Procedural history of the applicant's review application

1. By application dated 20 July 2018, Mr Peter Rontogiannis (a building surveyor) applied for review of two disciplinary decisions made by the VBA under the Building Act 1993 (Vic) (Building Act) on 16 July 2018 (Reviewable Decisions). In his application, Mr Rontogiannis indicated that he 'disputes the findings of guilt on some allegations' and contended that the 'penalty imposed is extremely excessive'.
2. It is unnecessary to set out the full procedural history of the application to date, save to note that there was considerable delay in the matter proceeding to a compulsory conference as a result of numerous adjournments being requested by Mr Rontogiannis, most of which were consented to by the VBA.
3. In the event, the proceedings were unable to be resolved at compulsory conference and orders were made on 28 October 2020 setting the matter down for a three-day hearing commencing on 15 February 2021. Those orders also set out a procedural timetable to progress matters towards hearing, including requiring that, by 14 December 2020, the applicant file and serve:
   1. Particulars for the scope of the merit review, including which findings and disciplinary actions are challenged (if any); and
   2. All materials, reports, witness statements and any other evidence on which the applicant intends to rely.
4. Mr Rontogiannis failed to comply with that order and, on 15 January 2021, the VBA submitted an application for directions hearing or orders 'seeking strike out/dismissal pursuant to s 78 of VCAT Act' (Strike Out Application).
5. Orders were made on 25 January 2021 providing that the Strike Out Application would proceed to be heard on 15 February 2021 and that the remainder of the hearing was vacated. Procedural orders were also made requiring each of the parties to file and serve their material for the Strike Out Application, with Mr Rontogiannis to do so by 12 February 2021, being the Friday before the hearing.

1. On 11 February 2021, Mr Rontogiannis' solicitors filed his material. Subsequently, on Friday 12 February 2021, at 5:51pm, Mr Rontogiannis sent a letter to the VBA advising:

We advise that the Applicant will only be challenging the penalty at the final hearing - namely the partial suspension of his registration. Accordingly, our client has now complied with all of the Tribunal's Orders.

1. At the hearing of the Strike Out Application, Mr Schwarz (who represented Mr Rontogiannis) clarified a number of matters that were not clear from the correspondence of 12 February 2021, including that:
   • his client no longer challenged any of the findings made by the VBA as part of the Reviewable Decisions;
   • his client only challenged the disciplinary action which the VBA determined to take in so far as it related to the partial suspension of Mr Rontogiannis' registration as a building surveyor. As such, Mr Rontogiannis did not seek to challenge the Reviewable Decisions in so far as the VBA imposed financial penalties, conditions related to compulsory professional development and directions to notify certain matters to councils and other parties; and
   • the only additional material proposed to be filed by Mr Rontogiannis was:
     • - an updated version of a report from Mr Rontogiannis' accountant as to the financial impact of the partial suspension (and possible alternatives), amended to remove (at the request of the VBA) references to without prejudice communications between the parties, and otherwise ensure compliance with the Tribunal's practice note PNVCAT2 concerning expert reports; and
     • - personal and professional references from a small number of parties.
2. As a result of these matters, Mr Bruno (who represented the VBA):

(a) indicated that the VBA 'does not press' that the matter should be struck out under section 78(2)(a) of the VCAT Act; but

(b) contended that the VBA should be awarded costs in the sum of $4,800, being his fees to prepare for and appear at the hearing of the Strike Out Application.

The Tribunal's power to strike out or dismiss a proceeding

1. Under section 78(2)(a) of the VCAT Act, the Tribunal may strike out or dismiss a proceeding if an applicant is conducting the proceeding in a way that unnecessarily disadvantages another party to the proceeding, relevantly including a failure (without reasonable excuse) to comply with an order or direction of the Tribunal.
2. It has been said that the making of such orders should be 'of last resort and not first resort'[1] and that consideration should be given to making a 'self-executing order' instead.[2] Further, VCAT should consider the power to make a costs order to address any disadvantage suffered by another party.[3]

1. Under section 78(2)(c) of the VCAT Act, the Tribunal may make an order for costs under section 109, where it is established that a party is conducting the proceeding in a way that unnecessarily disadvantages another party.
2. Section 109(1) sets out the general rule that each party should bear its own costs. However, if it is 'fair to do so', the Tribunal can make an order that a party pay all or a specified part of the costs of another party.[4]
3. In considering whether the making of a costs order is fair, the Tribunal should consider:[5]

(a) whether a party has conducted the proceeding in a way that unnecessarily disadvantaged another party to the proceeding by conduct such as -

(i) failing to comply with an order or direction of the Tribunal without reasonable excuse;

(ii) failing to comply with this Act, the regulations, the rules or an enabling enactment;

(iii) asking for an adjournment as a result of (i) or (ii);

(v) attempting to deceive another party or the Tribunal;

(b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceeding;

(c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law;

(e) any other matter the Tribunal considers relevant.

