Accent On Homes Pty Ltd and Ghiann Pty Ltd - [2007] WASAT 22

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: COMMERCIAL & CIVIL

ACT: BUILDERS' REGISTRATION ACT 1939 (WA)

CITATION: ACCENT ON HOMES PTY LTD and GHIANN PTY LTD [2007] WASAT 22

MEMBER: MR C RAYMOND (SENIOR MEMBER)
MR M SPILLANE (MEMBER)

HEARD: 27, 28 NOVEMBER 2006 AND 15 DECEMBER 2006

DELIVERED : 30 JANUARY 2007

FILE NO/S: VR 235 of 2005

BETWEEN: ACCENT ON HOMES PTY LTD
Applicant
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:

Builders Registration Act 1939 (WA) - Review of decision of Building Disputes Tribunal - Determination of date for commencement and completion of works - Damages for delay - Risk of theft from site - Whether costs of brick build up subject to adjustment - Claim for damages for substitution of specified materials - Review of quantum of compensation for remedial and incomplete works

Legislation:

Builders' Registration Act 1939 (WA), s 12A, s 41
Home Building Contracts Act 1991 (WA), s 17
State Administrative Tribunal Act 2004 (WA), s 27

Result:

Application under VR 235 of 2005 dismissed
Application under VR 283 of 2005 partially successful

Category: B

Representation:

VR 235 of 2005

Counsel:

Applicant: Mr G Slattery
Respondent: Mr G Wates and Ms J 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

Solicitors:

Applicant: N/A
Respondent: Minter Ellison

Case(s) referred to in decision(s):

BCCI v Ali [2002] 1 AC 251
Homburg Houtimport BV v Agrosin Private Ltd (The Starsin) [2003] 2 WLR 711
State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) & Ors [1999] HCA 3
Tangent Nominees Pty Ltd and Edwards & Anor [2006] WASAT 243

REASONS FOR DECISION OF THE TRIBUNAL:

Index	*Page*
1.	Summary of Tribunal's decision	5
2.	The consolidated proceedings	7
3.	The issues for determination and sources of evidence	8
4.	Background	12
5.	Commencement and completion dates	16
6.	Extension of time for completion	19
7.	Practical completion	21
(a) The standard of completion required	21
(b) Was practical completion achieved?	24
(c) Whether practical completion was accepted or waived	31
8.	Delay damages	33
9.	Which party bears the risk of theft?	37
10.	Brick build ups	37
(a) Survey costs	40
(b) Engineers inspection fees	40
(c) Propping costs	40
(d) Engineers inspection after build ups	41
11.	Substitution of lime silica bricks	42
12.	Claims for additional compensation for defective or incomplete work	43
13.	Conclusion and orders	44

Summary of Tribunal's decision

In this matter both parties to a hearing before the Building Disputes Tribunal were granted leave to review the decision and their respective applications were consolidated for the purposes of the review hearing.
The dispute arose out of four separate building contracts entered into between the property owner, Ghiann Pty Ltd, and the builder, Accent On Homes Pty Ltd, for the construction of four separate dwelling units. The Disputes Tribunal awarded compensation to the owner for remedial work, for the adjustment costs in respect of an item held to be in the nature of a provisional sum item and damages for delay in completion of the building works. Accent on Homes Pty Ltd challenged the basis of all orders other than in respect of the compensation for remedial work. The builder also claimed that it was not liable for the costs of an appliance stolen from one of the units, as found by the Disputes Tribunal, because the theft had occurred after the date of practical completion. Ghiann Pty Ltd challenged the amounts awarded for remedial work and claimed damages of $160 000 for a claim which had been dismissed in respect of substitution of materials in a total amount of $40 000, delay damages in an amount of $624 000 and additional compensation over and above the costs for remedial work awarded.
In relation to the claim for damages for delay, there were a number of sub‑issues which had to be determined, namely the date for commencement of the works, the builder's entitlement to claims for extensions of time and the dates on which actual practical completion was achieved. The Tribunal held that the commencement of the works had not been delayed by the failure of Ghiann Pty Ltd to provide compaction certificates in respect of earthworks to be undertaken by it. Further, that Accent on Homes Pty Ltd had failed to give notice pursuant to the respective contracts so as to claim any extensions of time. On an analysis of all the material before it, the Tribunal concluded that practical completion had been achieved in respect of Unit 4 on 15 December 2003 which was 22 weeks after the contractual completion date. Although practical completion was never achieved in respect of Units 2, 3 and 4, the Tribunal found that Accent on Homes Pty Ltd was not liable for any delay beyond 6 May 2004 when Ghiann Pty Ltd elected not to pursue an Order to Remedy the outstanding work and instead to claim an order to pay compensation in lieu thereof. The Tribunal found that Ghiann Pty Ltd was entitled to delay damages in an amount of approximately $42 400. These damages were assessed based on evidence of rental income in respect of the units and took into account the Tribunal's finding that works to be carried out by the owner after practical completion would take six weeks to complete.
Ghiann Pty Ltd's primary claim for damages for delay was dismissed. The claim was advanced on the basis that it was contemplated that the units were constructed for the purposes of sale, that they could not be sold because of the outstanding work required to achieve practical completion and that therefore Accent on Homes Pty Ltd was liable for all holding costs, by way of interest, to the present date. The Tribunal found that the measure of damages was inappropriate because Ghiann Pty Ltd had provided no evidence of and was not prepared to concede, that to advance such a claim, a credit would have to be given to Accent on Homes Pty Ltd in respect of the capital appreciation by which Ghiann Pty Ltd had benefited by not selling the properties. In any event it was not proved that the builder was aware before or at the time of entry into the contracts that the units were intended for sale.
Based on the Tribunal's findings as to the failure to achieve practical completion in respect of the unit from which an appliance was stolen, the Tribunal found that risk lay with Accent on Homes Pty Ltd which was accordingly not entitled to a reversal of the Dispute Tribunal's findings on that issue.
In respect of the claim concerning the adjustment to the cost of certain brick build ups, the Tribunal rejected the submissions on behalf of Accent on Homes Pty Ltd that the particular term was not in the nature of a provisional sum item. While the Tribunal accepted much of the costing evidence provided on behalf of Accent on Homes, it rejected some of the costings on the basis that the evidence was not supported by Accent on Homes Pty Ltd's own records. Further, the Tribunal rejected the contention that Accent on Homes Pty Ltd was entitled to a 15% mark up on the costs incurred, in respect to the build ups, because that was inconsistent with the contract provisions which provided that the mark up had been included in the contract sum and the only adjustment to be made was in respect of costs actually incurred. Consequently the Tribunal found that Ghiann Pty Ltd was entitled to a payment of an initial $2161.80 by way of adjustment of such costs, over and above the $4867 allowed by the Disputes Tribunal.
In relation to the claim advanced because of an unauthorised substitution of building materials, the Tribunal was unable to quantify the loss suffered by Ghiann Pty Ltd and therefore awarded nominal damages of $10 in respect of each contract, a total amount of $40.
In relation to the various claims advanced by Ghiann Pty Ltd for adjustment of the compensation awarded by the Disputes Tribunal for incomplete or defective work, no evidence was provided beyond that which had been furnished to the Disputes Tribunal. As that evidence was extremely limited and consisted of no more than the conclusions stated of the expert witness for Ghiann Pty Ltd, without any rationale or factual basis being provided to support the conclusions, the Tribunal was not prepared to come to a conclusion different to that of the Disputes Tribunal, which as a specialist Tribunal, with a builder member, had been able to assess the claims notwithstanding the deficiency in the evidence.
The Tribunal accordingly issued orders which affirmed the decision of the Building Disputes Tribunal to the extent that the decision was not affected by the above findings, but set aside the orders affected by the decision, substituted its own decision and otherwise dismissed the parties' respective applications for review seeking additional relief. Leave was granted for the parties to apply for costs within a limited timeframe, if so advised, but the Tribunal indicated that it would need to be persuaded that it was appropriate to make any award for costs given the starting point in the Tribunal that each party should bear its own costs.

