VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
planning and environment LIST	vcat reference No. P492/2021
 	
CATCHWORDS	
Section 109 of the Victorian Civil and Administrative Tribunal Act 1998; application for costs; interim enforcement order application; withdrawal of application for enforcement order.	

Applicant	Eric John Houghton	

Responsible Authority	Mitchell Shire Council	
Respondent	Tanya El-Gamal	
SUBJECT LAND	210 Tallarook Pylong Road                TALLAROOK VIC 3659	
HEARING TYPE	On the Papers - Costs	
DATE OF ORDER	15 November 2021	
CITATION	Houghton v Mitchell SC (Costs) [2021] VCAT 1364	

Order
Costs refused
1	The application by Tanya El-Gamal for an award of costs pursuant to section 109(3) of the Victorian Civil and Administrative Tribunal Act 1998 is refused.    
2	No order as to costs.

Teresa Bisucci
Deputy President		Susan Whitney
Member	

Reasons
background
1	On 18 March 2021 Eric John Houghton (applicant) brought an application under sections 114 and 120 of the Planning and Environment Act 1987 (PE Act).  On 25 March 2021, we heard the application for interim enforcement order (IEO) under section 120 of the PE Act.
2	On 26 March 2021, we refused to make an IEO as sought by the applicant and reserved costs.  
3	The urgency in bringing the application for IEO at that time related to a music festival that is held annually on the Easter long weekend (Music Festival) on the land at 210 Tallarook Pyalong Road, Tallarook (subject land).
4	The Music Festival is allowed to operate pursuant to planning permit PL6067/06.01 which was issued by the Mitchell Shire Council (council) on 30 November 2006 (permit).  
5	At the time that the application for IEO was filed with the Tribunal the applicant alleged a number of contraventions regarding compliance with relevant noise standards and breach of conditions 12 and 37 of the permit that deal with noise generated from the Music Festival.  The applicant was concerned that noise monitoring that was to occur during the Music Festival be undertaken ‘correctly’ and proposed a different noise monitoring regime.
6	A practice day hearing for the application for enforcement order was listed on 23 April 2021.  The applicant withdrew his application at this practice day hearing.
7	Tanya El-Gamal (respondent) has sought her costs associated with the hearing of the IEO and the practice day hearing.  The applicant objects to an order for costs being made by us.
8	Having regard to the submissions from the parties, we refuse to make any order awarding costs to the respondent.  Our reasons follow.
legislative framework
9	Section 109 of the Victorian Civil and Administrative Tribunal Act 1998 (VCAT Act) provides the legislative basis for an award of costs.
10	Section 109 of the VCAT Act provides:
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.
… 
11	It is important to note that the general rule set out in section 109(1) of the VCAT Act is clear, each party is to bear its own costs in a proceeding.  It is true that the Tribunal is more likely to depart from the general rule in certain circumstances, for example:
a.	where the proceeding is in the Tribunal’s original jurisdiction;
b.	whether a proceeding is brought by way of a statutory obligation; and
c.	where a practice has evolved that an award of costs is to be expected.
12	The application for IEO satisfies the first and third examples above.  However, simply because that is the case does not mean that it is a fait accompli that we will depart the general rule set out at section 109(1) of the VCAT Act.  A party seeking its costs must still satisfy the criteria set out in section 109(3) of the VCAT Act.
Parties’ submissions
Respondent 
13	The respondent seeks an award of costs on an indemnity basis or in the alternative, on the County Court Scale.  She submits that an award of costs is appropriate because:
a	she was successful in the matter; 
b	the applicant needlessly prolonged the proceeding because he did not withdraw the application for enforcement order necessitating attendance at a practice day hearing and further;
i	he did not take any steps to resolve the dispute; and
ii	he failed to communicate with the Tribunal and the respondent his intention to withdraw the proceeding prior to the practice day hearing; 
c	the application was fundamentally flawed and was always bound to fail because the allegations contained within the application for enforcement order were incorrect and not supported by any evidence.  The application did not ‘actually demonstrate a breach of the permit, including a breach that is likely to occur’ .  Further, the application had no tenable basis in fact or law because:
i	the applicant misunderstood the role of penalty infringement notices;
ii	the applicant failed to make ordinary enquiries about enforcement or management of noise with the respondent or Council;  
