CLINTWAY PTY LTD and THE OWNERS OF STRATA PLAN 21805

[2008] WASAT 294 (S)

CLINTWAY PTY LTD and THE OWNERS OF STRATA PLAN 21805 [2008] WASAT 294 (S)

Jurisdiction:	STATE ADMINISTRATIVE TRIBUNAL	Citation No:	[2008] WASAT 294 (S)
Act:	BUILDERS' REGISTRATION ACT 1939 (WA)
Case No:	VR:263/2005	Heard:	DETERMINED ON THE DOCUMENTS
Coram:	MR C RAYMOND (SENIOR MEMBER) MR R AFFLECK (SENIOR SESSIONAL MEMBER) MR P FAIGEN (SESSIONAL MEMBER)	Delivered:	9/12/08
Supplementary Delivered:	22/04/09
No of pages:	18	Judgment Part:	1 of 1
Result:	Applicant awarded costs relating to application for leave Respondent awarded costs relating to review hearing
Category:	B
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Parties:	CLINTWAY PTY LTD THE OWNERS OF STRATA PLAN 21805
Catchwords:	Builders' Registration Act 1939 (WA) Application for review of decision of Building Disputes Tribunal Applicant successful  in establishing Building Disputes Tribunal acted beyond power Respondent successful on issues relating to order made pursuant to s 12A(4a) of Builders' Registration Act 1939 (WA) Both parties applying for costs
Legislation:	Builders' Registration Act 1939 (WA), s 12A(4a)
Case References:	Clintway Pty Ltd and The Owners of Strata Plan 21805 [2006] WASAT 342 Clintway Pty Ltd and The Owners of Strata Plan 21805 [2008] WASAT 294 J-Corp Pty Ltd and Ly [2008] WASAT 242
Orders	1. The applicant's costs in respect of the application for leave are fixed in the sum of $5,420.,2. The respondent's costs, comprising legal fees and disbursements including expert witness costs, in respect of the review proceedings, are fixed in the sum of $17,006.,3. The applicant must pay to the respondent the difference between the costs fixed in accordance with order 1 and order 2 above in the sum of $11,586 on or before 15 May 2009.,4. The parties' respective applications for costs are otherwise dismissed.
Summary	The applicant was granted leave by the Tribunal on 24 November 2006 to review a decision of the Building Disputes Tribunal made on 15 April 2005. The leave was restricted to only one of a number of grounds of review proposed by the applicant, and that related to the power of the Building Disputes Tribunal to vary an order to remedy faulty or unsatisfactory building work.,In granting leave to review, the Tribunal raised whether, if the applicant was successful on review, the correct and preferable decision would require the Tribunal to revoke the order to remedy and issue an order for the applicant to pay to the respondent the cost of remedying the faulty and unsatisfactory work in question. The respondent supported the Tribunal making such an order and consequently the real contest between the parties shifted dramatically.,The applicant was successful on review, and the Tribunal found that the Building Disputes Tribunal had acted beyond power in amending the order to remedy. However, the Tribunal found that the correct and preferable decision required it to revoke the original order to remedy made by the Building Disputes Tribunal and substitute it with an order that the applicant pay to the respondent the necessary remedial costs which it assessed in an amount of approximately $81,000.,Both parties applied for the costs of the proceedings. Although the applicant had succeeded in obtaining an order for leave to review the Building Disputes Tribunal's decision, it had also failed in that application on a number of grounds which had taken considerably more time than that on which it had succeeded.,In applying the cost principles applicable to the review of decisions of the Building Disputes Tribunal as set out in J-Corp Pty Ltd and Ly [2008] WASAT 242, the Tribunal concluded that it was an appropriate case in which to award costs. Further, that in considering the case as a whole, the respondent had been the successful party, but it was not appropriate to make an order that costs follow the event. The Tribunal concluded that the appropriate costs dispensation was for the applicant to be awarded 80% of the allowable costs in respect of the leave application, and for the respondent to be awarded 80% of the allowable costs of the review. On that basis, the costs due to the applicant were fixed in the sum of $5,420, and those due to the respondent in the sum of $17,006. The Tribunal therefore made an order that the applicant pay the respondent the difference between those amounts, of $11,586.