The consolidated proceedings

Accent On Homes Pty Ltd (builder) first lodged an application in VR 235 of 2005 seeking a review of a decision of the Building Disputes Tribunal (Disputes Tribunal) reflected in an Order to Pay 149/2004‑05 dated 30 March 2005. Ghiann Pty Ltd (owner) then made a separate application in VR 283 of 2005 seeking to review the same decision.
On 12 December 2005, this Tribunal granted leave, and an order extending time in respect of the owner's application, to enable the decision to be reviewed in accordance with s 41 of the Builders' Registration Act 1939 (WA) (BR Act).
The building works which were the subject of the proceedings before the Disputes Tribunal consisted of the construction of four double storey units upon the owner's land described as Lot 2 East Street, Fremantle. A separate contract was entered into in respect of each unit, and it is common cause that the contracts in question are Home Building Work Contracts within the meaning of that term as defined in the Home Building Contracts Act 1991 (WA) (HBC Act).
For convenience, the proceedings were not consolidated initially. Directions were issued programming the matters to a hearing on the same day, but on the understanding that an order would be made for consolidation at the commencement of the hearing, as occurred on 27 November 2006.
The reasons for decision in respect of the owner's leave application reflected a considerable degree of confusion in the way in which the owner's case was presented. Unfortunately, the owner's preparation for the final review hearing and the documentation filed, or lack thereof in some respects, resulted in obvious deficiencies in the owner's case. That contributed, very substantially, to the first proposed hearing of the review being adjourned on 11 September 2006 to 27 November 2006. During the course of the aborted September hearing, the Tribunal was at pains to explain the need to file and serve all documents needed to support the owner's claims and on which it was intended to rely. The hearing concluded with the Tribunal issuing detailed directions for the preparation of bundles of documents and the filing of witness statements. While the matter was adjourned to a final hearing commencing on 27 November 2006, it was directed that a directions hearing be held on 26 October 2006 so that the readiness of the matter for hearing could be reviewed and any final directions made.
At the directions hearing on 26 October 2006, the Tribunal remained concerned about the lack of clarity in the formulation of the owner's case, and raised with the parties its preference to commence the hearing entirely afresh, so that the transcript of proceedings before the Disputes Tribunal would be used only for cross-examination purposes and each party would lead evidence to establish its respective case. The Tribunal was persuaded, albeit primarily by the builder's legal representative but with the support of the owner, that to do so would add unnecessarily to the costs. As a result, the matter proceeded on the basis that the parties would rely on the transcript of evidence before the Disputes Tribunal, and their respective bundle of documents. Further directions were issued requiring notice to be given not less than seven days prior to the hearing of any requirement for a witness, who had provided a witness statement, to attend the hearing for cross‑examination.

