BARNETT and BARRIER REEF POOLS (WA) PTY LTD

[2016] WASAT 50

BARNETT and BARRIER REEF POOLS (WA) PTY LTD [2016] WASAT 50

Jurisdiction:	STATE ADMINISTRATIVE TRIBUNAL	Citation No:	[2016] WASAT 50
Act:	BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA)
Case No:	CC:273/2015	Heard:	DETERMINED ON THE DOCUMENTS
Coram:	MS N OWEN-CONWAY (MEMBER)	Delivered:	9/05/16
No of pages:	17	Judgment Part:	1 of 1
Result:	Application for costs refused
Category:	B
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Parties:	LIA BARNETT JAMES MARSHALL BARRIER REEF POOLS (WA) PTY LTD
Catchwords:	Application for costs ­ Exercise of discretion ­ Consideration of non­compliant offers of settlement ­ Quantum of order lower than sought by applicants
Legislation:	Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 5(2), s 49, s 49(1), s 49(2) Home Building Contracts Act 1991, s 7, s 8, s 12, s 15A State Administrative Tribunal Act 2004 (WA), s 9, s 49(1), s 82(2), s 87 State Administrative Tribunal Rules 2004 (WA), r 40, r 41, r 41(2), r 42(2)
Case References:	Calderbank v Calderbank [1975] 3All ER 333 Chew and Director General of the Department of Education and Training [2006] WASAT 248 Hoskins and Daniel Vinci T/As D'Vinci Contracting [2011] WASAT 188 Leichhardt Municipal Council v Green [2004] NSWCA 341 Pearce & Anor and Germain [2007] WASAT 291 (S) South Eastern Sydney Area Health Service v King [2006] NSWCA 2 Western Australia Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32
Orders	For the reasons expressed above the Tribunal orders:,1. The respondent's application for costs of the proceedings pursuant to s 49 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) and s 87(2) of the State Administrative Tribunal Act 2004 (WA) is refused.,2. Save as otherwise ordered on 9 December 2015, the proceeding is dismissed.,3. Each party shall bear their own costs of the proceedings.
Summary	The applicants obtained an order that the respondent pay the applicants $3,886.25 being the amount calculated pursuant to the terms of the contract for the breach of the contract arising from a failure to achieve the promised dimensions of the fibreglass swimming pool installed by the respondent pursuant to the contract. The applicants had advanced a claim for contravention of s 15A of the Home Builders Contract Act 1991 which failed. The applicants sought a much greater sum by way of compensation than was achieved on the final order. The respondent sought an order that the applicants pay the respondent's legal and other costs in the sum of $14,355. The respondent had made two offers prior to the final hearing. Essentially the two offers were the same and on each occasion the offers were open for acceptance for short periods of time. The Tribunal did not consider the offers to be genuine because they did not permit the applicants a reasonable opportunity to consider and accept the same and further, the offers included a forbearance to sue the applicants in respect of claims which were not supported on the evidence in the proceeding. The Tribunal gave no weight to the offers. The evidence before the Tribunal did not persuade the Tribunal that the applicants had conducted the proceedings vexatiously, as an abuse of process or so as to impair the Tribunal achieving the objectives identified in s 9 of the State Administrative Tribunal Act 2004 (WA). The Tribunal declined to make an order for legal and other costs to be paid by the applicants pursuant to s 49 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) and s 87(2) of the State Administrative Tribunal Act 2004 (WA). The respondent's application for legal and other costs was refused.

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL ACT : BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA) CITATION : BARNETT and BARRIER REEF POOLS (WA) PTY LTD [2016] WASAT 50 MEMBER : MS N OWEN-CONWAY (MEMBER) HEARD : DETERMINED ON THE DOCUMENTS DELIVERED : 9 MAY 2016 FILE NO/S : CC 273 of 2015 BETWEEN : LIA BARNETT

First Applicant

JAMES MARSHALL
Second Applicant

AND

BARRIER REEF POOLS (WA) PTY LTD
Respondent

Catchwords:

Application for costs ­ Exercise of discretion ­ Consideration of non­compliant offers of settlement ­ Quantum of order lower than sought by applicants

Legislation:

Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 5(2), s 49, s 49(1), s 49(2)

