GIABENI PTY LIMITED and THE OWNERS OF 30 COODE STREET MOUNT LAWLEY STRATA PLAN 11321 - [2024] WASAT 105 (S)

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL
ACT: STRATA TITLES ACT 1985 (WA)
CITATION:   GIABENI PTY LIMITED and THE OWNERS OF 30 COODE STREET MOUNT LAWLEY STRATA PLAN 11321 [2024] WASAT 105 (S)
MEMBER:   MS R PETRUCCI, MEMBER
HEARD:   DETERMINED ON THE DOCUMENTS
DELIVERED          :   30 JANUARY 2025
FILE NO/S:   CC 1339 of 2023
BETWEEN:   GIABENI PTY LIMITED
Applicant
AND
THE OWNERS OF 30 COODE STREET MOUNT LAWLEY STRATA PLAN 11321
Respondent

Catchwords:

Strata Titles Act 1985 (WA) - Scheme dispute - Interim application - Application for costs - Costs of proceeding - Objectives of Tribunal - Onus on party seeking costs order - Success - Nature of dispute - Conduct of parties - Offers to settle - Whether rejection of offer to settle more favourable than Tribunal's ultimate decision should result in exercise of discretion to award costs - Whether fair and reasonable to award costs - Discretion of Tribunal to award costs - Broadbrush approach as a matter of impression and without attempt at mathematical precision

Legislation:

Legal Profession (Magistrates Court) (Civil) Determination 2022
Legal Profession (State Administrative Tribunal) Determination 2022
Legal Profession (State Administrative Tribunal) Determination 2024
Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2022
State Administrative Tribunal Act 2004 (WA), s 9, s 32(5), s 39, s 46(2), s 60(2), s 87(1), s 87(2), s 87(3), s 87(5), s 88(1), s 88(2), s 89
State Administrative Tribunal Rules 2004 (WA), r 40, r 41, r 42
Strata Titles Act 1985 (WA) (prior to 1 May 2020), s 71(8)
Strata Titles Act 1985 (WA), s 91(1)(c), s 100(1)(c), s 119, s 197(4), Sch 5, cl 30(1)
Strata Titles Amendment Act 2018 (WA)

Result:

Each application for costs partly successful
Order for costs made

Category: B

Representation:

Counsel:

Applicant	:	N/A
Respondent	:	N/A

Solicitors:

Applicant	:	Douglas Lawyers
Respondent	:	Taylor Smart

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

Ampezzo Pty Ltd and Franken [2009] WASAT 109 (S)
Banning and The Owners of Terrace Place Strata Plan 9704 [2019] WASAT 89
Calderbank v Calderbank [1976] Fam 93, [1975] 3 All ER 333
Chew and Director General of the Department of Education and Training [2006] WASAT 248
Clifford and Shire of Busselton [2007] WASAT 89 (S)
Edge Investments WA Pty Ltd and Q Group WA Pty Ltd [2024] WASAT 9 (S)
Giabeni Pty Limited and The Owners of 30 Coode Street Mount Lawley Strata Plan 11321 [2024] WASAT 105
Gill & Ors and Wildnight Pty Ltd [2008] WASAT 135
Medical Board of Western Australia and Kyi [2009] WASAT 22
Panegyres v Medical Board of Australia [2020] WASCA 58
The Owners of 52 Mill Point Road Strata Plan 62152 and Hanssen Pty Ltd [2021] WASAT 102
Tu'uta Katoa v Minister for Immigration, Citizenship, Migrant Services & Multicultural Affairs (2022) 276 CLR 579; [2022] HCA 28
Western Australian Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32

REASONS FOR DECISION OF THE TRIBUNAL:

Background

On 18 September 2024, the Tribunal published its decision in Giabeni Pty Limited and The Owners of 30 Coode Street Mount Lawley Strata Plan 11321 [2024] WASAT 105 (the substantive decision). It concerns a scheme dispute under s 197(4) of the Strata Titles Act 1985 (WA) (ST Act).
Giabeni Pty Limited (Giabeni) was successful against The Owners of 30 Coode Street Mount Lawley Strata Plan 11321 (strata company) in respect of the core (fencing) issue where the Tribunal made an order that the strata company be taken to have passed a resolution without dissent in order to break the 'deadlock' between the parties. Otherwise, Giabeni was unsuccessful in respect of the fencing issue. Further, Giabeni was unsuccessful in respect of the by-laws issue and the reimbursement issue.
Following publication of the substantive decision, on 3 October 2024, the Tribunal made the standard orders allowing for an application for costs to be made. Both Giabeni and the strata company filed an application for costs in the proceeding. Therefore, the issue for determination where both parties are legally represented in the proceeding is, whether in the particular circumstances or realities of this case, is it fair and reasonable that the party claiming costs should be reimbursed for the costs it has incurred, and if so, in what amount?
Prior to 1 May 2020, the Tribunal could not make an order for the payment of costs concerning a proceeding under the ST Act except in two circumstances. The first circumstance arose where the applicant was given leave by the Tribunal to amend their application to compensate persons (for example, the respondent) for time unnecessarily spent in connection with the application. The only other circumstance was concerning a variation to unit entitlements.[1]
[1] Section 71(8) of the ST Act prior to 1 May 2020. See generally Banning and The Owners of Terrace Place Strata Plan 9704 [2019] WASAT 89 at [75] to [77].
As a result of the major amendments to the ST Act, which came into operation on 1 May 2020 under the Strata Titles Amendment Act 2018 (WA), the Tribunal is now not so limited in making orders for the payment of costs concerning a proceeding under the ST Act. Consequently, as Giabeni commenced the proceeding in the Tribunal on 28 October 2023, that is after the major amendments, the provisions of the ST Act apply to the determination of both Giabeni's and to the strata company's application for costs (cl 30(1) of Sch 5 of the ST Act).
For the reasons set out below, in my view, it is fair and reasonable in all of the particular circumstances or realities of this case to make final orders requiring Giabeni to pay costs of the strata company fixed in the amount of $20,000 within 30 days of this order, or some other timeframe as agreed in writing by the parties and that both applications for costs are otherwise dismissed.

Costs - the parties' position

The parties are a long way apart in respect of the appropriate orders as to costs in the proceeding.

Giabeni's position on costs

Giabeni seeks costs in the proceeding in its favour according to four alternative levels as follows:[2]
(a)$41,810.85 which represents Giabeni's costs in the proceeding plus 6.25% of the strata company's costs (of $48,230.36) that will be passed on to Giabeni via strata levies; or
(b)$38,796.45 which represents Giabeni's costs in the proceeding; or
(c)$6,042.15 which represents the cost of experts required to determine the substantive issue (fencing issue) plus 6.25% of the strata company's costs (being the costs that will be passed on to Giabeni via strata levies); or
(d)$3,014.40 ($48,230.36 x 6.25%) which would reimburse the 6.25% of the strata company's costs that will be passed on to Giabeni via strata levies regardless of any order of the Tribunal.
[2] Giabeni's submission in respect of the strata company's costs application filed on 31 October 2024 at page 3.
Counsel for Giabeni submits that the Tribunal should exercise its discretion to award Giabeni its costs in the proceeding because:[3]
(a)the conduct of the strata company was such that Giabeni was required to apply to the Tribunal to break the 'deadlock' concerning the core issue, being the fencing issue and to cause the strata company to comply with its duty under the ST Act to perform maintenance; and
(b)the strata company was legally represented and in view of the necessity to present the evidence of experts and manage the hearing it was reasonable for Giabeni to have legal representation and in doing so allowed for the more efficient resolution of the matter.
[3] Giabeni's submissions on costs filed on 17 October 2024 at page 2.
In summary, counsel for Giabeni submits that it is not fair and reasonable in the circumstances of this case for the strata company to be awarded costs. This is because, in the view of counsel for Giabeni, the strata company had ample opportunity to propose and pass resolutions to resolve the fencing issue before the final hearing, which it did not do.[4]

Strata company's position on costs

[4] See above n. 2 at page 1.

