1. This is a basis upon which costs could be awarded: s.109(3)(a)(vi).
2. Costs can be awarded on this ground if proceedings were conducted vexatiously, but not solely because the claim made in the proceedings was vexatious: Straw v Proctor [2004] VCAT 464 @ [16]. However, it seems to me that a vexatious claim can provide the foundation upon which proceedings are conducted vexatiously. Put another way, a vexatious claim can be pursued vexatiously during the course of a hearing.
3. In Oceanic Sea Line Special Shipping Co v Fay [1988] HCA 32; (1988) 165 CLR 197 @ 247, Deane J said that " "vexatious" should be understood as meaning productive of serious and unjustified trouble and harassment".
4. Mr. Shaw persisted with several claims even after it must have become apparent to him, either as a result of submissions made by counsel for Rigby Cooke and as a result of explanations given by me, that the claims had no chance of success, or virtually no chance of success. His claim that Rigby Cooke failed to review the Supreme Court proceedings when it took over from Gadens (because he did not try to establish what a review would have ascertained) and his claim that Rigby Cooke did not check the availability of Mr. Bloch of counsel (because Mr. Shaw already had checked Mr. Bloch's availability) are examples.

1. This is a basis upon which costs could be awarded: s.109(3)(b).
2. Mr. Shaw regularly adjusted his claims as the hearing progressed, either by making new claims or by seeking to adjust existing claims. He constantly moved from one claim to another and then back again. He ignored rulings as to relevance, and continued to deal with matters ruled to be irrelevant.
3. He persisted in repetition, both when giving evidence and when asking questions in cross-examination. For example, Mr. Shaw covered the same ground time and time again when dealing with his claim that Rigby Cooke failed to transfer his case from the Supreme Court to VCAT, and with his claim that Rigby Cooke should not have agreed to a list of facts during the course of the Supreme Court trial.

1. This is a basis upon which costs could be awarded: s.109(3)(c).
2. Mr. Shaw's contention that the words "act or omission" in s.4.2.2(2)(b) of the Legal Profession Act introduced strict liability for any act or omission on the part of a legal practitioner in fact went nowhere, because Mr. Shaw did not make any claim based upon strict liability. Furthermore, his contention as to the effect of the Domestic Building Contracts (Amendment) Act 2004 simply ignored the wording of the Act and had no tenable basis in law.

1. I will put my findings in relation to each claim in the form of a table.

Arguable claim in law, but no tenable basis in fact for the claim. Occupied a relatively moderate amount of time

Unjustified claim pursued, but not sufficiently serious as to constitute pursuit of vexatious claim. Occupied a relatively small amount of time

Claim that Rigby Cooke failed to transfer case from the Supreme Court to VCAT

Repeat of claim made unsuccessfully in Shaw v Gadens Lawyers [2008] VCAT 2643. Occupied a relatively large amount of time. Hearing unreasonably prolonged by Mr. Shaw

Claim concerning operation of Domestic Building Contracts (Amendment) Act 2004

No tenable basis in law. Occupied a relatively moderate amount of time. Hearing unreasonably prolonged by Mr. Shaw

Claim that Rigby Cooke failed to review Supreme Court proceedings when it took over from Gadens

Vexatious claim pursued. No tenable basis in fact. Occupied a relatively moderate amount of time

Vexatious claim pursued. No tenable basis in fact or law. Occupied a relatively small amount of time

Decision based upon immunity from suit. Vexatious claim pursued, in that Mr. Shaw regularly returned to this claim in order to harass Rigby Cooke. Occupied a relatively large amount of time. Hearing unreasonably prolonged by Mr. Shaw

Claim that settlement offers not referred to Mr. Shaw, and that Mr. Shaw not advised could appeal against costs order based upon non-acceptance of earlier offer

No tenable basis in fact, although decision based partly upon immunity from suit. Occupied a relatively moderate amount of time

Compensation awarded. Occupied a relatively large amount of time

Vexatious claim pursued. No tenable basis in fact or law. Occupied a relatively moderate amount of time

Claim about costs orders made against Mr. Shaw on 10 August 2005 and 26 May 2006

As to order made on 10 August 2005, no tenable basis in fact or law.