Home Building Contracts Act 1991, s 7, s 8, s 12, s 15A
State Administrative Tribunal Act 2004 (WA), s 9, s 49(1), s 82(2), s 87
State Administrative Tribunal Rules 2004 (WA), r 40, r 41, r 41(2), r 42(2)

Result:

Application for costs refused

Summary of Tribunal's decision:

The applicants obtained an order that the respondent pay the applicants $3,886.25 being the amount calculated pursuant to the terms of the contract for the breach of the contract arising from a failure to achieve the promised dimensions of the fibreglass swimming pool installed by the respondent pursuant to the contract. The applicants had advanced a claim for contravention of s 15A of the Home Builders Contract Act 1991 which failed. The applicants sought a much greater sum by way of compensation than was achieved on the final order. The respondent sought an order that the applicants pay the respondent's legal and other costs in the sum of $14,355. The respondent had made two offers prior to the final hearing. Essentially the two offers were the same and on each occasion the offers were open for acceptance for short periods of time. The Tribunal did not consider the offers to be genuine because they did not permit the applicants a reasonable opportunity to consider and accept the same and further, the offers included a forbearance to sue the applicants in respect of claims which were not supported on the evidence in the proceeding. The Tribunal gave no weight to the offers. The evidence before the Tribunal did not persuade the Tribunal that the applicants had conducted the proceedings vexatiously, as an abuse of process or so as to impair the Tribunal achieving the objectives identified in s 9 of the State Administrative Tribunal Act 2004 (WA). The Tribunal declined to make an order for legal and other costs to be paid by the applicants pursuant to s 49 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) and s 87(2) of the State Administrative Tribunal Act 2004 (WA). The respondent's application for legal and other costs was refused.

Category: B

Representation:

Counsel:

First Applicant : In Person
Second Applicant : In Person
Respondent : Mr Grubb and Mr A Metaxas

Solicitors:

First Applicant : N/A
Second Applicant : N/A
Respondent : Metaxas & Hager

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

Calderbank v Calderbank [1975] 3All ER 333
Chew and Director General of the Department of Education and Training [2006] WASAT 248
Hoskins and Daniel Vinci T/As D'Vinci Contracting [2011] WASAT 188
Leichhardt Municipal Council v Green [2004] NSWCA 341
Pearce & Anor and Germain [2007] WASAT 291 (S)
South Eastern Sydney Area Health Service v King [2006] NSWCA 2
Western Australia Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32

REASONS FOR DECISION OF THE TRIBUNAL:

The dispute

1 The remaining dispute before the Tribunal in this proceeding is whether the Tribunal should make an order pursuant to s 87(2) of the State Administrative Tribunal Act 2004 (WA) (SAT Act) and s 49 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BSCRA Act) that the applicants pay the respondent's costs of the proceeding. The substantive dispute was resolved by a final order made by the Tribunal on 9 December 2015 at which time the issue of the respondent's application for costs was adjourned. Programming orders were made so that a decision on the documents could be made on the respondent's application for costs in its favour.

Background

2 On 9 December 2015 the Tribunal made a final order that the respondent pay the applicants the sum of $3,886.25 by 16 December 2015 arising from a breach of the contract between them concerning the installation of a fibreglass swimming pool at the applicants' home. Briefly, the Tribunal found that the swimming pool installed by the respondent did not conform to the contractual dimensions promised and that the contract provided for a formula for the calculation of the damages or such a breach of that contract. The applicants opposed the respondent's application for costs.

The respondent's submissions

3 The respondent filed its submissions on 11 December 2015 along with an affidavit of Mr Gregory Metaxas, solicitor for the respondent. The affidavit of Mr Metaxas merely annexes three emails to Mrs Bennett, for applicant, two of which emails attached letters. There is no dispute that the emails and letters were sent by the respondent's solicitors to Ms Barnett.

4 The respondent's submission urges the Tribunal to issue an order for costs in the sum of $14,355. There are no documents advanced by the respondent upon which that sum may be supported.

