D'Agostino v The Greater Shepparton City Council
[2019] VSC 199
•29 March 2019
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2017 03566
| RICHARD CHARLES D’AGOSTINO | First Appellant |
| v | |
| ROCKY PAUL D’AGOSTINO | Second Appellant |
| - and - | |
| THE GREATER SHEPPARTON CITY COUNCIL | Respondent |
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JUDGE: | MOORE J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 13 August 2018 |
DATE OF JUDGMENT: | 29 March 2019 |
CASE MAY BE CITED AS: | D’Agostino v The Greater Shepparton City Council |
MEDIUM NEUTRAL CITATION: | [2019] VSC 199 |
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COSTS — Appeal — Victorian Civil and Administrative Tribunal — VCAT proceeding review of local Council’s decision made under Local Government Act 1989 — Special Charge — Application for costs by successful applicant – Tribunal refused costs in one of the appellant’s applications — Consideration of entitlement to costs — ss 185, 185AA and 185AB of the Local Government Act 1989 — s 109 of the Victorian Civil and Administrative Tribunal Act 1998.
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APPEARANCES: | Counsel | Solicitors |
| For the Appellants | Mr L Watts | |
| For the Respondent | Mr R Appudurai | Russell Kennedy |
HIS HONOUR:
Introduction
The plaintiffs are brothers (the D’Agostinos) and the owners of two large parcels of land located at the Midland Highway in Shepparton East. On 15 September 2015, the defendant, the Greater Shepparton City Council (the Council) resolved to declare a special charge under the Local Government Act 1989 (the Local Government Act) for the purpose of defraying expenses relating to the construction of the Shepparton East Drainage Scheme (the scheme). The land owned by the D’Agostinos is within the area of the scheme. In September 2015, they received notices from the Council seeking to impose on them special charges in respect of the scheme totalling more than $225,000.00.
The D’Agostinos and two other landholders who were also made liable to contribute a special charge to the scheme all commenced proceedings in the Victorian Civil and Administrative Tribunal (the Tribunal) challenging various aspects of the scheme.
Amongst other things, the D’Agostinos challenged the validity of the scheme under s 185AA of the Local Government Act, on the grounds that there were defects in the statutory process leading to the declaration of the special charge. They also commenced proceedings under s 185 of the Local Government Act seeking to review the Council’s decision to impose the special charge, in the event that the challenge to the validity of the scheme was unsuccessful.
The proceedings under ss 185 and 185AA were heard together. The D’Agostinos were successful in their challenge to the validity of the scheme and on 7 April 2017 the Tribunal issued an order declaring that the Council’s decision to declare the scheme was invalid. As a consequence, it was unnecessary for the Tribunal to hear and determine the applications made under s 185 of the Local Government Act.
Following their successful challenge to the validity of the scheme, the D’Agostinos sought orders from the Tribunal that the Council pay them $226,242.83 for their costs and disbursements and $13,693.00 by way of fees reimbursement for Tribunal application and hearing fees.
On 8 August 2017, the Tribunal granted the D’Agostinos’ application for the reimbursement of application and hearing fees. The Tribunal also ordered pursuant to the Victorian Civil and Administrative Tribunal Act 1998 (the Act) that the Council pay 50% of the D’Agostinos’ costs reasonably incurred in the proceeding under s 185 of the Local Government Act. Their application for costs in the proceeding under s 185AA of the Local Government Act was refused. The Tribunal ordered that each party bear its own costs in that proceeding.
On 19 February 2018, the D’Agostinos were granted leave to appeal the orders made by the Tribunal. This judgment concerns the disposition of the following question of law relating to the Tribunal’s orders of 8 August 2017 for which leave to appeal was granted:[1]
Did the Deputy President failed [sic] to take into account the matters he was bound to take into account in exercising his discretion under s 109 of the VCAT Act?
[1]During the hearing of this matter, the D’Agostinos abandoned two other questions of law for which leave to appeal was granted on 19 February 2018. Those questions were: (1) Whether it was fair and just that in declining to order that the Respondent pay the Applicants’ costs of the proceeding that VCAT exclude from consideration those parts of the proceeding that were not the subject of the preliminary determination?; and (2) Was it fair and just not to award any costs to the Applicants by reason of the two citations under section 78 of the VCAT Act?
Background
On 16 October 2015, the D’Agostinos commenced proceeding No P2187/2015 in the Tribunal under s 185 of the Local Government Act (the s 185 proceeding) in which they challenged the quantum of the special charge imposed by the Council under the scheme in respect of their properties.
On 11 December 2015, the D’Agostinos commenced proceeding No P2594/2015 in the Tribunal under s 185AA of the Local Government Act (the s 185AA proceeding) seeking declarations that the Council’s declaration to levy a special charge was invalid.
Both proceedings were listed for hearing in the Tribunal over six days in February-March 2017. The s 185AA proceeding was scheduled to be heard first on the basis that a declaration that the special charge was invalid would obviate the need to hear the s 185 proceeding.
The hearing of the s 185AA application commenced on 13 February 2017 and proceeded over six days. On the fifth day of the hearing, the Tribunal determined that certain issues were to be decided by way of preliminary questions.
On 7 April 2017, the Tribunal ordered that the application by the D’Agostinos for declarations in the s 185AA proceeding be allowed in part. The Tribunal declared under s 185AA(2) of the Local Government Act that:
·the decision of the Greater Shepparton City Council made on or about 15 September 2015 to declare a special charge for the Shepparton East Drainage Scheme is invalid; and/or
·the special charge scheme for the Shepparton East Drainage Scheme is invalid due to the cumulative effect of irregularities in its preparation and implementation.
The Tribunal also ordered that the s 185 proceeding be struck out. The Tribunal published its reasons for making these orders and declarations on 7 April 2017 (the 7 April 2017 decision).
On 5 May 2017, the D’Agostinos made applications for costs and the reimbursement of fees in the s 185 and s 185AA proceedings. The parties subsequently filed and served written submissions.
On 8 August 2017, for reasons published on that date (the Costs decision), the Tribunal refused the D’Agostinos’ application for costs in the s 185AA proceeding and instead ordered that each party bear its own costs in that proceeding. The Tribunal ordered, however, that the Council pay 50% of the D’Agostinos’ costs reasonably incurred in the s 185 proceeding. The Tribunal also ordered in both proceedings that the Council reimburse the combined Tribunal application and hearing fees paid by the D’Agostinos in the total sum of $13,693.00. The D’Agostinos’ appeal is confined to the Tribunal’s order refusing their application for costs in the s 185AA proceeding.
Statutory provisions and authorities – costs
The Tribunal’s power to award costs is set out in s 109 of the Act which provides as follows:
109 Power to award costs
(1)Subject to this Division, each party is to bear their own costs in the proceeding.
