1. If the Costs Claim is to be determined by the Tribunal, the following orders will apply:

(a) the respondent must file and serve any affidavit material (limited to 3 A4 pages) and any written submissions (limited to 3 A4 pages) in support of the Costs Claim;

(b) by 7 March 2025, the applicant must file and serve any affidavit material (limited to 3 A4 pages) and any written submissions (limited to 3 A4 pages) in opposition to the Costs Claim; and

(c) subject to the party requesting an oral hearing, the Costs Claim will be determined 'on the papers' without the need for either party to appear.

1. The power to award costs is contained in s 109 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) ('the Act'), which provides, in part:

(1) Subject to this Division, each party is to bear their own costs in the proceeding.

(2) At any time, the Tribunal may order that a party pay all or a specified part of the costs of another party in the proceeding.

(3) The Tribunal may make an order under subsection (2) only if it is satisfied that it is fair to do so having regard to -

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

1. Section 109(3) sets out several factors that the Tribunal must have regard to when considering whether a party has conducted the proceeding in a way that unnecessarily disadvantaged the other party. In Vero Insurance Ltd v Gombac Group Pty Ltd,[1] Gillard J summarised the approach to be taken by the Tribunal when exercising its discretion on the question of costs:

1. In approaching the question of any application for costs pursuant to s 109 in any proceeding in VCAT, the tribunal should approach the question on a step by step basis, as follows:

(i) The prima face rule is that each party should bear their own costs of the proceeding. > > (ii) The tribunal may make an order awarding costs, being all or a specified part of costs, only if it is satisfied that it is fair to do so. That is a finding essential to making an order. > > (iii) In determining whether it is fair to do so, that is, to award costs, the tribunal must have regard to the matters stated in s 109(3). The tribunal must have regard to the specified matters in determining the question, and by reason of paragraph (e) the tribunal may also take into account any other matter that it considers relevant to the question.

2. In Martin v Fasham Johnson Pty Ltd,[2] Bell J further observed that:
   1. The discretion must be exercised judicially, which means the Tribunal must act fairly, impartially and by reference to relevant considerations and not arbitrarily, capriciously or by reference to irrelevant considerations and not in a manner that frustrates the legislative intent.

1. The Tribunal is a creature of statute and, on the question of costs, it commences from a different starting point. Usually parties must bear their own costs, which no doubt reflects the general object of the Act. That object, as identified by the President, is to promote access to justice generally and to minimise the overall level of costs in tribunal proceedings as far as practicable.
2. In accordance with the orders made on 5 February 2025, both parties filed affidavit material and submissions on the question of costs. Regrettably, the Applicant's submissions refer to documents which have previously been withdrawn and are no longer on the Tribunal's file. Clearly, I am unable to place material weight on submissions which refer to documents that, in essence, no longer exist and are not before me.
3. The respondent's submissions focus on several factors, which include:

(a) the filing of material that was heavily redacted and which the respondent submits caused the hearing on 5 July 2025 to be adjourned;

(b) the filing of material which is said to be voluminous and which required the respondent to consider that material;

(c) the fact that the Applicant's Application was withdrawn, which the respondent submits meant that the costs associated with considering the material previously filed by the applicant was thrown away; and

(d) the appearance on 5 February 2025, which could have been avoided had the applicant agreed to pay the respondent's costs of and associated with the Applicant's Application.

1. In contrast, and noting my comments in paragraph 20 above, the applicant raised the following factors which she submits weigh against any order being made for the costs of and associated with the Applicant's Application:

(a) the fact that Mr Watson-Jones had previously employed the applicant placed the respondent in a position of advantage compared to the respondent being represented by a solicitor who had no previous employment relationship with the applicant;

(b) the respondent filed no material in opposition to the Applicant's Application;

(c) the Applicant's Application was withdrawn well before the return date of 5 February 2025; and

(d) the quantum of costs claimed are excessive and largely relate to fees charged after the respondent was advised that the applicant would not press the Applicant's Application.

