSC 54 at [27]-[31] Justice Bell, citing with approval Stonnington CC v Blue Emporium Pty Ltd [2004] VCAT 1441 at [13] Justice Morris, sitting as President of the Tribunal, both set out in full below.

[47] And in the case of companies, must act through a solicitor under rules of court.

[48] See VCAT Act s 62(1)(b) and (c). The definition of a 'professional advocate' in s 62(8) includes an Australian lawyer. It also includes persons who would not typically be permitted to appear to represent a party in legal proceedings: see s 62(8)(a) former Australian lawyer; s 62(8)(b) former articled clerk (an articled clerk can be given leave to appear in court proceedings); s 62(8)(c) person who has an Australian legal qualification but not admitted to practice law; s 63(8)(d) person who in the opinion of the Tribunal has substantial experience as an advocate in proceedings of a similar nature.

[49] Justice Bell's observations were recently cited with approval by Moore J in D'Agostino v The Greater Shepparton City Council, [2019] VSC 199, at [16], stating that in VCAT proceedings 'prima facie' each party bears their own costs.

[50] Northern Territory v Sangare [2019] HCA 19; (2019) 265 CLR 164 at 172-173 at [24].

[51] It can hardly be. All of VCAT's civil jurisdiction once lay solely with the courts. Much of VCAT's civil jurisdiction under its different enabling enactments is also concurrent to that of Victorian courts, unless the matter is in federal jurisdiction, in which case VCAT loses jurisdiction and the matter must be heard and determined in a court. The Supreme Court being 'the superior Court of Victoria with unlimited jurisdiction' under Constitution Act 1975 (Vic) s 85(1) has jurisdiction 'in all cases whatsoever': see City of Collingwood v Victoria [1993] VicRp 58; [1993] 2 VR 66 per Harper J concerning the entrenchment provided by Constitution (Jurisdiction of Supreme Court) Act 1991 (Vic); Mayor, Councillors & Citizens of City of Collingwood v Victoria (unrep, App Divn Vic, 10/11/1992, 11826 of 1992) per Brooking J. Under the Constitution Act 1975 (Vic) ('Constitution Act'), ss 18(2A), 85(5)-(14) the Supreme Court's jurisdiction can only be displaced by Parliament by express repeal or amendment to s 85 of the Constitution Act itself: see s 85(8).

[52] The case concerned the 'important question of whether there is a different approach to the question of costs under s 109 of the VCAT Act in respect to an administrative review proceeding when compared with a proceeding in the Tribunal's original jurisdiction': see para [14]. Supreme Court held that there was not:

[17] It is important to note that [s 109] is concerned with a "proceeding". "Proceeding" is defined by s 3 ... as meaning "a proceeding in the Tribunal" ... There is nothing in s 109 which draws a difference between a review and a proceeding in VCAT's original jurisdiction. Its jurisdiction is divided into two parts by s.40, namely original jurisdiction and review jurisdiction. Section 109 deals with any proceeding in VCAT.

[54] She went on to observe, to the same effect in relation to other legislation:

In Transport Accident Commission v O'Reilly, [1998] VSCA 106; [1999] 2 VR 436, 441, [9] (Tadgell JA) the Court of Appeal said of s 50(2) of the Administrative Appeals Tribunal Act 1984 (Vic), which also contained a 'prerequisite' to the exercise of the power to award costs, as follows:

Section 50(2) imposes a prerequisite to the exercise of the power that it confers, namely that the tribunal should be satisfied that there are circumstances justifying a party's receiving an order for costs rather than bearing its own. I derive from s 50(2) ... no inhibition, however, in the exercise of the power. That is to say, if and when the tribunal makes an order for costs under s 50(2) - the prerequisite to the exercise of the power having been met - the exercise carries a wide discretion.

