While VCAT is an informal and cost efficient jurisdiction to initiate proceeding in, it is not generally a favorable jurisdiction for litigants seeking an order for costs.

The Victorian Civil Administrative Tribunal (VCAT) takes the prima facie position not to award costs unless there are justifiable grounds for VCAT to exercise its discretion pursuant to Section 109 (3) of the VCAT Act.

The Tribunal applies the test stringently under Section 109 (3) of Act.

Section 109 (3) of the VCAT Act states the following:
  (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.

Of course, there are cases where costs have been awarded at the Tribunal.

In Australian Federation of Consumer Organisations Inc. v Tobacco Institute of Australia, 19, Morling J ordered that the respondent pay the applicant’s costs on an indemnity basis.  Morling J stated:

‘I do not think it would be in the public interest for a litigant in the position of the applicant to be heavily out of pocket in consequence of the public spirited action it has taken’.

Costs are an important consideration when choosing which forum to bring proceedings under. Litigants should therefore appreciate that VCAT does not easily give out orders for costs. VCAT will have regard to each of the factors set out under Section 109 (3) and the Tribunal will apply the test stringently.

Written by RSG Lawyers.

Footnotes provided upon request.