EDGE INVESTMENTS WA PTY LTD and Q GROUP WA PTY LTD
[2024] WASAT 9 (S)
•11 JULY 2024
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: BUILDING SERVICES (COMPLAINT RESOLUTION AND ADMINISTRATION) ACT 2011 (WA)
CITATION: EDGE INVESTMENTS WA PTY LTD and Q GROUP WA PTY LTD [2024] WASAT 9 (S)
MEMBER: MS KY LOH, MEMBER
MR C MARSH, SESSIONAL MEMBER
HEARD: DETERMINED ON THE DOCUMENTS
DELIVERED : 11 JULY 2024
FILE NO/S: CC 62 of 2022
BETWEEN: EDGE INVESTMENTS WA PTY LTD
First Applicant
DAVID VICTOR PARIN
Second Applicant
AND
Q GROUP WA PTY LTD
Respondent
Catchwords:
Building services complaint - Costs - Whether onus of establishing claim for costs discharged - Transcript costs - Fees for expert reports which pre-date the commencement of proceedings
Legislation:
Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 43
Legal Profession (Magistrates Court) (Civil) Determination 2022 (WA)
Legal Profession (State Administrative Tribunal) Determination 2020 (WA)
Legal Profession (State Administrative Tribunal) Determination 2022 (WA)
Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2022 (WA)
State Administrative Tribunal Act 2004 (WA), s 9, s 48(2)(b)(i), s 60(2), s 87(1), s 87(2), s 87(3)
Result:
Application substantially allowed
Category: B
Representation:
Counsel:
| First Applicant | : | N/A |
| Second Applicant | : | N/A |
| Respondent | : | N/A |
Solicitors:
| First Applicant | : | Western Legal |
| Second Applicant | : | Western Legal |
| Respondent | : | Jacobson and Associates |
Case(s) referred to in decision(s):
Edge Investments WA Pty Ltd and Q Group WA Pty Ltd [2024] WASAT 9
J & P Metals Pty Ltd and Shire of Dardanup [2006] WASAT 282 (S)
Legal Profession Complaints Committee and in de Braekt [2012] WASAT 58 (S); (2012) 80 SR (WA) 194
Marvelle Investments Pty Ltd and Argyle Holdings Pty Ltd [2010] WASAT 125 (S)
Medical Board of Australia and Costley [2013] WASAT 2; (2013) 83 SR (WA) 1
Panegyres v Medical Board of Australia [2020] WASCA 58
Perth Central Holdings Pty Ltd and Doric Constructions Pty Ltd [2008] WASAT 302; (2008) 60 SR (WA) 194
Western Australian Planning Commission and Scutti [2019] WASAT 99
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction
On 23 February 2024, we made a building remedy order under s 43 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (the Act) that Q Group WA Pty Ltd (the builder) pay to the owner and project manager of a property, Mr David Parin and Edge Investments (WA) Pty Ltd respectively (the applicants), the sum of $6,371: Edge Investments WA Pty Ltd and Q Group WA Pty Ltd [2024] WASAT 9(Edge Holdings).
We made the building remedy order on the basis that, of the 119 complaint items, we were satisfied that four items constituted works not carried out in a proper or proficient manner or were faulty or unsatisfactory.
The builder has applied for its costs of the proceedings on the basis that it was largely successful in responding to the application and due to unreasonable conduct by the applicants, including pursuing an application in sole reliance on expert evidence that was clearly deficient.
The applicants dispute that the builder has discharged its onus of establishing its entitlement to costs.
The applicants also challenge whether sufficient evidence has been submitted in support of the costs application, and whether certain items of costs should be recoverable (such as the cost of transcripts and expert reports which pre-date the commencement of the Tribunal proceedings).
For reasons set out below, the builder has satisfied us that it is fair and reasonable for the applicants to pay for its costs of the proceedings fixed in the sum of $129,897.26.
Background
Following delivery of the decision in Edge Holdings, the builder lodged an application for costs on 26 February 2024.
We ordered the builder to file written submissions as to the basis on which the costs application is made and the quantum of costs claimed, along with a schedule of costs claimed in sufficient detail to enable us to assess and fix any costs, together with any supporting documents (including invoices) upon which the builder intends to rely.
Orders were also made for the applicants to file any submission in opposition to the costs application.
We ordered that the costs application be determined entirely on the documents pursuant to s 60(2) of the State Administrative Tribunal Act 2004 (WA) (SAT Act).
History to proceedings
The following factual history to the proceedings relied on by the parties in this application are based on uncontentious documents filed with the Tribunal, including the applicants' bundle of documents (Exhibit 1), and do not appear to be in dispute.
