1. Application of the Applicant for costs against 2nd Respondent (Tymbook Pty Ltd) dismissed.

2. Order 1st Respondent (Bradto Pty Ltd) to pay to the Applicant its costs of 4 hearing days, such costs to be on an indemnity basis, and, in default of agreement, to be assessed or settled by the Principal Registrar pursuant to s.111 of the Victorian Civil and Administrative Tribunal Act 1998.

3. The costs ordered to be paid by Bradto to the SOV pursuant to order 7 of the orders of 7th September 2005 are, in default of agreement, to be taxed on the Supreme Court Scale, and including a certificate for two counsel, and to be assessed and settled by the Principal Registrar pursuant to s.111 of the Victorian Civil and Administrative Tribunal Act 1998.

On behalf of the State of Victoria: Mr Garde QC, with Mr Fox of Counsel, instructed by the Victorian Government Solicitor.

On behalf of Bradto: Mr Nugent of Counsel, with Mr Hopper of Counsel, instructed by Mitrakas Savas & Co., Lawyers & Consultants.

On behalf of Tymbook: Mr Reilly of Counsel, instructed by Cornwall Stodart Lawyers.

1 As I have said on a previous occasion, this matter has a long and tortuous, if not tortured, history. I have made rulings in relation to it on 7th September 2005; 13th October 2005; 10th November 2005; 1st December 2005; 8th February 2006 ("the principal decision"); and 9th February 2006. It has also been before Deputy President Macnamara. It has been before the President. It has been to the Court of Appeal. It centres around an application by the State of Victoria ("the SOV") against Bradto Pty Ltd ("Bradto") and Tymbook Pty Ltd ("Tymbook") for interlocutory injunctions.

2 I have set out the factual background to this application in my ruling of 7th September 2005, and in the principal decision. It was also ventilated at some length before Deputy President Macnamara in the hearing before him on 21st, 24th and 25th October 2005. I do not intend to repeat it here.

3 As is evident from the principal decision, the SOV was ultimately successful in its application before me. It was also successful in the Court of Appeal. It now seeks its costs against both Bradto and Tymbook. Any determination in relation to costs in a matter such as this involves consideration of s.92(2) of the Retail Leases Act 2003 ("the RLA") and of various provisions of the Victorian Civil and Administrative Tribunal Act 1998 ("the VCAT Act"). Before the parties moved on to argument concerning what could be described as the merits of the costs dispute, two preliminary issues were raised by counsel. I shall deal with them at the outset.

4 On this occasion Mr Garde QC with Mr Fox of counsel appeared on behalf of the SOV. Mr Nugent of counsel with Mr Hopper of counsel appeared on behalf of Bradto. Mr Reilly of counsel appeared on behalf of Tymbook.

5 On behalf of Bradto, Mr Nugent submitted that the application by the SOV for costs was premature. He said that this was so for three essential reasons. Various authorities were cited in the support of the propositions which he advanced. Firstly, he pointed out that the injunction granted by me against Bradto was an interim injunction and not a final hearing or adjudication on the merits. The person ultimately determining the matter may arrive at a different conclusion, and if I were now to make a determination in relation to costs, it would remove from that person the ability to award costs in favour of Bradto. If I were to order costs in favour of the SOV, and the person who ultimately heard the matter on its merits came to the opinion that it was appropriate for Bradto to have its costs, that could not be done because the issue of costs, at least to this point in time, would have been dealt with already. It would also to an extent negate the undertaking given by the SOV. In addition, costs had previously been reserved, for example in relation to the hearing conducted on 11th, 12th and 13th October 2005, and the present application by the SOV involves Bradto in a further unnecessary application.

6 The second submission in relation to the premature nature of the application is this. The Court of Appeal has, in effect, found that the injunction sought by the SOV is futile. In essence, that is because the property of which Bradto is the tenant is in fact occupied, on the basis of sole occupancy, by a sub-tenant Maztan Pty Ltd ("Maztan"). In other words, if the relevant inspectors authorised by the SOV attempt to gain access, the situation is beyond the control of Bradto, which is not required to do anything. Access is entirely in the hands of Maztan. Thus, the injunction sought by the SOV against Bradto and granted by the Tribunal is of no real effect. It is futile. Therefore, no order as to costs should be made pending any further application or decision. Detailed written submissions of Mr Hopper concentrating largely on this issue were subsequently filed. These included extracts from discussions with Maxwell P in the Court of Appeal.

7 Thirdly, in the background lies a proceeding to determine possession. This concerns the question of whether or not the relevant lease expired on the date nominated by the SOV. Many of the documents concerning which discovery was ordered relate to the possession proceeding. There should not now be made an order for costs in favour of the SOV where such costs relate to discovery, and where the documents concerned are in turn related to the proceeding to determine possession. The discovery of those documents will save the SOV unnecessary expense, in that it will not have to be done a second time in the possession proceeding. The SOV should not now receive costs in relation to matters such as discovery in circumstances where Bradto might win the possession proceeding and the SOV would, in any event, have had to produce the very same documents. Any costs order relating to discovery should await the hearing and outcome of the possession proceeding.

8 On behalf of Tymbook, Mr Reilly essentially adopted the submissions of Mr Nugent, with the exception that the argument concerning futility was not applicable to Tymbook, it having no sub-tenant in occupation of its property.

9 On behalf of the SOV, Mr Garde responded as follows. Section 92(2) of the RLA, which contains the exception which permits the ordering of costs pursuant to that Act, commences with the words "However, at any time". Thus, there is no necessity to wait until the end of a case before the Tribunal can make an order for costs pursuant to s.92(2). Furthermore, the sub-section gives to the Tribunal a discretion to order that a party "pay all or a specified part" of the costs of another party. What the SOV is presently seeking is not all the costs of the proceeding, but the part specified in its application. As stated, an order for costs can be made before the conclusion of a proceeding (whenever that may be in the present case). It is highly appropriate when considering costs that the judicial officer principally responsible for the hearing of the proceeding, and for the making of decisions in the proceeding, be the judicial officer to whom a costs application is made. That judicial officer has obvious advantages. Furthermore, it is highly desirable that an application of this nature be made in reasonable proximity to the actual hearing.

10 In relation to the specific points made on behalf of Bradto and Tymbook, the fact that a final hearing as to whether or not there should be a permanent injunction has not yet taken place is not to the point. Many of the authorities to which counsel referred in relation to this are unhelpful because they have been decided in the context of a jurisdiction in which costs follow the event. In the present case, the jurisdiction to award costs is determined by a statute which provides that the liability to pay costs can be incurred as a consequence of vexatious conduct. We are not concerned with the ultimate event. The position of the SOV would be the same whether it or Bradto or Tymbook ultimately succeeds. A party could be successful, but nevertheless be ordered to pay costs as a consequence of the vexatious conduct of the proceeding. Pursuant to a statutory scheme which allows for the ordering of costs at any time, and in particular circumstances, it is not necessary to wait for the ultimate event as it might be in a situation where costs follow the event. An interlocutory application has been dealt with by this Tribunal and by the Court of Appeal. The fact that the final hearing has not taken place is not to the point. The nature of the vexatious conduct which incurs costs remains the same whenever the application for costs might be made.

11 In relation to the second argument advanced, the injunctions which have been obtained by the SOV are not futile. The Court of Appeal has in fact stated that, pursuant to the injunction, Bradto is required to "open the door". The conduct of Bradto would be contemptuous if it did not do so. Apart from that, this is not a good reason why an application for costs should not be heard immediately.

12 Similarly, the argument in relation to discovery is flawed. Such argument is tantamount to a confession of vexatious conduct, because what is being said is that the discovery sought in this proceeding in fact relates to another proceeding. If discovery was needed in the possession proceeding, it should have been sought in that proceeding.

13 In relation to costs that have been reserved, this does not mean that they have been reserved until the completion of the final trial. It simply means that they are being reserved for future decision.

14 By way of reply, Mr Reilly denied that the discovery applications were some sort of fishing expedition, and asserted that the original timetable of events was predicated upon the release of documents pursuant to the Freedom of Information Act 1982. It is incorrect to suggest that there was some sort of late attempt to obtain discovery or to engage in a fishing expedition. There is nothing in this conduct that represents an attempt to cause delay or to behave in a vexatious fashion. Furthermore, Mr Garde omitted to refer to part of s.92(2)(a) of the RLA. The conduct of the proceeding in a vexatious way must have unnecessarily disadvantaged the other party to the proceeding. The SOV cannot have been disadvantaged (past tense) in relation to an event which has not yet occurred. There is no indication of when the SOV will pursue its application for final relief. The only way to judge if a party has been unnecessarily disadvantaged by some conduct is to assess the full consequences of that conduct at the appropriate time, which is at the completion of the matter.

