J-CORP PTY LTD and LY

[2008] WASAT 242

J-CORP PTY LTD and LY [2008] WASAT 242

Jurisdiction:	STATE ADMINISTRATIVE TRIBUNAL	Citation No:	[2008] WASAT 242
Act:	BUILDERS' REGISTRATION ACT 1939 (WA)
Case No:	CC:3106/2005	Heard:	DETERMINED ON THE DOCUMENTS
Coram:	MR C RAYMOND (SENIOR MEMBER)	Delivered:	17/10/08
No of pages:	22	Judgment Part:	1 of 1
Result:	Application for costs granted
Category:	B
PDF Version

Parties:	J-CORP PTY LTD VO  LY SAI GHET DUONG
Catchwords:	Application for review of decision of Building Disputes Tribunal dismissed by consent Application by respondent for costs Principles to be applied
Legislation:	Builders' Registration Act 1939 (WA) Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA) Home Building Contracts Act 1991 (WA), s 15(5) Home Building Contracts Regulations 1992 (WA) Legal Practitioners (District Court Appeals) (Contentious Business) Report and Determination 2006 (WA) Legal Practitioners (Supreme Court) (Contentious Business) Determination 2004 (WA) Legal Practitioners (Supreme Court) (Contentious Business) Report and Determination 2006 (WA) State Administrative Tribunal Act 2004 (WA), s 87, s 89 State Administrative Tribunal Rules 2004 (WA), r 43
Case References:	Bilek and Vata Investments Pty Ltd [2005] WASAT 153 Chew and Director General of The Department of Education and Training [2006] WASAT 248 J & P Metals Pty Ltd and Shire of Dardanup [2006] WASAT 282 (S) J­Corp Pty Ltd and Ly [2006] WASAT 132 Lai and Costa [2006] WASAT 117 (S) Pearce and Germain [2007] WASAT 291 (S) Rainbow Pty Ltd and Hawkins [2007] WASAT 216 (S)
Orders	The Tribunal will issue orders as follows:,1. The respondents' costs, comprising legal fees and disbursements and expert witness costs, are fixed in the sum of $53,256.74.,2. The applicant must pay to the respondents such costs on or before 17 November 2008.
Summary	The respondents applied for costs to be awarded against the applicant in relation to proceedings for the review of a decision of the Building Disputes Tribunal which settled shortly before the final hearing on a basis which left the decision under review intact and preserved the respondents' right to apply for costs. The costs claimed comprised solicitors' fees totalling $41,053.98 plus disbursements in respect of counsel's fees and expert witness fees of $33,195.99, together totalling $74,249.97.,The Tribunal reiterated the principles on which costs might be awarded in respect of the review of such decisions, as outlined by the Tribunal in Lai and Costa [2006] WASAT 117 (S), Rainbow Pty Ltd and Hawkins [2007] WASAT 216 (S) and Chew and Director General of The Department of Education and Training [2006] WASAT 248. Costs may be awarded in a particular case if an injustice would otherwise result because the complexity and importance of the issues to be decided required a party to be legally represented or to incur the cost of engaging expert witnesses, or where a party has conducted itself unreasonably or inappropriately, particularly where that conduct gives rise to unnecessary costs being incurred by the other party.,The Tribunal found that it was an appropriate case to award costs based on the complexity and importance of the case, and because the owners could not have conducted the matter without incurring substantial costs, such that an injustice would result if costs were not awarded. ,In fixing costs the Tribunal found the Legal Practitioners (District Court Appeals) (Contentious Business) Report and Determination 2006, (WA) could not be regarded as being generally an appropriate guide in relation to a de novo review by the Tribunal. The Tribunal observed that the procedures followed after the grant of leave, at least in a case such as this, were more akin to a trial action, and that the District Court Appeal scale may be a useful guide in cases in which the grounds for review were so limited that the review process was closer to the form of appeal contemplated by the scale.,The Tribunal emphasised its expectation that representatives of parties before the Tribunal will approach a proceeding in a way that minimises costs to their clients. If clients choose to approach proceedings before the Tribunal in a way which substantially increases costs for them, it will be a rare case where that increase in costs will be recoverable. The Tribunal declined to allow the attendance of two legal representatives at mediation and substantially reduced a claim for getting up from $23,309 to $9,500 to avoid duplication as a result of counsel being engaged to represent the respondents. The costs claimed for preparation of the respondents' statement of issues, facts and contentions were reduced on the same basis and to the extent of the charges allowed by counsel for settling the document. Disbursements to counsel and expert witness costs were allowed in the sum of $32,264.74, reflecting a reduction of $436 to correct an arithmetical error in the claim and disallowance of $485.25 of the amount claimed for counsel's fees for which no supporting account was furnished. Solicitors' fees were reduced from $41,053.98 to $20,992, so that the total costs were fixed in the sum of $53,256.74.

