VCAT and claims for lost time

I was recently involved in a matter where a self represented applicant to a proceeding in the Victorian Civil and Administrative Tribunal (VCAT) had a substantial claim for damages and a substantial claim for lost time in preparing the matter for hearing. This is a fairly typical claim for a self represented litigant in VCAT.

I have included below a discussion of a claim for lost time in VCAT.

s109 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (the VCAT Act) is the governing provision for a claim for costs. s109 provides as follows (amongst other things):

(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.

The term 'costs' is not defined in the VCAT act. However there has been ample authority on the meaning of 'costs' in the VCAT Act.

'Costs' are not considered to include the time taken by an unrepresented litigant (who is not a lawyer) to prepare and run his or her matter. In the matter of Aussie Invest Corporation Pty Ltd v Hobsons Bay City Council [2004] VCAT 2188 (Aussie Invest v Hobsons Bay) Morris J, as President of VCAT, considered an application for lost wages and travelling expenses made by an unrepresented litigant. In that matter a non legal member considered that the applicant had acted unreasonably in causing an adjournment and ordered the applicant to pay costs (assessed at $150) subject to a review by Morris J on the question of whether VCAT has the power to order costs in the nature of lost wages and travelling expenses.

At [7] and [8] Morris J looked at s62 and noted that it encourages parties to appear without legal representation or 'professional advocates'. s62(1) provides as follows:

In any proceeding a party-

(a) may appear personally; or

(b) may be represented by a professional advocate if-

(i) the party is a person referred to in subsection (2); or

(ii) another party to the proceeding is a professional advocate; or

(iii) another party to the proceeding who is permitted under this section to be represented by a professional advocate is so represented; or

(iv) all the parties to the proceeding agree; or

(c) may be represented by any person (including a professional advocate) permitted or specified by the Tribunal.

At [9] Morris J noted that the extent and nature of representation depends on the particular list. For instance, in the residential tenancies list landlords are usually represented by estate agents and tenants usually appear in person, whereas in the planning list the most common form of representation was via a planning advocate. At [10] Morris J considered that because of the encouragement of self-representation and the range of other representation available, it would be odd if 'costs' was confined to money paid to, or a liability incurred for, professional legal services.

At [18] Morris J held as follows:

1. An order as to costs is an order in the nature of an indemnity, or partial indemnity.
2. VCAT cannot make an order for costs which would have been incurred if the person engaged professional services, but were not in fact occurred.
3. VCAT does not have the power to make an order for costs in favour of an unrepresented person based on the time spent by that person in relation to the proceeding.
4. Where an unrepresented person loses wages or incurs travelling expenses in order to attend the hearing of the proceeding, this is an outgoing directly related to the proceeding which can be indemnified.

At [19] Morris J held that the order for costs contemplated in the amount of $150 for lost wages and travel could be indemnified by way of an order for costs.

In the matter of Greenhill Homes Pty Ltd v Allianz Australia Insurance Limited [2006] VCAT 184 (Greenhill v Allianz), VCAT considered that the applicant conducted the proceeding in a way that disadvantaged the respondent and the application also lacked merit. The joined parties, the owners of the subject property, made an application for their costs. The joined parties were not legally represented but sought out of pocket expenses together with loss of income.

At [16] Deputy President Aird reiterated the comments of Morris J and commented that VCAT cannot pay costs to an unrepresented litigant where, if that party was represented, that party would not have been able to cover the expenses claimed by them in the application (at [17]):

However, whilst the Tribunal may have power to award costs in favour of unrepresented person, it must always have regard to the provisions of s109 of the Act. Section 109 is quite clear – each party must bear their own costs unless the Tribunal is satisfied it should exercise its discretion under s109(2) having regard to the matters set out in s109(3). I am not persuaded that the Tribunal’s discretion should be exercised in favour of an unrepresented party where to do so would allow that party to benefit from an order for costs in circumstances where it would not otherwise be in a position to recover costs if legally represented, for instance when attending a hearing in their capacity as a party to the litigation and/or to give instructions to their legal representatives.

VCAT also noted that some of the costs pre-dated the proceeding, and Deputy President Aird noted the requirement in s109 that the costs be costs 'in the proceeding' (at [19]):

The power to award costs in s109 relates only to costs of a proceeding. Although parties to this proceeding, Mr and Mrs Tieri have not commenced their own proceeding. It appears that a significant portion of the miscellaneous costs claimed by Mr and Mrs Tieri were incurred well before they lodged their insurance claim in November 2003, and the Applicant lodged its application with this tribunal in May 2004. Mr and Mrs Tieri also claim the cost of legal advice they obtained in April/May 2005 (the exact date in unclear). They have not been represented at any time during the course of the proceeding and I cannot be satisfied these costs should properly be described as ‘costs in the proceeding’. Although some of the miscellaneous costs were incurred after the commencement of this proceeding I am not persuaded I should exercise my discretion under s109 as I cannot be satisfied they can properly be described as costs incurred ‘in the proceeding’.

For the above reasons, in Greenhill v Allianz the joined parties were unsuccessful in their application for costs.

Another costs application came before Deputy President Aird in the matter of The Gombac Group Pty Ltd v Vero Insurance Limited [2006] VCAT 238. In that matter an application for review of an insurer's decision was dismissed and an appeal was unsuccessful. The owner sought reimbursement for the loss of five days leave without pay to attend the hearing. Deputy President Aird referred to her decision in Greenhill v Allianz and on that basis denied the application (at [16] and [17]).