BHOWANIAH and ESSENTIAL FIRST CHOICE HOMES PTY LTD
[2017] WASAT 52
•28 MARCH 2017
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA)
CITATION: BHOWANIAH and ESSENTIAL FIRST CHOICE HOMES PTY LTD [2017] WASAT 52
MEMBER: MS C WALLACE (SENIOR MEMBER)
HEARD: DETERMINED ON THE DOCUMENTS
DELIVERED : 28 MARCH 2017
FILE NO/S: CC 1520 of 2016
BETWEEN: DANUSHA BHOWANIAH
MARK POIDEVIN
ApplicantsAND
ESSENTIAL FIRST CHOICE HOMES PTY LTD
Respondent
Catchwords:
Building Services (Complaint Resolution and Administration) Act 2011 (WA) - Application for legal costs - Principles to be applied
Legislation:
Building Services (Complaints Resolution and Administration) Act 2011 (WA), s 5(1), s 5(2), s 9, s 11(1)(d), s 49
Legal Practitioners (State Administrative Tribunal) Determination 2012 (WA)
State Administrative Tribunal Act 2004 (WA), s 9, s 60(2), s 87, s 87(1), s 87(2), s 98, s 99
Result:
Application for costs is successful
Summary of Tribunal's decision:
The Tribunal was previously required to determine two preliminary points, one being a recusal application and the second being the legal standing of the second applicant. The recusal application was found to be without any merit and was dismissed. In addition, the second applicant was found to have no legal standing and the complaints made by him were dismissed except as to costs. The respondent proceeded to make a costs application in respect of legal costs incurred in relation to the determination of the two preliminary issues. The Tribunal considered the applicable principles for the award of costs and decided that it was appropriate to award costs in favour of the respondent for the following reasons: there was no merit in either preliminary issue yet the applicants pursued them in any event; the conduct of the applicants unnecessarily delayed the programming of the substantive matters and resulted in unnecessary work and legal costs being incurred by the respondent; despite being both encouraged by the Tribunal and through receipt of independent legal advice to abandon the recusal application, the applicants chose to ignore this advice; the manner in which the applicants presented their evidence unduly burdened both the respondent and the Tribunal; the applicants were presumed to be aware of the statutory objectives of the Tribunal and interfered with the Tribunal's ability to meet those objectives; and given the legal nature of the preliminary issues, it was necessary for the respondent to be legally represented and the costs incurred were reasonable in the circumstances. The Tribunal therefore awarded costs in favour of the respondent in the amount of $3,663.
Category: B
Representation:
Counsel:
Applicants: Alana Dowley
Respondent: Mathew Lang
Solicitors:
Applicants: Encore Legal Pty Ltd
Respondent: Jackson McDonald
Case(s) referred to in decision(s):
Bhowaniah and Essential First Choice Homes Pty Ltd (No 1) [2017] WASAT 29
Bhowaniah and Essential First Choice Homes Pty Ltd (No 2) [2017] WASAT 30
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
Marvelle Investments Pty Ltd and Argyle Holding Pty Ltd [2010] WASAT 125(S)
Perth Central Holding Pty Ltd and Doric Constructions Pty Ltd [2008] WASAT 302
Western Australia Planning Commission v Questdale Holding Pty Ltd [2016] WASCA 32
REASONS FOR DECISION OF THE TRIBUNAL:
The proceedings and application for costs
This matter involves a complaint lodged by Danusha Bhowaniah and Mark Poidevin, as joint applicants, against Essential First Choice Homes Pty Ltd, the respondent, with the Building Commissioner on 9 May 2016, pursuant to s 5(1) and s 5(2) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BSCRA Act), raising allegations of faulty or unsatisfactory workmanship in relation to a regulated building service, as well as allegations of breaches of contract in respect of a home building work contract. The dwelling the subject of the complaint is located at 230 Dalmilling Drive, Ellenbrook in the State of Western Australia.
On 22 September 2016 the complaint was referred to the Tribunal pursuant to s 11(1)(d) of the BSCRA Act. The proceeding was listed for an initial directions hearing before the Tribunal on 11 October 2016. At that directions hearing, two preliminary matters were raised, one being an application for the presiding senior member to recuse herself, and the second being the question as to whether Mr Poidevin had legal standing as joint applicant in the proceeding. Both of those preliminary matters were the subject of the filing of affidavit material by the parties.