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : COMMERCIAL & CIVIL ACT : BUILDERS' REGISTRATION ACT 1939 (WA) CITATION : J-CORP PTY LTD and LY [2008] WASAT 242 MEMBER : MR C RAYMOND (SENIOR MEMBER) HEARD : DETERMINED ON THE DOCUMENTS DELIVERED : 17 OCTOBER 2008 FILE NO/S : CC 3106 of 2005 BETWEEN : J-CORP PTY LTD

Applicant

AND

VO LY
SAI GHET DUONG
Respondents

Catchwords:

Application for review of decision of Building Disputes Tribunal dismissed by consent - Application by respondent for costs - Principles to be applied

Legislation:

Builders' Registration Act 1939 (WA)

Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA)
Home Building Contracts Act 1991 (WA), s 15(5)
Home Building Contracts Regulations 1992 (WA)
Legal Practitioners (District Court Appeals) (Contentious Business) Report and Determination 2006 (WA)

(Page 2)

Legal Practitioners (Supreme Court) (Contentious Business) Determination 2004 (WA)
Legal Practitioners (Supreme Court) (Contentious Business) Report and Determination 2006 (WA)
State Administrative Tribunal Act 2004 (WA), s 87, s 89
State Administrative Tribunal Rules 2004 (WA), r 43

Result:

Application for costs granted

Category: B

Representation:

Counsel:

Applicant : Mr S Pentony
Respondents : Ms R Cuthbertson

Solicitors:

Applicant : Hotchkin Hanley
Respondents : Jackson McDonald

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

Bilek and Vata Investments Pty Ltd [2005] WASAT 153
Chew and Director General of The Department of Education and Training [2006] WASAT 248
J & P Metals Pty Ltd and Shire of Dardanup [2006] WASAT 282 (S)
J­Corp Pty Ltd and Ly [2006] WASAT 132
Lai and Costa [2006] WASAT 117 (S)
Pearce and Germain [2007] WASAT 291 (S)
Rainbow Pty Ltd and Hawkins [2007] WASAT 216 (S)


(Page 3)

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

1 The respondents applied for costs to be awarded against the applicant in relation to proceedings for the review of a decision of the Building Disputes Tribunal which settled shortly before the final hearing on a basis which left the decision under review intact and preserved the respondents' right to apply for costs. The costs claimed comprised solicitors' fees totalling $41,053.98 plus disbursements in respect of counsel's fees and expert witness fees of $33,195.99, together totalling $74,249.97.

2 The Tribunal reiterated the principles on which costs might be awarded in respect of the review of such decisions, as outlined by the Tribunal in Lai and Costa [2006] WASAT 117 (S), Rainbow Pty Ltd and Hawkins [2007] WASAT 216 (S) and Chew and Director General of The Department of Education and Training [2006] WASAT 248. Costs may be awarded in a particular case if an injustice would otherwise result because the complexity and importance of the issues to be decided required a party to be legally represented or to incur the cost of engaging expert witnesses, or where a party has conducted itself unreasonably or inappropriately, particularly where that conduct gives rise to unnecessary costs being incurred by the other party.

3 The Tribunal found that it was an appropriate case to award costs based on the complexity and importance of the case, and because the owners could not have conducted the matter without incurring substantial costs, such that an injustice would result if costs were not awarded.

4 In fixing costs the Tribunal found the Legal Practitioners (District Court Appeals) (Contentious Business) Report and Determination 2006, (WA) could not be regarded as being generally an appropriate guide in relation to a de novo review by the Tribunal. The Tribunal observed that the procedures followed after the grant of leave, at least in a case such as this, were more akin to a trial action, and that the District Court Appeal scale may be a useful guide in cases in which the grounds for review were so limited that the review process was closer to the form of appeal contemplated by the scale.