[55] This is to be contrasted with the offer of compromise procedure under rules of court, where the offer must include an offer to pay the other party's costs up until the time the offer is open for acceptance and where, therefore, because of the application of the 'general rule' that costs follow the event in court proceedings, no costs comparison is required.

[56] As I discuss below, s 112 of the VCAT Act usually does not apply to cases in review jurisdiction, it did in that case by reason of VCAT Act, Sch 1, Part 20 - Transport Accident Act 1986 (Vic), s 93. Section 109(1) also did not apply in that case because the enabling enactment contained its own unconstrained costs discretion to award costs and the operation of s 109 of the VCAT Act was excluded by Sch 1, Part 20, s 92. However, the Court of Appeal's reasoning and analysis of s 112 was done in reference to s 109(1) and thus, its ratio applies generally to original jurisdiction cases to which s 109(1) applies.

[57] TAC's offer referred expressly to it the offer being made "in accordance with" s 112 of the VCAT Act, and Sch 1, cl 93 which varied the operation of s 112 in the proceeding in question.

[58] Section 159 of the VCAT Act provides that an inconsistent provision in an enabling enactment 'prevails to the extent of the inconsistency'.

...Such a provision would appear to displace s 109(1), making other and inconsistent provision, which prevails by reason of s 159. ... the conflict is more apparent than real; for Item 92 of Schedule 1 to the VCAT Act itself, in making special provision for the operation of the VCAT Act in respect of a number of other special statutes including the TAA, specifically declares that nothing in s.109 applies to a proceeding under the TAA.

[60] Sch 1 of the VCAT Act provides for variations from Parts 3 and 4 of the VCAT Act for various proceedings. See Sch 1, Part 20 - Transport Accident Act 1988, s 92 Costs and s 93 Settlement offers.

[61] See Phillips JA's analysis of that specific provision at [13] - [19].

[62] Phillips JA (with whom Brooking and Batt JJA agreed).

[63] Being the different views of Deputy President Coghlan and Deputy President McNamara in Elbat Mekaeel v. Transport Accident Commission [23 March 2000, unreported] and Linton v. Transport Accident Commission [7 December 1998, unreported] and of Member Davis in El-Badawi v. Transport Accident Commission [31 May 2001, unreported].

[64] Phillips JA referred at [27] - [28] to Tickle v Trifleska Pty Ltd (1990) 25 NSWLR 353 at [355]; Hobartville Stud v. Union Insurance Co Ltd (1991) 25 NSWLR 358 at [368] and Quirk v. Bawden (1992) 112 ACTR 1.

[65] Noting at [30] that in VCAT proceedings:

an applicant may withdraw an application before it is determined by the Tribunal only by leave of the Tribunal and then only on the terms specified in s 74(2), which inter alia expose the applicant to the possibility of an order for the payment of costs to all other parties. The offer that was made by the appellant on 14 March 2000 was, no doubt, that the applicant should be permitted by consent to withdraw without any such penalty as to costs as might be derived from s 74(2)(b). I accept that it must be a moot point whether the offer of 14 March did on that account contain some element of compromise, but I need not pursue it.

[16] Butterworths Australian Legal Dictionary (1997) "settlement", contrast "compromise" and "offer of compromise"; Oxford English Dictionary (2nd ed.) "settle" (meanings 33 and 34), contrast "compromise" (meanings 3 and 4), Macquarie Dictionary (1981) "settle" (meaning 16), Black's Law Dictionary (7th ed.) "settlement" (meaning 2).

[67] Referring to Calderbank v Calderbank [1976] Fam 93.

[68] Citing Hazeldene's Chicken Farm, 442 [25].

[69] Referring to Secretary to the Department of Transport v Provan's Timber Pty Ltd (No 2) [2020] VSCA 258, 8 [25] (Tate, Kyrou and McLeish JJA); Foster v Galea (No 2) [2008] VSC 331, 3-4 [9].

