VCAT Legal Costs:
VCAT was set up to be a no cost/low cost jurisdiction. Costs in VCAT are generally regulated by s.109 of the VCAT Act. Section 109(1) provides that, except as set out, each party is to bear its own costs in the proceeding but that VCAT has power to award costs at any time.
VCAT also has power to make an award against a representative of the party rather than the parties themselves if it believes the representative are responsible for the contravening behaviour.
Section 109 of the Victorian Civil and Administrative Tribunal Act 1998 lists the circumstances where costs may apply and is governed by the fundamental principles that each party bears its own costs unless there are exceptional circumstances. The exceptions to the VCAT fundamental principle are:
- Conducting the proceedings vexatiously:
- a litigation may properly be regarded as vexatious for present purposes on either objective or subjective grounds;
- The question is not whether legal proceedings have been instituted vexatiously but whether the legal proceedings are in fact vexatious.
- No tenable basis in law or fact:
- Means something so weak as to be unarguable, rather than merely weak. (so weak as to be virtually non-existent).
- The Tribunal’s power to order compensation and costs is discretionary:
- It is the Tribunal’s view that the discretion extends to the amount of compensation and costs which the Tribunal can award;
- It is not simply a matter of calculating the loss, damage and costs suffered at the end of the day any amount awarded by the Tribunal as compensation and costs must be an amount appropriate in all the circumstances of the case.
- Costs may be awarded by VCAT for matters over $10,000.00 but do not automatically follow the event like the Courts.
- There is no scale applicable to VCAT so the sum of any costs award is not certain but generally in accordance with the County Court Costs Scale.
Costs in standard civil claims (over $10,000.00) are pursuant to s.109 of the VCAT Act where there is a presumption against ordering costs. However it depends on the relative complexity of each case, the complexity of proceedings and other relevant matters given the wide discretions given to them by Sections 109(2) and (3) to award costs.
Costs in PE List are determined by Clause 63 of Schedule 1 of the PE Act provides that, in addition to the matters listed in s.109 of the VCAT Act, VCAT may have regard to whether or not the proceeding in the list was brought primarily to secure or maintain a direct or indirect financial advantage.
Section 150(4) of the Planning and Environment Act also provides that compensation for loss and damage and costs may be ordered by the Tribunal when a case is brought vexatiously or frivolously or primarily to secure a financial advantage.
Section 92 of the Retail Leases Act 2003 now prohibits the award of costs as between parties save where one party has declined to participate in alternative dispute resolution or has conducted the proceeding in a frivolous or vexatious manner as set out in Section 109.
- Subject to this, although VCAT Act s.109 provides that in general in VCAT the parties bear their own costs, the discretion to award costs in appropriate circumstances is more likely to be attracted in the Retail Tenancies List as the claim increases.
Security for Costs:
Section 79 of the VCAT Act provides as follows:
- On the application of a party to a proceeding, the Tribunal may order at any time that another party give security for that party’s costs within the time specified in the order; and
- That the proceeding as against that party be stayed until the security is given. To award security VCAT will consider:
- Whether the applicant’s claim is made bona fide and has reasonable prospects of success;
- Whether the applicant has a lack of funds;
- Whether the applicant’s lack of funds has been caused by the conduct of the respondent;
- Whether the making of the costs order would unduly damage the applicant’s ability to pursue the proceedings.
Alternative Dispute Resolution:
VCAT has two main alternative dispute resolutions procedures. VCAT can order a mediation and/or a compulsory conference which depends on the practice in any given list. VCAT have a stated aim to resolve disputes quickly and fairly and have indicated that mediation plays an essential role in resolving a wide range of disputes informally and cost-effectively. The table below summaries general practice.
- Mediations:
- Mediations are the primary method of alternative dispute resolution, used generally in the more complex matters at VCAT. Relevant sections of the VCAT Act: s. 88-93.
- As with Compulsory Conferences VCAT may make an order requiring a party to appear personally or through a representative with authority to settle.
- Representation at mediation is also subject to s.68 in the same manner as hearings before the Tribunal. As such, whether representation is allowed will depend on the type of case, its complexity and, to a lesser extent, the amount of the claim.
- Panel of mediators used at VCAT are lawyers, engineers and building consultants where appropriate. Whereas VCAT tribunal members preside over compulsory conferences to ensure they can enact orders if required as it is the last interlocutory stage before the final hearing.
- Mediations and compulsory conferences are without prejudice and the evidence is inadmissible at final hearing without the consent of both parties. One exception to the rule is that the fact of settlement and the terms of settlement are admissible to allow VCAT to satisfy itself as to the fact of settlement.
- Compulsory Conferences.
- Compulsory conferences are the VCAT equivalent of pre-hearing conferences in the Magistrates Court. Relevant sections of the VCAT Act are s83-87.
- Section 83 of the VCAT Act states a compulsory conferences will:
- Identify and clarify the issues in dispute;
- Identify and clarify questions of fact and law;
- Promote settlement;
- Make directions.
- Section 85 of the VCAT Act:
- Evidence of anything said or done in the course of the compulsory conference is inadmissible except in limited circumstances.
- Generally, compulsory conferences are without prejudice and no evidence can be called in relation to statements or admissions at compulsory conference without consent of both parties.
Discovery:
VCAT does not have a process for formal discovery. As such, it is common, in smaller cases at least, for documents to be seen on the day of hearing.
Orders for lists/copies of documents on which parties intend to rely are more common in more complex hearings and are commonly part of orders made at directions hearings. Such lists or copies are usually required 7 or 14 days prior to hearing.
Tribunal also has the power to compel production of documents from third parties or from witnesses pursuant to a summons.
Interlocutory Steps:
Interlocutory (all steps between the first step in an application and the final hearing) steps are minimised and unless all parties are represented by lawyers the parties agree points of claim or of defence, or particulars of them, are not usually ordered until after a mediation.
But where the claim is for less than $10,000 there will usually not be any interlocutory steps permitted and the proceeding will be dealt with and heard summarily (in totality).
Daniel Epstein of Counsel