The issues for determination and sources of evidence

The issues for determination are to be found in the parties' respective applications setting out the proposed grounds for review and in the subsequent Statements of Issues, Facts and Contentions which they were directed to file in support of those grounds. Many of the issues raised are subsumed in wider issues, which we have set out below to describe the principal issues for determination. They are as follows:
1.What was the contractual date for commencement and practical completion of the subject works?
2.What damages is the owner entitled to, if any, in respect of the delay in completion of the works?
3.Which party bears the risk of theft of a stove from Unit 1 on a date between 9 December 2003 and 4 January 2004?
4.On a proper construction of the building contracts, is the owner entitled to adjustment of the cost allowed for brick build ups and if so, in what amount?
5.Is the owner entitled to compensation for the substitution by the builder of lime silica bricks for clay bricks as specified for internal use?
6.Is the owner entitled to additional compensation above the amount allowed by the Disputes Tribunal for defective or incomplete work?
The grounds in respect of which the owner was granted leave to review the Disputes Tribunal's decision included an assertion that the Disputes Tribunal erred by omitting to make an order to compensate the owner for costs incurred in relation to the removal of a caveat. No reference was made to that matter in the owner's Statement of Issues, although in the Statement of Contentions at par 3.22, there is a reference to:
"caveat and cost of Quantities Surveyor, ArchiCentre and Lawyers fees
...
Ghiann has not received a quantity surveyor $275 award by Disputes Tribunal or the cost of ArchiCentre report $425."
During the hearing, Mr Wates advised the Tribunal that the owner would not pursue the claim in relation to the caveat for $175. No reference was made at any time during the hearing to the other costs referred to above.
The Tribunal endeavours to take a pragmatic approach, particularly in circumstances where a party is not legally represented, and ordinarily will allow the grounds of proposed review to be amended to accord with issues raised in the Statement of Issues, Facts and Contentions or possibly even to accord with issues raised only during the hearing, provided to do so will not prejudice the other party. However, as the Tribunal has been referred to no evidence to support the additional claims referred to, it would not be appropriate to permit the grounds of the review to be amended in relation to these matters.
As will appear from these reasons for decision, the case presented for the owner is subject to a number of deficiencies. The Tribunal has already commented on the circumstance that the owner's lack of preparation was a substantial cause of the final hearing being adjourned. Notwithstanding the very substantial amounts of monies claimed by the owners ‑ the claim for delay alone is some $624 000 ‑ the owner obviously received little legal assistance, or did not understand advice, on how to prepare for and present its case properly. It is noted that the owner did have the benefit of legal assistance - at least until 4 September 2006, when the Tribunal was notified by its solicitor that he had ceased to act. The owner filed only one witness statement, that being of Mrs Julia Wates. Mrs Wates is a director of Ghiann Pty Ltd. That notwithstanding, the statement contains very little direct evidence from her and to a large extent comprises of a summary of argument and reference to evidence given before the Disputes Tribunal. No evidence on any costings for remedial work was tendered, so that all that the Tribunal had before it was a three and a half page letter from D'Alessio Building Services, dated 5 June 2004, expressing the conclusions on costs of Mr D'Alessio, who apparently holds the degree B App SC (Quantity Surveying) and is a registered builder. The letter does no more than to identify each item of complaint raised in respect of the units and to set out against that item a dollar amount. There is nothing to indicate how Mr D'Alessio arrived at each estimate. The builder's solicitors gave notice requiring Mrs Wates to attend for cross‑examination, although as it transpired, in view of a ruling which the Tribunal made in relation to the proper measure of damages, the builder advised that there was no need to cross‑examine Mrs Wates.
The builder filed the witness statements of Mr Gregory Mark Grainger, Managing Director of the builder, and of Mr Andrew Schroder, who is no longer employed by the builder, but at the relevant time was employed as a bricklayer and estimator. The owner did not give notice for either witness to attend for cross‑examination. This notwithstanding, on the first day of the hearing, Mr Wates, for the owner, applied for leave to cross‑examine Mr Grainger. In order to avoid another adjournment of the hearing Mr Grainger had to make special arrangements to attend, which he did, and he was submitted to cross‑examination.
Also on the first day of the hearing, and on short notice to the builder and the Tribunal, Mr Wates applied to tender a report from an architect, Mr Barry Jones from the firm ArchiCentre. The application was opposed. It emerged that Mr Jones's evidence could not advance the hearing because all that he could properly do was to identify, and if need be, expand upon the various items of complaint to establish defective work. However, the builder accepted the findings of the Disputes Tribunal and its obligations to comply with the Order to Remedy which had been issued so that there was no issue in respect of these matters. It was then submitted by Mr Wates, although somewhat weakly, that Mr Jones could give evidence as to the cost of remedial work. There was nothing to indicate to the Tribunal Mr Jones's qualifications, as an architect and registered builder, to give expert evidence as to costings. In any event, it would have been quite inappropriate for that evidence to have been given without a witness statement being served in accordance with the Tribunal's prior directions, so that the builder could adequately prepare its case and cross‑examine Mr Jones, with the result that to permit that course would have resulted in yet another adjournment of the matter. The Tribunal was satisfied, based on its exchanges with the parties during directions hearings, and on the occasion of the adjournment of the final hearing, that the owner had been given a more than fair opportunity to prepare its case. The Tribunal accordingly ruled that it would not permit Mr Jones to be called, or his report to be tendered.
As it transpired, again to a large extent due to the inefficient manner in which the owner's case was presented, the hearing could not be completed within the allotted two days and had to be adjourned to a further hearing date on 15 December 2006. On that resumed hearing date, Mr Wates revived the application to call Mr Jones and to tender his report. No reasons were given to justify doing so which were any different to those advanced during the earlier part of the hearing. The Tribunal ruled against the owner's application on the same basis as the previous occasion.

As a result, the only evidence before the Tribunal was the transcript of the proceedings before the Disputes Tribunal, the bundles of documents prepared by the parties pursuant to the Tribunal's directions, and the abovementioned witness statements. To the extent that witness statements did not establish the truth of the contents of any of the documents in the bundles, the Tribunal indicated that it would nevertheless have regard to the documents, as it was not bound by the rules of evidence, but would determine the weight to be given to any such documents.

