GOODRICK and J-CORP PTY LTD

[2023] WASAT 70

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL

ACT: BUILDING SERVICES (COMPLAINT RESOLUTION AND ADMINISTRATION) ACT 2011 (WA)

CITATION:   GOODRICK and J-CORP PTY LTD [2023] WASAT 70

MEMBER:   MR D AITKEN, SENIOR MEMBER

HEARD:   DETERMINED ON THE DOCUMENTS

DELIVERED          :   2 AUGUST 2023

FILE NO/S:   CC 1573 of 2022

BETWEEN:   RODNEY MARTIN GOODRICK

First Applicant

DOMENICA VECCHIO

Second Applicant

AND

J-CORP PTY LTD

Respondent

Catchwords:

Building dispute - Application to withdraw proceeding - Whether proceeding should be dismissed or withdrawn - Section 46(2) of the State Administrative Tribunal Act 2004 (WA) - Costs - Failure by applicants to give a copy of application to withdraw proceeding to respondent - Respondent unnecessarily incurred costs before becoming aware of application to withdraw proceeding - Whether conduct of applicants has been inappropriate, unreasonable or an abuse of process

Legislation:

Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 5(2), s 10, s 11(1)(d), s 12(a), s 13(1), s 13(2), s 13(4), s 49
Home Building Contracts Act 1991 (WA), s 17, s 20, Sch 1, cl 5
State Administrative Tribunal Act 2004 (WA), s 9(b), s 42(1), s 46, s 46(1), s 46(2), s 46(5), s 49, s 60(2), s 87(2)

Result:

Leave given to withdraw proceeding and proceeding withdrawn
Respondent's application for costs partly successful

Category:    B

Representation:

Counsel:

First Applicant	:	N/A
Second Applicant	:	N/A
Respondent	:	N/A

Solicitors:

First Applicant	:	Morgan Alteruthemeyer Legal Group
Second Applicant	:	Morgan Alteruthemeyer Legal Group
Respondent	:	Hotchkin Hanly

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

Edmonds and Ventura Home Group Pty Ltd [2023] WASAT 34

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)

Medical Board of Western Australia and Kyi [2009] WASAT 22

Rogers v R (1994) 181 CLR 251

WA Country Builders Pty Ltd and Hathersage Nominees Pty Ltd [2016] WASAT 70

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

1. This proceeding concerns a complaint made under the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BSCRA Act) which has been referred to the Tribunal by the Building Commissioner.

2. The applicants, Rodney Goodrick and Domenica Vecchio (Applicants) are seeking leave to withdraw the proceeding and that the proceeding be withdrawn, with no order as to costs.

3. The respondent, J-Corp Pty Ltd (Respondent) does not object to the Tribunal granting leave to the Applicants to withdraw the proceeding but is seeking that the proceeding be dismissed instead of being withdrawn.  The Respondent is also seeking costs against the Applicants. 

4. Section 46(1) of the State Administrative Tribunal Act 2004 (WA) (SAT Act) provides that if the Tribunal gives leave the applicant may withdraw a proceeding and s 46(2) of the SAT Act provides that the Tribunal may make an order dismissing a proceeding if the applicant withdraws the proceeding.

Issues to be determined

1. The issues which need to be determined are:

   First issue:Should I make an order that the proceeding is withdrawn, or should I make an order that the proceeding is dismissed?

   Second issue:       Should I order that the Applicants pay costs to the Respondent?

Decision

1. For the reasons which follow I have decided to give leave to the Applicants to withdraw the proceeding and order that the proceeding is withdrawn (not that it is dismissed) and order that the Applicants pay to the Respondent costs fixed in the amount of $943 within 28 days.

History of the proceeding in the Tribunal

1. On 26 October 2022 the Building Commissioner referred to the Tribunal[1] a HBWC complaint[2] (Complaint) made to the Building Commissioner by the Applicants against the Respondent, which commenced this proceeding.[3]

   [1] Pursuant to s 11(1)(d) of the BSCRA Act.

   [2] A HBWC complaint is a complaint to the Building Commissioner about a matter referred to in s 17 or s 20 or Sch 1 cl 5 of the Home Building Contracts Act 1991 (WA): s 5(2) of the BSCRA Act.

   [3] Pursuant to s 42(1) of the SAT Act. Section 12(a) of the BSCRA Act provides that the complainant who made the complaint to the Building Commissioner is taken to be the applicant in the Tribunal proceeding.

2. The Complaint has arisen from a building contract (Contract) between the parties dated 3 September 2021 for the construction of a new residential dwelling in Viveash. 

3. There are two items of complaint:

   1)The Respondent has failed to comply with the time for completion stipulated under the Contract, being within 365 'days' of site work when construction commenced.

   2)The Respondent increasing the Contract price is due to the Respondent's failure to comply with the time for completion stipulated under the Contract.

