ACCENT ON HOMES PTY LTD and GHIANN PTY LTD
[2007] WASAT 22 (S)
•3 MAY 2007
| JURISDICTION | : STATE ADMINISTRATIVE TRIBUNAL | ||
| STREAM | : COMMERCIAL & CIVIL | ||
| ACT |
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| CITATION |
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| MEMBER |
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| HEARD |
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| DELIVERED | : 30 JANUARY 2007 | ||
| SUPPLEMENTARY | |||
| DECISION | : 3 MAY 2007 | ||
| FILE NO/S |
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| BETWEEN |
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AND
GHIANN PTY LTD
Respondent
| FILE NO/S | : | VR 283 of 2005 |
| BETWEEN | : GHIANN PTY LTD |
Applicant
AND
ACCENT ON HOMES PTY LTD
Respondent
Catchwords:
State Administrative Tribunal Act 2004 (WA) - Application for costs - Order granting leave to apply for costs within limited time - Effect of failure to comply
Legislation:
State Administrative Tribunal Act 2004 (WA), s 87(1), s 87(3), s 92
State Administrative Tribunal Rules 2004, r 22
Result:
Application for costs dismissed
Category: B
Representation:
VR 235 of 2005
Counsel:
| Applicant | : | Mr G Slattery |
| Respondent | : | Mr G Wates (Acting as Agent) |
Solicitors:
| Applicant | : | Minter Ellison |
| Respondent | : | N/A |
VR 283 of 2005
Counsel:
| Applicant | : | Mr G Wates (Acting as Agent) |
| Respondent | : | Mr G Slattery |
[2007] WASAT 22 (S)
Solicitors:
| Applicant | : | N/A |
| Respondent | : | Minter Ellison |
Case(s) referred to in decision(s):
Jackamarra v Krakaouer & Anor [1998] HCA 27 (dated 25 April 1998)
Lai & Anor and Costa [2006] WASAT 117 (S)
Miles and Anor v Palm Beach Pty Ltd [2001] WASC 42 (20 February 2001)
[2007] WASAT 22 (S)
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
1 Ghiann Pty Ltd, as a result of the review of a decision of the
Building Disputes Tribunal, had the award in its favour improved by some
$21,000.2 Ghiann applied for costs pursuant to leave granted by the Tribunal to
do so, but failed to comply with the time limit imposed. Accent on Homes Pty Ltd contended that Ghiann had no right to costs by reason of such failure.
3 In considering the merits of the application the Tribunal rejected a
submission made on behalf of Accent, to the effect that Ghiann could not claim the costs of obtaining legal advice from a legal practitioner who had not appeared in the proceedings on its behalf. The Tribunal considered s 87(3) of the State Administrative Tribunal Act 2004 (WA) permitted a claim of this nature. However, after analysing all of the costs claimed the Tribunal concluded that the costs were not significant and were incidental to the amount of the claims made in the proceedings and the benefit of the review order, so that there was no sufficient reason to depart from the starting position, that in proceedings before the Tribunal, each party should bear its own costs. It was therefore not necessary to decide whether the Tribunal had power to extend the time limit for the making of the application, and if so, to determine what criteria should be applied. The application for costs was accordingly dismissed.
The application for costs
4 On 30 January 2007 the Tribunal published its final decision in
respect of the above matters. The Tribunal indicated in its reasons for decision that it would grant the parties a limited time within which to make an application for costs, should either party wish to do so. The Tribunal’s orders issued on the same day included an order granting leave to the parties to apply for costs, subject to compliance with specific orders for the application to be made in writing, by affidavit, detailing the amount of costs claimed, the basis on which costs were computed, accompanied by an outline of written submissions as to why costs should be ordered, and an order that those documents be filed with the Tribunal and served on the other party on or before 21 February 2007.
5 On 21 February 2007 Ghiann Pty Ltd (the owner), filed a document
headed "Application for Costs" incorporating an affidavit of
[2007] WASAT 22 (S)
George Wates, and an outline of written submissions in support of the application.
