DRYLAND and TANGENT NOMINEES PTY LTD - [2025] WASAT 31 (S)

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL
ACT: BUILDING SERVICES (COMPLAINT RESOLUTION AND ADMINISTRATION) ACT 2011 (WA)
CITATION:   DRYLAND and TANGENT NOMINEES PTY LTD [2025] WASAT 31 (S)
MEMBER:   MR E CADE, MEMBER
MR R AFFLECK, SENIOR SESSIONAL MEMBER

HEARD:   DETERMINED ON THE DOCUMENTS
DELIVERED          :   11 SEPTEMBER 2025
FILE NO/S:   CC 974 of 2023
BETWEEN:   GAVIN DRYLAND
First Applicant
KASEY DRYLAND
Second Applicant
AND
TANGENT NOMINEES PTY LTD
Respondent

Catchwords:

Building dispute - Costs - Settlement offer - Turns on its own facts

Legislation:

Building Services (Complaint Resolution and Administration) Act 2011 (WA), s41(2)(d)(i), s 43, s 49
Legal Profession (State Administrative Tribunal) Determination 2024 (WA)
State Administrative Tribunal Act 2004 (WA), s 87(2)
State Administrative Tribunal Rules 2004 (WA),r 40, r 40(1)(b), r 41(2), r 42

Result:

Application for costs by applicant allowed in part

Category: B

Representation:

Counsel:

First Applicant	:	Mr S Mintz & Mr W Vogt
Second Applicant	:	Mr S Mintz & Mr W Vogt
Respondent	:	Mr C Taylor-Burch

Solicitors:

First Applicant	:	Vogt Legal
Second Applicant	:	Vogt Legal
Respondent	:	Morgan Alteruthemeyer Legal Group

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

Dryland and Tangent Nominees Pty Ltd [2025] WASAT 31
McLerie and Koleszko [2014] WASAT 160 (S)
Petsos and Judd [2025] WASAT 26 (S)

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

On 11 April 2025, following a final hearing held over four days, the Tribunal published its decision in Dryland and Tangent Nominees Pty Ltd [2025] WASAT 31 (the substantive decision).
The substantive decision involved a home building contract the parties entered into on 24 November 2021 under which the respondent was to build a single storey dwelling for the owners for the price of $425,041.00. The builder, however, did not ever commence the proposed works and the contract came to an end on or about 7 March 2023.
For the reasons we gave in the substantive decision, we found that the builder was in breach of the building contract by not commencing the proposed works and that the owners did suffer a loss due to the breach, and we made an order the builder is to pay $179,132.00 as compensation to the owners under s 41(2)(d)(i) and s 43 of the Building Services (Complaints Resolution and Administration) Act 2011 (WA) (BSCRA Act).
The order we made was for an amount that was less than the claim made by the applicants at the final hearing, which was for 'loss of bargain' damages in the amount of $225,931.92 and 'delay' damages in the amount of their rental payments from the expected completion date of the proposed works to the date of the decision at the rate of $340.00 per week.
On 12 May 2025 the Tribunal made the following orders:
1.By 26 May 2025, the Applicants must file (lodge) with the Tribunal and give to the Respondent any outline of submissions in respect of any costs application by them in respect of these proceedings, setting out the basis for any costs order and the quantum of costs being claimed.
2.By 9 June 2025, the Respondent must file (lodge) and give to the Applicant any outline of submissions in opposition to the costs order sought by the Applicants pursuant to Proposed Order 1.
3.Unless otherwise ordered by the Tribunal, any application for costs shall be determined by the Tribunal on the papers pursuant to Section 60(2) of the State Administrative Tribunal Act 2004 (WA).

