VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
administrative DIVISION
planning and environment LIST	 vcat reference Nos. P764/2018 & P769/2018
	
Application for costs in unsuccessful applications to amend a permit and for declarations – consideration of section 109 of the Victorian Civil and Administrative Act 1998 – whether an award of costs is fair – conduct of respondent justifying reduction in costs to be awarded	

APPLICANTS	Lucy Buckeridge & Sam Cross	
responsible authority	Darebin City Council	
RESPONDENT	HighBuild Pty Ltd	
SUBJECT LAND	111 & 113 Royal Parade
RESERVOIR  VIC  3073	
WHERE HELD	55 King Street, Melbourne 	
BEFORE	Helen Gibson AM, Deputy President 	
HEARING TYPE	Costs Application	
DATE OF ORDER	1 May 2019	
citation	Buckeridge v Darebin CC [2019] VCAT 637	

Order
1	Lucy Buckeridge and Sam Cross are ordered to pay the costs of HighBuild Pty Ltd fixed in the sum of $12,000.00.  The costs must be paid within 60 days of the date of this order or otherwise as agreed by the parties.

Helen Gibson AM 
Deputy President 				

reasons
background
1	These two proceedings involved an application for declarations pursuant to section 149B of the Planning and Environment Act 1987 (application P764/2018) and an application to amend planning permit D/309/2016 pursuant to section 87 of the Planning and Environment Act 1987 (application P769/2018).  In its order dated 6 June 2018, the Tribunal refused both applications.  Costs were reserved.
2	The respondent (HighBuild) has now made an application for costs against the applicants, Lucy Buckeridge and Sam Cross.  HighBuild claims indemnity costs in the sum of $27,500, plus costs associated with the costs application in the sum of $2,200.  
3	Both proceedings involve planning permit No D/309/2016 issued on 23 December 2016 for land at 111 Royal Parade, Reservoir.  The permit allows:
A medium density housing development comprised of the construction of a two (2) storey dwelling to the side of the existing dwelling, in accordance with the endorsed plans.  
4	111 Royal Parade, Reservoir was an irregular, triangular allotment of land located on the north side of Royal Parade, Reservoir.  At the time the permit was issued, it was occupied by an existing weatherboard dwelling.  The permit allowed development of an additional two storey dwelling plus attached ancillary garage and landscaping.  The overall size of the allotment was 578m2. 
5	A subsequent permit for a two lot subdivision was issued and the land has been subdivided into two lots.  Lot 1 on PS 808469R contains the existing dwelling.  It is now known as 111 Royal Parade, Reservoir and is owned by the applicants, Samuel Alexander Cross and Lucy Elizabeth Buckeridge.
6	Lot 2 on PS 808469R is now known as 113 Royal Parade, Reservoir and is owned by the respondent, HighBuild Pty Ltd.  
What were these proceedings about?
7	These proceedings were brought by the applicants, Lucy Buckeridge and Sam Cross, under section 87 of the Planning and Environment Act 1987 to amend planning permit D/309/2016 (the permit) and section 149B of the Act for declarations in respect of the effect of the two lot plan of subdivision on the permit.  
8	When HighBuild applied for and was granted the permit in 2016 for construction of a two storey dwelling beside the existing dwelling on the land it owned the whole of the land at 111 Royal Parade.  At that time, it intended to remove two existing windows in the two bedrooms of the existing dwelling, leaving two other existing windows to provide daylight to these rooms.  However, when it sold the existing dwelling to the applicants, which was before construction of the second dwelling had commenced, it had not removed these two windows.  When construction was commenced, the applicants were alarmed at the proximity of the new building to their dwelling, its height and its effect on daylight and sunlight into their bedroom windows through the two windows, which were supposed to have been removed.
9	The endorsed plans under the permit did not show two existing habitable room windows on the north-east side of the existing dwelling located 1 metre away from the two storey wall on the boundary of the new dwelling.  The applicants say that the failure to show the two habitable room windows on the plans endorsed under the permit constituted a material misstatement or concealment of fact in relation to the application for the permit or a material mistake in relation to the grant of the permit, which are grounds for amending the permit under section 87(1) of the Act.  
10	The applicants also complained that the eaves of the new dwelling overhang their land because of the wall being built on the boundary.
11	They sought to have the permit amended to show the existing windows on the endorsed plans and to set back the wall of the new dwelling from the boundary.
12	In deciding not to amend the permit, the Tribunal was not satisfied that the applicants had established grounds under section 87(1) of the Planning and Environment Act 1987 to justify an amendment.  Nor did it consider that the proposed amendment could be supported on its merits even if grounds were made out.  Equally, the Tribunal was not satisfied that the basis for making the declarations sought about the effect of the subdivision on the permit could be established.  In reaching its conclusion with respect to amendment of the permit, the Tribunal was critical about the lack of diligence shown by the applicants in their investigation of what was proposed to be constructed under the permit before completing their purchase of the existing dwelling and their reliance upon assumptions about what they imagined the effect of the new development would be upon their existing dwelling due to their misinterpretation of plans they were supplied with at the time of entering the contract of sale.
