VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
planning and environment DIVISION
planning and environment LIST
(LAND VALUATION)	vcat reference No. P146/2019

APPLICANTS	Warren Douglas Turner & Diane Edna Turner	
Valuation Authority	Baw Baw Shire Council	
SUBJECT LAND	121 Queen Street
WARRAGUL  VIC  3820	
WHERE HELD	Melbourne	
BEFORE	Justine Jacono, Senior Member	
HEARING TYPE	No Hearing	
Date of order	30 September 2021	
CITATION	Turner v Baw Baw SC [2021] VCAT 1139 	

Order

1	The Applicants are ordered to pay the costs of the Council fixed at the sum of $ 5,700.00, the costs must be paid within 120 days of the date of this order.

Justine Jacono
Senior Member

	

REASONS

1	On the 24 December 2019 the Tribunal made orders allowing for any party to make an application for costs by the 31 January 2020 with supporting documentation.
2	The timetable allowed for a response to be filed with the Tribunal and served on the other party by the 21 February 2020.
3	The Council made an application for costs and a submission on the 31 January 2020.
4	The Council seeks costs for the Applicants to pay Council’s professional fees fixed at $13,674.55, reasonable costs for the application for costs fixed at $2,500 and any costs associated with the application fee.
5	No response was received by the Applicants.

Background
6	On the 30 January 2019 the Applicants lodged an application for review of all three valuations, Site Value, Capital Improved Value and Net Annual Value at the relevant date of 1 January 2018. The Applicants contended the following valuations
Site Value		$ 3,000,000	
Capital Improved Value 		$ 4,000,000	
Net Annual Value 		$   200,200	
7	The application for review followed a Notice of Disallowance by Mr Barnett on the 24 December 2018. The Notice of Disallowance confirmed the valuations at the relevant date of 1 January 2018 as follows:
Site Value		$ 9,300,000	
Capital Improved Value 		$ 9,300,000	
Net Annual Value 		$   465,000	
8	The expert valuation report filed by Mr Barnett on the 31 October 2019 changed the valuations at the relevant date of 1 January 2018 as follows:
Site Value		$ 9,685,000	
Capital Improved Value 		$ 9,685,000	
Net Annual Value 		$   484,250	
9	On the 15 April 2019 the Tribunal was advised that MinterEllison were instructed to act on behalf of the Applicants.
10	The Tribunal made orders on the 14 February 2019 requiring, amongst other things, a Statement of Contentions to be filed with the Tribunal and served on the other party by the 5 April 2019 (this was later varied to the 21 June 2019). At the first Practice Day Hearing held on the 17 April 2019, the Applicants were legally represented by Ms Johns, Solicitor, MinterEllison and the Council was represented by Ms Christy of Baw Baw Shire Council and Mr Barnett of Gippsland Property Valuations. The Tribunal made orders to vary the date of the Statement of Contentions and required a Joint Key Issues to be filed by the parties on the 5 July 2019.
11	On the 11 July 2019 the Applicants’ representatives advised that they did not have instructions to attend the Compulsory Conference and as such would not be in attendance.  
12	The Council filed its Statement of Contentions on the 20 March 2019. As no Statement of Contentions was filed by the Applicants, no Joint Key Issues Statement could be filed. 
13	A Compulsory Conference was conducted on the 11 July 20219. The orders by the Tribunal dated the 15 July 2019 reflect the appearances at the Compulsory Conference by the Applicants, Mr Warren Turner, in person and Ms Linda Christy of Baw Baw Shire Council and Mr Jonathan Barnett of Gippsland Property Valuations. The matter was not resolved.
14	A further Practice Day Hearing was held on the 14 August 2019 listing the matter for a three-day hearing commencing on the 3 February 2020. The Tribunal’s orders provided for a timetable outlining an exchange of information including a Statement of Contentions for Hearing and Expert Reports to be filed on 1 November 2019. The Practice Day Hearing was attended by Mr Warren Turner, in person and Ms Linda Christy of Baw Baw Shire Council and Mr Jonathan Barnett of Gippsland Property Valuations.
15	On the 15 August 2019 the Tribunal was advised that Maddocks Lawyers were instructed to act on behalf of Baw Baw Shire Council.
16	On the 16 August 2019 the Tribunal was advised that MinterEllison no longer acted on behalf of the Applicants.
17	The Council filed an Expert Witness report on the 31 October 2019 by Mr Barnett, Gippsland Property Valuations.
18	A Practice Day Hearing was requested by the Council on the 19 November 2019 and held on the 18 December 2019. The Applicants did not appear nor was there any other representative for the Applicants. The Council was represented by Mr Cantor, Solicitor, Maddocks Lawyers. 
19	Following the Practice Day Hearing the Tribunal made orders that included the following orders:
1)	The matter is adjourned for administrative mention. By no later than 4pm Monday 23 December 2019, the Applicants must advise the Tribunal in writing:
•	Why they have not complied with the Tribunal’s orders dated the 14 August 2019;
•	Why they did not attend the Practice Day listed for 2pm on the 18 December 2019; and 
•	Whether or not they are seeking to proceed with the application and the hearing listed for 3 days commencing on the 3 February 2020.
	2) If the Applicants do not respond to Order 1 by the required time and date, the Tribunal will make an order to strike the matter out (pursuant to Section 76 of the Victorian Civil and Administrative Act, 1998), make orders for any application for costs to be filed and the other party to reply; and vacate the hearing.
	3) If the matter is to proceed, the Tribunal will make further orders listing the matter for a further Practice Day at 2pm on the 15 January 2020 to consider any changes required to the timetable of information exchange prior to the hearing and make any further procedural orders.
20	On the 24 December 2019 the application was struck out for want of prosecution pursuant to Section 76(1) of the Victorian Civil and Administrative Tribunal Act 1998 for the following reasons
a)	failure to comply with the Tribunal’s orders of the 14 August 2019;
b)	failing to attend the Practice Day Hearing on the 18 December 2019 and
c)	failing to respond to the Administrative Mention by 4pm on the 23 December 2019 warning that matter would be struck out if no response was received.