5 The Tribunal emphasised its expectation that representatives of parties before the Tribunal will approach a proceeding in a way that minimises costs to their clients. If clients choose to approach proceedings before the Tribunal in a way which substantially increases costs for them, it will be a rare case where that increase in costs will be

(Page 4)

recoverable. The Tribunal declined to allow the attendance of two legal representatives at mediation and substantially reduced a claim for getting up from $23,309 to $9,500 to avoid duplication as a result of counsel being engaged to represent the respondents. The costs claimed for preparation of the respondents' statement of issues, facts and contentions were reduced on the same basis and to the extent of the charges allowed by counsel for settling the document. Disbursements to counsel and expert witness costs were allowed in the sum of $32,264.74, reflecting a reduction of $436 to correct an arithmetical error in the claim and disallowance of $485.25 of the amount claimed for counsel's fees for which no supporting account was furnished. Solicitors' fees were reduced from $41,053.98 to $20,992, so that the total costs were fixed in the sum of $53,256.74.

Application and background

6 The respondents (the owners) have applied for costs in respect of these proceedings for the review a decision of the Building Disputes Tribunal (BDT) reflected in an Order to Remedy No 60/2005­06 dated 3 August 2005 (Order to Remedy). The costs claimed comprise solicitors' fees totalling $41,053.98 plus disbursements in respect of counsel's fees and expert witness fees of $33,195.99, together totalling $74,249.97. As there has been no substantial hearing (other than for the necessary application for leave) there have been no reasons for decision which provide a context for the costs application, and it is therefore necessary to set out some background.

7 On 24 May 2006, the applicant (the builder) was granted leave to review the decision of the BDT reflected in the Order to Remedy. The Order to Remedy required the builder to take the necessary remedial action to restore the owners' house and its foundations to a proper and workmanlike condition, which work was to be completed on or before 30 November 2005. The builder was also ordered to pay the owners' costs associated with the remedial action to be taken. The Building Disputes Tribunal did not define what work was necessary to comply with the order but it was mooted during the course of the proceedings before the Tribunal that the worst case scenario was that the house might have to be demolished and rebuilt. It is to be noted that the BDT granted leave to apply in the event that further time was required to complete the remedial work.

8 The leave to review was restricted to two grounds. The second ground was an incidental issue which required little attention during the proceedings and that related to the award of costs made by the BDT. The first ground

(Page 5)

related to whether the builder had carried out the building work in a proper and workmanlike manner on the basis that it was alleged that the BDT should have found that the builder had taken every reasonable step in assessing the site and designing the footing detail in question. It was common cause that the builder was responsible for the design of the works, including the footings. The footing design was held by the BDT to be inadequate for the purpose of providing a stable foundation and therefore the house had not been constructed in a proper and workmanlike manner. On the face of it, and for the reasons given in the decision in which leave was granted, J­Corp Pty Ltd and Ly [2006] WASAT 132 (J­Corp Pty Ltd and Ly), that decision was unassailable but for the possible effect of cl 7.1.4 of the building contract which provided that the owners warranted that the site would support the works. In granting leave, the Tribunal noted that the issue raised a significant question of law in relation to a standard form contract, the determination of which would clarify the effect of the contract for the benefit of future users of that, and other similar, standard form contracts.

9 The parties' respective statement of issues, facts and contentions, expert reports and the joint expert report concentrated on whether or not the builder's engineer had met the standard of a reasonably competent engineer in carrying out the site investigation prior to construction of the house. The builder's engineer assessed the site as a Class A site and designed the footings suitable for a site of that class. A Class A site has a foundation of mostly sand and rock with little or no ground movement for moistures changes. In fact, subsequent investigation showed the presence of black organic clay soils at a depth below that to which the builder's engineer tested. Consequently, the site should have been classified as a Class P site, being a site which includes soft soils, such as soft clay or silt. In addition, fill had been brought onto the site at some stage.

10 The builder has been represented by the same solicitors and counsel throughout the proceedings before the BDT and this Tribunal. The owners were not legally represented before the BDT or during the initial stages of the matter before this Tribunal. The evidence of the builder's engineer before the Building Disputes Tribunal had effectively gone unchallenged and tended to establish, as the Tribunal noted in its reasons for decision in J­Corp Pty Ltd and Ly at [34], that there was nothing to suggest that the builder should have taken any steps, other than those which it did, in assessing the site, designing the footing detail, and constructing the home in accordance with the plans and detail. The Tribunal stressed to the owners at an initial directions hearing that they would be well advised to procure the assistance

(Page 6)

of a lawyer experienced in building construction law because the potential consequences to them of an adverse decision were significant.

