FARANO and BUILDERS' REGISTRATION BOARD OF WESTERN AUSTRALIA
[2006] WASAT 60
•14 MARCH 2006
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: VOCATIONAL REGULATION
ACT: BUILDERS' REGISTRATION ACT 1939 (WA)
CITATION: FARANO and BUILDERS' REGISTRATION BOARD OF WESTERN AUSTRALIA [2006] WASAT 60
MEMBER: MR C RAYMOND (SENIOR MEMBER)
MR J BRAY (SESSIONAL MEMBER)
MR P FAIGEN (SESSIONAL MEMBER)
HEARD: DETERMINED ON THE PAPERS
DELIVERED : 14 MARCH 2006
FILE NO/S: VR 223 of 2005
BETWEEN: JOHN COSIMO FARANO
Applicant
AND
BUILDERS' REGISTRATION BOARD OF WESTERN AUSTRALIA
Respondent
Catchwords:
Review of application for registration as a builder – Successful applicant applying for costs against respondent Board – Principles for award of costs against regulatory bodies
Legislation:
Builders' Registration Act 1939 (WA), s 10(2)(a)
State Administrative Tribunal Act 2004 (WA), s 87, s 87(2), s 87(4), s 87(5)
State Administrative Tribunal Rules 2004 (WA), r 42
Result:
Application dismissed
Category: B
Representation:
Counsel:
Applicant: Mr M Hardy
Respondent: Mr N Oud
Solicitors:
Applicant: Hardy Bowen
Respondent: Builders' Registration Board of Western Australia
Case(s) referred to in decision(s):
Chen and Chiro Reg Board of Victoria [2000] VCAT 1461
Medical of Board of Western Australia and Roberman [2005] WASAT 81(S)
Motor Vehicle Industry Board and Dawson [2006] WASAT 8
Vissenga v Medical Practitioners Board of Victoria [2004] VCAT 1044
Case(s) also cited:
Nil
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
The applicant applied for an order for costs against the Builders' Registration Board (the Board) following the setting aside of the decision of the Board refusing an application for registration as a builder and substituting for that decision, one that the application for registration be granted.
The Tribunal set out the principles to be applied in considering an application for the award of costs against a vocational regulatory body, namely, that, ordinarily unless it could be demonstrated that the decision, or the conduct of the proceedings to support the decision was not made, or conducted, as the case may be, in good faith, or lacked any reasonable basis, costs should not be awarded simply because it was unsuccessful in the proceedings. One of the circumstances, in which it could be considered that the decision had not been made reasonably or in good faith was where there had not been a genuine attempt to make a decision on its merits. A specific costs order might also be made where an omission or failure by the body to act appropriately caused unnecessary costs.
The Tribunal concluded that none of the grounds advanced supported a conclusion that the Board had not genuinely attempted to make the decision in question on its merits. Further, the Tribunal did not consider that the decision had been reached, or that the proceedings had been conducted, without a reasonable basis or not in good faith. The application for costs was accordingly dismissed. The Tribunal also concluded that there was no sufficient omission or failure which caused unnecessary costs and warranted the making of any specific award of costs.
Application for costs
On 10 January 2006, the Tribunal issued orders setting aside a decision of the Builders' Registration Board (the Board) refusing the applicant's application for registration as a builder, and substituting its decision, that the application for such registration be granted.
As neither party had raised the question of costs, the Tribunal gave liberty to apply, but pointed out that as the starting position under s 87 of the State Administrative Tribunal Act 2004 (WA) (SAT Act) was that parties should bear their own costs, the Tribunal would need to be persuaded that it was appropriate to make any order.
The applicant has now made an application for the award of costs against the Board, pursuant to that liberty to apply claiming legal costs in an amount of $10 048.50. The Tribunal's order made on 14 January 2006 provided that if an application was made for costs, it was to be made in writing, setting out the amount of costs claimed with details of how the amount is made up. No break down has been provided.
The applicant advances the following grounds in support of the application.
1)It is stated that despite the request of the applicant, through his agent, the Board refused to participate in mediation.
2)It is alleged that the respondent was unable to provide a clear direction to the applicant in relation to the financial information required to satisfy the Board for the purposes of s 10(2)(a) of the Builders' Registration Act 1939 (WA) (BR Act).
3)Further, it is submitted that recommendations made to the Board by relevant officers of the Board were to the effect that the application ought to be approved.
4)Finally, it is stated that in the conduct of the hearing of the application for review, the Board was unable to provide any guidance or sustainable argument to give effect to the interpretation and application of the provisions of s 10(2)(a) of the BR Act, nor any cogent reason why the financial resources to which the applicant had any access were deemed to be insufficient for the purposes of satisfying the test specified in that section.
Based on those grounds, the applicant submits that:
a)If the matter had proceeded to mediation, it is highly likely that the financial resources and experience of the applicant would have been established as satisfactory; and
b)That the Tribunal must have regard, in these circumstances, as to whether the Board made a genuine attempt to make the decision in question on its merits.