A hearing in respect of the preliminary issues was listed on 22 December 2016. That hearing date was subsequently vacated following a decision made by the Tribunal that it was appropriate to determine the preliminary issues entirely on the documents, pursuant to s 60(2) of the State Administrative Tribunal Act 2004 (WA) (SAT Act).
The Tribunal published its reasons for decision in respect of the recusal application on 15 February 2017, Bhowaniah and Essential First Choice Homes Pty Ltd (No 1) [2017] WASAT 29 (Bhowaniah (No 1)) and in respect of the question of Mr Poidevin's legal standing on 17 February 2017, Bhowaniah and Essential First Choice Homes Pty Ltd (No 2) [2017] WASAT 30 (Bhowaniah (No 2)). The recusal application was unsuccessful and dismissed. In addition, the Tribunal found that Mr Poidevin did not have legal standing to make either a home building work contract complaint or a building service complaint and therefore the complaints, to the extent that they were sought to be made by Mr Poidevin, were dismissed except as to costs.
The Tribunal made programming orders requiring the respondent to file any costs application by 24 February 2017 and requiring the applicants to file any responsive submissions to a costs application by 8 March 2017. The respondent filed its costs application with the Tribunal on 23 February 2017 claiming a total of $4,070 by way of legal costs incurred in respect of the two preliminary issues. No responsive submissions were filed by the applicants.
The respondent submits that it ought to be awarded its legal costs on the following basis:
a)Mr Poidevin was found to have no legal standing and therefore complaints sought to be made by him were dismissed. In addition, the recusal application was found to have no merit and was also dismissed;
b)Given that the preliminary issues were legal in nature, it was both reasonable and necessary for the respondent to be legally represented. In addition the respondent was required to file affidavit evidence in respect of those issues;
c)The applicants conducted themselves unreasonably by filing extensive affidavit material that was incoherent, repetitive, confused, conclusionary and which did not provide any actual admissible evidence to substantiate an application seeking recusal;
d)The conduct of the applicants and the allegations of sexism, racism and general bias made both on affidavit and published online material by the applicants was entirely inappropriate and not founded on any evidence, and such inappropriate conduct caused the respondent to incur unnecessary costs in responding to the applications;
e)The applicants' case was extremely weak, to the point of being absurd and implausible and so obviously unmeritorious such that it should never have been brought; and
f)The applicants were warned by the Tribunal that continuing the applications would have potential adverse costs consequences but they persisted with the preliminary questions in any event.
The applicable principles for the award of costs
Section 49 the BSCRA Act provides as follows:
Costs and expenses
(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 2004 Part 4 Division 5.
The SAT Act also contains provisions in relation to costs of parties and provides in s 87 the following:
Costs of parties and others
(1)Unless otherwise specified in this Act, the enabling Act, or an order of the Tribunal under this section, parties bear their own costs in a proceeding of the Tribunal.
(2)Unless otherwise specified in the enabling Act, the Tribunal may make an order for the payment by a party of all or any of the costs of another party or of a person required to produce a document or other material on the application of the party under section 35.
…
As previous decisions of this Tribunal have established, s 49 of the BSCRA Act is 'neutral in effect' and should be applied in a manner which is consistent with and promotes the objectives and procedures of the Tribunal; Hoskins and Daniel Vinci t/as D'Vinci Contracting [2011] WASAT 188 at [19]. Therefore, although the Tribunal has a broad discretion to award costs pursuant to s 49 of the BSCRA Act, the considerations which have been found to be relevant in the exercise of discretion under s 87 of the SAT Act, remain relevant.
Some of the factors relevant in exercising the discretion to award costs pursuant to s 87 of the SAT Act were identified in Chew and Director General of the Department of Education and Training [2006] WASAT 248 at [85]:
[The] 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.