11 The owners engaged the services of its present solicitors. Through those solicitors, the owners retained and filed and served reports from a number of well­qualified experts; namely, Mr P Bruechle, a chartered engineer, Mr E Hudson­Smith, a geotechnical engineer, and Mr P McEvoy, a director of Rawlinsons (WA), a firm of quantity surveyors and construction cost consultants. The builder has filed expert reports from Ms T Ford, Senior Geotechnical Engineer with Structerre Consulting Engineers and M A Lalli, a chartered engineer.

12 The matter was first set down for a final hearing on 15 May 2007. The maintenance of that hearing date was dependent upon compliance with a number of programming orders. Because of difficulties in complying with the program, the final hearing was vacated by order made at a directions hearing on 18 April 2007. The program was revised and the matter was subsequently listed for hearing on 30 October 2007. The hearing on 30 October 2007, in turn, had to be adjourned because the owners' expert witness was hospitalised on the day prior to the hearing. The matter was subsequently listed for final hearing on 25 and 26 February 2008. However, prior to that date, the Tribunal was informed that the matter had settled. On 7 March 2008, orders were made reflecting the terms of the agreed settlement. Those terms obliged the builder to remedy the foundations and all associated cracking to the house by 30 June 2008. The owners were to be entitled to apply to the Building Disputes Tribunal regarding any question of compensation arising from the remedial works to be carried out. The question of liability for costs, if any, remained to be determined by the Tribunal and the application for review was dismissed. Orders were made programming the filing of submissions on costs.

Cost principles

13 Under s 87(1) of the State Administrative Tribunal Act 2004 (WA) (SAT Act) it is provided that unless otherwise specified in the SAT Act, the enabling Act, or an order of the Tribunal, under this section, parties bear their own costs in a proceeding of the Tribunal. However, a broad discretion is granted to the Tribunal under s 87(2) of the SAT Act to the effect that 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.

(Page 7)

14 Under s 87(4) of the SAT Act, the Tribunal is directed that in relation to proceedings within its review jurisdiction, the Tribunal is to have regard to whether the party (in bringing or conducting the proceeding before the original decision­maker) genuinely attempted to enable and assist the decision­maker to make a decision on its merits.

15 The application of those provisions to review proceedings under the Builders' Registration Act 1939 (WA) (BR Act) was considered in Lai and Costa[2006] WASAT 117 (S) (Lai and Costa). The Tribunal noted at [17] that the legislative scheme for the review of decisions of the BDT is different to the Tribunal's general review jurisdiction which relates to decisions made by government, local authorities and other bodies, and is a true administrative decision review process. By contrast, parties in proceedings before the BDT are private persons engaged in adversarial litigation. The Tribunal continued at [18] to state that there would be some cases in which an injustice could result if costs could not be recovered. It was noted that in this particular area of jurisdiction it is frequently the case that costs have to be incurred in engaging engineering or building consultants.

16 Underlying the rationale in the Laiand Costa decision was recognition of the competing jurisdictions of the BDT and the State courts to deal with building disputes and the public interest in ensuring that a specialist Tribunal, the BDT, provide a cost-effective and prompt method of dispute resolution in building cases as an alternative to the court system. The Tribunal concluded that the public interest would not be served if in some cases the cost of legal representation, and even expert witness fees, could not be recovered in a review proceeding, because that might impact on the use of the BDT. The Tribunal then went on to consider the merits of the costs claimed in the matter and concluded that the costs were relatively incidental to the benefit obtained from the order on review. For that reason, the Tribunal concluded that there was no sufficient reason for the Tribunal to move from the starting position that each party should bear their own costs.

17 The above principles were applied in Rainbow Pty Ltd and Hawkins [2007] WASAT 216 (S). That matter concerned the proper interpretation of the BR Act and raised issues that had not previously been the subject of determination by the Tribunal. The Tribunal considered that it was therefore reasonable for the respondents to obtain legal representation, especially as the matters raised by the application were not matters which the Tribunal considers the respondents, unrepresented, could have easily dealt with. The Tribunal concluded that an order for costs should

(Page 8)

be made.

18 Costs may be ordered also in circumstances where a party has conducted itself unreasonably or inappropriately, particularly where that conduct gives rise to unnecessary costs being incurred by the other party: Chew and Director General of the Department of Education and Training [2006] WASAT 248 at [85].

19 It is submitted on behalf of the owners that their sophistication may also be a factor to take into account in exercising a discretion on costs, relying on Bilek and Vata Investments Pty Ltd [2005] WASAT 153. That case is distinguishable insofar as it dealt with the award of costs in relation to the exercise of the Tribunal's jurisdiction under the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA). In any event, the criteria for the award of costs, under that jurisdiction, have changed in accordance with the decision of Deputy President Judge Chaney in Pearce and Germain [2007] WASAT 291 (S).