On or about 20 June 2018, the applicants lodged a disciplinary complaint form against the builder with the Building Commissioner (Exhibit 1, page 56).
By letter dated 6 February 2020 (against complaint reference B2018896), the Building and Energy division advised the builder of the decision to dismiss the disciplinary complaint due to insufficient evidence to substantiate the allegations (Exhibit 1, page 89).
By letter dated 17 March 2020 (against complaint reference B2020296), the Building and Energy division advised of a new disciplinary complaint made by Mr Parin alleging a failure to provide a certificate of home indemnity insurance, which complaint was ultimately refused (Exhibit 1, page 96).
In December 2021, Messrs Boni and Jacobson, solicitors for the applicants and builder respectively, exchanged correspondence about whether the builder had previously lodged a building services complaint (Exhibit 1, page 97 and page 113), with Mr Boni stating that while a disciplinary complaint was made by his client in complaint B2018-896, no previous building services complaint was made.
Mr Glenn Smith, for the builder, raised this query with the Building and Energy division by email dated 19 January 2022 (Exhibit 1, page 47), with Mr Parin responding on the same day to the Building and Energy division with his understanding that the previous disciplinary complaint was not a building services complaint (Exhibit 1, page 49).
The parties received an email response from the Building and Energy division that day advising that the complaints officer intended to recommend to the Building Commissioner's delegate that the matter be referred to the Tribunal due to the complex nature of the matter, but did not otherwise deal with the builder's query about whether a previous building services complaint was made by the applicants (Exhibit 1, page 44).
At a directions hearing on 1 March 2022, the Tribunal made programming orders for, amongst other things:
(a)the applicants to file with the Tribunal and give to the builder a complaint schedule by 15 March 2022, and their witness list, unavailable dates for a hearing and an estimate of hearing days by 19 April 2022; and
(b)the builder to file with the Tribunal and give to the applicants a complaint schedule with its response by 12 April 2022, and its witness list, unavailable hearing dates and an estimate of hearing days by 26 April 2022.
The Tribunal adjourned the proceedings to a further directions hearing on 4 May 2022.
The applicants filed their complaint schedule on 16 March 2022 and their witness list, unavailable hearing dates and estimate of hearing days on 19 April 2022.
On 18 March 2022, the builder lodged a request to issue summons form with the Tribunal for production of documents from the Building Commissioner regarding complaint reference B2018-896 on the belief that that complaint included a building complaint as well as a disciplinary complaint.
A completed summons form was not lodged with the Tribunal, and no summons was issued by the Tribunal.
By 26 April 2022, the builder had not filed the documents as required under the Tribunal order of 1 March 2022.
On 28 April 2022, the applicants lodged an application to determine the proceedings in favour of the applicants under s 48(2)(b)(i) of the SAT Act.
In the affidavit sworn by Mr Boni in support of the application, Mr Boni refers to failure of the builder to comply with the Tribunal's orders of 1 May 2022, and the absence of any communication about the delay or any application to vary the Tribunal's orders.
Mr Boni also states in his affidavit that the request for summons was never served on the applicants, and that the request was incomplete in that it failed to name the person being summonsed.
On 3 May 2022, the builder filed and provided to the applicants the completed complaint schedule, as well as an affidavit of Mr Jacobson, relevantly providing an explanation for the delay as being caused by a late change of instructions for Mr Jacobson to prepare the complaint schedule to which the latter was not able to attend until 3 May 2022.
At the directions hearing on 4 May 2022, the senior member dismissed the applicant's application under s 48(2)(b)(i) of the SAT Act.
Builder's submissions
The builder accepts that it bears the onus of establishing its claim for costs, and says, for the following reasons, that the applicants conducted themselves unreasonably, and have unfairly put the builder to unnecessary expense.
Firstly, the builder says that it can be inferred, from the applicants' spectacular failure to establish their claim, both quantitively and qualitatively, that the proceedings were brought vexatiously and for an improper purpose, and should never have been brought in the first place.
Secondly, the builder is critical of the applicants' heavy reliance on an argument that proved ultimately unsuccessful – that is, that works were not carried out in accordance with approved drawings.
Thirdly, the builder submits that the flaws in the evidence set out in Mr van der Meer's reports, as identified by the Tribunal, were so obvious on its face that any reasonable litigant would have taken steps to seek further evidence rather than to commence proceedings relying solely on those reports.
Fourthly, it is said that the applicants engaged in irrelevant crossexamination of Mr Airey about his firm's report for the neighbouring owners.
