FRANKOWIAK and CHAMBERS
[2012] WASAT 175
•21 AUGUST 2012
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: COMMERCIAL & CIVIL
ACT: BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA)
CITATION: FRANKOWIAK and CHAMBERS [2012] WASAT 175
MEMBER: MR C RAYMOND (SENIOR MEMBER)
HEARD: DETERMINED ON THE DOCUMENTS
DELIVERED : 21 AUGUST 2012
FILE NO/S: CC 548 of 2012
BETWEEN: ELLI FRANKOWIAK
Applicant
AND
JACK CHAMBERS
Respondent
Catchwords:
Building Services (Complaint Resolution and Administration) Act 2011 (WA) Compromise reached on all issues save costs Principles to be applied when no hearing on the merits
Legislation:
Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 5(1), s 11(1)(d), s 49
Result:
Application for costs granted in part
Category: B
Representation:
Counsel:
Applicant: Selfrepresented
Respondent: Selfrepresented
Solicitors:
Applicant: N/A
Respondent: N/A
Case(s) referred to in decision(s):
Gribbles Pathology Pty Ltd vs Health Insurance Commission (1997) 80 FCR 284
Hoskins and Daniel Vinci T/As D'Vinci Contracting [2011] WASAT 188
J & P Metals Pty Ltd and Shire of Dardanup [2006] WASAT 282 (S)
Pearce & Anor and Germain [2007] WASAT 291 (S)
Rainbow Pty Ltd and Hawkins & Anor [2007] WASAT 216 (S)
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
The proceedings were referred to the Tribunal by the Building Commissioner under s 11(1)(d) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA). The complaint related to damage sustained to the applicant's retaining wall and paving, as well as to cracking to the interior and exterior walls of the applicant's building, allegedly due to sheet piling carried out by the respondent on an adjoining property.
The matter was settled at the first directions hearing, save in respect of costs. The Tribunal made an order for remedial work to be carried out to the retaining wall, and programmed the making of an application for costs and the filing of submissions relating thereto.
The Tribunal referred to the principles applicable to the award of costs in the building jurisdiction set out in Hoskins and Daniel Vinci T/As D'Vinci Contracting [2011] WASAT 188, as well as other authorities concerning the approach taken to the assessment of costs. Reference was also made to Gribbles Pathology Pty Ltd vs Health Insurance Commission (1997) 80 FCR 284 for the proposition that, where parties reach a settlement of court proceedings on all issues save as to costs, unless the circumstances are exceptional (as where the court can clearly see that the claim was hopeless or the defence was bound to fail), the appropriate order is that each party bears its own costs. However, the Tribunal referred to the very different procedures under which the Tribunal operates, and to the emphasis on facilitative dispute resolution procedures with a view to settling matters. It was observed that, depending on the nature of the type of dispute and area of jurisdiction, procedures are often very informal and simplified and, very often, all relevant material is filed at an early stage. Consequently, the Tribunal considered that it should be prepared to endeavour to make an assessment of the likely outcome of the matter on the material which is before it, and to award costs where it can fairly be concluded that one or other of the parties is clearly more likely to succeed, although it might not be said that the opposing case is hopeless or bound to fail.
After consideration of the material before it, the Tribunal found that it could be positively concluded that the respondent would have failed in relation to the claim for damage to the retaining wall. The Tribunal found that it was probable that the respondent would have been successful in defending all other claims.
The applicant claimed costs in an amount of $10,985.40, nearly all of which related to the cost of retaining an expert engineer, as the nature of the case was such that the applicant had no alternative but to retain an appropriate expert and then to commence proceedings to protect her property. Consequently, the Tribunal concluded that it would work an obvious injustice if the applicant was not awarded costs in such circumstances. However, in assessing costs, it was necessary to have regard to the issues on which the applicant would probably have failed.
The Tribunal reviewed the costs claimed, and disallowed in its entirety a dilapidation report which related to the claims on which the applicant would probably have failed. In relation to the balance of the costs, there was insufficient detail to enable the Tribunal to properly assess whether all the work undertaken was strictly necessary for the purposes of preparation of the matter, or whether the time charged should reasonably be recovered in full from the respondent. The Tribunal concluded that the balance of the costs should be reduced by 25%. After deducting the dilapidation report costs, the Tribunal therefore made an order for payment of costs in favour of the applicant for an amount of $7,807.80.
The proceedings and application for costs
On 23 January 2012, the applicant lodged a complaint against the respondent with the Building Commission under s 5(1) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BS(CRA) Act).
The applicant is the owner of a property known as No 6B Panton Crescent, Karrinyup in the State of Western Australia. The respondent is a builder and, at all relevant times, was engaged in the construction of a dwelling on a property adjacent to that of the applicant. The complaint alleges that the respondent caused damage to the applicant's retaining wall and to her building as a result of sheet piling work undertaken on the adjoining property. The relevant history of what occurred is set out further below.