The fixing of costs

20 Section 89 of the SAT Act provides that if the Tribunal makes an order for the payment of costs and does not fix the amount of the costs, that amount is to be assessed or settled in accordance with the rules. Rule 43 of the State Administrative Tribunal Rules2004 (WA) provides that if the costs have not been fixed by the Tribunal, the amount is to be assessed or settled by the executive officer. Provision is made for the parties to attend an assessment of costs. As observed by Deputy President Judge Chaney in J & P Metals Pty Ltd and Shire of Dardanup [2006] WASAT 282 (S):

There is no prescribed scale in relation to work done in relation to proceedings before this Tribunal. Assessing costs for the purposes of s 87 of the State Administrative Tribunal Act 2004 (WA) (SAT Act) will usually require a determination as to what costs are reasonable given the nature of the matter, its complexity, its importance, possibly its urgency, and the amount of time and effort required to properly prepare and present the case. Consideration of issues of that nature may be assisted by analogy with other legal work for which a statutory scale is applicable. Scales are, however, no more than an indication of what might be thought reasonable for certain categories of work. If a scale is to be used for that purpose, it will not always be the scale applicable to Supreme Court proceedings. There will be cases where the subject matter will make the determination in relation to Magistrates Court civil proceedings more appropriate by way of analogy. The Tribunal will always strive to maintain proportionality between the subject matter of the proceedings and the costs associated with the proceedings. (par 9)

(Page 9)

…

The procedures of the Tribunal are designed to achieve the objectives prescribed by s 9 of the SAT Act. The Tribunal strives to ensure that its procedures are proportionate to the nature of the matters in issue. On occasions, matters before the Tribunal are difficult and complex, sometimes involving lengthy hearings. This is not such a matter. In the unusual event that an order for costs is made by the Tribunal, the Tribunal's obligation to minimise the costs to parties will be reflected in the costs assessed by the Tribunal as recoverable. That approach reflects an expectation that representatives of parties before the Tribunal will approach a proceeding in a way that minimises costs to their clients. If clients choose to approach proceedings before the Tribunal in a way which substantially increases costs for them, it will be a rare case where that increase in costs will be recoverable through a favourable costs order. (par 38)

21 While an appropriate scale of costs may be used as a guide, one can generally expect that the costs awarded in the Tribunal as between party and party will be a smaller percentage than might be awarded in the proceedings to which a particular scale applies. This is because the Tribunal expects that the parties' solicitors will embrace the Tribunal's procedures, avoid undue technicality and conduct the proceedings in the most cost­efficient manner to avoid any duplication of costs, or unnecessary costs. In fixing costs, it should also be borne in mind that the Tribunal will generally take more of a broadbrush approach and will not descend into a detailed taxation of costs.

Complexity and importance

22 The case law referred to in the reasons for decision for the grant of leave makes plain that a builder who is responsible for the design of works cannot escape responsibility for the construction of footings, in accordance with that design, where the footings are inadequate to support the weight of the building built upon it. In this instance, it is not disputed that the footings as designed were not suitable for a Class A site. In that context, the meaning and effect of the clause in the contract whereby the owners warranted that the site would support the works is far from readily apparent. It involves a degree of legal complexity, but one would not expect, if the proper interpretation of the contract were the only issue, that it would result in any significant costs being incurred.

(Page 10)

23 The real complexity in the case arises from having to meet the effect of the interpretation for which the builder contended. That interpretation is that the clause operates to allocate the risk or responsibility associated with the discovery of site conditions that impact on the construction of the works, but which would not have been discovered by the builder or its engineer, had the engineer and builder exercised all due care, skill and attention. That brought into play whether the practice purported to have been followed by the builder's engineer was in accordance with industry practice, and whether the 'practice' accorded with the standard which could be expected from a reasonably competent engineer. That in turn raises, as reflected in the parties' contentions, the appropriate legal test to be applied. The determination of these matters can be properly described as complex.

24 Further, the importance of the proceedings to the owners is self­evident. The owners are elderly migrants who came to Australia from Asia in 1982. The house had subsided, and according to the owners' expert was still subsiding, so that cracking could be expected to continue for many years. On any basis, repair would be expensive and it is arguable that the only certain remedy requires demolition and rebuilding. The matter is generally important because the same clause appears in standard form contracts, two of which are included in the schedules to the Home Building Contracts Regulations 1992 (WA), so that the use of those forms would result in the contracts being deemed to comply with the Home Building Contracts Act 1991 (WA) (s 15(5)). The effect is that the contract terms are deemed not to be unconscionable. The true meaning and effect of the clause in question is therefore of some industry importance.

