City of Port Phillip v Shout Rock Cafes Pty Ltd

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2022 0114
S EAPCI 2023 0031

CITY OF PORT PHILLIP (BILL YANNELIS, MUNICIPAL BUILDING SURVEYOR)	Applicant/ Cross-respondent
v
SHOUT ROCK CAFES PTY LTD (ACN 007 168 809)	First Respondent/ Cross-applicant
BUILDING APPEALS BOARD	Second Respondent

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JUDGES:	EMERTON P, KENNEDY and OSBORN JJA
WHERE HELD:	Melbourne
DATE OF HEARING:	29 November 2023
DATE OF JUDGMENT:	19 December 2023
MEDIUM NEUTRAL CITATION:	[2023] VSCA 327
JUDGMENT APPEALED FROM:	[2022] VSC 615 (Tsalamandris J)

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STATUTORY INTERPRETATION – Building order for minor works (‘BOMW’) – Council issued BOMW to owner of residential building requiring access to balcony and outdoor area be restricted – Municipal building surveyor of the opinion the building was a danger to life safety or health of any member of the public using the building because the balcony was in a state of disrepair and at risk of structural failure – Appeal to Building Appeals Board (‘the Board’) – Owner sought judicial review in Trial Division with respect to validity of BOMW as varied by the Board – Construction of s 113 of the Building Act 1993 – Trial judge found the Board’s decision was vitiated by errors of law and the BOMW was void as the works required by the BOMW were not ‘required by the regulations’ and impermissibly sought to restrict access to balcony and outdoor area – Whether trial judge erred in holding that the phrase ‘building work, protection work or other work required by the regulations’ in s 113 of the Building Act 1993 should be read conjunctively such that the words ‘building work’ and ‘protection work’ are qualified by the words ‘required by the regulations’, rather than being interpreted as simply bearing their meanings as defined in the Act – Conjunctive construction rejected – BOMW nonetheless beyond power because it was an order with respect to the entry into, use or occupancy of, the balcony – Leave to appeal granted – Appeal dismissed.

Building Act 1993, ss 3, 111(5), 113.

COSTS – Cross-appeal seeking costs on a different standard from that awarded by trial judge – No arguable error in trial judge’s exercise of discretion established – Leave to appeal refused.

Viterra Malt Pty Ltd v Youil [2023] VSCA 304, applied; Love v Kempton [2010] VSC 254, referred to.

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Counsel
Applicant/ Cross-respondent:		Mr A Woods with Mr R Chaile
First Respondent/ Cross-applicant:		Mr R Rozenberg
Solicitors
Applicant/ Cross-respondent:	Russell Kennedy Lawyers
First Respondent/ Cross-applicant:	Franzese & Associates

EMERTON P
KENNEDY JA
OSBORN JA:

Introduction

The first respondent, Shout Rock Cafes Pty Ltd (‘Shout Rock’), is the owner of a two storey residential building located within the municipality of the applicant, the City of Port Phillip (‘the Council’).
On 29 August 2017, a municipal building surveyor of the Council, issued a building order for minor works (‘BOMW’) pursuant to s 113 of the Building Act 1993 (‘the Act’) relating to a steel balcony forming part of the building.
The surveyor was of the opinion that the building was a ‘danger to life, safety or health of any member of the public using the building …’. The BOMW also records that it was issued because:
The condition of the existing balcony structure located at the rear/South side of the existing residence has deteriorated and is in a state of disrepair, is considered unsuitable for its intended use and is in possible risk of structural failure.
The BOMW required Shout Rock as the owner of the building to carry out the following building work:
Restrict access from all doors leading to the balcony from the upper level and all doors leading to the lower level outdoor space to the rear/South side of the existing residence. The doors are to be mechanically fixed shut with the use of screws or other permanent fixing that cannot be removed without the use of a tool.
Shout Rock appealed the BOMW to the second respondent, the Building Appeals Board (‘the Board’), raising both procedural and substantive complaints.
Ultimately, in November 2019, the Board dismissed the appeal (save for varying the required date for compliance).
Shout Rock then sought leave to reopen its appeal. In April 2021, the Board refused this application.
Shout Rock subsequently applied pursuant to order 56 of the Supreme Court (General Civil Procedure) Rules 2015 for judicial review of the Board’s primary decision dismissing its appeal and for a series of ancillary determinations.
Section 113 of the Act applies to orders to carry out work of a ‘minor’ nature. It provides:
Subject to section 107, a municipal building surveyor or a private building surveyor may make a building order requiring the owner of a building, land on which building work is being or is proposed to be carried out or a place of public entertainment to carry out building work, protection work or other work required by the regulations to be carried out without first serving a building notice if the building surveyor is of the opinion that the work required to be carried out is of a minor nature.
In the judicial review proceeding, Shout Rock contended that the BOMW was invalid because the Board had erred by:
(a)using the power conferred by s 113 as a means to restrict access to part of the building;
(b)improperly characterising the work the subject of the order as minor; and
(c)failing to establish the circumstances necessary to enliven the power in s 113.
The making of the judicial review application with respect to the Board’s substantive decision and two preliminary determinations, was out of time. Tsalamandris J extended time with respect to Shout Rock’s central complaints and accepted that the Board’s decision was vitiated by errors of law and that the BOMW was void. Her Honour held that:
(a)the phrase ‘building work, protection work or other work required by the regulations’ should be read conjunctively so that building work and protection work which may comprise the subject matter of a BOMW must be work ‘required by the regulations’. The works required by the BOMW were not required by the regulations; and
(b)the Board erred in deciding that that the power to require minor works extended to a power to restrict access to the balcony.[1]
[1]See Shout Rock Cafes Pty Ltd v City of Port Phillip [2022] VSC 615 (‘Reasons’).
Her Honour further ordered that the Council pay Shout Rock’s costs on a standard basis.[2]
[2]See Shout Rock Cafes Pty Ltd v City of Port Phillip (Costs Ruling) [2023] VSC 23 (‘Costs Reasons’).
The Council now seeks leave to appeal the decision of the trial judge with respect to the conjunctive construction of the description of the works which may be the subject of a BOMW. The proposed ground of appeal is:
The primary judge erred in holding that the phrase ‘building work, protection work or other work required by the regulations’ in s 113 of the Building Act 1993 (Vic) should be read conjunctively such that the words ‘building work’ and ‘protection work’ are qualified by the words ‘required by the regulations’, rather than being interpreted as simply bearing their meanings as defined in the Act.
Shout Rock seeks to support the conjunctive construction of the provision in issue and submits in the alternative that if that construction is rejected, the error complained of did not vitiate the trial judge’s conclusion that the BOMW was beyond power.
In the further alternative, Shout Rock seeks to raise a series of contentions which the trial judge found it unnecessary to determine.
Finally, Shout Rock seeks leave to cross-appeal and set aside the costs order made in its favour on a standard basis in respect of the judicial review proceeding, and to substitute an order giving it costs on an indemnity basis.
Both at first instance and before this Court, the Board has indicated that it will abide by the decision of the Court in accordance with accepted practice.[3]
[3]R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13, 35.
For the reasons that follow, we have concluded that:
(1)the conjunctive construction should be rejected; but
(2)the BOMW was beyond power because it was in substance an order with respect to the entry into, use and occupancy of, the balcony; and
(3)it is inappropriate to attempt to resolve Shout Rock’s further contentions; and
(4)leave in respect of the cross-appeal seeking indemnity costs should be refused.