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : COMMERCIAL & CIVIL ACT : BUILDERS' REGISTRATION ACT 1939 (WA) CITATION : CLINTWAY PTY LTD and THE OWNERS OF STRATA PLAN 21805 [2008] WASAT 294 (S) MEMBER : MR C RAYMOND (SENIOR MEMBER)

MR R AFFLECK (SENIOR SESSIONAL MEMBER)
MR P FAIGEN (SESSIONAL MEMBER)

HEARD : DETERMINED ON THE DOCUMENTS DELIVERED : 10 DECEMBER 2008 SUPPLEMENTARY
DECISION : 22 APRIL 2009 FILE NO/S : VR 263 of 2005 BETWEEN : CLINTWAY PTY LTD

Applicant

AND

THE OWNERS OF STRATA PLAN 21805
Respondent

Catchwords:

Builders' Registration Act 1939 (WA) - Application for review of decision of Building Disputes Tribunal - Applicant successful in establishing Building Disputes Tribunal acted beyond power - Respondent successful on issues relating to order made pursuant to s 12A(4a) of Builders' Registration Act 1939 (WA) - Both parties applying for costs

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Legislation:

Builders' Registration Act 1939 (WA), s 12A(4a)

Result:

Applicant awarded costs relating to application for leave

Respondent awarded costs relating to review hearing

Category: B

Representation:

Counsel:

Applicant : Mr P Kyle
Respondent : Mr M Atkinson

Solicitors:

Applicant : Kyle & Company
Respondent : Atkinson Legal

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

Clintway Pty Ltd and The Owners of Strata Plan 21805 [2006] WASAT 342
Clintway Pty Ltd and The Owners of Strata Plan 21805 [2008] WASAT 294
J-Corp Pty Ltd and Ly [2008] WASAT 242
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REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

1 The applicant was granted leave by the Tribunal on 24 November 2006 to review a decision of the Building Disputes Tribunal made on 15 April 2005. The leave was restricted to only one of a number of grounds of review proposed by the applicant, and that related to the power of the Building Disputes Tribunal to vary an order to remedy faulty or unsatisfactory building work.

2 In granting leave to review, the Tribunal raised whether, if the applicant was successful on review, the correct and preferable decision would require the Tribunal to revoke the order to remedy and issue an order for the applicant to pay to the respondent the cost of remedying the faulty and unsatisfactory work in question. The respondent supported the Tribunal making such an order and consequently the real contest between the parties shifted dramatically.

3 The applicant was successful on review, and the Tribunal found that the Building Disputes Tribunal had acted beyond power in amending the order to remedy. However, the Tribunal found that the correct and preferable decision required it to revoke the original order to remedy made by the Building Disputes Tribunal and substitute it with an order that the applicant pay to the respondent the necessary remedial costs which it assessed in an amount of approximately $81,000.

4 Both parties applied for the costs of the proceedings. Although the applicant had succeeded in obtaining an order for leave to review the Building Disputes Tribunal's decision, it had also failed in that application on a number of grounds which had taken considerably more time than that on which it had succeeded.

5 In applying the cost principles applicable to the review of decisions of the Building Disputes Tribunal as set out in J-Corp Pty Ltd and Ly [2008] WASAT 242, the Tribunal concluded that it was an appropriate case in which to award costs. Further, that in considering the case as a whole, the respondent had been the successful party, but it was not appropriate to make an order that costs follow the event. The Tribunal concluded that the appropriate costs dispensation was for the applicant to be awarded 80% of the allowable costs in respect of the leave application, and for the respondent to be awarded 80% of the allowable costs of the review. On that basis, the costs due to the applicant were fixed in the sum of $5,420, and those due to the respondent in the sum of $17,006. The Tribunal

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therefore made an order that the applicant pay the respondent the difference between those amounts, of $11,586.

