DIPLOMA CONSTRUCTION PTY LTD and OWNERS OF STRATA PLAN 44936
[2010] WASAT 63
•3 MAY 2010
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: COMMERCIAL & CIVIL
ACT: BUILDERS' REGISTRATION ACT 1939 (WA)
CITATION: DIPLOMA CONSTRUCTION PTY LTD and OWNERS OF STRATA PLAN 44936 [2010] WASAT 63
MEMBER: MR T CAREY (MEMBER)
HEARD: 7 APRIL 2010
DELIVERED : 3 MAY 2010
FILE NO/S: CC 79 of 2010
BETWEEN: DIPLOMA CONSTRUCTION PTY LTD
Applicant
AND
OWNERS OF STRATA PLAN 44936
Respondent
Catchwords:
Building disputes - Application for costs - Whether appropriate case for exercise of discretion to award costs
Legislation:
State Administrative Tribunal Act 2004 (WA), s 24, s 87(1), s 87(2)
State Administrative Tribunal Rules 2004 (WA), r 9, r 10
Result:
Costs application unsuccessful - Leave to withdraw granted
Category: B
Representation:
Counsel:
Applicant: Mr C Hollett
Respondent: Ms K Whitehead
Solicitors:
Applicant: Bowen Buchbinder Vilensky
Respondent: GV Lawyers
Case(s) referred to in decision(s):
Pearce & Anor and Germain [2007] WASAT 291(S)
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
The respondent sought an order for its costs on the applicant's withdrawal of these proceedings. The proceedings were in the nature of an application for leave to review decisions made by the Building Disputes Tribunal, and, if leave was granted for that review. Early in the proceedings, subsequent to the initial directions hearing, the applicant indicated that it no longer required a determination by the Tribunal and sought leave to withdraw the application.
The Tribunal considered the grounds upon which the respondent contended that the usual position whereby costs are not awarded should be departed from in favour of the exercise of the Tribunal's discretion to award costs. It found none of the grounds provided a sufficient basis for doing so. It was not possible, at the early stage at which the withdrawal was sought, to assess the merits of the application, and some other of the grounds were concerned with problems of enforcement, which were irrelevant to the costs issue. The Tribunal also took account of the deterrent effect that a costs order in the circumstances of this case may have on parties in other proceedings who might be reconsidering whether or not to proceed.
Factual background and basis of respondent's costs claim
On 18 January 2010, the applicant filed the application seeking review of one or more decisions of the Building Disputes Tribunal (BDT). The decisions which were to be the subject of the review application were those reflected in Order to Remedy No. 150/2009‑10 dated 11 December 2009, and Order to Pay No. 96/2009‑10, also dated 11 December 2009. Given the 28 day period in which such an application was required by r 9 of the State Administrative Tribunal Rules 2004 (WA) (SAT Rules) to be made, the application sought an extension of time in which to apply for a review under r 10 of the SAT Rules.
The application was listed for its initial directions hearing on 28 January 2010. At that directions hearing, both parties appeared by their respective legal representatives, and directions in standard form were made, including that the applicant obtain a transcript from the BDT; the BDT file and serve documents relevant to the matter pursuant to s 24 of the State Administrative Tribunal Act 2004 (WA), including a statement of reasons for decision; and the parties file witness statements and outlines of submissions. The application for leave was listed for hearing on 7 April 2010.
By letter dated 8 February 2010, the applicant's solicitors informed the Tribunal that the applicant no longer wished to pursue any of the matters referred to in the application, and sought leave to withdraw the application.
According to the applicant's solicitors' letter, the grounds upon which withdrawal of the application was sought were:
1.(The applicant) has made appropriate arrangements for payment of the Order to Pay in the sum of $60,383.
2.The Applicant will attend to the Order to Remedy in consultation with the Respondent.
3.The Applicant no longer seeks to have the determinations of the (BDT) reviewed by the State Administrative Tribunal.
