Rokon Holding Pty Ltd v River St Property Nominees Pty Ltd (No 2)

[2025] VSC 252

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

S ECI 2024 01937

Rokon Holding Pty Ltd (ACN 162 611 832)	Applicant
v
River St Property Nominees Pty Ltd (ACN 168 998 758)	First Respondent
and
Owners Corporation No. 1 PS502581D	Second Respondent

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JUDGE:	Quigley J
WHERE HELD:	Melbourne
DATES OF HEARING:	21 February 2025
DATE OF JUDGMENT:	9 May 2025
CASE MAY BE CITED AS:	Rokon Holding Pty Ltd v River St Property Nominees Pty Ltd (No 2)
MEDIUM NEUTRAL CITATION:	[2025] VSC 252

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COSTS — Administrative law — Appeal from VCAT dismissed — Where leave to appeal refused — No prospect of success — Whether applicant should be ordered to pay indemnity costs — Application for urgent oral hearing for leave to file rebuttal submissions — Application refused — Costs to be determined on the papers — Leave to file rebuttal submissions granted — Indemnity costs awarded to first respondent.

Victorian Civil and Administrative Tribunal Act 1998 (Vic) s 148 — Supreme Court Act 1958 (Vic) s 24 — Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189 — Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 — Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd [2013] VSCA 237, applied — J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (No 2) (1993) 46 IR 301 — Bishopsgate Insurance Australia Ltd v Deloitte Haskins & Sells [1993] 3 VR 863 — ACN 115 918 959 Pty Ltd (formerly known as Pearl Hill Pty Ltd) v Moulieris [2022] VSC 555, referred to.

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr I. Upjohn KC Mr J. Stavris	Doyles Construction Lawyers
For the First Respondent	Mr J. McKay	Baker McKenzie
For the Second Respondent	No appearance

HER HONOUR:

INTRODUCTION

1. This costs judgment follows the delivery of the principal judgment and related orders made on 13 March 2025,[1] in which I refused Rokon Holding Pty Ltd’s (‘Rokon’) application for leave to appeal a Victorian Civil and Administrative Tribunal (the ‘Tribunal’) decision pursuant to section 148 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (the ‘VCAT Act’) (see below at [11]).

   [1]Rokon Holding Pty Ltd v River St Nominees [2025] VSC 96.

1. Orders were made directing the parties to file and serve written submissions in respect of any applications for costs by 4:00pm, 20 March 2025. The first respondent, River St Property Nominees Pty Ltd (‘River Street’), filed submissions with the Court on 20 March 2025. River Street submitted that Rokon should pay the costs of River Street of and incidental to the proceeding on an indemnity basis. No submissions were received by Rokon on this date.

1. On 24 March 2025, by way of email correspondence with the Court, Rokon made an application requesting an urgent oral hearing for leave to file rebuttal submissions as to costs. Rokon did not file submissions by 20 March 2025, on the presumption that costs ordinarily follow the event, and it considered that no further submissions were necessary from either party.[2]

   [2]Affidavit of Natalia Petukhova (Supreme Court of Victoria, S ECI 2024 01937, filed on 24 March 2025) [8].

1. On 25 March 2025, I made orders regarding further cost submissions. Order 1 of these orders directed the applicant to file and serve written rebuttal submissions in response to the first respondent’s submissions filed 20 March 2025, by 4:00pm 8 April 2025. Order 2 of these orders directed the first respondent to file and serve any written submissions by way of reply to the applicant’s submissions filed pursuant to Order 1 by 4:00pm, 22 April 2025. Order 3 of these orders confirmed that costs would be determined on the papers rather than by way of urgent oral hearing.

1. In accordance with the below reasons, I will order that indemnity costs be ordered against the applicant.

BACKGROUND

1. The present application for costs arise from an initial dispute between the parties in the Tribunal. This dispute concerns a doorway which was constructed through a wall, forming a boundary between the parties’ respective lots.

1. River Street commenced an application in the Tribunal seeking an order against Rokon, compelling it to remove the door and remediate the wall and surrounding structures.

