VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
CIVIL DIVISION
BUILDING AND PROPERTY LIST	
vcat reference No. BP534/2017	
CATCHWORDS	
COSTS – costs of reinstatement – legal costs – expert report costs – s 109 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic)	

APPLICANT	Ms Virginia Dowzer	
FIRST RESPONDENT
sECOND RESPONDENT
third RESPONDENT
FOURTH RESPONDENT
FIFTH RESPONDENT	Mr Antonio Gennaro Paterno
Owners Corporation No. 1 PS320789Q
Owners Corporation No. 2 PS320789Q
Caroline Mary Poon
AWS Services Pty Ltd (ACN 163 375 031)	
WHERE HELD	Melbourne	
BEFORE	H. Nash, Member	
HEARING TYPE	On papers	
DATE OF SUBMISSIONS 	25 February 2021, 7 May 2021 and 10 May 2021	
DATE OF ORDER	3 June 2022	
CITATION	Dowzer v Paterno (Costs) (Building and Property) [2022] VCAT 619	

Order
1.	The first, second and third respondents shall pay to the applicant costs in the sum $750.00 ($250 to be paid by each of the first, second and third respondents).

H. Nash
Member			

Reasons
1	On 21 June 2018 the parties participated in a compulsory conference at the Tribunal which resulted in the proceeding being resolved and terms of settlement being entered into by all parties (the Terms of Settlement).
2	By orders dated 18 November 2020 the proceeding was reinstated due to the non-compliance with the Terms of Settlement by the respondents.
3	Having had the proceedings reinstated, the applicant has made an application for her costs associated with the reinstatement application to be paid by the respondents.
costs
4	The Terms of Settlement were silent about the costs of any reinstatement application. Accordingly, the applicant relies on s 109 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (the Act), which says in part:
s 109:
(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.
5	The applicant bases her claim on one or more of s.109(3)(a)(i) of the Act in that the respondents failed to comply with the Terms of Settlement entered into to resolve the proceeding, thus causing the proceeding to be reinstated..
6	As emphasised by the Supreme Court in the matter of Vero Insurance Limited v Gombac Group, the Tribunal should approach the question of entitlement to costs on a step-by-step basis:
(i)	The prima facie rule is that each party should bear their own costs of the proceeding.
	(ii)	The Tribunal should make an order awarding costs being all or a specified part of costs, only if it is satisfied that it is fair to do so;  that is a finding essential to making an order.
(iii)	In determining whether it is fair to do so, that is, to award costs, the Tribunal must have regard to the matters stated in s.109(3).  The Tribunal must have regard to the specified matters in determining the question, and by reason of (e) the Tribunal may also take into account any other matter that it considers relevant to the question.
7	The costs being sought by the applicant include the fees paid to a barrister and the costs of obtaining two further expert reports. 
8	The respondents dispute their liability for the costs and rely on s 109 of the VCAT Act.  They also argue that if they are held to be liable to pay the applicant’s costs, such costs should be limited to those costs incurred directly as a consequence of the reinstatement application and not costs which are more correctly categorised as costs of the proceeding.  
9	Having regard to s 109(3) I consider it fair for the respondents to pay the applicant’s costs which are directly related to the reinstatement of the proceeding. That is because such costs would not have been incurred but for the applicant making an application to reinstate the proceeding due to the respondents conduct with respect to the Terms of Settlement.
10	Those costs which are related to the ongoing prosecution of the applicant’s claim did not arise as a consequence of the applicant’s application to reinstate the proceeding and are therefore more appropriately considered as being costs in the proceeding. The liability for those costs is a matter for determination at the conclusion of the proceeding.
11	Those costs which are directly related to the reinstatement application are those which relate to the making of the application and the making of submissions in relation to that application. The category of costs are limited to the legal costs incurred. The expert report costs are costs in the proceeding and the consideration of those costs ought to be deferred until the conclusion of the proceeding.
12	With respect to the legal costs incurred by the applicant, I accept the submissions of the third and fourth respondents as to the appropriate breakdown of those costs as between the reinstatement application and the further conduct of the proceeding.  That is the sum of $750.00 for each proceeding; this proceeding and the related proceeding of BP960/2017.  
13	I therefore allow the applicant costs in the sum of $750.00, with $250 being payable by each of the first, second and third respondents.

H. Nash
Member