Background

The four contracts are each in accordance with the standard forms in MBA Home Building Works Contract Edition 3. Appendix II of each contract identifies the documents included and forming part of the contract. Somewhat peculiarly, Appendix II in each contract identifies, as part of the contract documents, variations to contract entered into prior to the date of signature of the contract. One of those variations is relevant to the brick build up issue, and further reference will be made to it below.
The contracts provide that the works were to commence within 10 days of the issue of all necessary approvals, or the date upon which the owner delivers to the builder evidence of title, whichever is the later.
The owner claims that the builder could have commenced work earlier than he did. The builder advances, as the only justification for delay, that the owner was responsible for site works, pursuant to a variation entered into on 3 December 2002, and that the works could not commence until the owner provided a compaction certificate. The owner's documents contained correspondence showing that a copy of the relevant certificate of title and finance approval documentation were provided to the builder prior to signature of the contract (docs A34 to A36). Similarly the building licence was issued prior to the date of signature of the contracts (doc A3).
The evidence before the Disputes Tribunal, which was not disputed by the builder, was that all approvals had been obtained prior to signature of the contracts (T:52 – builder's docs page 251).
Mr Grainger testified that it was necessary to install screw piles under the brick build ups to avoid loading a sewer line which ran under the site (statement par 27). Further, on 12 February 2003, the builder sent contractors to the site to install the screw piles (statement par 28).
By way of assertion, Mr Wates put in issue that screw piles constituted part of the brick build up, but tendered no evidence on this issue. The distinction between making submissions and providing evidence was explained on numerous occasions to Mr Wates. In any event, it is not disputed that the piling contractors attended the site on 12 February 2003.
Mr Andrew Schroder testified in his statement that where the owner is carrying out the earthworks, the owner has an obligation to advise when the site is ready. That as it was the owner's obligation to proceed with the footings as soon as the earthworks were complete, "I am able to say that until late February 2003 the earthworks were not complete. Had they been complete the footings would have been laid within 7 days of me being notified" (par 16).
The issue of whether there was a requirement for a compaction certificate to be provided after the site had been levelled and then whether another compaction certificate should have been provided after the brick build up and establishment of the finished pad level was first raised as a possibility by one of the members of the Disputes Tribunal, Mr P Mittonette (T:46 – builder's docs page 245).
The only compaction certificates tendered in evidence appear in the owner's documents (A24 to A27), one in respect of each unit and which are all dated 18 March 2003. Mr Grainger states that these certificates are not relevant to the compaction of the area for the brick build ups but relate to the ground slab (statement par 34).
Each of the contracts provided for the works to be completed within 210 calendar days from the date of commencement.
The contracts also provided a procedure by which the builder could claim an extension of time in the event of the progress of the works being delayed by specified causes or conditions (cl 19, read with cl 16(d)). During the course of the performance of the contracts, there is only one letter upon which the builder relies and which is alleged by the builder to constitute notice under the contract of a claim for the date for practical completion to be extended. This is a letter dated 11 July 2003 (builder's docs page 72). Nevertheless, the builder submits that extensions of time should be given for delays caused by the owner allegedly providing the wrong toilets, and as an alternative argument, that an extension of time should apply as a result of delay in commencement of the works due to the owner's failure to notify that the earthworks were ready and to provide a compaction certificate.
During the performance of the works, and without obtaining the consent of the owner, the builder substituted lime silica bricks for clay bricks in the internal walls of the units as specified under the contracts (material/colour selection schedule 26 November 2002 – Exh 2).
By letter dated 2 December 2003, the builder gave the owner notice that Unit 4 had reached practical completion. It is common cause that the owner's representatives had carried out an inspection of Unit 4 and had provided a list of matters requiring attention. By letter dated 3 December 2003, Mr Wates, on behalf of the owner, disputed that practical completion had been achieved and that it could be achieved prior to installation of appliances, because "no further work has been done on the list of tasks".
By letter erroneously dated 2 December 2003 (it should have been dated 3 December 2003), the builder responded to the owner's above letter advising that the appliances would be installed and that all units would be at the stage of practical completion on 9 December 2003. The owner disputes that this letter is capable of constituting the notice of practical completion required under the contract.
By facsimile dated 17 December 2003, the builder notified the owner that as practical completion had been achieved on 9 December 2003 and the owner had not advised in writing of any items requiring attention within the time period set out in cl 26(c) of the contracts, the units were deemed to have achieved the stage of practical completion. By letter dated 19 December 2003, the owner disputed that practical completion had been achieved and complained about lack of access to carry out any inspections. The builder refused to hand over the keys until all monies alleged to be outstanding were paid, and closed its offices for the Christmas holidays.
On 8 January 2004, the owner lodged a formal complaint with the Disputes Tribunal. Under s 6 of the complaint form, the owner is required to state the date of practical completion, which he answered by inserting "today 8/1/04". Attached to the complaint form is an undated letter, addressed to the General Manager, Disputes Tribunal, in which the owner complained about the builder's claim that practical completion had been achieved. Reference was made to an inspection which had taken place in respect of Unit 4 on 27 November 2003, as a result of which a list of items "to be rectified in 7 days" was prepared, and it was asserted that many of those items remained unattended. In relation to the other three units, the owner asserted that he had gained access in the previous week. It is not clear how this was achieved, given that the owner had not received the keys. In any event, the letter reflects complaints about outstanding work.
Based on these events, the builder claims that practical completion was achieved by 9 December 2003, and that no work had been done between then and 8 January 2004 when the owner acknowledged that the buildings were practically complete. Mr Wates acknowledged the statement of practical completion made in the complaint form but asserted that the acknowledgement was wrong and that, clearly, practical completion had not been achieved.
During or about this period, the builder caused a caveat to be registered against the owner's land. This became a subject of further complaint by the owner which, in a letter to the Disputes Tribunal dated 10 March 2004, asserted that "[We] are now on the market and have interested parties. Unless the builder removes this caveat (he has received full payment) settlements will be delayed".
The owner had paid for and had received the keys for Unit 4 on 12 December 2003, Unit 3 on 14 January 2004, and Units 1 and 2 on 11 February 2004.
An inspector of the Builders' Registration Board, Mr Smith, conducted an inspection of all the units on 2 March 2004. The complaints which Mr Smith addressed, his observations in respect of them and the actions recommended, are set out in a report dated 26 March 2004.
On 8 April 2004, the Registrar of the Disputes Tribunal, acting under delegated power, issued an Order to Remedy No 322/2003-04 requiring the builder, within 28 days or such further time that may be allowed on application, to carry out remedial work consistent with the inspector's earlier recommendations, and some issues were referred to a full hearing of the Disputes Tribunal.
A directions hearing was conducted in 2004, the purpose of which was to identify the matters in issue, particularly as the owner contended that the builder had failed to comply with the Order to Remedy, but the period in which the work was to be completed had not expired. The builder failed to attend, and the transcript (builder's docs commencing at page 176) reflects that the owner wished to apply to convert the Order to Remedy into an Order to Pay and that it was advised that it could not do that until the 28 day period had elapsed on 6 May 2004. It is common cause that the builder did not comply with the Order to Remedy within the permitted period and that the owner proceeded thereafter on the basis that it claimed compensation.
The matter was set down for final hearing on 22 March 2005, which resulted in the decision now under review. The Disputes Tribunal's reasons for decision were considered during the course of the applications for leave to review the decision, and it is not necessary to make further reference to them, other than in the context of discussing the particular issues raised for determination. We now address those issues.