The complaint was referred by the Building Commissioner to the Tribunal pursuant to s 11(1)(d) of the BS(CRA) Act on 3 April 2012. The matter was listed for a directions hearing on 24 April 2012, at which the parties compromised the dispute in relation to all issues, save costs. Orders were made programming the filing of an application for costs, setting out the details of the amount claimed sufficient to enable the Tribunal to assess and fix the costs, if any costs were to be awarded, and for the filing of submissions by the parties in relation thereto.
The applicant has duly made application and seeks payment of an amount of $10,985.40, all of which relates to disbursements incurred. The amounts claimed are as follows:
| Date | Type | Produced by | Reason | Cost |
| 14112011 | Report Dilapidation | BCI Firth | To document the state of the property at 6B Panton [Crescent], Karrinyup WA 6018 prior to the shoring [taking] place, | $575.00 |
| 18012012 | Structural Engineer | Airey Taylor Consulting | Engagement of professional Engineer to negotiate with the Chambers Building | $7,253.48 |
| 23022012 | Structural Engineer | Airey Taylor Consulting | Attending site for photographic evidence and professional advice | $1,379.00 |
| 08032012 | Structural Engineer | Airey Taylor Consulting | Representing Mrs Frankowiak (Building Commission Inspection) | $713.90 |
| 05042012 | Structural Engineer | Airey Taylor Consulting | Review of letter and sketch proposal by the Builder | $330.00 |
| 27042012 | Structural Engineer | Airey Taylor Consulting | SAT hearing Building Tribunal | $660.00 |
| 23042012 | Photos | Oxford Retail Pty Ltd | Printing of Photos for Building Tribunal hearing | $74.02 |
| Total | $10,985.40 |
The respondent has filed submissions opposing the award of costs. The essence of the respondent's submission is that he acted responsibly, ceased the sheet piling as soon as it became apparent that the process was causing movement of a corner post retainer on the applicant's property, and thereafter adopted an alternative retaining methodology using injected cement grouting to retain the stability of the applicant's property in the affected area. The respondent submits that the applicant engaged the services of Mr Airey, an engineer, for her own peace of mind, and that he should not be responsible for the costs of her so doing. The respondent also objects to payment of the BCI Firth dilapidation report costs on the basis that he did not engage the firm concerned and, in any event, had his own dilapidation report prepared.
The respondent also objects to payment of the photocopying costs claimed, on the basis that he also had to incur similar charges.
Relevant principles
In most areas of the Tribunal's jurisdiction, the starting point is that each party bears its own costs, but there is no presumption either way in relation to the Tribunal's exercise of jurisdiction under the BS(CRA) Act: Hoskins and Daniel Vinci T/As D'Vinci Contracting [2011] WASAT 188 (Hoskins). Nevertheless, the provisions of s 49 of the BS(CRA) Act, which provide the power to award costs, should be construed in a manner which promotes the objectives and procedures of the Tribunal, because it is inconceivable that the purpose of that legislation would include any intention to change the fundamental position upon which the Tribunal operates. In the exercise of a discretion to award costs, all of the considerations identified in previous decisions of the Tribunal remain relevant, but they are not exhaustive, and any other factors will be relevant which point to the justice of the case requiring an award of costs: Hoskins at [16] [19]. Those other considerations include where a party has had to embark on proceedings to vindicate its clear legal entitlement referred to as a contractual entitlement in the context of a commercial tenancy dispute in Pearce & Anor and Germain [2007] WASAT 291 (S).
In cases where the Tribunal does award costs, the Tribunal is concerned to meet its obligation to minimise the cost to the parties by ensuring that any costs awarded are proportionate to the nature of the proceedings: see the approach referred to in Rainbow Pty Ltd and Hawkins & Anor [2007] WASAT 216 (S) and J & P Metals Pty Ltd and Shire of Dardanup [2006] WASAT 282 (S).
Within the court system, where parties reach a settlement on all issues save as to costs, unless the circumstances are exceptional (as where the court can clearly see that the claim was hopeless or the defence was bound to fail), the appropriate order is that each party bears its own costs: see Gribbles Pathology Pty Ltd vs Health Insurance Commission (1997) 80 FCR 284 at [287], and the discussion in Civil Procedure Western Australia, Vol 1, by Kendall and Curthoys, LexisNexis, Butterworths, Australia 1990 at para 66.10.14. The Tribunal operates under very different procedures, which place significant emphasis on facilitative dispute resolution procedures with a view to settling matters. Depending on the nature of the type of dispute and area of jurisdiction, procedures are often very informal and simplified. Often, all relevant material is filed at an early stage. Consequently, the Tribunal should be prepared to endeavour to make an assessment of the likely outcome of the matter on the material which is before it, and to award costs where it can fairly be concluded that one or other of the parties is clearly more likely to succeed, although it might not be said that the opposing case is hopeless or bound to fail. This will help reduce the circumstances in which parties might be prepared to continue with the proceeding with the objective of obtaining a favourable costs order.