(2)At any time, the Tribunal may order that a party pay all or a specified part of the costs of another party in a proceeding.
(3)The Tribunal may make an order under subsection (2) only if satisfied that it is fair to do so, having regard to—
(a)whether a party has conducted the proceeding in a way that unnecessarily disadvantaged another party to the proceeding by conduct such as—
(i)failing to comply with an order or direction of the Tribunal without reasonable excuse;
(ii)failing to comply with this Act, the regulations, the rules or an enabling enactment;
(iii) asking for an adjournment as a result of (i) or (ii);
(iv) causing an adjournment;
(v)attempting to deceive another party or the Tribunal;
(vi) vexatiously conducting the proceeding;
(b)whether a party has been responsible for prolonging unreasonably the time taken to complete the proceeding;
(c)the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law;
(d) the nature and complexity of the proceeding;
(e) any other matter the Tribunal considers relevant.
(4)If the Tribunal considers that the representative of a party, rather than the party, is responsible for conduct described in subsection (3)(a) or (b), the Tribunal may order that the representative in his or her own capacity compensate another party for any costs incurred unnecessarily.
(5)Before making an order under subsection (4), the Tribunal must give the representative a reasonable opportunity to be heard.
(6)If the Tribunal makes an order for costs before the end of a proceeding, the Tribunal may require that the order be complied with before it continues with the proceeding.
(7)A power of the Tribunal under this section is exercisable by any member.
Subsection (1) of s 109 makes clear that, prima facie, each party in proceedings in the Tribunal is to ‘bear their own costs in the proceeding.’[2] Despite that prima facie position, the Tribunal may, pursuant to sub-s (3), make an order for costs only if satisfied that it is fair to do so. Such a finding ‘is an essential prerequisite to making an order for costs.’[3] In Vero Insurance, Gillard J stated that, in any application for costs pursuant to s 109, the Tribunal should approach that question on the following step by step basis:[4]
(i)The prima facie rule is that each party should bear their own costs of the proceeding.
(ii)The Tribunal may 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 para (e) the Tribunal may also take into account any other matter that it considers relevant to the question.
[2]Pacific Indemnity Underwriting Agency Pty Ltd v Maclaw No 651 Pty Ltd [2005] VSCA 165, [33], [35] (Ormiston JA) (‘Maclaw’).
[3]Vero Insurance Ltd v The Gombac Group Pty Ltd [2007] VSC 117, [19] (Gillard J) (‘Vero Insurance’).
[4]Ibid [20].
In considering each of the matters in s 109(3), Gillard J emphasised that:[5]
… in the end it is important that the Tribunal consider all the matters together and determine whether it is fair to make an order for costs. When dealt with in isolation, each of the matters may lead to the conclusion that it is not fair to make an order for costs, but when taken together, the Tribunal may be satisfied that it is fair to do so. It is the totality of all relevant matters under s 109(3) that must be considered in the context of the prima facie rule
[5]Ibid [22].
After referring to the applicability of the principles in House v R,[6] Gillard J observed more generally that:[7]
Courts are reluctant to interfere with costs orders. Indeed, if the Court is satisfied that the decision maker has considered the matters which are relevant to the exercise, the Court will normally refuse to interfere even if the reasons given are inadequate.
[6](1936) 55 CLR 499.
[7]Vero Insurance (n 3) [58].
Although the Tribunal’s discretion in respect of costs is subject to the express statutory requirements prescribed by the Act and in particular sub-ss 109(1)-(3), that discretion has been recognised to be broad in scope. In Martin v Fasham Johnson Pty Ltd, Bell J described the Tribunal’s discretion in respect of costs in the following way: [8]
30In ordinary civil litigation in a court, the costs discretion must usually be exercised by reference to considerations connected with or arising out of the individual case, including its nature, its lead up, its conduct and its outcome, which matters must be formally proved to or definitely observable by the judge.[9] While a costs order might usually be made against an unsuccessful party in favour of the successful party,[10] case-connected considerations – and only such considerations - might justify a different course.[11] In most cases, to make other than the usual order as to costs by reference to considerations not so connected would be an improper exercise of the discretion.[12]
31The Tribunal is a creature of statute and, on questions of costs, it commences from a different starting point. Usually parties must bear their own costs, which no doubt reflects the general object of the Act. That object, as identified by the President, is to promote access to justice generally and to minimise the overall level of costs in tribunal proceedings as far as practicable.[13]
32The considerations relevant to the exercise of the Tribunal’s costs discretion are specified in s 109(3) (see also s 78(2)(c)). As we have seen, it must be satisfied it is fair to make a costs order having regard to a number of specified matters. With one exception to which I will come, the matters specified are all case-connected – the conduct of the proceeding, unreasonable delay, making untenable claims, the nature and complexity of the proceeding (and the fact the Tribunal has struck the proceeding out).
33The exception is a catch-all consideration - any other matter the Tribunal considers relevant. I would not wish to say anything that might restrict the circumstances in which such other matters may arise. This has been left to the Tribunal to determine on a case by case basis. But I cannot see what other matters may be relevant to the selection of the scale in the present case.
[8][2007] VSC 54, [30]-[33].
[9]Donald Campbell & Co v Pollack [1927] AC 732, 811-812; Latoudis v Casey (1990) 170 CLR 534, 567-569; Oshlack v Richmond River Council (1998) 193 CLR 72, 121; Wilmoth Field Warne (a firm) v Equuscorp Pty Ltd [2007] VSCA 28 [12]-[13].
[10]Latoudis v Casey (1990) 170 CLR 534, 567-568.
[11]Ibid, 557, 567-569.
[12]Wilmoth Field Warne (a firm) v Equuscorp Pty Ltd [2007] VSCA 28, [12]-[13].
[13]Stonnington City Council v Blue Emporium Pty Ltd [2004] VCAT 1441, [13].
Tribunal’s decision on costs
As has been noted, the outcome of the Costs decision was that, in respect of the s 185 application, the Tribunal departed from the prima facie position that each party is to bear their own costs by ordering that the Council pay 50% of the D’Agostinos’ costs in that proceeding. However, in the Tribunal’s order the subject of appeal, the prima facie position was adopted and the D’Agostinos’ application for costs in the s 185AA proceeding was refused.
The Tribunal’s reasons for refusing the D’Agostinos’ application for costs in the s185AA proceeding is summarised below:
(a) The Tribunal referred to the general principle enshrined in s 109(1) of the Act that each party is to bear its own costs in a proceeding, but that it may award costs if satisfied that it is fair to do so having regard to the factors set out in s 109(3).[14] Save for having regard to those factors, the Tribunal stated that the notion of fairness is undefined, but is essentially to enable justice to be done, with the award of costs being a discretionary decision turning on the facts and circumstances of each case.