15 By way of reply, Mr Nugent stated as follows. The question is not whether the Tribunal has jurisdiction to deal with the matter to date. It clearly has. The question is whether it ought. Secondly, given the statutory constraints that apply in relation to costs, the Tribunal ought to be more, rather than less, cautious in ordering them, and particularly before the final determination. Thirdly, correspondence reveals that the SOV itself recognises that there has been some cost savings in relation to the possession proceedings by reason of what has already taken place. Fourthly, the transcript of what occurred in the Court of Appeal underlines the fact that the injunction obtained by the SOV is and was futile.

16 Mr Garde replied briefly in relation to the futility point, and what had in fact been said by the Court of Appeal. He further asserted that unnecessary disadvantage, an issue which in fact goes to the merits of the costs application, would be demonstrated.

17 I then indicated that, in relation to this preliminary point, there were two alternatives. Either I could reserve my decision, determine the point, and then, should I decide that the costs application was not premature, continue with the argument as to the merits. This necessarily involved the risk of the parties having to come back before me again. Alternatively, I could deal with the "premature" argument as part of my ultimate ruling, and arguments in relation to the merits could be advanced without any further delay. If I then decided that the application for costs was premature, there would be no need for me to move on to a consideration of the merits. If I decided that the application was not premature, the arguments relating to the merits would have been advanced and could be determined. Ultimately the parties preferred this latter course of action, and accordingly the hearing of the application was so conducted.

18 This was subject to the second preliminary point, which centred upon an argument advanced by Mr Reilly as to why there should be an adjournment. I ruled that I was not minded to grant an adjournment. If Mr Reilly and his client were in some way taken by surprise because of the late service of material (a proposition concerning which I was not convinced), that could be overcome by providing the opportunity for a consideration of any relevant material followed by written submissions. In other words, I would make no ruling until all parties had been given the opportunity to supplement any oral submissions with submissions in writing. Accordingly, the matter proceeded in this way. Detailed written submissions were ultimately received.

RULING AS TO WHETHER THE SOV'S APPLICATION FOR COSTS IS PREMATURE

19 I am of the opinion that the application by the SOV for costs is not premature. I agree with the submissions of Mr Garde in relation to this.

20 Section 92(2) of the RLA is the governing provision. Section 92(2) quite specifically provides that this Tribunal may "at any time" order a party to pay the costs of another party in the proceeding if certain conditions are satisfied. Only one of those conditions is relevant in the present case, but each underlines the breadth of the words "at any time", and each supports the proposition that costs do not necessarily follow the event. A costs order may be made against a party which conducted the proceeding in a vexatious way that unnecessarily disadvantaged the other party. The Tribunal may make such an order if it is satisfied that it is fair so to do. There is nothing to say that the party which conducted the proceeding in a vexatious way is necessarily the losing party. The Tribunal's satisfaction in relation to vexatious conduct need not await the ultimate result, or be influenced by it. This is also clear when one looks at s.92(2)(b). The Tribunal may make a costs order if it is satisfied that it is fair to do so because a party refused to take part in or withdrew from mediation or other alternative dispute resolution. The ultimate result of the proceeding is not referred to as a factor.

21 If costs do not follow the event, there is no necessity to await the occurrence of the event. The words "at any time" mean what they say, and the Tribunal is not obliged to wait until the final determination of a proceeding before making an order pursuant to s.92(2) of the RLA.

22 In addition, I do not accept that the "proceeding" in relation to which costs are sought has not concluded in any event, even if no ultimate determination has been given. It was argued by Mr Nugent that, as what was argued before me was an application for an interim injunction and not a final determination on the merits, the application was premature. A person ultimately hearing the matter might arrive at a different conclusion. In Braeside Bearings Pty Ltd v HJ Brignell & Associates (Boronia) [1996] VicRp 3; [1996] 1 VR 17, Tadgell JA, when referring to the definition of "proceeding" contained in s.3 of the Supreme Court Act 1986 (which definition is for all intents and purposes identical to the commencing words of the definition contained in s.3 of the VCAT Act), referred to it as meaning a vehicle by which the jurisdiction of the court is invoked. An application for an interim injunction which this Tribunal has the jurisdiction to grant falls within that definition. An unsuccessful application to have a proceeding reinstated has been held to itself be a proceeding for the purposes of costs pursuant to s.109(2) of the VCAT Act - see Velickovski v Housing Guarantee Fund [2003] VCAT 956, and this ruling, with which I agree, was given by Senior Member Lothian in circumstances where the Tribunal was otherwise functus officio.

23 I see no reason why the word "proceeding", should be interpreted in a different way in s.92 of the RLA. In the present case, a proceeding has been brought against Bradto and Tymbook by way of an application for an interim injunction. I have determined that proceeding. In the statutory context in which a decision must be made, I am in a position to determine whether the proceeding has been conducted vexatiously and whether a costs order should be made. Of course, this is in addition to any argument based upon the words "at any time". Apart from the power conferred by those words, I am of the view that the proceeding before me has concluded or reached the point where I am in a position to consider whether it is fair to make a costs order because of vexatious conduct. The fact that the matter may ultimately be contested as a final hearing or adjudication on the merits does not seem to me to be to the point. Such final hearing may be conducted in a totally non-vexatious way. What I have to determine is whether the application before me was conducted in a vexatious manner which unnecessarily disadvantaged the other party, thereby satisfying me that it is fair to make a costs order. I am not persuaded by the argument that, because of the interim nature of the relief sought, the seeking of costs pursuant to s.92 of the RLA is premature.

24 I am equally unmoved by the argument that it would be premature to determine costs because the order successfully sought and obtained by the SOV is in fact a futile order. Whether or not the order sought and granted is futile is also not to the point. The application of the SOV was contested vigorously, over a large number of days, and on a multitude of issues. The SOV was successful. Bradto certainly did not simply say "you can have your injunction because it is of no real effect and is futile". The matter was fought as if the fate of empires hung upon the outcome. What I now have to consider is not whether the injunction against Bradto successfully sought by the SOV is in fact of no real effect or may not achieve the result for which the SOV had hoped. What I have to consider is the way in which the proceeding was conducted, and the costs consequences that may flow as a result. In any event, even if it were a situation where the appropriate test was whether costs should follow the event, I doubt whether I would be particularly impressed by an argument to the effect that there should be no determination of costs in a situation where a party has fought long and hard to obtain a victory against unrelenting opposition but that victory is then alleged to be Pyrrhic. Accordingly, I am not of the view that I should make no order as to costs pending any further decision because of the alleged futility of the relief which I have granted.

25 I might add that, subsequently, I have heard an application by Bradto in which there is sought a declaration to the effect that it need do nothing in order to comply with the interim injunction granted. For the reasons which I have just stated, I do not regard any ruling which I might give in that application as having any relevant bearing upon the costs application which I am now deciding. I might also add that, whilst it is unnecessary for me to rule on such an argument, even if Bradto is correct in asserting that the interim injunction obtained by the SOV in fact requires it to do nothing, the injunction being prohibitory in nature and it not being the party in occupation of the land, it is another step again to say that the order is futile. In circumstances such as the present, a landlord may well wish to obtain an injunction restraining its tenant from interfering with its access to its property even if the tenant has sub-let that property. It may be that a prudent landlord would also seek an injunction in relation to the sub-tenant, but that is not to say that the order obtained against the tenant is necessarily futile. That may be a matter of some debate. In any event, in the present case the argument based upon futility seems to me to be not to the point when the allegedly premature nature of the costs application is being considered.