Relevant Legislation
21	The determination of the cost’s application is in accordance with Section 26, of the Valuation of Land Act, 1960 which provides: 
(1)	On a review or appeal, VCAT or the Court (as the case requires) may make an order as to the payment of costs, or no order as to the payment of costs, as it thinks appropriate.
(2) 	In determining any questions concerning costs, VCAT or the Court must take into consideration the following factors, as appropriate -
	(a)	the desirability of minimising the overall level of legal and valuation costs;
	(b)	any offer, whether or not made without prejudice, by a party in respect of the valuation;
	(c)	the extent of any adjustment to the valuation made by VCAT or the Court;
	(d)	the degree of openness in sharing information between the parties -
		(i)	during the objection process; and
		(ii)	 during the review or appeal;
	(e)	any unreasonable conduct on the part of any party -
		(i)	during the objection process; or
		(ii) during the review or appeal;
	(f)	the failure of a party to give adequate information or supply supporting material when permitted or required to do so;
	(g)	an excessively low value stated by the objector under section 24(2) or an excessively high value contended by the Council, valuer or valuer-general (as the case requires).
(3)    The Court may make an order with respect to the assessment of costs in the same manner as it may in respect of any other matter before the Court.

22	In determining the question of costs, the Tribunal has had particular regard to the provisions of Section 26(2), of the Valuation of Land Act, 1960 set out above. 

Council’s key contentions
23	The Council’s submission for costs relies on the following provisions:
•	S 26(2)(a)	the desirability of minimising the overall level of legal and valuation costs;
•	S 26(2)(d) the degree of openness in sharing information between the parties -
(i)	during the objection process; and
(ii) during the review or appeal;
•	S 22(2)(e) any unreasonable conduct on the part of any party -
		(i)	during the objection process; or
		(ii) during the review or appeal;
•	S 22(2)(f) the failure of a party to give adequate information or supply supporting material when permitted or required to do so.