As to order made 26 May 2006, compensation awarded.

Each claim occupied relatively moderate amount of time

Claim about costs order made by Hollingworth J on 5 April 2005

Arguable claim. Occupied a relatively large amount of time

Claim that Rigby Cooke failed to provide copies of correspondence

Vexatious claim pursued. Occupied a relatively small amount of time

Claim that Rigby Cooke failed to provide advice about costs and discovery

As to claim that Rigby Cooke failed to obtain copy documents through the discovery process, arguable claim. As to the remainder of the claim, dealt with as part of other claims. Occupied a relatively moderate amount of time

Repetition of another claim, already dealt with. Occupied a relatively small amount of time

Arguable claim, but considerable repetition on part of Mr. Shaw. Occupied a relatively large amount of time. Hearing unreasonably prolonged by Mr. Shaw

Mainly dealt with as part of another claim. Occupied a relatively small amount of time

Application C1507 of 2009 lodged by Rigby Cooke under Fair Trading Act

Arguable defence as to amount owing. Occupied a relatively large amount of time

Application C3826 of 2009 lodged by Mr. Shaw under Fair Trading Act

Three new claims included pursuit of two vexatious claims. Occupied relatively moderate amounts of time.

As to repetitious claims, already dealt with and occupied small amounts of additional time.

As to alleged failure to provide information about legal costs, arguable claim that occupied a relatively small amount of time

1. I have found that Mr. Shaw conducted large parts of the hearing vexatiously.
2. I have found that Mr. Shaw unreasonably prolonged the proceedings.
3. I have found that Mr. Shaw made claims that had no tenable basis in fact or law.
4. Section 109(1) of the Victorian Civil & Administrative Tribunal Act provides in substance that each party is to bear their own costs, subject to sections 109 to 115. Consequently, s.109 does not provide a basis upon which Mr. Shaw could be ordered to pay legal costs for work not associated with the findings.
5. I have found that there are three bases upon which a costs order could be made. I will make such an order. Furthermore, because of the nature of the events that gave rise to the findings, I will make the costs order on a solicitor/client basis.
6. It is impossible to calculate with precision the additional costs incurred by Rigby Cooke as a result of the events that led to the findings. I will do the best that I can. If the costs application was based solely upon s.109, I would order Mr. Shaw to pay 55% of Rigby Cooke's costs of and incidental to the final hearing, not 55% of the costs of the proceedings as a whole.
7. However, the costs application was not based solely upon s.109.