4. A directions hearing was held on 13 December 2022 at which I made orders, by consent, referring the matter to mediation by a member of the Tribunal on 9 February 2023, with each party required to file with the Tribunal and give to the other party prior to the mediation a concise 'without prejudice' position paper of no more than three pages.

5. The matter was not resolved at the mediation, and it was listed for a further directions hearing to be held before me on 16 March 2023.

Withdrawal Application

1. On 22 February 2023 the Applicants' legal representative, Morgan Alteruthemeyer filed a letter with the Tribunal (Withdrawal Application) seeking the following orders:

   1)Pursuant to section 46(1) of the SAT Act the Applicants have leave to withdraw the proceeding.

   2)The proceeding be withdrawn.

   3)There be no order as to costs.

2. The Withdrawal Application stated that:

   a)The Applicants made the Complaint to the Building Commissioner on 14 September 2022 seeking a time and cost efficient resolution for what they claim is the Respondent's breach of the Contract to construct the residential dwelling by 2 March 2022.

   b)The Building Commissioner referred the Complaint to the Tribunal due to its complex nature.

   c)The parties filed position papers agreeing the issues to be determined in the proceeding.

   d)In the Applicants' view they will not be able to deal with the matter in a manner which achieves their objective of reaching a cost and time efficient resolution with the Respondent.

   e)In the circumstances, the Applicants seek leave to withdraw the proceeding on the basis that:

   1)the issues in the proceeding are complex legal and evidential issues that can only be determined at a hearing because few if any facts can be agreed between the parties; and

   2)the Applicants' mental health has suffered significantly in the course of the proceeding and, in their view, is likely to deteriorate if the matter continues. 

3. Morgan Alteruthemeyer did not give a copy of the Withdrawal Application to the Respondent's legal representative, Hotchkin Hanly and on 1 March 2023 the Tribunal sent a copy of the Withdrawal Application to Hotchkin Hanly seeking the view of the Respondent.

4. On 3 March 2023 Hotchkin Hanly filed a letter with the Tribunal stating that the Respondent does not consent to the orders proposed in the Withdrawal Application.

Respondent's Application

1. On 15 March 2023 Hotchkin Hanly filed a letter with the Tribunal (Respondent's Application) seeking the following orders:

   1)Pursuant to section 46(1) of the SAT Act the Applicants have leave to withdraw the proceeding and the proceeding is hereby dismissed.

   2)The Applicants pay the Respondent's costs of the proceeding to be assessed, alternatively, the Respondent's costs incurred in drafting the letter from Hotchkin Hanly to Morgan Alteruthemeyer dated 28 February 2023.

2. Enclosed with the Respondent's Application were copies of letters which Hotchkin Hanly had sent to Morgan Alteruthemeyer dated 28 February 2023 and 8 March 2023 which Hotchkin Hanly says set out the basis for the Respondent's Application. It is not necessary for me to provide any details from those letters in these reasons because the Respondent set out the basis for the Respondent's Application in its submissions provided in accordance with the order referred to in [18] below.

3. At the directions hearing on 16 March 2023, I made an order for the Respondent to provide written submissions addressing the basis on which it contends that the proceeding should be dismissed (rather than being withdrawn) and that costs should be awarded to the respondent, and a schedule of the costs claimed. I also made an order for the Applicants to provide submissions in opposition to the Respondent's Application. Finally, I ordered that those matters would be determined entirely on the documents pursuant to s 60(2) of the SAT Act.

4. The parties provided their submissions and subsequently, by consent, the Respondent provided responsive submissions to the Applicants' submissions, which had referred to a decision of the Tribunal which had been published after the Respondent had provided its original submissions.

Respondent's submissions

1. The Respondent agrees to leave being granted to the Applicants to withdraw the proceeding, but on the basis that the Tribunal makes an order that the proceeding is dismissed, not withdrawn.

2. The Respondent seeks an order that the Applicants pay its costs in the proceeding of $16,000, or alternatively pay its costs of $943 for Hotchkin Hanly preparing and sending its letter to Morgan Alteruthemeyer dated 28 February 2023. 