iii	the applicant persisted with the application for IEO despite the lack of evidence with respect to acoustic noise impacts or breaches from the event; 
iv	the nature of condition 12 of the permit that provides council with the discretion to review the hours of operation, not the applicant;
d	the applicant is ‘sophisticated’ in that he objects to applications for planning permits and understands the planning system.  The application was part of a strategy to frustrate the respondent’s use of the subject land under the permit;
e	offers to settle the proceeding were made by the respondent and ignored by the applicant resulting in substantial additional costs to the respondent;
f	the application was made in VCAT’s original jurisdiction; and
g	the application was complex and involved a high level of risk to the respondent necessitating legal advice and representation. 
14	The respondent submits that an award of costs on an indemnity basis is appropriate because the applicant failed to mitigate costs in the proceeding.  We are told that two offers of compromise were made by the respondent to the applicant that were not accepted.  Further, it is submitted that the applicant was put on notice of ‘the cost risks in this complex matter and… intention to seek costs’.
15	Lastly, the respondent submits that an order under section 109(3)(e) of the VCAT Act is warranted because:
a	the applications were both unsuccessful; 
b	notice of an intention to seek costs was given to the applicant; 
c	notice was given to the applicant of the weakness of the applicant’s case; 
d	offers to settle the proceeding were made to resolve the proceeding to avoid those costs; 
e	the respondent has come to the proceeding with clean hands, including taking substantial steps with council to achieve compliance with the permit; and
f	the respondent has conducted the matter in “a reasonable and upworthy manner through the course of the proceeding” and should not be out of pocket as a result of a untenable proceeding. 
16	The respondent seeks the costs associated with both the IEO and the practice day hearing for the enforcement order.
Applicant
17	The applicant opposes an award of costs being made against him because:
a	he had a prima facie case about compliance with the permit conditions as he had received conflicting advice from council about noise monitoring required by the permit conditions;
b	he sought to resolve the application for enforcement order by responding to the email from the respondent’s lawyer;
c	the costs claimed lack detailed particulars with respect to the application at the Tribunal; and
d	he does not have the financial means to pay any costs, if such costs were awarded.
tribunal determination
Section 109(3)(e) of the VCAT Act
18	The respondent relies upon section 109(3)(e) of the VCAT Act and submits that we have a ‘broad discretion to award costs’ as we see fit.
19	We accept that the discretion under section 109(3)(e) of the VCAT Act is broad.  However, we are not satisfied that the matters relied upon by the respondent support the exercise of this discretion because:
a	whilst the applicant was unsuccessful in the application for IEO this is not sufficient in and of itself to satisfy section 109(3)(e) of the VCAT Act;
b	assessing the strength of the applicant’s case that led to us refusing to make an IEO was not a simple task.  It was made complex by the complicated drafting and length of condition 12 of the permit and its interaction with condition 37 of the permit.  Council’s submissions to us at the hearing of the IEO set out the five elements provided for in condition 12 of the permit.  The respondent added that conditions 12 and 37 of the permit should be read together with the result being that the council would be the ultimate arbiter of the audibility of noise at specific residential properties.  When considering whether to make an IEO, our reasons set out the detailed and complex nature of condition 12 of the permit.  Further, whilst we did not agree with the interpretation of condition 12 of the permit urged upon us by the applicant, it was not a situation where the condition was clear and precise.  We undertook a detailed analysis of this condition in order to refuse the IEO.  We will return to the issue of complexity later in these reasons;