The strata company seeks its costs in the proceeding according to three alternative levels as follows:[5]
(a)$48,230.36 which represents the strata company's costs in the proceeding; or
(b)$45,229.56 which represents the strata company's costs from 19 January 2024 being the date after the 18 January 2024 offer to settle was made; or
(c)$21,141.61 which represents the strata company's costs from 11 May 2024, being the date after the 10 May 2024 offer to settle was made.
[5] The strata company's submissions in support of its application for costs filed on 18 October 2024 at page 19 and the strata company's Schedule of Costs filed on 18 October 2024 at pages 1 to 2.
Counsel for the strata company submits that it has been substantially successful in the proceeding and therefore its conduct in maintaining its position in respect of each of the issues was reasonable in the circumstances. This is because in relation to the fencing issue, counsel for the strata company submits:[6]
(a)the parties had reached agreement at the mediation in the earlier proceeding of CC 1061 of 2023 to the effect that a plan for the replacement of the fencing panels would be presented to the owners by mid-2024;
(b)in his report of 17 October 2023, Mr Kasinathan Rajaram of WSP Consulting Pty Ltd opined that the fencing could be managed without replacement. Mr Rajaram confirmed this view at the final hearing;
(c)at the Annual General Meeting (AGM) held on 2 November 2023, the strata company resolved that it would put a fencing replacement proposal to the owners by June/July 2024; and
(d)the primary relief sought by Giabeni was the immediate and priority replacement of the fencing outside Lot 12, which was not supported by the evidence and would have been unfairly prejudicial to the other lot owners.
[6] The strata company submissions in respect of Giabeni's costs application filed on 28 October 2024 at page 2.
Counsel for the strata company accepts the fencing issue was the core issue but contends that the by-laws issue was not a minor issue. It is the position of the strata company that the by-law issue was a real and significant issue in light of its obligations under the ST Act to enforce the scheme by-laws in circumstances where Giabeni made the application seeking declarations that it had not contravened the scheme bylaws, which in the end Giabeni was completely unsuccessful.[7]
[7] Ibid at page 2.
In summary, counsel for the strata company submits that it is not fair and reasonable in the circumstances of this case for Giabeni to be awarded any amount for its costs and its application for costs should be dismissed.
Before turning to the additional material relied upon in relation to costs, it is useful to summarise how costs in relation to proceedings are to be considered in the exercise of the discretion conferred upon the Tribunal. Following that, an outline of the history of the proceeding in the Tribunal is provided.

Legislative framework and legal principles

SAT Act

As a starting point, each party should expect to pay their own costs in the proceeding before the Tribunal in circumstances where there is a genuine dispute under the ST Act. However, that does not exclude the possibility of an award of costs by the Tribunal: s 87(1) of the State Administrative Tribunal Act 2004 (WA) (SAT Act). For example, where a party conducts itself in such a way to unnecessarily prolong the hearing or acts unreasonably or inappropriately, the Tribunal may decide that the justice of the case supports moving away from the starting point (see for example Chew and Director General of the Department of Education and Training [2006] WASAT 248 at [85] and Medical Board of Western Australia and Kyi [2009] WASAT 22 at [73] to [74]).
The term 'costs of a proceeding' is defined in s 88(1) of the SAT Act to mean the costs of, or incidental to, a proceeding of the Tribunal, other than costs of a party. Section 88(2) of the SAT Act provides that the Tribunal may order all or any of the costs of a proceeding be paid by a party.
The power for the Tribunal to make an order for one party to pay all or any of another party's costs which includes an amount to compensate the other party for any expenses, loss, inconvenience or embarrassment resulting from the proceeding or the matter because of which the proceeding was brought is found in s 87(2) and 87(3) of the SAT Act, subject to the contrary in the relevant enabling Act. In this case, the enabling Act is the ST Act and it does not limit the Tribunal's powers to award costs (as explained above at [4] to [5]).
If the Tribunal makes an order for the payment of costs and does not fix the amount of costs, that amount is to be assessed or settled in accordance with the rules (s 89 of the SAT Act).
The leading authority on the exercise of the discretion conferred upon the Tribunal to make orders for the payment of the costs is the decision of the Court of Appeal in Western Australian Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32 (Questdale).
In considering the exercise of the discretion conferred upon the Tribunal under the SAT Act, Murphy JA made the following observations in Questdale at [49] to [62]:
49Although s 87(2) does not in terms say that the discretion is to be exercised if it is fair and reasonable in all the circumstances of the case to do so, the judicial nature of the exercise and the scheme of the SAT Act indicates that, broadly speaking, that is the legislative intention.
50… the 'important principle commonly referred to as the "usual order as to costs", under which the successful party is prima facie entitled to his or her costs, has no application given the presumptive position or starting point under s 87(1) of the SAT Act that each party is to bear its own costs'.
51Section 87(2) is to be construed in the context that the legal rationale for an order for costs is not to punish the person against whom the order is made, but to compensate or reimburse the person in whose favour it is made. That rationale is evident in s 87(3) of the SAT Act. Accordingly, even in a statutory context where the presumptive position is that no costs will be ordered, generally speaking, the question is whether, in the particular circumstances of the case, it is fair and reasonable that a party should be reimbursed for the costs it incurred. The onus is on the party seeking an order in its favour.
…
53… the nature of the dispute, … is a relevant consideration.
54… every party to proceedings before the Tribunal is, … taken to be cognisant of the Tribunal's objectives in s 9 of the SAT Act. … [I]t will be relevant to consider whether and to what extent the [party] can establish that the [other party's] conduct in connection with the proceedings has impaired the attainment of the Tribunal's objectives to have the proceedings determined fairly and in accordance with the substantial merits, with as little formality and technicality as possible, and in a way which minimises the costs to the parties.
55Nevertheless, the mere fact that a [party] ultimately fails on some contention or contentions advanced at [the hearing] would not, in itself, signify that it has acted inconsistently with the objectives in s 9. That is particularly so in the context that under s 46, s 47 and s 48 of the SAT Act, plainly unmeritorious claims, or claims made or pursued in circumstances which, broadly speaking, may be characterised as involving misconduct, may be screened out before the final hearing. The Tribunal in such circumstances may act on its own volition or on the application of a party.
…
58The nature of the dispute for determination, … will be a factor in the exercise of discretion under s 87(2) … That is not in recognition of a rule that costs follow the event. Rather, it is a recognition that, generally speaking, the legislative purpose will be served by 'the claimant … [receiving] his reasonable costs of obtaining the compensation that is, ex hypothesi, his due'. Even there, however, it would remain relevant to consider whether it would be fair and reasonable for the 'successful' [party] to be deprived of its costs, or part of its costs, in all the circumstances of the case, including having regard to the matters referred to earlier.
59The above observations proceed on the basis that there is no offer that the Tribunal is obliged to consider pursuant to s 87(5) of the SAT Act and r 42 of the SAT Rules. Where r 42 applies, the weight to be given to that mandatory consideration will be a matter for the Tribunal in each case. On the one hand, its importance as a factor is informed by the evident legislative intent that, where possible, parties to proceedings should endeavour to consider settlement …
…
62The above observations are not intended to provide an exhaustive statement of the considerations which should, or may or may not, be taken into account under s 87(2) of the SAT Act in proceedings[.] (Footnotes omitted)
It is well understood that costs do not follow the event in the proceeding in the Tribunal and that the broad discretion conferred on the Tribunal is to be properly exercised.
Finally, in the recent decision of The Owners of 52 Mill Point Road Strata Plan 62152 and Hanssen Pty Ltd [2021] WASAT 102 at [21] to [28] the Tribunal summarised the applicable principles in considering an application for costs referring to Questdale and other relevant cases.