The statutory scheme

The Act contains provisions directed to two overriding principal purposes:
(a)the establishment and enforcement of appropriate standards for building works (‘the standards objective’); and
(b)the prevention and remediation of hazards to the safety of persons and property arising from the condition of buildings (‘the safety hazards objective’).
The standards objective is reflected in the first three purposes stated in s 1 of the Act, namely:
(a) to regulate building work and building standards; and
(b)to provide for the accreditation of building products, construction methods, building components and building systems; and
(c)to provide an efficient and effective system for issuing building and occupancy permits and administering and enforcing related building and safety matters and resolving building disputes; …
It is further reflected in the objective stated by s 4(1)(d):
(d)to facilitate the adoption and efficient application of—
(i)national building standards; and
(ii)national plumbing standards;
In turn, the Act both makes comprehensive provision for the promulgation of regulations and makes clear that such regulations are to be utilised as the primary determinant of the appropriate standard of building works.
The safety hazards objective is reflected in the reference to safety matters in the purpose stated in s (1)(c) above and in the objectives stated in ss 4(1)(a) and (c):
(a)to protect the safety and health of people who use buildings and places of public entertainment;
…
(c)to promote plumbing practices which protect the safety and health of people and the integrity of water supply and waste water systems;
These objectives are given direct effect by the controls on occupancy contained in pt 5 of the Act and the provisions for the enforcement of safety and building standards contained in pt 8. Parallel enforcement provisions relating to plumbing work are contained in div 7 of pt 12A of the Act.
Part 2 of the Act provides for building standards. Section 7 states:
(1)The Governor in Council may make regulations for or with respect to prohibiting or regulating—
(a)the construction, use, maintenance, demolition and removal of buildings;
(b)any matter relating to the safety of buildings and places of public entertainment;
(c)the use and maintenance of places of public entertainment.
(2)Without limiting the generality of subsection (1), regulations under this Part may—
(a)provide for any matters set out in Part 1 of Schedule 1; and
(b)establish standards and requirements relating to any matter referred to in subsection (1)(a), (b) or (c) or Part 1 of Schedule 1; and
(c)require the carrying out of building work and maintenance on existing buildings and building work.
(3)The standards established by the regulations may be expressed in terms of performance, types of material, methods of construction or in other terms.
(4)The regulations may provide for buildings constructed with particular materials, designs or methods of construction to be deemed to satisfy the prescribed standards.
(5)The regulations may apply to existing buildings, whether or not building work is being or is proposed to be carried out on those buildings.
The following aspects of this provision may be noted:
•Regulations are intended to regulate matters not only relating to building works (s 7(1)(a)) but also matters relating to the safety of buildings (s 7(1)(b)).
•The power extends to existing buildings and is not restricted to new works (s 7(5)).
•The power extends to requiring the carrying out of building work and maintenance on existing buildings (s 7(2)(c)).
Part 1 of sch 1 to the Act elaborates the relevant regulation making powers. These include the power to make regulations with respect to the following matters:
2.       Form and contents of plans and specifications for building work.
3.       Preparation of land for building work.
4.       The construction of buildings.
…
6.The use and testing (including the destructive testing) of specified building products and materials.
7.Structural strength, integrity, stability, durability and insulating properties of building work and materials.
8.Fire prevention, fire fighting equipment and precautions and other emergency installations, services and equipment.
…
17.The construction and maintenance of floor, wall and roof coverings and of finishes to buildings.
18.The construction and maintenance of lifts and lift-shafts in buildings.
…
20.Utility, safety and hygiene services, installations and equipment located in, or related to, buildings and places of public entertainment.
…
23.The protection of adjoining property.
…
28. Use and maintenance of buildings and places of public entertainment including use and maintenance and replacement of services, installations and equipment referred to in this Schedule.
…
32.The provision of certificates as to compliance with any or all of the building regulations or with respect to any other matters under the building regulations.
…
34. The safety of buildings and places of public entertainment.
Section 8 provides that the building regulations may empower a municipal council to make local laws for or with respect to any matter set out in pt 1 of sch 1. By s 8(3), such a local law ‘is taken to be a building regulation in force in relation to the municipal district’.
Section 9 provides that the building regulations may adopt any matters contained in the Building Code of Australia ‘or any other document as in force or as issued or published at a particular time or as in force or as issued or published from time to time’. It is common ground that the Building Code of Australia has been substantially adopted by the regulations.
Before turning to the further provisions of the Act, we pause to observe that the matters listed in pt 1 of sch 1 enable the making of regulations with respect to each of the categories referred to in s 113 in respect of BOMWs, i.e. building work, protection work and other work. The following definitions contained in s 3 of the Act bear on these provisions.
building includes structure, temporary building, temporary structure and any part of a building or structure;
…
building work means work for or in connection with the construction, demolition or removal of a building;
…
construct, in relation to a building, includes—
(a)build, re-build, erect or re-erect the building; and
(b)repair the building; and
(c)make alterations to the building; and
(d) enlarge or extend the building; and
(e) place or relocate the building on land.
…
protection work means—
(a) permanent or temporary work of—
(i)underpinning, including the provision of vertical support, lateral support, protection against variation in earth pressures, provision of ground anchors and other support for adjoining property; or
(ii)shoring up of adjoining property; or
(iii)overhead protection for adjoining property; or
(iv)other work designed to maintain the stability of adjoining property or to protect adjoining property from damage from building work; or
(b)any work or use of equipment necessary for the provision, maintenance and removal of work referred to in paragraph (a)—
whether or not the work or equipment is carried out or used on, over, under or in the air space above the land on which the building work is or is to be carried out or the adjoining property.
These definitions must be, and are, broad and flexible in order to prospectively accommodate changes in building practices and materials.
We further note that ss 14 and 15 of the Act foreshadow the importance of the regulations to the subsequent scheme of the Act. Section 14 provides for the accreditation of building products and construction methods in accordance with the regulations.
Section 15 further provides:
The relevant building surveyor must not refuse to approve building work on the ground that any building product, construction method, design, component or system connected with the building work is unsatisfactory if the building product, construction method, design, component or system complies with—
(a)an accreditation given by the Building Regulations Advisory Committee or a person or body referred to in section 14(1), which is in force; or
(b)a certification or an approval given under any other accreditation system or process prescribed by the regulations, which is in force.
Part 3 of the Act provides for building permits as the primary mechanism for the regulation of construction work.
Section 16(1) requires a building permit for the carrying out of building works by creating an offence for carrying out such works unless a building permit has been issued or is in force.
Section 16(2) further requires compliance not only with a building permit but also the Act and the regulations:
A person must not carry out building work unless the work is carried out in accordance with this Act, the building regulations and the building permit issued in relation to that work.
Sections 16(3), (4), (4A) and (5) create subsidiary obligations on the part of owners of land, building practitioners, endorsed building engineers, architects and builders.
In turn, s 24 requires a building surveyor to refuse to issue a building permit unless they are satisfied that the building work will comply, inter alia, with the Act and the regulations. Section 24(2) provides:
Subject to section 24A and Division 4, the relevant building surveyor must not issue a building permit that imposes on the applicant lesser or greater standards or requirements than those prescribed by this Act or the building regulations, unless permitted to do so by this Act or the building regulations.
Part 10 provides for the Board and its jurisdiction. Sections 138(1)(a) and (b) provide:
(1) An appeal may be made to the Building Appeals Board against—
(a)the refusal or deemed refusal of a permit; or
(b)the imposition of a condition on a permit other than a prescribed condition or a condition required by or under this Act or the regulations to be included in a permit; …
Section 144(1) further provides:
(1)If the building regulations leave a matter to be determined or approved by a person or body or confer a similar discretion on a person or body, the owner of the building or land who requests the determination to be made, approval to be given, or discretion to be exercised may appeal to the Building Appeals Board against—
(a)that determination or approval or the exercise of that discretion; or
(b)the failure within a reasonable time, or refusal to make that determination, give that approval or exercise that discretion.
Unusually, in terms of the methodology of land use regulation in this State, s 160 also provides that applications can be made to the Board for a determination that a provision of the building regulations does not apply, or applies with specified modifications or variations, to a building or land specified in the application.[4] Such an application can be made by nominated persons including the owner and the municipal building surveyor.[5]
[4]Section 160(2).
[5]Section 160(3).