1. Shortly after the proceeding commenced in the Tribunal, and prior to any defence submissions being filed by the applicant, Rokon made an application for summary dismissal against River Street’s claim, pursuant to sections 75 and 76 of the VCAT Act.

1. By order dated 26 March 2024, the Tribunal dismissed Rokon’s application to strike out or dismiss River Street’s claim (the ‘Tribunal’s Orders’).

1. On 23 April 2024, Rokon applied for leave to appeal the Tribunal’s Orders in the Supreme Court of Victoria pursuant to section 148 of the VCAT Act.[3]

   [3]The notice of appeal was later amended on 19 July 2024.

1. On 13 March 2025, I handed down my judgment and orders dismissing Rokon’s application for leave to appeal and ordered that the parties file and serve written submissions in respect of any application for costs.

RIVER STREET’S APPLICATION FOR INDEMNITY COSTS

1. River Street’s submissions seek that Rokon pay the costs of River Street of and incidental to the proceeding on an indemnity basis.

1. In support of its application for indemnity costs, River Street asserts that each of the proposed questions of law posed by Rokon in its application for leave to appeal were misconceived, either because it sought to agitate questions of fact, or because it sought an outcome contrary to established precedent. Further, River Street contended that Rokon’s initial summary dismissal claim, and the subsequent attempt to review that decision were bound to fail and that it had put Rokon on notice of the potential adverse cost consequences of that outcome.

1. Rokon had sought to have the proceeding before the Tribunal summarily dismissed in circumstances where it had filed no defence to the first respondent’s claim, and prior to utilising the Tribunal’s procedures to compel production of documents. The claim before the Tribunal was inherently factual in nature, and was very likely to be assisted by pleadings, orders for discovery, and the issuance of summonses for production. The orders which were the subject of the appeal were matters of practice and procedure that should have been properly determined by the Tribunal.

1. River Street further submitted that the invocation of the Court’s appellate jurisdiction was simply inappropriate in the circumstances. Considerable private and judicial resources have been expended to deal with complex contentions that, when properly analysed, were always hopeless. The applicant should have known that the application would fail, and was indeed alerted to this by the first respondent’s solicitors on 28 May 2024, but persisted in ‘doubling down’ on its attempt to deny the first respondent a hearing on the merits.

1. Accordingly, River Street reasoned that the nature of the appeal and the circumstances in which it was filed militates strongly in favour of indemnity costs.

ROKON’S APPLICATION FOR LEAVE TO FILE REBUTTAL SUBMISSIONS

1. On 24 March 2025, Rokon submitted an affidavit and hearing form requesting an urgent oral hearing in order to seek leave to file rebutting submissions in response to the first respondent’s cost submissions.

1. Rokon outlined in its affidavit that it did not file submissions by 20 March 2025, on the basis that costs ordinarily follow the event, and the applicant considered that no further submissions were necessary from either party.

1. The applicant submitted that granting leave would allow for procedural fairness without undue prejudice to any party.

1. River Street does not consent to the application for leave to file rebuttal submissions on the basis that, by filing submissions outside the agreed upon timeframe, the applicant has the benefit of considering the first respondent’s submissions and any submissions by the applicant would be necessarily responsive, and would evidently prejudice the first respondent.

1. On the material before me, I refused the application for an urgent oral hearing for leave to file rebuttal submissions and ordered that costs be determined on the papers. I did not think it necessary to require the parties to appear before me on the basis that the question of costs could be adequately dealt with on the papers in the circumstances of the correspondence between the parties, and the reasoning given in my substantive decision. Procedural orders were made accordingly.

ROKON’S REBUTTAL SUBMISSIONS

1. On 7 April 2025, Rokon filed its reply to River Street’s cost submissions dated 20 March 2025.

Reasonableness of the application

1. Rokon contends that because of its ‘well-constructed’ case, its pursuit of the summary dismissal application and subsequent appeal was reasonable and in good faith, believing there to be valid questions of law to be tried. Therefore, the Court should not depart from its usual order of costs on a standard basis.