The builder submitted, with its costs submissions, Annexure A which provides the summary of costs, as well as copies of invoices relating to the engagement of its experts and transcript fees.
When adjusting Annexure A for arithmetic errors, the builder seeks an order that the applicants pay its costs of $149,463.64, comprising:
Expenditure item
Number of hours/day
Allowance (incl GST)
Lodgement of SAT Notice of Representation
12 min
$99
(at $495/hr)
Drafting Request to issue summons
30 min
$247.50
(at $495/hr)
Drafting affidavit in opposition to interim application by applicant to determine proceedings pursuant to s 48(2)(B)(i) of the SAT Act
45 min
$371.25
(at $495/hr)
Drafting Scott Schedule responses to items of complaint
7 hrs
$3,465
(at $495/hr)
Attending Hearing of interim application (Application was dismissed)
1 hr
$495
(at $495/hr)
Drafting Witness List and short summary of evidence
1 hr
$495
(at $495/hr)
Preparation of evidence for hearing
8 hrs
$3,344
(at $506/hr)
Preparation for four day hearing (4,5,6 and 7 July 2022)
50 hrs
$25,300
(at $506/hr)
Attending hearing 10.00 am - 3.00 pm
5 hrs
$2,530
(at $506/hr)
Attending hearing 10.10 am - 4.40 pm
6 hrs 50 min
$3,457
(at $506/hr)
Attending hearing 9.00 am - 5.00 pm
8 hrs
$4,048
(at $506/hr)
Attending hearing 9.00 am - 5.00pm
8 hrs
$4,048
(at $506/hr)
Preparation for and attendance at two day hearing (8 and 9 February 2023)
15 hrs
$7,590
(at $506/hr)
Attending hearing 10.15 am - 4.40 pm
6 hrs 25 min
$3,204
(at $506/hr)
Attending Hearing 10.15 am - 5.00 pm
7 hrs 15 min
$3,668
(at $506/hr)
Attending Hearing 10.15 am - 4.40 pm
6 hrs 25 min
$3,204
(at $506/hr)
Attending hearing 9.00 am - 1.50 pm
4 hrs 50 min
$2,485
(at $506/hr)
Written closing submissions
35 hrs
$17,710
(at $506/hr)
Drafting application for Costs
30 min
$253
(at $506/hr)
Drafting Submission in Support of Application for costs, including cost schedule
7 hrs
$5,542
(at $506/hr)
TOTAL COSTS
$91,555.75
Transcript Cost
$ 9,846.80
Expert Fees:
$48,061.09
Peter Airey
$26,356.09
Structerre
$ 2,310.00
Richard Machell
$19,395.00
TOTAL COSTS AND DISBURSEMENTS
$149,463.64
As to the cost of transcripts, the builder says that it was necessary to have access to transcript for the reasons of progressing the hearing (given the lengthy period of time over which the hearing occurred) and drafting the closing written submissions (given the complexity of the case and the evidence given during the hearing).
Applicants' submissions
The applicants deny that their complaint was frivolous and/or vexatious, or that there was an abuse of process in commencing proceedings in the Tribunal and submit that parties should bear their own costs.
The commencement of proceedings in the Tribunal was a result of the applicants' decision to remove the building defects claim in their 2018 Supreme Court proceedings to the Tribunal in 2022 on the basis that it was a more suitable jurisdiction, and one which would reduce costs to the parties.
The applicants submit that the mere fact that they had failed on a contention advanced at a hearing does not, in and of itself, establish that they had failed to act in accordance with the objectives set out in s 9 of the SAT Act.
They also say that the Tribunal's rejection of Mr van der Meer's evidence is simply an outcome of a discretionary exercise to prefer one expert over another, and does not lead to the conclusion that the building complaint should not be made.
Indeed, if the builder thought that the building complaint was fundamentally flawed, in particular, as it relates to Mr van der Meer's evidence, it could have sought to have the proceedings struck out or raised a preliminary issue with the Tribunal.
The applicants also take issue with the way the builder has presented its claim for costs, contending that the builder has failed to provide documentation to support its claim for legal costs such as itemised invoices, timesheets, or cost agreements.
In the absence of receipts for payment of invoices or supporting affidavit swearing that costs have been properly incurred and paid, the applicants say that there is no evidence that the costs claimed have been or will be incurred by the builder.