[70] Citing at fn [4], Dukemaster Pty Ltd v Bluehive Pty Ltd [2003] FCAFC 1, 3 [8]-[10] (Sundberg and Emmett JJ); Nutrient Water Pty Ltd v BACO Pty Ltd (No 2) [2010] FCA 304, 10 [33]-[34] (Kenny J); Mediterranean Olives Financial Pty Ltd v Lederberger (No 2) [2011] VSC 333, [10] (Pagone J); Keays v JP Morgan Administrative Services Australia Ltd (No 2) [2011] FCA 547, 7-8 [19]-[22] (Buchanan J); Strategic Property Reservoir Pty Ltd v Condec Pty Ltd (No 2) [2013] VSC 29, 5-6 [15] (Almond J); ROJ Property Group Pty Ltd v Eventpower Property Pty Ltd (Costs) [2023] VSC 268, 5-6 [12]; 23 [51] (Derham AsJ);]; LexisNexis, Civil Procedure Victoria (online at 16 July 2024) Chapter I: Supreme Court (General Civil Procedure) Rules 2015, [I 26.01.65].

[71] As Heerey J observed in Henderson v Amadio Pty Ltd and Ors [1996] FCA 1341 at [46]-[48]:

[46] In Calderbank v Calderbank [1976] Fam 93 at 94 the English Court of Appeal sanctioned the taking into account for cost purposes offers of compromise expressed to be without prejudice but reserving the right to refer to the offer on the issue of costs. The significance of Calderbank is that up until then the only general remedy available to a party who wished to protect its position on costs by making a reasonable offer was the procedure for payment into court. But that procedure was only available to a defendant faced with a money claim. It was no use to a defendant against whom a claim was made for other relief such as injunction or the return of property. Nor was the procedure available to a plaintiff who wanted to put forward a figure it would accept. Parties could of course make offers of any kind expressed to be without prejudice, but such communications were privileged and thus could not be referred to in any costs argument.

[47] What Calderbank did was to apply generally the principle underlying procedures used in specialist areas where a payment was not available. One was the use of sealed offers in Lands Tribunal proceedings. Another was the practice of offers as to apportionment between shipowners in Admiralty collision cases.

[48] In Cutts v Head (1984) Ch 290 the English Court of Appeal held that the use of a Calderbank letter was not confined to family disputes but could not be used as a substitute for a payment into court where that was appropriate.

[72] Eg Fasham Johnson Pty Ltd v Ware [2004] VCAT 1708 at [24]-[27]; West v Baxter Lodge Pty Ltd [2004] VCAT 2536, at [14]-[15]; Elali v Mina; H.F.K Cement Rendering v Mina [2005] VCAT 551 at [8] and more recently, Stalteri v Traralgon Contractors Pty Ltd [2016] VCAT 838 at [84] in which Deputy President Lulham carefully considered Hopkins, and which has been followed in other Tribunal cases.

[73] Velardo v Andonov [2010] VSCA 38 at [39]-[40], Ashley JA observing:

40 Two matters point in favour of that conclusion. The first is s 109(2) and (3)(e) in combination. The second is the fact that the costs consequences provided for by s 112(3) apply only if, inter alia, the offer complies with ss 113-114. Those costs consequences are ... in several respects idiosyncratic. In terms, the language of s 112(1) leaves open the prospect that an offer of some other kind might attract different consequences.

[74] Citing Elali v Mina; H.F.K Cement Rendering v Mina [2005] VCAT 551 at [8]; Fasham Johnson Pty Ltd v Ware [2004] VCAT 1708 at [24]; West v Baxter Lodge Pty Ltd [2004] VCAT 2536 at [13].

[75] See Mildura Rural CC v Victorian WorkCover Authority [2006] VCAT 2366 at [34].

[76] To use Ashley JA's expression in Velardo v Andonov [2010] VSCA 38 at [40]: see fn 6.

[77] Hazeldene's Chicken Farm, 442 [25].