Relevant facts
The facts hereafter set out are based on the documentation contained within the Building Commission file, information provided by the parties during the directions hearing on 24 April 2011, and in the parties' written submissions, to the extent that they have not been challenged.
On 26 September 2011, the respondent provided the applicant with a copy of an engineering report, dated 15 September 2011, which reflected that an inspection of the existing retaining wall revealed that some of the posts were leaning over and some of the panels did not have enough embedment into the posts, and further, that the retaining wall was considered to be unstable and should be rebuilt to an engineer's detail. The respondent put forward various proposals concerning the repair of the retaining wall prior to him taking steps to stabilise the wall and carrying out planned excavation works.
A report from Airey Taylor Consulting dated 21 November 2011 (Airey report) refers to a further letter addressed by the respondent to the applicant dated 7 November 2011 advising of an intention to drive sheet piling within 700 millimetres of the common boundary. This letter, with annexures, comprised some 19 pages of detailed engineering doctrine, the purpose of which was to make clear the inherent risk that sheet piling will cause damage to nearby structures. In two short concluding paragraphs of the letter, the author proposes the use of cement injection grouting between continuous flight augered reinforced concrete piles, followed by casting a slab on the top of the retention arrangement so the tops of the pile are fully restrained prior to excavation of the soil from beneath the slab.
Prior to the provision of the Airey report, the applicant obtained a dilapidation report from the firm BCI Firth (BCI Firth report). The BCI Firth report is dated 14 November 2011.
On 15 December 2011, the respondent commenced the installation of sheet piles. During the driving of the first two piles, movement of the corner post retainer was noticed and pile driving was ceased immediately.
The respondent regarded the BCI Firth report as being of little assistance, because it showed that there had been some subsidence in other areas of the applicant's property which could not be attributed to any work undertaken by the respondent. It is common cause that there were earlier building works involving the installation of a swimming pool, and that retaining issues had arisen which still needed to be resolved with the adjoining owner. The respondent had some initial difficulty in obtaining access to the applicant's property, which had been declined due to the passing away of the applicant's husband. As a result of this, the respondent called in the Stirling City Council Building Branch to assist, and a joint meeting was arranged with the applicant's engineer, Mr Airey.
The meeting occurred on 15 December 2011. The respondent then commissioned and obtained a dilapidation inspection report from BSP Construction Consultants dated 22 December 2011 (BSP report). At the meeting at the City of Stirling on 19 December 2011, there was discussion regarding a methodology, which the respondent states was provided to the applicant and Mr Airey prior to the meeting. In the respondent's submissions, it is stated that Mr Airey agreed that the methodology was appropriate. It appears the methodology involved the injection of fine cement grouting beyond the southeast corner retaining post area, where damage had occurred, along areas which might be affected by excavation. It appears likely that there would have been discussion along these lines, particularly as the use of injected fine cement grouting had been proposed in the earlier Airey report as well. However, the submission cannot be understood as conveying that there had been any agreement as to the remedial works to be carried out on the affected southeast corner, because that was a matter which, it will be seen, remained in issue between the parties. On 5 January 2012, the applicant gave the respondent preliminary notice of her intention to commence proceedings in the Building Commission and, as already stated, a complaint was lodged on 23 January 2012. The respondent did not put forward any proposal to resolve the matters of which the complaint was made, being not only the damage to the retaining wall (in the southeast corner), but also damage to the building.
On 1 March 2012, Inspector Sturmer of the Building Commission carried out an inspection of the matters the subject of the complaint and provided a written report dated 9 March 2012. Inspector Sturmer found that the damage to the retaining wall was likely to have been caused by the sheet piling and recommended that the respondent carry out remedial work. Inspector Sturmer observed that there had been movement of paving and the fence bordering the properties (in areas beyond the southeast corner), and expressed the view that the vibration created to insert sheet piling was likely to have contributed there too. The action recommended was that the respondent remedy the cause and effect of the movement in the retaining walls, paving and fencing along the east boundary.
The next complaint related to the footpath between the properties, and Inspector Sturmer repeated by incorporation his earlier observations, and made the same recommendations.
The following complaints related to exterior and interior cracking to the dwelling, which Inspector Sturmer considered was not significant and might as easily be attributed to settlement of the applicant's dwelling.