1. In Pizer's Annotated VCAT Act,[6] the author refers to various decisions that indicate the general rule is designed to promote access to justice generally and to minimise the overall level of costs in Tribunal proceedings as far as is practicable.
2. Mr Nekvapil goes on to set out key principles drawn from previous Tribunal decisions relating to the power to award costs, including that the power is:[7]

(a) conditional, and may not be exercised unless the Tribunal determines it is fair to do so, in the sense of being just or appropriate in the circumstances;

(c) broad in scope, and may differ from those commonly made by the courts; and

(d) subject to certain limitations, for example the Tribunal may only make an order for costs of the proceeding.

1. Mr Bruno submits that it was necessary for the VBA to make the application under section 78 of the VCAT Act because Mr Rontogiannis had failed to comply with the Tribunal's orders of 28 October 2020 to clarify the scope of his review application and produce the material he wished to rely on by 18 December 2020.
2. While Mr Rontogiannis filed a draft report from his accountant on 16 December 2020, it remained unclear (at least until 12 February 2021) whether he was still contesting the findings made by the VBA.
3. The VBA contends that Mr Rontogiannis has caused unnecessary disadvantage by failing to comply with the Tribunal's orders, and has not provided any reasonable excuse for his failure to do so.
4. The costs claimed by the VBA are disbursements for counsel's costs, relating to one day of preparation (reviewing the whole file, which was voluminous) and one day for Mr Bruno's appearance at the hearing of the Strike Out Application.
5. Mr Schwarz says the application for costs should be dismissed, suggesting it is actually Mr Rontogiannis that has suffered disadvantage in 'having to put on material' in relation to the Strike Out Application which was 'doomed to failure', even if Mr Rontogiannis had not indicated that he was only seeking review of the partial suspension of his registration. This is because various decisions indicate that a self-executing order should be made as a first resort in such cases.[8]
6. The VBA's application is said to be 'inappropriate' in circumstances where Mr Rontogiannis was in 'substantial compliance' with the Tribunal's orders of 28 October 2020 by late afternoon on Friday 12 February 2021 or, at the latest, first thing on Monday 15 February 2021.
7. In those circumstances, a directions hearing should have been sought by the VBA, rather than making an application under section 78.
8. Finally, Mr Schwarz submits that, if the Tribunal is minded to make an order for costs, it should be for a lesser amount than claimed as counsel's brief fee 'usually includes reading and preparation', and any costs should be awarded on a 'party/party basis'.

1. There was some debate between the parties as to whether the costs being sought by the VBA can be awarded under section 78(2)(c) of the VCAT Act, or can only be awarded under section 109, on the basis that the former section is limited to the costs arising from any unnecessary disadvantage prior to the making of the Strike Out Application.
2. Given that the precondition to an order under section 78 is the same as the first matter to which regard must be had for the purposes of section 109, it does not seem to me that there is any real difference.
3. As already indicated, the starting point is that section 109(1) establishes a general rule that 'each party is to bear their own costs'. That general rule applies in the ordinary course to regulation and disciplinary matters in the Review and Regulation List.[9]
4. It is then necessary to consider each of the matters set out in section 109(3) of the VCAT Act in deciding whether it is 'fair' to order that a party pay all or a specified part of the costs of another party.

Section 109(3)(a): Did Mr Rontogiannis conduct the proceeding in a way that unnecessarily disadvantaged the VBA?

1. There is little doubt that Mr Rontogiannis' failure to comply with the Tribunal's orders of 28 October 2020 'unnecessarily disadvantaged' the VBA.
2. Under the same orders, the VBA was required to prepare its reply materials by 18 January 2021. At the time that the VBA submitted the Strike Out Application, Mr Rontogiannis was almost a month late in providing his material and the VBA only had a few days left to prepare its reply.
3. There has been no satisfactory explanation proffered for the delay on the part of Mr Rontogiannis. Correspondence between the parties suggests that, despite the failure to resolve matters at the compulsory conference, Mr Rontogiannis was seeking to continue informal settlement discussions with the VBA. The Tribunal encourages parties to do so, but not at the expense of complying with the Tribunal's orders.
4. Notably, the letter sent to the VBA on the eve of the hearing of the Strike Out Application still failed to fully comply with the requirements set out in the Tribunal's orders.
5. In my view, this factor points towards the exercise of the discretion to award costs under section 109(2) of the VCAT Act.

Section 109(3)(b): Is Mr Rontogiannis responsible for prolonging unreasonably the time taken to complete the proceeding?