[78] Commissioner of State Revenue v Challenger Listed Investments Limited (No 2): [2011] VSCA 398, 4 [17] (Buchanan; Tate JJA; Sifris AJA).

[79] Noting that the Court of Appeal has accepted that a respondent's offer to an applicant to withdraw and no costs would be sought contains an 'element of compromise': see Phillips JA at [30] cited earlier, Batt JA agreeing.

[80] Coryule Pty Ltd v Westernport Regional Water Authority (No 8) (Land Valuation) [2010] VCAT 1230 at [31] applying Mount Lawley Pty Ltd v Western Australian Planning Commission (2007) 157 LGERA 1; [2006] WASC 82 ('Mount Lawley'). In Mount Lawley the Western Australian Supreme Court observed:

[83] The disadvantage from the offeror's perspective of using a Calderbank offer rather than an offer under [the rules of court], is that the Court's discretion as to costs cannot be fettered by the fact that a favourable Calderbank offer has been rejected. Although the circumstances in which the offer was made and rejected will be relevant to the exercise of the costs discretion, the principle that costs follow the event will be applied, unless the plaintiff acted unreasonably in rejecting the offer: NMFM Property Pty Ltd v Citibank Ltd (No 11) [2001] FCA 480; (2001) 109 FCR 77 at 98.

[92] There is a principle that an offeree does not unreasonably reject a Calderbank offer if there is some reasonable doubt about its value: Duncan & Weller Pty Ltd v Mendelson [1989] VicRp 36; [1989] VR 386 at 401; Grbavac v Hart [1996] VSC 37; [1997] 1 VR 154 at 155.

[81] Hazeldene Chicken, 441 at [23]

[82] Citing Henderson v Amadio Pty Ltd and Ors [1996] FCA 1341 (22 March 1996) at [51].

[83] It is also to be noted that Heerey J, in his full statement in the Federal Court case above of Henderson v Amadio Pty Ltd and Ors [1996] FCA 1341, said he was envisaged an offer that sought 'to achieve reasonable settlement', stating:

... the respondents argued that O 23 [of the Federal Court's rules] now constitutes a code and excludes any reliance on Calderbank letters. I do not agree. The Calderbank letter is such a useful and flexible weapon for litigants who want to achieve reasonable settlement that in the absence of express provision to that effect I am not prepared to draw the inference that the rule-makers intended to exclude it..

[84] See Owners Corporations Act: s 139 Model rules; Owners Corporations Regulations 2018, Model rule 7 Dispute Resolution. See also Pt 10 Dispute resolution.

[85] See Owners Corporations Act, s 5 providing that all owners corporations in carrying out its functions and powers 'must act honestly and in good faith' and 'must exercise due care and diligence'. By s 101, its committee, having the powers and functions delegated to it by or under s 11, must discharge its duties under s 5. A manager of the owners corporation has the same duties 'in the performance of the manager's functions' under s 122(1)(a) and (b). See Owners Corporation 1 Plan No. PS735439F v Singh (Owners Corporations) [2022] VCAT 389 at [93]-[94].

[86] Vero, at [18], [19] and [22]-[23]

[87] Unless amended by Sch 1 or other enabling enactment.

[92] Real Estate Victoria Pty Ltd v Owners Corporation No 1 PS332430W [2021] VSC 373 (25 June 2021) (Justice Richards) disapproving Conroy v Owners Corporation Strata Plan 30438 [2014] VCAT 550 (Justice Garde, President).

[93] The issue at para [522] fell away because Mrs Goldstone did not seek her solicitor's costs. At the costs hearing, Mr Leaman, a partner in Mrs Goldstone's husband's law firm who had been acting as the solicitor on the record and who instructed at the hearing, properly disclosed to the Tribunal that he had never billed Mrs Goldstone any solicitor's fees. Although he said she had signed a costs agreement entitling the law firm to charge legal fees, it was not produced, so the basis on which fees were to be charged and the circumstances under which she might have had any liability for costs, is not in evidence.

