Portico Signage Dispute Leads to VCAT Costs Order

Body Corporate No. 1 Plan No. PS431905W v The First East Auction Holding (Retail Tenancies) [2008] VCAT 1546

Quick Read

This 2008 VCAT decision is about a dispute in a Prahran strata title building over a sign above an entrance portico between tenants under common property licences that dragged them and the strata building into litigation. Despite the case involving arguments about the sign locations and tenants conducted, VCAT only had to decide about costs orders when one tenant removed their Aveda sign at the last minute. After considering the facts, the licence, cost provisions applying to VCAT and the parties’ conduct, VCAT overturned the default position and said it was ‘fair, that the tenant that installed and removed the sign pay the other tenant’s and the strata building’s costs. It’s a great reminder that how parties conduct cases can affect their exposure to cost orders and what VCAT will consider in those situations.

Implications

The default position at VCAT is that parties pay their own costs.
But VCAT can still order costs if it’s ‘fair’ under s 109(2) and s 109(3).
The relative strengths of the parties’ cases are an important factor.
In this case, the case was ‘strongly in favour’ of one party.
The new sign was not in the permitted location.

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Full Report & Case Details

This decision by VCAT is about a disputed sign swap on common property by commercial tenants.

In this commercial strata building at Prahran, Victoria a ground floor shop was leased to Yellowco Two and a first floor office was leased to First East Auction Holdings. Yellowco Two had constructed a portico entrance to its shop with a sign advertising its Aveda business above it with strata building approval.

Separately the strata building gave each tenant rights under a common property licence to install signs on defined parts of the portico.

But First East Auction Holdings removed Yellowco Two’s sign and put its own sign in the same location [because it was more visible there] without approval. That was not the location under the licence.

After a series of inter strata building complaints, the dispute ended up at VCAT between the tenants and the strata building.

The strata building and Yellowco Two argued that the sign was installed in a different location than was authorized under the licence, without strata building approval and without Yellowco Two’s approval.

First East Auction Holdings admitted that it had swapped signs but argued its sign had been installed in the designated area under the common property licence and that Yellowco Two had agreed to the sign location, or at least acquiesced in the sign change [creating a legal estoppel].

But, just before the VCAT hearing First East Auction Holdings removed its sign.

So, the primary issue was about the costs of the case.

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Keywords

#VIC #VCAT #licence #signs #costs #2008 #VCATA1988 #s109