1. The proceeding commenced by application made by Mr Rontogiannis on 20 July 2018.
2. On six separate occasions, Mr Rontogiannis sought to adjourn a compulsory conference being held. Although the VBA consented to most of the adjournments and the Tribunal made consent orders at the request of the parties, those adjournments have unreasonably prolonged the time taken to complete the proceeding.
3. In my view, this factor points towards the exercise of the discretion to award costs under section 109(2) of the VCAT Act.

Section 109(3)(c): In relation to the relative strengths of the claims, has Mr Rontogiannis made a claim that has no tenable basis in fact or law?

1. Mr Rontogiannis is, of course, entitled to bring an application for review of the Reviewable Decisions made by the VBA and to contest both the findings and the disciplinary action.
2. However, it is relevant to observe that, on the Friday before the date listed for final hearing, Mr Rontogiannis entirely abandoned any contest to the findings made by the VBA.
3. The orders made by the Tribunal at the conclusion of the compulsory conference, requiring Mr Rontogiannis to clarify the scope of his application for review and specify which findings he contested, suggest there was already some uncertainty and, perhaps, prevarication on that point as early as October 2020.
4. However, there is insufficient evidence before me to suggest that any challenge to the findings had 'no tenable basis in fact or law'. At the hearing before me, it was suggested that one reason that the challenge to the findings was abandoned was that Mr Rontogiannis could not afford the cost of an expert report.
5. In those circumstances, I consider that this is a neutral factor in the assessment of whether the general rule as to costs should be displaced.

Section 109(3)(d): Does the nature and complexity of the proceeding make it fair to make an order as to costs?

1. There is some complexity to the proceeding. There are two separate notices of decision that were issued by the VBA to Mr Rontogiannis, with some 14 grounds for disciplinary action found to have been substantiated.
2. Again, it is relevant to note that Mr Rontogiannis is entitled to bring an application for review of the Reviewable Decisions and that there is a cost to him in doing so.
3. I consider this is factor points against the exercise of the discretion to award costs under section 109(2) of the VCAT Act.

Section 109(3)(e): Are there any other matters that are relevant?

1. There is one other matter that is relevant.
2. As a result of the operation of section 187(3) of the Building Act, the Reviewable Decisions have been automatically stayed pending the outcome of the review.[10]
3. The purpose of the disciplinary regime in the Building Act is to protect the public.[11]
4. In the absence of the application for review, Mr Rontogiannis would have already completed the period of partial suspension of his registration by this time. However, as a result of the application and the manner in which the proceeding has been unreasonably prolonged, the protective purpose which the VBA seeks to achieve has yet to be served.
5. It is relevant to observe that the report produced by Mr Rontogiannis' accountant does not suggest that there should be no partial suspension at all; rather, it suggests that there should be modifications to the partial suspension to allow Mr Rontogiannis' business to continue to operate in some capacity and avoid its demise and the loss of employment for staff that would follow from the partial suspension proposed by the VBA.
6. Until all the evidence is in, the Tribunal is not in a position to determine if Mr Rontogiannis will succeed in his application. However, the automatic stay is a factor which also points in favour of a discretion to award costs under section 109(2) of the VCAT Act.

1. Overall, having regard to the above matters, I am satisfied that it is fair for the Tribunal to make an order for costs.

1. In terms of the quantum of costs, the respondent's counsel's costs were effectively costs 'thrown away' by reason of:

(a) Mr Rontogiannis' failure to comply with the Tribunal's orders of 28 October 2020; and

(b) the necessity for Mr Bruno to prepare for and attend the strike out hearing, given Mr Rontogiannis' letter of 12 February 2021:

(i) was only sent, after business hours, on the Friday before the hearing;

(iii) did not propose any consent orders to be put before the Tribunal.

1. In those circumstances, I consider it appropriate (and will order) that Mr Rontogiannis pay the full amount of the costs claimed.
2. I otherwise dismiss the application for orders under section 78 of the VCAT Act.

[1] Bell Corp Victoria Pty Ltd v Stephenson (2003) 20 VAR 280; [2003] VSC 255 [51] (Bell Corp).

[6] E Nekvapil, 6th Ed, Thomson Reuters, 2017 at [VCAT.109.60].

[8] See Bell Corp and Lucas v Lizio (No 2) [2017] VCAT 689.

[9] Fan v Business Licensing Authority (unreported, Justice Kellam P and Davis DP, 14 March 2001), cited in Pizer's Annotated VCAT Act at [VCAT.109.440].

[10] The Tribunal also made a stay order on 27 July 2019.

[11] Draper v Victorian Building Authority [2019] VCAT 1837 [48].