SAT Rules

Parties to a proceeding before the Tribunal may try to resolve their dispute by way of a written proposal in which an offer of settlement in precise, clear and unambiguous terms is made, that demonstrates a genuine compromise of the offeror's position and provides a summary of the reasons why the offer should be accepted, the terms of which are not disclosed to the Tribunal except in the event of a costs application. This is often referred to as a Calderbank[8] offer. The State Administrative Tribunal Rules2004 (WA) (SAT Rules) at r 40 deals with such offers to settle. Rule 41 of the SAT Rules concerns acceptance of an offer to settle the proceeding. Finally, r 42 of the SAT Rules concerns orders for costs where an offer to settle the proceeding is rejected.
[8] Calderbank v Calderbank[1976] Fam 93, [1975] 3 All ER 333.
The SAT Rules encourage parties to settle their differences without the need for a final hearing before the Tribunal. The is reflected in Clifford and Shire of Busselton [2007] WASAT 89 (S) at [48] (Clifford) as follows:
48The SAT Act, therefore, through s 87(5) and the rules referred to, reveals parliamentary support for the idea that, where possible, parties to proceedings should endeavour to consider settlement. This intent is evident elsewhere in the SAT Act. For example, s 9(b) makes it one of the main objectives of the Tribunal to act as speedily and with as little formality and technicality as is practicable, and minimise the cost to parties. Section 52 encourages the use of compulsory conference as an alternative to a final adversarial hearing. Section 54 encourages mediation as an alternative to a final adversarial hearing. Importantly, s 56 expressly deals with settlement and enables the Tribunal to make an order giving effect to a written settlement of the parties. In this statutory context then, the rules providing for the making and acceptance of the settlement offers and for the making of an order for costs in the event that a settlement offer is rejected, or at least settling out factors to be considered in relation to an application for an order for costs in some circumstances, are important.
However, there is no particular format that an offer to settle must be put. This is reflected in Gill & Ors and Wildnight Pty Ltd [2008] WASAT 135 where the Tribunal noted at [40]:
40There is no format in the SAT Act with which the settlement offer must comply. There is also no need for the settlement offer to refer to the SAT Rules. The offer must, however, be drafted in a way that, if accepted, an agreement comes into being. It must therefore be specific enough to settle issues in dispute if it is accepted.

In its original jurisdiction, which is the case here, the Tribunal is required to take into account if a party did not accept an offer of settlement made in compliance with r 40 and r 41 of the SAT Rules which is more favourable than the Tribunal's orders: s 87(5) of the SAT Act. However, it does not follow that a costs order will be made. This is because the SAT Rules do not provide that a party who makes an offer more favourable to a party than the result achieved in the Tribunal, is by reason of that, entitled to an order for costs. Rather, as stated by Martin CJ in Questdale at [10], r 42 of the SAT Rules merely provides, perhaps superfluously, that the Tribunal must take such matters into account. This is the same as stated by the Tribunal in the earlier decision of Clifford at [49] to [50].
If an offer to settle the proceeding does not comply with the SAT Rules, the Tribunal held in Ampezzo Pty Ltd and Franken [2009] WASAT 109 (S) (Ampezzo) at [37] that it is in the public interest that such offers of settlement be given careful consideration, so that settlement of disputes is encouraged. This reflects the position in Clifford at [65]. Similarly, if a settlement offer is made a very short time before a hearing is due to commence, the fact that a party is not properly able to take advice and consider the offer may also lead to the view that a rejection of the offer will not have consequences in costs for that party: Clifford at [66]. Otherwise, in considering whether to make a costs order, the factors the Tribunal must consider (mandatory considerations) and those which it must not consider (irrelevant considerations) arise from the subject matter, scope, and purpose of the SAT Act properly construed.
In considering the offer of settlement in Ampezzo, the Tribunal at [38] by reference to Seaman P, Civil Procedure Western Australia, LexisNexis, Butterworths, 1990 at [24A.O.5A] held that in deciding whether the rejection of a Calderbank offer was unreasonable, regard should be had to, at least the following:[9]
(a)the stage of the proceeding at which the offer was received;
(b)the time allowed for the offeree to consider the offer;
(c)the extent of the compromise offered;
(d)the offeree's prospects of success, assessed at the date of the offer;
(e)the clarity with which the terms of the offer was expressed; and
(f)whether the offer foreshadowed an application for (indemnity) costs in the event of the offerees rejecting it[.]
[9] The factors to consider remain unchanged as set out in the current version of Civil Procedure Western Australia, LexisNexis Australia, at [24A.11.3].
Finally, in order for the Tribunal to assess a party's claim as to costs, in Panegyres v Medical Board of Australia [2020] WASCA 58 Vaughan JA stated at [415]:
… 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[.]

SAT Determinations

The Legal Profession (State Administrative Tribunal) Determination 2022 with erratum (1 July 2022 to 30 June 2024) (Prior Determination) and the Legal Profession (State Administrative Tribunal) Determination 2024 (1 July 2024 onwards) (Current Determination) provide the maximum hourly and daily rates to be used to calculate the dollar amount chargeable by a legal practitioner, clerk or paralegal in providing advice and services to clients in respect of proceedings and potential proceedings in the Tribunal.
In Edge Investments WA Pty Ltd and Q Group WA Pty Ltd [2024] WASAT 9 (S), the Tribunal stated at [62] that 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 and the Legal Profession (Magistrates Court) (Civil) Determination 2022, may also be instructive in assessing the reasonableness of the costs claimed in proceedings before the Tribunal.