The respondent provided a response to the complaint to the Building Commission by way of the letter dated 16 March 2012, to which reference has already been made. The respondent did not accept Inspector Sturmer's recommendations. He did offer to arrest any further movement by reinstating the southeast corner post and panels of the retaining wall, and that proposal included compacting to the underside of the applicant's retaining wall. As will appear below, Mr Airey regarded a proposal to compact in this manner as likely to cause overturning moment and destabilisation of the retaining wall. If this had been part of any proposal discussed at the offices of the City of Stirling, it is unlikely to have been agreed.
There was considerable discussion at the first directions hearing before the Tribunal on 24 April 2012. Mr Airey was present at that hearing. It became evident that there had been movement in the paving and fence as a result of the earlier works undertaken on the site, with which the respondent had not been involved. There was no suggestion of any evidence likely to rebut this aspect of the respondent's defence. Further, reference was made to internal (and possibly external) cracking which had occurred in the structure of the dwelling at points far removed from the southeast corner where two sheet piles had been installed. Given the difficulties of proof related to the earlier works and subsidence, it is perhaps understandable that Mr Airey did not proffer any argument or rationale to suggest that it could only be concluded that this cracking had been caused by the sheet piling, and the same considerations applied in respect of the movement which had occurred in paving.
Eventually, agreement was reached, as reflected in the order made by the Tribunal on 24 April 2012, to the effect that the respondent would take all necessary steps to retain the southeast corner of the property known as No 6B Panton Crescent, Karryinyup, in a manner to prevent the escape of sand, such that the stress loads in the soil and the retention system satisfied the Building Code of Australia.
Consideration
Having regard to the above principles and the above facts, the following conclusions can be made.
Although there had been some movement in the retaining wall in this area, it was functioning. Perhaps some remedial work would have been required at some time in the future, however, it failed as a result of the work undertaken by the respondent. He proceeded with sheet piling, notwithstanding the detailed letter from Mr Airey pointing out the risks associated with it, and in the knowledge that he was dealing with a retaining wall which, in any event, required particular care. It can be positively concluded that the respondent would have failed on this issue. It is also probable that the respondent would have been successful in defending all other claims.
This is a case which clearly could not have been resolved without the applicant retaining an appropriate expert, and the applicant had no alternative but to commence proceedings to protect her property. Even after provision of detailed advice from that expert, the respondent proceeded with sheet piling, which had been demonstrated to be an inherently dangerous procedure.
It would work an obvious injustice if the applicant was not awarded costs in such circumstances.
However, in assessing costs, it is appropriate to have regard to the issues on which the applicant would probably have failed if the matter had gone to a hearing on the merits. It is, of course, also necessary to be satisfied that the costs claimed were reasonable.
The assessment of costs
As the applicant was likely to have failed on the claims relating to the paving and cracking of internal and external walls, the cost of the BCI Firth report is not allowed.
The various accounts provided by Airey Taylor Consulting do not show any hourly rate and, consequently, any assessment and fixing of costs will be necessarily arbitrary.
In relation to the account dated 18 January 2012, the fees component is $6,358.75. It appears that a substantial amount of work went into the preparation of the letter dated 21 November 2011. It was not necessary to go to the length of setting out engineering doctrine to the extent contained in that document. The real benefit was contained in the last few paragraphs of the letter which requested a conferral with the respondent's engineer. Without any breakdown of time spent on the individual activities set out in the tax invoice supporting the total charge, it is not possible to assess any specific amount to be deducted from the charge for the preparation of this particular letter.
In relation to each of the other invoices issued by Airey Taylor Consulting, there are questions about the extent to which the work undertaken was strictly necessary for the purposes of preparation of the matter, or relating to the time charged, and therefore we consider it would be reasonable for this full cost to be recovered from the respondent. For instance, an amount of $660 is charged for attending the directions hearing before the Tribunal, which probably lasted an hour and a half. There is no invoice provided showing how this amount has been computed, but it appears likely that it includes time outside the actual hearing before the Tribunal. The applicant and Mr Airey were late in attending the directions hearing because they had erroneously thought that the directions hearing was before the Building Commission. Quite clearly, that charge needs to be reduced. Similarly, in relation to the last invoice for copying of photographs of $74.02, it is not clear whether the photographs relate only to the structural retaining wall issue, or also to the internal and external wall cracks and pavement movement which appears likely. In all the circumstances, the amounts claimed in respect of all the invoices will be reduced by 25%. After deducting the amount disallowed in respect of the BCI Firth report, it is calculated that 75% of the balance equates to $7,807.80.
Order
For the above reasons an order will issue in the following terms:
1.On or before 18 September 2012, the respondent is to pay the applicant's costs fixed in the sum of $7,807.80.
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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