Recent Decision Analysis – Watpac Construction v Cota Residential Investments

A recent County Court decision in Victoria has analyzed the issue of costs in proceedings that have been discontinued and when the matter was heard in multiple jurisdictions. Firstly, Judge Kirton discussed the Court’s discretion in awarding costs, noting that a costs award is designed to compensate the successful party, rather than to punish the unsuccessful party. Her Honour emphasized that an assessment of whether the plaintiff acted reasonably in commencing the proceeding originally is an important consideration in assessing costs in a discontinued proceeding.

A primary focus of the judgement is analysing whether the VCAT proceeding and the County Court proceeding constituted two separate proceedings or one matter in two jurisdictions. Applying the principles in the recent case of Krongold, the referral of the matter from VCAT to the court “does not have the effect of issuing a fresh or new proceeding”, and the referred proceeding is “at all times taken to have commenced at the time the VCAT proceeding was issued”. This is to ensure as much continuity as possible between the different jurisdictions so that the matter can be resolved effectively.

The effect of this decision is that costs incurred in VCAT can be recoverable following a referral to the County Court as they are still the same proceeding. Her Honour held that in these circumstances, the avenue of section 109 of the VCAT Act is not relevant. According to rule 63A.09 of the County Court Civil Procedure Rules 2018, where proceedings from another court or tribunal are referred to the Court, that Court has the power to determine costs.

The County Court ultimately held that each party should bear their own costs (incurred in VCAT and the Court).