26 I am also not persuaded by the third essential argument advanced as to the premature nature of the costs application. Whether or not many of the documents concerning which there was argument also relate to the proceeding concerning possession is again not to the point. Whether or not the way in which arguments concerning discovery were conducted in the application before me constituted or contributed to vexatious conduct is one matter. Whether those documents might be relevant to a totally different matter not being argued before me is another. I agree with the submission of Mr Garde that, if discovery was required in relation to the proceeding concerning possession, it is in that proceeding that the argument should have been conducted. Further, the argument that discovery of the documents might serve a dual purpose - that is, if the documents had been discovered in this proceeding, it would have saved time and expense in the other proceeding - seems to me to be without merit. Before me was an application for an interlocutory injunction. This was a proceeding discrete from any future hearing concerning possession. In my ruling of 7th September 2005, I commented upon the attempts at discovery by way of subpoena which were being conducted by Bradto. In that ruling, I referred to the key issue as being the interpretation of one clause of the relevant lease, and whether or not it permitted access of the type requested by the landlord. I again referred to this in my ruling of 13th October 2005. Without wishing to haul myself up by my own judicial bootstraps, in that ruling, and on the question of discovery, I remarked as follows:-

"I also return yet again to what is before me. The relief sought remains the granting of injunctions effectively permitting access ... Mr Hammond (on behalf of Tymbook) stated that SOV "want to throw us out of the Palais" ... Whether or not ... such proposition be correct, the throwing out of his client from the Palais is not something which I shall be determining in this action. His statement is indicative of the approach taken which embraces issues beyond those which are before me. Similarly, Mr North (on behalf of Bradto) referred to my determining questions of possession and the duration of the lease, submitting that his client could effectively place such issues before me. I can only again assure all concerned that I am not going to be determining issues beyond those raised by the application made to this Tribunal. Whilst Mr Garde has foreshadowed some alteration to the wording of the relief sought, the application which must be determined by me does not go beyond that founded in the Notice of Interlocutory Relief first issued out of this Tribunal."

27 The matter has since been to the Court of Appeal. What was there argued concerned the application for interim injunctions, and did not concern possession. Indeed, the hearing of the case concerning possession has not yet commenced. In my opinion, in determining whether or not a costs order should be made, I should consider the conduct of the proceeding before me, and I should not have regard to whether or not that conduct might, either deliberately or by coincidence, assist the progress of another proceeding, the hearing of which has not commenced, the fate of which is unknown, and the determination of which involves a totally separate issue. In summary, I am not persuaded by an argument that it is premature to determine this costs argument because of aspects of these proceedings which may relate to the possession proceeding, the hearing of which might commence at some future date.

28 The submissions of Mr Reilly on behalf of Tymbook in relation to the issue of whether the SOV's cost application is premature basically echoed the arguments on behalf of Bradto. Whilst at least one of the arguments advanced on behalf of Bradto (the futility argument) was not available to Tymbook by reason of there being no sub-tenant in possession, otherwise the position of Tymbook is similar to that of Bradto. In particular, Mr Reilly emphasised that no costs ruling should be made concerning Tymbook's discovery applications made during the hearing until the final determination of the matter. I have already expressed my views in this regard.

29 Another argument which was briefly touched upon concerned any ruling, such as mine of 13th October 2005, where costs were reserved. I agree with the submissions of Mr Garde concerning this issue. The reservation of costs means reservation for determination at some future time. It does not mean reservation until after the ultimate trial or until all aspects of a matter are concluded.

30 Thus, I am not of the view that it is premature for me to determine the SOV's costs application. Before giving my ruling in that regard, I shall briefly summarise the arguments advanced on behalf of the parties. As it is the SOV that is seeking costs, I shall deal firstly with its arguments before turning to those of Bradto and Tymbook.

31 The arguments advanced by Mr Garde and Mr Fox on behalf of the SOV could be summarised as follows.

32 Section 92(2) of the RLA, which is similar in wording to parts of s.78 of the VCAT Act, involves consideration of three factors. These elements are whether the party conducted the proceeding in a vexatious way; whether this unnecessarily disadvantaged the other party; and, thirdly, the question of justice or fairness.

33 In relation to what is meant by "vexatious", reference is made to Oceanic Sun Line Special Shipping Co Inc v Fay [1988] HCA 32; (1988) 165 CLR 197. A proceeding is conducted in a vexatious way if it is conducted in a way productive of serious and unjustified trouble or harassment, or conduct which is seriously and unfairly burdensome, prejudicial or damaging. Where there is vexatious conduct which causes loss of time to the decision-making body or to other parties, indemnity costs should be ordered, and they are sought in this case.

34 In the present case, the hearing of the SOV's interlocutory injunction applications occupied 16 or 17 sitting days, but the reality is, when the merits of the applications were finally argued, the matters were disposed of in 3½ days. Furthermore, both Bradto and Tymbook conducted the proceedings vexatiously and in a manner that unnecessarily disadvantaged the SOV, causing the incurring of additional costs, numerous directions hearings, and an overall delay of at least 6 months. The Reasons for Decision of 3rd February 2006 are referred to in this regard. The nature of the relief sought and the issues involved were very limited. The manner in which the proceedings were conducted before the Tribunal conflicts with the objects of the VCAT Act. Both Bradto and Tymbook complicated and delayed the hearing at every turn by seeking access to irrelevant documents, and by engaging in lengthy and repetitious submissions concerning them. Much time was consumed with arguments concerning the conduct of VCAT's Registry or of the Victorian Government Solicitor's Office. An analysis of the matters argued on the various hearing days (which analysis is contained in the written submissions to which Mr Garde was speaking) reveals just how repetitive and unmeritorious some of the arguments advanced in fact were. Reference is made to comments contained in some of the earlier rulings (in particular, mine). It is clear that, in September and October, 2005, proceedings were conducted in a classically vexatious manner. The same could be said of the application before Deputy President Macnamara in late October 2005, and the application of Bradto concerning disqualification (of myself). Whilst that application, which was unmeritorious, was made by Bradto, Tymbook was represented throughout and did not oppose it.

35 That was followed by an application for reconstitution of the Tribunal made to Morris J on 28 and 29 November, 2005. Again, this was an application by Bradto, and again it failed. Again, Tymbook effectively remained silent.

36 When the hearing on the merits was ultimately reached, this was again unduly lengthy. That hearing was also conducted in a vexatious way, an example of which was the requirement by Bradto (without dissent from Tymbook) that witnesses attend for cross-examination only for there then to be an election not to cross-examine.

37 On 3rd February 2006, the SOV's applications were granted. Thereafter, there were further unsuccessful applications by Bradto and Tymbook in relation to a stay. Comments made by the Court of Appeal in dismissing the appeals of Bradto and Tymbook reinforce the proposition that the applications before the Tribunal consumed an inordinate amount of time, much of which was devoted to irrelevant issues.

38 The Tribunal is fully cognisant of the way in which these proceedings were conducted. Unnecessary disadvantage has been caused to the SOV. The proceedings have not been defended in a proper manner. The bottom line is that there was no utility in resisting examinations of the premises by professional consultants.

39 The Tribunal should be satisfied that it is fair to order costs against Bradto and Tymbook along the lines suggested in the proposed orders, and this is apparent from the submissions made.

40 In relation to those separate applications within the proceeding (bias and adjournment applications and the like) where the Tribunal was silent in relation to costs and no order or reservation was made, the Tribunal still has jurisdiction to deal with such costs. It is not a situation where there was a deliberate ruling of "no order as to costs", or an order that each party bear its own costs. In relation to these instances, the Tribunal has the jurisdiction to order costs if it is fair so to do.

41 The submissions by Mr Nugent and Mr Hopper on behalf of Bradto could be summarised as follows.

42 In relation to s.92 of the RLA, it is clear from an examination of that section and the explanatory memorandum contained in the relevant Bill that the Retail Tenancy List was meant to be a "no costs" jurisdiction unless certain requirements were satisfied. Those requirements represent a very high hurdle. Section 92 of the RLA prevails over s.109 of the VCAT Act.

43 In relation to the meaning of the word "vexatious", the test does not entail looking at whether a party conducted itself and conducted the proceeding in a sensible and reasonable way, a proposition advanced on behalf of the SOV. The test is as set out in Oceanic and as described by Gobbo J in J&C Cabot v City of Keilor [1994] VicRp 14; [1994] 1 VR 220. Proceedings are vexatious if they are instituted with the intention of annoying or embarrassing the person against whom they are brought; if they are brought for collateral purposes; or if they are obviously untenable or so manifestly groundless as to be utterly hopeless. The various applications brought by Bradto in relation to which costs are in issue could not be so described. Even if the conduct of the proceeding involving Bradto could be described as vexatious, which is strongly denied, such conduct did not unnecessarily disadvantage the SOV. The relevant matters would have had to be dealt with in any event, the issue being one of timing.

44 In relation to any alleged delay by Bradto, the sequence of events should be examined. Commencing with the original Supreme Court proceeding brought by the SOV (and concerning which the Supreme Court found that the appropriate jurisdiction was that of VCAT), arguments concerning discovery of documents had been going on between January and May 2005 with no documents being forthcoming from the SOV. Bradto had put the SOV on notice that the Supreme Court did not possess jurisdiction. Any delay occasioned by the Supreme Court proceedings should not be visited upon Bradto, and the material filed by Bradto in relation to that hearing related solely to the question of jurisdiction.