24	The provisions that have not been relied upon are S 26(2)(b)(c) & (g). S 26(2)(b) relates to an offer been made; presumably no offers were made. S 26(2)(c) relating to the extent of adjustment and S 26(2)(g) relating to the values contended by the parties are applicable when a determination of valuation has been made by the Tribunal. For the reasons already outlined this is not the case in this matter. 
25	The main focus of the submissions that the Council relies upon relate to the Applicants conduct during the proceeding. However, I will address each of the provisions in Section 26 of the Valuation of Land Act,1960 that has been relied upon by the Council.
26	As I have previously said, there are no submissions from the Applicants.
The desirability of minimising the overall level of legal and valuation costs
27	The Tribunal’s records show that the Applicants were legally represented between the period 15 April 2019 and 16 August 2019. The Council engaged legal representation on the 15 August 2019.
28	Whilst it is unknown why the Applicants did not instruct their legal representatives to attend the compulsory conference both parties have shown a desire to minimise legal costs prior and including the Practice Day Hearing on the 14 August 2019.
29	At the Practice Day Hearing on the 14 August 2019 the matter was listed for a 3-day hearing including a timetable for the exchange of information. Both parties were in attendance at the Practice Day Hearing and apprised of the process and requirements leading up to and including the hearing. 
30	Council’s engagement of legal representation directly after the matter was set down for hearing demonstrates a desire of minimising legal costs as they had waited to see if the matter could be resolved by agreement prior to expending legal costs. Why the Applicants legal representatives notified the Tribunal shortly after the Practice Day Hearing that they no longer acted for the Applicants, is unknown.
31	In my view the conduct of the Applicants after the matter was set done for Hearing on the 14 August 2019 is analogous with Senior Member Rickard’s view in Burgess Rural Pty Ltd v Whittlesea CC [2015] VCAT 644. At paragraph 20 Senior Member Rickards stated as follows:
‘A party can withdraw a proceeding at any time and may do so for various reasons for which the Tribunal does not look behind. However, a party that commences proceedings must be aware that they are required to progress the proceedings in a timely manner without causing the other party to spend time preparing for a proceeding that is ultimately withdrawn. A party that commences proceedings must be aware that the responding party is going to have to do just that, that is respond and will therefore be required to incur costs in responding to and preparing for a proceeding.’ 
32	I find that neither party has breached this provision up until November 2019. However, the Tribunal’s Orders dated the 14 August 2019 (following the Practice Day Hearing) came into effect on 1 November 2019, that is the first key date in the orders. The Council made several attempts to communicate with the Applicants that resulted in the Practice Day Hearing request on the 19 November 2019. At that point, the Applicants conduct, in effectively ignoring that the proceeding (that they initiated) was progressing, demonstrates disregard for the Council’s time and costs and that of the Tribunal’s. If the Applicants no longer wished to pursue the application, they could have simply requested that the application be withdrawn.
The degree of openness in sharing information between the parties 
33	The Council has made no direct submissions relating to this provision, rather this has been included in the overall unreasonable conducted by the Applicants contended by the Council. 
34	As such, I make no finding on this provision.
Any unreasonable conduct on the part of any party –
35	Council submitted that the Applicants conduct was unreasonable due to their failure to:
•	communicate with Council at all while the proceeding was afoot;
•	provide evidence and other relevant information while the proceeding was afoot in accordance with the Tribunal’s Orders of 14 August 2019;
•	attend the practice day hearing listed for 18 December 2019; and
•	communicate with the Tribunal or Council in relation to their absence at the practice day hearing on 18 December 2019, including failing to respond to the administrative mention required by the Tribunal’s Orders of 18 December 2019.