[14]Costs decision, [16]-[17].
(b) In referring to the 7 April 2017 decision, the Tribunal provided the following summary of its view of the parties’ conduct:[15]
[15]Ibid [20].
I consider this to be a most unusual case, and the outcome reflects poorly on the Council. However, for quite different reasons, it is also a most unusual case in relation to the question of costs, and in a manner that does not reflect well on the applicants.
(c) The Tribunal then addressed the factors referred to in s 109(3)(a) or (b). It noted that the D’Agostinos did not refer in their submissions to those considerations in support of their application for costs and observed that there was no allegation of any adverse conduct by the Council ‘in the proceeding’[16] that may have caused ‘unnecessary disadvantage to the D’Agostinos, or that it had unreasonably prolonged the proceeding. The Tribunal accepted the Council’s submissions that it did not engage in any such conduct.[17] Later in its reasons,[18] the Tribunal found that it was in fact the D’Agostinos who were responsible for causing disadvantage to the Council and unreasonably prolonging the proceeding. The Tribunal gave several detailed examples of this conduct and observed that ‘[i]t is quite surprising that the party that was actually causing the disadvantage now claims its full costs from the disadvantaged party.’[19] The Tribunal concluded that a
[16]Original emphasis.
[17]Costs decision, [21].
[18]Ibid [29]-[38].
[19]Ibid [36].
consideration of the factors in s 109(3)(a) and (b) militates strongly against an award of costs in favour of the applicants in these proceedings, particularly in relation to the s 185AA proceeding, both in absolute terms and as a matter of fairness.[20]
[20]Ibid [38].
(d) In relation to s 109(3)(c), the Tribunal stated that it did not ‘give significant weight’ to this factor because not all parts of the proceedings (namely the s 185 proceeding and some of the grounds in the s 185AA proceeding) were finally determined. The Tribunal observed that ‘it is difficult to form any view about the relative strengths of the claims made by any of the parties, other than those that were finally determined.’[21]
[21]Ibid [23].
(e) In relation to the nature and complexity of the proceedings referred to in s 109(3)(d), the Tribunal stated that ‘although the proceedings were clearly complex in nature, and run as a court-like process, some of the complexity arose from the way in which the applicants (or their legal team) chose to prepare and present their case.’[22] Further, although part of the information provided by Council in relation to the special charge scheme was confusing, the Tribunal considered that the D’Agostinos had exaggerated this issue and had still ‘made a meal of it.’ The Tribunal continued:[23]
[22]Ibid [24].
[23]Ibid.
I agree equally with the Council that the applicants’ case had an ‘evolving nature’ where the applicants amended their grounds on multiple occasions, including in the s 185AA proceeding well after the final hearing had commenced, and raised new issues and lines of enquiry over a period of many months. A review of the interlocutory process and the VCAT file reveals a confusing scattergun approach to discovery, pleadings and submissions – some of which had the appearance of being either unnecessary or misconceived.
(f) The Tribunal also did not accept that there was a ‘convoluted factual scenario’ in relation to the s 185AA proceeding, but that there were complexities in the 185 proceedings where expert evidence was to be called.[24]
[24]Ibid [25].
(g) The Tribunal next referred to the fact that, under the scheme, the Council was imposing a charge of approximately $225,000.00 on the D’Agostinos, who were now seeking to claim costs of approximately $226,000.00. The Tribunal considered that these costs were excessive and not proportionate to the outcome, especially in VCAT. The D’Agostinos ‘made somewhat of a meal of the contest, and made it far more complex than that needed to be.’[25]
[25]Ibid [26].
(h) The Tribunal then concluded as follows in relation to the nature and complexity of the proceeding:[26]
[26]Ibid [27]-[28].
27The key aspects of the special charge scheme relevant to its validity were comprised in ten or so statutory (and public) documents and reports that underscored the Council resolutions to prepare and declare the special charge. It was relatively easy for the Tribunal to disseminate the irregularities in this Council material once it was presented at the hearing. Indeed, the point upon which the s 185AA proceeding was ultimately decided in the applicants’ favour had only been partly and very generally referred to in the applicants’ grounds, and arose more through the examination of Council documents by VCAT in the course of the hearing (and questions of the Council arising from that examination) rather than from any deliberative arguments made by the applicants. The applicants and their legal team could have found and exposed those same irregularities at any early, stage, if they had properly investigated and prepared their case.
28It follows that I do not believe that the nature and complexity of these proceedings as they ultimately unfolded, by itself, provides a compelling reason for the award of all of the costs that the applicants claim. Even if some costs are to be awarded, the Council should not be obliged to pay what I consider to be overly excessive costs having regard to the nature of the two proceedings.
(i) Having addressed itself to the above matters, the Tribunal concluded its analysis as follows:[27]
[27]Ibid [40]-[44].
40In relation in the s 185AA application, and balancing the matters that I have discussed above, I do not consider it fair to make any award of legal costs in favour of the applicants despite them being successful, at least in part, in that proceeding. The applicants themselves made the proceeding more complex than it needed to be, and engaged in conduct that unnecessarily disadvantaged other parties, including the Council from whom they now claim costs. As I have said, the adverse conduct of the applicants in this cases was of such significance that the unusual step was taken to cite them on two occasions for conduct causing disadvantage for the purpose of s 78 of the VCAT Act.
41The application for costs in the s 185AA proceeding (P2594/2015) is therefore refused. Each party is to bear its own costs in that proceeding.
42In relation to the s 185 application, there is perhaps a reasonable argument to support the view that it would still be unfair to award any costs in favour of the applicants given the matters I have discussed above. However, I have ultimately taken a slightly different view. The basis upon which the special charge was ultimately declared invalid in the s 185AA proceeding was such that the applicants should never have had to make an application for review, as there was no valid scheme to review. I consider that it is fair that the applicants recover a proportion of the costs that they reasonably (and, as it turned out, unnecessarily) incurred in this regard.
43The applicants’ conduct is still clearly relevant to the award of costs for the s 185 application, and some of the poor conduct that I have referred to above applies to the s 185 review proceeding, although perhaps not quite to the same level as with the s 185AA proceeding.
44In the circumstances, having regard to all of the matters in s 109(3) of the VCAT Act, I consider it fair that the Council should pay 50% of the costs reasonably incurred by the applicants in the s 185 review proceeding.
Grounds of appeal & consideration
The question of law for which the D’Agostinos were granted leave to appeal the Tribunal’s orders in the s 185AA proceeding was as follows:
Did the Deputy President failed [sic] to take into account the matters he was bound to take into account in exercising his discretion under s. 109 of the VCAT Act?
In their Amended Notice of Appeal dated 19 March 2018, the D’Agostinos advanced the following nine grounds of appeal:
Ground 1:
VCAT, in declining to order that the Respondent pay the Applicants’ costs of the VCAT proceeding, failed adequately to have regard to sub-sections 109(3)(c) and (d) of the VCAT Act 1998.