History of the proceeding in the Tribunal

Following the commencement of the proceeding by Giabeni in the Tribunal on 28 October 2023, at the first directions hearing on 17 November 2023, the Tribunal referred the matter to mediation. A day was allocated for the mediation on 29 November 2023. The parties did not resolve or narrow down the issues in dispute at mediation.
Prior to the mediation, the strata company provided its written response to Giabeni's application, and the parties exchanged their respective books of documents.
On 13 December 2023, Giabeni filed a minute of amended orders it was seeking in the proceeding.
On 27 December 2023, a statement of issues, facts, and contentions (SIFC) was filed by Giabeni.
On 5 January 2024, the strata company gave notice to the Tribunal of its legal representation.
As a result of Giabeni's minute of amended orders sought, the Tribunal, at the second directions hearing, on 12 January 2024, joined Mr Robert Patrick (a lot owner in the strata scheme) as the second respondent. Further, amongst other orders, the Tribunal listed the matter for a final hearing for one day on 17 April 2024.
On 21 January 2024, Giabeni filed a book of documents on which it proposed to rely.
On 9 February 2024, the strata company filed its SIFC and bundle of documents.
Mr Patrick filed his SIFC and bundle of documents on 9 February 2024.
On 17 February 2024, Giabeni requested an extension of time to file witness statements and for the final hearing listed for 17 April 2024 to be vacated and relisted for a three day final hearing.
On 27 February 2024, at the third directions hearing, the Tribunal granted Giabeni an extension of time to file witness statements to 22 March 2024.
On 8 March 2024, Giabeni filed with the Tribunal a request to issue summons to various people including to the other owners in the strata complex (who were not a party to the proceeding).
On 20 March 2024, at the fourth directions hearing, the Tribunal gave leave to Giabeni to amend its application to reflect the minute of amended orders sought that was filed with the Tribunal on 13 December 2023. Further, the Tribunal authorised Giabeni to issue a summons to give oral evidence at the final hearing to:
(a)Ms Christine Gow of SVN Strata;
(b)Mr Mike Rossiter of the QIA Group; and
(c)Mr Nigel Jenkins of Platinum Strata Management.

At the same directions hearing, the Tribunal authorised the strata company to issue a summons to give oral evidence at the final hearing to Mr Rajaram of WSP Consulting Pty Ltd.
Finally, at the directions hearing on 20 March 2024, the Tribunal ordered for the parties to file a list of questions they propose to put to each person to be summoned. The Tribunal also ordered the strata company to inform all lot owners in the strata complex of the proceeding and to invite them to inform the Tribunal if they wish to be joined as a party to the proceeding. No other owner sought to be joined as a party to the proceeding. The original final hearing for 17 April 2024 was vacated and re-listed to 17 June 2024 for a duration of four consecutive days to accommodate Giabeni's request of 17 February 2024.
On 17 April 2024, at the fifth directions hearing, at the suggestion of counsel for the strata company, the Tribunal ordered the strata company to file documents reflecting approval given by the strata company for the installation or alterations to the lots such as for black shade sails and patios and for photographs of the fencing, driveways, carports and courtyards at the strata complex.
On 30 April 2024, at the sixth directions hearing, the Tribunal heard submissions from the parties as to whether the Tribunal should require the owners of Lots 5, 6, 7, 8, 9, 10, 13, 14 and 15 to attend before the Tribunal in respect of the proceeding and/or to produce any of the documents or materials as requested by Giabeni. Ultimately, the Tribunal declined Giabeni's request to summons any other lot owner (who was not already a party to the proceeding) to attend before the Tribunal or to produce any documents or materials.
On 3 May 2024, Giabeni filed questions to be put to each of the persons to be summonsed (see above at [45]). In relation to each of the two strata managers to be summonsed, the questions sought to be asked by Giabeni was in excess of 100 questions for each strata manager.
On 11 June 2024, Giabeni gave notice to the Tribunal of its legal representation.
On 12 June 2024, counsel for Giabeni filed an interim application seeking for Mr Patrick (the second respondent) to be removed as a party to the proceeding. This was determined by the Tribunal at a directions hearing on 13 June 2024 where Mr Patrick, the owner of Lot 16, was removed as a party to the proceeding. Further, at that directions hearing, the Tribunal gave leave for Giabeni to withdraw two orders from its application. The two orders were in regards to recovery of plumbing costs from the owner of Lot 16 (order 6) and a declaration that the owner of Lot 16 installed a patio without approval (order 8).
Just before the commencement of the final hearing on 17 June 2024, Ms Gow for the strata manager engaged by the strata company, emailed to the owners of the strata complex a 'fencing proposal'. The contents of the email are set out in full in the substantive decision at [81]. Further, at Appendix A to the substantive decision is the document attached to Ms Gow's email of 17 June 2023 headed 'Replacement of Super-Six fencing/Hardifence with Colorbond: proposal'.
At the start of the final hearing on 17 June 2024, counsel for Giabeni informed the Tribunal that questions would not be put to either of the strata managers (Ms Gow or Mr Jenkins) who were listed to give evidence on the first day of the hearing. Consequently, the Tribunal took the opportunity to attend the strata complex on the afternoon of 17 June 2024 with the parties and their counsel for a site inspection.
The final hearing concluded after three consecutive days on 19 June 2024, following which the Tribunal reserved its decision.
The substantive decision was published on 18 September 2024 which included orders requiring the parties to file a minute of proposed orders to give effect to the reasons for decision of the Tribunal.
On 3 October 2024, at the seventh and last directions hearing, the Tribunal made final orders including orders, at the request of each party, for the parties to make an application for costs in the proceeding, including costs for the interim application.[10] Finally, the orders provided that all costs applications received by the Tribunal would be determined on the documents in accordance with s 60(2) of the SAT Act.
[10] Neither the SAT Act nor the ST Act prescribe the procedure the Tribunal is to follow when dealing with the time at which any cost order might be made in relation to interim orders. Because of that, the Tribunal is guided by s 32(5) of the SAT Act which provides that the practice or procedure of the Tribunal is to be as the Tribunal determines.

Other facts relating to costs

The parties adduced additional evidence in relation to the issue of costs. The evidence broadly relates to:
(a)various offers made prior to the final hearing; and
(b)offer and counteroffer made during the final hearing.
The following is a summary of that evidence.

Offers made prior to the final hearing

Offer from strata company to Giabeni - 18 January 2024

On 18 January 2024, the strata company offered to settle the proceeding with Giabeni on the following basis (January settlement offer):[11]
1)[The strata company] will prepare a plan for the replacement of the fencing throughout the property and present a proposal for approval by the owners in the scheme by June 2024. As part of the proposal, [the strata company] will request the owners to consider which fences throughout the area should be replaced as a priority, including but not limited to considering whether the fencing in Lot 12 be replaced first;
2)[The strata company] will pay [Giabeni] $146.50 being the lodgement fee for [the] application, within 7 days of acceptance by electronic payment into [Giabeni's] nominated bank account;
3)Within 7 days after receipt of the above payment, [Giabeni] take any and all necessary steps to withdraw the proceedings entirely, including but not limited to writing to the SAT and requesting that the proceeding be withdrawn pursuant to s 46 of the State Administrative Tribunal Act 2004 (WA); and
4)The parties otherwise bear their own costs.
[11] Letter dated 18 January 2024 from counsel for the strata company to Giabeni at page 3.
Giabeni did not accept the strata company's January settlement offer.