More recently the Court of Appeal in Western Australia Planning Commission v Questdale Holding Pty Ltd [2016] WASCA 32 (Questdale) gave consideration to the operation of s 87(1) of the SAT Act and the exercise of the discretion conferred on the Tribunal by s 87(2) of the SAT Act, albeit in relation to a different enabling Act. The following relevant principles were found to apply to the resolution of a costs dispute:
1)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];
2)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 power and the scheme of the SAT Act indicates that legislative intention; Questdale per Murphy JA (with whom Martin CJ and Corboy J agreed) at [49];
3) 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];
4)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];
5)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];
6)The mere fact that a party fails on some contentions advanced does not of itself signify that the party has acted inconsistently with the objectives of s 9 of the SAT Act; Questdale per Murphy JA (with whom Martin CJ and Corboy J agreed) at [55]; and
7)Unmeritorious claims or claims made or pursued involving misconduct or which are vexatious or grossly exaggerated or presented in a way which is unduly burdensome may justify an exercise of the discretion conferred by s 87(2) of the SAT Act.
If the Tribunal exercises its discretion to award costs, it approaches the task of fixing costs in a broad and relatively robust fashion: Perth Central Holding Pty Ltd and Doric Constructions Pty Ltd [2008] WASAT 302 at [67] and Marvelle Investments Pty Ltd and Argyle Holding Pty Ltd [2010] WASAT 125(S) at [49]. It does not tax or assess costs in the way that courts do. However, although fixing costs involves a broad brush approach, the Tribunal still needs to be satisfied that the costs incurred are reasonable and not excessive.
Consideration
Recusal application
As mentioned earlier in these reasons, the applicants made an oral application for the presiding senior member to recuse themselves at a directions hearing on 11 October 2016. A natural consequence of bringing that application meant that the proceeding itself could not be programmed in the usual way and effectively was stayed pending the outcome of the recusal application. The application impacted not only this proceeding, but also a subsequent referral the Tribunal received from the Building Commissioner involving a complaint made by the respondent against Ms Bhowaniah, being proceeding number CC 1903 of 2016.
The Tribunal took some time to explain the ramifications to the applicants of making a recusal application where it appeared to the Tribunal that there was little to gain. The applicants were informed that the presiding senior member, the subject of the recusal application, would not have any substantive involvement in the matter and in particular, would not preside at any mediation or final hearing. Thus, the only possible outcome of a successful recusal application would be to delay the programming of the matter by a different presiding member. The Tribunal also noted at the initial directions hearing that it would benefit the applicants if they obtained legal advice on the recusal application given its legal nature and the possible adverse implications for the applicants if they were unsuccessful given the nature of the allegations being made (T:9-14; 11.10.16).
It is relevant to note that following the 11 October 2016 directions hearing the applicants did obtain legal advice in relation to their recusal application. That advice was filed with the Tribunal on 22 December 2016 and was sought to be relied upon by the applicants in respect of their 'settlement attempts' with the respondent.
In the context of the current costs application the written advice the applicants received dated 12 December 2016 is relevant. That advice in respect of the recusal application stated as follows:
Recusal application
…
As you know I have previously expressed real concern as to you proceeding with the affidavit in the form in which you had prepared it and without substantial revision to it to reduce a significant amount of the comments being made in the affidavit.
We also discussed, in our meeting last week, Mark's concerns. You will recall that I indicated that at that stage that if the Tribunal considered there were matters in the affidavit about which there was no foundation for the assertions you make that you could be held to be in contempt.
I am raising those matters with you again, particularly because as I indicated to you last week, whilst it may well be that the Tribunal simply listens to the application and then dismisses it, there is a risk that the Tribunal will consider that the comments and statements you have made in the affidavit, to the extent that they are not supported by evidence, are scandalous and therefore matters of contempt about which action could be taken against you.
I know that you have previously commented that, notwithstanding our advice, you will proceed with the affidavit in the form that you prepared it and with the recusal application.
To the extent however, that the application has not yet been heard, I write again to raise my concerns. In my view, given the risks involved in the matter and given that you are extremely unlikely to succeed in a recusal application, you ought [to] consider whether to withdraw the application for recusal and simply proceed with the directions hearing next week to program this matter through to a hearing as soon as possible[.]