[94] Oshlack at [67] (set out earlier).

[95] Assuming the Tribunal's ruling does not otherwise amount to a res judicata or give rise to an issue or cause of action estoppel. Now is not the occasion to examine the application those principles to this proceeding in the Tribunal brought under the Subdivision Act.

[96] See Law of Costs, 15.34 and 16.14-16.17.

[97] Richardson's submissions on costs dated 16 August 2024, para 18-20.

As I have found, in this case the interpretation of the Subdivision Act and Owners Corporations Act lead to the conclusion - as a question of proper statutory construction - that in regard to an owners corporation for a 2-lot subdivision under the Owners Corporations Act, unless there is a 'unanimous resolution' of the members within the meaning of its s 7A(2) to the alteration to the plan of subdivision, s 34D of the Subdivision Act does not empower this Tribunal to make an order in an application to the Tribunal under its s 34D(1)(a) or (b).

[100] Referring to para 162 of the Tribunal's reasons

[101] Citing Dennis Family Corporation Pty Ltd v Casey CC (Red Dot) [2008] VCAT 691 at [19].

[102] Citing Fuggle v Murrindinidi SAC [2007] VCAT 494 at [12].

[103] Citing Thirty Fourth Enterprise Pty Ltd v Leggetts Tennis and Squash Centre Pty Ltd (No 2) [2000] V ConvR 58-541; [1999] VCAT 27.

[104] Citing Charter Hall Group v Whitehorse CC (No. 2) [2008] VCAT 1536 at [7].

[105] Citing Clifford Hallam Healthcare Pty Ltd v Price [2010] VCAT 1117.

[106] I do not agree with Mr Richardson's Counsel that the other issues on which he claims Mrs Goldstone was unsuccessful were discrete items that can readily or sensibly be separately considered for special costs treatment. They were also entirely proper constructional arguments to make in a case that was concerned with proper statutory construction of complex and interconnected land subdivision and owners corporation legislative provisions.

[107] Within the 'disallowance' principle I have discussed earlier in Northern Territory v Sangare [2019] HCA 19; (2019) 265 CLR 164. (I note below those costs I consider would be disallowable if costs had been awarded against Mrs Goldstone.).

[108] I record that as with the adjournment on day one to permit Mr Richardson to amend (when the Tribunal ordered costs thrown away to be reserved including costs of any amended defence), on day two when the Tribunal adjourned the hearing a second time to permit Mrs Goldstone to amend her defence to properly articulate any allegation of improper motive she sought to advance at final hearing, the Tribunal reserved costs thrown away (including the costs of any reply to the amended defence).

[109] To use the language of Devlin J in Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd, adopted by the High Court in Oshlack at [69] cited earlier.

[110] A 2-lot subdivision affected by an owners corporation is 'exempt from compliance' under s 7A(1)(a) which otherwise requires all owners corporations to have formal rules designed to help quell controversies between lot owners and occupants without unnecessary resort to litigation in the Tribunal.

[111] Stating at [42]: 'The point is emphasised by s 112(1)(c), which speaks of an offer complying with ss 113 and 114'.

[112] The double negative in this sentence needs to be properly understood. Section 114(1)-(3) states:

(1) An offer must be open for acceptance until immediately before the Tribunal makes its orders on the matters in dispute, or until the expiry of a specified period after the offer is made, whichever is the shorter period.

(2) The minimum period that can be specified is 14 days.

(3) An offer cannot be withdrawn while it is open for acceptance without the permission of the Tribunal.

Thus, Court of Appeal found that it is incorrect, as a matter of construction, 'to treat [s 114(1)] as saying that where an offer does not specify a shorter period, the offer is deemed to be open up to the time of making final orders ... [T]hat is not what the subsection says.'