3. The Respondent also seeks an order that the Applicants pay its costs of the Respondent's Application of $2,745.

4. The costs schedule attached to the Respondent's submissions describes the costs claimed by the Respondent as follows:

Date	Description	Time Recorded
26/10/22 to 18/11/22	Initial attendances on client; considering documentation relevant to claim (investigation report, other Building Commission documents, contract and correspondence between the parties); preparing notice of representation; preparing Questionnaire for filing and service; liaising with client for instructions.	56 units ($2,402.40 at scale)
7/12/23 to 9/2/23	Reading correspondence from Tribunal; preparing orders for hearing; email to client regarding orders; reading email from client; email to applicants' lawyers re orders; arranging for lodging of proposed orders; reading email from applicants' lawyers; preparing consent orders; emails re consent orders; preparing for and attending hearing on 13/12/23. Preliminary work for position paper, considering applicants' position paper received 25 January 2023; considering amended position paper 27 January 2023; correspondence with applicants' lawyers; preparing responsive position paper (including research on decisions referred to in applicants' paper; calculation of times under contract); preparing for mediation; attending mediation (44 units).	215 units ($9,223.50 at scale)
13/2/23 to 28/2/23	Work undertaken in liaising with client re Without prejudice save as to costs letter; preparing and sending letter dated 28 February 2023.	22 units ($943.80 at scale)
1/3/23 to 22/3/23	Corresponding with SAT; reading Withdrawal Letter; corresponding with applicants' lawyers; telephone with applicants' lawyers; drafting further offer of settlement; preparing for and attending SAT hearing on 16 March 2023.	89 units ($3,818.10 at scale)
Total	382 units $16,387 at scale
22/3/23	Preparing submissions	64 units ($2,745.60 at scale)

1. The Respondent refers to s 87(2) of the SAT Act which confers a discretionary power on the Tribunal to make an order for the payment by a party of all or any of the costs of another party. The Respondent also refers to s 49 of the BSCRA Act, which provides that the Tribunal may make such orders for costs as it thinks fit in relation to proceedings arising from a HBWC complaint.

2. The Respondent submits that these provisions contemplate costs orders being made for conduct that has caused another party to incur costs, where that conduct is unreasonable, inappropriate or is an abuse of process.  The Respondent refers to Medical Board of Western Australia and Kyi [2009] WASAT 22 (Kyi) at [73] and [74] in support of this submission.

3. The Respondent says that:

   (a)The Second Applicant, Ms Vecchio is a promoter of a group of owners who are behind a group who wish to make a 'class action' claim against the Respondent, and other corporate entities, said to comprise the 'BGC Group'.

   (b)Ms Vecchio is an administrator for the group of owners.

   (c)Ms Vecchio messaged Mr Michael Bartier, the Executive General Manager for the BGC Housing Group on 13 October 2022 (after requesting the matter be referred to the Tribunal) saying 'Michael, I said it to Jason our area manager … and I'll say it again, I won't stop!  I will keep pushing forward for justice for all affected'.

   (d)In October 2022 (after requesting the matter be referred to the Tribunal), Ms Vecchio was active in progressing the 'BGC Class Action Group'.

   (e)The Applicants' legal representative, Morgan Alteruthemeyer has confirmed publicly that it is working with Ms Vecchio in regard to the preparation of a class action, stating 'The admins of the BGC Class Action Facebook Group are working with us to examine the possibility of bringing a Class Action against the BGC Group. Based on the documentation provided by BGC Group homeowners to date, there appear to be causes of action under the Australian Consumer Law, the Home Building Contracts Act 1991 and the individual building contracts. We are currently in discussion with litigation funders on behalf of the BGC Class Action Facebook Group and will provide an update on this matter shortly'. As at the date of these submissions, the Applicants' legal representative continues to publish the above statement.

   (f)On 3 March 2023, The West Australian published a story in which the Applicants' legal representatives were quoted as follows 'Morgan Alteruthemeyer Legal Group is acting on behalf of affected homeowners "regarding the impacts of construction delays"'.

4. The Respondent submits that the 'inescapable inference' from the above is that the Applicants intend to pursue their claims via the class action group of which they are a part and have been a part since the matter was referred to the Tribunal by the Building Commissioner.

5. The Respondent submits that the Applicants 'have metaphorically dipped their toes in the Tribunal's waters, and now seek to swim elsewhere' and that course has come at considerable cost to the Respondent.

6. The Respondent submits that the conduct of the Applicants:

   a)by commencing the proceeding in the Tribunal and compelling the Respondent to incur costs in addressing disputed allegations;[4]

   b)seeking, without notice, without conferral and without any concession that the dispute is no longer pursued, to withdraw the proceeding prior to any determination; and

   c)with the intention to pursue the same allegations in an alternative jurisdiction, which will inevitably lead the Respondent to incur costs again in addressing the same matters,

   is inappropriate or unreasonable conduct and 'constitutes an abuse, in that it involves an unfair use of the Tribunal's processes and procedures (to require the Respondent to incur costs of preparing for and attending hearings, to prepare a position paper and attend mediation, with all those steps resulting in no benefit) and arguably brings the administration of justice into disrepute'.  The Respondent refers to Rogers v R (1994) 181 CLR 251 (Rogers) at 286 as authority for the latter contention.

   [4] It should be noted that it is not the Applicants who commenced the proceeding.  It was the Building Commissioner who commenced the proceeding by referring the Complaint to the Tribunal (albeit, following a request by the Applicants' legal representative that the Building Commissioner do that):  see [7] of these reasons.