36	I consider that the Applicants conduct in failing to comply with the Tribunal’s Orders on the 14 August 2019 and 18 December 2019, failing to attend the Practice Day on the 18 December 2019 and failing to communicate with the other party or indicate their intentions not to proceed all contribute to my finding of unreasonable conduct on the part of the Applicants from early November 2019.
The failure of a party to give adequate information or supply supporting material when permitted or required to do so 
37	The Council relies on in addition to the Applicants failure to respond to correspondence, the failure of the Applicants to comply with the Tribunal’s Orders of the 14 August 2019 and 18 December 2019 which ultimately resulted in the Tribunal’s Orders of the 24 December 2019 striking out the proceeding for want of prosecution.
38	To be clear, I do not find that the Applicants failure to file expert evidence to be a breach of the Orders. The Tribunal’s Orders of the 14 August 2019 allow for a Statement of Contentions for Hearing to be filed and served in the event that the Applicants are not represented by a valuer. However, what is a breach of the orders is the Applicants failure to do either. No Statement of Contentions for Hearing was submitted, and no expert evidence was filed.
39	I agree with the Council and find that the strike out with the reasons cited is sufficient for this provision to be made out against the Applicants.
Council’s costs
40	Council’s total costs comprise legal fees and disbursements of $9,464.69 and valuation costs of $6,000 totalling $15,464.69 (ex GST). An attachment was provided itemising the invoices; it is noted that the total of the items in the attachment equal $15,149.50 (ex GST). 
41	Council seeks the following costs:
Item 1.	Legal fees and disbursements between 1 November 2019 and 24 December 2019 on an indemnity basis	$4,233.00	
Item 2.	Remaining legal fees and disbursements, excepting the period between 1 November 2019 and 24 December 2019 on a standard basis (at 70% of total incurred $4,916.50)	$3,441.55	
Item 3.	Valuation Fees	$6,000.00	
Item 4.	Costs incurred in preparing Cost Submission	$2,500.00	
	Total
(It is noted that the amounts above reconcile with the Attachment provided and that $15,464.69 appears to be a typographical error. The sub-total of $9,464.69 according to the invoices amounts to $9,149.50.)	$16,174.55	
	Council also seeks reimbursement of any application fee by the Tribunal for the cost’s application.		

42	The Council further submits that the costs should be fixed at $16,174.55. I will now address each of the four items claimed in turn within the context of the provisions cited in Section 26 of the Valuation of Land Act, 1960.

Item 1 - $4,233.00 
Legal fees and disbursements between 1 November 2019 and 24 December 2019 on an indemnity basis.
43	Councils submits that the Applicants
•	Repeatedly failed to respond to correspondence in relation to the Tribunal’s Orders of 14 August 2019;
•	Did not circulate expert evidence in accordance with the Tribunal’s Orders of 14 August 2019
•	Did not attend the practice day hearing on 18 December 2019 nor provide any notice of their absence; and
•	Did not provide reasons in accordance with the Tribunal’s Orders dated the 18 December 2019.
44	Their submission at paragraph 40 relies upon Milankovic v Binyun Pty Ltd and Ors to support in an award of indemnity costs because the Applicants conduct:
‘wrongfully and inappropriately forced Council to continue to participate in legal proceedings which, is now apparent, the Applicants ultimately had no intention of prosecuting; and so 
constitutes misconduct causing a loss of time and consequent wasted expense both to the Tribunal and Council.’

