| JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : COMMERCIAL & CIVIL ACT : STRATA TITLES ACT 1985 (WA) CITATION : BLUEJADE ENTERPRISES PTY LTD and OWNERS OF MAYLANDS SHOPPING CENTRE STRATA PLAN 30217 [2011] WASAT 167 MEMBER : DR B DE VILLIERS (MEMBER) HEARD : DETERMINED ON THE DOCUMENTS DELIVERED : 20 OCTOBER 2011 FILE NO/S : CC 856 of 2010 BETWEEN : BLUEJADE ENTERPRISES PTY LTD Applicant
AND
OWNERS OF MAYLANDS SHOPPING CENTRE STRATA PLAN 30217
Respondent
Catchwords: Strata titles Award of costs by Tribunal Cost for time unnecessarily spent as a result of application being amended Application amended at commencement of hearing Application withdrawn shortly after commencement of final hearing Legislation: Commercial Tenancy (Retail Shops Agreement) Act 1985 (WA)
State Administrative Tribunal Act 2004 (WA), s 5, s 87(1)
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Strata Titles Act 1985 (WA), s 48(4), s 48(8), s 81(5), s 81(7), s 81(7)(a), s 83(1), s 85, s 94, s 95(1), s 97, s 97(1) Result: Application for costs successful Category: B
Representation: Counsel:
Applicant : Mr N Jessy
Respondent : Mr D Taylor
Solicitors:
Applicant : CS Legal
Respondent : DTS Legal
Case(s) referred to in decision(s):
Pearce & Anor and Germain [2007] WASAT 291 (S)
Radford and The Owners of Miami Apartments Strata Plan 45236 [2007] WASAT 51
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REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision 1 The respondent sought an order for costs for time unnecessarily spent due to an amendment by the applicant of the application. The application had already been amended once before but no order was sought for wasted costs as a result of that amendment. Section 81(7)(a) of the Strata Titles Act 1985 (WA) empowers the Tribunal to award costs if it is of the view that time had been unnecessarily wasted due to an amendment to an application. The applicant sought to amend the application a second time on the day of the final hearing when proceedings commenced. Shortly after leave was granted for the application to be amended, the applicant withdrew the application and thereby discontinued the proceedings. 2 The respondent contended that aspects of the application were doomed to fail from the time it was lodged and that substantial time and resources had to be spent by the respondent to reply to all the matters raised by the applicant in its statement of issues, facts and contentions. The respondent said that although the matter was withdrawn prior to oral arguments being heard, substantial wastage occurred in the preparation of the papers. 3 The applicant contended that the Tribunal is, in essence, an own cost jurisdiction, that the application was withdrawn prior to oral arguments being heard, and that no substantial wastage of time occurred. 4 The Tribunal found that the applicant did cause a substantial wastage of time by the very late amendment of its application on the day when the hearing commenced. Substantial parts of the written response that had to be prepared by the respondent to address the contentions of the applicant prior to the hearing became irrelevant and wasted as a result of the amendment. 5 An order for payment of costs was made.