5 The respondent's submissions advance the argument that the applicants conducted themselves unreasonably in the Tribunal proceedings because:

(a) the applicants failed to achieve a monetary order in the quantum claimed (and substantially less so);

(b) one aspect of the applicants' referred claim (a contravention of s 15A of the Home Building Contracts Act 1991 (WA) (HBC Act)) was wholly unsuccessful; and

(c) the applicants conducted themselves unreasonably because they failed to accept the respondent's 'without prejudice, save as to costs' offers to resolve the substantive dispute which offers, if accepted, would have resulted in the applicants being in as good as or better position than they are in having had the substantive matter determined by the Tribunal.

6 The respondent's offers were the subject of the emails and letters annexed to Mr Metaxas' affidavit.

The issues

7 The issues to be determined in this matter are:

1. Did the applicants commence or conduct the proceedings in a way that impaired the Tribunal's discharge of the functions as provided for by s 9 of the SAT Act? The Tribunal concludes that there is no evidence to support the contention that the applicants' conduct impaired the discharge of the Tribunal's objectives as specified in s 9 of the SAT Act.

2. Is it fair in all of the circumstances of the proceeding to award the respondent's any costs of the proceedings? The Tribunal concludes that it is not fair in all of the circumstances to order the applicants to pay any costs of the respondent.

The statutory framework

8 Section 87(1) of the SAT Act directs that unless otherwise specified in:

• the SAT Act;

• the relevant enabling Act;

• in any other order of the Tribunal made pursuant to s 87(2) to s 87(6);

the parties bear their own costs in a proceeding of the Tribunal.

9 Section 87(2) of the SAT Act confers a discretionary power on the Tribunal to make an order for the payment by a party of all or any of the costs of another party, unless specified to the contrary in the relevant enabling Act.

10 Section 49 of the BSCRA Act (the enabling Act in this proceeding) relevantly provides:

(1) Subject to this section, the Building Commissioner or the State Administrative Tribunal may make such orders for costs as they think fit in relation to proceedings arising from a building service complaint or a HBWC complaint.

…

(7) This section does not limit the powers of the State Administrative Tribunal under the State Administrative Tribunal Act 2004Part 4 Division 5.

(Tribunal Emphasis)

11 Section 49 of the BS(CRA) Act is 'neutral in effect' and should be applied in a manner which is consistent with and reinforces the objectives and procedures of the Tribunal (Hoskins and Daniel Vinci T/As D'Vinci Contracting [2011] WASAT 188 (24 November 2011) (Hoskins)) In Hoskins the Tribunal commented at [19]:

… In the exercise of that discretion all of the considerations identified above in relation to the exercise of the discretion under s 87 of the SAT Act remain relevant. Those considerations are however not exhaustive and any other factors will be relevant which point to the justice of the case requiring an award of costs.

(Tribunal emphasis)

12 The Tribunal stated in Chew and Director General of the Department of Education and Training [2006] WASAT 248 (Chew) at [85] that in exercising the discretion conferred on the Tribunal by s 87(2) of the SAT Act:

[T]he Tribunal should not generally make an award for costs unless a party has conducted itself in such a way as to unnecessarily prolong the hearing; has acted unreasonably or inappropriately in its conduct of the proceedings, has been capricious; or the proceedings in some other way constitute an abuse of process. The Tribunal might also make an order as to costs where a matter has been brought vexatiously or for improper purposes.

13 Further in Pearce & Anor and Germain [2007] WASAT 291 (S) (Pearce) at [24] the Tribunal stated:

[W]here, however, there is a genuine dispute between the parties … their respective rights are unclear and one or both seek determination of their rights in the Tribunal, the starting point remains that each party should expect to pay their own costs, unless there are circumstances of the type identified in Chew.

14 The Tribunal's statements in Hoskins,Chewand Pearceare consistent with Western Australia Planning Commission v Questdale Holdings Pty Ltd[2016] WASCA 32 (Questdale) where the Court of Appeal gave consideration to the operation of s 87(1) of the SAT Act and the exercise of the discretion conferred upon the Tribunal by s 87(2) of the SAT Act, albeit in relation to a different enabling Act. The following principles apply to the resolution of the costs dispute:

1. In its original jurisdiction, by reason of s 87(5) of the SAT Act and r 42(2) of the State Administrative Tribunal Rules 2004 (WA), the Tribunal is bound to take into account the fact (if found) that:

a) a party made a written offer of settlement that was made in compliance with r 40 and r 41 of the SAT Rules;

b) the offer was not accepted; and

c) in the Tribunal's opinion, the Tribunal's final orders were not more favourable than the offer.