The applicants' costs submissions

The applicants lodged costs submissions on 27 May 2025 totalling 21 pages (the applicants' costs submissions) which seek an order that the builder pay their legal costs in the sum of $66,687.80 and their disbursements in the sum of $7,155.55 within 14 days of the date of pronouncement of the relevant orders.
The applicants claim their legal costs and disbursements on the basis:
(a)there is sufficient basis to depart from the usual position where the parties bear their own costs;
(b)the circumstances of this case are such that there is a legitimate basis for the Tribunal to exercise the discretion under s 87(2) of the State Administrative Tribunal Act 2004 (WA) and s 49 of the BSCRA Act; and
(c)in this case, it is fair and reasonable in all the circumstances for the Tribunal to order that the respondent pay the applicants' costs and disbursements of these proceedings from 10 July 2024, limited to:
(i)the preparation of witness statements;
(ii)the preparation of the Hearing Bundle;
(iii)drafting the applicants' Reply to RSIFC;
(iv)preparation for and attendance at the final hearing of this matter;
(v)preparation of the Opposing Outline; and
(vi)the preparation of written closing submissions.

The applicants seek their costs and disbursements of the proceedings from 10 July 2024 as, on 25 June 2024, the applicants made an offer to the respondent to settle the proceedings, with the offer being open for 14 days and which they say the respondent unreasonably did not accept.

The respondent's submissions in reply

The respondent lodged its submissions in reply on 10 June 2025 (the respondent's submissions). While the respondent accepts the applicants were largely successful on their claim it contends the applicants have not discharged the onus, which is on them, to satisfy the Tribunal it ought to make an award of costs in their favour. This is because, it says:
(a)the respondent reasonably presented to the Tribunal for its decision a genuine dispute between the parties;
(b)the respondent appropriately and efficiently conducted its defence; and
(c)no settlement offer made by the applicants can properly be characterised as having been more favourable to the respondent than the Tribunal's decision, nor was any rejection by the respondent of a settlement offer unreasonable.
Consequently, the respondent contends the Tribunal should refuse to make any order as to costs in favour of the applicants.
Alternatively, the respondent contends that if an award of costs is to be made, it ought to be for a fixed sum substantially less than the amount sought by the applicants.