In accordance with the Tribunal's orders made on 30 January 2007, Accent on Homes Pty Ltd (the builder), filed written submissions opposing the owner's application for costs. The submissions assert that the owner's application for costs was served on 23 February 2007, and that as this was not in compliance with the Tribunal's order, the application for costs should be dismissed. The submissions go on to deal with the merits of the application. The owner has not disputed the contention that the application for costs was not served by 21 February 2007 as required by the Tribunal's order.
The effect of non-compliance with the Tribunal's order
7 The course which the application for costs has followed raises a
number of interesting issues. Does the Tribunal have power pursuant to s 92 of the State Administrative Tribunal Act 2004 (WA) (SAT Act) read with r 22 of the State Administrative Tribunal Rules 2004 to grant an order extending time for the making of the application for costs? That would of course require that an opportunity be given to the owner to make such an application. If such an application were to be made, upon what criteria should it be granted? See the principles discussed in Jackamarra v Krakaouer & Anor [1998] HCA 27 (dated 25 April 1998), and the criteria to be considered, which depend upon whether the builder had a vested right in the proceedings being finalised as at 22 February 2007, as no application for costs had been served on it, on the preceding day?
8 These issues will need to be determined only if the Tribunal
considers that on the material before it, costs should otherwise be awarded to the owner. We accordingly turn to consider the merits of the application.
The merits of the cost application
9 The principles to be considered in an application for an award for
costs, in relation to proceedings for the review of a decision of the Building Disputes Tribunal, are set out in Lai & Anor and Costa [2006] WASAT 117 (S). The Tribunal there stated, commencing at par 15:
"Having regard to the provisions of s 87 of the SAT Act to which reference has been made above, the intent of the legislation is clear that the starting point in any consideration of
[2007] WASAT 22 (S)
an application for costs, is that each party should bear their own costs. It is intended that the Tribunal should remain readily accessible to the public at relatively low cost, and in particular, that the Tribunal should act as speedily and with as little formality and technicality as is practicable and minimise the costs to parties as is expressly prescribed in s 9 of the SAT Act. Accordingly, great care should be taken in exercising a power to award costs to ensure that accessibility to the Tribunal is not affected."
10 The Tribunal then went on to make a number of observations relating
to the award of costs by the Disputes Tribunal and acknowledged that the legislative scheme for the review of decisions of the Disputes Tribunal is different to that governing the Tribunal's general review jurisdiction, which relates to decisions made by government, local authorities and other bodies. That is a true administrative decision review process, whereas the parties in proceedings before the Disputes Tribunal are private persons engaged in adversarial litigation. The Tribunal recognised that there would be some cases in which an injustice could result by not allowing costs to be recovered and that it was relevant to take into account that an inability to recover costs might in practical terms affect access to the Disputes Tribunal, which would not be in the public interest.
11 Neither the owner nor the builder was legally represented before the
Disputes Tribunal. Nevertheless, the nature of the issues raised in the review and the monetary value of the claims would have justified legal representation by both parties in the review proceedings. The owners' claim for delay alone, exceeded $600 000 and the claim for delay required a difficult analysis of both legal concepts and facts. The case is one in which there were claims and counter-claims, which resulted in two separate applications which were consolidated. We consider that the owner was the substantially successful party, which in a building dispute would be generally entitled to costs as being the party to which there was a final flow of money: Miles and Anor v Palm Beach Pty Ltd [2001] WASC 42 (20 February 2001). In such circumstances, there is much to be said for an award of costs. If costs could not be recovered as a matter of course in matters such as this it would operate as a disincentive to the use of the Disputes Tribunal.
12 In Lai, which was also a complex matter, the Tribunal nevertheless declined to order costs, because the costs incurred were relatively incidental to the benefit obtained from the order on review. It is relevant therefore to have regard to the individual costs claimed.
[2007] WASAT 22 (S)
13 The first amount claimed is $275 in relation to costing advice
provided by Dallessio Building Services. These costs were in fact incurred in relation to a report provided to the Disputes Tribunal. No further costings were provided on review. The costs incurred were not raised on review and were not dealt with by the Disputes Tribunal. By virtue of s 87(1) of the SAT Act, the Tribunal can only award costs "in a proceeding of the Tribunal". These costs are therefore not recoverable.