1. Rigby Cooke served an "offer of compromise" upon Mr. Shaw on 17 December 2008. The offer of compromise is in evidence. It states that it is made pursuant to s.112 of the Victorian Civil & Administrative Tribunal Act 1998. I have perused the offer carefully, and I have perused sections 112, 113 & 114 of the Act carefully, and I am satisfied that the offer complied with the formal requirements for the making of an offer pursuant to s.112.
2. The offer was that Rigby Cooke would accept $15,000.00 from Mr. Shaw "in full and final settlement of the Applicant's claim, the Respondent's counterclaim and the proceeding generally". Mr. Shaw did not accept the offer within the time allowed, or at all.
3. I made final orders on 5 August 2009. In the application brought by Mr. Shaw under the Legal Profession Act, I ordered Rigby Cooke to pay compensation of $6,240.00 to Mr. Shaw. In the application brought by Rigby Cooke under the Fair Trading Act, I ordered Mr. Shaw to pay $38,926.90 to Rigby Cooke for legal costs and interest thereon. I further ordered that the $6,240.00 be offset against the $38,926.90, thus reducing the amount payable by Mr. Shaw to $32,686.90.
4. Section 112 of the Victorian Civil & Administrative Tribunal Act provides that, unless the Tribunal orders otherwise, a party who made an offer in accordance with the section "is entitled to an order that the party who did not accept the offer pay all costs incurred by the offering party after the offer was made", if the orders made by the Tribunal are not more favourable than the offer.
5. Counsel for Rigby Cooke put its case simply. He submitted that Rigby Cooke offered to accept $15,000.00 from Mr. Shaw in full and final settlement, that the Tribunal ordered Mr. Shaw to pay $32,686.90 to Rigby Cooke, that Rigby Cooke therefore is entitled to all its costs after the offer was made, and that there was no reason why the Tribunal should order otherwise.
6. Mr. Shaw made a quite different submission. He pointed out, quite correctly, that when the offer was made the only proceedings on foot were his application under the Legal Profession Act and a counterclaim purportedly made by Rigby Cooke under that Act. On 11 February 2009, I ruled that Rigby Cooke could not lodge the counterclaim under the Legal Profession Act because the amount of the counterclaim exceeded the jurisdictional limit under the Act. That ruling was reduced to writing on 2 March 2009: see Shaw v Rigby Cooke Lawyers [2009] VCAT 319. The ruling led to Rigby Cooke lodging an application under the Fair Trading Act, where there is no jurisdictional limit, which made the same claims as those made in its purported counterclaim under the Legal Profession Act. Indeed, the counterclaim was annexed to the application under the Fair Trading Act as particulars of the application.
7. Mr. Shaw submitted that the Fair Trading Act application should be ignored, because it was not on foot when the offer of compromise was made. The outcome of the Legal Profession Act application was that Rigby Cooke was ordered to pay compensation of $6,240.00 to Mr. Shaw, an outcome much more favourable to Mr. Shaw than the offer that Mr. Shaw pay $15,000.00 to Rigby Cooke.
8. The response of Rigby Cooke was to rely upon paragraph 2 of the offer of compromise, which provided that "The Respondent [Rigby Cooke] will accept the sum of $15,000.00 ("the settlement sum") inclusive of interest and costs from the Applicant [Mr. Shaw] in full and final settlement of the Applicant's claim, the Respondent's counterclaim and the proceeding generally". Counsel for Rigby Cooke submitted that "the Respondent's counterclaim" was exactly the same claim as that made by Rigby Cooke in its Fair Trading Act application.
9. I accept the submission made on behalf of Rigby Cooke. The offer of compromise must be considered in the light of circumstances as they existed when the offer was made. At that time there was a purported counterclaim by Rigby Cooke for costs for the provision of legal services, and interest thereon. The offer was that Mr. Shaw pay $15,000.00 to Rigby Cooke in settlement of Mr. Shaw's claims for compensation, and in settlement of Rigby Cooke's claims for the cost of legal services and interest thereon. Mr. Shaw did not accept that offer. To ignore the counterclaim, because the amount of the counterclaim subsequently was ruled to be in excess of a jurisdictional limit and replaced by an identical claim under the Fair Trading Act, would be a victory of form over substance. Section 97 of the Victorian Civil & Administrative Tribunal Act provides that "The Tribunal must act fairly and according to the substantial merits of the case in all proceedings", so substance must prevail.
10. I find that the orders made by me on 5 August 2009 under the Legal Profession Act and the Fair Trading Act, treated as a whole, were not more favourable to Mr. Shaw than the offer of compromise made to him on 17 December 2008. The result is that Rigby Cooke is entitled to an order that Mr. Shaw pay all costs incurred by Rigby Cooke after the offer was made: s.112(2) Victorian Civil & Administrative Tribunal Act. I acknowledge that the Tribunal may order otherwise, but there is no reason to refuse an order that all costs be paid by Mr. Shaw.
11. Rigby Cooke is entitled to "all costs" incurred after the offer was made. Counsel for Rigby Cooke submitted that "all costs" mean costs calculated on a solicitor/client basis. Mr. Shaw submitted that "all costs" means costs calculated on a party/party basis. The meaning of "all costs" is a contentious issue. Pizer's Annotated VCAT Act, 3rd edition at [4100] refers to conflicting VCAT decisions, which variously conclude that "all costs" means party/party costs, solicitor/client costs, indemnity costs, and all reasonable costs.
12. Mr. Pizer suggests a different interpretation. He submits that the words "unless the Tribunal orders otherwise" in s.112(2) give the Tribunal a discretion to award all costs, and that in the exercise of that discretion the Tribunal may award costs on a party/party basis or an indemnity basis. I favour the interpretation suggested by Mr. Pizer, although I would extend it to party/party costs, solicitor/client costs or indemnity costs.
13. The offer of compromise was made on 17 December 2008, and Rigby Cooke is entitled to all costs incurred after that date: s.112(2). The final hearing commenced shortly afterwards, on 9 February 2009. It occupied six days, the last day being 18 March 2009. Consequently, the costs involved predominantly will be the costs of preparing for and conducting the final hearing.
14. When dealing with the costs application made under s.109 of the Victorian Civil & Administrative Tribunal Act I found that Mr. Shaw conducted large parts of the hearing vexatiously, that Mr. Shaw unreasonably prolonged the hearing, and that Mr. Shaw made claims that had no tenable basis in fact or law. If the costs application was based solely upon s.112, in the light of the findings just mentioned, and in the exercise of the discretion given to me by s.112(2), I would order Mr. Shaw to pay all costs incurred by Rigby Cooke after 17 December 2008 calculated on a solicitor/client basis.

