HERITAGE HOMES (WA) PTY LTD and WERNICKE
[2012] WASAT 127
•21 JUNE 2012
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: COMMERCIAL & CIVIL
ACT: BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA)
CITATION: HERITAGE HOMES (WA) PTY LTD and WERNICKE [2012] WASAT 127
MEMBER: MS J MCGOWAN (SENIOR SESSIONAL MEMBER)
HEARD: 26 MARCH 2012
DELIVERED : 21 JUNE 2012
FILE NO/S: CC 199 of 2012
BETWEEN: HERITAGE HOMES (WA) PTY LTD
Applicant
AND
DALE WERNICKE
ANTOINETTE WERNICKE
Respondents
FILE NO/S :CC 246 of 2012
BETWEEN :DALE WERNICKE
ANTOINETTE WERNICKE
ApplicantsAND
HERITAGE HOMES (WA) PTY LTD
Respondent
Catchwords:
Building Services (Complaint Resolution and Administration) Act 2011 (WA) - Costs - State Administrative Tribunal Act 2004 (WA) s 87 - Costs
Legislation:
Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 49
State Administrative Tribunal Act 2004 (WA), s 9, s 87, s 87(3)
Result:
Applicant's application unsuccessful
Respondents' application unsuccessful
Category: B
Representation:
CC 199 of 2012
Counsel:
Applicant: Mr PV Monkhouse (Acting as Agent)
Respondents : Mr N Oud
Solicitors:
Applicant: Heritage Homes (WA) Pty Ltd
Respondents : Standpoint Legal
CC 246 of 2012
Counsel:
Applicants: Mr N Oud
Respondent: Mr PV Monkhouse (Acting as Agent)
Solicitors:
Applicants: Standpoint Legal
Respondent: Heritage Homes (WA) Pty Ltd
Case(s) referred to in decision(s):
Hoskins and Daniel Vinci T/As D'Vinci Contracting [2011] WASAT 188
Pearce & Anor and Germain [2007] WASAT 291 (S)
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
This matter arose from a matter that was the consolidation of two complaints relating to building work. The substantive complaint was the subject of an order following a hearing. At that hearing, the parties applied for costs and were ordered to provide grounds in writing, which were then considered by the Tribunal.
The Tribunal considered the effect of the cost provisions set out under s 49 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA). The Tribunal outlined that the application of s 49 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) must take into account the manner in which the Tribunal is to exercise its powers in relation to its jurisdiction in building matters; in particular, to provide an informal, inexpensive and flexible means of resolving disputes. Therefore, s 49 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) should be construed in a manner which promotes those objectives and procedures, but with reference to considerations identified in earlier decisions of the Tribunal on costs and any other factors that are relevant.
The Tribunal then dealt with the merits of the costs application. It dismissed both the applicant's and the respondents' application for costs.
The proceedings and application for costs
This matter is brought under the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BS(CRA) Act).
It is a consolidation of two complaints:
1)CC 199 of 2012 commenced on 12 January 2012 between Heritage Homes (WA) Pty Ltd as the applicant and Dale Wernicke and Antoinette Wernicke as the respondents; and
2)CC 246 of 2012 commenced on 27 January 2012 between Dale Wernicke and Antoinette Wernicke as the applicants and Heritage Homes (WA) Pty Ltd as the respondent.
Orders were made at a directions hearing on 23 February 2012 to consolidate the matters, the effect of which was that Heritage Homes Pty Ltd was to be referred to as the applicant and Dale Wernicke and Antoinette Wernicke as the respondents.
Both complaints were in relation to electrical work being part of building work the subject of a lump sum contract being entered into between the parties and dated 24 August 2009.
The applicant was seeking payment of a sum of $21,935, an amount alleged to be outstanding for electrical work undertaken by the applicant for the respondents (Folios 140 143). The respondents were seeking relief from payment of some, or all, of that sum.
The substantive complaint was determined at the hearing held on 26 March 2012, and an order issued. At the conclusion of that hearing, the respondents' solicitor requested that there be an order for costs in favour of the respondents.
Directions were then made that the parties could make a formal application in writing supported by appropriate submissions as to what orders should be made in respect to costs.
Both parties made an application for costs.