c	we do not consider the ‘offers’ made by the respondent to the applicant were reasonable.  The email of 22 March 2021(March offer), is not expressed to be a Calderbank offer nor an offer under section 112 of the VCAT Act.  In passing, we note that the March letter would not satisfy the criteria set out in section 112 of the VCAT Act because it was not open for acceptance for 14 days.  We accept that the hearing of the IEO was expedited and the 14 days could not be provided.  However, the applicant was given less than one day to respond.  We note that the March offer concedes that the applicant would not be aware of the noise monitoring being undertaken by the respondent.  The March offer does not set out why the applicant should withdraw his application for example, with reference to condition 12 of the permit.  Rather, the March offer sets out the respondent ‘strongly opposes the orders… and refused the claims within it’.  Whilst conditions 12 and 37 of the permit do not require the applicant’s involvement in noise monitoring, it is not surprising given the history of non-compliance by the respondent that the applicant brought the proceeding.  We say given the history of non‑compliance by the respondent because we were told by the council at the hearing of the IEO application that two Penalty Infringement Notices (PIN’s) had been issued in respect of the Music Festival in 2019.  These non-compliances led to the requirement that the respondent would be required to fund noise monitoring for future events.  We also understand that the offer of a conversation with the respondent’s lawyer might not be sufficient incentive for the applicant to withdraw his application given the history of the non-compliance by the respondent.  Whilst we accept that the respondent made an offer prior to the hearing of the IEO, we do not consider it to be a reasonable one in the circumstances as it lacked clarity and was not a genuine offer to settle.  Given that, it was not unreasonable for the applicant to ignore the offer;
d	On 21 April 2021, the respondent sent an email to the respondent (April offer) two days before the practice day hearing scheduled for the application for enforcement order.  The April offer is also not expressed to be a Calderbank offer nor an offer under section 112 of the VCAT Act. That email says that ‘At that hearing the merits of the application will be heard and determined’.  This position is simply not correct, as the purposes of the practice day hearing were:
i	To obtain information regarding the music event held on the Easter weekend in 2021 as it relates to this VCAT application;
ii	To ascertain whether this matter has been resolved or whether it will proceed to a final hearing of the enforcement order application;
iii	To consider whether any further procedural orders are sought or required in preparation for the final hearing of the enforcement order application; and
iv	To give directions about the future conduct of the proceeding.
Again, the applicant was given less than a day to respond. The April offer included that the respondent’s costs of the IEO be paid by the applicant and that he withdraws the application for enforcement order.  No details were provided in the April offer with respect to the quantum of costs.  The April offer also provides that if the applicant did not pay the unspecified costs and withdraw the application, the respondent would proceed with an application to strike out the application and seek costs with respect to that.  The applicant responded to the April offer within the time provided for and stated:
The VCAT Order dated 26 March 2021 point 2 states "The purpose of the Practise Day Hearing is : To obtain information regarding the music festival held on the Easter weekend in 2021 as it relates to this VCAT Application"
I have no information from Mitchell Shire or your client about the compliance enforcement of the said music festival. You are invited to direct anything you feel informative to me today.
I did make a complaint to the council and I am aware from your client of other complaints.
In relation to your continued concerns about costs to me. As a sole parent pensioner carer for a young child with my very limited resources, I have not sought to restrict the operation of the music festival rather just compliance.
The applicant, properly, in our view, states that he does not have information from the respondent or the council about noise compliance in respect of the Music Festival in 2021.  Further the applicant states that that he made a complaint to the council and he was aware from the applicant about other complaints. In such circumstances, we consider the rejection of the April offer (to the extent there was an offer) to be reasonable.  We also note that the April offer provided less than one day for the applicant to accept the offer.  The respondent had almost one month from our decision in the IEO and the date of the practice day hearing to provide such an offer but chose to do so 2 days from the date of the practice day hearing.  That timeframe is unreasonable in the circumstances of this case;
e	on the material before us we cannot conclude that the applicant’s behaviour was to frustrate the respondent’s use of the subject land notwithstanding that the applicant may participate in the planning process and is thus familiar with it. 