Ground 2:
In making the said order, VCAT failed to take into account for the purposes of s 109(3)(c), (d) & (e) of the VCAT Act 1998:
(a)The Plaintiffs’ costs to the whole proceeding inclusive of the issues that were not the subject of the preliminary determination of law.
(b)The nature and complexity of all of the issues in the proceeding inclusive of the issues that were not the subject of the preliminary determination of law.
Ground 3:
In making the said order, VCAT failed to take into account for the purposes of s 109(3)(c),(d) & (e) of the VCAT Act 1998, that the Respondent Council had no tenable basis in fact or law in opposing the application for relief under section 185AA of the Local Government Act (“the LG Act”).
Ground 4:
In making the said order, VCAT failed to take into account for the purposes of s 109(3)(c),(d) & (e) of the VCAT Act 1998, that the application was to enforce public law obligations and that in exercising its powers under s 185AA of the LG Act, VCAT was obliged to take into consideration that:
(a) Section 1(5) of the Preamble to the LG Act which provides for Councils to be accountable to their local communities in the performance of functions and the exercise of powers and the use of resources.
(b)Section 3C(g) of the Local Government Charter which provides that an objective of councils must be to ensure transparency and accountability in Council decision-making.
Ground 5:
In making the said order, VCAT failed to take into account for the purposes of s 109(3)(c),(d) & (e) of the VCAT Act 1998, that VCAT needed to apply section 109 of the VCAT Act so as not to frustrate the achievement of the purposes of section 185AA of the LG Act when read with:
· Section 1(5) of the Preamble to the LG Act;
· Section 3C(g) of the Local Government Charter.
Ground 6:
In making the said order, VCAT failed to take into account for the purposes of s 109(3)(c),(d) & (e) of the VCAT Act 1998, its findings that:
(a)There was questionable and confusing conduct by the Council and its officers.
(b)The Council had not been advised by its officers that the figures in a report had been altered, which was disturbing conduct, whether deliberate or inadvertent.
(c) There seemed to be two parallel processes at play.
(d)The Council officers were telling the Council one thing and telling landowners something different in terms of the liability of individual landowners, without the knowledge of either, or any apparent explanation to either.
(e)What followed was very much a mess of the Council’s own making, and a mess that was then compounded with each extra step taken by Council.
(f)The cumulative and compounding effect of all of the Council’s actions was concerning.
(g) Council’s actions lacked transparency.
(h)Council’s actions undermined confidence in the Council’s overall decision-making processes for the Shepparton East Drainage Scheme.
Ground 7:
The Tribunal failed to take into account for the purposes of s 109(3)(c), (d) & (e) that the basis of the application raised ‘significant issues’ as to the interpretation and future administration of statutory provisions relating to declaring special charges of the LG Act.
Ground 8:
In making the said order, VCAT failed to take into account for the purposes of s109(3)(c),(d) & (e) of the VCAT Act 1998, that the said Order penalises applicants who have acted responsibly and successfully in challenging according to law significant public interest issues pertaining to the due and proper administration by councils of their obligations under the LG Act.
Ground 9:
In making the said order, VCAT failed to take into account for the purposes of s 109(3)(c),(d) & (e) of the VCAT Act 1998, the statutory context and the clear purpose of parliament to permit affected ratepayers to exercise functions by way of appeal to VCAT seeking the enforcement of proper administration by councils of the LG Act.
Unhelpfully, the D’Agostinos’ written and oral submissions were not cast by reference to each of the above grounds of appeal and instead were structured by reference to paragraphs (c), (d) and (e) of s 109(3) of the Act. Each of the grounds of appeal refer to each of these paragraphs. In the circumstances, it is convenient to consider the appeal by reference to the submissions as they were ultimately advanced by the D’Agostinos by reference to each paragraph in s 109(3) of the Act.
Before considering the submissions on each of these paragraphs of s 109(3) the Act, it is necessary to address two matters. First, in their written submissions in relation to s 109(3)(e) (‘any other matter the Tribunal considers relevant,’) the D’Agostinos referred to a long list of findings said to have been made by the Tribunal in the 7 April 2017 decision and submitted that they ‘alone constitutes [sic] a proper basis on which an order for costs should be made.’ At the hearing of the appeal, Counsel’s attention was drawn to the fact that the claimed error of law for which leave to appeal had been granted was confined to whether the Tribunal had erred by failing to take into account mandatory considerations. Counsel for the D’Agostinos conceded that there was no requirement for the Tribunal to take into account the various matters referred to in their written submissions when considering whether it was fair to make a costs order. In light of this concession and the specific criterion for which leave to appeal has been granted, I will not further address the submissions made in relation to s 109(3)(e).[28] All of the grounds of appeal, insofar as they refer to that paragraph, must accordingly fail.
[28]Certain of the matters relied on in relation to s 109(3)(e) were also relied on by the D’Agostinos with respect to their submissions in relation to s 109(3)(d) and are referred to below.
Secondly, it is necessary to say something about the D’Agostinos first ground of appeal: that the Tribunal ‘failed adequately’ to have regard to sub-ss 109(3)(c) and (d) of the Act. In their oral submissions, the D’Agostinos clarified that this ground was intended to convey a claim that the Tribunal had not given ‘proper, genuine and realistic consideration’ to the relative strengths of both parties’ claims (s 109(3)(c)) and the nature and complexity of the proceeding (s 109(3)(d)).
In this regard, the D’Agostinos relied on the following observations of Gummow J in Khan v Minister for Immigration and Ethnic Affairs:[29]
… what was required of the decision maker … was that in considering all relevant material placed before him, he give proper, genuine and realistic consideration to the merits of the case and be ready in a proper case to depart from any applicable policy … The assertion by a decision maker that he has acted in this fashion will not necessarily conclude the matter; the question will remain whether the merits have been given consideration in any real sense.
[29](1987) 14 ALD 291, [25] (‘Khan’).
The D’Agostinos also relied on the High Court’s endorsement of this statement in Minister for Immigration and Citizenship v SZJSS:[30]
[30](2010) 243 CLR 164, [30] (‘SZJSS’).
[30] In Swift v SAS Trustee Corporation,[31] Basten JA (with whom Allsop P agreed) noted Khan’s case and said of the language of ‘proper, genuine and realistic consideration’:
[31][2010] NSWCA 182, [45].
That which had to be properly considered was ‘the merits of the case’. Taken out of context and without understanding their original provenance, these epithets are apt to encourage a slide into impermissible merit review.
