EDMONDS and VENTURA HOME GROUP PTY LTD
[2023] WASAT 34
•5 MAY 2023
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: BUILDING SERVICES (COMPLAINT RESOLUTION AND ADMINISTRATION) ACT 2011 (WA)
CITATION: EDMONDS and VENTURA HOME GROUP PTY LTD [2023] WASAT 34
MEMBER: MS N OLDFIELD, MEMBER
HEARD: 24 APRIL 2023
DELIVERED : 24 APRIL 2023
PUBLISHED : 5 MAY 2023
FILE NO/S: CC 916 of 2022
CC 1380 of 2022
BETWEEN: SAMANTHA EDMONDS
First Applicant
NIGEL EDMONDS
Second Applicant
AND
VENTURA HOME GROUP PTY LTD
Respondent
Catchwords:
Building dispute - Costs - Respondent's withdrawal of the subject of the dispute - Turns on own facts
Legislation:
Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 11(1)(d), s 49(1), s 49(7)
Legal Profession (State Administrative Tribunal) Determination 2020 (WA)
Legal Profession (State Administrative Tribunal) Determination 2022 (WA)
State Administrative Tribunal Act 2004 (WA), s 9, s 87(1), s 87(2), s 87(4)
State Administrative Tribunal Rules 2004 (WA), Div 5, Div 6, r 40, r 41, r 42(2)
Result:
Application dismissed
Category: B
Representation:
Counsel:
| First Applicant | : | Mr J Jacobson |
| Second Applicant | : | Mr J Jacobson |
| Respondent | : | Mr L Swanson |
Solicitors:
| First Applicant | : | Jacobson and Associates |
| Second Applicant | : | Jacobson and Associates |
| Respondent | : | Hotchkin Hanly |
Case(s) referred to in decision(s):
Calderbank v Calderbank [1976] Fam 93; [1975] 3 All ER 333
Kos and DND Building Co Pty Ltd [2022] WASAT 32
Medical Board of Western Australia and Kyi [2009] WASAT 22
Moore and City of Wanneroo [2017] WASAT 145 (S)
Sanders and Gemmill Homes Pty Ltd [2017] WASAT 41 (S)
Western Australian Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction
This hearing involved an application by Samantha and Nigel Edmonds (the Edmonds) for costs of $5,000. Their application arose out of the withdrawal by Ventura Home Group Pty Ltd (Ventura Homes) on 16 January 2023 of its notices of extensions of time on 3 February 2022 and 2 August 2022. That withdrawal effectively removed the subject matter of the present proceedings and left the Edmonds little choice but to seek withdrawal.
Following my dismissal of the Edmonds' cost's application, Ventura Homes sought its costs relating to the cost's application from the Edmonds. The oral application for costs by Ventura Homes was accepted, but after oral submissions by both parties, dismissed.
Issue to be determined
The issue which must be determined by the Tribunal is whether the parties have established their claims for costs.
Proceedings before the Tribunal and relevant facts
On 24 July 2021 Ventura Homes entered into a contract with the Edmonds for the construction of a residence. The date for completion of the buildings works was agreed to be 300 days from the date of the commencement of the building works. The building works commenced on or about 13 December 2021.[1]
[1] Applicants' Submissions, paras 1 - 3; Respondent's Submissions, paras 9, 10 and 13.
By written notice dated 3 February 2022, Ventura Homes issued a notice to claim to an extension of time to complete the building works, of 105 days (First EOT). On 25 April 2022 the Edmonds lodged with the Building Commissioner a challenge to the validity of the First EOT. On 18 July 2022 the Building Commissioner referred the complaint regarding the First EOT to the Tribunal, pursuant to s 11(1)(d) of the Building Services (Complaint Resolution and Administration) Act2011 (WA) (BSCR Act).[2]
[2] Applicants' Submissions, paras 4, 6 and 9; Respondent's Submissions, paras 13, 15 and 16.
On or about 2 August 2022, Ventura Homes issued a further notice to claim to an extension of time to complete the building works, of 95 days (Second EOT). On 28 August 2022 the Edmonds lodged with the Building Commissioner a challenge to the validity of the Second EOT. On 28 September 2022 this complaint was also referred to the Tribunal for determination.[3]
[3] Applicants' Submissions, paras 12 - 14; Respondent's Submissions, paras 17, 19 and 20.
The Tribunal assigned the complaints regarding the First EOT and the Second EOT matter numbers CC/916/2022 and CC/1380/2022 respectively. On 6 October 2022 orders were made for the matters to be heard concurrently.
On 10 October 2022, in relation to the First EOT, the Edmonds filed an application for the production of documents by Ventura Homes (Application for Disclosure). On 6 December 2022 a memorandum of consent orders signed by the parties was lodged with the Tribunal. In accordance with that memorandum, on 6 December 2022 orders were made for the disclosure by Ventura Homes of most of the documents sought by the Edmonds and adjourning the hearing of the balance of the application. On 19 January 2023 orders were made listing the hearing of the Application for Disclosure for 23 February 2023.