Offer from strata company to Giabeni - 10 May 2024

On 10 May 2024, the strata company, with the consent of Mr Patrick (as the second respondent), offered to settle the proceeding with Giabeni on the following basis (May settlement offer):[12]
[12] Letter dated 10 May 2024 from counsel for the strata company to Giabeni at pages 4 to 5.
1)When [the strata company] presents the proposal for the replacement of the fencing throughout the property in or around June or June 2024, [the strata company's] [c]ouncil will propose by way of resolution that:
a.The fencing at Lot 12 be replaced in the first stage of the replacement works; and
b.The first stage of the replacement works be undertaken as soon as possible and in any event a work order be issued to the relevant contractor by 31 August 2024,
and each member of the [c]ouncil warrants that they will vote in favour of such resolution;
2)[The strata company] will allow [Giabeni] to keep the 2 decorative screens in your exclusive use carport, in their current state, and will not take any enforcement action in relation to the installation of the 2 decorative screens;
3)Within 45 days after acceptance of this offer, [Giabeni] will paint the pergola (including any roof or other in [Giabeni's] exclusive use courtyard a dark green colour, matching the pergolas throughout the property, or a cream colour, matching the walls of the building, the colour to be chosen at [Giabeni's] election;
4)Within 45 days after acceptance of this offer, [Giabeni] will remove the grey paint from the driveway in your exclusive use carport and the portion of the driveway which [Giabeni] [has] painted but do not have exclusive use of, or otherwise return the driveway to its previous colour being a light purple colour matching the rest of the driveways throughout the property;
5)[The strata company] will allow [Giabeni] to keep the 3 lower CCTV cameras installed around Lot 12, which for clarity includes the camera located on the bottom of [Giabeni's] pergola, the camera located above [Giabeni's] front door and the camera located adjacent to [Giabeni's] carport, and will not take any enforcement action in relation to [Giabeni's] conduct in installing those 3 CCTV cameras without [the strata company's] approval;
6)Within 60 days after acceptance of this offer, [Giabeni] will fully remove the 3 higher CCTV camera installed around Lot 12, which for clarity are the 3 cameras installed on the external walls of the building on Lot 12, at or around the second level of the building on Lot 12, and repair any associated damage to the common property, including but not limited to re-painting the relevant parts of the external walls of the building on Lot 12.
7)[Giabeni] undertake that [it] will not alter, or allow to be altered, or carry out any improvements on the common property for which [Giabeni] [has] been granted exclusive use without first receiving the written approval of [the strata company];
8)[Giabeni] undertake that [Giabeni] will not subsequently commence a Tribunal application with respect to any and all of the matters and issues raised in these proceedings, and otherwise agree to fully and finally release [the strata company] and Robert Patrick from any and all claims or actions [Giabeni] may have with respect to the matters and issues raised in these proceedings save and except for any Tribunal applications, claims or actions with respect to the enforcement of the agreement formed by this offer and any Tribunal applications, claims or actions with respect to the fencing throughout the property in the event that the resolution referred to in paragraph 1 of this offer is not passed by the owners;
9)Within 7 days after acceptance of this offer, [Giabeni] take any and all necessary steps to withdraw the proceedings entirely, including but not limited to writing to the SAT and requesting that the proceeding be withdrawn pursuant to section 46 of the State Administrative Tribunal Act 2004 (WA); and
10)The parties otherwise bear their own costs.
Giabeni did not accept the strata company's May settlement offer.

Offer and counteroffer made during the final hearing

Offer from Giabeni to the strata company - 17 June 2024

During a break at about midday on the first day of the hearing (17 June 2024), counsel for Giabeni emailed to the strata company an offer to settle the fencing issue, to be in the form of orders of the Tribunal with consent of the parties, on the following basis (Giabeni's offer to settle fencing issue):
1.Stage 1 as set out in the plan attached to [the strata company's] email below will be performed by the [s]trata [c]ompany subject to the terms below.
2.The fencing contractor will be instructed within 14 days and the works will be performed within 60 days. In the event that the contractor is unable to perform within 60 days, [Giabeni] shall be permitted to engage a contractor on behalf of the [s]trata [c]ompany, at the expense of the [s]trata [c]ompany.
3.The cost of the fencing shall be paid from the available funds with priority over any other works or legal fees.
4.The fence around Lot 12 shall be colorbond Dune or Shale Grey, being the closest to the existing fence colour.
5.The height of the fence shall be 1.8 metre panels, plus any required plinths.
6.The claim with regard to the replacement fencing in CC 1339 of 2023 be dismissed, save that each party reserves it rights with regard to any application for costs.

Counteroffer from the strata company to Giabeni - 17 June 2024

Shortly after the hearing on the first day (17 June 2024), in response to the offer put by counsel for Giabeni earlier in the day (see above at [64]), counsel for the strata company put the following counteroffer to Giabeni with respect to the fencing issue (strata company's counteroffer to settle the fencing issue):
1)Within 7 days, the [s]trata [c]company will issue a notice convening an Extraordinary General Meeting (EGM) containing the following:
a.A special resolution to approve and issue a work order for the quote from Brownes Fencing, Q14052, attached, in accordance with section 102(5) of the Strata Titles Act 1985 (WA).
2)Each member of the [c]ouncil of the [s]trata [c]ompany, being the owners of Lots 1, 7, 8 and 10, warrants that they will vote in favour of the special resolution referred to in paragraph 1.
3)Within 2 days after the end of the voting period for the special resolution referred to in paragraph 1 and in the event the resolution is passed, the [c]ouncil will instruct Brownes Fencing to perform the works pursuant to quote Q14052. The [c]ouncil will request Brownes Fencing to complete the works within 60 days.
4)The cost of the fencing shall be paid from the available strata company funds with priority over any other works or legal fees.
5)The colour of the fencing shall be paperbark.
6)Within 1 day of acceptance of this offer, the parties execute and [Giabeni] file with the Tribunal consent orders on the following terms:
Pursuant to s 46(1) of the State Administrative Tribunal Act 2004 (WA), [Giabeni] has leave to withdraw orders 1, 2, 3 and 4 as set out in the document titled 'Amended orders sought' filed with the Tribunal on 13 December 2023 and for which leave was granted by order 3 of the orders made by the Tribunal on 20 March 2024 for [Giabeni] to amend the orders as set out in the application filed on 28 October 2023, and orders 1, 2, 3 and 4 sought are hereby dismissed pursuant to s 46(2) of the State Administrative Tribunal Act 2004 (WA). For avoidance of doubt, orders 1, 2, 3 and 4 as sought by [Giabeni] and now dismissed provide:
Order 1.To accept the quote from Brownes Fencing (quote 11814 in the amount of $7,480.00) to replace the damaged, cracked and failing asbestos fencing at the exclusive use area of Lot 12 immediately using existing funds.
Order 2.To accept the quote from Brownes Fencing (quote 11813 in the amount of $12,750.00) to replace the damaged, cracked and failing asbestos fencing at the exclusive use areas between Lots immediately after order 1 is attended to using existing funds.
Order 3.To replace other areas of damaged, cracked and failing asbestos fencing as required and in accordance with approvals from neighbours under the Dividing Fences Act.
Order 4.To raise a special levy if inadequate funds exist to replace fencing (item 3 above).
For avoidance of doubt, only paragraph 6 is proposed to be the subject of orders by consent.

Just prior to the commencement of the second day of the final hearing (18 June 2024), the strata company withdrew its counteroffer to settle the fencing issue as set out above at [65].
I now turn to consider the issue identified above at [3]. That is, whether in the particular circumstances of this case it is fair and reasonable that a party should be reimbursed for the costs it incurred, and if so, in what amount?

Costs - Exercise of Tribunal's discretion

I start by identifying a number of general matters before turning to consider the nature of the dispute, the conduct of the parties and the offers to settle all of which are relevant considerations to the Tribunal's exercise of its discretion to make an order for costs.

General matters

Onus

The party claiming costs is to discharge the onus of establishing that it is fair and reasonable in the circumstances of the case for that party to be awarded its costs. This is often referred to the onus probandi.
In this case as both parties are claiming their costs, the onus is on each party to establish that it fair and reasonable in the particular circumstances of the case to be reimbursed for the costs they incurred.