7. The Respondent submits that it has been understood by the Applicants since before the matter was commenced in the Tribunal that the allegations were disputed and that the matter involved some complexity and the Applicants' explanation that they are seeking to withdraw the proceeding almost six months after it commenced because there are complex legal and evidential issues should not be accepted.

8. The Respondent submits that all disputes are (unfortunately) stressful and it was the Applicants who, with knowledge of the fact that their allegations were disputed and the reasons why they were disputed, chose a course of action that would, inevitably, cause the Respondent to incur costs but increase their own stress.  The Respondent submits that, for that reason, the Applicants' unsubstantiated explanation as to the effect of the proceedings on their health, should not excuse them from the consequences of their conduct. 

Applicants' submissions

1. The Applicants refer to s 49 of the BSCRA Act and several decisions of the Tribunal concerning applications for costs; Hoskins and Daniel Vinci T/as D'Vinci Contracting [2011] WASAT 188 at [13], WA Country Builders Pty Ltd and Hathersage Nominees Pty Ltd [2016] WASAT 70 (WA Country Builders) at [12] and [14] and Edmonds and Ventura Home Group Pty Ltd [2023] WASAT 34 (Edmonds) at [24] and [25].

2. The Applicants submit that the recent decision of the Tribunal in Edmonds is a case 'where the respondent withdrew the proceedings by conceding the essence of the claim sought by the applicants, being the withdrawal of extensions of time notices'.

3. The Applicants submit that they have not conducted themselves or the proceeding by acting in a way that was unreasonable, or 'unnecessarily prolonged the hearing' or by acting inappropriately, capriciously or in some other way abused the process of the Tribunal.

4. The Applicants say that their decision to withdraw the proceeding is based on commercial and mental health grounds, because the complexity of the proceeding necessitated legal representation beyond the mediation and their mental health has suffered significantly during the proceeding and, in their view, was likely to deteriorate if they continued with the matter.

5. The Applicants make the point that the Withdrawal Application was made 11 days after the unsuccessful mediation of the matter.  The Applicants submit that this is in line with the reasoning of the decision in Edmonds and that the withdrawal of proceedings which otherwise, on their face, constitute a genuine dispute is insufficient to enliven the discretion of the Tribunal to make an adverse costs order.   

6. The Applicants submit that the inference that the Respondent is asking the Tribunal to draw that they have some ulterior motive for the withdrawal of the proceeding in connection with a potential 'class action' against 'the BGC Housing Group' should not be accepted because:

   (a)there is no class action on foot against 'BGC';

   (b)the Applicants' inferred alleged intention to join or not join the class action is irrelevant as the terms of entry into the class are not defined (because there is no class action on foot);

   (c)the Applicants' rejection of the Respondents' offers of settlement being evidence of an ulterior motive or intention is also without basis.  The mere rejection of a settlement offer cannot be seen to show an intention to join a non-existent class action;

   (d)the question of whether the Applicants' claim could be pursued in another jurisdiction is a matter of law;

   (e)the Respondent consented to leave being granted to the Applicants for the proceeding to be withdrawn;

   (f)if the Respondent truly believed that the Applicants had an ulterior motive for withdrawing the proceeding then they could have withheld consent; and

   (g)the Respondent's submissions show that the Respondent is seeking the costs order to 'punish' the Applicants for being involved in a Facebook group which is against the interests of 'BGC as a whole'.

1. The Applicants submit it is the Respondent who is acting unreasonably in making the Respondent's Application.

Respondent's responsive submissions

1. The Respondent says, correctly, that the submission by the Applicants, referred to in [33] above, that the respondent in Edmonds withdrew the proceeding by conceding the essence of the claims against it is wrong because the respondent in Edmonds did not withdraw the proceeding (which as a respondent it could not do) nor did it 'concede the essence of the claim'.

History of the Complaint with the Building Commissioner

1. Before I consider the issues which I need to determine, I note the history of the Complaint with the Building Commissioner.

2. The investigation report[5] provided to the Tribunal by the Building Commissioner when the Complaint was referred to the Tribunal states that:

   •The Complaint was lodged with the Building Commissioner on 14 June 2022 and accepted by the Building Commissioner's delegate on 2 September 2022.

   •After the Complaint was accepted, the Respondent was requested to provide its comments and, in response, the Respondent made submissions to the Building Commissioner seeking that the Complaint be dismissed.

   •The Applicants' legal representative disputed the Respondent's submissions and requested that the Complaint be referred to the Tribunal.

   •The Building Commissioner's authorised investigator recommended to the Building Commissioner that the Complaint be referred to the Tribunal due to the complex nature of the Complaint in which the evidence is contested.

   •The Building Commissioner referred the Complaint to the Tribunal. 

First issue:  should I make an order that the proceeding is withdrawn, or should I make an order that the proceeding is dismissed?