As to particular items claimed by the builder, the applicants make the following submissions:
(a)the request for summons lodged on 18 March 2022 was incomplete and never progressed;
(b)the responsive affidavit prepared for, and attendance at a hearing on 4 May 2022 of, the applicants' interim application under s 48(2)(b)(i) of the SAT Act was required because the builder had first failed to comply with Tribunal directions;
(c)the builder did not provide particulars of what preparation was undertaken for the hearing in July 2022, and works asserted to have been carried out may have been carried out in respect of the Supreme Court proceedings;
(d)the claim for the cost of transcripts should fail as that is not a cost necessary to progress a hearing;
(e)the invoices for the builder's expert witnesses cannot be claimed as they pre-date the commencement of the proceedings and are properly claimable in the Supreme Court;
(f)the invoices of Mr Airey of 8 July 2022 and 29 March 2023, and the invoice of Structerre of 1 March 2023, lack particulars as to the rates charged, dates on which work was performed or the actual times taken to perform the works invoiced; specifically, in the case of Mr Airey's invoice of 29 March 2023, Mr Airey omitted to provide a copy of the previous invoice 41493.
Legal principles
The general legal principles relating to costs applications in building disputes before the Tribunal are set out in our primary decision in determining an application for costs by the applicants: Edge Holdings at [643] – [661].
Further challenges have been raised in submissions relating to the builder's cost application, such as a claim for costs incurred prior to the commencement of proceedings, and the approach for assessing quantum of costs.
Quantum of costs ordered
If satisfied that a costs order is warranted, the Tribunal embarks on a 'stringent approach to costs' (Marvelle Investments Pty Ltd and Argyle Holdings Pty Ltd [2010] WASAT 125 (S) at [35], Western Australian Planning Commission and Scutti [2019] WASAT 99 (Scutti) at [86]) on the basis that:
The procedures of the Tribunal are designed to achieve the objectives prescribed by s 9 of the SAT Act. The Tribunal strives to ensure that its procedures are proportionate to the nature of the matters in issue. […] In the unusual event that an order for costs is made by the Tribunal, the Tribunal's obligation to minimise the costs to parties will be reflected in the costs assessed by the Tribunal as recoverable. That approach reflects an expectation that representatives of parties before the Tribunal will approach a proceedings [sic] in a way that minimises costs to their clients. If clients choose to approach proceedings before the Tribunal in a way which substantially increases costs for them, it will be a rare case where that increase in costs will be recoverable through a favourable costs order.[1]
[1] J & P Metals Pty Ltd and Shire of Dardanup [2006] WASAT 282 (S) (J & P Metals) at [38].
The Tribunal will usually require a determination as to what costs are reasonable given the nature of the matter, its complexity, its importance, possibly its urgency, and the amount of time and effort required to properly prepare and present the case: J & P Metals at [9].
The Tribunal will undertake the assessment of costs in a 'relatively robust fashion' (Marvelle at [49]) or 'broad fashion' (Perth Central Holdings Pty Ltd and Doric Constructions Pty Ltd [2008] WASAT 302; (2008) 60 SR (WA) 194 at [67]), taking a 'robust and broad brush approach' (Medical Board of Australia and Costley [2013] WASAT 2; (2013) 83 SR (WA) 1 (Costley) at [66].
Whilst the Tribunal is entitled to be robust and broad-brush in dealing with quantification of costs, the Tribunal's reasons for quantifying costs must reveal the process of reasoning for why costs have been allowed at a certain amount: see Panegyres v Medical Board of Australia [2020] WASCA 58 (Panegyres) per Vaughan JA at [339] and [342] (which whom Buss P and Murphy JA agreed).
Such process will be considered inadequate particularly where the Tribunal had no breakdown of the amounts charged and claimed, meaning that there was no identification of the work being claimed for: Panegyres at [342].
Further, his Honour Vaughan JA observed (at [415]) that:
The Tribunal should … ensure that it is in a position to evaluate and assess the Board's claim as to costs. At the least this requires that the Tribunal be appropriately informed as to the work done and time taken as is claimed for and the rates which are said to apply to that work. The detail required in this respect is a matter for the Tribunal. It may take the form of an affidavit attaching the tax invoices as charged. Alternatively, the Tribunal may consider it appropriate to require a short form bill of costs …
There is no prescribed scale of costs in relation to work done in proceedings before the Tribunal, although relevantly the Legal Profession (State Administrative Tribunal) Determination 2020 and Legal Profession (State Administrative Tribunal) Determination 2022 (2020 SAT Determination and 2022 SAT Determination, respectively) prescribes the maximum amount which a legal practitioner can charge a client without a written agreement as to costs.