By correspondence dated 16 January 2023 Ventura Homes withdrew the First EOT and the Second EOT. The withdrawals were expressed to be made on the basis of commercial considerations and without any concession as to the validity of the EOTs.[4]
[4] Applicants' Submissions, para 20; Respondent's Submissions, para 30; Respondent's Book of Documents, pages 31 32.
On 18 January 2023, in relation to both complaints, the Edmonds filed with the Tribunal applications for costs of $5,000 and their costs of the costs application. On 23 February 2023 by consent of the parties' orders were made for the withdrawal of the Application for Disclosure and the filing of documents in relation to the Edmonds' costs application.
There was a hearing of the Edmonds' costs application on 24 April 2023. Following oral submissions by the parties I advised my preliminary view was that the application should be dismissed. The parties made further oral submissions following which I confirmed my views regarding the disposition of the Edmonds' costs application. Thereupon Ventura Homes made an oral application for its costs occasioned by opposing the Edmonds' costs application. No written application or submissions regarding this application had been filed. Ventura Homes indicated it did not seek an adjournment for the purpose of lodging documents and wished simply to be heard on the basis of oral submissions. The Edmonds had no objection and accordingly I allowed the application and heard oral submissions from both parties. Ultimately, I determined the costs application by Ventura Homes should also be dismissed.
Applicable principles
Section 87(1) of the State Administrative Tribunal Act 2004 (WA) (SAT Act) directs that unless otherwise specified the parties bear their own costs in a proceeding of the Tribunal. However, s 87(2) of the SAT Act confers a discretionary power on the Tribunal to make an order for the payment of all or any of the costs of another party, unless the relevant enabling Act specifies to the contrary.
Section 49(1) of the BSCR Act provides the Tribunal may make such orders for costs as it thinks fit in relation to proceedings arising out of that Act[5].
[5] See also BSCR Act, s 49(7).
It is well established s 49(1) of the BSCR Act modifies the usual position under s 87(1) of the SAT Act so that there is no presumption regarding costs, making for a 'costs neutral' position where any party seeking costs must satisfy the Tribunal such an order is merited consistently with the objectives and procedures of the Tribunal.[6]
[6] Sanders and Gemmill Homes Pty Ltd [2017] WASAT 41 (S), [8].
In considering costs, r 42(2) of the State Administrative Tribunal Rules 2004 (WA) (SAT Rules) obliges the Tribunal to take into account any offer of settlement made in accordance with r 40 and r 41, if the offer was more favourable than the Tribunal's order.
The general principles relevant to costs applications is well settled. The decision of the Supreme Court of WA in Western Australian Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32 relevantly observed:[7]
(a)The discretion is to be exercised judicially, not arbitrarily, capriciously or so as to frustrate legislative intent.
(b)The discretion is to be exercised if it is fair and reasonable to do so in all the circumstances of the case.
(c)The onus is on the party seeking costs to establish an order ought to be made in its favour.
(d)The nature of the dispute is a relevant consideration.
(e)Each party is taken to be aware of the objectives of the Tribunal as set out in s 9 of the SAT Act.
(f)The mere fact a party fails on a contention does not signify a party has acted inconsistently with the Tribunal objectives.
(g)Even in a jurisdiction where the general rule is that costs follow the event, it does not follow that the grant of leave to withdraw attracts an order that the withdrawing party pay the costs of the other party. The withdrawing party does not carry any onus to establish it ought not to pay the other party's costs.
[7] Murphy JA [46] - [58], [65].
The parties' submissions referred to Medical Board of Western Australia and Kyi [2009] WASAT 22 in which the Tribunal stated:[8]
73… If a party has conducted itself in such a way as to unnecessarily prolong the hearing, has acted unreasonably or inappropriately in its conduct of the proceedings, has been capricious, or the proceedings in some other way constitute an abuse of process, then this may give rise to an exercise of the discretion to award costs. This encompasses a situation where proceedings should not have been maintained against a party because it is clearly untenable and no reasonable person would have believed they could be successful[.]
74Thus the Tribunal's discretion to award costs extends to ordering the payment of costs incurred unnecessarily by a failure of a party to act appropriately in a particular circumstance in the conduct of the proceedings. Considering the primary position of the Tribunal as a no costs jurisdiction, it is not sufficient merely to identify that a party may have conducted itself in a different manner and thereby reduced costs incurred; it will usually be necessary to show that the conduct of the party was unreasonable and unfairly caused the increased costs.
Submissions of the parties
[8] Kyi [73] - [74].