1. It is necessary for me to merge the order that I would make under s.109 (if the application under that section was the only costs application) with the order that I would make under s.112 (if the application under that section was the only costs application).
2. I will order that Mr. Shaw pay to Rigby Cooke 55% of the costs of and incidental to the final hearing incurred up to and including 17 December 2008, plus 100% of the costs of and incidental to the proceedings incurred after 17 December 2008, both calculated on a solicitor/client basis.
3. For the avoidance of doubt, costs of and incidental to the final hearing does not include costs associated with the directions hearing that took place on 21 February 2008, or the cost of complying with orders made at that directions hearing, or costs solely associated with the hearing set down for 10 November 2008 which did not proceed because of illness on my part.
4. The costs of the proceedings incurred after 17 December 2008 are to include the costs incurred by Rigby Cooke in relation to this costs application, calculated on a solicitor/client basis. The costs are to be calculated on a solicitor/client basis because the costs application would not have been necessary if Mr. Shaw had accepted the offer made under s.112. It is significant that the offer included settlement of the costs of the proceedings.
5. Mr. Tatarka of counsel, who appeared for Rigby Cooke, requested certification of his fees for his appearances at the final hearing and on this costs application. He informed me that his fee was $4,300.00 per day, inclusive of GST. In considering his request, I have taken the following factors into account:

(a) that the claims made by Mr. Shaw related to services provided by Rigby Cooke in relation to proceedings in the Supreme Court and the Court of Appeal;

(b) that Mr. Shaw made 17 claims in his application under the Legal Profession Act, seeking compensation in the vicinity of $500,000.00;

(c) that Mr. Shaw sought compensation of at least $750,000.00 in his application under the Fair Trading Act, although I acknowledge that his claims under that Act substantially duplicated the claims made by him under the Legal Profession Act ;

(d) the complexity of the claims made by Mr. Shaw, the fact that he regularly sought to adjust his claims as the hearing progressed, and the fact that he constantly moved from one claim to another and back again;

(e) that Mr. Shaw conducted large parts of the hearing vexatiously, causing "serious and unjustified trouble and harassment" to Rigby Cooke and its counsel, to adopt the words of Deane J in the Oceanic Sea Line Case.

1. I certify that this matter justified the engagement of counsel of Mr. Tatarka's seniority, and that his fee of $4,300.00 per day was an appropriate fee for his appearances at the final hearing and on the costs application.
2. The next step is to determine the scale to be applied. There is no prescribed scale which applies to cases conducted at VCAT, although it is common for VCAT to use a court scale as a guide. It is a guide because it is necessary to adapt court scales to accommodate procedural differences between cases conducted at VCAT and cases conducted in the courts. It has been common in cases of the present size and complexity to make use of County Court scale "D", the scale applying to all claims in that Court exceeding $50,000.00. After taking account of the same factors that I took into account when dealing with certification of the fees of counsel, I will order that costs be calculated on County Court scale "D" with any necessary adaptations.
3. Rigby Cooke is to prepare a bill of costs in taxable form. In the absence of agreement as to the amount of the costs, the costs are to be assessed by the Costs Court.