Applicable principles in respect of costs

The principles applicable in respect of an application for costs in proceedings of this kind have recently been summarised by Member Benter and Sessional Member Woodforde in Petsos and Judd [2025] WASAT 26 (S) at [19] - [29], which we respectfully adopt:
19The SAT Act provides that the general starting position in Tribunal proceedings is that each party bears their own costs, but that the Tribunal has discretion to make an order for the payment of costs where it considers appropriate.
20The builder's costs submissions seek to address the engagement between the relevant provisions of the SAT Act and s 49(1) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BSCRA Act), which states:
(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.
21This engagement between the relevant provisions in relation to the costs of building disputes, and the principles applicable to determining costs, have been considered previously by the Tribunal and were well summarised by Senior Member Aitken of the Tribunal in Deshmukh and Distinctive Building Services Pty Ltd [2024] WASAT 62 (Deshmukh) as follows:
39… Thus, in considering a claim for costs made pursuant to s 49(1) of the BSCRA Act, the Tribunal is not required to start from the position that each party is to bear its own costs. However, as is well understood, costs do not 'follow the event' in Tribunal proceedings and the broad discretion conferred on the Tribunal is to be properly exercised by taking into account relevant considerations.
40In Hippydayze (S) at [11] the Tribunal referred to the guidance given to the Tribunal in relation to the exercise of its discretion to award costs by the Court of Appeal in Western Australian Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32 (Questdale) in which the following principles were found to apply:
(1)The discretionary power is to be exercised judicially; that is not arbitrarily, capriciously, or so as to frustrate the legislative intent;
(2)The power to award costs is to be exercised if it is fair and reasonable in all the circumstances of the case to do so;
(3)The onus is on the party seeking an order in its favour to establish that a favourable order ought to be made;
(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. It is therefore necessary for the applicant to establish that the respondent's conduct has impaired the attainment of the Tribunal's objectives to have the proceedings determined fairly and in accordance with the substantial merits, with as little formality and technicality as possible and in a way which minimises the costs to the parties; and
(5)The mere fact that a party ultimately fails on a contention advanced during the course of the hearing does not, in itself, signify that the party has acted inconsistently with the objectives set out in s 9 of the SAT Act.
41In Hippydayze (S) at [12] the Tribunal noted that if it exercises its discretion to award costs, it is to approach the task of fixing costs in a broad and relatively robust fashion, referring to the decisions of the Tribunal in Perth Central Holdings Pty Ltd and Doric Constructions Pty Ltd [2008] WASAT 302 at [67] and Marvelle Investments Pty Ltd and Argyle Holdings Pty Ltd [2010] WASAT 125 (S) at [49]. However, although fixing costs involves a relatively broad-brush approach, the Tribunal must nevertheless be satisfied that the costs claimed are reasonable and not excessive in nature.
42I agree with the view of the Tribunal expressed in both Gileno and Hippydayze (S) that in considering a claim for costs made pursuant to s 49(1) of the BSCRA Act, the Tribunal is not required to start from the position that each party is to bear its own costs, although that does not mean that costs 'follow the event'.
43The broad discretion conferred on the Tribunal under s 49(1) of the BSCRA Act is to be properly exercised by taking into account relevant considerations. The power to award costs is to be exercised if it is fair and reasonable in all the circumstances of the case to do so and the onus is on the party seeking an order for costs in its favour to establish that a favourable order ought to be made.
22Adopting the principles above in respect of the related proceedings, being building dispute proceedings pursuant to the BSCRA Act, the Tribunal is not required to start from the position that each party is to bear its own costs and is to exercise its discretion as to costs taking into account all relevant considerations.
23As noted above, the homeowners' costs application is founded upon both the 25 June Offer and the builder's conduct in the proceedings.
24In relation to the impact of a settlement offer on the costs of a proceeding in the Tribunal, s 87(5) of the SAT Act states:
(5)The rules may deal with the effect of certain offers to settle, and responses, if any, to the offer, on the making of an order for the payment by a party of the costs of another party.
25The State Administrative Tribunal Rules 2004 (WA) (SAT Rules) in turn set out the process by which a party in Tribunal proceedings may make a settlement offer to another party and, where such an offer has been made, r 42 provides as follows:
42.Order for costs if settlement offer is rejected
(1)This rule applies if —
(a)a party to a proceeding (other than a proceeding in the Tribunal's review jurisdiction) gives another party to the proceeding an offer in writing to settle the proceeding; and
(b)the other party does not accept the offer within the time the offer is open; and
(c)the offer complies with rules 40 and 41; and
(d)in the opinion of the Tribunal, the orders made by the Tribunal in the proceeding are not more favourable to the other party than the offer.
(2)If this rule applies, the Tribunal is to, in determining the costs that may be awarded, take into account that the party did not accept an offer more favourable than the Tribunal's order.
(3)In determining whether its orders are or are not more favourable to a party than an offer, the Tribunal —