The submissions of the Edmonds regarding their application for costs might be summarised as follows:
1)Ventura Homes unnecessarily prolonged the hearing and acted unreasonably and inappropriately in its conduct before the Tribunal and the Building Commissioner because:[9]
[9] Applicants' Submissions, paras 32 -35.
a)It knew the First EOT and Second EOT were invalid.
b)It 'effectively strung the [Edmonds] along' until it became apparent the Edmonds were not prepared to accept settlement offers made to them, so that Ventura Homes 'had no choice but to capitulate and withdraw the EOTs'.
c)Had Ventura Homes withdrawn the invalid EOTs when the initial complaints were made to the Building Commissioner, the Edmonds would not have incurred the legal costs which they subsequently incurred.
2)Ventura Homes acted unreasonably and inappropriately in that:[10]
[10] Applicants' Submissions, para 37; Applicants' Book of Documents pages 38 - 39.
a)The First EOT was a generic letter which failed to identify with the necessary specificity the basis for the delay;
b)Ventura Homes sent an email to the Building Commissioner requesting the complaint be dismissed due to the pressure and risk the same placed upon it.
c)The Second EOT sought an extension based on labour shortages related to 'current stage brickwork' even though the building works had reached plate height and an invoice had been issued by Ventura Homes;
d)Opposing the request for documents and thus putting the Edmonds to the expense of the Application for Disclosure, before then agreeing to provide the documents;
e)Withdrawing the First EOT and Second EOT after vigorously opposing the applications of the Edmonds before the Building Commissioner and then the Tribunal over a period of 11 months;
f)On 6 February 2023, issuing a further EOT, which was expected to become the subject of a further complaint to the Building Commissioner.
3)The Edmonds would not have been in a better position by accepting any of the offers of Ventura Homes because the terms of the offers required the Edmonds to accept a substantially later date of completion of the building works than was stipulated in the parties' contract.
4)Allegations as to collateral purpose are irrelevant. In any event it is commonplace for a claimant in litigation to want their case to act as a deterrent to a respondent further engaging in the conduct of which they complain. This does not constitute an improper purpose.
5)Total costs of $5,000 are substantiated by copies of invoices[11] which demonstrate the costs were reasonably incurred and consistent with the 2020 and 2022 Determinations.[12]
[11] Affidavit of Jonathan Hilton Jacobson dated 22 April 2023.
[12] Legal Profession (State Administrative Tribunal) Determination 2020 (WA), Legal Profession (State Administrative Tribunal) Determination 2022 (WA).
The submissions of Ventura Homes in opposition to that application might be summarised as follows:
1)There are none of the factors which might justify an award of costs by the Tribunal - Ventura Homes had not conducted itself in such a way as to unnecessarily prolong the hearing, had not acted unreasonably or inappropriately in the conduct of the proceedings and had not been capricious or in some other way abused the processes of the Tribunal.[13]
2)The decision of Ventura Homes to withdraw the First EOT and Second EOT was a commercial and pragmatic decision taken after settlement negotiations were unsuccessful. The decision to do so save the parties and the Tribunal unnecessary time and expense and brought finality to the dispute.[14]
3)Ventura Homes did not make any concession regarding the validity of the First EOT and Second EOT. The Tribunal cannot determine the validity of the EOTs without a contested hearing with evidence tested under cross-examination.[15]
4)It was believed the Edmonds declined the settlement offers of Ventura Homes for a collateral purpose and had they accepted one of the offers they would have been in a better position than their current position.[16]
5)The Application for Disclosure was not lodged at the behest of Ventura Homes but pursuant to an order of the Tribunal. They were entitled to review and consider the application.
6)The invoices lodged by the Edmonds suggest the claim for $5,000 costs includes costs incurred prior to the proceedings before the Tribunal and so should not be the subject of a costs order by the Tribunal.
[13] Respondent's Submissions, paras 6, 48 and 50.
[14] Respondent's Submissions, paras 7 and 44.
[15] Respondent's Submissions, paras 5, 45 and 47.
[16] Respondent's Submissions, paras 8 and 49.
The oral submissions of Ventura Homes regarding their application for costs might be summarised as follows:
1)It was unreasonable of the Edmonds to bring an application for costs in a 'no costs' jurisdiction and the decision in Moore and City of Wanneroo [2017] WASAT 145 (S) (Moore) supports this proposition.
2)It should have been clear to the Edmonds, from the date of receipt of the submissions of Ventura Homes if not earlier, that their application for costs was unlikely to succeed. Therefore, the Edmonds should have withdrawn their costs application.
3)If the Edmonds had accepted at least the third or fourth of Ventura Homes' settlement offers they would have been in a better position. Each of those offers was made on the basis refusal could have costs consequences pursuant to Div 5 and Div 6 of the SAT Rules and principles established by decisions including Calderbank v Calderbank [1976] Fam 93; [1975] 3 All ER 333.