[…]
[34]It has been recognised that to describe reasoning as irrational or unreasonable may merely be an emphatic way of disagreeing with it.[32] In referring to ‘any rational, reasonable approach to the evaluation’ and the need for ‘a proper, genuine or realistic evaluation’ of the letters, the Federal Court was registering emphatic disagreement with the Tribunal’s assessment of the factual matters to which the letters were relevant. It appears the Federal Court would have weighed the letters differently which seems to suggest that, on the basis of the letters, the Federal Court would have been satisfied that Maoists were pursuing the first respondent in Kathmandu. When employing the formula ‘proper, genuine and realistic evaluation’ in respect of the letters, the Federal Court did not appear to consider that one of the matters against which the Tribunal weighed the letters was the first respondent’s evidence of the effects of social and political changes in Nepal.
[35]Whether the letters were ‘highly supportive’ or ‘powerfully corroborative’ (as they appeared to the Federal Court) of the first respondent's claim that Maoists were pursuing him in Kathmandu was a question upon which reasonable minds might come to different conclusions. The Tribunal's preference for other evidence, including the first respondent's own evidence about numerous matters […] could not be said to constitute a failure to take into account a relevant consideration as canvassed in Peko-Wallsend or Yusuf's case. Nor could it be said to be a failure to respond to a substantial argument thereby giving rise to the kind of error identified in Dranichnikov v Minister for Immigration and Multicultural Affairs.[33]
[36]The conclusion that the Tribunal erred in giving ‘no weight’ to the letters, with the implication that it should have given different, presumably determinative, weight to them, depended on the Federal Court reviewing the factual findings of the Tribunal rather than the process by which it arrived at its conclusions.
[37]Further, the Federal Court's conclusion that the Tribunal erred in this way did not, in the light of the whole of the evidence, require the further conclusion that the result in the Tribunal was manifestly irrational or unreasonable. Nor did it support a finding of any other failure which might be characterised as jurisdictional error.
[32]Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 (2003) 77 ALJR 1165, 1167 [5] (Gleeson CJ).
[33](2003) 77 ALJR 1088; 197 ALR 389.
Although their written submissions contained no reference to Khan or SZJSS, nor the formulation ‘proper, genuine and realistic consideration,’ that formulation was relied upon in aspects of the D’Agostinos’ oral submissions on sub-ss (c), (d) of s 109(3) of the Act as outlined below.
Section 109(3)(c)
Section 109(3)(c) identifies that, in considering whether it is fair to make a costs order, the Tribunal is required to take into account:
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.
The D’Agostinos submitted that the Tribunal did not give proper, genuine and realistic consideration to the relative strengths of the claims made by the parties. Although the Tribunal referred to this consideration and stated that it did not give significant weight to it,[34] the Tribunal was submitted to have erred in failing to identify and to have regard to this consideration. They contended that, if the Tribunal had had ‘proper regard’ to this consideration, it should and would have had regard to the following two statements in the 7 April 2017 decision which allowed, in part, the D’Agostinos’ applications for declarations in the s 185AA proceeding:
(a) ‘Some (but not all) of the non-compliances with s 163 of the LG Act, and other irregularities in the Council documentation, are conceded by the Council – for example, a technical non-compliance with s 163(2BA)’;[35]
(b) ‘It follows that there is a non-compliance with s 163(2BA) of the LG Act. Ultimately, on the final day of hearing, this was conceded by the Council, albeit only conceded as a “technical” non-compliance created by the two different sets of figures’.[36]
[34]Costs decision, [23].
[35]7 April 2017 decision, [22].
[36]Ibid [67].
The D’Agostinos’ complaint in relation to the Tribunal’s approach to s 109(3)(c) must be seen in the context of the principal paragraph in the Costs decision in which the Tribunal addresses that consideration. At [23] the Tribunal stated (emphasis added):
I do not believe that I should, in considering the application for costs, give significant weight to the factor under s 109(3)(c) of the VCAT Act – namely, the relative strengths of the claims made by the applicant in its proceedings. The substantive merits of some of the grounds in the s 185AA application, and the whole of the s 185 review proceeding, were never finally heard and determined. In this case, it is difficult to form any view about the relative strengths of the claims made by any of the parties, other than those that were finally determined. This is certainly not fatal to the applicants’ claim for costs. It simply means that the application needs to be founded on other relevant grounds or circumstances.
It is apparent from this paragraph that the Tribunal did give some weight to the relative strength of the claims; namely, ‘those that were finally determined,’ and therefore did actually undertake the task required of it under s 109(3)(c). In substance, the D’Agostinos seek to contest the particular manner in which the Tribunal determined to take into account the consideration in s 109(3)(c) and thereby invite this Court to impermissibly engage in merits review. Further, it is apparent from the Tribunal’s discussion of the ‘irregularities’ in the materials produced by the Council[37] that it was well aware of and took into account the non-compliance issues which the D’Agostinos emphasise and which are referred to in paragraph 31 above. This submission and each of the grounds of appeal, insofar as they are directed at s 109(3)(c), must accordingly fail.
[37]Costs decision, [27].
Section 109(3)(d)
In considering whether it is fair to make a costs order, the Tribunal was required to take into account ‘the nature and complexity of the proceeding,’ in accordance with s 109(3)(d) of the Act. The D’Agostinos’ challenge to the Costs decision rests primarily on a number of interrelated errors by the Tribunal in its approach to this consideration. These are considered below.
The D’Agostinos submitted that, in addressing itself to s 109(3)(d), the Tribunal erred by only considering that part of the proceedings brought by them which was the subject of the 7 April 2017 decision, thereby failing to have regard to the nature and complexity of the proceeding as a whole. They submitted that the word ‘proceeding’ means the entire proceeding, not discrete parts thereof. It was submitted that there was a total failure to have regard to the nature and complexity of the proceeding as a whole.
There is no substance to this complaint. First, as is apparent from the summary of the Costs decision set out above,[38] in exercising its discretion in relation to costs, the Tribunal had regard to both the ss 185 and 185AA proceedings. This is exemplified in [20] of the Costs decision where the Tribunal refers to the proceedings before it as ‘a most unusual case.’ Secondly, in relation to s 109(3)(d) in particular, the Tribunal directed itself to ‘the proceedings [which] were clearly complex in nature, and run as a court-like process’.[39] The Tribunal went on to refer to the ‘evolving nature’ of the D’Agostinos’ case, involving various amendments on multiple occasions and ‘a confusing scattergun approach to discovery, pleadings and submissions’ as indicated by ‘[a] review of the interlocutory process and the VCAT file’.[40] Thirdly, the Tribunal expressly had regard to factual complexities in the s 185 proceeding in relation to expert evidence. This can only be understood as a reference to parts of the proceeding which were not determined in the 7 April 2017 decision.[41] Fourthly, in directing itself to the ‘nature and complexity of these proceedings as they ultimately unfolded,’[42] it was entirely open, and unsurprising, that the Tribunal placed particular emphasis upon that part of the proceedings the subject of the 7 April 2017 decision.