The applicants did not accept the advice set out above and continued to pursue the recusal application. They each filed an affidavit in addition to a document which they contended was 'evidence'. It is relevant to note that the material was voluminous in nature, convoluted, repetitive, and in the most part did not constitute evidence but rather set out commentary and the personal views of the applicants themselves.
It is unnecessary to set out in any detail the Tribunal's consideration of the recusal application on the basis that the decision of the Tribunal was published: Bhowaniah (No 1). However, it is important to note that each of the grounds upon which the recusal application was based were found to be unfounded and without merit and were dismissed. In addition, one of the main contentions of the applicants was that the presiding senior member was related to an employee of the respondent, Mr Sacha Wallace, on the basis that the senior member and the employee shared a common surname. The applicants persisted with that allegation of bias due to a familial relationship despite being informed in writing by the Executive Officer of the Tribunal on 19 September 2016 that the allegation was baseless.
In relation to the allegations of bias on the basis of alleged sexism and/or racism, it is worth noting that the comments alleged by the applicants to have been made by the presiding senior member, were evidenced by a certified transcript of the relevant directions hearing to be, in fact, comments made by Ms Bhowaniah herself (T:32-35; 26.04.16, in proceeding CC 461 of 2016). In order to address the complete lack of evidence to support the applicants' serious allegations they alleged deliberate editing of the transcript. Such allegation was found to be a baseless assertion which failed to explain why the certified written and audio transcript clearly evidenced the very same comments being made by Ms Bhowaniah.
In summary, the Tribunal found the allegations made by the applicants to be unfounded and completely devoid of merit. It would not be illplaced to characterise the allegations as vexatious in nature when considering all of the circumstances. They were ultimately dismissed.
Legal standing of Mr Poidevin
The question of the legal standing of Mr Poidevin as joint applicant was addressed in some detail at the directions hearing before the Tribunal on 11 October 2016. At that directions hearing, the presiding senior member expressed a preliminary view that Mr Poidevin did not have legal standing and he was therefore encouraged to withdraw the complaints, only insofar as they were made by him, given that the complaints could continue to be agitated by Ms Bhowaniah.
It was made clear to Mr Poidevin that, in essence, he had nothing to gain by being named as joint applicant yet potentially had a lot to lose, not only due to a possible costs application which could be made against him, but also by exposure to possible prosecution for breach of various provisions of the SAT Act including s 98 by giving false or misleading information in respect of the recusal application, and s 99 for misbehaviour and obstruction of a Tribunal member (T:35 and T:1214; 11.10.16). Despite the expression of a firm preliminary view and the possible adverse consequences to Mr Poidevin, he decided not to withdraw his complaints and instead to continue to proceed with the preliminary question as to his legal standing being determined by the Tribunal. That decision was published: Bhowaniah (No 2).
It is unnecessary to set out the Tribunal's determination in any detail in these reasons, other than to note that in respect of the home building work contract complaints, other than a mere assertion made by Mr Poidevin that he was also a contracting party, there was a complete absence of any evidence to support that contention. In fact, all of the contractual documents clearly evidenced that the only contracting parties were Ms Bhowaniah and the respondent.
In respect of the building service complaint, the onus was on Mr Poidevin to identify an interest of his which had been adversely affected. Mr Poidevin failed to identify any interest which had been adversely affected and thus there was no basis on which he could bring a building service complaint against the respondent.