(a)must take into account any costs it would have ordered on the date the offer was made; and
(b)must disregard any costs it ordered in respect of any period after the date the offer was received.
26The reasoning behind the SAT Rules in respect of settlement offers, and the manner in which they are applied, was addressed by the Tribunal in Giabeni Pty Limited and The Owners of 30 Coode Street Mount Lawley Strata Plan 11321 [2024] WASAT 105 (S) at [25] to [27] as follows:
25The SAT Rules encourage parties to settle their differences without the need for a final hearing before the Tribunal. The is reflected in Clifford and Shire of Busselton [2007] WASAT 89 (S) at [48] (Clifford) as follows:
48The SAT Act, therefore, through s 87(5) and the rules referred to, reveals parliamentary support for the idea that, where possible, parties to proceedings should endeavour to consider settlement. This intent is evident elsewhere in the SAT Act. For example, s 9(b) makes it one of the main objectives of the Tribunal to act as speedily and with as little formality and technicality as is practicable, and minimise the cost to parties. Section 52 encourages the use of compulsory conference as an alternative to a final adversarial hearing. Section 54 encourages mediation as an alternative to a final adversarial hearing. Importantly, s 56 expressly deals with settlement and enables the Tribunal to make an order giving effect to a written settlement of the parties. In this statutory context then, the rules providing for the making and acceptance of the settlement offers and for the making of an order for costs in the event that a settlement offer is rejected, or at least settling out factors to be considered in relation to an application for an order for costs in some circumstances, are important.
26However, there is no particular format that an offer to settle must be put. This is reflected in Gill & Ors and Wildnight Pty Ltd [2008] WASAT 135 where the Tribunal noted at [40]:
40There is no format in the SAT Act with which the settlement offer must comply. There is also no need for the settlement offer to refer to the SAT Rules. The offer must, however, be drafted in a way that, if accepted, an agreement comes into being. It must therefore be specific enough to settle issues in dispute if it is accepted.
27In its original jurisdiction, which is the case here, the Tribunal is required to take into account if a party did not accept an offer of settlement made in compliance with r 40 and r 41 of the SAT Rules which is more favourable than the Tribunal's orders: s 87(5) of the SAT Act. However, it does not follow that a costs order will be made. This is because the SAT Rules do not provide that a party who makes an offer more favourable to a party than the result achieved in the Tribunal, is by reason of that, entitled to an order for costs. Rather, as stated by Martin CJ in Questdale at [10], r 42 of the SAT Rules merely provides, perhaps superfluously, that the Tribunal must take such matters into account. This is the same as stated by the Tribunal in the earlier decision of Clifford at [49] to [50].
27In considering whether a party's refusal to accept an offer made in accordance with the Calderbank principles is unreasonable, the Victorian Court of Appeal in Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority [No 2] [2005] VSCA 298 (Hazeldene's Chicken Farm) stated at [25] that regard should ordinarily be had to at least the following matters:
…
(a)the stage of the proceeding at which the offer was received;
(b)the time allowed to the offeree to consider the offer;
(c)the extent of the compromise offered;
(d)the offeree's prospects of success, assessed as at the date of the offer;
(e)the clarity with which the terms of the offer were expressed;
(f)whether the offer foreshadowed an application for an indemnity costs in the event of the offeree's rejecting it.
28An offer made in accordance with the SAT Rules may or may not, depending upon the circumstances, also constitute an offer made in accordance with the Calderbank principles. However, whether a settlement offer is made pursuant to the SAT Rules, the Calderbank principles or both, the Tribunal has regularly referred to the factors outlined in Hazeldene's Chicken Farm as being matters relevant to the Tribunal's consideration of an application for costs based upon a settlement offer that was not accepted.
29In relation to the otherwise broad discretion in respect of costs, the Tribunal in McLerie and Koleszko [2014] WASAT 160 (S) stated at [3]:
3There are a range of factors that might contribute to the Tribunal making a costs order, including the following non-exhaustive list:
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;
e)where the case is weak, being incredible or implausible or obviously unmeritorious;
f)where a party has to embark in proceedings to vindicate its clear contractual entitlement;
g)the circumstances of the case having regard to the above, or other factors, are such that the justice of the case supports moving away from the initial position that each party should bear their own costs; and
h)in the case of proceedings conducted under the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BSCRA Act), although s 39 [sic] thereof broadens the Tribunal's discretion in relation to costs, the provision should not be understood as providing that costs will generally follow the result, it is neutral in effect, and should be applied in the manner which is consistent with and reinforces the objectives and procedures of the Tribunal and any factors will be relevant which point to the justice of the case requiring an award of costs;
as discussed in Pearce & Anor and Germain [2007] WASAT 291 (S) at [22] - [24]; Marvelle Investments Pty Ltd and Argyle Holdings Pty Ltd [2010] WASAT 125 (S) and Hoskins and Daniel Vinci t/as D'Vinci Contracting [2011] WASAT 188.
(Footnotes omitted)