The regulations are thus the cornerstone of the building standards that are required to be imposed by building permits by way of a comprehensive and detailed scheme.
Part 4 of the Act provides for the inspection of building work. The power to inspect in div 1 of pt 4 is complemented by powers to give directions to fix building work in div 2 of pt 4. Following an inspection, a municipal building surveyor or authorised person[6] may give directions to fix building work in the circumstances described in ss 37A and 37B. Each section provides that the power arises if after an inspection, the relevant officer believes on reasonable grounds that the building work fails to comply with the Act, the building regulations or the relevant building permit. In turn, s 37E provides:
A direction to fix building work may require the relevant person to do all or any of the following—
(a)carry out work so that the building work complies wholly or substantially with this Act, the building regulations and the building permit issued in relation to the building work;
(b)stop any further building work that may prevent the building work to which the direction applies from being adequately inspected, until the relevant building surveyor or authorised person is satisfied that a requirement under paragraph (a) has been complied with.
[6]Defined in s 37 and s 3 to be the Victorian Building Authority or a Victorian Building Authority inspector.
Section 138A gives a right of appeal to the Board against a written direction to fix building work.[7]
[7]Section 37C provides for the giving of either oral and written directions, however, a written direction is required in the case of non-compliance with an oral direction by operation of s 37D.
Part 5 of the Act provides for occupancy permits. If a building permit states that an occupancy permit is required, either for the whole or part of a building, a person must not occupy such a building or part of a building unless an occupancy permit has been issued under the Act.[8] Further, special provision is made for places of public entertainment.[9]
[8]See ss 39 and 40.
[9]See div 2 of pt 5.
These provisions do not bear directly on the issues in this case, save that they demonstrate that when necessary, the Act regulates occupancy and not simply building work, for safety purposes.
Part 6 of the Act provides for private building surveyors and does not require elaboration save that by its scheme the Act gives broadly parallel powers in many instances to both municipal building surveyors and private building surveyors.
Part 7 of the Act governs protection work in respect of adjoining property and, because of the relevance of the detailed terms of s 113 in the present case, requires some consideration. First, it can be observed that the provision of protection work to give support to adjoining property gives effect to what we have called the safety hazards objective.
Secondly, the scheme of the Act involves the sequential giving of notice to adjoining property owners by persons required to do so by the regulations, and the resolution of appropriate protection works by agreement with the adjoining owner, or by determination of the relevant building surveyor, or in the case of an appeal, by determination of the Board.[10]
[10]See ss 84–88.
In turn, by s 88(2) an owner who is required by the building regulations to carry out protection work in respect of an adjoining property must carry out the relevant works. Section 88(2) provides:
(2)The owner must carry out any protection work required by the building regulations—
(a)if the adjoining owner has agreed to the protection work, in accordance with that agreement; or
(b)if the relevant building surveyor has made a determination under this Part in respect of the protection work, in accordance with that determination; or
(c)if the Building Appeals Board has made a determination under Part 10 in respect of the protection work, in accordance with that determination.
Once again, it can be seen that the application of the building regulations is central to the scheme.
Part 8 of the Act is concerned with the enforcement of safety and building standards. As such, it gives effect both to the standards objective and the safety hazards objective we have identified.
Division 1 of pt 8 provides for emergency orders. Such orders may be made by the municipal building surveyor if they are of the opinion that the order is necessary because of a danger to life or property arising out of the condition or use or proposed use of a building, or the land on which building work is being or is proposed to be carried out, or a place of public entertainment.[11]
[11]Section 102.
An emergency order may require evacuation of a building or prevent entry, use or occupancy of a building and/or require the owner or occupier of a building to take or refrain from taking certain action including requiring them to carry out works.[12] Relevantly for the present case, s 104(1)(b) provides that an emergency order may require an owner or occupier:
to within a specified time stop building work or to carry out building work or other work necessary to make the building, land or place safe or to secure the building, land or place from access.[13]
[12]See ss 103–104.
[13]Emphasis added.
These provisions may be compared with s 113. That section contains no provisions authorising the giving of notice to vacate a building, the prevention of occupancy, nor the carrying out of work necessary ‘to secure the building, land or place from access’.
An emergency order is of a limited time duration and may be replaced by a building order given under the next succeeding provisions.[14]
[14]Section 105A.
Division 2 of pt 8 provides for building notices and building orders. Section 106 provides:
Subject to section 107, a municipal building surveyor or a private building surveyor may cause a building notice to be served on an owner of a building, land on which building work is being or is proposed to be carried out or a place of public entertainment if the building surveyor is of the opinion that any one of the following circumstances exists—
(a)building work has been carried out on the building, land or place without a building permit required by this Act, or in contravention of a building permit or this Act or the building regulations;
(b)the use of the building or place contravenes this Act or the building regulations;
(ba)safety or emergency services, installations or equipment have not been maintained in accordance with the occupancy permit and the regulations;
(c)the building or place is unfit for occupation or for use as a place of public entertainment;
(d)the building, land or place or building work on the building, land or place is a danger to the life, safety or health of any member of the public or of any person using the building, land or place or to any property.
Sections 106(a), (b) and (ba) give effect to the standards objective of the Act and make express reference to the regulations. Sections 106(c) and (d) give effect to the safety hazards objective of the Act with no reference made to the regulations.