The cost applications and background

6 These proceedings relate to the review of a decision made by the Building Disputes Tribunal (BDT) on 15 April 2005. Leave to apply for the review was granted by an order of the Tribunal made on 24 November 2006 and was limited to one ground concerning the power of the BDT to vary an order to remedy defective work other than in accordance with s 12A(4a) of the Builders' Registration Act 1939 (WA) (BR Act).

7 In the decision under review, the BDT had purported to vary an order to remedy which had been made some time previously. The full protracted history, which relates to a complaint first made to the BDT in 1996, is set out in Clintway Pty Ltd and The Owners of Strata Plan 21805 [2008] WASAT 294. When the Tribunal granted leave, it raised with the parties whether, if the applicant (builder) succeeded on review, the Tribunal would be bound, in arriving at the correct and preferable decision on review, to make an order under s 12A(4a) of the BR Act. That is an order which the BDT may make if satisfied that there has been non-compliance with an order to remedy and is in terms which sets aside the earlier order to remedy and substitutes an order to pay the costs of remedying the building work that is faulty or unsatisfactory. That result became a significant issue in the review hearing, which resulted in the Tribunal hearing evidence from four expert witnesses concerning the work necessary to remedy the faulty or unsatisfactory building work. An expert report was also tendered by a quantity surveyor on behalf of the respondent (owner) in order to establish the cost of repairs recommended by the owner's expert engineer witness.

8 The builder succeeded on review in establishing that the BDT had erred in varying the order to remedy. Conversely, the owner was unsuccessful in its attempts to support the validity of the order under review.

9 The Tribunal rejected the builder's submissions aimed at confining the review only to the form of order made by the BDT. As set out in its reasons for decision in respect of the review, the Tribunal held that the only power which the BDT could validly exercise, having regard to the complaint before it, was that set out in s 12A(4a) of the BR Act. In order to exercise that power, the BDT should have ensured that the parties were afforded an opportunity to present the evidence necessary for that purpose, but had failed to do so. Consequently, in arriving at the correct and

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preferable decision, this Tribunal had to follow that course. Although the builder was therefore successful on the issue of principle raised on review, it resulted in an order being made against the builder to pay the owner an amount of approximately $81,000 to cover the cost of remedial work.

10 Both parties have applied for the costs of the proceedings. The builder claims an amount of $26,950. To facilitate these reasons for decision, a copy of the builder's draft bill of costs is annexed marked Annexure A. The builder's claim for costs does not include disbursements.

11 The owner's claim for costs is for a total amount of $31,333, of which $26,515 is in respect of legal costs, and $4,818 is for disbursements, including expert witness fees. A copy of the owner's schedule of costs is attached marked Annexure B.

Cost principles

12 The applicable principles in relation to the review of a decision of the BDT is set out fully in J-Corp Pty Ltd and Ly [2008] WASAT 242 (Ly) at [13] - [19], and we apply those principles. There is no doubt that the proceedings were complex, as is evident from the discussion of the issues set out in the review decision. It is a case which a layperson would have had great difficulty in presenting without the benefit of legal representation. Further, the costs incurred on both sides are significant in relation to the benefit of the Tribunal's order. We are satisfied that it would result in an injustice if an appropriate order as to costs were not to be made.

Who is entitled to costs?

13 The builder contends that it was successful with its application, that the owner had not actually applied for an order to pay the costs of the remedial work, and that such an order could not have been made without the builder first succeeding with its application. The builder does concede, in its replying submissions, that the owner did submit that an order to pay was appropriate. The owner does not expressly submit that it was the successful party, although this is clearly the implicit basis upon which the application is made.