[5] Pursuant to s 10 of the BSCRA Act.

1. The Tribunal has a discretion under s 46(1) of the SAT Act as to whether it gives an applicant leave to withdraw a proceeding.[6]

   [6] I note that s 13(1) of the BSCRA Act provides that a building service complaint or a HBWC complaint may, subject to that section, be withdrawn by the complainant. However, s 13(2) of the BSCRA Act provides that a complaint cannot be withdrawn if it has been referred to the Tribunal and s 13(4) of the BSCRA Act provides that the section does not limit the powers of the Tribunal under s 46 of the SAT Act.

2. In this matter the Respondent consents to the Tribunal giving the Applicants leave to withdraw the proceeding and, therefore, I will give that leave.

3. The Tribunal has a discretion under s 46(2) of the SAT Act as to whether to make an order dismissing a proceeding if an applicant withdraws the proceeding.

4. The SAT Act does not prescribe the considerations relevant to the exercise of the power given to the Tribunal to dismiss a proceeding under s 46(2) of the SAT Act.

5. In my view, the considerations which are relevant to the exercise of power under s 46(2) of the SAT Act to dismiss a proceeding include:

   1)the reason for the withdrawal of the proceeding;

   2)the stage of the proceeding at which an applicant is seeking to withdraw the proceeding; and

   3)whether there is any prejudice to the respondent if the matter is not dismissed and is simply withdrawn.

6. Where the parties to a proceeding consent to the Tribunal giving leave to withdraw and either making an order that the proceeding is withdrawn or an order that the proceeding is dismissed, I would expect that the Tribunal would normally make the order as requested by the parties. However, I note that s 46(5) of the SAT Act provides that the Tribunal may make an order under s 46 on the application of a party or on its own initiative.

7. One instance in which, in my view, the Tribunal might, on its own initiative, make an order that a proceeding is dismissed pursuant to s 46(2) of the SAT Act, rather than an order that the proceeding is withdrawn, even though the respondent has consented to an order that it be withdrawn, might be when a proceeding is at the stage of a final hearing or is ready to be listed for a final hearing and considerable resources of the Tribunal have been utilised in the proceeding getting to that stage.

What is the reason for the withdrawal of the proceeding?

1. The Applicants' reasons for seeking to withdraw the proceeding are set out in [13] above.

2. The Respondent does not accept those stated reasons and submits that I should draw the 'inescapable inference' that the reason for the Applicants wishing to withdraw the proceeding is that they intend to pursue their claims via a 'class action group'.[7]

   [7] See [26] - [29] of these reasons.

3. There is not enough evidence before me to be able to decide whether the reasons given by the Applicants are valid, or to decide whether I should draw the inference which the Respondent asks me to draw.  

4. I accept the Respondent's submission that all disputes are, unfortunately, stressful.  In my view, if an applicant in a proceeding in the Tribunal decides at any stage in the proceeding that they do not want to pursue the matter any further because of the stress that they are experiencing then that is an understandable reason they might decide to seek to withdraw the proceeding.  That might then give rise to the issues first, of whether the Tribunal should make an order that the proceeding be dismissed rather than an order that the proceeding be withdrawn and secondly, whether any costs should be awarded against the applicant.  In this matter the Respondent has raised those issues.

5. I do not accept the Respondent's submission referred to in [29] above that the conduct of the Applicants in this proceeding has been inappropriate, unreasonable or an abuse of process.

6. In Rogers at 286, McHugh J observed that abuses of process in legal proceedings usually fall into one of three categories, namely (1) where a court's procedures are invoked for an illegitimate purpose; (2) the use of the court's procedures is unjustifiably oppressive to one of the parties; or (3) where the use of the court's procedures would bring the administration of justice into disrepute.

7. The Respondent has referred to the third category in its submissions.  I do not accept that the Applicants conduct in attending an initial directions hearing, then a mediation conference, and then seeking to withdraw the proceeding is a use of the Tribunal's procedures in a way which brings the administration of justice into disrepute.  

At what stage is the proceeding?

1. The proceeding is at an early stage.

2. In accordance with the usual practice of the Tribunal when the Complaint was referred to the Tribunal by the Building Commissioner on 26 October 2022 the matter was listed for an initial directions hearing on 13 December 2022.

3. At the request of the parties, and in accordance with the usual practice of the Tribunal, at the first directions hearing the matter was referred to mediation on 9 February 2023, with the parties required to file with the Tribunal and give to each other a concise 'without prejudice' position paper of no more than three pages for the purpose of the mediation.