45 The SOV issued its application for an injunction without warning, and the relevant material was not received by Bradto until the day before the proposed hearing (that being 30th August 2005). Accordingly, on 29th August 2005, an application was made to Senior Member Davis in relation to an adjournment. A short adjournment was granted until 5th September 2005, so that the adjournment application was successful in this regard, and it should not be seen as contributing to any delay or as representing vexatious conduct by Bradto. As stated, the injunction application was brought on essentially without warning, service of the application being effected on Bradto rather than the solicitors on the record. There were difficulties concerning the availability of Bradto's counsel at such short notice. Furthermore, Mr Pilarinos, the person who effectively runs Bradto, was interstate and not available on the hearing date. Hence there was an application for an adjournment. Also, when Senior Member Davis granted the adjournment, the nature of the relief sought changed from an interim injunction to a final injunction.

46 The matter came on before me on 6th September 2005, that application involving only Bradto and not Tymbook. I commented that I was not impressed with the urgency of the situation as submitted by the SOV, and adjourned the matter to be heard at the same time as Tymbook's case. Therefore, again, Bradto was partially successful. The principal reason for the adjournment was to enable Bradto to obtain further documents from the SOV and others to assist in the preparation of its case. Had there been jurisdiction and had the matter proceeded in the Supreme Court, Bradto would have been entitled to full discovery. Bradto had every right to fear that there had not been proper discovery, particularly when further important documents possessed by the SOV came to light after these early directions hearings at VCAT. The fact that, at that time, I set aside some subpoenas issued by Bradto, found that it had acted vexatiously, and ordered it to pay costs, does not mean that it acted vexatiously thereafter.

47 Pursuant to those orders then made (those of 7th September 2005) the SOV did in fact provide some further documents. Bradto was dissatisfied with what was provided, and sought a further order in relation to discovery. This was unsuccessful (see my ruling of 13th October 2005). However, it was entitled to bring such an application, and it is to be remembered that it was in the context of what was then to be a final hearing. Bradto was seeking documents that would be unhelpful to the SOV's case at a final hearing. Indeed, a judicial officer now conducting a final hearing of the matter might take a different view than I did in my ruling of 13th October 2005. In addition, there was reason to believe, and it seems an indisputable fact, that the documents provided were not provided in the usual manner, in that the original files were reviewed by unidentified officers of the State of Victoria who then passed on a selection of documents to the person swearing the affidavit. Again, even if arguments based upon this were not accepted, it was not vexatious conduct on the part of Bradto to seek further and proper discovery. There were reasonable grounds for doing this. Even though I ruled that Bradto was wrong in relation to these matters, it is understandable why it would form the view that there may have been a vast number of other relevant documents which it ought to be able to see in order to prepare for what was going to be a final hearing.

48 Furthermore, Bradto was of the view that the issues were broader than what I ultimately ruled they were, and believed that, logically, the tenancy or possession question might need to be determined first. Whilst I ultimately ruled against this, in the context of a final hearing in relation to the injunction there was a danger that an issue estoppel would be created.

49 Before Deputy President Macnamara, Bradto was essentially successful. He accepted that there had been a change of circumstances in relation to access to further documents, particularly because the SOV had commenced the possession proceeding. He also changed the injunction application to one seeking interim, rather than final, relief. He was silent as to costs, and they were not reserved as they were by me on 13th October 2005. Given that the issue of costs was not expressly dealt with by him, it is not now appropriate to make an order as to the costs of the hearing before him, even allowing for the "slip rule" contained in the VCAT Act (s.119). Alternatively, Deputy President Macnamara, having heard the application, should be the person determining any costs.

50 In relation to the application of Bradto that I disqualify myself on the basis of apprehended bias, this resulting in my ruling of 10th November 2005, even though that application was unsuccessful, there were reasonable grounds for making it. I had previously used strong, critical language in relation to Bradto. The subsequent application pursuant to s.108 to Morris J did not result in any costs order being made. In any event, it is not suggested in his ruling that the application was improperly brought. As in the case of the hearing before Deputy President Macnamara, if anyone makes a determination in relation to the costs of that application, it should be Morris J, being the person who heard the application.

51 Turning to the application for the injunction itself, it would appear that the SOV is not seeking costs in relation to the 3 days of the actual hearing. Nevertheless, there has been reference to vexatious conduct during those days by reason of Bradto requiring witnesses to attend for cross-examination and then electing not to cross-examine them. However, the application had to be conducted within the timeframe which had been set. Accordingly, some unofficial election was made between making oral submissions and cross-examining witnesses, and Bradto decided not to cross-examine witnesses. This was not vexatious behaviour. Furthermore, there was still considerable debate then continuing concerning the actual form of the orders sought by the SOV. It was not vexatious for Bradto to point out difficulties with the orders, particularly as I accepted that at least some such difficulties existed.

52 In relation to the scale and quantum of costs, costs pursuant to s.109 of the VCAT Act are normally ordered on the County Court Scales. That should be even more clearly the situation in relation to s.92 of the RLA where the obtaining of costs is much more difficult. Indemnity costs should not be ordered. Reference is made to the decision of Deputy President Macnamara in Barbcraft Pty Ltd v Geobel Pty Ltd [2004] VCAT 747. In that ruling, the Deputy President emphasised just how rare should be an order for indemnity costs in this Tribunal. The authorities show that the appropriate scale of costs would be Scale "D" of the County Court Scales. Further, a finding that a party has conducted a proceeding in a vexatious way does not mean that, automatically, costs are ordered. There is still a discretion to be exercised.

53 It is also to be remembered that the SOV should be a model litigant. Given the important issues to be determined, the duration of the proceedings should have been anticipated. Further, the SOV has pursued this litigation zealously and in an aggressive manner, and Bradto was entitled to do the same. The fact that several of its applications were not upheld does not mean that such applications were vexatious.

54 The submissions advanced by Mr Reilly on behalf of Tymbook could be summarised as follows.

55 Firstly, attention is drawn to a correction which the Court of Appeal made to its original judgment. Tymbook did not waste time arguing about whether there existed a serious question to be tried. It had never contended that there was no such serious question. The original decision of the Court of Appeal has been amended to reflect this.

56 What was argued by Tymbook in the injunction application was in essence that I should have a high degree of assurance that the matters in contest should be decided in favour of the SOV. The Court of Appeal rejected the proposition that the appropriate test was a high degree of assurance.

57 It is also to be remembered that there were two separate proceedings being determined by me. They cannot be lumped in together. For example, Tymbook had no application to make in relation to apprehended bias. That was solely Bradto's application. The same can be said of the application to Morris J pursuant to s.108. Sitting silent whilst Bradto conducted these unsuccessful applications does not amount to vexatious conduct.

58 Dealing with the history of the Tymbook proceeding in a chronological fashion, Tymbook cannot be accused of delay in relation to the SOV's failed Supreme Court application. It warned the SOV of the lack of jurisdiction. In relation to conduct of the matter before this Tribunal, despite not being properly notified, Tymbook appeared before Deputy President Aird on 30th August 2005, and at that time indicated that it would be ready to proceed with an interlocutory injunction application the following week. However, the SOV proposed that the matter be fixed for final hearing. After some discussion, the matter was fixed for final hearing in November, 2005. It was so fixed by consent. Again, an accusation of delay cannot be properly made against Tymbook. The timetable then established was premised upon the belief that Tymbook would get some documents. Reference is also made to an application under the Freedom of Information Act 1982. Documents were not received as a result of this application, and therefore Tymbook informed the SOV that it would be unlikely to be able to comply with that part of the timetable referrable to witness statements. However, the SOV did agree to discovery, and sent to Tymbook on 5th October 2005 copy documents identified in the course of the request for documents made by Bradto. Relevant documents were essential to Tymbook's presentation of its case.

59 Whilst the directions hearing on 11th, 12th and 13th October 2005 continued over 3 days, other County Court and Tribunal business had to be accommodated by me, and, in any event, Tymbook's oral submissions occupied less than 2½ hours over that period.

60 Turning to the 3 day hearing before Deputy President Macnamara, Tymbook's application was in fact successful. Whilst Deputy President Macnamara did not accede to an application that the upcoming hearing before me be adjourned, the nature of the relief sought was altered from final to interlocutory. In the background was a related proceeding concerning ownership of the improvements on Tymbook's land, and it was proposed that the question of ownership of such improvements form part of the subject matter of this proceeding. In seeking the consent of the SOV to this, Tymbook was in fact attempting to maintain the hearing date. When the SOV would not agree to this, Tymbook was forced to go to the Tribunal (to Deputy President Macnamara due to problems of my availability) and seek that there be no final hearing.