45	I find generally in favour of the Council and consider that the Applicants conduct as submitted by Council constitutes misconduct causing a loss of time and expense which could have and should have been avoided by the Applicant communicating with the Council and the Tribunal. However, I draw the distinction between the two cost items that comprise item 1; the sum of $1,660.50 relating to a bill date of 20 December 2019 and a sum of $2,572.50 relating to a bill date of 29 November 2019. In my view, the first amount pertains directly to the misconduct of the Applicants and should be borne by the Applicants. The second amount I consider should be included in item 2 and awarded on a partial basis (in addition with the invoice of 31 October 2019) and not in its entirety.
Item 2 - $3,441.55 
Remaining legal fees and disbursements, excepting the period between 1 November 2019 and 24 December 2019 on a standard basis (at 70% of total incurred)
46	For the same reasons I have outlined in item 1, I generally find in favour of the Council but consider that the Applicants conduct as submitted by Council constitutes misconduct causing a loss of time and expense is limited to circa November 2019. I have referred to ‘circa’ November 2019 as in my view there was a build-up in the events from late October 2019 to the Council’s request for a Practice Day Hearing on the 19 November 2019. Therefore, I consider that the costs should be applied on a standard basis at 70% of the bill $2,572.50 dated 29 November 2019 (from item 1) and at 30% of the $4,143.00 incurred for the bill date of 31 October 2019. These two amounts of $1,800.75 plus $1,242.90 equates to $3,043.65. I do not consider the sum of $773.50 at the bill date of 30 August 2019 should be included.
Item 3 - $6,000.00 
Valuation Fees.
47	Council relies on Aussie Invest Corporation Pty Ltd v Hobsons Bay CC. President Morris (as he was then) held that ‘costs’ are not confined to legal costs but include professional valuer costs. 
48	I agree that valuer fees are within the broader term of professional costs. However, unlike the legal fees, details of the valuation fees have not been provided. The Council’s submission at paragraph 41 states:
‘Other than the period between 1 November 2019 and 24 December 2019 in respect of which indemnity costs are sought, Council seeks:
Its costs of the proceeding on a standard basis; and 
the costs of its expert valuer, Gippsland Property Valuations, in full.’
49	The Council was required to provide a Statement of Contentions pursuant to the Tribunal’s Orders dated the 14 February 2019.
50	The Statement of Contentions amongst other items requires the Council to provide a valuation of the subject property by the valuer, the valuation methodology and/or rationale used to support the contended valuation, and details of all comparative sales or other valuation evidence relied upon by the valuer (including analysis and the justification for any adjustment) in arriving at that valuation. This information and level of details is enquired for each valuation under review that is, the Site Value, Capital Improved Value and Net Annual Value.
51	The expert valuation report was filed on the 31 October 2019 with the valuer contending increased valuations of $9,685,000 for both the Site Value and Capital Improved Value and $484,250 for the Net Annual Value.
52	It is unknown whether the receiving of the higher contended valuations caused the Applicants to cease to pursue their application or whether or not the increased valuations were warranted as the Tribunal did not determine the matter.
53	It is noted that the same valuer, Mr Barnett, considered the objection (including the provision of the prescribed information) and the Statement of Contentions for the Compulsory Conference that responded to the Tribunal’s Orders of the 14 February 2019. 
54	The valuation fee of $6,000 maybe inclusive of the Statement of Contentions and other valuation expenses such as the valuer attending the Compulsory Conference and or Practice Day Hearings prior to the 15 August 2019. 
55	Whilst I have made a finding that some of the Applicants actions constituted misconduct, I do not consider that the valuation fees prior to November 2019 should be borne by the Applicants.
56	It maybe that the valuation fee of $6,000 was purely for the additional work required that led to the increase in values. For example, costs of demolition were included in the valuation approach in the expert report. In the event that the valuation fees all relate to the expert report filed on the 31 October 2019 then I find that the fee of $6,000 is excessive and unreasonable for the Applicants to be required to pay this amount. 
57	As I have previously said, in this application for costs there is effectively a turning point in late October/early November 2019 when the Applicants ceased communications. I do not accept that a sum of $6,000 is either reasonable for the Applicants to pay for professional valuation fees in the Council responding to a valuation under review in the preliminary stages or for an expert report when much of the information in the expert report was already provided. The same valuer had already considered the valuation during the objection stage and provided a detailed Statement of Contentions filed on the 20 March 2019.
Item 4 – $2,500.00 
Costs incurred in preparing Cost Submission.
58	I consider that some of the cost in this cost application should be borne by the Applicants. I have taking into consideration that not all costs have been awarded in Council’s favour and consider $1,000 should be paid by the Applicants.
59	I have been advised that no application fee for costs has been issued and therefore this item does not require any determination.

Conclusion
60	An application for review of a valuation decision is an application by one party only, the Applicants. It stands that only the Applicants can be aware of any change in mind to cease to pursue an application.
61	The Council properly and appropriately prepared and responded to the procedural orders of the Tribunal. The reasons why the Applicants effectively ceased all communications from late October 2019 is unknown. 

62	However, the Applicants were aware that the matter was listed for Hearing, they were aware that the Council was legally and professionally represented, and they were aware that both parties were required to comply with the exchange of information prior to the Hearing.
63	I consider that the Council was unreasonably put to additional costs in the preparation and attendance at the Practice Day Hearing on the 18 December 2019. I also consider that some of the Council’s costs associated with communications required to respond to the Tribunal’s Orders dated the 14 August 2019, particularly in the build-up to the Practice Day request (made on the 19 November 2019), should be borne by the Applicants as they could have been avoided.
64	I find that the Applicants must pay the Council’s costs fixed at $ 5,700.00 within 120 days of the date of this Order.

Justine Jacono
Senior Member