1. In my judgment, I described the case made on behalf of the applicant as ‘well‑constructed’. However, this does not speak to the reasonableness of Rokon’s application, but the manner in which its arguments were presented before me. Rather, I was not persuaded that the substance of Rokon’s arguments were, in reality, anything more than disappointment with the outcome of the Tribunal’s decision.

1. Second, Rokon rejects the premise that it acted unreasonably by disregarding binding precedent established in Bishopsgate Insurance Australia Ltd v Deloitte Haskins & Sells [1993] 3 VR 863 (‘Bishopsgate’) or ACN 115 918 959 Pty Ltd (formerly known as Pearl Hill Pty Ltd) v Moulieris [2022] VSC 555 (‘Moulieris’). Significantly, Rokon argues that it sought to explore its application in the unique factual matrix that was this case.

1. Although such an exploration is a legitimate exercise of appellate rights, this is the first instance in which Rokon has argued that the factual circumstances of this case are so ‘unique’ that the settled principles in Bishopsgate or Moulieris should be departed from. I am not persuaded that this is a persuasive proposition.

1. Third, Rokon asserts that its application for leave to appeal was brought in good faith and based on reasonable legal arguments.[4] Although several legal arguments were put before me by Rokon, I found five of the six proposed questions were not valid questions of law. Moreover, the fifth proposed appeal question, and the only properly constructed question of law raised, was ultimately not pursued by Rokon.

   [4]Rokon’s submissions relied on principles established in Batistatos v Roads and Traffic Authority of New South Wales; Batistatos v Newcastle City Council [2006] HCA 27.

Timeliness and procedural fairness

1. Rokon asserts that River Street has mischaracterised its reliance on pre-issuance delay as irrelevant and a waste of judicial resources. Rokon contends that although its arguments for pre-issuance delay were not ultimately adopted by the Court in its judgment, this does mean that its focus on pre-issuance delay was irrelevant. Rather, Rokon contends that its arguments are relevant as the substantive part of the judgment focuses on the distinguishment between pre-issuance and post-issuance delay.

1. Ultimately, the focus on pre-issuance delay was rejected on its merits. In my view, that is not to say it was irrelevant, it just had no persuasive merit.

1. Rokon further argues that its application for summary dismissal was brought early in the Tribunal proceedings before key procedural steps had occurred. It is argued that this timing reflects a legitimate strategy to narrow the scope of the dispute and conserve judicial and private resources.

1. Whilst this may well be a legitimate and well used tactic in commercial disputes in the Court, this tactic was one which was clearly premature in the context of the Tribunal’s dispute settlement obligations, general procedure,[5] and the incipient point of time in the litigation.

   [5]Victorian Civil and Administrative Tribunal 1998 (Vic) s 98.

Wilful disregard of facts or law

1. Rokon further submits that it did not act in wilful disregard of known facts or established law. It was contended that the questions of law raised were genuinely arguable and presented in good faith. Moreover, its attempt to adduce fresh evidence, for example, turned on judicial discretion rather than any inherent flaw in Rokon’s arguments.

1. The decision of this Court to reject the adducing of fresh evidence was not founded on the actual exercise of judicial discretion, but rather on legal principles.[6] It is a well‑established principle that adducing fresh evidence, unless in exceptional circumstances, is impermissible. This Court is concerned with what occurred at the Tribunal and, therefore, the question of whether there was an error of law is to be decided on the evidence that was before the Tribunal.[7] Hence, the attempt to rely on fresh evidence underlines my concern about the nature of the questions of law raised in this appeal, and whether this attempt was in fact made in good faith.[8]

   [6]Rokon Holding Pty Ltd v River St Property Nominees Pty Ltd [2025] VSC 96, [41].

   [7]Bulasa Pty Ltd v Baytown Properties Pty Ltd [2003] VSC 248, [28].

   [8]Rokon Holding Pty Ltd v River St Property Nominees Pty Ltd [2025] VSC 96, [40].