13	At the same time, the Tribunal noted the failure by HighBuild to communicate adequately with the applicants about the need to fill in or remove the existing windows in order to comply with the permit and the endorsed plans.  However, this factor did not affect the Tribunal’s findings regarding the grant of the permit and the lack of any grounds for amending the permit such as material misstatement or concealment of fact in relation to the application for the permit, or material mistake in relation to the grant of the permit.
statutory framework for an award of costs
14	The Tribunal’s power to award costs and the matters it must consider when doing so are set out in section 109 of the Victorian Civil and Administrative Tribunal Act 1998.  It provides as follows:
109 	Power to award costs
(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 subsection (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);
(iv) 	causing an adjournment;
(v) 	attempting to deceive another party or the Tribunal;
(vi) 	vexatiously conducting the proceeding; 
(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;
(d) 	the nature and complexity of the proceeding;
(e) 	any other matter the Tribunal considers relevant.
parties’ positions
HighBuild Pty Ltd  
15	HighBuild relies upon subsections (b), (c), (d) and (e) of the section 109(3) in support of its claim for costs and its submission that in order for justice to be done between the parties, it is fair that HighBuild is awarded its costs. 
16	In terms of section 109(3)(b) – whether a party has been responsible for prolonging unreasonably the time taken to complete the proceeding – HighBuild refers to the applicants’ application for a stop order, which caused additional cost and was unsuccessful.  It notes that further, the applicants first sought to cancel the permit then retracted this position, seeking only to amend the permit.  
17	In respect of section 109(3)(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 – HighBuild submits that the application for amendment of the permit was untenable.  It points to its own strong and successful case and notes that the applicants’ failure to undertake proper due diligence was criticised in the Tribunal’s order.  
18	With respect to section 109(3)(d) – the nature and complexity of the proceeding – HighBuild submits that the proceeding was complex.  The proceeding concerning declarations required considerable legal analysis.  Evidence was called and relied upon and substantial legal questions were raised.  
19	With respect to section 109(3)(e) – any other matter the Tribunal considers relevant – HighBuild submits that in circumstances where it has been successful in all respects and where the applicants’ failure to undertake proper due diligence before or after signing the contract to purchase the property was criticised in the decision, costs are warranted.
The applicants
20	The applicants oppose any award of costs, but in particular on an indemnity basis.  
21	They say it was not unreasonable for them to seek a stop order and their doing so did not unreasonably prolong the time taken to complete the proceeding.  In fact, in the circumstances of the case, it actually led to an expedited hearing.  No delay was caused by the applicants’ amendment of their application under section 87 from one to cancel the permit to one to amend the permit.  
22	With respect to HighBuild’s argument under section 109(3)(c) regarding the relative strengths of the claims made by each of the parties, the applicants submit that an award of costs requires far more than that one party was successful, or even that one party had a better case, or even that one party had a weak case.  It is inherent to the whole exercise that in every dispute that comes before the Tribunal, one side will succeed, and one party will have a stronger case than the other.  Parties are entitled to bring arguable cases before the Tribunal and to have arguable claims determined.  To justify an award of costs, something more is required, which has not been established in this case.
23	With respect to the nature and complexity of the proceedings, the applicants submit that the complexity in the determinative issues in the case arose from facts associated with, at least in substantial part, HighBuild’s own conduct – the lack of clarity in its permit application, coupled with the subdivision and sale of part of the subject land without first undertaking the works required on their part of the land (i.e. filling in the windows) as a condition precedent to it being able to develop the remaining parcel.  They submit that whilst HighBuild was successful in the substantive applications, it cannot lay particular ‘blame’ for the complexity of the issues in dispute at the feet of the applicants.   
24	Finally, with respect to section 109(3)(e), the applicants refer to the need under section 109 for the Tribunal, in making any order for costs, to be satisfied that it is fair to do so.  In the present circumstances, the applicants point to the actions of HighBuild as being the basis for the applicants making their applications to amend the permit and for declarations.  They say it would not be fair to make an award of costs in these circumstances.  They submit that:
As the Tribunal has found, HighBuild’s conduct did not give rise to any of the grounds provided for under s 87 for cancelling a planning permit.  That does not mean that its conduct played no role in giving rise to the dispute – it was unusual, contentious, sharp dealing by an experienced property developer, of a nature especially apt to give rise to legal dispute.
should an award of costs be made?
25	The Tribunal must approach an application for costs on the following basis:
•	The prima facie rule is that each party should bear their own costs of the proceeding.
•	The Tribunal may make an order awarding costs, only if it is satisfied that it is fair to do so and this finding is essential to making an order.
•	In determining whether it is “fair to do so”, the Tribunal must have regard to the matters stated in section 109(3).
26	With respect to section 109(3)(b) I find that the applicants have not been responsible for prolonging unreasonably the time taken to complete the proceeding.  