We note in the context of outlining the requirements of s 106 and the requirement to give notice that s 113 expressly provides that a BOMW may be given ‘without first serving a building notice’. As the trial judge’s reasons record,[15] the parties accepted at first instance that the power under s 113 could not be validly exercised unless the municipal building surveyor first formed one of the opinions listed in s 106. With respect, this is difficult to reconcile with the scheme of the Act. It is true that the power contained in s 113 could not be exercised other than for the purposes of the Act. It is also true that if the municipal building surveyor formed one of the opinions set out in s 106 such a purpose would be shown. It does not follow, however, that s 113 is to be read as subject to the preliminary requirements of s 106 in circumstances where the notice requirements of s 106 are expressly stated to be inapplicable to the giving of a BOMW.
[15]Reasons, [122].
Section 108 provides for the form and content of a building notice and makes clear that it may be directed to the entry, use and occupation of a building or the carrying out of work.
(1)A building notice may require the owner of a building, land or place of public entertainment to show cause within a specified period—
(a)why entry to, or the use or occupation of the building, land or place should not be prohibited; or
(b) why the owner should not evacuate the building.
(1A)A building notice may require the owner of a building, land or place of public entertainment to show cause within a specified period why the owner should not carry out building work, protection work or work required by the regulations in relation to the building, land or place.
(2)A building notice must be in writing and must contain any matters required by the regulations.[16]
[16]Section 108(1A) is in different terms to those employed in the subsequent building order provisions in that it refers to the carrying out of ‘building work, protection work or work required by the regulations’. It does not refer to ‘other’ work. No party submitted that anything turned on this.
In turn, s 109 provides:
An owner may, in the manner specified in the notice, make representations to the relevant building surveyor about the matters contained in the notice.
Section 111 provides for completion of the show cause procedure and the making of different kinds of orders which embrace both restrictions on entry, use and occupation, and the carrying out of work:
(1)Subject to section 107, a municipal building surveyor or a private building surveyor may make a building order under this section after the end of the time allowed by the building notice for making representations.
(2)Before making an order, the relevant building surveyor must consider any representations made by the owner concerned.
(3)A building order under this section may—
(a)direct an owner or occupier to evacuate a building or land or a place of public entertainment within a specified time or times; and
(b)if an order under paragraph (a) is given, direct any person to vacate a building or land or a place of public entertainment within a specified time or times.
(4)A building order under this section may prohibit any person from entering, using or occupying a building, land or a place of public entertainment for a specified period unless permitted by the municipal building surveyor.
(5)A building order under this section may direct the owner of a building, land or a place of public entertainment to carry out building work, protection work or other work required by the regulations in relation to the building, land or place.
(6)A building order may require the owner of a building or land or a place of public entertainment to cause an inspection of that building, land or place to be conducted by a specified person within a specified time.
(7)A building order may require the owner of a building or a place of public entertainment or a builder to cause specified material used in that building or place to be tested (other than destructively tested) by a specified person within a specified time.
(8)A building order may require the owner of a building or a place of public entertainment that is a building, or a builder, to, in accordance with the regulations (if any), arrange for, within a specified time, a specified building product or material used in that building to be subjected to destructive testing conducted by a prescribed testing authority if the relevant building surveyor believes on reasonable grounds that the use of the building product or material is connected with a contravention of this Act or the regulations.
(9)An owner or builder referred to in subsection (8) must provide the results of the destructive testing of the building product or material to the relevant building surveyor or another person authorised by the relevant building surveyor to receive the results within the time specified in the building order.
In summary, a building order may require:
(a)evacuation of a building;
(b)a restriction on occupancy of a building;
(c)the carrying out of ‘building work, protection work or other work required by the regulations’;
(d)the carrying out of inspections; and
(e)the testing of materials.
We interpolate that, s 113 repeats and amplifies the language of s 111(5) with respect to the types of work which may be the subject of an order, but does not extend to any of the other matters provided for in s 111, including, in particular, orders with respect to the evacuation and occupation of buildings.
Section 112 provides for building orders to stop building work. Such orders may be made to achieve both the standards objective and the safety hazards objective of the Act.
Section 112(2) provides:
(2)The order may be made if, in the opinion of the relevant building surveyor, the building work—
(a)contravenes this Act or the building regulations; or
(b)is a danger to the life, safety or health of any member of the public or any person using the building, land or place or to any property; or
(c)affects the support of any adjoining property.
Such an order may be made without first serving a building notice.[17]
[17]Section 112(3).
Section 113 makes provision for a building surveyor to serve a BOMW in the terms we have referred to.[18] These terms adopt the phraseology of s 111(5) ‘building work, protection work or other work required by the regulations’, although, s 113 adds the words ‘to be carried out’ to this phrase. The section dispenses with the giving of a building notice but requires that the building surveyor be of the opinion that the work to be carried out is of a minor nature.
[18]See [9] above.
As the parties to this proceeding agreed, the context supports the view that the common words governing the subject matter of an order should be given the same meaning in both s 111(5) and s 113.
Section 114 provides for the form and service of a building order:
(1)A building order—
(a)must be in writing; and
(b)must specify the time or times within which the order must be complied with; and
(c)must contain any other matters required by the regulations.
(2)The relevant building surveyor must cause a building order to be served on the person to whom it is directed without delay after it is made.
By s 116, an owner may request the relevant building surveyor to amend or cancel the building order.
Contravention of an emergency order or a building order is an offence.[19]
[19]Section 118.
Further, if work required by an emergency order or a building order is not carried out by the owner, the municipal building surveyor may cause the work to be carried out[20] and recover the costs of such work.[21]
[20]Section 121.
[21]Section 123.
Section 142 provides for the appeal by an owner (and in respect of emergency orders, an occupier) to the Board against a building notice or a building order on a variety of grounds.
By s 146, the consequence of an appeal is a stay of a BOMW or building order requiring works.