Commencement and completion dates

The contracts were each signed on 6 December 2002. All necessary approvals and evidence of title had been provided prior to this date. Subclause 9(a) of the contracts refers to the builder's obligation to commence work within 10 days of the issue of all necessary approvals, or the date upon which the owner delivers to the builder evidence of title. Before the Disputes Tribunal, and this Tribunal, the parties conducted the case on the basis that the clause meant that the builder had to commence work within 10 days of execution of the contracts. There is some doubt as to whether that is correct, and whether there was not an obligation to commence on signature. But, as the matter was not addressed by the parties, we shall proceed on that common assumption.
As stated above, it was Member Mr Mittonette of the Disputes Tribunal who raised the issue of whether there should have been two compaction certificates (T:14 – builder's docs page 245). Prior to that point, the following evidence was given (commencing at T:42 – builder's docs page 241):
"Grainger:Well I am suggesting that we commence when we can pour concrete on the job because the owner did their own site works because that wasn't part of the contract.
Chairman:OK.
Keating:That was the 17th of February, is that right?
Grainger:What we actually provided was an invoice for the concrete for the date they poured the concrete.
Chairman:That was on page … ?
Grainger:Page 92, 25th February, page 92 of the …
Chairman:Page 92.
Grainger:That was the footings and the brick build up so it wasn't the slab footing. That was the initial build up.
Chairman:Initial build up of bricks, yes.
Mittonette:And that’s your commencement date?
Grainger:Yeah.
Chairman:And that was the 25th February. That's the date of the invoice. Was that the actual date … the same date you did the work?
Grainger:They always invoice it on the day … of the day they've done the work."
Thereafter, the issue was raised as to whether or not the owner had provided a compaction certificate. Mr Grainger indicated in the affirmative. Mr Wates then explained that the earthworks were done in two parts, and that led to Member Mr Mittonette raising that there should have been two certificates.
In the proceedings before this Tribunal, the alleged delay in providing compaction certificates for the brick build up was the reason attributed by Mr Grainger for the delay in commencing work. His evidence was that, because of a variation to the contracts, the owner was responsible for the earthworks and had to notify when the earthworks had been completed, and provide two sets of compaction certificates, both before and after the brick build up had been constructed. Mr Grainger testified in his statement that a contract administrator, Ms Demi Buist, who is no longer employed by the builder and is believed to be living in Tasmania, was responsible for facilitating the start date of construction. He referred to a schedule (builder's document 314) said to be a record of telephone calls made by Ms Buist. This reflects an entry "14/01/03(db) tried calling Wates no answer on home phone. Left message on mobile to call re earthworks ASAP".
Mr Schroder's statement reflects that it was his practice, where someone else was carrying out the earthworks, to telephone them on a regular basis to find out when the earthworks would be completed. He also stated that as it was his responsibility to proceed with the footings as soon as the earthworks were complete, he was able to say that "until late February 2003 the earthworks were not complete. Had they been complete the footings would have been laid within 7 days of me being notified" (par 16). Notwithstanding that there is no direct evidence to contradict Mr Schroder's above evidence, we are unable to accept it as the reason for the delay in commencing works. Contrary to the above evidence before the Disputes Tribunal, Mr Grainger's statement of evidence reflects that the screw pile contractors attended on site on 12 February 2003 (par 28). Further, the only compaction certificate which was provided is dated 18 March 2003. It is apparent that the builder was more than willing to commence the works without receipt of the compaction certificate. Further, as Mr Schroder referred to in his evidence, there is a lead time, usually of seven days, in order to arrange for contractors to attend the site. It is probable, on the builder's own evidence, that it accepted that the earthworks had been completed by 5 February 2003. However, there is no evidence of any advice from the owner during or about this time, or subsequent to the alleged telephone call on 14 January 2003 from Ms Buist, that the earthworks had been completed.
It has always been the owner's case, as appears in the transcript before the Disputes Tribunal, that the earthworks had been completed in September 2002 and that the site was ready. The site survey plan is attached to, and forms part of, the contract documents. It reflects that the site works had been carried out. Before the Disputes Tribunal, Mr Grainger testified, in an attempt to rebut this, that the site works had been carried out to approximate levels and were not satisfactory.
The Tribunal has cause to approach the evidence provided by the builder with circumspection. As will be seen further below, there are instances in which it is demonstrably not accurate. The evidence of Mr Schroder referred to above is simply incorrect, and we consider that Mr Grainger has attempted to make an issue of the compaction certificates, which never existed until the suggestion that two certificates were required was made by Member Mittonette in the Disputes Tribunal. The evidence shows that no reliance was placed on the need for a compaction certificate prior to commencement of work. Once work had commenced, if the delay in providing a compaction certificate caused delay, that was a matter for which the builder would have been entitled to claim an extension of time.
In these circumstances, we are not prepared to accept Mr Grainger's interpretation of the telephone notes as reflecting that Ms Buist was seeking any confirmation from the owner that the earthworks had been completed because the builder was waiting for the compaction certificates to commence work. In the absence of direct evidence from Ms Buist, we accept only that a note was made of a telephone call to discuss some aspect of the earthworks.
The objective material establishes that the owner had done all that was necessary to obtain the necessary approvals and to provide proof of its title prior to the contract being entered into. The site plan attached to the contract drawings shows that site works were carried out also prior to the date of signature of the contracts. There is nothing to suggest that any work was done thereafter. There was nothing to prevent the builder from commencing work within 10 days of the date of signature of the contracts, that is, by 16 December 2003, which date we find is the contractual date for commencement of the works. We note that notwithstanding Mr Mittonette's suggestion that compaction certificates should have been provided before and after the brick build up, that the Disputes Tribunal's unanimous decision was to the same effect as we have found, and that Mr Wates' evidence that the site was ready in September 2002 was accepted.
The contractual period for completion of the works was 210 calendar days. The contractual date for practical completion in respect of each unit was, therefore, on our calculation, 15 July 2003, subject to any entitlement which the builder has to an extension of time.