61 In relation to the dates of 2nd, 3rd and 10th November 2005, which dates were essentially consumed by Bradto's disqualification application, Tymbook's only role was to call on a Summons To Produce Documents directed to the SOV, and documents were produced, without objection, in response. On those days, the matter was listed for the hearing of the SOV's application for interlocutory injunctive relief.

62 Nothing which Tymbook did on the 2nd, 3rd, 10th, 28th and 29th November, could, on any basis, be said to amount to vexatious conduct. Indeed, as at 29th November, the SOV was still attempting to amend the orders which it was seeking. Further, on 1st December 2005, the SOV sought leave to amend its application in terms of a further amended document and to rely upon two further affidavits. Each of these applications was refused by me. Indeed, Further Proposed Amended Orders were filed and served on 5th December 2005, this having been anticipated when a draft was presented on 2nd December 2005, just before the conclusion of the substantive hearing. These were later revised again.

63 In relation to s.92(2)(a) of the RLA, the Tribunal must be satisfied that both of the required elements have been established. This is clear from the decision in Falconbridge Pty Ltd v Yarra City Council [2005] VCAT 2449. Section 92 of the RLA is to be read in conjunction with s.109(3) of the VCAT Act. Of the list of exceptions concerning costs set out in s.109(3)(a) of the VCAT Act, the legislature chose to insert in s.92(2) of the RLA only that exception to do with vexatious conduct. Therefore, the other exceptions contained in s.109(3)(a) of the VCAT Act are not available and are to be ignored.

64 Reference is also made to the ruling of His Honour Judge Dove in Tomasevic v SOV [2005] VCAT 739, concerning what is meant by the word "vexatious". Tymbook did not conduct this proceeding in a vexatious way. Nor did Tymbook cause any unnecessary disadvantage to the SOV. The opposite is the case. Tymbook was always prepared to expedite the hearing of the matter. Apart from that, at the ultimate hearing Tymbook's submissions took approximately 1 day of the allocated time.

65 For these reasons a costs order should not be made against it.

66 In essence, there was not a great deal of conflict between the parties as to the principles to be applied in relation to the operation of s.92 of the RLA. Clearly that section is designed to restrict the number of situations in which costs can be ordered. I agree that, whilst assistance can be gained from looking at various sections of the VCAT Act and the manner in which they have been interpreted, s.92 should essentially be viewed in isolation. Whilst it might be that, under both the RLA and the VCAT Act the starting point is that no order should be made as to costs and that each party should bear its own costs, the exceptions contained in s.109(3) of the VCAT Act, with the exception of (3)(a)(vi), do not operate. If I am to order costs in a matter brought pursuant to the RLA, I must be satisfied that it is fair so to do because a party conducted the proceeding in a vexatious way, and that such conduct unnecessarily disadvantaged another party to the proceeding.

67 I am also of the view that, pursuant to the frequently cited test in Oceanic Sun Line, a proceeding is conducted in a vexatious manner if it is conducted in a way productive of serious and unjustified trouble or harassment, or if there is conduct which is seriously and unfairly burdensome, prejudicial or damaging. A similar approach was adopted by Gobbo J in J&C Cabot, although it could be said that the tests there set out relate more to the bringing of or nature of the proceeding in question, rather than the manner in which it was conducted. Indeed, if one looks at the factual and statutory context in which the decision in J&C Cabot was taken, that distinction is underlined. Section 150(4) of the Administrative Appeals Tribunal Act 1984 refers to "... proceedings (that) have been brought vexatiously or frivolously ...". (My emphasis). Furthermore, the tests adopted by Gobbo J are those previously expressed by Roden J in Attorney-General (Vic) v Wentworth (1988) 14 NSW LR 481, and are worded as "... Proceedings are vexatious if they are instituted ... if they are brought ... if, irrespective of the motive of the litigant, they are so obviously untenable or manifestly groundless as to be utterly hopeless". (Again my emphasis). This is to be contrasted with the wording of s.92 which specifically refers to a proceeding being "conducted ... in a vexatious way". (Again my emphasis).

68 In the present case, it has not been suggested that the proceedings were instituted with the intention of causing annoyance, embarrassment, or the like, or that they have been brought for collateral purposes. Indeed, the proceedings have been instituted and brought by the SOV, which is the party alleging vexatious conduct. Nor is the reference to the proceeding being obviously untenable relevant. Indeed, the proceeding was successful both before me and in the Court of Appeal. In summary, whilst the tests quoted by Gobbo J in J&C Cabot are useful, the definition of the word "vexatious" in Oceanic Sun Line seems more relevant, particularly when one is considering the conduct of, rather than the instituting of, a proceeding.

69 Turning from matters of general principle to the approach to be adopted in this application, it seems to me that some analysis is required of the conduct of the parties during the various hearings which have occurred. In other words, I am not of the view that I should take a "broad brush" approach, and simply express a view such as "this proceeding went far too long to the tune of some 13 sitting days. That is so manifestly excessive that it must represent vexatious conduct. Therefore I will make a costs order accordingly". Rather, some brief analysis of the individual hearings, and what occurred during them, is necessary.

70 Bearing these matters in mind, I now turn to my ruling in respect of the costs sought against Bradto and Tymbook.

71 Whilst the submissions on behalf of Bradto were presented before those on behalf of Tymbook, I shall deal firstly with the ruling in relation to Tymbook. There is no magic in this. Mr Reilly, in presenting Tymbook's case, placed considerable emphasis and reliance upon a chronology, and I am delivering at least some aspects of this ruling in chronological sequence. In addition, the situation in relation to Tymbook is perhaps simpler.

72 In my opinion, the application of the SOV against Tymbook fails for a number of reasons. Before even turning to any question of unnecessary disadvantage, I am not of the opinion that Tymbook conducted the proceeding involving it in a vexatious way. In arriving at this conclusion, I have taken into account the following matters, which are not listed in order of importance:-

(a) I am of the opinion that I should only make costs rulings concerning those parts of the Tymbook proceeding which were heard by me. Whilst there is nothing in either the RLA or the VCAT Act which would indicate that I do not have the power to make a costs order in relation to those parts of the proceeding heard by members of this Tribunal other than myself, there are obvious difficulties in my attempting to determine whether the proceeding was conducted before others in a vexatious way, causing unnecessary disadvantage. The making of a costs order by a person who has not heard the proceeding, or a relevant part thereof, can be difficult enough in a situation where costs would normally follow the event or where other tests apply. When what is to be considered is vexatious conduct causing unnecessary disadvantage, it is much more difficult to arrive at a state of satisfaction that it would be fair to order costs. In the present case, it is not an enterprise on which, considering fairness, I am prepared to embark.

(b) In any event, nothing that has been put to me persuaded me that, in those parts of the proceeding not heard by me, Tymbook conducted them in a vexatious way. Nothing which occurred prior to Tymbook first appearing before me establishes vexatious conduct, much less unnecessary disadvantage to the SOV. Whilst the application before Deputy President Macnamara seems to have taken an inordinate amount of time, I can find nothing in the transcript, or in the ruling of Deputy President Macnamara, that would suggested that Tymbook engaged in vexatious conduct causing unnecessary disadvantage. In the application pursuant to s.108 of the VCAT Act before Morris J, Tymbook's participation seems to have been extremely limited. As I indicated from the bench during submissions, I am not greatly moved by arguments on behalf of the SOV that, somehow, a type of "guilt by association" should be visited upon Tymbook because it sat mute throughout Bradto's bias and reconstitution applications. Whilst Tymbook and Bradto may have overlapping interests, and may have at times acted in concert, I find it difficult to see how a party can be accused of behaving in a vexatious way, causing unnecessary disadvantage, if it does nothing whilst two other parties argue the toss. In any event, and particularly in relation to the applications conducted before Deputy President Macnamara and Morris J, and particularly bearing in mind that each was silent on the issue of costs, any rulings as to costs are better made by them for the reasons previously stated.

(c) The same logic concerning Tymbook being effectively mute during the application pursuant to s.108 of the VCAT Act before Morris J applies in relation to Bradto's disqualification application before me on 2nd, 3rd and 10th November 2005. If anything, Tymbook is in an even stronger position. The application of the SOV concerning it, along with that concerning Bradto, was fixed for hearing on 2nd November 2005, so that it was required to be in attendance. Tymbook specifically did not join in Bradto's disqualification application. It caused a subpoena to be called on, a step which it was perfectly entitled to take, and which resulted in the production of some documents. Otherwise, it effectively took no part in what was occurring. I do not see how this can constitute conduct which would attract a costs order pursuant to s.92 of the RLA.