The judge’s reasons

The trial judge first summarised the nature of the application before her, noting that Shout Rock sought to challenge:
(a)the determination of preliminary questions by the Board;
(b)the determination of a bias application by the Board;
(c)the substantive determination of the appeal by the Board;
(d)a first costs order made by the Board following the substantive determination; and
(e)a second costs order made by the Board following a refusal to reopen the appeal.
Her Honour then set out a summary of the powers given to a municipal building surveyor to make orders with respect to building work and protection work.
Her Honour then summarised the history of previous steps taken by the Council with respect to safety concerns relating to the balcony, noting that Shout Rock relied on this history to found an allegation that the BOMW was not issued in good faith. In September 2007, the Council under the hand of the then municipal building surveyor had issued a building notice under s 106 of the Act, requiring rusting and corrosion of the balcony to be remedied and other modifications to be made. The notice was followed by a building order which was appealed, and on appeal, amended by the Board. Shout Rock was subsequently charged with failing to comply with the amended order. The prosecution was successfully defended in the Magistrates’ Court on the basis that there was a reasonable doubt that the municipal building surveyor had inspected the balcony as required by the regulations governing the service of the building notice. The charge was dismissed on 24 October 2013.
In September 2014, Shout Rock issued Supreme Court proceedings challenging the validity of the initial building notice and building order (which had not been withdrawn). These proceedings were settled in September 2017, shortly prior to trial, on a basis which required that the municipal building surveyor issue an apology to one of Shout Rock’s principals for the stress and inconvenience caused to him by the initial building notice and building order, the Board’s subsequent amended order, and the Magistrates’ Court prosecution.
Her Honour then carefully set out the history of the BOMW the subject of the present proceedings and the convoluted course of proceedings on appeal before the Board. For present purposes, it is sufficient to note the following. First, the BOMW was issued on 29 August 2017 shortly prior to settlement of the initial Supreme Court proceedings. Secondly, in its determination dated 25 November 2019, the Board dismissed the substantive appeal before it for the following reasons:
The Board considers that permitting access to the balcony would pose an unacceptable risk, and that there is a possible risk of structural failure. The balcony is no longer suitable for its intended use and access to the balcony should be restricted, whilst the balcony is in its current state.
The Board has determined that fixing the doors to the balcony shut with the use of screws is appropriate and is work of a minor nature.[22]
[22]See Reasons, [88].
Her Honour next set out the different bases on which Shout Rock sought judicial review before stating:
At the commencement of the plaintiff’s oral submissions, it submitted that the primary focus of its application was that the BOMW (and the varied BOMW)[23] could not be used to prohibit access to part of a building using the power granted under s 113 of the Act, and that doing so resulted in a nullity. Whilst the plaintiff’s other grounds of judicial review were maintained, these were expressed to be secondary grounds, which were not actively pursued at the hearing.[24]
[23]The BOMW as varied by the Board as to date.
[24]Reasons, [115] (explanatory footnote added).
Her Honour went on to carefully summarise the parties’ submissions with respect to this primary ground of judicial review, before resolving whether special circumstances existed to justify an extension of time with respect to judicial review of the first three decisions challenged by Shout Rock (including the determination of the substantive appeal by the Board).
As her Honour recorded, Shout Rock contended the Board erred in law by:
(a)using the power conferred by s 113 as a means to restrict access;
(b)improperly characterising the work the subject of the BOMW; and
(c)failing to establish the circumstances necessary to enliven the power in s 113.