The Tribunal has adopted a practice of using the SAT Determination as a guide to the maximum rates which might be allowed in the Tribunal on a party-party basis for an hourly or daily rate: Marvelle at [35] and [47], Legal Profession Complaints Committee and in de Braekt [2012] WASAT 58 (S); (2012) 80 SR (WA) 194 (in de Braekt) at [53].
In appropriate cases, the Tribunal may assess claims for legal costs by analogy with legal work under a statutory scale applicable to other jurisdictions: see J & P Metals at [9] and Marvelle at [48] (where complexity and importance of the matter to the parties supported using the relevant Supreme Court scale of costs as an additional guide).
However, even if prescribed scales are used as a guide, the approach of the Tribunal is not to look at what has actually been charged to the client, but rather what reasonable allowance should be made: Costley at [66].
Costs for expenses incurred prior to commencement of proceedings
Costs which fall within the meaning of 'expenses … resulting from … the matter because of which the proceeding was brought' may be claimed, even if they were incurred prior to the commencement of proceedings: Scutti at [46] – [48].
Scutti involved a claim for compensation for injurious affection of the claimants' land by reason of a reservation on their land under the Metropolitan Region Scheme, which claim could only be made upon the occurrence of a triggering event, including where a development application was refused.
Whilst the Tribunal accepted that s 87(2) of the SAT Act, when read in the context of s 87(1) of the SAT Act, confers power to make an order where the costs the subject of the order are 'costs in the proceedings of the Tribunal', it is clear from the terms of s 87(3) of the SAT Act that that provision extends or expands the ordinary meaning of the expressions 'costs in the proceeding of the Tribunal' and 'the costs of another party' to relevantly include 'expenses … resulting from … the matter because of which the proceeding was brought'.
The Tribunal was satisfied that the relevant 'matter because of which the proceeding was brought' was the claim for compensation for injurious affection, which was triggered by the making of the development application, and therefore the claimants were entitled to claim for the costs incurred in making their development application prior to the commencement of proceedings as 'expenses … resulting from … the matter because of which the proceedings was brought' within the meaning of s 87(3) of the SAT Act.
Provisions under SAT determinations and other cost scales in other similar jurisdictions
Subject to any written costs agreement, the 2020 SAT Determination and 2022 SAT Determination set the maximum allowable rate that a senior practitioner may charge a client for advice or services in respect of Tribunal proceedings, which is capped at $418 per hour (applicable from 1 July 2020) and $429 per hour (applicable from 1 July 2022) respectively.
The limits for particular items of legal work that can be claimed by a party against another party in contentious proceedings, such as that set out in the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2022 (2022 Supreme and District Courts Determination) and the Legal Profession (Magistrates Court) (Civil) Determination 2022 (2022 Magistrates Court Determination), may also be instructive in assessing the reasonableness of the costs claimed in Tribunal proceedings.
For example, item 13 of Table B to the 2022 Magistrates Court Determination provides for a limit of 50 hours of work for preparation of case for trial, whilst item 19 of Table B to the 2022 Supreme and District Courts Determination provides for a limit of 120 hours of work for preparation of case for trial.
Notably, the 2022 Magistrates Court Determination provides for the same maximum allowable rate for practitioners, paralegals and counsel fees as the 2022 SAT Determination, whilst the 2022 Supreme and District Courts Determination provides for higher maximum allowable rates.
Consideration
For the following reasons, we are satisfied that the builder has discharged its onus of establishing its claim for costs, and that in the particular circumstances of the case, save in respect of particular cost items (as discussed below), it is fair and reasonable that the builder should be reimbursed for the costs it incurred.
We find that the conduct of the applicants has impeded the Tribunal in achieving our objectives under s 9 of the SAT Act to have the proceedings determined fairly, and to conduct proceedings in a way which minimised the costs to the parties.
In our primary decision, we made the following findings against Mr van der Meer's objectivity and independence as an expert witness arising from the way in which he was instructed:
(a)Mr van der Meer's objectivity and independence in forming opinions about whether work was carried out in a manner which was proper or proficient, or was faulty or unsatisfactory, was compromised by the earlier provision of photographs which carried at least an implied suggestion (and, in the case where photographs were marked or magnified by Mr Parin, an express suggestion) that such works failed to meet such standard (EdgeHoldings at [102]);
(b)the fact that Mr van der Meer later verified the photographs at his site visits did not remove the potential bias as the earlier provision of the photographs might already have left an impression with him (EdgeHoldings at [103]);
(c)the potential influence exerted by Mr Parin who made a list of defects 'collectively on site' with Mr van der Meer called Mr van der Meer's independence into question (EdgeHoldings at [104]).