4. The matter was not resolved at the mediation, and it was listed for a further directions hearing on 16 March 2023.

5. On 22 February 2023 the Applicants filed with the Tribunal the Withdrawal Application.

6. The Applicants' legal representative, Morgan Alteruthemeyer was remiss in not giving a copy of the Withdrawal Application to the Respondent's legal representative, Hotchkin Hanly and the Respondent only became aware of the Withdrawal Application when the Tribunal sent a copy of it to Hotchkin Hanly on 1 March 2023 seeking the view of the Respondent.

7. If the Respondent had consented to the Withdrawal Application, I would have made the orders sought by the Applicants administratively and vacated the directions hearing.

8. However, the Respondent notified the Tribunal on 3 March 2023 that it did not consent to the orders proposed in the Withdrawal Application and then on 15 March 2023 the Respondent filed the Respondent's Application.

9. Therefore, the directions hearing proceeded on 16 March 2023 and I made the orders referred to in [18] above, so that I could determine the Respondent's Application.   

Is there any prejudice to the Respondent if the proceeding is not dismissed and is simply withdrawn?

1. The significance of a proceeding being dismissed under s 46(2) of the SAT Act, instead of being withdrawn, is that s 49 of the SAT Act provides that another proceeding of the same kind in relation to the same matter cannot be commenced without the leave of a judicial member.[8]

   [8] In the case of a HBWC complaint which is referred to the Tribunal by the Building Commissioner the proceeding in the Tribunal commences when the complaint is received by the Tribunal from the Building Commissioner, so it would be at that time that s 49 of the SAT Act would apply.

2. I do not think there is any prejudice to the Respondent if the proceeding is withdrawn, rather than dismissed.  In my view, the Complaint seems to be genuine, although the Respondent clearly strongly contests it.  Due to the proceeding being at an early stage there has not been any evidence or legal arguments presented to the Tribunal on which I can form a view on the merits of the Complaint. 

Decision regarding whether to order the withdrawal or the dismissal of the proceeding

1. As I have stated above, I have not accepted the Respondent's submission that the conduct of the Applicants in this proceeding has been inappropriate, unreasonable or an abuse of process.

2. Also, I have not drawn the inference the Respondent asks me to draw that the reason for the Applicants wishing to withdraw the proceeding is that they intend to pursue their claims via a 'class action group'.

3. The proceeding is at an early stage, with just an initial directions hearing, and a mediation held, which did not resolve the matter, before the Applicants sought leave to withdraw the proceeding.

4. As I have stated above, I do not think there is any prejudice to the Respondent if the proceeding is withdrawn, rather than dismissed.  In my view, the Complaint seems to be genuine, although the Respondent clearly strongly contests it.  Due to the proceeding being at an early stage there has not been any evidence or legal arguments presented to the Tribunal on which I can form a view on the merits of the Complaint.

5. The Respondent consents to leave being given by the Tribunal for the proceeding to be withdrawn.

6. In these circumstances I consider it to be fair and reasonable to give leave to the Applicants to withdraw the proceeding and make an order that the proceeding is withdrawn (not dismissed).

Second issue:  should I award any costs to the respondent?

Applicable principles

1. The applicable principles regarding the costs in a proceeding which is before the Tribunal under the BSCRA Act are well established and were conveniently set out in the decision of the Tribunal in WA Country Builders at [10] - [15] as follows:

   10Section 87(1) of the State Administrative Tribunal Act 2004 (WA) (SAT Act) directs that unless otherwise specified in:

   •the SAT Act;

   •the relevant enabling Act;

   •in any other order of the Tribunal made pursuant to s 87(2) to s 87(6) of the SAT Act,

   the parties bear their own costs in a proceeding of the Tribunal.

   11Section 87(2) of the SAT Act confers a discretionary power on the Tribunal to make an order for the payment by a party of all or any of the costs of another party, unless specified to the contrary in the relevant enabling Act.

   12Section 49 of the BSCRA Act (the enabling Act in this proceeding) relevantly provides:

   (1)Subject to this section, the Building Commissioner or the State Administrative Tribunal may make such orders for costs as they think fit in relation to proceedings arising from a building service complaint or a HBWC complaint.

   ...

   (7)This section does not limit the powers of the State Administrative Tribunal under the State Administrative Tribunal Act 2004 Part 4 Division 5.

   Section 49 of the BSCRA Act is 'neutral in effect' and should be applied in a manner which is consistent with and reinforces the objectives and procedures of the Tribunal: Hoskins and Daniel Vinci T/As D'Vinci Contracting [2011] WASAT 188 (24 November 2011) (Hoskins).  In Hoskins, the Tribunal commented at [19]:

   … In the exercise of that discretion all of the considerations identified above in relation to the exercise of the discretion under s 87 of the SAT Act remain relevant. Those considerations are however not exhaustive and any other factors will be relevant which point to the justice of the case requiring an award of costs.