Discretionary considerations

1. Rokon concludes that it should be exempt from indemnity costs as such orders are usually reserved for exceptional cases involving misconduct, abuse of process, or clearly hopeless claims. Rokon asserts that its conduct throughout the entire proceeding was reasonable and consistent with its legitimate rights to challenge the Tribunal’s Orders.

1. Although an application for leave to appeal does not of itself justify the departure from the usual order that costs follow the event, the Court can consider whether indemnity costs should be awarded. It is within the Court’s discretion to make an award of costs in such applications, such discretion to be exercised judicially and not unreasonably.[9]

   [9]Bass Coast Shire Council v King & Vink Nominees Pty Ltd [1997] 2VR 5 [29].

1. Rokon submits that departure from the standard costs order would impose an undue punitive burden on Rokon, contrary to the principles of fairness and proportionality that underpin cost awards. Such a decision would also risk discouraging parties from pursuing legitimate appeals, thereby undermining access to justice.

1. In my view, as expressed in the substantive judgment, leave to appeal was refused on all grounds, the Court being satisfied that Rokon’s appeal had no ‘real prospect of success’.[10] Further, River Street had put Rokon on notice that it would seek costs on an indemnity basis. I accept the principle that the award of indemnity costs may well be a disincentive to a litigant to pursue further litigation by way of appeal. However, it is equally a relevant consideration that unmeritorious appeals should not be pursued to the financial detriment of the responding party. That is not to concede that indemnity costs are a punishment or penalty, but rather that the successful litigant is not out of pocket as a result of being required to defend an unmeritorious appeal.

   [10]Rokon Holding Pty Ltd v River St Property Nominees Pty Ltd [2025] VSC 96, [55]-[58], [113]

1. Although in most circumstances, costs will be awarded on a standard basis, River Street had warned Rokon by way of email on 28 May 2024, that it intended to pursue indemnity costs as the application was baseless and doomed to fail. This provided Rokon with ample time to prepare and file cost submissions refuting the award of indemnity costs. For the purposes of procedural fairness, I extended the filing of costs submissions for both parties.

RIVER STREET’S SUBMISSIONS BY WAY OF REPLY

1. On 23 April 2025, River Street filed its costs submissions in reply to Rokon.

1. River Street’s submissions in reply largely addressed the matters argued in Rokon’s submissions. River Street concluded by reiterating the position enunciated by the Court, that the appeal was a ‘faintly disguised complaint of disappointment in the outcome of the Tribunal’s merits decision on the material it had before it’.[11]

   [11]Rokon Holding Pty Ltd v River St Property Nominees Pty Ltd [2025] VSC 96, [40].

RELEVANT PRINCIPLES

1. The principles governing special costs orders were confirmed by the Court of Appeal in Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd,[12] and are relevantly as follows:

   [12][2013] VSCA 237, [538]-[551] (Warren CJ, Osborn JA and Macaulay AJA).

(a) The statutory source of the power to make costs orders (including special costs orders) is section 24 of the Supreme Court Act 1986 (Vic), which states that ‘costs are in the discretion of the Court and the Court has full power to determine by whom and to what extent the costs are to be paid’. It should be observed that there is nothing in the VCAT Act or any rules of the Court that qualifies this power. To the contrary, section 148(7)(d) of the VCAT Act confirms that this Court can, on an appeal under that section, make ‘any … order the court thinks appropriate’.

(b)       Special circumstances must exist to justify a departure from the usual course of costs following the event.[13]

[13]Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189, [7] (Harper J).

(c)        Relevantly, the jurisdiction to make a special costs order will arise where ‘the proceedings were commenced or continued … in wilful disregard of known facts or clearly established law’.[14]

[14]Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, 223-224 (Sheppard J).

