| JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : COMMERCIAL & CIVIL ACT : BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA) CITATION : DIGISOUND MESSAGES ON HOLD PTY LTD and CME HOLDINGS PTY LTD & ANOR [2013] WASAT 155 MEMBER : MS J MCGOWAN (SENIOR SESSIONAL MEMBER) HEARD : 17 JULY 2013 DELIVERED : 19 SEPTEMBER 2013 FILE NO/S : CC 1817 of 2011 BETWEEN : DIGISOUND MESSAGES ON HOLD PTY LTD Applicant
AND
CME HOLDINGS PTY LTD
IVAN PAVLOVIC & ASSOCIATES PTY LTD
Respondent
Catchwords: Costs Legislation: Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 5(1), s 11(d), s 49
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Legal Practitioners (State Administrative Tribunal) Determination 2012
State Administrative Tribunal Act 2004 (WA), s 87(1) Result: Applicant's application for costs successful
Summary of Tribunal's decision: On 30 July 2012, a consent order to remedy was made in the Tribunal requiring the respondent to remedy certain items about which the applicant had made a complaint to the Building Commission. Of relevance to this proceeding is item 2.14, which was not repaired. On 17 July 2013, the applicant succeeded in its application to convert the consent order to remedy into an order to pay. The applicant was granted leave to apply for ordinary legal costs incurred in the course of legal representation and further supplementary costs incurred by the applicant participating in the proceedings. A decision was made on the written submissions and the bill of costs submitted by the applicant. The respondent chose not to make any submissions. The Tribunal considered the applicant was entitled to costs because of:
1) the respondent's unreasonable conduct in failing to comply with an order of the Tribunal which led to unnecessary costs to the applicant;
2) the respondent's failure to attend the hearing which suggested a weak if not unmeritorious case; and
3) the applicant having to embark upon the proceedings to vindicate its rights.
Given the respondent was legally represented and that there was continuing collateral damage arising from the failure to comply with the order, it was not unreasonable to expect the applicant to engage legal representation to convert the consent order to remedy into an order to pay.
Costs totalling $9,842.80 were awarded, with the legal fees adjusted to accord with the Legal Practitioners (State Administrative Tribunal) Determination 2012.
Category: B
Representation: Counsel: (Page 3)
Respondent : Mr D McCashney
Solicitors:
Applicant : Lavan Legal
Respondent : Margaret River Law
Case(s) referred to in decision(s):
Pearce & Anor and Germain [2007] WASAT 291 (S)
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REASONS FOR DECISION OF THE TRIBUNAL:
Introduction 1 This matter was heard at the Tribunal on 17 July 2103. The applicant was seeking an order to convert an order to remedy into an order to pay. 2 At the conclusion of the hearing, in which the applicant was successful, the applicant sought leave to apply for ordinary legal costs incurred in the course of legal representation and further supplementary costs incurred by the applicant having participated in the proceedings. 3 The Tribunal granted leave, and order 5 provided that: The Tribunal shall determine the application on the documents and if costs are awarded, shall fix the amount of such costs. 4 The applicant is seeking $11,243.21 made up as follows: 5 These are my reasons for concluding that the respondent should be ordered to pay the applicant's costs fixed at $9,842.80.
Background to the complaint 6 The applicant lodged its building services complaint at the Building Commission, pursuant to s 5(1) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BS(CRA) Act). The matter was referred to the Tribunal under s 11(d) of the BS(CRA) Act. The complaint related to the construction of a house at No 44 Gin Gin Road, Lancelin.
The complaint's progression through the Tribunal 7 The progression of the complaint through the Tribunal, culminating in the hearing on 17 July 2013, is of particular significance to this application for costs. (Page 5)
8 On 30 July 2012, a consent order was made requiring the respondent to remedy item 2.14 (in relation to water ingress) and item 10.2 (not relevant to these reasons) within 28 days from the order. 9 On 15 March 2013, the applicant's solicitor wrote to the respondent's solicitor, Mr David McCashney, at Margaret River Law (MRL) advising that: 1) item 2.14 'remains defective'; 2) an inspection had been conducted by Mr Machell and a summary of his observations regarding the causes of moisture in the offending area (being the subject of item 2.14) was provided; 3) the failure to remedy the work had resulted in significant and continuing collateral water damage; and 4) the applicant will have no alternative but to refer the matter back to the Tribunal if the work was not remedied. 10 In response, Mr McCashney referred the applicant's solicitors to a second complaint that had been made in relation to the same building work, suggesting that all matters be heard together. 11 On 24 April 2013, a directions hearing ordered that a hearing in relation to the conversion of item 2.14 of the consent order into an order to pay would be held on 27 June 2013, which was, at the request of the applicant's solicitor, later rescheduled for 17 July 2013. The applicant's solicitors duly prepared the six hearing booklets for the hearing. 12 On 15 July 2013, Mr McCashney advised the Tribunal and the applicant's solicitor that he no longer acted for the respondent. The respondent did not attend the hearing on 17 July 2013. Mr Machell attended and gave evidence. 13 Thus, in summary: (Page 6)
3) The failure to comply with the consent order resulted in the applicant having to commission a report from Mr Machell, and having its solicitors prepare for and attend at the necessary directions hearings to program the matter to a hearing, and the substantive hearing on the 17July 2013. 4) The notification by Mr McCashney of his ceasing to act for the respondent required enquiry to be made as to who, if anyone, would be appearing at the hearing. 5) The respondent did not advise anyone that it would not be attending the hearing. 14 In coming to its findings on the costs application, the Tribunal took into account the written submissions (submissions) filed by the applicant on 23July 2103. The respondent did not take the opportunity to respond to these submissions.