Relevant factors in exercise of discretion
Although the starting position is that each party bears its own costs, the Tribunal is of the view that the discretion to award costs in favour of the respondent ought to be exercised for the following reasons:
a)The applicants' recusal application was unmeritorious and was based on allegations of a most serious nature that were completely unfounded. In addition, Mr Poidevin sought the Building Commissioner to join him as joint applicant in circumstances where there was no basis on which he could assert that he had legal standing;
b)The conduct of the applicants resulted in significantly delaying the conduct of two proceedings and creating unnecessary work for both the respondent and the Tribunal, as well as resulting in additional legal costs being incurred by the respondent;
c)The applicants were encouraged by the Tribunal to withdraw the recusal application and withdraw complaints insofar as they were sought to be made by Mr Poidevin in circumstances where, if they persisted and were unsuccessful there may be adverse consequences for the applicants including a possible costs application. These comments were made by the Tribunal in order to assist the applicants and to explain the nature and legal implications of the assertions they were making. They ultimately chose to ignore the recommendations of the Tribunal in this regard;
d)At some point following the 11 October 2016 directions hearing and prior to 12 December 2016, the applicants obtained legal advice in relation to their prospects of success in respect of the recusal application, such advice being that they ought to withdraw the application and that if they persisted they could be held in contempt. Despite receiving legal advice in these strong terms, the applicants appeared to ignore the advice and continued with the recusal application;
e)Because one of main grounds on which the recusal application was based was an alleged relationship between the presiding senior member and Mr Sacha Wallace, the respondent had no option but to file affidavits to refute that allegation, including an affidavit sworn by Mr Wallace. The affidavit material prepared on behalf of the respondent also had to address the issue of the relevant parties to the home building works contract given the issue of the legal standing of Mr Poidevin. Therefore, it was a necessary consequence of those preliminary issues requiring determination that the respondent would incur legal costs;
f)The manner in which the applicants presented the material upon which they relied unduly burdened both the Tribunal and the respondent. As mentioned earlier in these reasons, the material was convoluted, voluminous and in the most part contained mere assertions and commentary, rather than evidentiary matters; and
g)The applicants are well familiar with the Tribunal's processes, having appeared at the Tribunal in two prior matters and were aware, or ought to have been aware, of the Tribunal's statutory objectives in ensuring that proceedings are determined fairly and in accordance with the substantial merits of the matter, and with as little formality and technicality as possible. The applicants, nevertheless, conducted themselves in a way which impaired the attainment of these statutory objectives by raising technical preliminary legal issues without any foundation and against legal advice. The natural consequence was to delay the substantive proceedings and increase the costs incurred by the respondent in addressing those issues and interfere with the Tribunal's statutory obligations set out in s 9 of the SAT Act.
As mentioned previously, the Tribunal took effort to dissuade the applicants from proceeding with the recusal application and pressing the question of Mr Poidevin's legal standing, unfortunately to no end. In addition, when it became clear to the Tribunal that the applicants wished to proceed and have both preliminary issues determined, the Tribunal took steps so as to reduce the costs incurred by the respondent (and thereby reducing the applicants' exposure to a costs application) by not requiring the respondent's legal representative to file written submissions on the preliminary issues, and by also vacating the hearing date and determining the issues on the documents, thus, avoiding the costs of the respondent's legal representative in preparing for and attending the hearing.
However, it was unavoidable that the respondent would incur some costs in attending the initial directions hearing, receiving legal advice on the preliminary issues, the preparation and filing of the necessary affidavit material, the need to review and advise on the applicants' material, the need to correspond with the applicants when there was delay in the filing of their affidavit material and, in reviewing the two published decisions of the Tribunal.
The respondent has claimed 10 hours of legal time at a total cost of $4,070. The Tribunal, as previously noted, approaches the task of fixing costs in a broad and relatively robust fashion. The Tribunal notes that it has considered the work undertaken by the respondent's legal representative and the time undertaken to do that work and finds that the work was necessary and the time taken to be reasonable. The Tribunal also finds that the costs incurred are reasonable and not excessive and that it was appropriate for the respondent to be legally represented in relation to the two preliminary matters, given that they were legal in nature. Given that the respondent has entered into a valid costs agreement with its solicitors, there is no need to have regard to the Legal Practitioners (State Administrative Tribunal) Determination 2012 (WA) which sets out a scale in relation to solicitor and client costs.
In all the circumstances, the Tribunal has determined that it is appropriate that the applicants pay the respondent's legal costs incurred in respect of the two preliminary issues, with the exception of the costs incurred in relation to preparing submissions on costs in the amount of $407. The Tribunal therefore fixes the costs awarded in the amount of $3,663.
Order
The Tribunal therefore makes the following order:
1.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 applicants shall pay the costs incurred by the respondent in relation to the determination of the two preliminary questions fixed in the amount of $3,663 within 21 days of the date of this order.
I certify that this and the preceding [29] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MS C WALLACE, SENIOR MEMBER
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