27	With respect to section 109(3)(c) relating to the relative strengths of the claims made by each of the parties, I agree with the applicants’ submissions that just because one party ‘wins’ by defeating a weaker case by another party does not mean that an order for costs is justified.  In this respect I support what was said by Deputy President Dwyer in unChain St Kilda Inc v Port Phillip CC:
[7]	For the purposes of s 109(3)(c), I agree with BBC that the application for declarations was comprehensively dismissed. However, as has been indicated in other decisions on costs, the fact that the Tribunal is (after hearing and analysis) able to reach a firm or comprehensive conclusion does not mean, of itself, that the unsuccessful party’s case had no tenable basis in fact or law such that costs should be awarded against it. ‘Untenable’ means more than ‘weak’, and an award of costs should not ordinarily be made against an unsuccessful party just because it lost a relatively weak case. …
28	Whilst I do not consider that the applicants had a strong case with respect to either the amendment or the declaration proceedings, I am not satisfied that it would be fair to make an award of costs on the basis of section 109(3)(c).
29	Rather, it is subsections (d) and (e) of section 109(3) combined, which I consider justify an award of some costs being paid by the applicants in this particular case.  
30	Both these proceedings were brought in the Tribunal’s original jurisdiction.  They are unlike ordinary applications for review in respect of planning permit application where there are extensive opportunities for third parties to participate in review proceedings before a permit is issued, either by objectors making an application for review against a decision to grant a permit, or for objectors to participate in an application for review against conditions in a permit or the failure or refusal to grant a permit application.  In the case of an application to amend a permit or for declarations, applicants have a choice about whether to make the applications, but respondents frequently have little or no choice about defending such applications if the use or development of their land is under attack or a permit which they hold is being challenged and an amendment or cancellation of it is being sought by a third party.  
31	It is for this reason that the Tribunal has often been more willing to make an order for costs against applicants in such cases where their applications have not been successful and where respondents or councils have been put to cost in defending their interests or actions.  The Tribunal has often commented that once granted, a planning permit is a valuable right and should not be interfered with lightly upon the application of a third party.  For example, in Lee v Mornington Peninsula SC the Tribunal noted:
[14]	It is important that there be certainty about the status of planning permits and that once issued, they are able to be relied upon and acted upon. For this reason, they are not to be set aside lightly and the Act contains a number of hurdles that third party requestors in particular must overcome…
32	Where such an attempt is made but is unsuccessful, it is frequently considered to be fair that a respondent or council be recompensed for its costs in defending such an application and protecting its interests or actions.   
33	In the circumstances of this case, I consider it is fair that HighBuild should be recompensed for its costs in defending its permit from the attacks represented by these two applications made by the applicants.  In my decision, I found that HighBuild had done nothing wrong in terms of its actions leading to the grant of the permit and that there was no merit in the amendments sought by the applicants.  Equally, I found there was no basis for making the declarations sought about the effect of the subsequent subdivision on the permit.  I found that the applicants’ misunderstanding about the permit arose largely from their own actions or lack of due diligence about the meaning of the permit and the plans endorsed under it prior to completing their purchase.  I consider that in the circumstances, it would be fair having regard to the nature of the proceedings to order that the applicants pay the respondent’s costs.  
34	However, whilst nothing that HighBuild did gave rise to any ground under section 87 of the Planning and Environment Act 1987 to justify amendment of the permit, HighBuild’s actions in failing to remove the windows, which were not shown on the endorsed plans under the permit, before completing the sale of the existing dwelling to the applicants and commencing construction of the second dwelling under the permit, contributed to the underlying dispute between the applicants and HighBuild.  Although having no direct relevance to the outcome of the two proceedings, nevertheless I consider HighBuild’s conduct has some relevance in considering this application for costs.  HighBuild’s actions fall within the ambit of “any other matter”, which I consider is relevant in being satisfied about whether an award of costs should be made.  I do not consider HighBuild’s actions justify making no award of costs, as submitted by the applicants.  In this respect, I reject their characterisation of HighBuild’s conduct.  Nevertheless, its conduct did contribute to the set of facts giving rise to the dispute between the applicant and HighBuild.  For this reason, having regard to section 109(3)(e), I consider that the costs, which I would have otherwise awarded in favour of HighBuild, should be reduced.  
35	In terms of quantum, HighBuild’s claim for costs on an indemnity basis cannot be justified.  An award of indemnity costs is extremely rare and is certainly not justified in this case.  Having regard to the costs claimed and my decision to reduce the award to be made in favour of HighBuild, and rather than putting the parties to the additional expense of requiring costs to be taxed, I have decided to make an award of costs fixed in the sum of $12,000.

Helen Gibson AM 
Deputy President