The respondents filed a submission in support of the costs application. They provided a draft bill of costs, together with copies of invoices actually raised in respect of all work done by their solicitors from 23 February 2012.
The applicant also filed a draft bill of costs and provided written submissions as to its claim for costs. It also provided a detailed response to the respondents' application.
The Tribunal took into consideration the written submissions provided by both parties over time in coming to its findings.
Applicant's bill of costs
The applicant's application for costs was presented in a document called 'Bill of Costs'. It listed items for which costs were sought in an unnumbered timesequence order. The total amount sought was $6,951.39. The Tribunal has grouped the items for which costs are sought for the purpose of clarity in these reasons as follows:
| Items identified by number allocated to its position in the sequence. | Description of item. |
| 1 8 | Communication with respondents regarding their complaint item, work in relation to prelodging of complaint form. |
| 9 12 | Preparing and lodging complaint and processing information regarding complaint after lodging. |
| 13 | Preparing for directions. |
| 14 | Attending at directions, hearing time and associated costs. |
| 15 19 | Preparing for hearing including collecting hearing booklets and associated costs. |
| 20 | Hearing, including costs and contractor's time at $400 per hour. |
These costs included a sum of $1,053.24 attributable to a business overhead margin, photocopying, parking, travelling, typing and attendance at the post office, and $100 in respect of an application fee.
Respondents' bill of costs
The respondents' costs were outlined in a threepage document called 'Statement of the basis upon which costs have been included in bill and annexures' which was received by the Tribunal on 13 April 2012. A bill of costs was also provided.
The amount claimed by the respondents' solicitors in their bill of costs is $7,669.20, inclusive of $768 disbursements which included witness fees. The costs were based on a chargeout rate of $352 per hour.
The charged costs as identified from the annexures in the 'Statement of the basis on which costs have been included in the bill and annexures' were $9,372, inclusive of $768 disbursements. The chargeout rate used to calculate this figure was an agreed $440 per hour.
Power to award costs
The power of the Tribunal to award costs under the State Administrative Tribunal Act 2004 (WA) (SAT Act) is contained in s 87 of the SAT Act, which materially provides:
(1)Unless otherwise specified in this Act, the enabling Act, or an order of the Tribunal under this section, parties bear their own costs in a proceeding of the Tribunal.
(2)Unless otherwise specified in the enabling Act, the Tribunal may make an order for the payment by a party of all or any of the costs of another party or of a person required to produce a document or other material on the application of the party under section 35.
…
The BS(CRA) Act is an enabling Act for the purposes of s 87 of the SAT Act. Section 49 of the BS(CRA) Act provides as follows:
(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.
(2)The Building Commissioner must not award costs to a party for the services of a representative of that party unless, in the opinion of the Building Commissioner, it is fair to do so, having regard to
(a)whether a party has acted in relation to a complaint in a way that unnecessarily disadvantaged another party; or
(b)whether a party has been responsible for prolonging unreasonably the time taken to deal with the complaint; or
(c)the relative strengths of the claims made by each of the parties; or
(d)any other matter the Building Commissioner considers relevant.
…
Section 87(3) of the SAT Act empowers the Tribunal to make an order for payment by a party of the costs of another party, which power includes the making of an order for the payment of an amount to compensate the other for any expenses, loss, inconvenience or embarrassment resulting from the proceeding or the matter because of which the proceeding was brought.
The matter of costs in matters under the BS(CRA) Act was addressed by Senior Member Raymond in Hoskins and Daniel Vinci T/As D'Vinci Contracting [2011] WASAT 188 (Hoskins), in which he indicated that the clear wording of s 49 of the BS(CRA) Act removes 'the initial predisposition against an award of costs'.
He went on to further provide, however, at [16]:
… the provisions should be construed in a manner which promote the objectives and procedures of the Tribunal because it is unconceivable [sic] that the purpose of the BS(CRA) Act would include any intention to change the fundamental basis upon which the Tribunal operates …
This fundamental basis is in s 9 of the SAT Act, which requires the Tribunal, in dealing with matters within its jurisdiction:
to act as speedily and with as little formality and technicality as is practicable, and minimise the costs to parties[.]