The shadow cast over Mr van der Meer's objectivity and independence based on the way in which he was instructed formed part of the basis upon which we found it necessary to exercise more caution in accepting his opinion where it conflicted with another expert's (Edge Holdings at [117]).
We find it unsatisfactory and unreasonable for a party to have instructed an expert in the way that Mr Parin did, which carried a high risk of tainting the independence and objectivity of any opinion reached by Mr van der Meer.
In our view, it was then wholly unsafe to solely rely on Mr van der Meer's evidence to establish allegations that the builder carried out building work in a manner which was not proper or proficient manner, or was faulty or unsatisfactory.
Further, we accept that the mere fact that the applicants failed on a major contention relied at the hearing – that deviation from approved plans or specifications should be considered to be work carried out in a manner which was not proper or proficient, or which was faulty or unsatisfactory (see Edge Holdings at [155] – [163]) – does not, in and of itself, establish that the applicants acted inconsistently with an objective under s 9 of the SAT Act.
However, it is the fact that there are elements of disingenuity in making this allegation in respect of some complaint items that we find has impaired our ability to have the proceedings determined with as little technicality as possible, and in a way which minimises the costs to the parties.
For example, the applicants sought to rely on departures from approved plans in relation to changes that they themselves have sought or were aware of at the commencement of the contract – see, for example, Edge Holdings at [242] and [245] in relation to the Mr Parin's request to remove gas bayonets and Edge Holdings at [457] in relation to the location of the hot water system.
Finally, whilst our calculation of the specific time taken to crossexamine Mr Airey about his firm's report prepared for the neighbouring owners was closer to 1 hour and 30 minutes, rather than the 3 hours alleged by the builder in its costs submissions, nonetheless we agree with the builder that, even to that extent, that crossexamination 'at length' (Edge Holdings at [132]) was overzealous and proved wholly ineffective to challenge the reliability of Mr Airey's independence: see Edge Holdings at [135] – [139].
We therefore agree that the applicants' conduct, in its lengthy crossexamination of Mr Airey over his firm's report prepared for the neighbouring owners, has also impaired our ability to have the proceedings determined with as little technicality as possible, and in a way which minimises the costs to the parties.
It is not necessary to make a finding that the applicants have brought the proceedings vexatiously or for an improper purpose, as we have found their conduct, as particularised above, to have impeded the Tribunal in achieving our objectives under s 9 of the SAT Act such as to establish a basis for the builder's claim for costs.
Challenges to legal costs
The applicants rely on Panegyresin challenging the adequacy of evidence provided by the builder in its costs application, which, with respect, do not support their contention that receipts or an affidavit swearing that costs have been properly incurred or paid is required.
The case in Panegyres involved a claim for costs by the Medical Board of Australia which did not particularise the manner in which costs were claimed, by way of the rate of the legal work claimed and the time taken, so that the Tribunal (and an appellate court) could determine the reasonableness of the claim.
In this case, the legal work claimed clearly identified a description of the item of work, the time claimed, and the rate applied to the time claimed.
It is clear from the obiter of Vaughn JA in Panegyres (at [415]) that a short form bill of costs may be considered appropriate, and we are satisfied that the builder's summary of costs constitutes a short form bill of costs.
Indeed, in the applicants' own claim for costs, they had provided a similar summary in seeking their costs rather than providing any receipt or an affidavit swearing that costs have been properly incurred or paid, so we do not accept that there has been insufficient evidence provided in the builder's claim.
As to the claim for works undertaken in relation to the request for summons, we accept the applicants' submission that it remained an incomplete request as a completed summons form, which was required to be submitted with the request to issue summons, was never filed with the Tribunal.
Further, it appears sufficiently clear from the correspondence from the Building and Energy division dated 6 February 2020 that complaint B2018-896 was a disciplinary complaint only, and not a building services complaint as well.
While the status of complaint B2018-896 was not confirmed by the Building and Energy division when the matter was referred to the Tribunal, it was for the builder to pursue its request for documents had the builder maintained its reservations, which it did not do following its incomplete submission of forms with the Tribunal.
We do not consider therefore that it is fair and reasonable for the builder to be reimbursed for its legal costs relating to the preparation of the request for summons and will therefore not make any allowance for this cost item.
As to the builder's legal work in responding to the applicants' s 48(2)(b)(i) of the SAT Act, we agree with the applicants that the trigger for the application was the builder's own delay in complying with the Tribunal's directions.
Whilst the s 48(2)(b)(i) application was ultimately unsuccessful, in circumstances where the builder's hands were not completely clean in failing to comply with the Tribunal's directions in the first place, and failing to apply for an extension of time, we find that each party should bear their own costs in respect of this application, and we will decline to make any allowance for the cost items relating to this application.