(d) In relation to the discovery of documents, Tymbook was party to the applications before me on 11th, 12th and 13th October 2005. It had not been before me when I made my previous ruling in relation to documents on 7th September 2005. Only Bradto and the SOV had been involved on that occasion. Nevertheless, as I stated in my ruling of 13th October 2005, it would be surprising if those representing Tymbook were not aware of my ruling concerning Bradto on 7th September 2005. Nevertheless, whilst my thinking in relation to the production of documents should have been relatively clear, the fact remains that Tymbook is a separate party which had not previously had the opportunity of advancing submissions in its proceeding. Furthermore, whilst the arguments on its behalf were expounded at some considerable length, and whilst I was not moved by them - indeed, I was quite critical of some of them - the overall time consumed by them was not so excessive, and the contents of the submissions not so utterly ill-founded or irrelevant, as to lead to the conclusion that what was occurring was vexatious conduct within the meaning of s.92 of the RLA. It is also to be remembered that Tymbook was not returning in the face of earlier adverse remarks concerning its approach to the discovery of documents.

(e) In relation to the actual hearing of the application for interlocutory relief, at which we finally arrived on 28th November 2005, certainly I rejected arguments advanced on behalf of Tymbook. Apart from rejecting those which coincided with submissions made on behalf of Bradto, I specifically rejected those solely or principally advanced by Tymbook. These included submissions concerning the role of the Crown, the appointment of agents, and ownership of the improvements upon Tymbook's land. Not only did I reject those submissions, but the Court of Appeal was also unmoved. Indeed, in relation to the submissions of Bradto and Tymbook generally, the Court of Appeal observed that most of the grounds relied on to support the application for leave had no prospect of success. The submissions of Tymbook in relation to the State of Victoria, the Crown, and agency, were described as being plainly wrong and contrary to basic principles of constitutional law, and not being reasonably arguable.

Be that as it may, and whilst acknowledging that the SOV might theoretically be on stronger grounds in relation to Tymbook's conduct of the actual application than it is elsewhere, for two reasons it seems to me that its submissions again fail. Firstly, even if Tymbook's submissions were unsuccessful and could be described as plainly wrong, that does not make Tymbook's conduct of the proceeding vexatious within the meaning of s.92 of the RLA. It does not mean that the SOV was thereby unnecessarily disadvantaged. Time constraints in relation to the conduct of the actual application were ultimately applied and observed. Thus, I am not satisfied that, in relation to the actual hearing concerning interlocutory relief, the requirements of s.92 have been satisfied.

In addition, the costs orders sought by the SOV concede a total period of 4 days for the disposal of the matter. I questioned Mr Garde as to whether this was a global assessment and as to how it was constituted. He stated that, in his submission and as previously stated by me and by the Court of Appeal, 17 days for the hearing of the matter was far too long, and even 4 days was a generous assessment. However, if the SOV had to select particular days as being those conceded in the proposed orders concerning which no costs are sought, they would be 3 of the 3½ days occupied by the final hearing, the remaining day being attributed to directions hearings.

The arguments advanced on behalf of Tymbook, whether or not they could be described as plainly wrong and whether or not some of them could be described as pedantic or irrelevant, were essentially so advanced during the last 3 days of the ultimate hearing. Further, it was towards the end of that period that Tymbook advanced its principal arguments. It was then that the parties debated the substance of the matter. In other words, whatever be the merits of the submissions made on behalf of Tymbook, they may well have been so made during the period for which the SOV does not seek costs. In addition, during the final stages of the hearing, and in order to achieve some finality, time restraints were imposed upon the parties, they then having the opportunity to make further submissions in writing. There was compliance with that timetable.

Apart from criticism of some of the arguments advanced on behalf of Tymbook, and with which I have now dealt, I can see no other way in which its conduct immediately leading into or during the ultimate hearing could be described as vexatious within the meaning of the section. Mr Garde stated during submissions that, on no view, should more than 3 days be permitted as appropriate for the final hearing. That final hearing was in fact concluded within 3½ days. Given that such hearing commenced on the afternoon of 29th November, when the matter was referred back to me after the unsuccessful application to Morris J, a hearing time of 3 days would take it through to the 2nd December in any event.

73 I am not sure whether the SOV is also including in its estimate of the time spent upon these applications the day upon which I handed down my decision (3rd February 2006), the hearing of the stay application on 8th February 2006, and my handing down of a ruling in that regard on 9th February 2006. On my reckoning, the Bradto and Tymbook proceedings had already been before the Tribunal for some 17 or 18 days prior to these dates. These hearing days after the conclusion of argument are referred to in the written submissions. In any event, I do not find that anything resembling vexatious conduct occurred on these occasions.

74 In summary, I am not satisfied that, pursuant to s.92 of the RLA, it would be fair to order Tymbook to pay to the SOV the costs which it seeks. Whilst I (and the Court of Appeal) have been critical of some of the arguments advanced by Tymbook, and whilst I have been critical of the highly technical or "nit-picking" approach that was quite frequently adopted in this case, I am not satisfied that it conducted the proceeding in a vexatious way so as to cause unnecessary disadvantage to the SOV.

75 Again it is necessary to look at what occurred on particular days or groups of days and at particular stages of the hearing. Some of the findings which I have made in relation to Tymbook are equally applicable to the Bradto proceeding. These are as follows:-

(i) For the reasons previously stated, I make no ruling as to costs in relation to the hearing before Deputy President Macnamara on 21st, 25th and 26th October 2005.

(ii) For some of the reasons previously given, I make no ruling as to costs in relation to the hearing before Morris J on 28th and 29th November 2005. In this instance, Tymbook had available the additional argument that it was not making any application pursuant to s.108 of the VCAT Act, and effectively remained silent whilst Bradto pursued such application. Whilst it was Bradto's application and whilst it was unsuccessful, I remain of the view that it is more appropriate that any costs application be dealt with by the person who has conducted the hearing and who is in a far better position to assess whether it was conducted in a vexatious way within the meaning of s.92 of the RLA.

(iii) The hearing conducted before me on the afternoon of 29th November 2005, and subsequently on 30th November 2005, 1st and 2nd December 2005, being when the merits of the application for interlocutory relief were finally argued, represents a period which I now treat as the 3 days for which the SOV does not seek costs. I disregard the additional half day that may have been involved because of the necessity of each party being present on all occasions, and because I cannot identify any particular vexatious conduct which occurred on what could be described as the additional half day. I again refer to what was said by Mr Garde concerning the 3 day period concerning which costs are not sought.

(iv) Whether or not the SOV is placing any reliance upon the hearings of 3rd, 8th and 9th February 2006, I cannot see how any vexatious conduct occurred on those days.

(v) There is nothing to suggest that Bradto engaged in any vexatious conduct when the matter was before Senior Member Davis on 29th August 2005, and that is apart from the fact that Senior Member Davis may be in a better position to assess whether there was any such conduct. On the basis of the material available to me, I am not prepared to make a costs order for this day. As I understand it, the hearing before Deputy President Aird on 30th August 2005 did not involve Bradto, and there is no indication of vexatious conduct in any event. Similarly, I make no order in relation to that day.

76 I now turn to the hearings which were conducted before me. I have previously ordered costs against Bradto in relation to the hearing of 6th and 7th September 2005. It was put to me that Bradto was partially successful in this hearing. My reasons should be read in this regard. I was highly critical of Bradto, and ordered costs against it. As Mr Nugent has correctly pointed out, the fact that I found Bradto to have conducted that particular application in a vexatious way does not mean that subsequent applications or parts of the proceeding were so conducted. In addition, Mr Garde has drawn to my attention the fact that, when ordering such costs, I did not fix a scale or indicate whether the costs were, for example, on an indemnity basis. Given the history of this matter, the manner in which it has been litigated, and the very important and significant issues which I have been told are involved, it seems to me that the appropriate scale for that particular costs order is the Supreme Court Scale, and I make that order accordingly. Further, I certify that this was an appropriate application for the retaining of Senior Counsel, and of two counsel.