2. Beyond s 87(4) and s 87(5) of the SAT Act and r 42(2) of the SAT Rules, the facts which the Tribunal is bound to consider and is precluded from considering are to be determined by implication from the subject matter, scope and purpose of the SAT Act properly construed (Questdale per Murphy JA (with whom Martin CJ and Corboy J agreed) at [48]).

3. The discretionary power is to be exercised judicially. That is, not arbitrarily, capriciously or so as to frustrate the legislative intent (Questdale per Murphy JA (with whom Martin CJ and Corboy J agreed) at [48]).

4. Although not expressed in s 87(2) of the SAT Act or elsewhere that the power is to be exercised if it is fair and reasonable in all the circumstances of the case to do so. The 'judicial nature' of the exercise of the scheme of the SAT Act indicates that legislative intention (Questdale per Murphy JA (with whom Martin CJ and Corboy J agreed) at [49]).

5.The presumptions as to costs orders that operate in curial litigation have no application, given the provisions of s 87(1) of the SAT Act and the directive contained therein (Questdale per Murphy JA (with whom Martin CJ and Corboy J agreed) at [50]).

6.The onus is on the party seeking an order in its favour to establish that a favourable order should be made (Questdale per Murphy JA (with whom Martin CJ and Corboy J agreed) at [51]).

7. The nature of the dispute is a relevant consideration in any application for costs (Questdale per Murphy JA (with whom Martin CJ and Corboy J agreed) at [58]).

8. Every party to proceedings before the Tribunal is taken to be cognisant of the objectives of the Tribunal as expressly provided for in s 9 of the SAT Act (Questdale per Murphy JA (with whom Martin CJ and Corboy J agreed) at [54]).

9.It will be relevant to the Tribunal to consider whether and to what extent the party who bears the onus on costs, can establish that the other party's conduct in connection with the proceedings has impaired the attainment of the Tribunal's statutory objectives to have the proceedings determined fairly and in accordance with the substantial merits of the matter, with as little formality and technicality as possible and in a way which minimises the costs of the parties (Questdale per Murphy JA (with whom Martin CJ and Corboy J agreed) at [54]).

10.The mere fact that a party fails on some contentions advanced does not of itself signify that that party has acted 'inconsistently with the objectives in s 9 [of the SAT Act]' (Questdale per Murphy JA (with whom Martin CJ and Corboy J agreed) at [55]).

11. Unmeritorious claims or claims made or pursued involving misconduct or which are vexatious or grossly exaggerated or presented in a way that is unduly burdensome may justify an exercise of the discretion conferred by s 87(2) of the SAT Act.

12. The relevance of a compliant offer and the weight to be attributed thereto 'is influenced by the evident legislative intent, that where possible, parties to proceeding should endeavour to consider settlement' (Questdale per Murphy JA (with whom Martin CJ and Corboy J agreed) at [59]).

13. The weight to be given to the mandatory consideration of a complaint offer is a matter for the Tribunal in each individual case (Questdale per Murphy JA (with whom Martin CJ and Corboy J agreed) at [59]).

15 The Tribunal concludes that the discretion conferred by s 87(2) of the SAT Act is informed by the overarching obligation to exercise the discretion judicially and where it is fair and reasonable in all of the circumstances including a consideration of the nature of the jurisdiction exercised by the Tribunal 'but starting from the position that no order for costs will be made' (Questdale per Martin CJ at [9]). Further, the provisions of s 49(1) of the BSCRA Act do not alter the nature of the discretion to be exercised by the Tribunal in awarding costs to a party pursuant to s 87(1) and s 87(2) of the SAT Act and do not direct the Tribunal to make orders that are not consistent with the s 9 objectives of the Tribunal.