It is unnecessary for present purposes to further set out her Honour’s summary of the parties’ arguments, save to note, that from the outset, it is plain that Shout Rock contended that the Board erred in using the power granted by s 113 as a means to restrict access to the balcony and adjacent areas.[25]
[25]Ibid [117].
Her Honour then analysed the parties’ submissions and expressed the following conclusions. First, as a preliminary matter, Shout Rock should not be prevented from relying on grounds of review going to the validity of the BOMW which were not raised before the Board.[26]
[26]Ibid [163].
There is no challenge to this conclusion and it was, with respect, correct.
Next, her Honour accepted that the BOMW was void for two fundamental reasons. First, the phrase ‘carry out building work, protection work or other work required by the regulations’ should be read conjunctively so that the reference to ‘building work’ and ‘protection work’ relates to those types of work as required by the regulations.[27]
[27]Ibid [168]–[169].
Secondly, s 113 is not intended to be used as a means of circumventing the requirements of s 106 to s 111 in order to achieve the evacuation, or restriction of use of a building.[28]
[28]Ibid [170].
Her Honour went on to say:
Given the Council’s concern that the balcony was in a state that posed an unacceptable risk to safety, and that access to it should be restricted (but this was not an emergency), in accordance with Division 2 of Part 8, the following steps were required for a valid building notice to be issued:
1.First, the MBS [municipal building surveyor] must have been of the opinion that one of the circumstances set out at s 106 existed in order to justify the issuing of a building notice.
Pursuant to s 106(d), Mr Yannelis was of the opinion that the building was a ‘danger to life, safety or health of any member of the public using the building …’. Therefore, in accordance with the Act, circumstances existed for Mr Yannelis, as the MBS, to serve a building notice on the property owner.
2.Second, a building notice must have been issued in accordance with the content and form requirements of s 108.
Given Mr Yannelis was of the opinion that use of the balcony and terrace below should be prohibited, pursuant to s 108(1)(a), the building notice must have required the building owner to show cause, within a specified period, as to why entry to, or use of that part of the building, should not be prohibited.
3.Third, in accordance with ss 108 and 109, the building notice must have provided a time period for the building owner to make representations to the MBS as to matters contained in the building notice.
4.Fourth, after the time allowed for the owner to make representations has elapsed, in accordance with s 111(2), the MBS was then required to consider any such representations prior to making a building order.
5.Lastly, in the event that the MBS remained of the view that the s 106 circumstances existed to justify the making of a building order under s 111(4) to prohibit any person using the balcony or terrace below, then a general building order could have been issued. A general building order must comply with the form and service requirements at s 114.
However, Mr Yannelis did not take these steps. Instead, he sought to use the power conferred upon him as a MBS under s 113 to effectively prohibit the use of the plaintiff’s balcony and terrace. For the reasons given above, this was impermissible, irrespective of his concerns regarding the safety of the building.
Further, I also accept the plaintiff’s submissions that the Board’s reference to the use of screws as being appropriate demonstrates it incorrectly considered the requirements of s 113. It should have asked what work was required under the Regulations, and if so, whether such work was minor.
Having considered the text, context, and purpose of s 113, I am satisfied that it was unable to be used by either the Council or the Board in the way they purported to. For the reasons explained, s 113 is confined to works required by the Regulations, and the terms of the BOMW (and the varied BOMW) made no reference to any regulation which required the placing of screws on the balcony doors. I am satisfied that there was a fundamental error of law in deciding that the BOMW was a lawful means to restrict access to the balcony. Further, Mr Yannelis and subsequently the Board, erred in law in purporting to use the power under s 113 to achieve an objective that, under the scheme of the Act, required compliance with different provisions. The consequence of such errors is that the BOMW is void.[29]
[29]Ibid [173]–[176].
We interpolate that, on appeal, the Council submitted that her Honour’s decision was wholly dependant upon the conclusion which she reached as to the conjunctive construction of s 113. We do not accept that this is so. It is apparent from the course of her Honour’s reasons and her ultimate conclusions in [176] that she identified two fundamental problems with the BOMW.
Having reached these conclusions, her Honour returned to the question of extension of time setting out the relevant principles and identifying the circumstances relevant to the exercise of her discretion.[30] Her Honour then determined to grant an extension of time with respect to the challenge to the substantive appeal determination.[31] There is no challenge to this decision.
[30]Ibid [178]–[211].
[31]Ibid [212].
Having concluded that the BOMW issued by the municipal building surveyor and varied by the Board were nullities, the trial judge further concluded it was unnecessary to consider Shout Rock’s remaining contentions.[32]
[32]Ibid [213]–[214].

The parties’ submissions

In summary, the Council contends that the conjunctive construction should not be adopted because:
•The description of work which may be the subject of a BOMW should be read disjunctively;
•The text of s 113 does not require the defined terms ‘building work’ and ‘protection work’ to be given a narrow meaning;
•It is consistent with ordinary grammatical rules to read the qualifying words ‘required by the regulations’ as applying to works other than building work and protection work;
•Regulations regulate but do not require building work and protection work;
•The Act and the regulations do not give an identifiable meaning to the phrase ‘building work required by the regulations’ or ‘protection work required by the regulations’;
•Neither the Act nor the regulations specifically set out required building work in instances of illegal work or dangerous buildings on land. Rather, the Act leaves the determination of remedial consequences to the discretion of the relevant building surveyor;
•The disjunctive construction does not give unfettered powers to the building surveyor. The work must necessarily be minor;
•The use of parallel language in s 111(5) does not require or support the conjunctive construction; and
•The conjunctive construction results in inconvenient and impractical outcomes.
In summary, Shout Rock submits:
•The decision that the BOMW was invalid rested on alternative bases;
•The Council’s sole ground of appeal cannot be dispositive of the conclusion that the BOMW was invalid;
•The trial judge found that s 113 was not intended to be used to achieve the objectives of vacating or restricting use of a building. This finding is not challenged by the proposed ground of appeal;
•The conjunctive construction of s 113 should be upheld;
•The conjunctive construction reflects the text of s 113;
•The regulations themselves include a form provided for a BOMW which reflects the conjunctive construction;
•The Act demonstrates that the regulations are intended to regulate not only the construction but also the use, maintenance and safety of buildings;
•The Act imposes obligations with respect to protection work only on that class of persons required by the regulations;
•The conjunctive construction is supported by the scheme of the Act;
•Sections 104(1)(b), 111(5) and 113 should all be read consistently and conjunctively;
•Section 106 is a gateway provision which does inform the content of s 111(5).