The effect of the 25 June 2024 offer

On 25 June 2024 the applicants' solicitors made an offer of settlement to the respondent. This offer of settlement contained, in fact, two alternative offers:
(a)Option One, the respondent constructs the home in the unvaried form for the contract price of $425,041.00; or
(b)Option Two, the respondent pay the applicants the sum of $180,000.00 in full and final settlement of the proceedings.
The applicants contend the 25 June 2024 offer complies with the substantive requirement of rules 40 - 42 of the State Administrative Tribunal Rules 2004 (WA) in that:
(a)In accordance with r 40(1)(b) the offer was made in writing 'without prejudice save as to costs' and it stated it is made pursuant to rules 40 - 42; and
(b)In accordance with r 41(2) the offer was open for acceptance for 14 days from the date of its issue.

On 10 July 2024 the respondent wrote to the applicants' solicitors stating it was 'willing to construct the proposed residence and accept(s) in principle'. The applicants say this response does not constitute an acceptance of their 25 June 2024 offer as it includes a 'series of counterproposal' with the result it 'cannot be construed as anything other than a counteroffer'. As a consequence, the proceedings then went to a final hearing.
The applicants, understandably, accept that Option Two in their 25 June 2024 offer that the respondent pay them $180,000.00 in full and final settlement of the proceedings was not better than the outcome at the final hearing which was that the builder was ordered to pay the applicants $179,132.00. However, they contend that Option One is better. They say this is because they say the estimated cost of the home in the Joint Costing Statement is $485,688.27, so that the difference between the cost to the builder of completing the home and the contract price offered by the applicants of $425,041.00 would result in a loss to the builder of $60,647.27. This loss is substantially less than the $179,132.00 the Tribunal at the final hearing ordered the builder pay the applicants.
The applicants contend that the following other matters are relevant to the Tribunal's consideration of their costs application:
(a)That on 25 June 2024 the parties had exchanged their respective statements of issues, facts and contentions.
(b)The builder's conduct of its case at the final hearing, in the following respects, unnecessarily incurred costs for the applicants:
(i)By not calling its former employee Mr McManus to give evidence, the respondent was not able to put before the Tribunal any evidence which contradicted the applicants' evidence as to what Mr McManus did and said over the course of their dealings with one another. The Tribunal understands this to mean that in doing this the respondent unduly extended the final hearing.
(ii)In its Outline of Opening Submissions, the respondent indicated it would call Ms Donohue to give evidence but then, over the course of the final hearing, stated it would not do this. This meant the applicants' costs in preparing submissions and preparing for the cross-examination of this witness were wasted.
(iii)During the course of the final hearing the respondent lodged a supplementary witness statement for Ms Bergamaschi which put the applicants to the cost of arguing against the respondent's application for leave to tender this supplementary statement.
For these reasons, the applicants say the Tribunal should make an order in their favour for their legal costs in accordance with the Legal Profession (State Administrative Tribunal) Determination 2024 in the amount of $66,687.80 and disbursements in the amount of $7,155.55 as set out in their Schedule of Costs and Disbursement, for a total of $73,843.35.[1]
[1] Under this determination the Senior Practitioner maximum allowable hourly rate is $484.00 and the Junior Practitioner maximum allowable hourly rate is $385.00.
The respondent's primary reply to the applicants' submissions is in summary that:
(a)No settlement offer made by the applicants can be properly characterised as having been more favourable to the respondent than the Tribunal's decision, nor was any rejection by the respondent of a settlement offer unreasonable.
(b)Each of the parties reasonably presented to the Tribunal for its decision a genuine dispute between them.
(c)The respondent appropriately and efficiently conducted its defence.
The respondent contends that Option One in the applicants' offer of 25 June 2024 was not better than the decision of the Tribunal as this option required the respondent to build the home so as to include 'numerous changes to the originally contracted works' as well as a number of new special conditions such as a new liquidated damages regime, giving up its right to issue certain price increases and to claim extensions of time. The result of this is that the respondent would be 'exposed to any number of source of liability that could well, in the result, have seen the [r]espondent be worse off than paying the sum fixed by the Tribunal'.
The respondent also says its response to this offer was not to simply turn down the offer, but to seek to clarify and develop it so as to make it capable of acceptance by the respondent.
The respondent says the applicant properly conceded the outcome of the final hearing was not better than their Option Two, with the result, that this option does not require any further consideration.
Finally, the respondent says the applicant's prospects of success as at 25 June 2024 were not so clear as the applicants now assert. It says the case was not straightforward but turned on significant issues of contractual construction and contested oral and documentary evidence as to issues of waiver and authority.
Accordingly, even though the Tribunal may still take the settlement offer into account, it ought to be given little weight.
The respondent contends it conducted its case reasonably and efficiently and sought to confine the issues to those that required decision. It says it made appropriate concessions.
The respondent also says:
(a)that Ms Donohue was a relatively minor witness who could add little to the documentary evidence before the Tribunal. It says its decision not to call Ms Donohue was therefore reasonable, and was certainly preferable to calling Ms Donohue.
(b)Ms Bergamaschi's supplementary witness statement was lodged as, during the final hearing, relevant documents had come to light which in accordance with the respondent's obligations to the Tribunal were required to be disclosed. In any event, conferral between the parties' counsel during the final hearing day led to the issues raised by this supplementary witness statement being effectively resolved by consent.
The respondent therefore contends there is no real basis for an award of costs in the applicants' favour.
The respondent's alternative position is that if an award of costs is to be made, it ought to be for a fixed sum substantially less than the amount sought by the applicants. The respondent contends that if the Tribunal does make an order for costs, the obligation on parties to minimise their costs is to be reflected in the costs assessed by the Tribunal as recoverable. In addition, the respondent reminds the Tribunal that any costs it awards are to be reasonable and not excessive in nature.
The respondent says on this basis the applicants' claim for costs in the amount of $66,687.80 for the period 10 July 2024 to 16 January 2025 is excessive and considerably exceeds what is reasonable. It says, in particular:
(a)The costs for Mr Mintz's time have been calculated at a rate for a senior practitioner where, if it should be allowed, it should be at the rate for a junior practitioner of $385 per hour.
(b)To the extent that Mr Mintz's rate and time are claimed for work as counsel, there was no justification for the applicants to be represented at the hearing by two counsel. This has resulted in the unnecessary duplication in preparation time in the lead up to the hearing (items 6 and 7, 14 and 15 and 16, 17 and 18).
(c)A good portion of the hearing time was taken up by the extensive cross-examination of the respondent's witnesses, which to a real extent pursued irrelevant issues and involved matters of submission.
(d)Entries in the applicant's schedule contain erroneous or duplicative entries, these being items 3, 4, 5, 18, 20 and 21.
Accordingly, if the Tribunal is minded to make an order as to costs, the respondent submits the Tribunal ought to fix costs at an amount substantially less than that claimed by the applicants. However, the respondent takes no issue with the applicants' claim for disbursements in the amount of $7,155.55.