Consideration of non­conforming offers of compromise

16 The Tribunal is not expressly bound by the SAT Rules to have regard to the offers made by the respondent in this proceeding as they are non­conforming offers (because neither offer specified that they were open for a minimum of 14 days from the date of the offer: see r 41(2) SAT Rules. However, in exercising its discretion judicially, the Tribunal ought to have regard to the respondent's offer made on 9 June 2015 and elaborated upon by the email from the respondent solicitor on 10 June 2015, and the subsequent offer made on 17 June 2015, upon the basis that the consideration of offers made to resolve proceedings is relevant 'so as to encourage proper compromise of litigation in private interest of litigants and public interest of prompt and economical disposition of litigation' (South Eastern Sydney Area Health Service v King [2006] NSWCA 2 per Hunt AJA at [83] and Leichhardt Municipal Council v Green [2004] NSWCA 341 (Leihhardt) per Santow J at [14]).

17 The first question is whether there is evidence of any offers. On this issue the respondent relies on the fact that the letters dated 9 June 2015 and 17 June 2015 and the email dated 10 June 2015 are expressed to be 'without prejudice save as to costs' this being a shorthand form of expressing the intention that the statements contained in the correspondence are made on a without prejudice basis as to the issue of liability and/or the question of quantum of the claim:

(a) so that the statements cannot be disclosed to the Tribunal hearing the substantive matter;

(b) so that the statements cannot be relied on as evidence of a concession against the author's interest at the hearing of the substantive matter;

(c) so that the author reserves the right to refer to the correspondence on the issue of costs only at the conclusion of the proceedings; and

(d) so that the author may advance the submission that the offeree acted unreasonably in refusing or not accepting the offer because the offer if accepted would have resulted in a better outcome for the offeree than was provided by a final order in the proceedings.

(Calderbank v Calderbank [1975] 3All ER 333)

18 The Tribunal finds that the respondent's emails and letters are admissible to establish that an offer of compromise was made on 10 June 2015 and 17 June 2015, which are relevant to the issue of whether the respondent should be awarded the costs of the proceedings.

19 In considering any offers of compromise the Tribunal must have regard to whether:

(a) the offers constituted genuine offers of compromise;

(b) the failure or refusal to accept the offers was unreasonable conduct by the offerees having regard to:


(i) the prospects of the offeree's success;

(ii) whether the offer was made with sufficient time for the offeree to consider the offer;

(iii) whether the offeree had adequate information to enable the offeree to consider the offer;

(iv) whether the offer was subject to any conditions and the reasonableness of the conditions;


(Leichhardt).

The offers

20 The respondent's first offer (email dated 9 June 2015, letter dated 9 June 2015 and email dated 10 June 2015) comprised:

• a credit of $3,000 in the applicants' favour;

• the $3,000 credit offered be set off against monies alleged in the offer to be owed to the respondent for variations amounting to $5,199.21;

• the respondent forgoing any claim to the balance of the monies allegedly owed by the applicants to the respondent of $2,119.21 after having applied the offered $3,000 credit; and

• the application before the Tribunal be dismissed with no order as to costs.

21 In short, this is an offer that each party walk away from the proceedings with no order as to costs. The offer also includes a promise by the respondent to forbear from suing the applicants to recover alleged unpaid monies arising from alleged 'variations' to the contract between the parties. The offer expressed the author's opinion on the poor prospects of success of the applicants' claim and indicated that the respondent's costs for the hearing would be $10,000, which sum would be claimed on the basis that a rejection of the offer amounted to unreasonable conduct.

22 The offer was expressed to be open until 12 noon Friday, 12 June 2015 ­ some 25 minutes shy of three working days from the date of the offer on 9 June 2015 at 12.35 pm. The Tribunal notes that the offer was made on the day that the respondent filed and served its list of the respondent's witnesses and documents. The respondent's list of witnesses referred to the proposed evidence of monies outstanding to the respondent, and the documents produced by the respondent referred to a number of invoices from service providers to the respondent but included no variations (signed or unsigned) to the contract between the applicants and respondent. The respondent's claim to variation sums was not the subject of any complaint to the Building Commission of Western Australia pursuant to s 5(2) of the BSCRA Act and referral to the Tribunal.

23 The respondent's second offer made on 17 June 2015 by email sent at 13.46 pm on 17 June 2015 is in similar terms to that of the first but with additional commentary and explanations. It is expressed to be open for acceptance until 12 noon on 19 June 2015. That is, the second offer was made in similar terms to the first and was available for acceptance for less than 48 hours.