Analysis

The resolution of the principal issues in this matter requires the interpretation of the Act by reference to its text, context and purpose in accordance with principles which are well understood.[33]
[33]Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, 381 [69] (McHugh, Gummow, Kirby and Hayne JJ); SAS Trustee Corporation v Miles (2018) 265 CLR 137, 149 [20] (Kiefel CJ, Bell and Nettle JJ), 157 [41] (Gageler J), 162–3 [64] (Edelman J); Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27, 46–7 [47] (Hayne, Heydon, Crennan and Kiefel JJ); Commissioner of Taxation (Cth) v Consolidated Media Holdings Ltd (2012) 250 CLR 503, 519 [39] (French CJ, Hayne, Crennan, Bell and Gageler JJ).
Before turning to the dispute with respect to the conjunctive interpretation of s 113, it is convenient first to deal with Shout Rock’s alternative submission. This raises the second basis upon which the trial judge held that the BOMW was invalid.
We agree that, in substance, by ‘restrict[ing] access’ the BOMW prohibited Shout Rock from entering and using the balcony and adjacent outdoor space and required Shout Rock to cease occupancy of them.
Section 113 is in marked contrast to the emergency order provisions and the building notice provisions contained in the Act. Section 113 contains no provision with respect to the evacuation of buildings or the entry, use or occupation of buildings. Further, unlike s 104(1)(b), it contains no ancillary power to require the works necessary to secure a building (including part of a building) from access.
In the course of oral submissions, the Council ultimately conceded that the BOMW might be regarded as being beyond power.[34] This concession was correctly made and is dispositive of the Council’s appeal. Whether or not the trial judge erred with respect to the conjunctive construction question, there was no vitiating error in her Honour’s decision that the BOMW was invalid. Section 113 did not empower the municipal building surveyor to control occupancy of the balcony and adjacent areas.

The conjunctive construction question

[34]More particularly, it was conceded:

(a)the municipal building surveyor could not use the general power relating to building work contained in s 113 to achieve outcomes relating to occupancy which are the subject of specific provisions in s 111;

(b)an order restricting access is not an order requiring building work, protection work or other work required by the regulations;

(c)the BOMW went beyond requiring minor works.

We accept that the two competing constructions contended for by the parties are open as a matter of ordinary language. The word ‘other’ may be used as introducing the residual category of ‘other work required by the regulations to be carried out’, or it may be read as implying that each category of work which may be the subject of a BOMW must be required by the regulations to be carried out.
The following matters favour the conjunctive construction which the trial judge preferred:
(a)A BOMW imposes an obligation to carry out work at the owner’s expense. Non-compliance is a criminal offence and may result in the municipal building surveyor causing the work to be carried out and the costs for the work being recovered from the owner. Each of these consequences is a material interference with an owner’s property rights. The nature of these consequences encourages a narrow construction of s 113.
(b)Whilst it is true that a BOMW is subject to the owner’s right to request amendment or cancellation pursuant to s 116 and is subject to the right of appeal, it is of some significance that, in the first instance, a BOMW is made without notice. Insofar as a BOMW is excepted from the notice requirements of s 106, this also encourages a narrow view of s 113.
(c)As we have sought to explain, the promulgation of standards by way of regulations is a central objective of the Act. In addition, regulations are the touchstones of the building permit process. The scope of the regulation making power is very broad and extends to regulating work and existing buildings. Part 1 of sch 1 makes clear that the regulation making power extends to each of the categories of work referred to in s 113, i.e. building work, protection work and other work. The significance that is accorded to the regulation making power elsewhere in the Act supports the view that the conjunctive construction is consistent with the broad scheme of the Act in respect of regulations.
(d)Section 113 is, in effect, a limited exception only to the provisions of s 111(5). Moreover, the gateway provisions of s 106 need not be read as governing the terms of s 111(5).
Conversely, there are a number of considerations which support the view that the conjunctive construction should not be accepted.
(a)Part 8 is concerned with the enforcement of both safety and building standards. The provisions relating to emergency orders and building orders other than BOMWs make this clear. The conjunctive construction does not give effect to the safety hazards objective. As the Council submitted, it is inherently unlikely that the legislature intended to constrain the operation of s 113 in situations of concern for safety.
(b)The parties accept that the relevant phrase ‘building work, protection work or other work required by the regulations’ must be given the same meaning in s 111(5) and s 113. When regard is had to ss 106(c) and (d), it is apparent that building orders may potentially be made with respect to buildings (including parts of buildings) which are unfit for occupation or which are ‘a danger to the life, safety or health of any member of the public or of any person using the building, land or place or to any property’ without reference to the regulations. The purposes identified are ones of public interest and, the powers given to achieve them should be upheld and given full effect.
(c)Whilst the making of a building order to carry out work is potentially onerous, so too of course is an order to vacate and cease the occupancy of a building. In any given situation, the rectification of a defective element in a building may be considerably less costly and onerous than the cost to an owner of closing a building or part of a building. The right to seek amendment of a building order and the right to appeal both give rise to the possibility that an owner will raise legitimate arguments of parsimony if a disproportionate remedy is sought by the building surveyor. It may well be that the carrying out of building work or protection work will be the most cost effective solution to a given problem.
These possibilities support the view that s 111(5) and s 113 are intended to form part of a flexible system of discretionary powers which are subject to checks and balances. As such, they should not be read down in the manner for which Shout Rock contends. The minimisation of the burden upon owners will result from the proper and parsimonious selection of the appropriate remedy in a particular case. It will not necessarily result from limiting the remedies available to a building surveyor. On the contrary, the conjunctive construction will almost inevitably result in the imposition of orders to vacate and cease the occupancy of buildings under s 111 in circumstances where this may be, as a matter of practical reality, a disproportionate response to the problem in issue.
(d)It is inherent in the nature of the safety hazards in issue that they may arise in circumstances which are not anticipated either because of the use of novel methods of construction, or the occurrence of environmental circumstances which are not anticipated. We take judicial notice of the fact that from time to time the understanding of the safety or adequacy of building materials or methods and of environmental risks in particular circumstances, has fundamentally changed.
The Council submitted that the coverage of the building regulations is currently inadequate because they do not adequately control buildings which predate their introduction or buildings which were illegally constructed. As a matter of strictness, the construction of the Act may be informed by the regulation making power but cannot be determined by reference to the building regulations themselves. It is sufficient for the purposes of the argument, however, to postulate that it is realistically possible that gaps in the applicability or adequacy of the regulations may exist or may develop with the use of new construction methods or materials or new understanding of environmental constraints.
These possibilities encourage the view that s 113 should be construed so as to give effect both to the standards objective and the safety hazards objective of the Act. The conjunctive construction would give effect to the standards objective only and would deprive a building surveyor of material powers to address the consequences of gaps in the regulations.
(e)A further specific difficulty with the conjunctive construction is that the s 106 building notice regime is directed to the contravention of both the Act and the regulations (see ss 106(a) and (b)). Similarly, building orders to stop the building work may be made if, in the opinion of the building surveyor, the building work contravenes the Act or the building regulations (s 112(2)(a)).[35] The conjunctive construction would exclude the making of orders under s 111(5) or s 113 to carry out building work or protection work required by the Act, or necessary to remedy breaches of the Act as distinct from the regulations. Thus, building work commenced or undertaken without a permit under the Act would not be caught. It will be recalled that the definition of building work extends to demolition and removal of a building. It may well be that such work is necessary to achieve compliance with the Act but cannot be said to be ‘required by the regulations’.
[35]The notice to fix work provisions also cover work in contravention of both the Act and the regulations.
(f)The protection work provisions which we have summarised above further illustrate the problem. Part 7 of the Act imposes requirements both under the Act and the regulations. The effect of agreement by an adjoining owner to proposed protection work is governed by the Act (see ss 86 and 88). If an owner commences work in breach of s 88(1) or fails to carry out work in accordance with s 88(2), the owner acts in breach of the Act rather than in breach of a requirement of the regulations, albeit that the regulations define the class of owners upon whom the obligations rest and may define the work required. More particularly, if there is an agreement between adjoining owners, the requirement to carry out works in accordance with that agreement arises under s 88(2)(a) of the Act and not under the regulations. The same may be said with respect to obligations under a determination by a relevant building surveyor under s 88(2)(b) or a determination of the Board under s 88(2)(c). It is difficult to impute an intention to the legislation which excludes building orders requiring compliance with the Act (as distinct from the regulations) in respect of protection work from the ambit of s 111(5) and s 113. Nonetheless, the conjunctive construction makes the regulations the exclusive legislative determinant of what maybe required by way of protection work.
(g)Another potential anomaly arising from the conjunctive construction is demonstrated by reference to the provisions of the Act relating to directions to fix work. Section 37E permits a direction to be given to carry out work so that building work ‘wholly or substantially’ complies with the regulations, the Act or the relevant building permit. By contrast, the conjunctive construction would not allow a building order directed to substantial compliance with the regulations. It would only permit an order directing works ‘required by the regulations to be carried out’. This outcome is on the face of it anomalous when regard is had to s 37E and is potentially highly disadvantageous to a building owner.
(h)The Council submitted that in general the regulations do not ‘require’ work but set standards for building work. As we have said above, the construction of the Act cannot ultimately be determined by the content of the regulations. Further, insofar as the regulations make provision for matters such as the minimum height of a balcony rail, they can be said to require work to achieve that height. Nonetheless, the Council’s submission points out the potential for ongoing controversy in the interpretation of the Act by reference to the regulations if the conjunctive interpretation is adopted. It is unlikely that this outcome was intended by the legislature.
(i)The Council further submitted that it was of particular concern that the regulations cannot impose specific requirements with respect to what should be done by way of rectification or interim safety measures in case of partial fire damage to a building. The concern arises in cases which do not meet the requirements of an emergency order. What is required will depend on the extent and nature of the damage in the circumstances of the case. It cannot realistically be prescribed by regulations. The same submission might be made with respect to damage caused by flood, earthquake or landslip. There is some force in this submission.
(j)If the conjunctive construction is not adopted, the power under s 113 will still be qualified by:
(i) a need to act for the purposes of the Act;
(ii)     the fact that the works must be minor;
(iii)    the right to seek amendment or cancellation of the BOMW; and
(iv)    the right of appeal to the Board.
(k)The use in s 104(1)(b) of the phrase ‘other work necessary to make the building, land or place safe or to secure the building, land or place from access’ does not qualify the phrase ‘building work’ in s 104(1)(b). The power to order emergency work is fundamentally conditioned by the requirement pursuant to s 102 that the municipal building surveyor be of the opinion that the order is necessary due danger to life or property. Section 104(1)(b) does not further qualify this condition with respect to building work by additionally requiring that the work be ‘necessary’. Accordingly, s 104(1)(b) does not support the conjunctive construction of s 113 by analogy.