As to the builder's claim for 50 hours of work required to prepare for the July 2022 hearing, we consider that the limit for preparation of case in item 13 of Table B to the 2022 Magistrates Court Determination provides a fair estimate of what could be considered reasonable legal work undertaken, particularly as we consider that civil proceedings in the Magistrates Court bear a similar level of complexity to building disputes in the Tribunal.
The recognition of the comparability of legal work undertaken in the civil jurisdiction of the Magistrates Court is reflected in the equivalent maximum rates that can be claimed under the 2022 Magistrates Court Determination as can be claimed under the 2022 SAT Determination.
We find that a matter that was originally listed for hearing for five days, later extended by three days, dealing with 119 complaint items and involving four independent expert witnesses, justifies a claim for 50 hours for preparation of case.
Indeed, the applicants had themselves made a claim for about 61.4 hours for getting up for hearing, and so we are satisfied that the 50 hours sought by the builder is fair and reasonable.
Other than the bare assertion that such preparation works may have been carried out in respect of the Supreme Court proceedings, the applicants have not provided any information as to the state of the Supreme Court proceedings such as to ground the basis for a concern that works undertaken by Mr Jacobson could relate to the Supreme Court proceedings; as such, we dismiss such concerns as unfounded and will allow for this cost item.
Similarly, we will allow the claim for 15 hours of further preparation work for subsequent hearing days as being fair and reasonable, given the length and the complexity of the proceedings as set out in [90] above, and the fact that the applicants sought costs for a near equivalent quantum of work in their cost application.
Further, whilst not challenged by the applicants, we have also assessed the claim for the next substantial cost item – preparing written closing submissions at 35 hours – as being fair and reasonable, in light of the complexity of the case as set out in [90] above, and the fact that the applicants sought costs for a very similar quantum of work in their cost application.
In addition, whilst not challenged by the applicants, we are also satisfied that it is fair and reasonable for the builder to claim for its costs in making the cost application (30 minutes) and preparing its submissions in support of its application (7 hours), given that it bears the burden of establishing its claim and is thus required to incur the expense of preparing its cost application.
Finally, although the builder appears to have claimed for costs for legal work against the hourly rates provided in the relevant Supreme and District Courts Determination, we do not consider that the level of complexity of this case falls within that expected in the Supreme Court or District Court.
We will adjust the hourly rate claimed for legal work of a senior practitioner (which the applicants do not contest as being the applicable rate) to that allowed under the 2020 SAT Determination (for work completed from 1 July 2020) and 2022 SAT Determination (for work completed from 1 July 2022) of $418 and $429 respectively.
There were also arithmetic errors in calculating the time spent for the hearing on 5 July 2022 and 9 February 2023, and we have adjusted the duration of time to 6 hours 30 minutes and 6 hours 45 minutes respectively in allowing those cost items.
Challenges to disbursements
As to the claim for the cost of transcript, we agree with the builder that, given that the hearing over eight days stretched over nearly a year, it was justifiable to seek transcripts to prepare for the case when it resumed on each occasion.
Further, as there was no conferral of the experts prior to the hearing, nor a joint statement of matters upon which they agree and disagree, it is necessary to accurately confirm the experts' position on each complaint item or complaint group from their oral evidence in preparing closing submissions, for which transcript would have been undoubtedly helpful.
In particular, in light of our finding that it was necessary to check the accuracy of the applicants' counsel's closing submissions against transcript (see EdgeHoldingsat [674]), we find that that was a useful exercise for the builder to have had access to transcript, and we are satisfied it is a justifiable expense incurred by the builder in conducting its case.
As to invoices of the expert reports which pre-date the commencement of the Tribunal proceedings, it is clear from the amendments to the amended substituted statement of claim in the applicants' Supreme Court action filed on 17 January 2022 (Exhibit 1, pages 57 - 79), as confirmed by the applicants in their responsive cost submissions (at paragraphs 28 - 34), that the applicants' claim for defective works was originally raised in that action, but was later removed to coincide with the lodgement of a building complaint replicating the same claim for defective works with the Building Commissioner.
This is confirmed by the reliance by both parties in the Tribunal proceedings of expert reports which all pre-date the lodgement of the building complaint by the applicants.
Indeed, the applicants had themselves sought the costs of Mr van der Meer's reports of 2018 and 2019 in their cost application.