Extension of time for completion

Clause 19 of each contract provides that, in the event that the progress of the works is delayed for any of a number of stated causes, including inclement weather or conditions resulting from inclement weather, in any such case, the builder shall be entitled to seek or make a variation by way of an extension of time for completion of the works in accordance with the provisions of cl 16(c) or cl 16(d), as the case may be.
Subclause 16(c) deals with variations to the contract in circumstances in which the builder agrees to undertake a variation required by the owner. It is therefore not applicable, because no extension of time is claimed in respect of any such variation to the works. Subclause 16(d) provides that where any variation to the contract or the drawings and specification is necessary, relevantly, by virtue of circumstances that could not reasonably have been foreseen by the builder at the time when the contract was entered into, then:
"[T]he Builder shall be entitled to such a variation provided that before carrying out the work relating to the variation, he gives to the Owner a statement setting out the reason for, and the cost to be incurred in respect of the variation, together with a copy of any written direction referred to in subparagraph (i)."
Subclause 16(e) refers to the statement mentioned in par (d) and provides that:
"[T]he Builder shall give the statement referred to in paragraph (d) to the Owner within fourteen days after the Builder:
(i)[not applicable]; or
(ii)became aware or should reasonably have become aware of the circumstances referred to in paragraph (d)(ii)."
It is noted that subclause 16(f) provides that where a statement is given to the owner by the builder, and the owner considers that the variation is not one to which the clause applies, the owner may apply to the Disputes Committee (Tribunal) for relief under s 17 of the HBC Act, provided that such application is made within 14 days after the statement was given to the owner.

The scheme of cl 16 of the contract is clearly designed to require the builder to give the requisite statement of a circumstance entitling the builder to an extension of time within the stated 14 day period, so as to provide the owner with an opportunity to satisfy himself that the builder is entitled to the variation to the terms of the contract, by extending the date for practical completion. The builder's entitlement to such a variation is expressed to be "provided that" the requisite statement is given. Further, the owner's entitlement to challenge the variation is dependent upon the owner, in turn, making an application to the Building Disputes Tribunal, as it is now called, within 14 days after the statement was given to the owner.
We find that the giving of a statement in accordance with cl 16(d)(ii) of the contract is a condition precedent to any entitlement to any extension of time. As only one letter is relied upon as constituting such a notice - that being a letter dated 11 July 2003 in which the issue of inclement weather was raised - we find that the builder is not entitled to any extension of time due to other causes.
We turn, therefore, to consider the claim for an extension of time in relation to inclement weather. The relevant portions of the letter dated 11 July 2003 addressed to George and Julia Waites (no issue is made as to the form of address) is as follows:
"As you are aware we have been experiencing a run of unusually consistent inclement weather over the past 3 5 weeks with further rains forecast.
…
The purpose of this correspondence is firstly to advise you that we will do everything in our power to speed up the building process and recover as much lost time as possible once the weather conditions allow and secondly to formally advise you that the contract will now be extended for a period yet to be determined (subject to ongoing weather conditions) in accordance with clause 19(a)(iii) of the building contract."
We are unable to construe this letter as constituting the statement required by cl 16(d)(ii) of the contract. It does no more than to indicate that some delay had been experienced over the past three to five weeks, and foreshadows that the contract would be varied in accordance with cl 19(a)(iii) by extending the date for practical completion once the period of delay for inclement weather could be finally determined. Once the period of delay was known the builder had still to follow the processes set out in cl 16.
For the above reasons, we find that the builder is not entitled to any extension of the date for practical completion, which remains 15 July 2003.

Practical Completion

(a) The standard of completion required

Clause 26 of each contract provides as follows:
"26. PRACTICAL COMPLETION
(a)Practical Completion is that stage when the Works are completed except for any omissions and/or defects which do not prevent the Works from being reasonably capable of being used for their intended purpose by the Owner, and such testing or certification by any authority having jurisdiction has been complied with. For the purposes of this Clause the phrase 'the Works' does not include any labour or materials which are to be supplied and/or fixed by the owner.
(b)When, in the opinion of the Builder, the Works are practically completed, the Builder shall give to the Owner notice thereof in writing, in the form set out in Appendix III.
(c)Within SEVEN (7) days after the service of such notice the Owner shall give to the Builder notice in writing, of those matters and things (if any) which the Owner considers are required by the Contract to be done for Practical Completion. The Builder shall forthwith do all such things (if any) as may be required by the Contract for the achievement of Practical Completion and shall give to the Owner further notice in writing when he has done all such things.
(d)In the event that the Owner does not give any notice within the time specified in paragraph (c), the Works shall be deemed to have been practically completed at the date of service of the notice given by the Builder pursuant to the provisions of paragraph (b).
(e)The Works shall be at the risk of the Owner in all respects upon Practical Completion."
It is the owner's case that the builder was, at all relevant times, aware that the units were intended for resale and that the works, therefore, had to have reached a stage of completion such that they could be sold. The builder has not formally admitted this, although it is conceded that at least three units must have been intended for an investment purpose, whether they be sold or rented out, leaving as a possibility, that Mr and Mrs Wates, as directors of the owner, may have intended to live in one of the units.
Neither party gave any evidence as to any discussion prior to entry into the contract which disclosed the purpose for which the units were intended. The owner company contracted with the builder for the construction of the units. We are prepared to infer from these circumstances that in the absence of any evidence that Mr and Mrs Wates intended to live in any one of the units, all four were intended for investment purposes, whether they were to be rented out or sold. There is a letter from Fudhal Investments Pty Ltd to the owner dated 20 November 2002 (owner doc A35) which shows that no interest was to be paid on money loaned by Fudhal Investments Pty Ltd to the owner until each of the units were sold, but there is no evidence that this letter was provided to the builder. A later letter, dated 28 November 2002, from Fudhal Investments Pty Ltd to the builder confirms only that an inter-company loan facility had been provided (owner doc A36).
We are prepared to give full weight to the above letters, but for the reasons given, they do not establish that it was within the contemplation of the parties, that is, that it was known to the builder in particular, that the units were to be sold on completion. In our view, this makes little difference as to the type of omissions or defects which might preclude practical completion being achieved. We consider that when a property is intended to be used for investment purposes, whether for immediate sale or for rental, a greater degree of completion is required than in circumstances in which it is intended that the property will be owner occupied. This is because an owner occupier can be expected to cope with some inconvenience provided the property can be used for that intended purpose. On the other hand, any person who has purchased a property outright or has rented it is entitled to the undisturbed quiet enjoyment of the property, unless they contract expressly to permit whatever work is required. Further, it is a matter of common knowledge, of which we take notice, that a better price or rental can be achieved for a property which presents well, as opposed to one which does not.
It is contended for the builder that there should be no difference in the standard of completion required for the units than in the case of an intended purpose of owner occupation, because the owner had a considerable amount of owner's works, not included in the contracts, which had to be completed and that all omissions and defects to be attended to by the builder could be completed before the owner's works were finalised. As we have found below the owner's works should have taken six weeks to complete.
We consider that cl 28 (Defects Liability Period) properly construed permits the owner to provide more than one defect list so that the builder could have been placed on terms to carry out remedial or outstanding work within the six weeks for owner's work to be undertaken. Consequently, we consider that, in this case, the type of outstanding work which would preclude practical completion would be no different to that of an owner occupier. This is because, as is evident below, the nature of the works to be carried out by the owner, at least internally, required that the units be completed to a degree that would not interfere with the owner proceeding with work such as carpeting and painting.
We proceed, therefore, to address the issue of when actual practical completion of each of the units was achieved, based on the above conclusions.