4)Any further notice of extension of time is not a part of these proceedings and is therefore irrelevant. It follows therefore, the Edmonds should have accepted one of the offers of settlement and Ventura Homes should not have been put to the costs of the cost's application.
5)It would be reasonable for the Tribunal to assume Ventura Homes would seek costs for two hours of preparation time and the time taken for the hearing.
The submissions of the Edmonds in opposition to that application might be summarised as follows:
1)The only notice the Edmonds received of this application was the letter of their solicitors dated 21 April 2023, which referred to the decision of Moore. That decision was predicated on a misunderstanding by the party seeking costs, is a decision in the Tribunal's planning jurisdiction and for these reasons is irrelevant.
2)The mere fact a party makes an unsuccessful costs application does not give the other party an entitlement to costs. This is a 'no costs' jurisdiction which means that before costs are awarded there must be something untoward, such as the application was capricious and had no prospect of success. That is not the case here.
Decision
The essential question is whether it is fair and reasonable in the circumstances of the case that a party should be reimbursed for costs it incurred.
Rule 42(2) of the SAT Rules requires the consideration of settlement offers where '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'. On the slim evidence before me, it is questionable whether any of the offers of Ventura Homes were more favourable than the present position. Furthermore, the present position did not arise through an order by the Tribunal in the proceeding, but by the decision of Ventura Homes to withdraw the First EOT and Second EOT. Therefore, I am not required to take the settlement offers into account.
I am not satisfied the Edmonds have discharged the onus of establishing it is reasonable in all the circumstances to make an award of costs in their favour for the following reasons:
1)Given the early stage at which the substantive proceedings halted, there is insufficient evidence on which for me to form a reasonable judgment as to the validity or invalidity of the First EOT and Second EOT.
2)On the face of it, each proceeding constituted a genuine dispute.
3)The withdrawal by Ventura Homes of the Notices cannot be a basis for concluding the notices were invalid or that the dispute was not genuine.
4)It is commonplace for parties to compromise valid legal claims for reasons of commerciality. It is not inconsistent with the objectives of the Tribunal that parties compromise or withdraw from disputes which are uncommercial to pursue.
5)I am unable to conclude Ventura Homes acted inappropriately in relation to the Application for Disclosure. At this stage in the proceedings, it seems equally arguable the Edmonds were entitled to seek disclosure of documents and Ventura Homes was not obliged to concede.
6)If the First EOT and Second EOT may have been valid and if Ventura Homes' opposition to the Application for Disclosure may have been reasonable (and in the absence of any other allegation of conduct breaching Tribunal objectives), I have no basis upon which to conclude Ventura Homes unnecessarily prolonged the proceedings or acted inappropriately or unreasonably in the conduct of the proceedings.
7)It is questionable whether the issuing of another notice to claim to an extension of time to complete the building works on 6 February 2023 may be admissible or relevant given it does not form part of these proceedings. Even if it were, I do not consider that would be sufficient in the circumstances of this case to counter my conclusion at 6) above.
I am not satisfied Ventura Homes has discharged the onus of establishing it is reasonable in all the circumstances to make an award of costs in their favour for the following reasons:
1)The Moore decision is not directly relevant as it considers costs in the Tribunal's review jurisdiction relating to planning decisions where the claim for costs was based solely upon s 87(4) of the SAT Act. I accept the broad contention the Tribunal may in an appropriate case award a party costs in relation to a cost's application.
2)The submissions of Ventura Homes were strongly predicated on the basis their settlement offers had been more favourable to the Edmonds, as compared to the current position. Even though I am not obliged to consider the offers, I may nevertheless choose to do so.[17] However, the very early stage at which the substantive proceedings halted means I have insufficient evidence on which to conclude any of the offers were more favourable to the Edmonds than standing on the completion date stipulated in the parties' contract.
3)The fact the costs application was not successful does not demonstrate a failure to adhere to the objectives of the Tribunal.
4)I do not consider in all the circumstances it would be just to make an award of costs in relation to the costs application in favour of Ventura Homes.
5)Even had I been minded to make an award of costs in favour of Ventura Homes, there was no evidence regarding the costs incurred and this is not a case where it would be proportionate for the parties to incur the costs of a further assessment.
[17] Kos and DND Building Co Pty Ltd [2022] WASAT 32 at [33].
For the above reasons, the orders of the Tribunal in each of the matters are as follows.
Orders
The Tribunal orders:
1.Pursuant to s 46(1) of the State Administrative Tribunal Act 2004 (WA) the applicants have leave to withdraw the proceeding and the proceeding is withdrawn.
2.The applicants' application for costs is dismissed.
3.The respondent's oral application for costs relating to the applicants' costs application is accepted.
4.The respondent's application for costs is dismissed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MS N Oldfield, MEMBER
5 MAY 2023
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