VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
planning and environment LIST	vcat reference No. P960/2021
Permit Application no. WH/2020/378	
CATCHWORDS	
Application for costs; Victorian Civil and Administrative Tribunal Act 1998 (Vic) ss. 74(2)(b), 109, 111(a).     	

Applicant	LZL Property Group Pty Ltd	

Responsible Authority	Whitehorse City Council	
Respondents	Michael Chau, Michael Thomas Scott and Elizabeth Ann Foster Ting Shi (Frank Chao), Victoria Emerson, 	
Referral Authorities	Head, Transport for Victoria	
	Melbourne Water	
SUBJECT LAND	502-510 Station Street
BOX HILL  VIC  3128	
HEARING TYPE	On papers	
DATE OF HEARING	28 April 2022	
DATE OF ORDER	30 May 2022	
CITATION	LZL Property Group Pty Ltd v Whitehorse CC [2022] VCAT 607	

Order

1	The application for costs of the responsible authority made on 22 February 2022 is refused.

Picha Djohan
Member	

Reasons
Background
1	This proceeding was commenced by the applicant under s.77 of the Planning and Environment Act 1987 (Vic) (the Act) and was originally scheduled for a four day hearing commencing on 13 December 2021.
2	On 19 November 2021, the Tribunal ordered that the hearing be adjourned to commence on 7 March 2022 . 
3	On the material before the Tribunal, I am able to ascertain the following – 
a.	On 18 November 2021, the applicant made a request for adjournment of the hearing scheduled to commence on 13 December 2021 (the adjournment request).
b.	The adjournment request was accompanied by the consent of some of the other parties, including the consent of Whitehorse City Council (Council).
c.	The reason given for the need for an adjournment was a conflict of interest arising from the engagement by the applicant of an urban design expert employed by a firm that was previously engaged by Council to advise on the permit application.
d.	As a result of the conflict of interest, neither the applicant, nor Council were in a position to lodge expert evidence on urban design issues in compliance with previous orders of the Tribunal.
4	On 23 February 2022, pursuant to s.74 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (the VCAT Act), the Tribunal granted leave for the application for review to be withdrawn, and the permit application was withdrawn. 
5	On the material before the Tribunal, I am able to ascertain the following – 
a.	On 23 February 2022 (at approximately 12.10pm) the applicant lodged an application for leave to withdraw the application for review for the following reason –	

b.	On 23 February 2022, by email correspondence (at approximately 4.12pm) Council requested the leave of the Tribunal to make an application for costs under s.109(3) of the VCAT Act “due to the poor conduct of the applicant and its late notice of withdrawal.”
6	On 28 February 2022, the Tribunal ordered that by 15 March 2022, Council must give the Tribunal and the parties submissions supporting its application for costs. In addition, the Tribunal ordered that Council’s submissions must include (but not limited to) the following – 
•	The basis on which costs are sought.
•	The party that Council says should pay the costs sought.
•	The amount and detail of the costs claimed including any itemised bills with invoices where relevant.
•	The basis on which the costs are calculated.
•	The reasons why costs should be awarded having regard to the provisions of the Victorian Civil and Administrative Tribunal Act 1998 (Vic).
•	A copy of any document relied upon in the costs application or supporting submissions.
7	By the same order, any party who wished to oppose or otherwise respond to Council’s costs application, was required, by 4 April 2022, to provide to the Tribunal and the parties, submissions setting out the basis for opposition to the costs application and documents relied upon in support of those submissions.
8	On 15 March 2022, the Tribunal received Council’s written submission together with three supporting documents.
9	On 4 April 2022, the Tribunal received the applicant’s submission opposing Council’s application for costs.
10	Council’s application for costs now relies on s.74(2)(b) of the VCAT Act.
11	Council submits that “an award is justified having regard to Section’s (sic) 109 (3)(a)(iv), (b) and (e).”
12	Council further submits – 
a.	The applicant delayed the proceeding by seeking an adjournment to the original hearing listed for 13 December 2021. “Correspondence circulated on 18 November 2021 confirmed that the Permit Applicant and its representative were aware that the Council had sought to engage an expert witness in relation to the proceeding.”
b.	The withdrawal of the application seven business days before the commencement of the hearing in March 2022 was “extraordinarily late in the proceeding and beyond what could be considered reasonable conduct of the permit applicant. The request to withdraw the proceeding by the permit applicant was not made with any haste, nor did the permit applicant make any attempt to limit or reduce the expenses incurred by the Council in preparing for the hearing.
c.	It is significant that the application was withdrawn after Council, “acting in good faith, filed the expert witness statement of its urban design witness, Mr Nathan Alexander, which was circulated to parties on 21 February 2021, in accordance with the Tribunal’s Practice Note and the Tribunal’s orders on 19 November 2021.”
13	As to the amount of costs claimed, Council submits “The Council’s costs are limited to those direct costs incurred as a result of the permit applicant’s late withdrawal of the Application for Review.”
14	Council’s submission includes a timeline of events that includes the following – 