Consideration

With respect to rules 40 - 42, it is clear that neither of the applicants' 25 June 2024 offers were accepted by the respondent within the 14 day period set out in the offer.
It is also clear the decision of the Tribunal was more favourable to the respondent than the applicants' Option Two offer to the difference of $868.00.
However, the Tribunal must determine whether the applicants' Option One offer was more or was less favourable to the respondent than the decision of the Tribunal.
Option One is set out in detail in paragraphs 63 to 80 of the 25 June 2024 offer and runs for a little more than four pages. While it would require the respondent to build the home for the contract price of $425,041.00, it would, we find, also require the respondent to build the home with 'numerous changes to the originally contracted works' as well as a number of new special conditions such as a new liquidated damages regime and it would require the builder to give up its right to issue certain price increases and to claim certain extensions of time. The result of this is, as the respondent contends, it would be 'exposed to any number of sources of liability that could well, in the result, have seen the [r]espondent be worse off than paying the sum fixed by the Tribunal'.
We are satisfied and we find it would be extremely unlikely that under Option One the respondent would be limited to building the home for a loss fixed in the amount of $60,647.27, and certainly the applicants have not produced any evidence that would indicate that their many additional requirements would result in no further losses to the respondent through building the home.
To the contrary, the Tribunal is satisfied the many requirements sought by the applicant would almost certainly result in a loss to the respondent through building the home that would exceed $60,647.27, but may conceivably also exceed $179,132.00, particularly given the uncertain nature of the supporting works that are required before any building work could commence, the additional works required by the owners and the unknown but likely high costs that would follow from the limitations placed on the respondent's right to claim price increases and extensions of time.
Given the very uncertain nature of the Option One offer the Tribunal is not satisfied the orders made by the Tribunal in the proceedings are not more favourable to the respondent than this offer.
The Tribunal will now consider in turn the factors set out in in McLerie and Koleszko.[2] Turning to each of these factors in turn:
(a)Where a party conducts itself unreasonably, particularly where the conduct leads to unnecessary costs to the other party: We do not consider the respondent conducted its case unreasonably when it indicated in its opening submission it would call Ms Donohue to give evidence, but then during the course of the final hearing it decided not to call her. This is because Ms Donohue's evidence was primarily as to the content of emails she had exchanged with various persons, and it is clear that had she given oral evidence there was little if anything that she could have said about these emails that was not contained within the emails themselves. While it is no doubt the case that some wasted time was spent by the applicants in preparing to cross‑examine Ms Donohue, we doubt that this would have been anything other than modest. We also do not consider the respondent unreasonably lodged a supplementary witness statement for Ms Bergamaschi. Rather, we consider that in the circumstances it was only proper that the respondent disclose this statement to the applicants. The time that was then spent conducting an interlocutory hearing into whether leave should be granted to the respondent to introduce this statement into evidence was then time that it was necessary to spend, and in any event, it resulted in the introduction of evidence that was more favourable to the applicants than it was unfavourable. However, we do consider that the respondent was unreasonable putting in issue at the final hearing whether its then employee Mr McManus possessed either its implied authority or an apparent authority to bind the builder to various agreements, particularly when the respondent did not intend to call Mr McManus to give evidence at the final hearing. The greater part of the final hearing was spent in hearing evidence and dealing with submissions on this aspect of the dispute between the parties. This extensive evidence, however, showed only that it was through the respondent's own actions, such as by giving Mr McManus access to its DocuSign platform which it informed the applicants is 'safe, secure, and legally binding', as well as by its poor supervision of Mr McManus, that the difficulties the parties then faced in building the home arose at all. It was therefore unreasonable, in our view, that the respondent should attempt to shift the liability for Mr McManus' conduct to the applicants when all the evidence showed that at law it was bound by the agreements Mr McManus entered into with the applicants.