Having regard to the above matters, the conjunctive construction should not be accepted. The word ‘other’ contained in s 113 simply introduces the third category of work which may be the subject matter of a BOMW, i.e. ‘other work required by the regulations to be carried out’. This construction is supported by the factors to which we have referred, and in particular, the provisions of s 106 giving effect to the safety hazards objective of the Act, the need to give s 111(5) full force and effect, and the need to avoid anomalous outcomes.

The notice of contention

By notice of contention, Shout Rock further seeks to uphold the trial judge’s decision on a series of grounds which go to invalidity arguments which her Honour found unnecessary to decide. These include the contentions that Shout Rock was denied procedural fairness by the Board and that the BOMW is void for unreasonableness.
Given our conclusion with respect to the validity of the BOMW, it is also unnecessary for us to canvass these matters.

The cross-appeal as to costs

By a separate costs ruling dated 6 February 2023, the trial judge awarded Shout Rock the costs of the proceeding on a standard basis.
In so doing, her Honour rejected an application by Shout Rock for costs on an indemnity basis.
In her ruling on costs, the trial judge set out the relevant principles governing her discretion.[36] These is no dispute that the relevant principles were properly identified.
[36]Costs Reasons, [13]–[21].
Her Honour applied the dictum of J Forrest J in Love v Kempton:[37]
Before making such an order, the Court needs to be satisfied that the conduct of the party warrants the ordering of costs on an indemnity basis. Special circumstances must be demonstrated ‘which lift the case out of the ordinary’. Such conduct includes the commencement or continuation of proceedings in wilful disregard of known facts or clearly established law, as well as the commencement or continuation of such proceedings for an ulterior motive.[38]
[37][2010] VSC 254.
[38]Ibid [19] (citations omitted) quoted in Costs Reasons, [20].
Her Honour summarised the basis of Shout Rock’s application as follows:
In considering whether special circumstances exist, the conduct of a litigant giving rise to or inviting the litigation may be relevant.
The plaintiff contended that the first defendant maintained the BOMW and the current proceeding in ‘wilful disregard of known facts or clearly established law, for an ulterior motive, in circumstances where the defence had no prospects of success.’ It stated that the first defendant’s prior conduct, which including the appeal to the second defendant and the criminal prosecution, was relevant to the Court’s assessment of its conduct as a litigant. The plaintiff emphasised that the balcony, the subject of the BOMW, had been ‘subjected to erroneous actions of the first defendant ... since 2007’, and that this could be characterised as ‘“high handed” and contrary to achieving the purposes of the [Building] Act.’ Further, the plaintiff contended that as it had been required to defend two actions brought by the first defendant, which it said were both subject to jurisdictional error, justice required indemnity costs to be awarded.
The plaintiff also submitted that the public interest would be best served by an award of indemnity costs to ‘restore confidence in the administration of justice and collaterally to send a message to public authorities entrusted with the administration of justice that a subject should not be exposed to legal costs in defending against maladministration, recklessness, or for a reason other than for the purposes of an Act.’[39]
[39]Costs Reasons, [21]–[23].
The Council resisted the application on the basis that it had sought to exercise powers in good faith, which it believed on reasonable grounds were available under the Building Act. Its position had been upheld by the Board as an independent statutory tribunal and the Council had participated in the Supreme Court proceedings in circumstances where it was necessary to do so in order to provide a contradictor in respect of matters relevant to its statutory function.[40]
[40]Ibid [24].
Her Honour concluded:
I am not persuaded that there are special circumstances in this case to justify a departure from the usual order as to costs. That is, that ‘costs follow the event’ and the successful party is entitled to an award of standard costs in its favour. There is no direct evidence before me that the first defendant had an ulterior motive in respect of its conduct prior to and during the proceedings. The plaintiff’s written submissions in support of its application for indemnity costs are, in the main, an attempt to revisit the merits of its primary application as well as to re-agitate much of the history between the parties. Notwithstanding my finding that the first defendant did not comply with the requirements of s 113 of the Building Act, I am not prepared to infer that the first defendant instituted or maintained the proceeding for an ulterior purpose, or in circumstances where it was patently unreasonable to do so. Nor am I prepared to infer that the first defendant acted either before or during the proceedings in a reckless manner or in wilful disregard of known facts or clearly established law. As such, I am not persuaded that special circumstances exist to justify the making of an indemnity costs order in its favour.
Further, in exercising my discretion as to the appropriate order for costs in this case, I am not minded to take into account a finding by another judicial officer in a different proceeding. Notwithstanding that the Magistrates’ Court matter related to the balcony (the subject of the BOMW), the Magistrate’s ruling was not made in respect of the first defendant’s powers under s 113 of the Building Act. Therefore, I consider it irrelevant to the exercise of my discretion in respect of the basis on which to award costs in the proceeding before me.[41]
[41]Ibid [25]–[26] (citations omitted).
Accordingly, her Honour awarded Shout Rock its costs of the proceeding on a standard basis.
Shout Rock now seeks to appeal this ruling on the following grounds:
1.The Honourable Justice failed to take into account the past conduct of the City of Port Phillip which was relevant to its conduct as a litigant in the proceeding and to the issue of indemnity costs.
2.The Honourable Justice erred in holding:-
1. That the Proceedings were not defended in circumstances where it was patently unreasonable to do so.
2.that an inference could not be made the proceedings were defended by the City of Port Phillip for a ulterior motive, in circumstances where the defence had no prospects of success.
3.The Honourable Justice erred by not providing adequate reasons.
4.The Honourable Justice erred by granting a[n] indemnity certificate to the City of Port Phillip in circumstances where the proceeding was maintained where the defence had [no] prospect of success and where it was patently unreasonable to do so.
These proposed grounds fall to be assessed by reference to the well-known principles stated in House v The King.[42] Further, as this Court recently observed in Viterra Malt Pty Ltd v Youil:
In relation to costs decisions, this Court has repeatedly observed that appeals from orders as to costs are treated as exceptional and require this Court to exercise particular restraint. The authorities explain that the principal rationale for that caution is that the trial judge is almost always best placed to assess in whose favour and to what extent the discretion as to costs should be exercised. That is particularly so after a long and complex trial. The test is not whether we should have exercised the discretion in the same way as the judge did, but whether there was a ground on which he could reasonably have made the order in question.[43]
[42](1936) 55 CLR 499, 504–5 (Dixon, Evatt and McTiernan JJ).
[43]Viterra Malt Pty Ltd v Youil [2023] VSCA 304, [42] (Sifris, Walker and Whelan JJA) (citations omitted).
In our view, the application for leave to appeal with respect to costs must be refused for the following reasons.
Proposed ground 1 must fail. It is plain that her Honour did take into account the history of past conduct of the Council. That history is summarised in her Honour’s substantive decision under the heading ‘Events prior to the BOMW’.[44] That summary is adopted in the costs decision.[45] Further, it is plain from the course of her Honour’s reasoning, including reference to particular events such as the Magistrates’ Court decision, that her Honour did have regard to the history of the dispute between the parties.
[44]Reasons, [35]ff.
[45]Costs Reasons, [7].
Shout Rock’s real complaint is that her Honour did not draw inferences from that history that justify the award of indemnity costs. A failure to draw inferences is not a failure to have regard to underlying facts. No such failure has been established. In oral submission, Shout Rock emphasised that the BOMW was made at a time when the validity of the initial building notice and building order were in issue in Supreme Court proceedings. These facts do not compel the inference for which Shout Rocks contends.
Proposed ground 2 raises two matters. The first is that her Honour was bound to conclude that the proceedings were defended when it was patently unreasonable to do so. In our view, it was well open to her Honour to fail to be persuaded of this fact in circumstances where:
(a)Shout Rock faced a material threshold hurdle as a result of the requirement for extension of time in respect of its core complaint concerning the Board’s substantive determination;
(b)The Board had independently upheld the view that the BOMW was valid. From the Council’s point of view, the Board was an expert tribunal with respect to the matters in issue. Its subsequent reliance upon the decision of the tribunal cannot be said to be unreasonable.
(c)Interpretation of the Act is not free from difficulty and was not relevantly the subject of binding determination by a superior court; and
(d)The proceeding raised issues of public interest concerning the ambit of powers which the Council was bound to exercise for the good government of the municipality.
It was also open to her Honour to fail to be persuaded that the proceeding was defended for an ulterior motive:
(a)As her Honour found, there was no direct evidence the Council had an ulterior motive in respect of the conduct in issue prior to, and during, the proceeding;
(b)The evidence (including the decision of the Board made after two inspections of the premises) supported the view that the Council, by its municipal building surveyor, formed a bona fide opinion that the balcony was defective;
(c)The view of the municipal building surveyor as to his consequent powers, although misguided, was upheld by the Board;
(d)It was proper to act as contradictor to Shout Rock’s challenge with respect to the Board’s decision;
(e)The statutory scheme which was in issue was not free from difficulty nor uncontroversial in its application;
(f)The allegation made by Shout Rock was in effect one of fraud. As such, it required proof commensurate with its seriousness.[46]
[46]Briginshaw v Briginshaw (1938) 60 CLR 336; Evidence Act 2008, s 140.
Proposed ground 3 asserts that the trial judge failed to give adequate reasons. Her Honour’s ruling makes clear her path of reasoning. Shout Rock’s real complaint is simply that she was not persuaded to draw inferences which it urged upon her. Her Honour’s reasons for her conclusions in this respect are adequately explained in her ruling.
Proposed ground 4 goes to an order made under the Appeals Costs Act 1998. This order is not something in respect of which Shout Rock has an interest and, in our view, Shout Rock has no standing to challenge it.[47]
[47]Moreover, no objection was taken to the grant of an indemnity certificate at first instance.
Accordingly, leave to appeal with respect to the trial judge’s costs order in favour of Shout Rock is refused. We add for completeness that, on one view, the rejection of the contention that the Council acted with malice would justify a refusal to make any award of costs in favour of Shout Rock. The ultimate exercise of the judge’s discretion was, in this sense, generous to Shout Rock.

Conclusion

We will grant leave to appeal with respect to the substantive decision of Tsalamandris J resulting in orders 1, 2, 3, 4 and 5 of the Court’s order of 6 February 2023, but dismiss the appeal.
The application for leave to appeal the costs order comprising orders 6, 7 and 8 of the Court’s order of 6 February 2023 is refused.

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[2023] VSCA 327

19 December 2023