77 Bradto was before me again on 11th, 12th and 13th October 2005, and that application was the subject of my ruling of 13th October 2005. In my opinion, this application and part of the proceeding was conducted vexatiously by Bradto. As I stated in my ruling, Bradto seemed to have learned little from my earlier ruling of 7th September 2005 in which I was critical of it, ordered costs against it, but afforded to it, with considerable misgivings and in the interests of fairness, the opportunity to prepare a serious and sensible list of documents to which it sought access. As I stated in the ruling of 13th October 2005, my observations did not represent an invitation to embark upon a fishing expedition, or engage in an exercise which would be just as oppressive and irrelevant as the subpoenas which I had earlier refused to issue. Bradto should have been well aware of the purposes of my orders of 7th September, and of my attitude towards what had occurred and what should occur. However, the request for documents which it made and which brought it back before me was almost as oppressive as what had gone before, and irrelevant material was again sought. As I stated in my ruling of 13th October 2005, I was perfectly satisfied that the SOV had complied with the earlier order which I had made in relation to Bradto, yet here it was back before me again, arguing, at inordinate length, in support of an oppressive demand for documents. In addition, it raised complaints and arguments of a highly technical and "nit-picking" nature.

78 I stated in that ruling that I agreed with Mr Garde that the whole exercise had involved considerable wastage of time, and that remains my opinion. The fact that some of the documents or categories of documents to which Bradto received access might or might not be of use in a subsequent proceeding is not to the point. Three days were consumed in this proceeding, dealing with an application which should never have been brought, which effectively ignored or sailed in the face of a ruling previously made, and which was, as one would expect, unsuccessful. The disadvantage caused to the SOV is obvious in terms of wastage of time and of legal energy, and in terms of the incurring of what one would expect to be quite substantial legal costs. It seems to me equally clear that, for the reasons set out above, this disadvantage was caused unnecessarily. Whilst arguably some adjustment may have to be made so as to allow for that part of the hearing which involved Tymbook rather than Bradto, I shall deal with this subsequently. However, in my opinion it is fair to order Bradto to pay costs of the SOV in relation to a large part of the hearing before me on 11th, 12th and 13th October 2005 because it conducted that part of the proceeding (and therefore the proceeding itself) in a vexatious way that unnecessarily disadvantaged the SOV. The costs of that application were reserved. I now order that Bradto pay the SOV's costs, the amount and scale of which shall be discussed subsequently.

79 The hearing conducted before me on 2nd and 3rd November 2005, and which was the subject of my ruling of 10th November 2005, concerned an application by Bradto that I disqualify myself on the basis of bias. As I stated in my ruling, necessarily such an application must involve appropriate and proper criticisms of the decision-maker. It is also important that the decision-maker approach the application in a fair and dispassionate manner, even though he or she is the subject of that criticism. Obviously, this is important not only in relation to the application itself but, in circumstances where the application is unsuccessful, in relation to any argument concerning costs. I have attempted to approach it in that fashion.

80 I am of the opinion that the bias application was conducted in a vexatious way that unnecessarily disadvantaged the SOV, and that it is fair to order costs against Bradto. The application took 2 days. One might have thought that, if the submission had been confined to relevant matters, it might have taken 1 hour. Large portions of the submissions made were irrelevant, and some bordered on the nonsensical. In addition to this, they revealed a disregard for what is involved in a bias application. Furthermore, as I pointed out in my ruling of 10th November 2005, the lengthy submissions made on behalf of Bradto were frequently irrelevant, erroneous, and based on inaccuracies which had the potential to create a false impression or lead one to an incorrect conclusion. Various examples of that are set out in some detail in the ruling. In addition, and as stated, some of the submissions advanced on behalf of Bradto, and the manner in which they were presented, caused me disquiet and concern in relation to their accurate representation of what had previously occurred. Needless to say, these submissions were also time-consuming. Other submissions, argued at length, were wide of the mark, unhelpful, or, as I stated, beyond my comprehension. I might add that neither my ruling of 10th November 2005, nor the further application dealt with by Morris J on 28th and 29th November 2005, in which Morris J effectively found against Bradto and ruled that I continue to hear the matter, attracted an appeal by Bradto. Whilst Bradto's submissions were advanced at great length and with great vigour, I appreciate that the absence of an appeal is hardly a factor of significance in dealing with the present costs application. However, it could be regarded as a matter of interest when one considers the strength of the language which I employed concerning some of the submissions made on behalf of Bradto, and, given that no attempt has been made to have the ruling of 10th November 2005 (or indeed the ruling of Morris J) corrected by the Court of Appeal, there is no legal reason why I should not maintain the views expressed in that ruling. In fact, they continue to reflect my opinion.

81 In summary, and particularly given the length of time which was spent by Bradto in pursuing irrelevant, unhelpful and potentially misleading submissions, I am of the view that it is fair that it pay the SOV's costs associated with the application relating to disqualification.

82 I would add that any party is entitled to make such an application, to be critical of the decision-maker, and to present relevant and accurate submissions in support of its application. I am not saying that Bradto was not entitled to make such an application. I am critical of the way in which it was conducted.

83 In summary, I am of the opinion that Bradto should pay the costs of the SOV associated with the hearing of 2nd and 3rd November 2005. It has been pointed out that the orders made on 10th November 2005 are silent as to costs. In my opinion, when viewing the proceeding as a whole, such silence does not preclude me from identifying the 2nd and 3rd November 2005 as days upon which Bradto conducted an application, and thus part of the proceeding, in a vexatious manner. It was put to me that the absence of any reference to costs could be corrected pursuant to s.119 of the VCAT Act. Whether or not that be the case, I am quite satisfied that I possess the jurisdiction to make a costs order in part based upon the conduct of the bias application. As earlier stated, s.92(2) permits the making of a costs order at any time. In addition, the bias application was part and parcel of the hearing on the merits. It was a preliminary application raised by Bradto on a day when the SOV's application for relief was fixed for hearing. Many would consider that the determination of such a preliminary point, however lengthily presented, does not warrant a separate and discrete costs order or reservation of costs. However, I see no reason why the individual components of the proceeding cannot be examined so as to see whether each subsidiary application was conducted in a vexatious manner, and that is so whether or not any specific costs order was made at the conclusion of that particular component or submission.

84 As previously set out, I am not of the view that I should make any further order as to costs for events occurring after 3rd November 2005.

(d) Total Amount of Time for Which Bradto Should Pay Costs

85 As earlier stated, in my opinion costs, if payable, cannot be based upon the simple calculation of deducting from the total number of days involved (be it 17 or 18) the figure of 4 days, being the total time (including directions hearings) that the proceeding should have taken. What actually occurred during parts of the proceeding needs to be examined. However, if only part of a proceeding is conducted vexatiously, and other parts are not so conducted, that does not mean that an application pursuant to s.92 of the RLA must fail. Conducting part of a proceeding vexatiously may, and usually will, impact upon the overall conduct of the whole proceeding, and can cause unnecessary disadvantage as a result. Conversely, because part of that proceeding is conducted in an appropriate and non-vexatious manner, does not mean that the proceeding, viewed as a whole, has not been conducted vexatiously within the meaning of s.92. To draw an extreme example, it is no answer to say that the proceeding was not conducted vexatiously because the parties announced their appearances in a most expeditious and appropriate fashion.

86 As I have set out, the parts of the proceeding which I consider were conducted vexatiously by Bradto occurred during the hearings conducted on 10th, 12th and 13th October 2005 and 2nd and 3rd November 2005. Following this the parties were again in attendance on 10 November for the purpose of the ruling then given and to ascertain the future conduct of the proceeding, the allocated hearing days having been lost due to the bias application. It seems to me that, even allowing for the time consumed by Tymbook in the hearing of 11th, 12th, and 13th October, and allowing a short time for a proper disqualification application based upon relevant material on 2nd November 2005, 4 days were wasted as a result of Bradto's vexatious conduct. What took 5 days should have been completed in 1 day. Viewed another way, the SOV is prepared to concede a total of 1 day for directions hearings. That could be offset against the 5 days which I have just listed, although that could be seen as a somewhat generous approach, given that it makes no allowance for the directions hearing before Senior Member Davis or the protracted directions hearing before me on 6th and 7th September 2005. An allowance of only 4 days costs might also seem to be unduly generous to Bradto because it makes no allowance for attendance by the SOV on 10th November 2005 for the purposes of the ruling in relation to the disqualification application.

87 In summary, the part of the costs which I specify that Bradto pay to the SOV is that part related to and totalling 4 hearing days. I am not convinced that I need identify the precise days. However, it seems to me that what should have been disposed of in one sitting day in fact took 5 sitting days, being the 11th, 12th and 13th October and 2nd and 3rd November 2005. The consumption of the extra 4 days was related directly to the vexatious way in which Bradto conducted those applications.