Hoskins, at [19], provides a guiding statement as to the award of costs under s 49 of the BS(CRA) Act:
Accordingly, s 49 of the BS(CRA) Act should not be understood as providing that costs will generally follow the result. It grants the Tribunal the broadest possible discretion in relation to costs and should be regarded as being entirely neutral in effect, but should be applied in a manner which is consistent with and reinforces the objectives and procedures of the Tribunal. 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.
A list of considerations relevant to the Tribunal when making a costs order was provided by Senior Member Raymond. It is to be noted that it is a nonexhaustive list. They arise from the discussion in Pearce & Anor and Germain[2007] WASAT 291 (S) (Pearce) at [22] [24], and are summarised below:
a)where a party conducts itself unreasonably, particularly where the conduct leads to unnecessary costs to the other party;
b)where a party has conducted itself inappropriately, particularly where the conduct leads to unnecessary costs to the other party;
c)where credibility of evidence is at the heart of the matter;
d)where the application undermines the integrity of proceedings under the relevant Act;
e)where the case is weak, being incredible or implausible or obviously unmeritorious; and
f)where a party has to embark on proceedings to vindicate its clear contractual entitlement.
Consideration of the costs claim
The following observations are relevant to the costs applications.
The issue in dispute was the cost of electrical work undertaken by the applicant for the respondents as part of building/renovation work undertaken at the respondents' residence.
The electrical works were a PS item in the contract between the parties. The PS amount provided for in that contract was $7,700. The applicant's claim was for $21,955 alleged to be outstanding in addition to the PS sum. The final amount ordered to be paid was inclusive of the PS sum.
The respondents issued their complaint following unsuccessful attempts to obtain an itemised statement of the costs of work as required by cl 11(d) of the building contract.
The applicant had not and did not provide an invoice itemising the cost of the work, telling the respondents that it 'could not and would not do so'.
Evidence was presented to the Tribunal as to those costs by Mr Jan Blazek, the contractor who undertook the work over a period in excess of two years.
Mr Blazek's evidence as to the work he undertook was not based or supported by timesheets of the time he or his assistants spent on the job, or by invoices of materials purchased. His charges were based only on his memory of the work.
The applicant was not legally represented.
The respondents obtained legal representation the day after the directions hearing on 23 February 2012.
The applicant's costs
The applicant's claim for costs is dismissed. The applicant has not provided the Tribunal with any reason to persuade it to depart from the principle in s 87 of the SAT Act.
The respondents' costs
The applicant refused to provide the respondents, when requested, with an itemised account for the cost of the electrical work. Without it, the respondents did not know the rationale, if any, for the invoiced amount and/or the subsequent legal proceedings. Once the applicant commenced proceedings, the respondents needed the itemised information in order to resist or otherwise deal with the claim. This was provided only at the hearing through the evidence of Mr Blazek.
The applicant's failure to disclose this important information on request was in breach of the building contract.
The exercise of the discretion to award costs to the respondents could potentially arise because:
1)The applicant conducted itself unreasonably in failing to provide particulars of the invoiced amount claimed under the contract, as required by the contract, despite requests from the respondents to so do. These particulars were at the heart of the issue in dispute, and when provided in evidence by the applicant's witness, Mr Blazek, clearly established the implausibility of the applicant's case.
2)The failure of the applicant to provide particulars of the invoiced amount claimed, as required by the contract, is both unreasonable and inappropriate conduct.
However, the Tribunal is not satisfied that there is sufficient justification to depart from the principle in s 87 of the SAT Act, despite the capacity to so do as provided for in s 49 of the BS(CRA) Act, for the following reasons:
1)The respondents personally issued their complaint, CC 246 of 2012.
2)The costs claimed were (in the main) for legal advice and representation at the hearing. The respondents engaged their lawyers after the directions hearing which they had personally attended. There was no substantial alteration to the issues in dispute that arose, either after the issue of the claim or from the directions hearing, to signal a need to engage legal representation for the hearing.
3)Although the respondent breached the building contract in failing to provide an invoice for the costs of work as required by cl 11(d), the breach was not one that was legally complex, requiring legal assistance to vindicate.
Thus, the Tribunal dismisses the respondents' claim for costs.
Orders
The Tribunal makes the following orders:
1.The applicant's claim for costs is dismissed.
2.The respondents' claim for costs is dismissed.
I certify that this and the preceding [43] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MS J MCGOWAN, SENIOR SESSIONAL MEMBER
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