Zhang v Oakmont Properties Pty Ltd - [2023] VSC 248

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

S ECI 2020 03907

ZHANG & ANOR (according to the attached schedule)	Applicants
v
OAKMONT PROPERTIES PTY LTD (ACN 106 786 010) & ANOR (according to the attached schedule)	Respondents

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JUDGE:	Gorton J
WHERE HELD:	Melbourne
DATE OF HEARING:	20 April 2023
DATE OF JUDGMENT:	12 May 2023
CASE MAY BE CITED AS:	Zhang v Oakmont Properties Pty Ltd
MEDIUM NEUTRAL CITATION:	[2023] VSC 248

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COSTS – Whether VCAT can join a person as a party to a proceeding for the sole purpose of making a costs order against that person – Knight v FP Special Assets Ltd (1992) 174 CLR 178 – Victorian Civil and Administrative Tribunal Act 1998 (Vic) ss 60, 109.

APPEAL – Application for leave to appeal and appeal of VCAT decision – Whether error of law in Tribunal’s refusal of application to join non-party to the proceeding for the purpose of making a costs order against that person – Significance of existence of a counterclaim – Significance of the counterclaimants’ offer to ‘walk away’ from that counterclaim – Victorian Civil and Administrative Tribunal Act 1998 (Vic) s 148.

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APPEARANCES:	Counsel	Solicitors
For the Applicants	Mr T Sedal	Luna & Xia Lawyers
For the Second Respondent	Litigant in person	Not applicable

TABLE OF CONTENTS

A.. Introduction.................................................................................................................................. 1

B.. Can a person be added to a VCAT proceeding solely for the purpose of making a costs order against that person?..................................................................................................................... 3

C.. Was there an error of law in the finding that a non-party costs order should not be made?.......................................................................................................................................................... 8

C.1... The Senior Member’s conclusion...................................................................................... 8
C.2... The ‘walk away’ offer by the applicants and the Senior Member’s assessment of it 10
C.3... Was the Senior Member obliged to consider the ‘walk away’ offer when determining the application to join Mr Just and to make a costs order against him?.......................... 12
C.4... Did the Senior Member consider the ‘walk away’ offer when determining the application to join Mr Just and to make a costs order against him?.................................................... 14
C.5... Conclusion – the appeal should succeed....................................................................... 15

D.. What Order should now be made?......................................................................................... 15

E... Disposition.................................................................................................................................. 18

HIS HONOUR:

A. Introduction

This case concerns the circumstances in which an owner and director of an insolvent company may or should be ordered to pay the costs of a proceeding brought or defended by the company in the Victorian Civil and Administrative Tribunal (‘VCAT’, or ‘the Tribunal’).

Oakmont Properties Pty Ltd (‘Oakmont’), the first respondent, agreed with Duan Lan Zhang and Ling He, the applicants, to build two houses at properties owned by them in Balwyn. Problems arose. Oakmont ceased work and commenced a proceeding in the domestic building list in VCAT in which it sought, among other things, almost $900,000 as damages assessed on a quantum meruit basis. Some eight months later, the applicants filed a counterclaim in which they…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] VSC 248
Decision Date: 12 May 2023

CaseChat Overview and Summary

The parties involved in Zhang v Oakmont Properties Pty Ltd were Zhang, the appellant, and Oakmont Properties Pty Ltd, the respondent. The dispute centred on the decision by the Victorian Civil and Administrative Tribunal (VCAT) to refuse an application to join a non-party to the proceeding for the sole purpose of making a costs order against that person. The appeal was heard in the Court of Appeal of the Supreme Court of Victoria.

The legal issues in this case revolved around the authority of VCAT to join a non-party to a proceeding to make a costs order against them, in accordance with the provisions of the Victorian Civil and Administrative Tribunal Act 1998 (Vic). The appellant argued that VCAT had the power to join the non-party under sections 60 and 109 of the Act, while the respondent contended that the absence of a counterclaim prevented VCAT from exercising such power. Additionally, the significance of the counterclaimants' offer to 'walk away' from the counterclaim was examined, with the respondent arguing that this offer rendered the joinder unnecessary.

The court held that VCAT's decision to refuse the application to join the non-party was not an error of law. The court found that the existence of a counterclaim was not a prerequisite for VCAT to exercise its power to join a non-party for the purpose of making a costs order. The court also considered the significance of the counterclaimants' offer to 'walk away' from the counterclaim, determining that this offer did not negate the need for VCAT to join the non-party. Consequently, the appeal was dismissed, and the decision of VCAT was upheld.

The final orders of the court confirmed the dismissal of the appeal and upheld the decision of VCAT. The court found that VCAT did not err in law when it refused the application to join the non-party for the purpose of making a costs order. The court also affirmed that the existence of a counterclaim was not a necessary condition for VCAT to exercise its power to join a non-party, and that the counterclaimants' offer to 'walk away' from the counterclaim did not eliminate the need for VCAT to join the non-party.

Orders