14 The next amount claimed is $425 in respect of a report provided by
the Archicentre Building Advisory Service relating to the cracking of internal bricks substituted by the builder for the type specified under the applicable building contracts. The issue before this Tribunal was whether there had been a breach of contract by reason of the substitution of brick types, and if so what damages resulted. Whether the substituted bricks were defective, and whether cracking resulted, were not issues for determination by the Tribunal. The costs are therefore not recoverable.
15 A further amount of $2275 is also claimed in respect of "advice,
meetings, preparing reports and further inspection of houses" by a representative of the Archicentre Building Advisory Service. The extent of defective work was not an issue in the review. The Tribunal did not permit evidence to be led from the Archicentre Building Advisory Service because that evidence was not relevant to the review. The costs are therefore not recoverable.
The next claim is in respect of the Tribunal's hearing fee of $736. If costs were to be awarded, that amount would be allowable.
17 A claim is then made for $3750 in respect of legal advice provided
by Mr Burgoyne, a legal practitioner. Section 87(3) of the SAT Act empowers the Tribunal to make an order for payment by a party of the costs of another party, which power includes the making of an order for the payment of an amount to compensate the other party for any expenses, loss, inconvenience, or embarrassment resulting from the proceeding or the matter of which the proceeding was brought. We therefore do not accept the submission made on behalf of the builder that such costs cannot be claimed because Mr Burgoyne did not represent the owner in the proceedings. To the extent that the advice might be procedural in nature, so that the owner could conduct the proceedings without a legal practitioner appearing on its behalf, we would regard the cost of such advice as being properly recoverable.
[2007] WASAT 22 (S)
18 It is apparent that Mr Burgoyne reduced his costs substantially and
that on a time basis he would have been entitled to charge considerably more than he did, having spent some 34 hours attending to the matter. Nevertheless, the amount charged covered all of the advice given. There is no information from which we can distinguish between costs incurred in providing advice on the merits of the claims and procedural advice. The manner in which the owner’s claims were advanced would suggest that any procedural advice was not a significant component of the advice provided. Alternatively, if this conclusion is wrong, and more extensive procedural advice was given, the owner clearly did not follow that advice. We refer to the many criticisms we made in our earlier reasons for decision, of the manner in which the owner presented its case. In the circumstances we do not consider that more than 20% of the costs, or $750 should be regarded as being recoverable in principle.
19 The remaining costs claimed totalling some $405 represent
photocopying, stationery, printing and sundries. No vouchers have been provided to support this expenditure. We note that it includes an amount of $105 in respect of a SAT application fee and that amount, at least, is allowable in principle.
20 There are other factors relevant to the discretion to award costs. In
this instance, as reflected in the earlier reasons for decision, the lack of preparation on behalf of the owner contributed, very substantially, to the hearing being adjourned on the first day of the initial hearing. The manner in which the owner's case was presented also contributed significantly to prolong the completion of the hearing. The builder has had to bear its costs in relation to the initial adjournment and of the extended hearing. In addition the total costs of $1591 we have determined to be allowable in principle are not significant in relation to the claims advanced by the owner which were in excess of $600 000 and the benefit to the owner of the review order. The review order resulted in the award made by the Disputes Tribunal being increased by some $21 000. The result, in our view, is that any costs to which the owner would be entitled are incidental to the proceedings when regard is had both to the claims made by the owner and to the result of the review.
21 Taking all factors into account we do not consider that there is a
sufficient basis upon which to make an order which varies the starting
position in this Tribunal, that each party should bear their own costs.22 In view of the conclusion to which we have come, it is not necessary
for us to give further consideration to the question of our power to extend
[2007] WASAT 22 (S)
the time period for compliance with the order made on 30 January 2007
and the criteria to apply to any such order.
Order
For the above reasons, we order as follows:
1. The application by Ghiann Pty Ltd for costs is dismissed.
I certify that this and the preceding [23] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________ MR C RAYMOND, SENIOR MEMBER
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