[2004] VCAT 2000

1 Mayfair Collins Pty Ltd is joined as an additional respondent to the proceeding.

2 The Applicants must pay the costs of the respondents Mayfair Collins Pty Ltd and Denton Corker Marshall Pty Ltd in this proceeding, in such sum as is assessed by the Principal Registrar using the Supreme Court scale.

1 When is it appropriate to award costs to a party on the basis of the nature and complexity of a proceeding? This case raises that question in the context of a planning case in which a landowner sought to invalidate (not overturn) a decision of the Minister for Planning to grant a permit for a major central city development.

2 On 18 December 2000 the Minister decided to grant a permit pursuant to the Melbourne Planning Scheme for the development and use of land at 167-173 Collins Street, Melbourne for the purpose of dwellings, shop, food and drink premises, office and associated car parking. The proposed development included a tower building, some 60m high, in the central portion of the land.

3 Sweetvale Pty Ltd is the owner of the land immediately to the east of the subject land; the building on that land is known as the T & G building. Sweetvale is supported in its case by JGL Investments Pty Ltd, which is both the occupier of one of the levels of the T & G building and a company closely associated with Sweetvale[1].

4 The T & G building was effectively rebuilt about a decade ago and has a height of approximately 40 metres. When the T & G building was rebuilt it was thought that the subject land, being subject to heritage controls, would not be redeveloped. Consequently windows were provided in the upper levels of the western façade of the T & G building and these windows enhance the amenity of that building. The proposed tower is to be located on the property boundary, abutting the T & G building. This will require the closing up of a number of windows in the T & G building, an outcome that Sweetvale sought to avoid.[2]

5 On 8 January 2001 Sweetvale applied to the Tribunal to review the decision pursuant to section 82 of the Planning and Environment Act 1987. The hearing of that application for review commenced on 28 May 2001. On 30 May 2001 Deputy President Horsfall and Member Hewet, who comprised the Tribunal, determined that certain parts of the Minister's decision were precluded from review as these parts were exempt from third party rights.[3] Sweetvale appealed to the Supreme Court of Victoria against this ruling. However, Ashley J affirmed the decision of VCAT.[4] Sweetvale then sought to appeal to the Court of Appeal against the decision of Ashley J. However, the Court of Appeal refused leave to appeal, on the basis that the decision of Ashley J was not attended by sufficient doubt.[5]

6 Sweetvale then made an application to the Tribunal pursuant to s.149B of the Planning and Environment Act for declarations (effectively) that the Minister's decision to grant the permit was invalid. This became the principal proceeding before the Tribunal, and was heard by the President. However it was still accompanied by the original application for review, which was heard concurrently by the President and Mr Cimino. The application for declarations was dismissed. The application for review was also dismissed, although some of the conditions of the permit were altered by consent. Separate reasons have been published for both these decisions.

7 A respondent to the declaration proceeding, Denton Corker Marshall Pty Ltd, has now applied for an order that the applicants pay it the costs of the declaration proceeding. This application is the essence of the matter now before the tribunal.

8 Before dealing with the central issue, there is a technical matter that needs to be considered. The original permit application was made in the name of the architects, Denton Corker Marshall Pty Ltd, and not the name of the owner of the land, Mayfair Collins Pty Ltd. The various proceedings have continued on this basis, without formally changing the name of the respondent to Mayfair Collins Pty Ltd. Although matters can proceed in that way, it is generally better for the landowner to be named as the party to a planning dispute, rather than an agent such as an architect or planning consultant.

9 In a creative submission, Mr Wright QC, on behalf of Sweetvale, submitted that no costs should be awarded because any costs that were incurred were incurred by the owner of the land, Mayfair Collins Pty Ltd, and not Denton Corker Marshall Pty Ltd. I doubt whether that would be correct, as the party on the record when the costs were incurred was Denton Corker Marshall Pty Ltd; and lawyers acting for that party would have been delivering a service to it. Mr Jones, who appeared for Denton Corker Marshall Pty Ltd, sought to overcome the objection by amending the proceeding by substituting Mayfair Collins Pty Ltd. Mr Wright replied by stating that it was too late to do so; and there could not be a change in the real identity of a party when costs are being considered.

10 I believe justice would be served by adding, not substituting, Mayfair Collins Pty Ltd as a party to the proceeding. I see nothing in section 60 of the VCAT Act which prevents this at this stage of the proceeding. In my opinion, the tribunal should not allow a technical issue of this nature to stand in the way of a fair outcome.

11 Section 109 of the VCAT Act relevantly provides:

(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 a proceeding.

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

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

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

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

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

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

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

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

(e) any other matter the Tribunal considers relevant.