Success

What constitutes 'success' in the proceeding in the Tribunal is to be determined by the reality of the circumstances involved in the case.
As stated in the substantive decision (at [12], [151] to [153] and [275], Giabeni was successful in respect of the core issue, being the fencing issue, in that the Tribunal made an order that the strata company be taken to have passed a resolution without dissent to break the 'deadlock' between the parties. However, Giabeni was otherwise unsuccessful in respect of the fencing issue because the orders sought by Giabeni, in particular relating to the need for prioritisation and the immediate replacement of the fencing outside of Lot 12, were not made by the Tribunal.
Further, as stated in the substantive decision (at [12], [248] to [257] and [275]), Giabeni was entirely unsuccessful in respect of the by-laws issues as a declaration was made that Giabeni had breached Schedule 1 bylaw 16 and made orders requiring Giabeni to remedy the breaches of that bylaw.
Finally, as stated in the substantive decision (at [12], [268] to [274] and [275], Giabeni was entirely unsuccessful in respect of the reimbursement issue as the claim was dismissed.
In summary, the reality of the circumstances involved in this case leads to the conclusion, in my view, that Giabeni was successful on the core issue whereby the Tribunal made an order to break the 'deadlock' in order for the parties to move on with the fencing proposal but was otherwise unsuccessful. Notwithstanding this conclusion, as stated in Questdale at [50], the important principle commonly referred to as the 'usual order as to costs' (under which the successful party is prima facie entitled to its costs) has no application in proceedings in the Tribunal given the starting point in s 87(1) of the SAT Act is that each party is to bear its own costs.

Nature of the dispute

A relevant consideration to the Tribunal's exercise of its discretion to make an order for costs, is the nature of the dispute.
In this case, the core issue required the Tribunal to intervene as a practical means of breaking the 'deadlock' between the parties on the fencing issue in circumstances where the issue had been on the agenda for a couple of years, a previous resolution on the fencing issue proposed to the strata company had failed on 1 March 2023 and a fencing proposal was presented to the owners on 17 June 2024 but was lacking in certainty (see the substantive decision at [132] to [152]).
It was therefore open and appropriate, in my view, for the strata company to participate in the proceeding and to put forward its position which required the engagement of experts to give evidence as to the condition of the fencing and which of the fencing panels, if any, required immediate replacement.
It was also reasonable for Giabeni to make the application concerning the fencing issue because in its view, the strata company had 'not demonstrated a genuine attempt to maintain the common property' and the strata company's 'delay in not renewing or replacing the fencing is unreasonable' (see the substantive decision at [8] and [109]).
However, the nature of the fencing dispute was not such that the fencing panels of the Exclusive Use Area of Lot 12 and between the Lots required immediate replacement as asserted by Giabeni. This is clearly evident from Giabeni's expert Mr Woodhouse who opined, following an inspection of the strata complex on 7 July 2022, that the 'fencing is structurally unsafe and dilapidated and should be replaced' (see the substantive decision at [20]). However, and importantly, Mr Woodhouse did not opine that the fencing required immediate replacement. In seeking orders 1 and 2 in its application to the Tribunal, Giabeni put the strata company to unnecessary cost to defend its position that the fencing did not require immediate replacement.
The by-law issue raised the issue of whether what Giabeni had done by installing two decorative screens, painting the driveway and pergola/patio and the installation of CCTV cameras was 'maintenance or upkeep' of the Exclusive Use Area of Lot 12.
In my view it was reasonable for Giabeni to bring the proceeding in the Tribunal at the time of making it application to the Tribunal. This is because at that time, the strata company had not issued a notice of breach of by-laws to Giabeni. The issue of whether something is 'maintenance or upkeep' or an 'alteration or improvement' in the context of scheme bylaw 16 is a complex issue as set out in the substantive decision at [179] to [198].
In such circumstances, it was also reasonable for the strata company to defend its position that what was done by Giabeni was in breach of scheme bylaw 16 as reflected in the notices issued to Giabeni. The strata company also had to defend it position as Giabeni challenged the validity of the notices on the basis that the strata company had not exercised it power properly in relation to s 119 of the ST Act.
In summary, the by-law issue raised various complex issues as set out in the substantive decision at [200] to [210] and it was therefore, in my view, entirely appropriate for both parties to have legal representation to make submissions on the issues.
The reimbursement issue was for $605 for the report from Mr Woodhouse. A complex issue arose as to the obligations imposed on a strata company under s 91(1)(c) of the ST Act including maintenance of the fencing on the common property. It was therefore appropriate and reasonable, in my view, for the parties to have legal representation to make submissions on this issue.

Conduct of the parties

As already stated, both parties engaged legal representation. In the case of Giabeni, legal representation was engaged in the week prior to the final hearing. As stated in the substantive decision at [22], and repeated here, the submissions of counsel for each party greatly assisted me in determination of the issues.
Counsel for the strata company took issue with Giabeni having two legal practitioners attending all hearings stating that it resulted in duplicative costs claimed. In the view of counsel for the strata company, all attendances could have, and ought to have been conducted by one legal practitioner.[13] The number of legal practitioners attending hearings in the Tribunal which impacts on the conduct of the parties may be a relevant consideration to the Tribunal's exercise of its discretion to make an order for costs.
[13] The strata company's submissions in respect of Giabeni's costs application filed on 28 October 2024 at page 5.
It is necessary to consider, whether, and to what extent a party has established that the conduct of the other party has impaired the attainment of the Tribunal's objectives to have the proceedings determined fairly and in accordance with the substantial merits, with as little formality and technicality as possible, and in a way which minimises the costs to the parties (see above at [21]).
Giabeni ultimately was unsuccessful on all contentions, apart from the fencing issue, that were advanced at the final hearing (see above at [71] to [75]). However, that itself does not, without more, signify that Giabeni acted inconsistently with the objectives of the Tribunal as set out in s 9 of the SAT Act.
Giabeni was criticised by counsel for the strata company in its running of the case when not legally represented as well as the time it took for Giabeni to file documents and the unnecessary lines of enquiry that Giabeni sought to pursue. Counsel for Giabeni submits that these criticisms are not a reason for awarding costs when the role of the Tribunal is to provide accessibility to justice for ordinary people and its design is to encourage self-representation which is reflected in s 39 and s 87(1) of the SAT Act.[14]
[14] See De Villiers, Bertus, Accessibility to Law: Adjusting Court Proceedings to the Modern Era - Novel Practices and Procedures from Down Under (2016) 14 NZJPIL 229.
The Tribunal had occasion to consider requests and make orders regarding the proceeding where Giabeni requested:
(a)an extension of time to file documents, in particular witness statements;
(b)to amend its application to include orders against Mr Patrick who was then joined as the second respondent;
(c)to issue summons to various people including to all the other lot owners (which was ultimately declined); and
(d)to have Mr Patrick removed as a respondent.
All of the above requests made by Giabeni, apart from the last request, were made without legal representation.
While I accept that the role of the Tribunal is to provide accessibility to justice, in my view, the following conduct by Giabeni unnecessarily prolonged the final hearing and incurred unnecessary costs for the strata company:
(a)the filing of only one witness statement on 4 May 2024 two months after Giabeni was ordered to file its witness statements in circumstances were Giabeni sought an extension of time to file the witness statements and to vacate and relist the final hearing;
(b)the claims made by Giabeni against Mr Patrick, the owner of Lot 16 who was joined as a respondent to the proceeding on 12 January 2024, for the recovery of plumbing costs and for a declaration that he had installed a patio without approval. These claims were withdrawn on 13 June 2024, just before the final hearing in circumstances where Mr Patrick had repaid to the strata company the plumbing costs much earlier on 1 February 2024 and the council had approved the patio even earlier on 12 December 2023;
(c)the request by Giabeni to summons strata managers Ms Gow and Mr Jenkins when on the morning of the final hearing (17 June 2024), the Tribunal and the strata company were informed that no questions would be put to either of Ms Gow or Mr Jenkins;
(d)the list of more than 100 questions to be asked of each of Ms Gow and Mr Jenkins which required both the current strata manager and the strata company to incur unnecessary costs in reviewing the questions because of the circumstances set out in (c) above; and
(e)the seeking to summons every lot owner in the strata scheme to explain improvements including improvements to the Exclusive Use Area which ultimately the Tribunal refused.
In regards to the strata company, it was successful on all contentions advanced at the final hearing apart from the fencing issue but only as to the order made that the strata company be taken to have passed as a resolution without dissent the fencing proposal in order to break the 'deadlock' between the parties.
The strata company complied with all orders of the Tribunal in a timely manner and thereby assisted the Tribunal to achieve its objective of acting speedily in the resolution of the proceeding and to minimise the costs to the parties. In the circumstances, I am satisfied and find that the strata company acted reasonably in its conduct in the proceeding.