15	The material provided in support of Council’s application for costs does not contain a copy of the expert evidence said to have been ‘circulated’ by Council on 21 February 2022. After review of all of the material before the Tribunal, I am unable to find any record that establishes that Council lodged with the Tribunal any expert witness statements on 21 February 2022 or on any other date.
16	In addition, the material before the Tribunal does not contain a copy of any attempted contact between Council and the applicant on 22 February 2022.
17	Council’s submission does not identify whether the costs claimed from the applicant are to be calculated on the standard basis or on an indemnity basis.
18	Instead, the ‘total costs’ claimed by Council are listed in its written submission in a table as follows – 

19	As Council’s claim for costs is based on a total figure, it may be that it seeks an order from the Tribunal under s.111(a) of the VCAT Act that fixes the amount of costs to be awarded.
aPPLICANT’S RESPONSE
20	The applicant submits that following the grant of adjournment on 19 November 2021, the applicant sought to obtain alternative urban design witness evidence. The applicant further submits – 
However due to the Christmas and New Year holiday period and ongoing issues resulting from the COVID pandemic, an alternative witness was not able to be secured in sufficient time to appear at the 7-10 March 2022 hearing dates. A large number of urban design witnesses were approached to provide evidence however many were not available due to existing workload and also conflicts of interests in assisting Council with other matters.
21	The applicant acknowledges that its request for leave to withdraw was served on all parties ‘late’ but that this was largely due to matters outside its control.
cONSIDERATION
22	From the outset, I state that I have not been adequately assisted by the submissions from either Council or the applicant. Both sets of submissions reveal that the authors do not fully appreciate the difference between submissions and evidence in support of those submissions. 
23	While it is the case that this Tribunal is expected to proceed with as little formality and as expeditiously as possible, that does not relieve parties to a proceeding to properly support their relative positions expressed in submission with evidence where assertions of fact are made. Where costs are claimed by one party against another, it is essential for the transparent delivery of justice that all necessary evidence to support a claim is provided to the Tribunal to assist it in making its determination.
24	Section 74(2)(b) of the VCAT Act provides – 
(2)	 If an applicant withdraws an application or referral – 
…
(b)	the Tribunal may make an order that the applicant pay all, or any part of, the costs of the other parties to the proceeding; and
25	Council submits that all of its ‘total costs’ should be paid, and it relies on s.109(3)(a)(iv), (b) and (e) of the VCAT Act to justify an award of costs.
26	Section 109(3) of the VCAT Act provides – 
(3)	The Tribunal may make an order under subsection (2) only if it is satisfied 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 f the proceeding;
(e)	any other matter the Tribunal considers relevant.
	(emphasis added)
27	The power to award costs under s.74(2) of the VCAT Act is a separate power to the general power to award costs.
28	If it were not for s.74(2)(b) there would be doubt as to whether the Tribunal could make an award for costs after the proceeding is withdrawn, the Tribunal being functus officio.
29	In Asghari v SBS Radio [2001] VCAT 1755 at [4], a decision in the Anti-discrimination List of the Tribunal, Deputy President McKenzie stated that – 
Section 74(2)(b) is a separate power to order costs on the withdrawal of a proceeding. There is no rule here that costs lie where they fall, unless the Tribunal considers it fair to order otherwise. Here the Tribunal has an unfettered and broad discretion as to costs, similar to the discretion which the Anti-discrimination Tribunal had under the now repealed s.138 of the Equal Opportunity Act, 1995. However, the fact that there is an unfettered and broad discretion under s 74(2)(b) of the VCAT Act also means that there can be no automatic rule that costs will always be awarded against a withdrawing party. The decision as to costs must be based on the particular circumstances of each case. There is no reason why similar factors to those that have been taken into account in decision under s.138 of the Equal Opportunity Act, could not also be taken into account in determining whether or not to award costs under s 74(2)(b) of the VCAT Act. 
30	In Decleah Investments Pty Ltd v Cardinia Shire Council (Land Valuation) [2011] VCAT 1292 at [6], Deputy President Macnamara stated – 
Nevertheless, since the Section 74 discretion is open it must be exercised against the background of the costs regime laid down by Section 26 and that regime is significantly different from the one which generally applies in the Tribunal. Generally, the presumption is that costs lie where they fall. Section 26 of the Valuation of Land Act leaves that as an option but it contains no preference for that outcome over any other in contrast to Section 109(1) of the Victorian Civil and Administrative Tribunal Act 1998 which makes that the rule in the Tribunal’s General jurisdiction when the award of costs as between party and party the exception.