12 Denton Corker Marshall Pty Ltd submit that in the circumstances of this proceeding the tribunal should be satisfied that it is fair to order that the applicants pay costs by reason of paragraphs (c), (d) and (e) of section 109(3).

13 The claim made by the applicants in this proceeding has not succeeded. But this is not sufficient to justify an award of costs. It could be described as a "hopeful" proceeding, rather than an "unlucky" proceeding. Be this as it may, the application which has been rejected could not be described as so weak as to be vexatious or frivolous. The points raised by counsel for the applicants were carefully crafted and skilfully presented; and required considerable analysis by the tribunal before the claims were rejected. Hence I am not satisfied that it would be fair to make any order as to costs solely or primarily by reference to the relative strengths of the claims made by each of the parties.

Findings as to the nature and complexity of the proceeding

14 The nature of the proceeding was out of the ordinary for the Planning and Environment List. It was a proceeding in the nature of judicial review; not merits review. Further, because it was brought pursuant to section 149B of the Planning and Environment Act 1987, it was necessary that the proceeding be heard by a presidential member of the tribunal.

15 The proceeding was complex. The arguments presented by counsel for the applicant were, as has been indicated, carefully crafted. And they involved subtle contentions as to the niceties of planning law and practice.

16 Thus I am satisfied that the nature and the complexity of the proceeding was quite different to the run of the mill planning case before the tribunal. In character the proceeding was closer to a proceeding commonly brought and determined in the Supreme Court of Victoria, not only by reason of the amount at stake (the project involved a multi-million dollar building), but also by reference to the type of issues involved.

17 Section 109 of the VCAT Act gives the tribunal a broad discretion in relation to costs. The existence of such a discretion enables the tribunal to do its best to provide a just outcome, subject to the basic principle that each party will usually bear its own costs. There is much to be said for the existence of such a broad discretion. But, equally, it is important that the obligation to pay costs be predictable; as this promotes certainty. A proper balance is likely to be promoted if decisions as to costs are only made after serious and close consideration of the statutory provisions; and then according to principles and practices that develop in relation to particular provisions, cases or lists.

18 In my opinion, for an award of costs to be made it is not sufficient to demonstrate that the nature of the proceeding has a strong resemblance to inter-parties litigation in a court. Section 109(1) of the VCAT Act is designed to cover proceedings in all lists of the tribunal, including those where proceedings are characteristically similar to those conducted in the County Court of the Supreme Court. But paragraph (d) of section 109(3) of the VCAT Act anticipates that certain types of proceedings will be brought before the tribunal which will be of a character to enable the tribunal to be satisfied that an order should be made as to costs. How are these cases to be identified? No doubt it would be convenient if a list of such cases was published. But I think it would be unwise to essay such a list; that will have to emerge over time.

19 What can be said is this. It is more likely that the nature and complexity of a proceeding will make it fair to make an order as to costs if:

* the proceeding was in the tribunal's original jurisdiction, not its review jurisdiction;

* the proceeding involved a large number of issues, or a small number of particularly complex issues;

* the proceeding involved a large sum of money or a major issue affecting the welfare of a party or the community;

* the proceeding succeeded and was a type which was required to be brought, either by reason of a statutory duty or by reason of some unlawful or improper conduct by another party which warranted redress;

* the proceeding failed and was a type where a party has asserted a right which it knew, or ought to have known, was tenuous;

* a practice has developed that costs are routinely awarded in a particular type of proceeding, thus making an award of costs more predictable for the proceeding in question.

20 I am satisfied that the present case is of a character which can found an award of costs. I rely upon the nature of the issues involved (which involved judicial review in the tribunal's original jurisdiction), the amount at stake, the commercial nature of the objectives sought to be achieved, the complexity of the legal questions, and the requirement that a presidential member hear the case. The high quality of counsel arguing the proceeding is an indicia of the importance and complexity of the case. I also take into account the tenuous nature of the claim as an additional factor, even though this would not be sufficient in itself to make it fair to award costs. I also believe these same factors mean that it is appropriate that costs be assessed on the Supreme Court scale.

[1] References in this decision to "Sweetvale" are to be taken as references to both Sweetvale Pty Ltd and J G L Investments Pty Ltd, unless the context suggests otherwise.

[2] When the T & G building was rebuilt, Sweetvale entered into an agreement pursuant to the Building Act to close up the windows on the western boundary if this became necessary as a result of the redevelopment of the subject land. In the principal decision, I described the case as having a "commercial context" for this reason.

[3] Sweetvale Pty Ltd v Minister for Planning [2001] VCAT 1426.

[4] Sweetvale Pty Ltd v Victorian Civil and Administrative Tribunal [2001] VSC 426.

[5] Sweetvale Pty Ltd v Victorian Civil and Administrative Tribunal [2003] VSCA 83.