   (Tribunal emphasis)

   13The Tribunal stated in Chew and Director General of the Department of Education and Training [2006] WASAT 248 (Chew) at [85] that in exercising the discretion conferred on the Tribunal by s 87(2) of the SAT Act:

   [T]he Tribunal should not generally make an award for costs unless a party has conducted itself in such a way as to unnecessarily prolong the hearing; has acted unreasonably or inappropriately in its conduct of the proceedings, has been capricious; or the proceedings in some other way constitute an abuse of process.  The Tribunal might also make an order as to costs where a matter has been brought vexatiously or for improper purposes. 

   Further, in Pearce & Anor and Germain [2007] WASAT 291 (S) (Pearce) at [24], the Tribunal stated:

   … Where, however, there is a genuine dispute between the parties to a lease, their respective rights are unclear and one or both seek determination of their rights in the Tribunal, the starting point remains that each party should expect to pay their own costs, unless there are circumstances of the type identified in Chew.

   14The Tribunal's statements in Hoskins, Chew and Pearce are consistent with Western Australia Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32 (Questdale) where the Court of Appeal gave consideration to the operation of s 87(1) of the SAT Act and the exercise of the discretion conferred upon the Tribunal by s 87(2) of the SAT Act, albeit in relation to a different enabling Act. The following relevant principles apply to the resolution of the costs dispute:

   1)Beyond s 87(4) and s 87(5) of the SAT Act and r 42(2) of the State Administrative Tribunal Rules 2004 (WA) (SAT Rules), the facts which the Tribunal is bound to consider and is precluded from considering are to be determined by implication from the subject matter, scope and purpose of the SAT Act properly construed: Questdale per Murphy JA (with whom Martin CJ and Corboy J agreed) at [48].

   2)The discretionary power is to be exercised judicially; that is, not arbitrarily, capriciously or so as to frustrate the legislative intent:  Questdale per Murphy JA (with whom Martin CJ and Corboy J agreed) at [48].

   3)Although not expressed in s 87(2) of the SAT Act or elsewhere that the power 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 of the power and the scheme of the SAT Act indicates that legislative intention: Questdale per Murphy JA (with whom Martin CJ and Corboy J agreed) at [49].

   4)The presumptions as to costs orders that operate in curial litigation have no application, given the provisions of s 87(1) of the SAT Act and the directive contained therein: Questdale per Murphy JA (with whom Martin CJ and Corboy J agreed) at [50].

   5)The onus is on the party seeking an order in its favour to establish that a favourable order should be made:  Questdale per Murphy JA (with whom Martin CJ and Corboy J agreed) at [51].

   6)The nature of the dispute is a relevant consideration in any application for costs:  Questdale per Murphy JA (with whom Martin CJ and Corboy J agreed) at [58].

   7)Every party to proceedings before the Tribunal is taken to be cognisant of the objectives of the Tribunal as expressly provided for in s 9 of the SAT Act: Questdale per Murphy JA (with whom Martin CJ and Corboy J agreed) at [54].

   8)It will be relevant to the Tribunal to consider whether and to what extent the party who bears the onus on costs can establish that the other party's conduct in connection with the proceedings has impaired the attainment of the Tribunal's statutory objectives to have the proceedings determined fairly and in accordance with the substantial merits of the matter, with as little formality and technicality as possible and in a way which minimises the costs of the parties:  Questdale per Murphy JA (with whom Martin CJ and Corboy J agreed) at [54].

   9)The mere fact that a party fails on some contentions advanced does not of itself signify that that party has acted 'inconsistently with the objectives in s 9 [of the SAT Act]': Questdale per Murphy JA (with whom Martin CJ and Corboy J agreed) at [55].

   10)Unmeritorious claims or claims made or pursued involving misconduct or which are vexatious or grossly exaggerated or presented in a way that is unduly burdensome may justify an exercise of the discretion conferred by s 87(2) of the SAT Act.

   11)The weight to be given to the mandatory consideration of a complaint offer is a matter for the Tribunal in each individual case:  Questdale per Murphy JA (with whom Martin CJ and Corboy J agreed) at [59].

   12)Even in a jurisdiction where the general rule is that costs follow the event, it does not follow that the grant of leave to withdraw attracts an order that the withdrawing party pay the costs of the other party.  The withdrawing party does not carry any onus to establish it ought not pay the other party's costs:  Questdale per Murphy JA (with whom Martin CJ and Corboy J agreed) at [65].

   15The Tribunal concludes that the discretion conferred by s 87(2) of the SAT Act is informed by the overarching obligation to exercise the discretion judicially and where it is fair and reasonable in all of the circumstances, including a consideration of the nature of the jurisdiction exercised by the Tribunal 'but starting from the position that no order for costs will be made': Questdale per Martin CJ at [9]. Further, the provisions of s 49(1) of the SAT Act do not alter the nature of the discretion to be exercised by the Tribunal in awarding costs to a party pursuant to s 87(1) and s 87(2) of the SAT Act, and do not direct the Tribunal to make orders that are not consistent with the s 9 objectives of the Tribunal.