[38]See [21] above and in particular subparagraphs (b) and (i).
[39]Costs decision, [24].
[40]Ibid.
[41]Costs decision, [25].
[42]Ibid [28].
Relatedly, the D’Agostinos next submitted that the Tribunal erred by failing to have regard to the complexity of all of the issues raised in the proceeding and by confining itself to a consideration of the complexities of the issues which were the subject of the preliminary points of law determined in the 7 April 2017 decision.[43] The balance of their case - which was unnecessary to decide in light of the declarations and orders made on 7 April 2017 - was submitted to raise important and particularly complex issues of statutory interpretation about the meaning and application of ss 163(2), 163(2A) and 163(2B) of the Local Government Act which had not been the subject of any previous authority. The D’Agostinos were obliged to prepare their case in relation to these issues prior to the Tribunal deciding, on the fifth day of the hearing, to embark upon the determination of particular preliminary points.
[43]The complexity of all of the issues raised in the proceedings was in turn also said to characterise the ‘nature’ of the proceedings.
The gravamen of this complaint is that the Tribunal failed to have proper, genuine and realistic regard to the complexity associated with the interpretation of ss 163(2), 163(2A) and 163(2B) of the Local Government Act, being the balance of the proceedings not determined by the 7 April 2017 decision. This was said to be evidenced by [25] of the Costs decision where the Tribunal refers to the D’Agostinos’ contention that there was a ‘convoluted factual scenario,’ but concludes:
[25] … I am not convinced that this was necessarily the case in relation to the s 185AA application, although there was some complexities in the s 185 review proceeding where expert evidence was to be called.
The D’Agostinos submitted that this paragraph demonstrates that, in considering the proceedings as a whole,[44] the Tribunal confined itself to a consideration of the factual complexity of the proceedings and did not address itself to the complexity of all of the legal aspects in the proceeding; namely, those relating to the abovementioned provisions of the Local Government Act. This conclusion was also said to be supported by the Tribunal’s statements at [23] in relation to s 109(3)(c) of the Act and the Tribunal’s reference in [28] to the nature and complexity of these proceedings ‘as they ultimately unfolded’.
[44]A submission which, it may be noted, is inconsistent with the D’Agostinos’ first ground of complaint in relation to s 109(3)(d) considered in paragraph 35 above.
The complaint advanced on behalf of the D’Agostinos is without merit. In exercising its discretion in respect of costs, the Tribunal was required to take into account the complexity of the proceeding. As explained in paragraph 36 above, the Tribunal clearly did this.[45] The complexities associated with the interpretation of ss 163(2), 163(2A) and 163(2B) of the Local Government Act did not occupy any time before the Tribunal and did not require determination. As such, the proposition that the Tribunal erred by failing to give proper, genuine and realistic consideration to those particular complexities is without foundation.
[45]In particular at [24] of the Costs decision, the Tribunal took into account ‘the proceedings [which] were clearly complex in nature, and run as a court-like process.’
I also reject the argument that the Tribunal ‘approbated and reprobated’ in describing the proceedings as being ‘clearly complex in nature, and run as a court-like process,’[46] but then making the statement extracted in paragraph 38 above. In the former statement the Tribunal is self-evidently referring to the complexity of the proceedings in general; in the latter, it is addressing the claimed factual complexity of the proceedings in particular.
Public interest nature of the proceeding
[46]Costs decision, [24].
A significant part of the D’Agostinos’ submissions in relation to s 109(3)(d) concerned what was said to be the public interest nature of the s 185AA proceeding. As ultimately put,[47] it was contended that the Tribunal failed to give proper, genuine and realistic consideration[48] to the nature of that proceeding as involving the public interest.
[47]The D’Agostinos initially contended, but did not press, that there was a total failure by the Tribunal to have regard to the claimed public interest nature of the proceeding.
[48]In the sense referred to in Khan noted in paragraph [27] above.
The public interest nature of the proceeding was submitted to be evident because s 185AA authorises affected persons to institute and conduct proceedings to secure the observance by local councils of legislation enacted for the benefit of an identified section of the public; namely, the person required to pay a special rate or special charge. In exercising its powers under s 185AA, it was submitted that the Tribunal is obliged to take into account the objects of the Local Government Act and the Local Government Charter (the Charter) and in particular the following provisions:
(a) Section 1(4) & (5) of the Preamble to the Local Government Act which provides:
(4)It is the role of the Council to provide governance and leadership for the local community through advocacy, decision making and action.
(5)It is essential that there is a legislative framework that provides for Councils to be accountable to their local communities in the performance of functions and the exercise of powers and the use of resources.
(b) Section 1A(1) of the Local Government Act which provides:
It is the intention of the Parliament that the provisions of this Act be interpreted so as to give effect to the Preamble and the local government charter.
(c) Section 3C of the Charter which relevantly states:
Objectives of a Council
(1)The primary objective of a Council is to endeavour to achieve the best outcomes for the local community having to the long term and cumulative effects of decisions.
(2) In seeking to achieve its primary objective, a Council must have regard to the following facilitating objectives—
….
(f) to ensure the equitable imposition of rates and charges;
(g) to ensure transparency and accountability in Council decision making.
The D’Agostinos submitted that the provisions of the Charter were important because they emphasised the need for transparency in decision-making by local councils. They contended that the subject matter and purpose of s 185AA is such that an award of costs to a successful applicant would promote the objects of the legislature in enacting the above provisions and s 185AA itself. The Tribunal’s failure to award costs in favour of the D’Agostinos following their successful challenge to secure observance of the Local Government Act was therefore not ‘fair or appropriate’ and would, if followed in subsequent cases, have the effect of impeding or frustrating the objects of the Local Government Act and the Charter as well as the rights which s 185AA was designed to secure. It was submitted that, to disallow costs in respect of the s 185AA application, would inevitably act as a disincentive to affected ratepayers bringing applications under that provision and would be the very antithesis of what is just and fair in relation to ratepayers seeking the performance by local government of public law obligations. They directed particular criticism to the Tribunal’s statement in the Costs decision that:[49]
The general principle enshrined in s 109(1) of the VCAT Act is that each party is to bear its own costs in a proceeding. The legislative premise for this is to promote access to justice, and to allow ordinary citizens to seek to protect their rights without undue fear of costs if they are unsuccessful in doing so.
[49]Costs decision, [16].
The D’Agostinos referred to the following matters – described as findings made in the 7 April decision - which were said to be relevant matters to which the Tribunal was required to have regard in order to give proper, genuine and realistic consideration to the nature of the proceeding:
(a) The public notice of the Council’s intention to declare the special charge did not contain an outline of the proposed declaration, in breach of s 163(1B) of the Local Government Act.