Issue Whether costs should be awarded to the respondent pursuant to s 81(7)(a) of the Strata Titles Act 1985 (WA) (ST Act) as a result of time wasted due to an amendment to the application. (Page 4)
Background 6 The respondent filed an application for costs following an amendment to the original application by the applicant. Leave to amend the application was sought on the day when the final hearing commenced. Section 81(7)(a) of the ST Act allows for a claim for payment of costs to be lodged for time unnecessarily spent in connection with the amendment of an application in strata title matters. 7 The original application was lodged on 18 June 2010. The application was lodged pursuant to s 85 of the ST Act. At that stage, the applicant was selfrepresented. 8 The original application was amended on 9 June 2011. The amended application was brought pursuant to s 83(1), s 94, s 95(1) and s 7(1) of the ST Act. In the written submissions by the applicant, reference was also made to s 48(4) and s 48(8) of the ST Act. At this stage, the applicant was legally represented and continued to be represented for the remainder of the proceedings. 9 The applicant filed and served its statement of issues, facts and contentions on 9 June 2011. The respondent filed and served its reply on 9 September 2011. 10 The applicant filed and served its outline of submissions on 12 September 2011. 11 The matter was set down for a one day hearing to commence on 14 September 2011. 12 At the commencement of the hearing, the applicant sought leave to amend the application by bringing the proceedings entirely under s 97 of the ST Act. Leave to amend the application was granted. 13 The applicant subsequently withdrew the application before the hearing on the matters of substance could commence. The respondent objected to the granting of leave to withdraw the application, but the Tribunal drew the attention of the respondent to s 81(5) of the ST Act which allows an application to be withdrawn as a matter of right and not discretion. 14 The respondent indicated that it would seek a cost order, and programming orders were made for the parties to make submissions regarding a cost application. (Page 5)
Submissions by the parties 15 The contentions of the respondent in favour of a cost order can be summarised as follows: a) Since the original application was lodged, it had been substantially amended twice. The respondent did not seek costs for the first amendment. Leave for the second set of amendments was sought on the day of the final hearing. This is after the respondent had incurred substantial time and cost to reply to all the grounds set out in the applicant's first amended application. In the second amended application, the grounds for claim were reduced from four to one. b) The date for the final hearing had been varied twice and there was ample opportunity for the applicant to establish and clarify the basis of the claim prior to the respondent complying with the programming orders. c) The applicant withdrew the entire proceedings after leave for the second amendments had been granted. This means that all the costs incurred since the lodging of the application were wasted. d) Section 81(7) of the ST Act provides that an order for payment of costs may be made in circumstances such as those that appear in these proceedings. e) The amendment meant in practical terms that 90% of the applicant's submissions were withdrawn and consequently the reply by the respondent became wasted expenditure. f) The fact that the amendment to the application took place prior to the oral hearing does not mean no time was wasted. The respondent had to reply in writing to all the submissions made by the applicant and when those submissions were withdrawn by way of the amendment to the application, the costs incurred by the respondent were wasted. (Page 6)
g) The parties should be given an opportunity to attempt to agree on costs and if that was not successful, the Tribunal should order the amount to be paid. 16 The contentions of the applicant against the application for costs can be summarised as follows: a) SAT is essentially an own cost jurisdiction. The power of the Tribunal to award cost is curtailed under s 81(7) of the ST Act to time spent unnecessarily in connection with an amended application. In these proceedings, no time was wasted since the application was withdrawn without an oral hearing. b) The application was withdrawn pursuant to s 81(5) of the ST Act and no cost order can be made in pursuance thereof. c) The respondent, by failing to adduce evidence of a resolution seeking to obtain vacant possession of common property, contributed to costs being wasted and the ultimate withdrawal of the proceedings. d) There should be no order as to costs.
Consideration 17 In Radford and The Owners of Miami Apartments Strata Plan 45236[2007] WASAT 51 (Radford), the Tribunal observed, as far as the general principles are concerned regarding applications for costs pursuant to s 81(7) of the ST Act, as follows: It is generally accepted that great care should be exercised by the Tribunal in awarding costs so as to ensure that the Tribunal remains readily accessible to the public at a relatively low cost. (at [15]) The ultimate discretion if costs should be awarded is that of the Tribunal. The mere fact that an application has been amended does not automatically give rise to a cost order. The test remains whether time has been unnecessarily spent as a result of the amendment. (at [19]) As pointed out by the parties, the Strata Titles Referee did not have the power to award costs prior to the establishment of SAT. While the Tribunal now has such power, it is a limited one and it caters for a situation where in the view of the Tribunal unnecessary costs were been incurred due to an amendment to an application. (at [20] (Page 7)