Consistent with the Tribunal's usual practice, the respondent's solicitors were contacted in order to ascertain the respondent's attitude to the withdrawal request. The respondent's solicitors indicated their client did not oppose the withdrawal of the application, but sought an order for payment of the respondent's costs of the application.
The Tribunal thereafter made directions that the respondent file a memorandum of costs being claimed and written submissions in support of the costs application; the applicant file and serve written submissions in opposition; and the Tribunal thereafter determine the application on the documents, and if costs were awarded, to fix the amount of such costs.
The respondent duly filed a memorandum of costs indicating a total amount of $1,052 was being claimed. Its submissions indicated that, in the respondent's view, this was a case in which the broad discretion of the Tribunal to award costs under s 87(2) of the SAT Act should be applied to award costs. For the sake of convenience, I set out fully the grounds submitted by the respondent as justifying such an outcome here:
(a)The Respondent is a body corporate representative of numerous lot owners and therefore must act prudently to preserve the rights of the owners and justify expenditure.
(b)It was reasonable for the Respondent to engage solicitors given it is a body corporate and the history of the matter being more than 5 years old and with a Building Disputes Tribunal hearing lasting 10 days.
(c)The Applicant issued its Application on 18 January 2010 and sought to withdraw it on 8 February 2010 after the parties had already attended a directions hearing. The Application was filed after the deadline for payment of the Order to Pay which was 8 January 2010. Therefore, the Applicant was already in breach of the Building Disputes Tribunal's Order. It did not pursue any stay of the enforcement of the Order to Pay in this jurisdiction or elsewhere.
(d)The Applicant sought to withdraw its Application before receipt of the Building Disputes Tribunal's Reasons for Decision. The Reasons for Decision were received on 12 February 2010 by the Respondent.
(e)The Applicant issued its Application to the Tribunal out of time causing unnecessary costs to the Respondent when considering the merits of the Application and whether it was a valid application given that it was filed out of time. These costs would not have been necessary had the Applicant acted prudently and reasonably in filing its Application with time.
(f)The Respondent took the Application seriously and engaged its solicitors to review the Application, advise on the merits and defend the Application because of the possible consequences. These costs were all reasonable and prudently incurred.
(g)It can be inferred that the Applicant's Application was unmeritorious and weak in circumstances where the Applicant sought to withdraw its Application before receipt of the Reasons for Decision and that Application was only brought to frustrate the Respondent and delay payment of the Order to Pay. This conduct is unreasonable and inappropriate. Such conduct should not be encouraged as it wastes the time and resources of the Tribunal and puts parties to unnecessary cost.
(h)The Application caused the Respondent unnecessary costs in having to engage solicitors to defend the Application; particularly in circumstances where the Applicant has not paid the Order to Pay and the Respondent has had to issue a Property Seizure & Sale Order against the Applicant for payment. As at the date of these submissions and notwithstanding an Order to Pay, the Respondent has not received any monies from the Applicant to the Order to Pay.
(i)As at 8 February 2010, the Applicant had not made appropriate arrangements for payment of the Order to Pay despite its solicitors stating this as a ground for its withdrawing the Application. On 12 February 2010 the Respondent was advised by the Midland Bailiff that the Applicant had proposed a timetable for payment of the Order to Pay by way of instalment (the final payment being due on 20 April 2010). The Respondent never agreed to such proposal and does not consider this an 'appropriate arrangement'. Such an arrangement and the Applicant's conduct undermine the integrity of the Building Disputes Tribunal's Order to Pay which required payment by 8 January 2010. Again, the Respondent is incurring further and unnecessary costs because of the Applicant's inappropriate conduct and delaying tactics.
The applicant, in its written submissions, argued that this was a case in which the normal position that parties bear their own costs in proceedings in the Tribunal in accordance with s 87(1) of the SAT Act should apply. It submitted that none of the grounds upon which the respondent relied established any reason to depart from that position. It also challenged the amount claimed in a couple of respects.