Offers to settle

Offers to settle are also a relevant consideration to the Tribunal's discretion to make an order for costs.
I have not examined each of the offers to settle to ensure compliance with the SAT Rules. This is because, following Ampezzo, it is in the public interest that all offers to settle, whether they comply with the SAT Rules or not, should be carefully considered in a costs application so that settlement of disputes is encouraged.
Each of the offers to settle put a proposal to settle the fencing issue.
As already stated, and repeated here, the outcome of the proceeding in respect of the fencing issue was the order of the Tribunal that the strata company be taken to have passed a resolution without dissent for the fencing proposal in order to break the 'deadlock' between the parties. The order of the Tribunal has little difference from the resolution ultimately passed by the strata company at the extraordinary general meeting held in August 2024[15] (that is, prior to the Tribunal handing down the substantive decision) and being the strata company's intended course of conduct per the resolution passed at its AGM held the previous year on 2 November 2023 (which was shortly after Giabeni filed its application with the Tribunal).
[15] Minutes of Extraordinary General Meeting held on 28 August 2024 being Annexure 2 attached to the strata company's submissions in support of its application for costs filed on 18 October 2024.
However, none of the offers to settle made by the strata company (that is, on 18 January 2024, 10 May 2024 and the counteroffer in reply to Giabeni's offer to settle on the first day of the final hearing on 17 June 2024) are specific as to when the fencing work will be done by or provide a timeline for completion of the works. Rather, in the offers to settle, the strata company guaranteed that the fencing proposal would be put to a meeting and voted on. Because of this lack of specificity, it was entirely reasonable, in my view, for Giabeni to refuse each of the offers to settle in respect of the fencing issue in the particular circumstances or realities of this case, where no prior vote on the fencing issue had been successful.
It was not reasonable, however, for Giabeni to pursue its claim that the 'damaged, cracked and failing asbestos fencing at the Exclusive Use Area of Lot 12 be immediately replaced' and 'at the exclusive use areas between Lots immediately after order 1' (orders 1 and 2 sought by Giabeni in its application) when Giabeni's expert, Mr Woodhouse did not support this position, including well before Giabeni lodged its application with the Tribunal on 23 October 2023.
However, it was entirely reasonable for the strata company to refuse the offer to settle the fencing issue put by Giabeni on 17 June 2024. This is because until the members of the strata company (or in other words, all the owners) voted in favour of the fencing proposal for the common property, and to vote in favour of raising levy contributions to pay for the works, the strata company could not commit to instructing the nominated fencing contractor. At best, all the strata company could do, as was put forward in the strata company's counteroffer to Giabeni of 17 June 2024 was that it would promptly convene a general meeting and for the council to warrant to vote in favour of the motion to approve a work order to be issued to the nominated fencing contractor.
As it turns out, at the extraordinary general meeting of the strata company held on 28 August 2024, prior to the substantive decision being handed down by the Tribunal, the motion to proceed with the fencing proposal and raise levy contributions between 1 November 2024 to 1 January 2025 for the purposes of the stage 1 fencing works was not passed by one vote. Giabeni voted against the motion.[16]
[16] Ibid.
In my view, while none of the offers to settle the fencing issue was specific in order to settle the dispute, in the particular circumstances of this case, where the motion had to be put to the strata company to be voted on, it was clear from Giabeni's expert, Mr Woodhouse, that he recommended on or about 7 September 2022 that the fencing panels 'should be replaced as soon as possible' (see substantive decision at [123] and [124]), but not immediately as sought by Giabeni in orders 1 and 2 sought in its application to the Tribunal. It was therefore entirely appropriate and reasonable, in my view, for the strata company to participate in the proceeding to protect its interests and in doing so incurred costs by engaging legal representation and expert witnesses to support its position that the fencing did not require immediate replacement.
Only the May settlement offer dealt with the by-laws issue.
The offer to settle made by the strata company in the May settlement offer was a better outcome for Giabeni as compared to the Tribunal's decision in respect of the decorative screens, the CCTV cameras, and the time period to remove the paint from the driveway and to repaint. Further, in the May settlement offer, the strata company offered for the parties to bear their own costs, at a time when the strata company was legally represented and had incurred significant legal costs whilst Giabeni was not yet legally represented and therefore had not incurred any legal costs.
While the prospect of success of the by-law issue may not have been easy for Giabeni to determine at the time of the May settlement offer, on the basis submitted by counsel for Giabeni that many experienced litigators and even Tribunal members and judges grapple with determining the prospects of success of a case, much less, determining it accurately,[17] in my view, Giabeni's rejection of the May settlement offer in respect of the by-law issue was unreasonable taking into consideration the extent of the compromise offered by the strata company and the certainty of the offer made.
[17] Tu'uta Katoa v Minister for Immigration, Citizenship, Migrant Services & Multicultural Affairs (2022) 276 CLR 579; [2022] HCA 28 where the judge's finding as to the prospects of success was challenged.
None of the offers to settle specifically dealt with the reimbursement issue. However, in the May settlement offer the strata company compromised by offering for the parties to bear their own costs at a time when Giabeni was not legally represented. The Tribunal dismissed Giabeni's claim for the reimbursement issue and therefore the strata company was successful on that issue. It was entirely appropriate, in my view, for the strata company to defend its position and in doing so it incurred costs.
Finally, in my view, it was unreasonable for Giabeni to pursue the reimbursement issue in the particular circumstances or realities of this case where its expert, Mr Woodhouse, did not support order 1 or order 2 sought by Giabeni asserting that the fencing required immediate replacement.

Exercise of discretion

As already stated, and repeated here, in assessing costs, the Tribunal takes a relatively broadbrush approach as a matter of impression and without any attempt at mathematic precision. In doing so, the costs awarded are compensatory and not punitive.
In assessing what is fair and reasonable as to the amount of costs, I have had regard to:
(a)the written submissions of counsel for Giabeni and the strata company;
(b)the nature of the dispute;
(c)Giabeni was successful in that an order was made by the Tribunal to break the 'deadlock' between the parties for the fencing issue but was otherwise unsuccessful in respect of all the other orders sought in respect of the fencing issue;
(d)Giabeni was unsuccessful as to the by-laws issue and the reimbursement issue;
(e)the conduct of Giabeni and the strata company in the proceeding; and
(f)the offers to settle.