24 In the Tribunal's view, less than three days is insufficient for the unrepresented applicants to have comprehended and understood the full impact of what is essentially a 'walk away' offer that is based upon the respondent's allegations of variations to the contract and a claim for unpaid monies, which claim is not based on any signed variations as required by s 7 of the HBC Act or on any exception thereto as provided for by s 8 of the HBC Act. The respondent's variation claim, not being made to the Commission and referred to the Tribunal was not before the Tribunal and is not one that the Tribunal had any jurisdiction to determine or consider. In order for the Tribunal to assess whether the respondent's offers constituted genuine offers of compromise, it is necessary to consider the value of the respondent's claim for unpaid monies pursuant to variations. It should be noted that the claims by the respondent were not conceded by the applicants.

25 The strength and value of the respondent's claim did not form any part of the applicants' case and, as referred by the Tribunal, is not relevant to the applicants' case in the Tribunal. However, the respondent was permitted to lead evidence of that claim at the hearing on the basis that it went to the applicants', and in particular Ms Barnett's credit. This evidence forms the basis of the Tribunal's assessment of the strength of the respondent's variation claim and therefore its value when considered in the context of the respondent's offers and whether they were 'genuine' offers to compromise.

26 The Tribunal gives little weight to the respondent's alleged variation claim against the applicants. There were no signed variations as required by s 7 of the HBC Act. There was no evidence that the applicants agreed to any additional work for any additional cost or that they requested any additional work at all. Further, the respondent's evidence does not persuade the Tribunal that the alleged additional work and cost that comprises the respondent's variation claim (the cost of excavation and removal of limestone) is additional to the respondent's contractual scope of works for which it agreed a lump sum. The terms of the contract, and in particular clause 7, condition 3.2 and clause 3 thereof, and the handwritten reference 'possible' in relation to 'limestone' in clause 7, persuade the Tribunal that confronting limestone in the excavation of the cavity for the swimming pool on the applicants' property was in contemplation by the respondent at the time of the execution of the contract. In those circumstances, it cannot be said that confronting limestone in the excavation is a 'circumstance that could not reasonably have been foreseen by the respondent at the time when the contract was entered into' as required by s 8 of the HBC Act, such that the respondent might be entitled to additional payment where a variation has not been agreed and signed by the parties in compliance with s 7 of the HBC Act. Further, clause 7 of the contract makes no allowance for any provisional sums for the possibility of limestone confrontation even though it is clearly contemplated (as noted in clause 7 by reference to the word 'possibly' being inserted next to 'Limestone' in handwriting), which the Tribunal concludes is consistent with a construction of the contract that the excavation of limestone was included in the respondent's contractual scope of work. If limestone was foreseeable (as in this case) and the respondent could not accurately cost the excavation of limestone, under the HBC Act, the respondent was obliged to provide a provisional sum in the lump sum contract as a genuine estimate of the cost (see s 12 of the HBC Act). If no cost is included as a provisional sum for known and foreseeable contingencies, then the respondent is taken to have agreed to the lump sum price specified in the contract for all of the work necessary to achieve the outcome contracted for. The rates referred to in clause 8 of the contract are applicable for additional work that is not included in the contract. The clause 8 rates are not applicable to the respondent performing work that was necessary and foreseeable at the date of the contract to install the swimming pool for a lump sum price.

27 The Tribunal considers that the respondent's offers are not genuine attempts at compromise because there is significant doubt about the right of the respondent to make the variation claim on the evidence lead at the hearing in this matter and in any event, in the circumstances, the applicants were given a very short time to consider the offers.

28 As to the time permitted by the respondent for the applicants to consider the offers, it follows from the Tribunal's conclusions and reasoning above that the offers were not open for acceptance for a sufficient period to afford the applicants a reasonable opportunity to consider each of them and make an informed decision to accept them or not.

29 The Tribunal concludes that the offers that the applicants dismiss the proceedings in consideration of forbearance to sue for recovery of the sum of $5,199.22 to be of no value and not a genuine offer of compromise.