31	It is relevant therefore when considering whether to award costs under s.74(2)(b) of the VCAT Act, to bear in mind that under s.109(1) each party is to bear their own costs in a proceeding involving the review of a decision made under a planning enactment. Other relevant circumstances may include, or reflect, the matter listed in s.109(3) of the VCAT Act but are not limited to the circumstances therein described.
32	Council seeks to rely on the adjournment to the original hearing dates in December 2021 as justification for an award of costs against the applicant for unnecessarily disadvantaging Council by – 
a.	causing an adjournment; and 
b.	prolonging unreasonably the time it has taken to complete the proceeding.
33	Council, and all other parties to this proceeding, consented to the adjournment. How it is that Council can now allege it was somehow disadvantaged by an adjournment that it freely gave its unconditional consent to at the relevant time remains a mystery. If Council formed the view that it would be disadvantaged by the adjournment then the appropriate time to raise this was when the adjournment was requested. But for an inclusion in the table setting out the timeline of events, Council’s submission does not address its consent to the adjournment and the relevance of its consent to the question of costs. This omission is not one that is expected of an entity expected to conduct itself as a model litigant.
34	Council also bases its claim for costs on the withdrawal of the proceeding some seven days before the commencement of the final hearing in March 2022. Council submission attributes some responsibility to the applicant for it incurring the costs of its expert witness. 
35	Any decision to call expert evidence by a party to a proceeding in the Planning and Environment List, is a decision made independently of whether another party intends to call evidence on the same area of expertise. The parties to this proceeding were not required by order or under PNVCAT 2 – Expert Evidence to notify each other of the evidence intended to be called on their behalf prior to the lodgment of statements of expert witnesses.
36	While late withdrawals may be inconvenient, parties should not be penalised if they genuinely seek to withdraw an application. On the facts of this matter, the applicant sought withdrawal of its review application because it asserts it could not engage an urban design expert to give evidence on its behalf at the final hearing. Council has not disputed that this was the motivating factor for the request by the applicant to withdraw the proceeding. 
37	Continuing in this proceeding without such an urban design expert on behalf of the applicant may not have been determinative of the outcome of the proceeding and even if it was, it is unlikely to have resulted in an award of costs against the applicant without some other factor debunking the starting position in s.109(1) of the VCAT Act. 
38	The withdrawal did however avoid the need for the parties to attend a four day final hearing and led to the finalisation of the proceeding without the Tribunal having to consider the merits of the proposal that the applicant no longer wished to pursue.
39	Finally, something needs to be said about the ‘total costs’ claimed by Council. First, Council’s submission is devoid of the basis on which it says the Tribunal should award costs, being either on the standard basis or on an indemnity basis. I have speculated that Council may want the Tribunal to make an order to fix costs in furtherance of the Tribunal’s discretion under s.111(a) of the VCAT Act. When a party makes an application for costs, the Tribunal should not be left to speculate as to the basis on which costs are to be calculated. I note that the Tribunal’s order of 23 February 2022 required Council to specifically identify the basis on which costs are to be calculated.
40	Council’s claim for its ‘total costs’, is one that would exceed an order for full indemnity costs because even indemnity costs are calculated by reference to items in a litigious scale and not according to ordinary time costing of consultants or solicitors. Where a party seeks an order for fixed costs and the amount claimed is equivalent to total recovery as between consultant and client, some justification for total recovery should be given. The need for the justification for full recovery does not arise simply because a party uses an advocate that is not a lawyer or solicitor. Even if Council established on all the facts and circumstances an award of costs should be made against the applicant, nothing in the material before me justifies an award of costs that amounts to full recovery of the costs claimed.
41	Secondly, despite identifying all the amounts included in Council’s ‘total costs’ as costs ‘incurred’ in its written submission, it is apparent from review of the invoices of Song Bowden Planning that both are draft invoices and, by definition, these costs have not been ‘incurred’ by Council. As draft documents, they are not evidence of any costs incurred by Council but possibly costs that may be incurred; it is difficult to know what to make of them. 
42	In addition, it is simply not possible to allocate a cost for certain work done from work of a different nature from a figure derived from a global time costing. 
43	Further, where it is claimed that, say for example, costs have been incurred for the drafting of (all or part) final submissions, one would expect a copy of those submissions to also be provided in support of the application. 
44	Council has not persuaded me that any costs should be awarded against the applicant.
CONCLUSION
45	After considering all the circumstances and on the material before me, I refuse Council’s application for costs for the above reasons.

Picha Djohan
Member