(b) The public notice of the Council’s intention to declare the special charge was not sent to each person liable to pay the charge ‘within 3 working days of the day on which the public notice is published,’ in breach of s 163(1C) of the Local Government Act.
(c) The declaration of the actual special charge was altered from that specified in the public notice, in that the liability of the D’Agostino brothers was increased by more than 10% and/or other than in response to a submission or objection, in a manner not authorised by s 163(2BA) of the Local Government Act and in breach of that section.
(d) Council’s resolutions in April 2015 (providing an intention to declare the special charge) and September 2015 (declaring the special charge) specified a total cost or charge that was GST inclusive, which led to or compounded the breaches of ss 163(1B) and 163(2BA) of the Local Government Act.
(e) There were a number of irregularities or errors in the Council’s documents, notices and/or resolutions that demonstrated non-compliance with the requirements of s 163 of the Local Government Act and/or are sufficient in combination to undermine the validity of the decision of the Council to impose the special charge.
(f) There was questionable and confusing conduct of the Council and its officers.
(g) The Council had not been advised by its officers that the figures in a report had been altered which was disturbing conduct, whether deliberate or inadvertent.
(h) There seemed to be two parallel processes at play as Council officers were telling the Council one thing and telling landowners something different in terms of the liability of individual landowners, without the knowledge of either, or any apparent explanation to either.
(i) What followed was very much a mess of the Council’s own making, and a mess that was then compounded with each extra step taken by Council.
(j) The cumulative and compounding effect of all of the Council’s actions was concerning.
(k) The Council’s actions lacked transparency.
(l) The Council’s action undermined confidence in the Council’s overall decision-making processes for the Shepparton East Drainage Scheme.
The D’Agostinos further submitted that, not only were they successful in establishing that the Council had failed to observe the legislative requirements in respect of the imposition of the special charge, the bringing of that challenge meant that further significant public interest issues were exposed, including what they described as ‘questionable, disturbing and confusing conduct’ by the Council and its officers and the ‘existence of two parallel processes with Council officers informing counsellors one thing and informing landowners in different terms, without the knowledge of either counsellors or landowners and without any apparent explanation.’ The D’Agostinos submitted that, if they had not instituted the s 185AA proceedings, these ‘discrepancies and the irregularities by Council in public administration, would never have been exposed.’
The D’Agostinos referred the Court to a number of authorities in support of the above submissions including that it is ‘fair and appropriate’ that costs incurred by a successful applicant to secure observance of legislation be paid by an unsuccessful government agency which has been made accountable to observe legislation.
The D’Agostinos relied upon the following statement by Menzies J in Cooney v Ku-ring-gai Corporation:[50]
Prohibitions and restrictions such as those under consideration are directed towards public health and comfort and the orderly arrangement of municipal areas and are imposed, not for the benefit of particular individuals, but for the benefit of the public or at least a section of the public, viz. those living in the municipal area.
[50](1963) 114 CLR 582, 605 (‘Cooney’). Further statements attributed in oral submissions to Menzies J do not appear in any of the judgments in Cooney.
The D’Agostinos also cited Kirby J in Oshlack v Richmond River Council for the proposition that a failure to consider public interest in relation to costs could frustrate or even prevent the achievement of Parliament’s purpose.[51] They referred in particular to the following statements by his Honour:[52]
[51](1998) 152 ALR 83, 83.
[52]Ibid [112]-[119] (citations omitted).
[112] However, such statutory provisions as to costs must be understood in the context in which (and for the purposes for which) they are enacted. The Land and Environment Court is a specialised court. It enjoys a wide range of powers conferred upon it by a large body of legislation that might be described, generally, as concerned with environmental and planning matters. By s 20(1)(c) of the Land and Environment Court Act, the Court is empowered to hear and dispose of proceedings under s 123 of the Environmental Planning and Assessment Act 1979 (NSW). By the last-mentioned section, it is provided that "[a]ny person" may bring proceedings in the Land and Environment Court for an order to remedy or restrain a breach of the Act "whether or not any right of that person has been or may be infringed by or as a consequence of that breach". Many other statutory provisions afford jurisdiction to the Court. But this is the provision which the appellant invoked in these proceedings. The power to award costs was clearly intended to extend to such cases.
…
[116] In exercising its powers under s 123 of the Environmental Planning and Assessment Act, the Land and Environment Court is obliged to take into account the objects of that Act stated in s 5. Those objects include the encouragement of the proper management, development and conservation of the environment and protection thereof (s 5(a)(i),(vi)) and also (s5(c)):
“[T]o provide increased opportunity for public involvement and participation in environmental planning and assessment.”
[…]
[119] A similar approach must be taken to the meaning and application of s 69(2) of the Land and Environment Court Act at least where that Court is exercising jurisdiction under s 123. If the narrow view which found favour in the Court of Appeal were adopted, it would have the effect, in some cases at least, of impeding or frustrating the achievement of the object which the widening of standing rights was designed to secure.
The D’Agostinos also relied on the following statement by the Full Court of the Supreme Court of Queensland in Wyatt v Albert Shire Council:[53]
The case was one in which the objector had both appealed and succeeded on a substantial ground involving the safety of users of a major and busy highway, which it cannot be denied was a matter of public concern or interest. In these circumstances, the discretion as to costs having miscarried when it was originally exercised, we would now be disposed to exercise it ourselves in favour of the objector.
[53][1987] 1 Qd R 486, 494. In that proceeding, the relevant provision in relation to costs provides was as follows: ‘The Court may make such order as it thinks fit as to the costs of any proceedings before it, including allowances to witnesses attending for the purpose of giving evidence at the hearing.’
The D’Agostinos submitted that it was evident from the Costs decision that the Tribunal had failed to give proper, genuine and realistic consideration to the public interest nature of the proceeding. They contended that the Tribunal did not advert at all to that characteristic of the proceedings before it and submitted that the general reference in [28] of the Costs decision where the Tribunal states, ‘[i]t follows that I do not believe that the nature and complexity of these proceedings as they ultimately unfolded, by itself, provides a compelling reason for the award of all the costs that the applicants claim,’ does not show any proper genuine and realistic consideration of nor engagement with the public interest nature of the proceeding by the Tribunal.
The D’Agostinos’ submissions based on the proposition that the Tribunal failed to give proper, genuine and realistic consideration to the public interest nature of the proceeding are fundamentally flawed in two key respects.
First, it is relevant to note that, in their submissions on costs before the Tribunal, the D’Agostinos referred to the proceedings commenced by them as proceedings which were ‘required to be brought by reason of unlawful and improper conduct’ by the Council. They relied specifically on certain findings made by the Tribunal in the 7 April decision as to ‘irregularities in Council’s resolutions and documentation of the special charge scheme.’ They submitted that, had they not commenced the proceedings, these ‘discrepancies and irregularities by Council in public administration would never have been exposed.’