The statutory framework 15 That each party bears its own costs of a proceeding before the Tribunal is generally the starting point in an application for costs (s 87(1) of the State Administrative Tribunal Act 2004 (WA) (SAT Act)). 16 However, the Tribunal can use, and has used, its discretion to allow for a successful party to recover costs, thereby moving away from that starting point. This was discussed in Pearce & Anor and Germain [2007] WASAT 291 (S) at [22] [24] which developed the following nonexhaustive list of reasons as to when and why the Tribunal may award costs: a) where a party conducts itself unreasonably, particularly where the conduct leads to unnecessary costs to the other party; b) where a party has conducted itself inappropriately, particularly where the conduct leads to unnecessary costs to the other party; c) where credibility of evidence is at the heart of a matter; d) where the application undermines the integrity of proceedings under the relevant Act; (Page 7)
17 Section 87(1) of the SAT Act must be read in conjunction with s 49 of the BS(CRA) Act, which specifically allows for a discretion to award costs, in providing as follows: 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. 18 The non-exhaustive list of reasons referred to above thus provides the basis upon which to exercise the discretion provided in s 49 of the BS(CRA) Act, so as to align any award of costs in a BS(CRA) Act matter with the general objectives of the SAT Act.
Costs in this matter 19 Having taken into account the applicant's written submissions, the Tribunal exercises its discretion to award costs for the following reasons. 1) The respondent's unreasonable conduct in failing to comply with an order of the Tribunal led to unnecessary costs to the applicant. It is perplexing that, having agreed to a consent order to remedy item 2.14, the repair was not carried out. The applicant's letter of 15 March 2013, more than six months after the date by which the repair work ought to have been completed, gave notice to the respondent of the applicant's intention to proceed to have the matter referred back to the Tribunal. It also gave notice that collateral damage was occurring. The item was still not remedied. 2) The need to have the order to remedy converted to an order to pay, given that the remedial order was a consent order and that the respondent had a considerable amount of time to attend to the repairs, leads the Tribunal to the conclusion that the respondent's defending of the application for an order to pay was weak, if not unmeritorious. The failure of the respondent to attend the hearing without explanation, or even notifying the (Page 8)
Tribunal that it would not attend, and its dismissal of its legal representative in the days leading up to the hearing supports this conclusion. 3) The applicant had to embark on proceedings to vindicate its clear statutory entitlement, and, more relevantly, its entitlement resulting from the 30 July 2012 consent order. 4) Given: a) that the respondent was legally represented until two days before the hearing; b) the curious failure of the respondent to comply with the order to which it had consented; and c) the amount sought in the order to pay, including a claim for ongoing collateral water damage, it is not unreasonable to expect the applicant to engage legal representation to convert the order into an order to pay. The applicant was entirely successful. 20 The applicant's contention in its submissions that the respondent engaged Mr McCashney primarily to delay the proceedings was a hypothesis and not considered relevant to the Tribunal's consideration of whether it would award costs.
The costs 21 The applicant's submission attached a draft bill of costs, and identifies the time actually spent by the various legal practitioners involved in the preparation and presentation of the applicant's case in respect of each of the items identified in the draft bill, and the charges in respect of those items. 22 The draft bill has not, however, been prepared with regard to the maximum applicable amounts allowable under the Legal Practitioners (State Administrative Tribunal) Determination 2012 (Cost Determination). The applicant's bill of costs is reduced (where applicable) to the scale rate. The following table sets out details of the fees sought, and the relevant scale rates. | Practitioner | Hours charged | Rate charged | $ Total | Hourly Rate allowed under Cost Determination | $ allowable under the Cost Determination |
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| JP - Junior practitioner | 6.1 | 319 | 1,945.90 | 275 | 1,677.50 | | C Counsel | 4.8 | 363 | 1,742.40 | 297 | 1,425.60 | | SP Senior practitioner | 3.2 | 451 | 1,443.20 | 374 | 1,432.20 |
23 The $4,147 claimed under the nonexistent descriptor JC (in the table below) has been calculated at the rate elsewhere used for a junior practitioner. This leads the Tribunal to a conclusion that the descriptor 'JC' was inaccurate, and takes it to read 'JP'. | J[P] | 14.5 | 319 | 4,625.50 | 275 | 3,987.50 | | Totals | 9,755.50 | 8,522.80 | 24 The legal fees claimed are at the maximum allowable, albeit on an incorrect scale. The respondent provided no objections in relation to the scale or the hours spent. The allocation of time is reasonable, given the preparation for the directions and hearing, together with the briefing of Mr Machell which was necessary and time consuming. The fees are fixed at $8,522.80. 25 In the absence of any objection to the cost incurred in the commissioning of the report, $1,320.00 is allowed, the report being crucial to the application. 26 In relation to the facsimiles and photocopying, the Tribunal has, in the past, considered these as 'normal' costs always incurred to get the matter before the Tribunal. As it does not further the objectives of the Tribunal, these costs would not ordinarily be awarded. Therefore, they will not be awarded in this matter. 27 There will be an order that the respondent pay the applicant the sum of $9,842.80 no later than 30 calendar days from the date of this order.
Orders 1. The applicant's costs, comprising legal fees in respect of the proceedings, are fixed at $8,522.80. 2. The $1,320 cost incurred for Mr Machell's report is allowed. 3. The respondent is to pay the applicant $9,842.80 within 30 days of this order. I certify that this and the preceding [27] paragraphs comprise the reasons for decision of the State Administrative Tribunal. (Page 10)
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