The Board's submissions
The Board has filed written submissions opposing the application for costs. It points to the applicant's failure to provide a breakdown of costs and refers to a letter dated 6 February 2006, addressed to the applicant requesting that a breakdown be provided in compliance with the Tribunal's order. The Board submits that during the early stages of the proceedings the applicant was represented by an agent, who was given leave to appear on the basis no fee would be charged for his representation, so that if the amount claimed includes any fee charged by the agent, it would have to be abated to that extent. Further, because there is no breakdown, it is submitted that it is not possible to assess the reasonableness of the amount claimed.
The Board acknowledges that it did not wish to participate in mediation, but submits that the decision not to do so, was based on its determination that the chances of successfully mediating a solution were so remote as to not make it a worthwhile exercise. Further, the Board refutes the submission that it was likely that the financial resources and experience of the applicant would have been established as satisfactory to the Board as the tests proposed by both parties differed radically and depended upon interpretation (of the statute) and the application of that interpretation.
On the same basis, the Board refutes that there was no genuine attempt on its part to make a submission on the merits ([sic] – determine the application on its merits).
The statutory framework
The following provisions of the SAT Act are relevant.
"87 Costs of parties and others
(1)Unless otherwise specified in this Act, the enabling Act, or an order of the Tribunal under this section, parties bear their own costs in a proceeding of the Tribunal.
(2)Unless otherwise specified in the enabling Act, the Tribunal may make an order for the payment by a party of all or any of the costs of another party or of a person required to produce a document or other material on the application of the party under section 35.
3)…
4)Without limiting anything else that may be considered in making an order for the payment by a party of the costs of another party where the matter that is the subject of the proceeding comes within the Tribunal’s review jurisdiction, the Tribunal is to have regard to —
(a)whether the party (in bringing or conducting the proceeding before the decision-maker in which the decision under review was made) genuinely attempted to enable and assist the decision-maker to make a decision on its merits;
(b)whether the party (being the decision-maker) genuinely attempted to make a decision on its merits."
Cost principles in vocational matters
The starting point in any matter before the Tribunal is that the parties must bear their own costs unless otherwise specified in the SAT Act, the applicable enabling act, or an order of the Tribunal under s 87.
Subsection 87(2) nevertheless, gives the Tribunal a discretion to make a costs order unless the enabling act specifies otherwise. Section 87(4) requires that, in review proceedings, the Tribunal is required to have regard to whether the original applicant in the proceedings before the decision‑maker genuinely attempted to enable and assist the decision‑maker, and whether the decision‑maker, genuinely attempted, to make a decision on its merits.
A number of decisions provide guidance as to the exercise of the discretion to award costs. In Medical of Board of Western Australia and Roberman [2005] WASAT 81(S) it was determined that where regulatory authorities successfully bring a complaint of conduct which, if proved, justifies disciplinary action by the Tribunal, there will usually be a strong case for the exercise of the discretion to award costs in favour of the regulatory body. The Tribunal recognised that such bodies perform a function which promotes the public interest, usually with limited resources, and that it would be a disincentive to properly perform its function and to properly present its case, if there was no capacity to recover some or all of its costs in the event that as all it succeeds in the proceedings.
While Roberman's case was concerned with disciplinary proceedings initiated by the regulatory authority, the principles stated have equal application to a licensing authority which successfully defends its decision in proceedings before the Tribunal.
In Roberman's case, the Medical Board of Western Australia was awarded only one third of its costs because it was unsuccessful in relation to some of the allegations made against the medical practitioner. The decision does not establish that an affected person in such proceedings is entitled to an award of costs for the portion of the proceedings in which they were successful. As was stated by the President of this Tribunal, Barker J, in Motor Vehicle Industry Board and Dawson [2006] WASAT 8:
"If this approach were to be adopted, vocational regulatory bodies may well feel inhibited in commencing proceedings that should be commenced and maintained in the public interest even though "success" cannot be guaranteed. Consequently, the Tribunal considers that, ordinarily, unless it can be demonstrated that an application made by a vocational regulatory body lacked any reasonable basis or was not made in good faith, costs should not be awarded against a vocational regulatory body simply because the application was not successful."
In Vissenga v Medical Practitioners Board of Victoria [2004] VCAT 1044, President Maurice expressed similar sentiments at [53]:
"The Medical Practitioners Board has an obligation to investigate matters concerning possible unprofessional conduct. Where it discharges that obligation responsibly, then it is not fair to order it to pay the costs of another party on the basis that the tribunal has made a different judgment than a panel in relation to the matter."
Clearly, a vocational regulatory body could not be said to have acted responsibly, if the application made by it lacked any reasonable basis or was not made in good faith.
We consider that, the same considerations must apply in relation to a vocational regulatory body charged with the responsibility of licensing, or registering persons permitted to engage in particular occupations. It is necessary, in our view, to show that the decision made by the regulatory body or the conduct by it in proceedings before the Tribunal lacked any reasonable basis, or was not made, or conducted, as the case may be, in good faith before costs will be awarded simply became the regulatory body was unsuccessful in the proceedings. On the other hand, there is a general discretion under s 87(2) to award costs and that could be exercised against a vocational regulatory body to order payment of specific costs incurred unnecessarily by an omission or failure to act appropriately in particular circumstances: see Re: Chen and Chiro Reg Board of Victoria [2000] VCAT 1461. The respondent Board was ordered to pay $800 costs arising from an adjournment caused by the late giving of notice of intention to produce further evidence.