14 Section 12A(4a) of the BR Act does not contemplate that it is necessary for the beneficiary of an order to remedy to apply for the order to be revoked and an order to be made for payment of the remedial costs. It is simply

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envisaged that, if the BDT is satisfied that there has been non-compliance with the order to remedy, it may make the orders therein provided. It was, in any event, obvious from the date of the first directions hearing after leave to review had been granted, that the owner wished to present evidence to support an order for the payment of remedial costs, in the event that the Tribunal held that the BDT had erred in varying the order to remedy. There is no doubt that this issue took up most of the two-day review hearing. Nevertheless, the builder is correct in its basic contention that the making of the order to pay could only have been made if the builder succeeded on the issue on which leave was granted.

15 Looking at the matter holistically, we consider that the owner must be regarded as the successful party. But, in the peculiar circumstances of this case, we do not consider that the usual order that costs should follow the result is appropriate.

16 The builder was the party successful in relation to the application for leave to review the decision of the BDT. Nevertheless, there were other grounds of proposed review on which the builder failed. In this regard, we refer to the decision made in respect of the leave application in Clintway Pty Ltd and The Owners of Strata Plan 21805 [2006] WASAT 342. Those other grounds required consideration of a history of the matter going back to the initial construction of the development in 1992. It required an analysis of the proceedings as they had been conducted before the BDT and an assessment of the evidence before the BDT during a hearing in 2005. All of this was aimed at establishing that there was no complaint of faulty or unsatisfactory work before the BDT, no evidence to establish that the builder had any obligation to stabilise the land when the houses were built in 1992, and that the matter before the BDT in 2005 was statute-barred. These were time-consuming issues on which the owner was successful. Nevertheless, the application for leave was granted, restricted to the one ground mentioned. The builder ultimately succeeded on final review in respect of this ground.

17 It is relevant to take into account that, at no time prior to the publication of the decision on the leave application, did the owner identify the issue raised by the Tribunal that if the builder succeeded on review, the correct and preferable decision might require the Tribunal to make an order to pay in favour of the owner.

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18 Insofar as the review hearing is concerned, as we have already indicated, the time-consuming issues were those related to the identification of the appropriate remedial method. On those issues, the owner succeeded entirely. At the same time, the owner failed in a number of its contentions aimed at maintaining the validity of the decision under review.

19 But for the correct and preferable decision issue raised by the Tribunal, the builder would have been the successful party overall. However, once that issue was raised, the real contest between the parties shifted dramatically. Both parties disavowed any desire to leave the assessment of the appropriate remedial measures and the costing thereof to the BDT, in the event that the review succeeded on the ground in relation to which leave was granted.

20 Having regard to all of the above circumstances, we consider that the appropriate cost dispensation is that the builder should be awarded 80% of the allowable costs in relation to the leave application, and the owner 80% of the allowable costs in respect of the review itself. In arriving at this conclusion, we reject the builder's submission to take into account that the owner could have raised its allegations concerning the builder's failure to comply with the order to remedy approximately four years earlier than it did. It is submitted that delay substantially increased the builder's costs. We do not consider the delay affected the amount of legal work necessary. Further, if the BDT had made the order which it did in 2005 some years earlier, the appeal would have been to the District Court, and it is likely the conversion of the order to remedy would then have been conducted before the BDT. It is unlikely that costs would have been reduced.

The fixing of costs

21 The principles to be applied in relation to the fixing of costs are also set out in the Ly decision at [20] and [21].

22 In this case, the Tribunal accepts that the legal representatives for both parties have embraced the Tribunal's procedures and have endeavoured to avoid undue technicality in the conduct of the proceedings in order to ensure that they have proceeded in the most cost-efficient manner. Further, the rates at which the parties have claimed costs are manifestly reasonable and well below that to which they would have been entitled on the applicable Supreme Court scale, which is a useful guide to the Tribunal. Where some costs have been claimed, which the Tribunal considers should be either disallowed or fixed at a lower sum than that claimed, the reason for the Tribunal's views are set out below. The costs will be assessed to determine the full amount which is properly to be allowed and the total amount

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shall then be subjected to a 20% reduction to fix the costs payable at 80% of the amount allowable. In fixing the costs to be allowed to the parties, the Tribunal will endeavour to take a broadbrush approach and avoid descending into a detailed taxation of costs.