18 The discretion of the Tribunal to award costs is set out in the State Administrative Tribunal Act 2004 (WA) (SAT Act) and the enabling Act in this case, the ST Act. If there is an inconsistency between the SAT Act and the ST Act, the enabling Act prevails (s 5 SAT Act). 19 As is highlighted by the applicant, the point of departure to consider an application for costs under the SAT Act is that parties bear their own costs (s 87(1) of the SAT Act). The SAT Act does not, however, contain a bar against any form of cost order. In Pearce & Anor and Germain [2007] WASAT 291 (S), the then Deputy President of the Tribunal, his Honour Judge Chaney, set out the general indicia that can guide the Tribunal when applications for costs are considered. In those proceedings, costs arising from the Commercial Tenancy (Retail Shops Agreement) Act 1985 (WA) were considered. The rationale for awarding costs under the general provisions of the SAT Act is different from the discretion to award costs pursuant to s 81(7) of the ST Act. 20 The ST Act provides an even narrower ground for an award for costs than the SAT Act. Section 81(7) of the ST Act provides that: 21 It is a regular occurrence for the Tribunal to give parties in strata title proceedings leave to amend their applications. It is especially when parties are selfrepresented and during the early stages of an application that leave is often sought for an application to be amended so as to bring it under the appropriate section of the ST Act or to make other variations. 22 This explains why in these proceedings the Tribunal gave leave during the early stages for the application to be amended especially in light of the fact that the applicant was initially not legally represented and no substantial costs had yet been spent. 23 The Tribunal emphasised in the Radford matter that it must be taken into account that an application can be withdrawn and a new application lodged with no risk of a cost order. The mere fact that an application is amended should therefore not be seen as justification for a cost order. (Page 8)
24 In these proceedings, the applicant sought leave to amend the application at a very advanced stage of the proceedings and then, after leave was granted, withdrew the application. 25 Ironically, if the applicant had simply withdrawn the application, it would not stand at risk of a cost order. But having withdrawn the application after it had been amended, the door does open for a cost order. This is an oddity of the ST Act that may cause confusion, but nevertheless means that a cost order can be sought when an application is amended on the day of the hearing, but that a cost order can not if the application is withdrawn on the day of the hearing. 26 In the Radford matter the Tribunal observed at [22] [24] that: The answer to the question whether time was unnecessarily spent due to an amendment, depends on the stage of the proceedings at which the amendment is sought. If the amendment is made at the initial directions hearing, the time wasted is for obvious reasons less than if the trial had begun. It is apparent that the later in the proceedings an amendment is made, the greater the risk of time unnecessarily spent on the original application. A possible award for costs is particularly relevant where substantial preparation had gone into a response to the original application, which is then amended in a way that renders the work done worthless. 27 The Tribunal accepts that in these proceedings substantial time was spent by the respondent in preparation of the hearing. The respondent had to make detailed written submissions in reply to all the issues raised by the applicant in its amended application and subsequent statement of issues, facts and contentions. The applicant contended that it has the right to exclusive use of areas of common property for which the respondent failed to register a by-law. The respondent had no choice but to reply to those contentions in great detail. 28 It is obvious that if leave to amend the application was sought sooner, those costs would not have been incurred and all the attention could be focused on s 97 of the ST Act. 29 It seems as if the applicant commenced with an ambit claim under several parts of the ST Act and then, on the day of the hearing, had second thoughts. (Page 9)
30 The frustration of the respondent at having had to prepare extensive submissions is understandable. This is the typical situation to which s 81(7) of the ST Act applies. 31 The Tribunal does not accept the proposition by the applicant that s 81(7) of the ST Act only applies, in effect, after the oral arguments during the hearing had commenced. The costs in these proceedings were wasted due to the very lengthy and substantial submissions the respondent had to make to counter issues that ultimately were withdrawn by way of an amendment.
Finding 32 The Tribunal accepts the contention by the respondent that substantial time was unnecessarily spent due to the amendment of the application on the day of the hearing. 33 The applicant was legally represented and there were many opportunities in the course of these proceedings where the application could have been amended without so much time being wasted. 34 The Tribunal therefore finds justification for an order for costs pursuant to s 81(7)(a) of the ST Act. 35 The Tribunal will afford the parties an opportunity to attempt to reach agreement as to cost and if such efforts are not successful, a determination will be made after a final Bill of Costs is prepared and submissions received.
Orders (Page 10)
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