(d)       Despite this test having an apparent subjective element (as suggested by the use of the word ‘wilful’), the authorities confirm that the test is essentially objective. As French J said in J‑Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (No 2):

It is not a necessary condition of the power to award such costs that a collateral purpose or some species of fraud be established. It is sufficient, in my opinion, to enliven the discretion to award such costs that, for whatever reason, a party persists in what should on proper consideration be seen to be a hopeless case.[15]

(e)        Conduct which causes a loss of time to the Court or other parties may enliven the discretion.[16]

(f)        Criteria such as those stated above are not intended to operate as inflexible guidelines, and do not fetter the Court’s discretion.[17]

[15](1993) 46 IR 301, 303.

[16]Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189, [7]-[8] (Harper J).

[17]Ibid [8].

CONSIDERATION

1. Based on the established principles above, Rokon should be ordered to pay indemnity costs on the basis that its appeal, when properly considered, had no real chance of success. In this regard, I note the following:

(a)        The application for summary dismissal advanced before the Tribunal was ambitious and serious in its nature and consequences. As the Court noted in its reasons for judgment, the dismissal application was brought before the filing of a defence or reply, and before the processes for production of documents had been utilised. As a consequence, the Tribunal was never going to be in a position to resolve the disputed questions at the heart of the proceeding, as there was a real prospect that further documentation would come to light that would bear on the assessment of those controversies. Even if the Tribunal had been minded to try and resolve those controversies on the limited materials before it, it was forbidden from doing so.

(b)       The dismissal procedure before VCAT prevents the resolution of contested matters of evidence, and dismissal should be granted only where the case is ‘hopeless’ or ‘doomed to fail’. Accordingly, there was never a real prospect of Rokon establishing that the case was hopeless at such an early stage in the proceeding, and on such limited materials.

1. The original dismissal application was ambitious. The merits of the appeal are equally so characterised. This is so for three principal reasons:

(a) First, as the Court observed, five of the six proposed questions of law were directed to the question of whether ‘weight’ or ‘proper weight’ was given to a particular matter. By framing the issue in this way, Rokon was complaining that the Tribunal failed to attribute a particular significance or force to certain matters. That form of argument might have had some carriage on an appeal by way of rehearing, but an appeal under section 148 of the VCAT Act is in the nature of judicial review. The procedure eschews questions of fact, weight, and evaluation of evidence, and focuses on the legality of the decision, and the process by which it was reached. In framing the questions of law, Rokon had no regard to these well-established limitations on the scope and nature of fact‑finding in judicial review. No attempt was made to frame a question that raised any of these grounds of impeachment of the decision-making process, with the complaint being pitched at the weight given to certain matters raised in argument. The appeal was a quintessential example of an impermissible merits review, and it had no prospects of succeeding given the manner in which the dispute before this Court was framed.

(b)       Second, as to the sole ground that raised a question of law (ground five – paucity of reasons), that avenue of questions was never developed or explained by Rokon either in its written or oral submissions.

(c)        Third, was the preoccupation of Rokon’s appeal with the question of delay in issuing proceedings (as distinct from the delay in prosecuting proceedings). Bishopsgate is a binding decision of the Full Court of the Supreme Court of Victoria, which has been applied repeatedly in virtually all subsequent decisions on want of prosecution in this state (including recently in Moulieris). Those decisions make it plain that the party seeking dismissal for want of prosecution must establish a delay in the prosecution of the proceeding. That endeavour was doomed to fail and should not have been attempted.

1. The circumstances of the case suggest that a special costs order is appropriate, and ought be made as a matter of discretion. Proceedings at first instance should be conducted on their merits. It will be a rare case where the decision-maker can, merely on the face of the claimant’s pleading, confidently conclude that a case has no prospects of success such as to warrant summary dismissal. A special costs order is the appropriate consequence for Rokon, given the economic costs flowing to River Street due to the proceeding being derailed into complex appellate litigation that had no real prospect of success.

1. Accordingly, I am satisfied that indemnity costs should be awarded.

CONCLUSION AND ORDERS

1. In light of the above reasons, I am satisfied that Rokon should pay River Street’s costs of and incidental to the proceeding, arising out of the notice of appeal filed on 23 April 2024 and amended on 19 July 2024, on an indemnity basis.

1. I will make orders accordingly.

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