These principles need to be applied to a consideration of the grounds relied upon by the applicant.
Refusal to participate in mediation
We accept the Board's submissions that there was very little prospect of mediation resulting in an acceptance by the Board that the applicant had the necessary experience to be registered as a builder.
As reflected in our decision on the merits of the application, the Board was insistent on the experience relied upon by an applicant for registration as a builder having a commercial character, and we accept that it has been a long standing practice to apply this standard. As a result of the application of that standard, the Board has consistently declined to recognise experience gained by owner builders. It was this aspect of the test applied by the Board which we overturned in our decision on the merits.
We accept that a mediation was likely to have resulted in an acceptance that the applicant had the necessary financial resources to satisfy the Board as to the requirements of s 10(2)(a) of the BR Act. But, that was far from being the main issue in the proceedings. The matter was not fully explored before the Board at the time when it considered the application for registration, which it had refused on the basis that the applicant lacked the requisite experience. As reflected in our earlier reasons for decision, a subsequent meeting was arranged with the applicant to address the financial issues but at that time, there was no clear statement of the applicant's proposed building activities. Obviously an assessment of the adequacy of financial resources to meet debts as they fall due is dependent on the magnitude of the proposed business operation. That information was only provided at a late stage in the course of proceedings before this Tribunal. We recognise that may be in part due to the next ground relied upon by the applicant, canvassed below, but we consider that it should have been obvious to the applicant that the nature of his proposed business operation would be a relevant consideration.
We conclude that there was a reasonable basis upon which the Board declined to participate in mediation.
Failure to give clear direction as to financial information required
We accept that this is a valid criticism of the Board's procedures. While the Board has done much to provide information to applicants as to the requirements which must be satisfied in order to qualify for registration, there is no guidance as to what is required in order to be able to satisfy the Board under s 10(2)(a) of the BR Act that the applicant has sufficient material and financial resources available to meet his or its financial obligations as and when they become due. It would be of undoubted assistance to applicants if the Board could provide some guidelines to applicants in relation to this issue.
Nevertheless, the failure to provide any guidance on this issue does not establish that the Board acted without any reasonable basis, or that the decision was not made in good faith.
Recommendations by officers to grant application
The Board's officers were satisfied that the applicant met the requirements for admission in relation to academic training, qualifications and financial capacity. The Board took issue with the experience claimed by the applicant and concluded that a significant portion of the experience did not have the commercial character which it had consistently required. No final view as to financial capacity was reached because of the conclusion reached in relation to the experience issue. The processing officer's statement reflects merely that he had checked the forms and supporting documentation and based thereon that he considered that the statutory requirements for registration had been met. The experience stated was therefore accepted on face value. The Board was obliged to form its own view and while the recommendation would no doubt ordinarily be of assistance, in this case, the Board was not satisfied that the experience listed met what it saw as being the necessary commercial character.
The Board was not bound to follow the recommendation of its officers and the fact that it did not do so does not establish that it acted without a reasonable basis or in good faith.
Conduct of the hearing
The applicant has levelled criticisms of the manner in which the hearing was conducted with reference to the failure to provide guidance or any sustainable argument to give effect to the interpretation and application of s 10(2)(a) of the BR Act.
The documentation supporting the applicant's financial capacity as relied upon in the hearing was voluminous. The Tribunal was taken through it very carefully and clearly by the applicant's counsel. While the Board's counsel would not formally concede that financial capacity had been demonstrated, very little, if any, additional time was taken up on that issue beyond the time spent by the applicant's counsel. If a proper consideration had been given to the financial documentation prior to the hearing, that time may have been saved by an appropriate concession.
Conclusion
As we understand the applicant's submissions, all the above grounds are to be taken into account by us in having regard to whether the Board genuinely attempted to make a decision on its merits, as we are obliged to do under s 87(4) of the SAT Act. In our view, there is nothing in the conduct of the Board, taking into account all of the above matters, to suggest anything other than that it genuinely attempted to make a decision on the merits of the application. To the extent that there is some legitimate criticism of the respondent's failure to give adequate consideration to the information provided to support the applicant's financial capacity, that is directed to the process subsequent to the making of the decision to refuse the application.
We find that the Board genuinely attempted to make a decision on its merits in this matter. The failure at the hearing to concede that the applicant's financial capacity had been demonstrated is not, in our view, conduct sufficient to warrant the making of a costs order against the Board.
We do not consider that it is established in arriving at its original decision, or in the conduct of the proceedings, that the Board acted without a reasonable basis or not in good faith.
We accordingly conclude that the application for costs must be dismissed.
In these circumstances, it is not necessary for us to address the quantum of costs claimed and the criticisms raised by reason of the failure to detail the amount claimed.
Order
We accordingly order:
1)The applicant's application for costs is dismissed.
I certify that this and the preceding [37] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR C RAYMOND, SENIOR MEMBER
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