(b) Was practical completion achieved?

On 2 December 2003, the builder sent the owner a letter stating as follows:
"Please be advised that Unit 4 (rear unit) has now reached the stage of practical completion in accordance with clause 26(a) of the building contract with the exception of the installation of the appliances.
It is our normal practice to install the appliances at the owner's instruction, usually after handover of keys (so the owner has control of the security of the site). This is solely to eliminate the chance of theft of those products from site.
We are happy to install the appliances when you instruct before or after handover but you should be aware that the risk will be entirely yours (in accordance with clause 26(e))."
One of the incorporated documents within the contract is a document headed "Colour and Material Selection Schedule" dated 26 November 2002 which includes a three-page document headed "Special Notes". The Special Notes include a specific provision in relation to appliances to the effect that all appliances, including spa pumps, ovens, hotplates and hot water systems supplied and fitted by the builder will only be installed after handover "due to the increased theft of these items". While on the face of it, this is inconsistent with the concept of practical completion as described in the standard form conditions of contract, the express terms contained in the special notes must displace the general provisions, to give effect to the agreement between the parties: see Homburg Houtimport BV v Agrosin Private Ltd (The Starsin) [2003] 2 WLR 711 (HL) and the discussion in Lewison, The Interpretation of Contracts, London, Sweet & Maxwell 2004 at par 7.04. This is contrary to cl 2(d) of the contracts which provide an order of precedence in the event of ambiguity but we do not consider that any ambiguity exists.
The owner, by letter dated 3 December 2003, challenged that practical completion had been achieved in respect of Unit 4, and recorded that, although it had required all appliances to be installed, they had not been. Further in respect of Unit 4, a list of tasks, which we understand to be a list of omissions and defects to be completed prior to practical completion being achieved, provided by the owner to the builder, had not been completed. Although this letter has not been proved by direct evidence, it forms part of a chain of correspondence between the parties, and there is, therefore, little reason to doubt that it properly reflects Mr Wates' understanding as the representative for the owner. Further, it is a letter on which the builder has relied to demonstrate that an inspection had already taken place in respect of this unit. It is apparent that the owner did not understand that, by virtue of the express terms of the contract, practical completion could be achieved, notwithstanding that the stated appliances had not been installed.
In view of our above findings as to the standard to which the units are required to be completed for practical completion could be achieved, it could be reasonably implied, or found as a matter of construction, that the appliances would be installed without any delay immediately after handover, in order that effect be given as far as possible to the intent of the general provisions relating to practical completion. In the result, little turns on this, because the builder does not rely on the special notes provision to argue that practical completion had been achieved even though the appliances had not been installed.
Once weight is given to part of the above chain of correspondence between the parties, we consider that weight must be given to all of the chain, unless there is some reason to doubt the veracity of any of the contents of the correspondence.
By a letter, as already mentioned, wrongly dated 2 December 2003 but which it appears should have been dated 3 December 2003, the builder responded to the abovementioned letter from the owner, and relevantly stated as follows:
"I take from your correspondence, however, that you want the appliances installed which we are arranging for Tuesday next week at which time the units (all four) will be at the stage of practical completion and the risk for them will be yours.
Andy will try to contact you in the meantime to see if you wish to carry out an inspection to identify any other items (the one on your correspondence regarding the basin is noted and being attended to) that require attention."
In a later letter dated 18 December 2003 addressed to the builder, the owner states as follows:
"In your letter of 2/12 you state 'Andy will try to contact you' to arrange a time for you to carry out the required inspections – NEVER happened. You claimed that the units would reach practical completion by 9/12 – as you know the garage doors were not even fitted until this week. For weeks both your supervisors have been saying they would organise the site and internal clean up. Still has not happened despite the 'pigs sty' comments by Andy weeks ago. We have taken a full reel of dated photographic evidence for presentation at the appropriate forum.
In your letter of 11/12 you state 'Bill Wesley will be spending some time in the units over the next few days … ' Never happened. We have not seen Bill around nor had the last tradesmen on site. 'No have not seen him for days'. Again yesterday your wife said, 'Bill is there this afternoon' Wrong again there was no sign of Bill before or until 5 pm."
By a letter dated 19 December 2003, the owner responded to a facsimile, dated 17 December 2003, from the builder which was received in the post. An annotation on the facsimile reflects that the attempt to transmit the facsimile had been unsuccessful and that it was posted. The owner challenged a statement made in the facsimile that "it is not a requirement of the building contract that you have an inspection on site to determine the stage of practical completion. Refer to cl 26(b) of the contract, you have been notified in writing". The builder further stated that, as the owner had been advised that the stage of practical completion was reached on 9 December 2003 and had not advised in writing of any items that required attention, the homes were deemed to be practically completed in accordance with cl 26(d) of the contract.
We do not accept that the builder has complied with the requirements of cl 26 of the contract. Clause 26(b) requires that the builder give the owner notice in the form set out in Appendix III. Appendix III contains the following form of required notice.
"NOTICE OF PRACTICAL COMPLETION
(Clause 26(b))
2:          ____________________  (Owner)