It does not say that where an offer does not specify a shorter period, the offer is deemed to be open up to the time of making final orders

[113] Ashley JA (with whom Mandie JA and Habersberger AJA agreed) held at [44] that:

The construction of s 114(1) which I prefer is compatible with a jurisdiction where, often enough, parties are not represented. So construed, an offeree, without needing to read and understand the Act, would know from the offer itself whether it was open for acceptance up to the time of final disposition, or else for some specified shorter period.

[114] Thus, the section contemplates a late settlement offer made just prior to hearing or even during a hearing, which the recipient can accept before final order is made on the matters in dispute.

[116] Mrs Goldstone's submissions about her offers to Mr Richardson were made in written submissions prepared by Mr Schlict and oral submissions made at the costs hearing by Mr Leaman. Mr Richardson's written submissions filed in opposition to Mrs Goldstone's application for costs are in section D, para [13]-[52], supplemented by further oral submissions by Mr Jones of Counsel at the costs hearing.

Our client purchased ... on the basis of the lot liability and lot entitlement and in particular on the basis that as a two lot subdivision, each party had an equal 50% vote on any decision of the Owners Corporation. It is clear that neither client should be entitled to a greater vote than 50%. Your client has already demonstrated a clear intention to try to make decisions on the Owners Corporation's behalf to the detriment of our client.

[118] It gave no legal explanation for why Mr Richardson would be unsuccessful or why it was reasonable for him to accept that offer. After beginning the letter by referring to an earlier letter from Mr Richardson's solicitors of 26 March 2021, it stated:

Our client does not agree that it is appropriate to amend either Lot Liability or the Lot Entitlement. There is no good reason why the liability and entitlement should be changed from the time when the plan was first registered & from when both parties bought their respective units. While our client agrees that the properties are different in size & value, the amount of outgoings incurred by the Owners Corporation each year are relatively modest and this application is an unnecessary expense being incurred by the parties',

It then gave reasons why Mrs Goldstone herself was happy with the way things were, and put her 'Offer'. After sections and Calderbank authorities relied on, all it said was that:

In our view there are significant advantages to your client in accepting the Offer contained in this letter and bringing an end to this matter.

[119] All it said about why he would be unsuccessful or why it was reasonable for him to accept that offer was an assertion that 'our client considers your claim to be weak' and it was in the parties' interests to avoid the 'inherent risks, delays and uncertainties of the proceeding'.

[120] As noted, earlier, Mr Schlicht had prepared the written costs submissions for her dated 12/9/2024 in response to Mr Richardson's costs application and had appeared for her in the substantive application.

[9] See the observations of Nettle JA in Berrigan Shire Council v Ballerini [2006] VSCA 65 [33], further to what this Court said in Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435.

[10] Pacific Indemnity Underwriting Agency Pty Ltd v Maclaw No 651 Pty Ltd [2005] VSCA 165; (2005) 13 VR 483, 496-497 [33] (Ormiston JA), 518 [91]-[92] (Nettle JA) and 522 [111] (Hansen AJA), citing Re Adelphi Hotel (Brighton) Ltd [1953] 1 WLR 955, 961. See also DH v NS (Court of Appeal, 10 June 2005, unreported, Chernov JA and Byrne AJA).

[11] The costs regime which the Act establishes, including s 112(3), seems likely to produce difficulties in the formulation of offers. See, for instance, Dover Beach Pty Ltd & anor v Geftine Pty Ltd [2008] VSCA 248; (2008) 21 VR 442, [108]-[127].

[122] Unlike Rule 26.03(7) of Chapter 1 of the Supreme Court Rules, s 112 - specifies no costs consequences in the event of acceptance of an offer

[123] In characterising the terms of Mrs Goldstone's offer made in her solicitors' letter of 22 June 2022 I consider that case to be distinguishable.

[124] See for example Order 26 - Offers of Compromise of the Supreme Court rules in Ch 1 of its General Rules of Procedure in Civil Proceedings 1986.