(b)Where a party has conducted itself inappropriately, particularly where the conduct leads to unnecessary costs to the other party: We do not consider this factor arose in this proceeding.
(c)Where credibility of evidence is at the heart of a matter: The issues in the final hearing were essentially issues of law and did not involve any assessment of the credibility of evidence, particularly given that the respondent chose not to call Mr McManus to give evidence.
(d)Where the application undermines the integrity of proceedings under the relevant Act: We do not consider this factor arose in this proceedings.
(e)Where the case is weak, being incredible or implausible or obviously unmeritorious: Subject to our findings above in relation to the respondent putting Mr McManus' authority in issue when it did not intend to call him to give evidence, we do not consider the respondent's case to be weak, implausible or obviously unmeritorious.
(f)Where a party has to embark in proceedings to vindicate its clear contractual entitlement: This factor is directly related to our findings that the respondent conducted itself unreasonably by putting Mr McManus' authority in issue at the final hearing. It is clear that, as a consequence of this decision by the respondent, the applicants had no choice but to continue these proceedings in order to vindicate their clear contractual entitlements, and that the greater part of the final hearing was spent hearing evidence and otherwise dealing with this issue. Had the respondent not have put this in issue the final hearing would have been shortened considerably.
(g)The circumstances of the case having regard to the above, or other factors, are such that the justice of the case supports moving away from the initial position that each party should bear their own costs: Given our findings in relation to the respondent's decision to put Mr McManus' authority in issue in the circumstances where it chose not to call Mr McManus to give evidence we are of the view that the justice of this case supports moving away from the initial position that each party should bear their own costs. We have also taken into account Option Two was only $868.00 less than the order made by the Tribunal.
[2] McLerie and Koleszko [2014] WASAT 160 (S) [3].
We are therefore persuaded that on this analysis of the McLerie and Koleszko factors that it is proper and just to make an order the respondent pay the applicants' costs at the fee earner rates set out in the Legal Profession (State Administrative Tribunal) Determination 2024.
Nonetheless, even while we accept the respondent should pay the applicants' costs, we do accept the respondent has properly identified some parts of their claim for costs which are unreasonable or excessive. With respect to these:
(a)The costs for Mr Mintz's time have been calculated at a rate for a senior practitioner where if it should be calculated, this should be at the rate for a junior practitioner of $385 per hour: Despite the respondent in its submissions directly challenging the applicants to provide evidence that Mr Mintz is a senior practitioner, the applicants have provided no evidence of this. Accordingly, the Tribunal is not satisfied that Mr Mintz should be charged as a senior practitioner and it will therefore reduce the applicants' claim for its costs to the extent that Mr Mintz is to be properly charged out only as a junior practitioner.
(b)To the extent that Mr Mintz's rate and time are claimed for work as counsel, that there was no justification for the applicants to be represented at the hearing by two counsel. This has resulted in the unnecessary duplication in preparation time in the lead up to the hearing (items 6 and 7, 14 and 15 and 16, 17 and 18): The Tribunal is not satisfied that this matter is of such complexity it requires two counsel from the same firm. Accordingly, the Tribunal will reduce the applicants' claim for its costs to the extent that it will allow for a single counsel instructed by Mr Mintz as a solicitor at the final hearing.
(c)A good portion of the hearing time was taken up by, and significant reason for a fourth hearing day having to be listed was the extensive cross-examination of the respondent's witnesses, which to a real extent pursued irrelevant issues and involved maters of submission: While the Tribunal accepts that this submission has some force, it can also be said that, given the unreasonable approach taken by the respondent in putting Mr McManus' authority in issue, the applicant was justified in taking a very careful approach to the cross-examination of the respondent's witnesses, particularly where Mr McManus was not himself called to give evidence. Accordingly, the Tribunal will not reduce the applicants' claim for their costs due to the applicants very careful, if not painstaking, approach to cross‑examination.
(d)Entries in the applicant's schedule appear to contain erroneous or duplicative entries, these being items 3, 4, 5, 18, 20 and 21: The Tribunal has carefully examined these items and does find some of them to be erroneous or duplicative. Accordingly, the Tribunal will reduce the applicants' claim for its costs to remove the erroneous and duplicative items.