In that part of the Costs decision which addressed s 109(3)(d), the Tribunal stated as follows:[54]
27The key aspects of the special charge scheme relevant to its validity were comprised in ten or so statutory (and public) documents and reports that underscored the Council resolutions to prepare and declare the special charge. It was relatively easy for the Tribunal to disseminate the irregularities in this Council material once it was presented at the hearing. Indeed, the point upon which the s 185AA proceeding was ultimately decided in the applicants’ favour had only been partly and very generally referred to in the applicants’ grounds, and arose more through the examination of Council documents by VCAT in the course of the hearing (and questions of the Council arising from that examination) rather than from any deliberate arguments made by the applicants. The applicants and their legal team could have found and exposed those same irregularities at an early stage, if they had properly investigated and prepared their case.
28It follows that I do not believe that the nature and complexity of these proceedings as they ultimately unfolded, by itself, provides a compelling reason for the award of all of the costs that the applicants claim. Even if some costs are to be awarded, the Council should not be obliged to pay what I consider to be overly excessive costs having regard to the nature of the two proceedings.
[54]Costs decision, [27]-[28], emphasis added.
It is clear from the emphasised parts of these paragraphs and in particular the reference to the word ‘irregularities’, that the Tribunal was cognisant of and directed itself to the D’Agostinos’ submissions referred to above. It may be noted that those submissions were significantly more confined than those that have been put on appeal and were not characterised as relating to the ‘public interest’ nature of the proceeding. Critically, however, what is evident is that the submissions put by the D’Agostinos on this point did not find favour for the reasons given by the Tribunal. A challenge based on a claimed failure by a decision-maker to give proper, genuine and realistic consideration to a mandatory consideration cannot be properly understood as requiring the decision-maker to address itself to the specific consideration in the particular manner contended for by a party. That is the import of the D’Agostinos’ submissions on this point. None of the specific matters referred to by the D’Agostinos in support of their submissions in relation to the public interest nature of the s 185AA proceeding were themselves mandatory considerations to be taken into account by the Tribunal. The D’Agostinos’ submissions are a bald invitation to the Court to ignore the cautionary observation by the High Court in SZJSS that reliance on the proper, genuine and realistic ground is not licence for the Court to engage in impermissible merits review. That this is the true character of the D’Agostinos’ submissions is manifest from their submissions that the Tribunal’s refusal to award costs in the s 185AA proceeding was not ‘fair or appropriate’ given the provisions of the Local Government Act and the Charter.
The second underlying flaw in the D’Agostinos’ submissions concerns their misplaced reliance on the authorities referred to above and their failure to address themselves to the framework established by the Act in relation to costs. It may be accepted that the authorities relied upon identify the public interest served by proceedings similar to those contemplated by s 185AA. For the reasons to which I have referred above, the Tribunal had regard to the public interest nature of the proceeding in exercising its discretion on costs and the D’Agostinos did not press any contention that the Tribunal failed to take that matter into account. The authorities relied on by the D’Agostinos are, however, necessarily concerned with their respective statutory frameworks, none of which pertain to the Act. Further, none of the authorities referred to establish any general or overriding principle that, irrespective of the relevant statutory context, the public interest character of particular provisions is elevated as a special or overriding consideration in the exercise of a discretion in relation to costs.
In relation to the Act, Part 4 (in which s 109 appears) sets out the general procedure of the Tribunal.[55] Schedule 1 of the Act sets out variations from the general procedure for certain types of proceedings. The relationship between s 109 and Schedule 1 was considered in Maclaw in which Ormiston JA stated:[56]
… In other words, s 109 and the subsequent sections should be allowed to operate according to the natural construction of their language. The extent to which Parliament thought that in VCAT proceedings specific provisions relating to costs and other procedural matters should be altered to prescribe different modes of process and the making of different kinds of orders, according to the nature of the proceeding brought in the Tribunal or according to the jurisdiction exercised under particular Acts, can be gauged from ss 39 and 58 of the Act and in particular from Sch 1 thereof. For present purposes, ie the power of the Tribunal to award costs, s 58 and particular provisions of Sch 1 of the Act represent that legislative intention, so far as Pt 4 of the Act, including the provisions as to costs, is concerned. Something in excess of 21 “jurisdictions” give VCAT varied or different powers in this way, each being identified by the statute (or group of statutes) which grants VCAT particular jurisdiction. So far as the relevant jurisdiction, granted under the Domestic Building Contracts Act 1995 (see especially ss 53–59 and 59A-62) is concerned, Part 6 of the First Schedule to the Act makes only minor alterations to the procedure otherwise laid down by Pt 4 of the Act, as appears from cll 12 and 12A of the Schedule. By way of contrast, the rules laid down for costs under s 109ff. are specifically varied by clauses of the First Schedule for proceedings in which jurisdiction is granted under, for example, the Equal Opportunity Act 1995 (see cl 27), the Small Claims Act 1973 (see cl 88), under “Taxing Acts” (see cl 91) and under each of the Transport Accident Act 1986 (see cl 92) and the Valuation of Land Act 1960 (see cl 99), by each of which clauses it is stated that s 109 does not apply at all. …
Now it does not follow that particular factors in building disputes, especially building insurance disputes of this kind, cannot activate the Tribunal’s power to award costs as laid down by s 109, such as the “nature and complexity” of some building disputes or the unreasonableness of a builder’s or insurer’s conduct, but it should be borne in mind at all times that the scheme of the VCAT legislation is that prima facie each party is to “bear their own costs in the proceeding”. Why Parliament saw this to be appropriate in cases such as the present and why it chose not to vary s 109 so far as domestic building disputes, or at least claims against insurers, are concerned, may, to some eyes, be hard to fathom. If the same disputes were still able to be litigated in one of the ordinary courts of this State, there would be the conventional “bias” in favour of the conclusion that costs should follow the event, even if only on a party/party basis. But that is not the presumption of the present legislative scheme, as represented in particular by s 109.
[55]s 58(1).
[56]Maclaw (n 2) [34]-[35].
Only one variation is made by Schedule 1 of the Act to the application of s 109 to the Local Government Act. That variation concerns proceedings under s 81Q(2) of the Local Government Act and is of no relevance to this proceeding.[57] Given this provision, there is no mandate to depart from the established general principles relating to the operation of s 109 referred to earlier in this judgment by, in effect, elevating or treating as a special consideration, the public interest nature of the s 185AA proceeding.
[57]Clause 46F of Schedule 1 to the Act.
For the above reasons, each of the grounds of appeal insofar as they are directed at s 109(3)(d), must accordingly fail.
The appeal is accordingly dismissed with costs.
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