1. In my view, it was open and not unreasonable for the applicant to raise the question whether it was appropriate for Mr Watson-Jones to act for the respondent in circumstances where the applicant had been a former employee of Mr Watson-Jones. Indeed, the concession made by Mr Watson-Jones during the hearing on 5 February 2025, that he would not appear as an advocate at the substantial hearing of the proceeding or otherwise seek to personally cross-examine the applicant at the substantial hearing of the proceeding, indicates that their previous working relationship could prejudice the applicant if no controls were put in place.
2. However, I am also of the view that the way in which the Applicant's Application was progressed or prosecuted has disadvantaged the respondent. Specifically, the filing and serving of documents that were ultimately withdrawn has led to a situation where costs were incurred but ultimately thrown away. Clearly, with the benefit of hindsight, the Applicant's Application may have benefited if the applicant had retained legal representation from the outset, rather than after those costs were incurred.
3. Therefore, I find that it would be fair to make an order that the applicant pay some of the respondent's costs of and associated with Applicant's Application. I make that finding based on the following factors:

(a) the Applicant's Application and supporting material was served on the respondent and reasonably required the respondent to consider that application and supporting material;

(b) the Applicant's Application required the respondent to appear at two separate hearings, albeit that the hearing on 5 February 2025 also considered timetabling matters unrelated to the Applicant's Application;

(c) the costs incurred by the respondent in considering and responding and appearing (in part) became superfluous after the applicant decided to withdraw the Applicant's Application; and

(d) it is reasonable to infer that the costs incurred by the respondent in considering, responding and appearing would not have been incurred had the Applicant's Application not been made.

1. However, my finding that it would be fair to make an order that the applicant pay some of the respondent's costs of and associated with the Applicant's Application, is tempered by the fact that it was reasonable to raise a question over Mr Watson-Jones' representation and, importantly, by the concession made by Mr Watson-Jones, as noted in the orders dated 5 February 2025. Had that concession not been made, it is reasonable to infer that the Applicant's Application may have been re-agitated before the presiding member hearing the substantive hearing if cross examination by Mr Watson-Jones became unfairly prejudicial to the applicant.
2. In considering what costs should be ordered, I have had regard to the invoices or timesheets exhibited to the affidavit of Mr Watson-Jones dated 27 February 2025. In relation to invoiced fees, I find that the following line items are materially related to the Applicant's Application:

Telephone call to Chris, reading affidavit from Maya, email to Chris

Reading affidavit and submissions from Maya, telephone call to Chris

1. There are other costs or fees which are claimed after 1 August 2024 which represent work in progress but have not been invoiced. Those costs or fees cover the period 9 August 2024 to 5 February 2025.
2. In my view, it would not be fair to make an order that the applicant pay for any fees associated with the Applicant's Application after the applicant had indicated that she no longer wished to press that application. According to the submissions of the applicant, that occurred on 4 December 2024. In that regard, I find that the appearance at the directions hearing on 5 December 2025, although originally listed to hear the Applicant's Application, ultimately dealt with timetabling matters concerning the substantive hearing and the respondent's application for costs. Therefore, the costs of and associated with that hearing are to remain as costs in the cause.
3. During the period 9 August 2024 until 4 December 2025, the Pre-Billing Guide exhibited to the affidavit of Mr Watson-Jones indicates that $1,039.50 accrued as work in progress. Whether that amount was or is ultimately charged is unknown.
4. The aggregate amount of invoiced fees and work in progress charges referred to above is $2,376. That amount represents costs or fees charged or to be charged, rather than costs calculated on any court scale. In my view, it would not be fair to make an order for that amount as that would constitute an order for indemnity costs, which I consider unjustified in the circumstances. Therefore, I find that it would be fair to fix those costs or fees at 60 percent of the total amount, being $1,425.60.
5. Given that the amount of costs which I consider fair to order as against the applicant is significantly less than the amount claimed by the respondent, I do not consider it fair to make any order that the costs of this costs application be paid by either party. There will be no order as to the costs of and associated with the respondent's application for costs.
6. In conclusion, I will order that the applicant pay the respondent $1,425.60 representing the costs of and associated with the Applicant's Application.

[1] [2007] VSC 117.

[2] [2007] VSC 54.