25 The case was one which quite clearly was beyond the capacity of most laypersons to run. The owners could not have run the proceedings without legal representation by a practitioner experienced in building construction law.

26 By reason of the above factors, and the level of expenditure incurred by the owners in engaging legal practitioners and expert witnesses, this is a matter in which an injustice would result if costs were not to be awarded.

Conduct of the builder

27 The owners have asserted that a further basis for costs to be awarded is that the builder failed to comply with various programming orders made by the Tribunal.

(Page 11)

28 In view of the conclusion that costs should be awarded to the owners, it is not necessary to make specific findings concerning any failure to comply with directions made by the Tribunal. The costs of all directions hearings will be included in the overall costs awarded.

29 The owners also submit that the builder's expert witness was arguably 'less than forthcoming' in relation to the evidence given before the BDT. This is presumably intended to bring s 87(4) of the SAT Act into play on the basis that there was not a genuine attempt to enable and assist the decision­maker to make a decision on the merits. This the builder rejects. Although expressed in euphemistic terms, this is a very serious allegation which impugns the professional integrity of the builder's engineer. Without a substantial hearing having taken place, at which the engineer would have had an opportunity to respond to such allegations, it is not appropriate to base any costs award on this criticism.

The determination of costs to be awarded

30 Attached, and marked Annexure A, is a scanned copy of the owners' draft Bill of Costs. For ease of reference, each item has been numbered in manuscript from 1 ­ 25. An arithmetical error appears in the total shown for the amounts disbursed in respect of counsel's fees and expert witness charges (items 22 ­ 24). The total for those items is $32,759.99, not $33,195.99, and consequently the grand total is reduced to $73,813.97.

31 The owners have furnished in support of the costs application a copy of all accounts rendered by their solicitors from 30 November 2005 to 27 February 2008, and copies of accounts rendered by counsel and the expert witnesses.

32 There are some general observations which should be made at the outset. The total amount of the solicitor's invoices, after deducting disbursements, is $40,854.55. The total amount of legal costs claimed in the Bill of Costs, excluding disbursements and item 21 for preparing the Bill of Costs (being an attendance obviously after the date of the last invoice) is $39,642. It is apparent, therefore, that there is very little difference between the actual solicitor and client costs incurred and the party and party costs being claimed. A perusal of the accounts reflects that there are many attendances which are of a solicitor and client nature. Examples are of conferences between fee earners, conferences between the fee earner and a partner of the firm, charges made for attending handover of the file (presumably from one fee earner to another) reviewing the file and considering file issues in the context of that handover. Unfortunately, the accounts do not give a detailed breakdown of attendances by time and it is therefore not

(Page 12)

possible to discern the amounts charged for such activities.

33 The owners have not contended that any particular scale of costs should be used as a guide in this matter. However, it is noted that the rates charged on a time basis, as reflected in the fee earner summary attached to each account, is generally in line with the rates applicable under the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2004 (WA) which applied until 30 June 2006, and the Legal Practitioners (Supreme Court) (Contentious Business) Report and Determination 2006 (WA), which operatedfrom 1 July 2006. For instance, item 1, (when regard is had to the fee earner summary attached to the account of 24 February 2006), relating to submissions prepared by a senior practitioner, which could then have been charged at a rate of $363 per hour, was in fact charged at $270 per hour. A junior practitioner's charge rate was then up to $253 per hour.

34 The builder has contended that the appropriate scale to use as a guide is the Legal Practitioners (District Court Appeals) (Contentious Business) Report and Determination 2006 (WA), on the basis that until jurisdiction was conferred on the Tribunal to review the decisions of the BDT, a right of appeal lay to the District Court. With respect, that scale of costs cannot be regarded as being generally an appropriate guide in relation to a review by this Tribunal, which is a review de novo. The procedures followed after the grant of leave, at least in a case such as this, are more akin to a trial action. The District Court Appeal scale may be a useful guide in cases in which the grounds for review are so limited that the review process is more akin to the form of appeal contemplated by the scale.

35 In all the circumstances, the Tribunal will use the applicable Supreme Court scale (which is also applicable to trials in the District Court) as a general guide, and in doing so, will assess what it considers to be a reasonable charge in relation to the applicable activities.