My consideration
Section 87(1) of the SAT Act creates a presumption of a 'no costs' jurisdiction. As was explained by the then Deputy President, now President, of the Tribunal in Pearce & Anor and Germain [2007] WASAT 291(S) at [17], such a presumption is desirable as for promoting accessibility to the Tribunal. It is, however, subject to the broad discretion in s 87(2) of the SAT Act to award costs in appropriate cases. Such factors as unreasonable or inappropriate conduct, where a matter turns on a party's credibility, or where a matter is implausible or obviously unmeritorious, might result in the discretion being exercised in the circumstances of a particular case.
It is difficult, at the early stage in the proceeding at which the applicant has sought to withdraw its application, to assess those factors usually considered in the determining applications for costs in the Tribunal. By way of illustration, it is virtually impossible to make any assessment of the merit, or lack thereof, of the review application, given that the Tribunal is not privy to the BDT's reasons for decision. I deal with the respondent's submission of an inference to be drawn that the application was unmeritorious in my consideration of the grounds relied upon by the respondent to support the discretion being exercised in its favour.
I turn then to the respondent's grounds. Some of the grounds overlap so that they can be dealt with together:
(a),(b),(f)I accept that it was reasonable for the respondent to engage solicitors to represent it in opposing the application.
(c)The fact that the application was filed at a time when the applicant was in breach of the deadline for payment under the Order to Pay cannot, in my view, be regarded as a relevant factor in determining the costs questioned. Neither is the decision not to pursue a stay of enforcement. The non‑payment, and the failure to seek a stay, created conditions in which the respondent was entitled to seek to have the Order to Pay enforced. However, they constituted no bar to the applicant bringing and pursuing the review application.
(d),(g)Production by the respondent of the reasons for decision may have assisted the Tribunal in assessing whether any of the substantive claims made in the application document, or any additional claims which may have been added, had any prospect of success. In the absence of the reasons, I am simply unable to make any meaningful assessment on the merits. In my view, the timing of the decision is a neutral factor in the assessment of merit. I do not accept the respondent's contention that the applicant's decision to withdraw the application before the reasons for decision were received gives rise to the inference that the application was unmeritorious. The fact that the withdrawal request was made prior to receipt of the BDT's reasons is equally consistent with the withdrawal decision being based on factors other than the merits of the case, given that it could not have been based on those BDT reasons. It must also be borne in mind that there is an onus cast on prospective applicants to file any application for review within the time period allowed by r 9 of the SAT Rules. As it was, the application was filed out of time, and required an extension of time from the Tribunal in order to be pursued.
(e)This is a claim relevant to those costs incurred by the respondent related directly to the fact that the application was issued some 10 days out of time. Such costs could not reasonably have been significant, given that the Tribunal's rules governing time limitation and extensions, and the principles applying in relation to extension of time applications, are clear and within a narrow focus.
(h),(i)Although no doubt provoked by the reference, in the applicant's solicitor's letter seeking leave to withdraw, to appropriate arrangements having been made for payment, ground (h) again raises the issue of enforcement. The fact, if it be the fact, that the applicant continues to defy the order to pay, and this is resulting in the respondent incurring further costs, may give rise to further claims against the applicant. It is irrelevant to the question that I must determine.
Arising from the above discussion, I find none of the respondent's grounds to provide a sufficient basis for the making of any costs order.
Viewing the matter from the wider perspective of the Tribunal, an award of costs in the circumstances of this case may well be seen as a deterrent to parties wishing to keep their position in proceedings in the Tribunal under constant review, and, in appropriate cases, to seek their withdrawal. As well as fostering access to it, the Tribunal will also be keen to facilitate the discontinuance of matters where, for one reason or another, applicants no longer wish to pursue them.
I do not consider that the applicant has established a basis upon which the general presumption in the Tribunal against awarding costs should be displaced.
Orders
The Tribunal orders that:
1.The applicant has leave to withdraw the application and the application is hereby withdrawn; and
2.The respondent's application for costs is dismissed.
I certify that this and the preceding [17] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR T CAREY, MEMBER
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