VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
civil DIVISION
CIVIL CLAIMS LIST	VCAT REFERENCE NO.C806/2021
CATCHWORDS	
Successful applicant and two respondents that have had the cases against them dismissed make application for costs. Victorian Civil and Administrative Tribunal Act 1998 (Vic) ss 109(3)(c) and 112.	

APPLICANT	Grace Zhang	
FIRST RESPONDENT	Aus Made Express International Pty. Ltd ACN: 604 566 065 	
SECOND RESPONDENT	Huifeng Liu	
third respondent	Qiujia Zhang	
WHERE HELD	Melbourne	
BEFORE	K Knights, Member	
HEARING TYPE	Costs – on the papers	
DATE OF SUBMISSIONS	Applicant submissions 20 and 26 September 2023
Second and third respondents’ submissions 20 September 2023	
DATE OF ORDER	21 December 2023	
CITATION	Zhang v Aus Made Express International Pty Ltd (Civil Claims) (Costs) [2023] VCAT 1428	

OrderS
1	The applicant’s application for costs is struck out.
2	The second respondent’s application for costs is dismissed.
3	The third respondent’s application for costs is dismissed.
4	The first respondent, Aus Made Express International Group Pty Ltd ACN: 604 566 065, must pay the applicant, Grace Zhang’s VCAT fees in the sum of $1,979.40.

K Knights 
Member			

APPEARANCES:		
For Applicant	On the papers	
For Respondents	On the papers	

Reasons
Applicant and second and third respondents make application for costs
1	In this proceeding the applicant, Grace Zhang, and the second and third respondents, Huifeng Liu and Qiujia Zhang, applied for costs following orders being made in the proceedings on 26 July 2023 as follows:
a.	The first respondent, Aus Made Express International Group Pty Ltd ACN: 604 566 065 (‘AME’), pay the applicant, Grace Zhang, the Australian dollar equivalent of 155,640RMB at the rate published by the Australian Taxation Office at the date of this order.
b.	The claim against the second respondent, Huifeng Liu, is dismissed.
c.	The claim for the VCAT application fee under Victorian Civil and Administrative Tribunal Act 1998 (Vic) s 115B is reserved.
d.	Costs reserved.
2	Upon the close of Grace Zhang’s case on 29 July 2022, counsel for the third respondent, Qiujia Zhang, made a successful no case submission and the case against the third respondent was dismissed on that date.
Applicant’s application for costs
3	The applicant, Grace Zhang, did not pay the costs fee for the application for costs. Several reminders to pay the costs fee have been sent (most recently 6 October 2023) and the time for making application has long passed. Grace Zhang’s application for costs is struck out because the costs fee has not been paid.
Second and third respondents’ application for costs
4	The third respondent, Qiujia Zhang, seeks costs in the sum of $18,569.81 and the second respondent, Huifeng Liu, seeks costs in the sum of $20472.81.
5	The application for costs on behalf of Qiujia Zhang and Huifeng Liu relies upon the following grounds:
a.	Section 109(3)(c) of Victorian Civil and Administrative Tribunal Act 1998 (Vic) (‘the VCAT Act’) which provides an exception to the usual rule that each party bear their own costs where that would be fair having regard to the relative strengths of the claims made by the parties including if a party has made a claim that has no tenable basis in fact or law; and
b.	Section 112 of the VCAT Act which provides for a presumption of an order for costs in certain circumstances where a settlement offer is not accepted and the offeree does not obtain a more favourable result.
6	For the reasons that are set out in the decision published at Zhang v Aus Made Express International Group Pty Ltd (Civil Claims) [2023] VCAT 865, I am satisfied that Grace Zhang’s claims against both Qiujia Zhang and Huifeng Liu had no tenable basis in law. However, I am not satisfied that it would be fair to order Grace Zhang to pay the costs claimed by them under s 109(3)(c) of the VCAT Act for the following reasons:
a.	It was the same firm of solicitors and same counsel who acted for all three respondents throughout the proceedings.
b.	It is apparent from the calculation of the costs claimed that the amounts have been arrived at by calculating the total legal costs for the three respondents to 29 July 2022 (being the date the case against Qiujia Zhang was dismissed) ($55,709.42) and dividing that cost evenly between the three respondents ($18,569.81 each) and then calculating the additional costs after 29 July 2022 (being the date the case continued against AME and against Huifeng Liu) ($3,806) and dividing that cost evenly between the two remaining respondents ($1,903 each).
c.	The calculation reveals that the costs are calculated on an indemnity basis.
d.	The costs claim ignores that the first respondent has been found substantially liable to the applicant’s claims.
e.	The costs claim ignores the position of Qiujia Zhang and Huifeng Liu as directors of the first respondent and that the evidence they gave in witness statements and at the hearing was central to the defence of the first respondent, AME, as well as themselves.
f.	There is no evidence that Qiujia Zhang and Huifeng Liu have personally paid any of the legal costs that they are claiming.
g.	It is reasonable to assume that as directors of AME, Qiujia Zhang and Huifeng Liu, would have, or could have, caused AME to pay the legal costs.
7	For the reasons set out above I am not satisfied that it would be fair to order Grace Zhang to pay the costs claimed by Qiujia Zhang and Huifeng Liu under s 109(3)(c) of the VCAT Act.
8	Qiujia Zhang and Huifeng Liu also make application for costs under s 112 of the VCAT Act.
9	On 28 April 2021, the solicitor for the three respondents sent an offer to Grace Zhang that referenced ss 112 and 114 of the VCAT Act. The offer was for the proceeding to be dismissed and each party bear their own costs (‘respondents’ offer’). The respondents’ offer made no differentiation between the three respondents. It was an offer by all of them for the case against all of them to be dismissed.
10	Section 112 of the VCAT Act provides for a presumption of an order for costs in circumstances where a settlement offer is made that is not more favourable to the other party than the offer and that offer is not accepted.
11	Qiujia Zhang and Huifeng Liu did not make separate offers from AME for the proceedings to be dismissed.
12	The respondents’ offer was not more favourable to Grace Zhang than the Tribunal’s orders made in the proceeding. In the proceeding Grace Zhang obtained the following order against one of the three respondents that made the respondents’ offer:
a.	The first respondent, Aus Made Express International Group Pty Ltd ACN: 604 566 065, pay the applicant, Grace Zhang, the Australian dollar equivalent of 155,640RMB at the rate published by the Australian Taxation Office at the date of this order.
13	The conditions under s 112 of the VCAT Act for the presumption of an order for costs upon rejection of a settlement offer do not apply because the respondents’ offer was not more favourable to Grace Zhang than the orders made in the proceeding.
14	For the reasons set out above, the application made by Qiujia Zhang and Huifeng Liu for costs is dismissed.
VCAT fees
15	Under s 115B of the VCAT Act, the Tribunal may make an order that an unsuccessful respondent re-imburse VCAT fees paid by an applicant that has been substantially successful.
16	Grace Zhang has been substantially successful in her claim against AME and it is appropriate that an order be made under s 115B of the VCAT Act that AME be ordered to re-imburse the VCAT fees paid by Grace Zhang as follows:
Application fee paid 11/03/2021					$487.30
Hearing fee day 1 paid 17/11/2021				$368.30
Hearing fee day 2 paid 27/07/2022				$374.60
Hearing fee day 3 paid 7/03/2023				$749.20
Total VCAT fees	$1,979.40

K Knights
Member