30 Even if the Tribunal were persuaded that the offers were genuine and made so as to afford the applicants a reasonable opportunity to consider the same, the next question is whether the applicants would have been in a better position had they accepted the offers. As stated, on the evidence before the Tribunal lead by the respondent, there is significant doubt concerning the respondent's entitlement to additional sums arising from the alleged variations. As a result the Tribunal concludes that no value can be ascribed to the respondent's variation claims. The Tribunal is not satisfied that the offers which are in effect offers to dismiss the proceedings, and each party walk away, could have been a better outcome for the applicants than the Tribunal's orders for the respondent to pay the applicants $3,880.25.

31 For the reasons expressed the Tribunal gives no weight to the fact that the respondent made the offers dated 9 and 17 June 2015.

Other factors and the discretion

32 Whilst the applicants were not as successful in obtaining an order for the sum claimed ($78,773.95) and fell considerably short of that claim, the applicants' claim was not vexatious, capricious or unreasonable. The applicants claimed common law damages and alternatively damages as assessed under the contract. It is often the case that while the breach of the contract is real and proved the contractual damages as agreed in the contract may be much lower than they might be if assessed at large. The fact is the applicants agreed to a contractual calculation of damages when they executed the contract and that is the basis of the Tribunal's order on the substantive dispute. The fact that they miscalculated the sum or claimed a higher sum does not detract from the fact that they had a genuine claim against the respondent and there was a genuine dispute between the parties. It should be noted that the respondent calculated the contractual measure incorrectly as well.

33 Further, although the applicants failed in their claim against the respondent pursuant to s 15A of the HBC Act because the claim they sought to advance at the hearing was not the claim that was referred by the Commission to the Tribunal, they did not fail because they failed to establish any misstatements concerning the dimensions of the swimming pool.

34 In considering whether the respondent should be compensated for costs in defending the claim for the greater amount the Tribunal should have regard, in this case, to factors such as:

(a)the contractual damages dispute was referred to the Tribunal by the Building Commissioner of Western Australia and to that extent, the applicants had little control over the matter proceeding in the Tribunal rather than being determined by the Commissioner's delegate;

(b) as a general rule the successful applicant should not be denied the benefits of a favourable order on the substantive issue by a costs order against the party and the order sought in this proceeding would emasculate the order made concerning the substantive dispute and in fact leave the applicants significantly out of pocket;

(c) the applicants were unrepresented while the respondent chose to be legally represented in a jurisdiction where legal representation is not mandatory for a party;

(d) the applicants had no control over the respondent's decision to be legally represented;

(e) the nature of the dispute was not complex or difficult and did not require greater structure than usual for Tribunal matters of this kind;

(f) the applicants did succeed in achieving a favourable order whereas the respondent's offers amounted to each party walking away from the proceedings;

(g) the applicants failed to establish a claim pursuant to s 15A of the HBC Act and failed to make good their claim for $78,773.95 based on a calculation provided for in the contract; and

(h) neither party delayed the hearing or prolonged the resolution of the dispute.

35 In the Tribunal's view, there is no evidence to support a conclusion that the applicants maintained a vexatious claim; made a claim for an improper purpose, or that the claim was an abuse of process, or that they were unreasonable in conducting the claim, such that the Tribunal's objectives as specified in s 9 of the SAT Act were impaired. Simply because the applicants failed to succeed on a ground or failed to achieve an order in terms of the claimed sum in the circumstances of this case, does not render the applicants' pursuit of their claim to be unreasonable. A greater injustice would be to make the order as sought by the respondent. The respondent chose to be legally represented and it has that right, but in this case the respondent must bear these costs alone.

36 In the circumstances of this proceeding, the Tribunal does not consider that it is fit to make an order for costs payable by the applicants pursuant to s 49(1) of the BSCRA Act, and does not consider it is fair in all of the circumstances of the case to make an order for costs payable by the applicants pursuant to s 87(2) of the SAT Act. In the circumstances of this proceeding, the Tribunal considers that s 87(1) of the SAT Act should prevail and each party shall bear their own costs of the proceedings.

Order

For the reasons expressed above the Tribunal orders:

1. The respondent's application for costs of the proceedings pursuant to s 49 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) and s 87(2) of the State Administrative Tribunal Act 2004 (WA) is refused.

2. Save as otherwise ordered on 9 December 2015, the proceeding is dismissed.

3. Each party shall bear their own costs of the proceedings.

I certify that this and the preceding [36] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

___________________________________

MS N OWEN-CONWAY, MEMBER