The builder's costs of the leave application

23 The builder has claimed for a number of attendances subsequent to the hearing of the leave application on 28 August 2006, and these are all disallowed. In relation to the directions hearings prior to the leave application hearing, there is a discrepancy between the times claimed by the builder and those claimed by the owner, with the former asserting that each hearing, except one, took up one hour, and the latter asserting that the directions hearings, including preparation, took .75 of an hour. On balance, the Tribunal considers that the approach of the owner is likely to be more accurate.

24 There were seven directions hearings prior to the leave application hearing (items 1 - 7 of Annexure A) and the builder will therefore be allowed an amount of $1,575 in respect of those attendances. Item 8 in respect of the leave application is allowed in the sum claimed of $1,200.

25 In relation to the preparation of documents, the builder is allowed item 1 in respect of preparation of the application of $500. In relation to item 2, the minute of issues, the Tribunal has been unable to identify the document to which this relates. In any event, item 3 covers the reasonable cost of preparing a statement of issues, facts and contentions, and on the face of it, item 2 and item 4 should be incorporated in that charge. The builder will be allowed an amount of $2,000 in respect of items 2, 3 and 4 under the heading 'Preparation of documents'. Item 5 under that heading clearly relates to the preparation of witness statements for the final review hearing and is disallowed.

26 In relation to item 1 and item 2 under the heading 'Preparation for hearings', item 1, which relates to preparation for the leave application, is allowed in full, and item 2, which relates to the final review, is disallowed.

27 The above amounts need to be reduced by 20% to fix the costs due by the owner to the builder at 80% of the costs of the leave application as allowed above. The total amount allowed is $6,775, as set out in the summary below, and 80% thereof equates to $5,420.

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The costs of review to be allowed to the owner

28 The owner claims $3,465 under item 1 for 14 directions hearings, which exclude three hearings which the owner accepts were caused due to default on its part. As seven of the directions hearings occurred prior to the leave application and have been allowed to the builder, they are disallowed in respect of the owner's claim. The amount allowed, therefore, is $1732.50 in respect of the remaining seven directions hearings.

29 Item 2 and item 3, in respect of attendances up to 25 August 2006, relate to the leave application and are therefore disallowed. That part of item 3 in respect of the drafting of a statement of issues, facts and contentions on 29 July 2007 relates to the review of application and is allowed in full.

30 Item 4 relates to the preparation of submissions in support of an application to strike out part of the builder's statement of issues, facts and contentions. An amount of $1,650 is claimed based on five hours time. Only part of the strike out application was justified, although the point had to be taken to avoid a considerable widening of the issues and the evidence which would have been necessary at the review hearing. There were, however, many issues raised in relation to which the owner was not successful. In all the circumstances, an amount of $650 will be allowed in respect of this attendance.

31 Item 5 related to the preparation of a supplementary submission after the final hearing of the review application. The submissions dealt with an authority referred to in the builder's list of authorities filed more than two weeks prior to the hearing. The Tribunal made no order permitting the filing of further submissions, and considers that this should be regarded as a solicitor and client expense, because the matter should have been fully dealt with at the hearing. This item is therefore disallowed.

32 Item 6 and item 7 relate to the leave application and are therefore disallowed.

33 Items 8 - 11, inclusive, relate to necessary attendances, subsequent to the leave application, and are allowed in full. The total legal costs allowed is therefore $16,638.50, subject to a 20% reduction.

34 Items 12 - 17, inclusive, relate to disbursements. Item 12 relates to the owner's expert witness and the fee claimed is $3,960 which equates to $165 per hour. The Tribunal considers this cost to be reasonable and

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necessary, and it is allowed in full. Items 13, 14 and 15 relate to photocopying of documents. Item 3 is for $250 in respect of photocopying, which the owner's solicitor submits is charged at one-half of the rate permitted under the Supreme Court scale, which is $1 per page. The claim is therefore in respect of some 500 pages of photocopying. As far as the Tribunal can assess, the builder has provided the bulk of the documents which were placed before the Tribunal. Nevertheless, it is inevitable that the owner was involved in a significant amount of photocopying. As no particular documents have been identified, we will allow an amount of $100 in respect of item 13.