88 In my opinion, in the circumstances of this case, the SOV should not be out of pocket in respect of the 4 wasted days, and I am prepared to order costs on an indemnity basis. Whilst the orders sought by the SOV also refer to the Supreme Court Scale, my understanding of the law in relation to indemnity costs is that, when they are ordered, no scale is specified. The costs are those actually incurred, unless unreasonable. In any event and as previously stated, this proceeding is one that would normally attract costs on a Supreme Court Scale, should a scale need to be specified for the assistance of the Principal Registrar. True it may be that the ordering of indemnity costs in this jurisdiction is a rarity. However, it is not an impossibility. There were many aspects of this proceeding which could be considered comparatively rare, not the least being the extraordinary length of time which it took and the irrelevancy of many of the arguments advanced. An observation in my ruling of 7th September 2005 reflected my initial view, namely that many would consider that the approach adopted by Bradto smacked of obfuscation and delay for commercial purposes. The subsequent conduct of the proceeding has not caused me to revise that opinion.

89 In Ugly Tribe Company Pty Ltd v Mario Sikola & Ors [2001] VSC 189, Harper J referred to the special circumstances which should exist before a court should depart from its usual course in relation to costs, and order that they be paid on an indemnity basis. He specifically referred to the unreported decision of French J in Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd (delivered 3rd May 1991) as describing conduct which causes loss of time to the court and to other parties as being a special circumstance. He also emphasised that, whilst it is desirable to have some uniformity of approach in relation to the ordering of indemnity costs, the categories of special circumstances are not closed.

90 In the first ruling which I delivered in this matter on 7th September 2005, which ruling involved only Bradto and the SOV, I essentially concluded that the summonses to produce documents issued by Bradto constituted an abuse of process. As previously stated, I made the remark that many would consider that the approach adopted by Bradto smacked of delay for commercial purposes. The Court of Appeal reinforced my opinion that the case was in reality a relatively simple one, stating that it was a very great pity that so much time and expense had been devoted to it. In my ruling of 13th October 2005, I again pointed to the objects of the VCAT Act, and lamented the wastage of time.

91 Considerable analysis of the circumstances in which indemnity costs might be ordered is to be found in the judgment of Sheppard J in Colgate-Palmolive Company v Cussons Pty. Limited [1993] FCA 536; (1993) 46 FCR 225. The decision in Tetijo is again referred to as standing for the proposition that conduct which causes loss of time to the court and to other parties can constitute a special circumstance so as to warrant the ordering of indemnity costs.

92 Of course, pursuant to s.92 of the RLA, the existence of vexatious conduct is a pre-requisite to the ordering of costs. Whilst this does not mean that costs pursuant to s.92 will always be ordered on an indemnity basis, it does mean that, in attempting to persuade the Tribunal to exercise its discretion in this way, the party seeking indemnity costs must already have advanced its position a considerable distance. Necessarily, in a case such as this, a determination concerning the appropriate scale or quantum of costs presupposes the existence of an entitlement to costs, which in turn means that vexatious conduct has been established. In dealing with the awarding of costs on a basis more generous than party/party costs, it was said in Rosniak v Government Insurance Office (1997) 41 NSW LR 608 as follows:-

"Nevertheless the court requires some evidence of unreasonable conduct, albeit that it need not rise as high as vexation."

Thus, arguably a party which has established that high level of vexation is well on the way to establishing an entitlement to an order for costs on a more generous basis than party/party costs. It may be contended that the degree of vexation required to attract indemnity costs pursuant to s.92(2) of the RLA is greater than that required for a similar order pursuant to s.109 of the VCAT Act, given the far more restrictive approach to costs evinced in the RLA. This may be so, although it is also to be remembered that vexatious conduct of proceedings is but one of the many circumstances justifying the ordering of costs pursuant to the VCAT Act. Even if the degree of vexation required for the ordering of indemnity costs pursuant to the RLA is considerably greater, I am satisfied that it exists here.

93 In the present case, the wastage of time which was occasioned to the Tribunal and to the SOV by Bradto in pursuing an unmeritorious application on 11th, 12th and 13th October 2005 warrants the awarding of indemnity costs. This is particularly so when my ruling of 7th September 2005 and the observations contained therein are borne in mind. As previously stated, Bradto opted to come back before the Tribunal with another application devoid of merit, having apparently learned little from the ruling of 7th September and being apparently determined to sail on in the face of it. I would refer again to the discussion of these matters set out above in my ruling concerning vexatious conduct. Whilst it is an order not often made by this Tribunal, in the particular circumstances I am satisfied that Bradto should pay the SOV's costs on an indemnity basis in relation to the hearing conducted from 11th to 13th October 2005, or for a very substantial part thereof.

94 Whilst acknowledging the exceptional or unusual circumstances which must be established before costs are awarded on an indemnity basis, and also recognising that applications for disqualification of the presiding decision-maker carry with them their own difficulties and peculiarities, I am of the view that costs in relation to the hearing on 2nd and 3rd November 2005 should also be on an indemnity basis. Again, as in my ruling of 10th November 2005, I have attempted to approach this ruling on a dispassionate basis. It would be easy to fall into the error of finding that such special or unusual circumstances existed as to warrant the ordering of indemnity costs because one was reacting adversely to criticism. I have attempted to avoid such a reaction.

95 In discussing vexatious conduct, I have referred to details of my ruling of 10th November 2005. I can only refer again to them. The overwhelming bulk of the time consumed involved submissions that were wide of the mark, totally without foundation, irrelevant, and, at times, bordering on the misleading. The submissions made were of almost ridiculous length, and caused considerable wastage of time both to the Tribunal and to the SOV. I would also point out that this application by Bradto occurred on the first of 5 days which had been allocated for the hearing of the substantial matter. This was not in the nature of an interlocutory application made prior to the hearing of the principal application, even if that was in turn interlocutory in nature. The disqualification application, largely based on spurious grounds, not only occupied 2 days, but the first 2 days of what would have been the hearing on the merits (and, as a result, caused the vacating of the remaining days, not that any claim is made in relation to these).

96 In summary, I am of the view that the time of both the Tribunal and the SOV was wasted as the result of an ill-considered and poorly based application in which irrelevant arguments were advanced at length. The SOV has established an entitlement to costs on an indemnity basis in respect of this hearing. Given the way in which it was presented, I find it difficult to view the disqualification application as being anything other than more wastage of time. In my opinion, Bradto should again pay the SOV's costs in relation to the 2 days consumed by this on an indemnity basis, or at least so pay for the overwhelming majority of the time so consumed.

97 I am of the view that Tymbook should not be ordered to pay any part of the costs orders sought by the SOV. I am of the opinion that Bradto should pay the SOV's costs relating to 4 hearing days, and pay such costs on an indemnity basis. I am not of the view that the 4 days for which such costs are to be ordered need be specified. In my view, the total amount of time involved in relation to the hearings of 11th, 12th and 13th October and 2nd and 3rd November 2005 should not have exceeded 1 day. I have arrived at this conclusion after making an allowance for the amount of time relating solely to the Tymbook proceeding.

98 As previously stated, I am also of the opinion that the scale of costs relating to the order of 7th September 2005 should be the Supreme Court Scale, although not on an indemnity basis. There seems to me to be a distinction between the circumstances prevailing in relation to the order of 7th September 2005, and those prevailing in relation to the other costs orders sought by the SOV. In the ruling of 7th September 2005 I made my views clear as to the manner in which Bradto was conducting the proceeding as compared with what might reasonably be expected. I also made it clear that I was dissatisfied with that method of procedure, and indeed ordered costs against Bradto on the basis that it had conducted that part of the proceeding in a vexatious manner. That hearing might be described as Bradto's first encounter with me, and mine with it. Given that it had received no earlier warning concerning the manner in which it was conducting the litigation, to then order costs against it on an indemnity basis may be viewed as being unfair, although it may also be viewed as the adopting of a somewhat generous attitude towards Bradto. Not all litigants have the advantage of a preliminary warning. An order for costs on scale, and as previously discussed on the Supreme Court Scale, seems more appropriate in relation to that first hearing before me. To continue with time-wasting applications and the conduct which I have described seems to me to lift that subsequent conduct to a level where the imposition of indemnity costs is fair and justified.

99 Accordingly, the orders of the Tribunal are as follows

1. The application of the SOV for costs against Tymbook is dismissed.

2. It is ordered that Bradto pay the SOV's costs of 4 hearing days, such costs to be on an indemnity basis, and, in default of agreement, to be assessed or settled by the Principal Registrar pursuant to s.111 of the VCAT Act.

3. The costs to be paid by Bradto to the SOV pursuant to order 7 of the orders of 7th September 2005 are, in default of agreement, and including a certificate for two counsel, to be taxed on the Supreme Court Scale, and to be assessed and settled by the Principal Registrar pursuant to s.111 of the VCAT Act.