____________________
____________________
Take notice that the Works, the subject of our contract have been practically completed in terms of Clause 26 and you are required to inspect the Works.
You should advise the Builder within seven (7) days of any matters which you consider are required by this contract to be done for Practical Completion.
Dated     …………………………
Signed   ………………………… (Builder)"
No such notice was ever provided by the builder. The first letter from the builder, dated 2 December 2003, (builders doc 78) advises that practical completion of Unit 4 had been reached. Given that the owner does not dispute that it had the opportunity to inspect, and had inspected and provided a "list of tasks" which it required to be completed prior to practical completion, we consider that this notice constitutes substantial compliance with the requirements of cl 26(b) of the contract. But the owner, nevertheless, contended that practical completion had not then been achieved because of the "list of tasks" to be completed. The builder's response dated 2 December 2003 [sic] (builders doc 80) advised that all four units would reach the stage of practical completion on 9 December 2002. We are prepared to infer that this recognises that there were tasks still to be completed (together with the installation of appliances) in respect of Unit 4 which would, therefore, delay practical completion to that date.
In our view, the second letter, dated 2 December 2003 [sic], does not constitute substantial compliance with the requirements of the contract. It is a letter which anticipates that practical completion will be achieved at a future date. That is not what the contract contemplates. Clause 26(b) requires the builder to give notice when, in the opinion of the builder, the works are practically completed. That was never done in respect of Units 1, 2 and 3.
Nevertheless, the builder contends that even if there was non‑compliance with the terms of cl 26, if practical completion had been achieved, then cl 26(a) is clear, and would not be affected by the failure to give notice. We do not accept that submission. The scheme of cl 26 requires notice to be given because practical completion cannot be achieved in secret. It has important consequences in terms of the obligation to make payment of the outstanding balance, such that without notice from the builder, if payment is not received by the due date, interest commences to run at a rate of 12% per annum (cl 27 read with Appendix I item (6)). Further, the defect liability period commences to run (cl 28).
The purpose of giving notice in accordance with Appendix III that practical completion has been achieved is to provide the owner with an opportunity to inspect and to either accept that to be the case, or raise matters still requiring attention. If a dispute then develops, the parties know the position of the other and the consequences flow as a matter of course. The contract should be interpreted in a manner which allows it to operate in a common sense way: BCCI v Ali [2002] 1 AC 251; Lewison, above at 7.01.
It is, of course, possible for an owner to waive strict compliance with the contract, for instance, by the taking of possession. It is in this context that regard must be had to the owner's conduct subsequent to the builder's assertion that practical completion had been achieved in respect of all of the units. But we shall first consider whether, in fact, practical completion had been achieved in respect of all of the units. In this regard, the inspector's report, dated 26 March 2004 reflecting the state of the units during an inspection on 2 March 2004, is of assistance. It must, of course, be remembered that the builder made it clear during the hearing that it accepted its obligation to comply with the Order to Remedy subsequently made on 8 April 2004, which reflected the recommendations made in the inspector's report. It was to a large extent because of this, that objection was made to the owner calling expert evidence from its expert architect witness, Mr Barry Jones.
In our view, the number of items requiring attention as set out in the Inspector's Report/the Order to Remedy, and the nature of some of them, is such as to preclude Units 1, 2 and 3 having reached the stage of practical completion to the standard we have found applies.
In relation to Unit 1, the nature of the following complaint items would, in our view, have prevented practical completion being achieved.
•Item 10, which required the completion of a site clean up and the removal of all builder's rubble;
•Item 15, which required exposed cut ends of steel enforcing rods in the stairs to be cut back and resealed, and a nosing provided to the edge of the concrete slab, as well as making good of all surfaces;
•Item 16, which referred to gaps in the concrete to the stairway which required that damaged or poorly finished nosings and internal angles of the stair be brought to an acceptable standard and that all adjacent surfaces and finishes be made good;
•Item 17, which required the paintwork to the main bedroom door to be brought up to an acceptable standard of finish and a split in the edge strip to be rectified.

I certify that this and the preceding [156] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MR C RAYMOND, SENIOR MEMBER

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: COMMERCIAL & CIVIL

ACT: BUILDERS' REGISTRATION ACT 1939 (WA)

CITATION: ACCENT ON HOMES PTY LTD and GHIANN PTY LTD [2007] WASAT 22 (S)

MEMBER: MR C RAYMOND (SENIOR MEMBER)
MR M SPILLANE (MEMBER)

HEARD: 27, 28 NOVEMBER 2006 AND 15 DECEMBER 2006; COSTS DETERMINED ON THE DOCUMENTS

DELIVERED : 30 JANUARY 2007

SUPPLEMENTARY
DECISION :3 MAY 2007

FILE NO/S: VR 235 of 2005

BETWEEN: ACCENT ON HOMES PTY LTD
Applicant
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

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)

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

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.
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.
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

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.
On 21 February 2007 Ghiann Pty Ltd (the owner), filed a document headed "Application for Costs" incorporating an affidavit of 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

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?
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

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 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."
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 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