[125] The word 'settle' in ordinary English means 'resolve or reach an agreement about (an argument or problem)'. An offer to settle therefore means an offer made to resolve the dispute by it to an end by agreement. It may or may not necessarily entail a compromise. That meaning is consistent with the established purpose of the settlement offer provisions in s 112-115 of the VCAT Act as being to facilitate the resolution of disputes in the Tribunal. Thus in Metricon Homes Pty Ltd v Sawyer [2013] VSC 518, Justice Garde observed:

[42] The purpose or object of the settlement offer provisions of the VCAT Act is to facilitate the resolution of disputes in VCAT.

[126] Within principles discussed by the Court of Appeal in Mainieri v Cirillo [2014] VSCA 227 such as to satisfy the indemnity principle.

[127] See Law of Costs, 7.15 in discussing pro bono costs.

[128] Coincidentally, that is also consistent with the rules of court dealing with offers of compromise that require that time expressed by an offer of compromise 'shall not be less than 14 days after [its] service': see Rule 26.03 of the Supreme Court (General Civil Procedure) Rules 2015 S.R. No. 103/2015.

[129] This is also implicit in s 112(3)(b).

[130] See reasons at para [5] and [492]-[513].

[131] As I also found in my reasons, that Mrs Goldstone's counsel resiled from the material pleaded in the amended defence, but pressed an allegation differently on different material (see para [497]) and that Mr Richardson's motive for bringing his application was not a discretionary consideration I considered to be relevant under s 34D(6) of the Subdivision Act (see para [513]).

[132] See Goldstone's submissions on costs dated 24 July 2024.

[133] See First respondent's outline of submissions dated 5 October 2022 [Submissions book, p 49-57, Mr Philpott], First respondent's submissions on objections dated 5 October 2022 [Submissions book, p 85ff, Mr Philpott], First respondent's submissions in respect of evidence objected to by the applicant dated 6 October 2022 [Submissions book, p 102-104, Mr Philpott], Supplementary submissions of the first respondent filed 2 December 2022 [Submissions book, p 74-81, Mr Schlicht]; First respondent's reply submissions as to s 44D(6) filed 17 February 2023 [Submissions book 122-126, Mr Schlicht]. 57

[134] See Richardson's submissions in reply to Goldstone's application for costs dated 30 August 2024.

[135] See Richardson's submissions on costs dated 16 August 2024 opposed by Goldstone's reply submissions dated 12 September 2024.

[136] Mr Richardson claims 100% of the hearing on 12 December 2022.

[137] Mr Richardson claims 24% of his costs of the hearing on 21 February 2023.

[138] Mr Richardson claims 39% of his costs of the hearing held on 22 February 2023.

[139] Mr Richardson claims 100% of his costs of the hearing held on 1 March 2023.

[140] See Richardson's Tabulated Statement of Costs Claimed dated 13 November 2024 and attached notated solicitors' tax invoices from CBL, barrister's clerks tax invoices from Svenson Barristers and other disbursement invoices from Law in Order. He also claims $19,132.58 for costs of making and defending the costs applications.

[141] See Goldstone's submission in reply dated 21 November 2024, submitting that in relation to Item 3.1.6 (hearing 12 December 2022), table items 10 to 14, Mr Richardson had amended his points of claim five times and on 3 October 2022 (on the third amendment) and again on 20 October 2022 (on the fourth amendment), the Tribunal reserved costs and that her costs of all his amendments should be offset if Mr Richardson is awarded his costs of Mrs Goldstone's amendment.

[142] Although the claim in the proceeding was decided as a matter of statutory construction of the Subdivision Act and Owners Corporations Act together, the actual application in the proceeding was under the former Act. Thus s 115C(1)(c) is inapposite. Accordingly, I make the order under s 115B taking into considerations 115C(3)(a)-(c), noting also that the order only relates to fees paid for the costs application which Mrs Goldstone was successful.