35 No vouchers have been provided in respect of item 14 - photocopying documents at the Tribunal - or for the cost of colour photocopying of colour photographs. The amounts involved are relatively low. These claims are disallowed. Item 16 relates to the recovery of a transcript fee paid to the builder's lawyers of $500. There is no voucher in respect of this disbursement, but it is a not insignificant amount, and the builder has not disputed in its opposing submissions that the amount was paid. In the circumstances, we allow this amount. Item 17 relates to Landgate search fees of $59. Again, there is no voucher in respect of this item. However, we can understand that search fees may have been incurred for a number of reasons, either to reach a proper understanding as to the extent of the strata parcel, the boundaries of the lots and the determination of common property areas, or to ascertain the identify of the owner of the adjoining quarry land. We consider it was reasonable to incur search fees for either of these purposes, and we allow the sum claimed of $59. The total disbursements allowed is therefore $4,619 subject to a 20% reduction.

36 The total legal costs and disbursements allowed totals $21,257.50, and 80% thereof equates to $17,006.

37 For the reasons given above, the costs due to each party are fixed as follows.

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Summary of costs allowed

(a) The builder:

Attendances before Tribunal

Item No	Amount Claimed	Amount Allowed
1	$150	}
2	$300	}
3	$300	}
4	$300	} $1,575
5	$300	}
6	$300	}
7	$300	}
8	$1,200	$1,200
9	$300	Nil
10	$600	Nil
11	$300	Nil
12	$300	Nil
13	$300	Nil
14	$300	Nil
15	$300	Nil
16	$300	Nil
17	$600	Nil
18	$300	Nil
19	$300	Nil
20	$600	Nil
21	$300	Nil
22	$6,000	Nil

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Preparation of documents

Item No	Amount Claimed	Amount Allowed
1	$500	$500
2	$1,000	}
3	$2,000	} $2,000
4	$1,000	}
5	$1,000	Nil

Preparation for hearings

Item No	Amount Claimed	Amount Allowed
1	$1,500	$1,500
2	$6,000	Nil

Total	$26,950	$6,775
Fixed at 80%	$5,420

(b) The owner:

Item No	Date	Amount Claimed	Amount Allowed
1	Various	$3,465	$1732.50
2	15/06/06	$2,640	Nil
13/07/06	$82	Nil
3	25/08/06	$462	Nil
29/07/07	$1,551	$1,551
4	15/10/07	$1,650	$650
5	20/08/08	$330	Nil
6	Various	$2,475	Nil
7	28/08/06	$1,155	Nil
8	19/01/07; 16/02/07	$1,815	$1,815
9	Various	$5,610	$5,610
10	12/08/08; 13/08/08	$4,950	$4,950
11	20/01/09	$330	$330
Total	$26,515	$16,638.50

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Disbursements

Item No	Amount Claimed	Amount Allowed
12	$3,960	$3,960
13	$250	$100
14	$4	Nil
15	$45	Nil
16	$500	$500
17	$59	$59
Total	$4,818	$4,619

Combined total

Amount Claimed	Amount Allowed
$31,333	$21,257.50
Fixed at 80%	$17,006

Order

38 The Tribunal will accordingly issue orders as follows:

1. The applicant's costs in respect of the application for leave are fixed in the sum of $5,420.

2. The respondent's costs, comprising legal fees and disbursements including expert witness costs, in respect of the review proceedings, are fixed in the sum of $17,006.

3. The applicant must pay to the respondent the difference between the costs fixed in accordance with order 1 and order 2 above in the sum of $11,586 on or before 15 May 2009.

4. The parties' respective applications for costs are otherwise dismissed.

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I certify that this and the preceding [38] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

___________________________________

MR C RAYMOND, SENIOR MEMBER

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Annexure A

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Annexure B