36 The order made for costs in respect of the application for leave was expressed in terms that the costs, if any costs should ultimately be awarded, were reserved. For the above reasons, the costs of the leave application should be awarded to the owners.

37 In relation to item 1, $2,403 is claimed for submissions in relation to the leave application (prepared by a senior practitioner). It is considered reasonable to allow seven and a half hours for the preparation of the submissions at the rate charged, as reflected in the account dated 30 November 2005, of $270 per hour; that is, $2,025. In relation to

(Page 13)

item 2, $1,647 is claimed. However, the account dated 24 February 2006 shows that the amount charged was $648 and that included an attendance for perusing a letter. Assuming .1 of an hour for that attendance and noting the charge­out rate of $270 per hour, an amount of $621 will be allowed. The amounts charged, as reflected in items 7 and 18, are considered fair and reasonable (based on the rate charged of $270 per hour) and will be allowed in the amounts of $621 and $1,215 respectively. The total amount allowed in respect of the leave application is therefore $4,482.

38 In relation to item 3, an amount of $2,190 is claimed for the preparation of a statement of issues, facts and contentions (by a junior practitioner). Although the date given is 30 August 2007, that is in fact the date on which the document was filed. A perusal of the accounts immediately prior to that date do not refer to the preparation of this document. However, the accounts of 29 November 2006 and 21 December 2006 contain details relating to the drafting of a statement of claim and amending a writ of summons and statement of claim. It appears most likely this is a reference to the statement of issues, facts and contentions. No time break down is given for each attendance. It is not possible to discern the actual time taken to prepare the document. In this instance the work carried out, as reflected in the accounts, was charged at a rate of $260 per hour, which is slightly in excess of the Supreme Court rate then applying of $253 per hour. It would be reasonable to allow seven and a half hours for the preparation of the document at, say, $250 per hour; that is, $1,875. However, the accounts from counsel show that counsel charged $300 for settling the statement of issues, facts and contentions. On the basis that counsel's fee be allowed and to then avoid duplication, an amount of $1,575 will be allowed for this item.

39 Under item 4, $1050 is claimed for reviewing and preparing a joint bundle of documents (prepared by a junior practitioner). It is considered reasonable to allow two hours for this task at $250 per hour; that is, $500.

40 In relation to item 5, $1,470 is claimed for drafting two witness statements (prepared by a junior practitioner). It is considered reasonable to allow a total of four hours for these tasks at $250 per hour; that is, $1,000.

41 In relation to item 6, $1,560 is claimed for drafting a submission on costs. It is considered that the submissions are unnecessarily lengthy. Much of the detail provided is to support an application for costs based on the manner

(Page 14)

in which the proceedings were conducted by the builder's solicitors and to justify a criticism of the evidence given by the builder's engineer before the BDT. Costs have not been awarded on either of these bases. In all the circumstances, it is considered reasonable to allow two hours for the preparation of the submissions at $250 per hour; that is, $500.

42 Items 8 to 11, inclusive, and 13 to 15, inclusive, are attendances at directions hearings. The amount claimed varies from $260 to $208. It is considered reasonable to allow $200 per hearing; that is, a total of $1,400 in respect of these items.

43 In respect of item 12, an amount of $1,655 is claimed in respect of attendance at a mediation, which was attended by a senior and junior practitioner. While a party is entitled to determine the manner in which they might wish to be represented, it is not reasonable to expect that the other party should bear the cost of attendance by two legal practitioners. The fee earner summary attached to the account of 22 February 2007 reflects that a senior practitioner spent 3.5 hours on the matter at a rate of $310 per hour. However, the account shows that the senior practitioner also spent time in conference with a junior practitioner in preparation for a telephone conference with the client and in attending on that telephone conference. It is not possible to be exact because there is no time breakdown given for each attendance but in the circumstances, 2.5 hours will be allowed in respect of the mediation at a rate of $310 per hour; that is, a total of $775.

44 In respect of item 16, an amount of $390 is claimed in respect of a junior practitioner attending on the adjourned hearing on 30 October 2007. It can be discerned from the fee earner statement and account dated 27 February 2008 that the practitioner concerned was then charged out at $300 per hour. It is reasonable to allow one hour for the adjournment at $250 per hour; that is, a total of $250.

45 Item 17 relates to the adjournment of the hearing on 25 February 2008 which was attended to by a junior practitioner. The amount claimed is $416. It is reasonable to allow one hour for the adjournment at a rate of $250 per hour; that is, a total of $250.