2. The principles set out in Kyi at [73] - [74] are also relevant, in which the Tribunal stated:

   73General principles regarding costs were also discussed in Summerville and Department of Education and Training [2006] WASAT 368 (S) at [23] - [44]. If a party has conducted itself in such a way as to unnecessarily prolong the hearing, has acted unreasonably or inappropriately in its conduct of the proceedings, has been capricious, or the proceedings in some other way constitute an abuse of process, then this may give rise to an exercise of the discretion to award costs. This encompasses a situation where proceedings should not have been maintained against a party because it is clearly untenable and no reasonable person would have believed they could be successful. These principles are also generally applicable to vocational regulation proceedings.

   74Thus the Tribunal's discretion to award costs extends to ordering the payment of costs incurred unnecessarily by a failure of a party to act appropriately in a particular circumstance in the conduct of the proceedings.  Considering the primary position of the Tribunal as a no costs jurisdiction, it is not sufficient merely to identify that a party may have conducted itself in a different manner and thereby reduced costs incurred; it will usually be necessary to show that the conduct of the party was unreasonable and unfairly caused the increased costs.

Decision regarding costs

1. On 28 February 2023, Hotchkin Hanly, being unaware of the Withdrawal Application, prepared and sent a 'without prejudice save as to costs' letter to Morgan Alteruthemeyer making an offer to settle the matter.  I can take that into account for the purposes of deciding whether to award costs to the Respondent.

2. In my view, because Morgan Alteruthemeyer did not give a copy of the Withdrawal Application to Hotchkin Hanly (for which Morgan Alteruthemeyer has not given any explanation in the Applicants' submissions) the Respondent unnecessarily incurred the costs of Hotchkin Hanly preparing and sending that letter on 28 February 2023.  That letter is four pages long and the amount claimed by the Respondent for the preparation of it is reasonable.  Therefore, I will order the Applicants to pay the costs claimed by the Respondent of $943 for that letter.  I consider that a period of 28 days for the Applicants to pay that amount is appropriate.

3. In my view, the Respondent has not satisfied the onus of establishing that it is fair and reasonable to award to the Respondent any of the other costs claimed by it for the following reasons:

   1)There was nothing out of the ordinary in how this proceeding has been dealt with in the Tribunal.  The only stages in the proceeding have been the initial directions hearing, the mediation and then the second directions hearing.

   2)Whether or not there is, or may be, a 'class action' (more accurately described as a 'representative action') against the 'BGC Group' in another jurisdiction[9] in which the Applicants may participate is not relevant to this proceeding.  This proceeding is concerned only with the Complaint which has been referred to the Tribunal by the Building Commissioner.

   3)The preparation of concise 'without prejudice' position statements for the purpose of a mediation is the usual practice in these types of matters.  In my view it is fair and reasonable to expect that each party will prepare their statement at their own cost in the interest of endeavouring to resolve the matter by mediation. 

   4)Parties are expected to minimise their costs in a proceeding before the Tribunal in accordance with the objective of the Tribunal stated in s 9(b) of the SAT Act to minimise the costs to parties: J & P Metals Pty Ltd and Shire of Dardanup [2006] WASAT 282 (S) at [38].

   5)I am surprised that the Respondent has incurred the costs claimed of $2,402.40, $9,223.50 and $3,818.10 which are set out in the table in [23] above, in the circumstances where there has only been an initial directions hearings, a mediation and then a further directions hearing, with no programming orders made for anything to be prepared and filed other than the concise 'without prejudice' position statements for the mediation.  However, that is a matter for the Respondent, and I suspect it may be related to the Respondent's view regarding what it considers to be a potential 'class action' against it (or the 'BGC Group').

   6)The Respondent's Application has substantially failed, with the exception only of my decision to award to the Respondent the costs of $943 referred to in [76] above.  Therefore, in my view it is not fair or reasonable that the Applicants be ordered to pay the costs of $2,745 incurred by the Respondent in making the Respondent's Application.  

   [9] There is no provision in the BSCRA Act, nor in the SAT Act which would enable a 'representative action' before the Tribunal.

Conclusion

1. For the reasons I have given I will make the usual order to give leave to the Applicants to withdraw the proceeding and that it is withdrawn, and I will order the Applicants to pay the Respondent's costs fixed at $943 within 28 days.

Orders

1. I will make the following orders:

   The Tribunal orders:

   1.Pursuant to s 46(1) of the State Administrative Tribunal Act 2004 (WA) the Applicants have leave to withdraw this proceeding and the proceeding is withdrawn.

   2.By 30 August 2023 the Applicants are to pay to the Respondent the Respondent's costs fixed at $943.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.

MR D AITKEN, SENIOR MEMBER

2 AUGUST 2023