Section 109(3)(b) of the VCAT Act
20	We are not satisfied that the respondent has substantiated her claim for an award of costs pursuant to section 109(3)(b) of the VCAT Act for the following reasons:
a.	none of the alleged behaviour of the applicant unreasonably prolonged the time taken to complete the proceeding.  We note that this issue is raised solely in respect of the practice day hearing and not the hearing of the IEO.  The respondent opines that the applicant should have alerted the Tribunal and the parties that he would be seeking withdrawal of the application subject to the proviso that he receive an update form council.  We disagree and find the respondent has not satisfied us that because attendance at a practice day hearing was required before the application was withdrawn that an award of costs should follow; and
b.	we have already dealt with the March and April offers above and in any event, do not consider that the failure to respond to the March offer and the rejection of the April offer to be unreasonable.  
Section 109(3)(c) and (d) of the VCAT Act
21	We do not agree with the respondent that the application had no tenable basis in fact or law.
22	As we have set out above, we consider the drafting of condition 12 of the permit to be lengthy and complex.  This is further complicated by its relationship with condition 37 of the permit.  Planning permits are documents that should be able to be understood by lay people, particularly conditions in planning permits that exist to protect the amenity of surrounding residential properties.  This is certainly not the case with condition 12 of the permit.  Thus, we do not accept the submission by the respondent that the application had no tenable basis in fact or law.  
23	We do agree that applications for enforcement order can be complex and can involve serious consequences and risk.  However, this does not mean that an order for costs automatically follows.  The Tribunal has been willing to depart from the general rule that each party bear its own costs in applications for enforcement in the circumstances described earlier however, this has generally been where the council bears the statutory obligation to enforce the planning scheme pursuant to section 14 of the PE Act.
Other matters
24	The respondent has relied upon section 113 of the VCAT Act to advise us of settlement offers that were made without prejudice.  Section 113 of the VCTA Act is part of suite of provisions in the VCAT Act that allow for a presumption of an order for costs if a settlement offer is rejected. Given our earlier comments regarding the March offer and April offer, little turns on this for the purposes of this application for costs.
conclusion
25	Overall, we are not persuaded that it would be fair to award costs against the applicant. We acknowledge that the applicant was unsuccessful in seeking an IEO and withdrew the EO application at the practice day hearing. However, in light of the level of complexity involved in the relevant permit conditions, the past behaviour of the respondent (such as that which led to the PINs being issued), the past actions of the council in its handling of previous complaints, and the purposes of the practice day hearing, we do not regard the applicant’s action in waiting until the practice day hearing to seek leave to withdraw the proceeding as being unreasonable in the circumstances of this case. Further, for the reasons set out above we do not regard the March offer or the April offer to be reasonable offers of compromise or the rejection of either offer by the applicant to be unreasonable in the circumstances.
26	It is clear from the submissions of the respondent that she is annoyed at the applicant for bringing the application for IEO and enforcement order and seeks that there be some punishment by an award of costs. However, this is not the purpose of costs being awarded pursuant to section 109 of the VCAT Act; rather, the purpose of this provision is to enable justice to be done, allowing a person to be compensated for costs incurred in circumstances where it would be unfair for them to be liable for those costs. In the absence of us finding that there has been any behaviour by the applicant that unnecessarily disadvantaged the respondent or unreasonably prolonged the time taken to complete the proceeding, and mindful of the complexity of the matters involved, there is no reason for us to conclude that it would be unfair for the costs incurred by the respondent to be borne by the respondent.  In short, none of the submissions by the respondent has persuaded us that it would be fair to award costs against the applicant.
27	Therefore, the application by the respondent for an award of costs pursuant to section 109(3) of the VCAT Act is refused.    

Teresa Bisucci
Deputy President		Susan Whitney
Member