46 Item 19 reflects a claim for getting up for the final hearing of $23,309. The bulk of this work was done by a junior practitioner at a rate of $300 per hour, which is in excess of the maximum under the Supreme Court scale of $253 per hour. Given the almost parity between the solicitor and client costs and the party and party costs claimed,

(Page 15)

there is a considerable risk that solicitor and client attendances are included within this component of the claim. Further, it is noted that one of the disbursements claimed is for the briefing of junior counsel, who was involved in advising generally in relation to the matter (see, for instance, the accounts dated 22 April 2007 and 27 February 2008) and who was also briefed on the hearing in October 2007. The amount claimed for junior counsel's fees is $5,886.25. Given the objectives of the Tribunal and its approach to costs as outlined above, claims for getting up and for counsel's fees for preparation should generally not both be allowed to avoid duplication in charges. Taking all factors into account, and in particular the extent to which counsel's fees have been allowed below, an amount of $9,500 will be allowed for getting up.

47 Item 20 is in respect of photocopying, faxes and other office disbursements in the sum of $501.98. The builder had responsibility for preparing the agreed bundle of documents for the hearing and would therefore have had the bulk of photocopying charges. It is noted that the total disbursements billed was $1,856.02. In all the circumstances, the Tribunal will allow disbursements of $500 in respect of this claim.

48 Item 21 relates to a claim of $910 for preparing a draft Bill of Costs (prepared by a junior practitioner). The Bill of Costs was an essential document which has been of considerable assistance in fixing the costs. An amount of $750 will be allowed, being three hours at $250 per hour.

49 Item 22 is for junior counsel's fees totalling $5,886.25. Invoices from counsel furnished in support of this item total only $5,401. The amount charged appears to be fair and reasonable and should be allowed in the sum of $5,401.

50 Item 23 reflects an amount of $11,814 claimed in respect of the owners' expert engineer witness. The costs claimed were necessarily incurred and appear to be reasonable and should be allowed in full.

51 Item 24 relates to costs of $15,059.74 claimed in respect of the owners' expert geotechnical engineer. One of the witnesses reports addresses rectification requirements. The builder contends that these costs were not necessarily incurred as it is submitted that the owners did not state that they required the Tribunal to make anything other than an order to remedy. That submission is not accepted. The owners in par 27 of their statement of issues, facts and contentions asserted an entitlement to a remedy under either the Home Building Contracts Act 1991 (WA) or

(Page 16)

the BR Act, under which an order to pay the cost of remedial work could be made. On the same date as that on which the statement of issues, facts and contentions was filed, the owners also filed the report from their quantity surveyors, Rawlinsons, which included the cost of demolition and rebuilding of the house. The builder did not seek to assert that any false issue had been raised which would unnecessarily extend the duration of the hearing. It may well have been the case that the Tribunal concluded that the correct and preferable decision was for an order to pay to issue rather than an order to remedy. The full amount claimed should be allowed as a reasonable and necessary cost.

52 It is not necessary to address item 25 as the quantity surveyor made no charge.

Conclusion

53 For the above reasons the total amount of costs payable by the builder to the owners is fixed as follows.

Item No	Amount Claimed	Amount Allowed
1	$2,403.00	$2,025.00
2	1,647.00	621.00
3	2,190.00	1,575.00
4	1,050.00	500.00
5	1,470.00	500.00
6	1,560.00	500.00

(Page 17)

Item No	Amount Claimed	Amount Allowed
7	621.00	621.00
8	260.00	200.00
9	208.00	200.00
10	208.00	200.00
11	260.00	200.00
12	1,655.00	775.00
13	260.00	200.00
14	260.00	200.00
15	260.00	200.00
16	390.00	250.00
17	416.00	250.00
18	1,215.00	1,215.00
19	23,309.00	9,500.00
20	501.98	500.00
21	910.00	750.00
22	5,886.25	5,401.00
23	11,814.00	11,814.00
24	15,059.74	15,059.74
Total	$73,813.97	$53,256.74

Order

54 The Tribunal will issue orders as follows:

1. The respondents' costs, comprising legal fees and disbursements and expert witness costs, are fixed in the sum of $53,256.74.

(Page 18)

2. The applicant must pay to the respondents such costs on or before 17 November 2008.

I certify that this and the preceding [54] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

___________________________________

MR C RAYMOND, SENIOR MEMBER

(Page 19)

(Page 20)

(Page 21)

(Page 22)