In our view, the subject matter of the current proceedings, or the 'matter because of which the proceeding was brought', being the claim for remedy for defective building works, was the subject of an earlier claim in the Supreme Court, and then transferred to be determined under the Act.
The expenses incurred by the builder as a result of such claim include the cost of expert reports required to respond to the allegations of defective work, in particular, in response to Mr van der Meer's reports of 2018 and 2019, with all expert reports continuing to be relied upon by both parties in the later Tribunal proceedings.
We are thus satisfied that, as in Scutti, the builder is entitled to claim such costs as 'expenses … resulting from … the matter because of which the proceeding was brought' within the meaning of s 87(3) of the SAT Act.
As an aside, whilst the applicants contend that such expenses could be claimed as part of the costs in the Supreme Court proceedings, we have some doubts as to the correctness of that submission where the allegations in respect of which the expert reports were prepared were removed from, and no longer form part of, the claim in the Supreme Court proceedings.
As to the applicants' challenges to the invoices of Mr Airey and Structerre, having reviewed these invoices, we are satisfied that there is sufficient particularisation to support the reasonableness of the work done by these experts.
In the absence of any specific concerns about the reasonableness of the work described, or the quantum charged (for example, by reference to their own expert fees and work undertaken), it is appropriate to adopt a robust approach to assessing the reasonableness of expert fees and charges, and we accept the claim by the builder for these disbursements.
As to the challenge to the lack of provision of Mr Airey's invoice 41493 (as referred to in invoice 41539), the amount claimed under invoice 41493 did not form part of the fee sought under invoice 41539, nor by the builder in its ultimate claim, and as such it is not necessary for the builder to have provided that invoice.
Finally, we have adjusted the claim for the costs of Mr Machell's fees, as the total of his invoices submitted with the builder's costs application is $16,125, not $19,395 as claimed.
We have also adjusted the claim for Mr Airey's fees, as the total of his invoices submitted with the builder's costs application is $26,365.91, not $26,356.09.
We have further adjusted the transcript costs slightly as the total of the transcript invoices is $9,847, not $9,846.80 as claimed.
Conclusion
For the reasons set out above, we are satisfied that the builder has demonstrated that it is fair and reasonable for the applicants to pay its costs and disbursements fixed at $129,897.26, comprising the following amounts:
Expenditure item
Number of hours/day
Allowance (incl GST)
Lodgement of SAT Notice of Representation
12 min
$83.60
(at $418/hr)
Drafting Scott Schedule responses to items of complaint
7 hrs
$2,926.00
(at $418/hr)
Drafting Witness List and short summary of evidence
1 hr
$418.00
(at $418/hr)
Preparation of evidence for hearing
8 hrs
$3,432.00
(at $429/hr)
Preparation for four day hearing (4,5,6 and 7 July 2022)
50 hrs
$21,450.00
(at $429/hr)
Attending hearing 10.00 am - 3.00pm
5 hrs
$2,145.00
(at $429/hr)
Attending hearing 10.10 am - 4.40 pm
6 hrs 30 min
$2,788.50
(at $429/hr)
Attending hearing 9.00 am - 5.00 pm
8 hrs
$3,432.00
(at $429/hr)
Attending hearing 9.00 am - 5.00 pm
8 hrs
$3,432.00
(at $429/hr)
Preparation for and attendance at two day hearing (8 and 9 February 2023)
15 hrs
$6,435.00
(at $429/hr)
Attending hearing 10.15 am - 4.40 pm
6 hrs 25 min
$2,752.75
(at $429/hr)
Attending Hearing 10.15 am - 5.00 pm
6 hrs 45 min
$2,895.75
(at $429/hr)
Attending Hearing 10.15 am - 4.40 pm
6 hrs 25 min
$2,752.75
(at $429/hr)
Attending hearing 9.00 am - 1.50 pm
4 hrs 50 min
$2,073.50
(at $429/hr)
Written closing submissions
35 hrs
$15,015.00
(at $429/hr)
Drafting application for Costs
30 min
$214.50
(at $429/hr)
Drafting Submission in Support of Application for costs, including cost schedule
7 hrs
$3,003.00
(at $429/hr)
TOTAL COSTS
$75,249.35
Transcript Cost
$ 9,847.00
Expert Fees:
$44,800.91
Peter Airey
$26,365.91
Structerre
$ 2,310.00
Richard Machell
$16,125.00
TOTAL COSTS AND DISBURSEMENTS
$129,897.26
Orders
The Tribunal makes the following order:
1.On or before 2 August 2024, the applicants are to pay the respondent's costs fixed at $129,897.26.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MS K Y Loh, MEMBER
11 JULY 2024
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