Quantum of costs to be awarded

On the basis of these findings the Tribunal will adjust the applicants' claim for their costs as follows:
(a)By amending the hourly rate in items 1,2, 4, 5, 7, 9, 1, 13, 15, 16, 17, 18, 19, 20 and 21 to $385 an hour with the result the total amount claimed for legal costs is adjusted to $62,919.20.
(b)While the Tribunal accepts the respondent's submission that it is not proper for the applicants to be represented by two counsel, but rather to be represented by one counsel and one instructing solicitor, this does not in our view require the applicants' costs claim to be amended. The items the respondent claims are duplicative are items 6 with 7 and 14 with 15 where a claim is made for cross examination preparation by both Mr Mintz and Mr Vogt, as well as with items 16, 17 and 18 where the claim is made that the cross examination was prepared by Mr Mintz, but was conducted by Mr Vogt. However, on reviewing the costs schedule we are satisfied that all that is meant by these entries is that Mr Mintz as a solicitor assisted Mr Vogt, who acted as counsel, to prepare for cross-examination. This does not appear to us to be so unusual as to mean these claims should not be allowed.
(c)For the reasons given above, the Tribunal will not adjust this item.
(d)Item 3 refers to a different matter, that is, it does not refer to these proceedings. Items 4 and 5 are both a claim for attendance for the fourth day of the final hearing on 27 November 2024. Item 18 appears to be doubled. Item 21 is entirely subsumed within item 20. Accordingly, the applicant's claim for their costs is amended by removing items 3, 5 and 21 and by halving item 18 (as well, as noted above, reducing Mr Mintz's hourly rate to $385). This amends the applicants' costs claim from $62,919.20 (as calculated above) to $56,207.00.

The Tribunal has, after amending the applicants' claim for its costs as set out above, then further reviewed the applicants' claim with an eye as to whether it is in any way excessive or unreasonable. Given that the hearing book comprised over 2,500 pages and the final hearing was held over four days the Tribunal considers the amount of $56,207.00 plus $7,155.55 (totalling $63,362.55) for disbursements is in all the circumstances is justified, is not excessive and is reasonable. We consider this amount should be paid by the respondent within 21 days of the date of our order.

Orders

The Tribunal orders:
1.Pursuant to s 49(1) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) and s 87(2) of the State Administrative Tribunal Act 2004 (WA), the respondent is to pay to the applicants the total sum of $63,362.55 in respect of their costs of this proceeding by no later than 3 October 2025.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MR E Cade, MEMBER
11 SEPTEMBER 2025