In coming to a conclusion in the exercise of the Tribunal's discretion to award costs, I am mindful that what was sought by way of costs by each party is not the full legal fees charged but rather the legal fees claimed have been based on or limited to the amounts set out in the Prior Determination and the Current Determination.
In my view, the dispute between Giabeni and the strata company raised a number of complex issues in circumstances where a previous proposal to the strata company about fencing at the strata complex had failed. The core issue concerned the fencing and whether the Tribunal should intervene to break the 'deadlock' between the parties. There were also complex issues concerning whether Giabeni was in breach of scheme bylaw 16 or whether what was done was 'upkeep or maintenance' rather than an 'improvement or alteration' to the Exclusive Use Area of Lot 12. The validity of the notices issued by the strata company raised complex issues as to whether the strata company had exercised its powers properly under s 119 of the ST Act. It was therefore entirely appropriate and reasonable for the strata company to make submissions to defend its position. The fact that Giabeni was unsuccessful on the contentions it put forward at the final hearing, apart from the fencing issue, supports a finding that the strata company had a strong basis for challenging Giabeni's position.
In my view, the conduct of the strata company was reasonable and appropriate in the conduct of the proceeding and therefore did not impair the attainment of the objectives of the Tribunal as set out in s 9 of the SAT Act. Further, in my view, the strata company made reasonable offers to settle in regards to the by-laws issue in the May settlement offer and also in regards to the parties bearing their own costs in the January settlement offer and the May settlement offer at a time when Giabeni had not incurred any legal costs.
On the other hand, in my view, the conduct of Giabeni has impaired the attainment of the Tribunal objectives, as set out in s 9 of the SAT Act, which weighs against an award of costs in favour of Giabeni. In particular, the matters set out above at [93] unnecessarily prolonged the final hearing and incurred unnecessary costs for the strata company.
Giabeni was successful on the fencing issue in that an order was made by the Tribunal, however Giabeni was not successful in having orders made in the terms sought per orders 1 and 2 in its application. The strata company was successful on all the other issues. As stated in Questdale at [58], the legislative purpose of the SAT Act will be served by the claimant receiving its reasonable costs of obtaining the compensation that is the claimant's due. However, it is still necessary, to consider, in all of the particular circumstances or the realities of the case, whether it would be fair and reasonable for the 'successful' party to be deprived of its costs, or part of its costs.
In this case, Giabeni claims legal fees of $35,768.70 for the period 12 June 2024 to 3 October 2024 inclusive on the basis of the maximum hourly rate of $484 for a Senior Practitioner and $385 for a Junior Practitioner per the Current Determination. As the Current Determination only applies from 1 July 2024, I have adjusted the legal fees claimed up to 30 June 2024 downwards by $3,564 giving total legal fees claimed of $32,204.80. I am satisfied that the amount of $32,204,80 for legal fees as adjusted are based on the maximum allowable hourly rate set out in the Current Determination and the Prior Determination. In addition, expert witness fees in relation to the fencing issue of $3,027.75 were claimed by Giabeni. The total costs claimed by Giabeni is therefore $35,232,55.
The strata company claims legal fees of $38,846.10 for the period 5 January 2024 to 30 June 2024 inclusive on the basis of the maximum hourly rate of $429 for a Senior Practitioner and $341 for a Junior Practitioner per the Prior Determination. Further, for the period 18 September 2024 to 18 October 2024 inclusive legal fees of $8,134.50 were claimed by the strata company on the basis of the maximum hourly rate of $484 for a Senior Practitioner and $385 for a Junior Practitioner per the Current Determination. In addition, the strata company claims $1,578.50 in relation to its costs application. In addition, the strata company claims disbursements of $1,249.74 with the main item being for costs of $1,196.26 paid to SVN Strata Management in relation to reviewing questions to be put to the strata managers. The total costs the strata company claims is therefore $49,808.84.
On balance, in my view, the legislative purpose of the SAT Act will be served by the strata company receiving its reasonable costs after making adjustments in the particular circumstances of this case where it would be fair and reasonable for the strata company to be deprived of part of its costs: Questdale at [58].
Taking a relatively broadbrush and pragmatic approach looking at the realities of the case where there is no itemised schedule of costs by the three issues: fencing, by-laws and reimbursement, and as a matter of impression and without any attempt at mathematical precision, I am satisfied, subject to the further comments below, that a total amount of $25,000 (out of total costs of $49,808.84) ought to be recovered by the strata company from Giabeni.
I accept the submission by counsel for Giabeni that Giabeni will still be liable for 6.25% (based on a unit entitlement of 1 unit out of 16 units) of the strata company legal costs of about $3,014.40 (or adjusted to $3,113 based on total costs of $49,808.84). This is on the basis that there is no scheme by-law that provides for a different basis for levying contributions by the strata company (s 100(1)(c) of the ST Act). In any event, in my view, it would not be fair and reasonable to adjust the $25,000 determined to be recovered by the strata company from Giabeni as set out in the preceding paragraph by $3,014.40 (or other amount) as all owners, whether or not they are party to the proceeding in the Tribunal, will be required to pay the amount strata levies according to their unit entitlement (or other basis if provided for by a scheme bylaw).
In my view, it is fair and reasonable to adjust the $25,000 downwards by $5,000, as a matter of impression and without any attempt at mathematic precision, in regards to the fencing issue on the basis that Giabeni was successful in getting an order from the Tribunal to break the 'deadlock' between the parties. The result is, in my view, that the strata company ought to recover costs fixed in the sum of $20,000 from Giabeni in the proceeding. For avoidance of doubt, the $25,000 payable by Giabeni to the strata company is to be offset by $5,000 payable by the strata company to Giabeni in respect of the fencing issue to arrive at costs fixed in the amount of $20,000 payable by Giabeni to the strata company.
Having dealt with the fencing issue, as far as it relates to Giabeni, in the previous paragraph by making a $5,000 downwards adjustment to the amount of costs the strata company ought to recover from Giabeni, as Giabeni was otherwise unsuccessful in its application, in my view, it would not be fair and reasonable in the particular circumstance or realities of this case, for Giabeni to recover any of its other costs in the proceeding as claimed (see above at [8] and [117]). It is therefore fair and reasonable, in my view, in all the circumstances or realities of this case to otherwise dismiss the applications for costs.

Conclusion

In conclusion, having regard to the objectives of the Tribunal and in the interests of justice, in my view, it is fair and reasonable, for the reasons set out above, that Giabeni be required to pay to the strata company costs fixed in the amount of $20,000 pursuant to s 87(2) of the SAT Act within 30 days of these orders, or as otherwise agreed in writing by Giabeni and the strata company. Further, pursuant to s 46(2) of the SAT Act, both Giabeni's application for costs and the strata company's application for costs are otherwise dismissed.

Orders

The Tribunal orders:
1.Pursuant to s 87(2) of the State Administrative Tribunal Act 2004 (WA), the applicant must pay costs fixed in the amount of $20,000 to the respondent to be paid within 30 days of these orders, or some other timeframe as agreed in writing by the applicant and the respondent.
2.Pursuant to s 46(2) of the State Administrative Tribunal Act 2004 (WA), the application for costs of each of the applicant and the respondent are otherwise dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MS R PETRUCCI, MEMBER
30 JANUARY 2025