KITCHING and TOP CLASS RENOVATIONS PTY LTD

[2013] WASAT 102

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL

STREAM:   COMMERCIAL & CIVIL

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

CITATION:   KITCHING and TOP CLASS RENOVATIONS PTY LTD [2013] WASAT 102

MEMBER:   MS K LANG (SENIOR SESSIONAL MEMBER)

MR R TRAVERS (SESSIONAL MEMBER)

HEARD:   DETERMINED ON THE DOCUMENTS

DELIVERED          :   21 MAY 2013

PUBLISHED           :  2 JULY 2013

FILE NO/S:   CC 1610 of 2012

BETWEEN:   KEITH DAVID KITCHING

Applicant

AND

TOP CLASS RENOVATIONS PTY LTD
Respondent

Catchwords:

Costs

Legislation:

Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 11, s 49, s 49(2)(c), s 49(2)(d)
Legal Practitioners (State Administrative Tribunal) Determination 2012
State Administrative Tribunal Act 2004 (WA), s 9, s 87

Result:

Respondent's application for costs successful

Summary of Tribunal's decision:

The Building Commission referred the applicant owner's workmanship and contractual complaints to the State Administrative Tribunal under s 11 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA). The respondent contractor was successful at the final hearing and applied for costs. The Tribunal considered the contractor was justified in engaging a legal practitioner due to the size and nature of the claim. The Tribunal noted the owner relied on legal advice in prosecuting the complaints, which were weak, implausible and obviously unmeritorious.

The Tribunal saw fit to allow costs to the contractor of $8,112.50.

Category:    B

Representation:

Counsel:

Applicant:     Self-represented

Respondent:     Mr A Searle

Solicitors:

Applicant:     N/A

Respondent:     Doyles Construction Lawyers

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

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)

Lai & Anor and Costa [2006] WASAT 117 (S)

Marvelle Investments Pty Ltd and Argyle Holdings Pty Ltd [2010] WASAT 125 (S)

Pearce & Anor and Germain [2007] WASAT 291 (S)

REASONS FOR DECISION OF THE TRIBUNAL: 

The proceedings and application for costs

1. In June 2012, the owner lodged two complaints against the contractor with the Building Commission.  The complaints concerned both contractual and workmanship issues in regards to works undertaken by the contractor comprising a roof restoration and the construction of a second storey room at the owner's residence at 4 Salisbury Street, Bayswater (works).  The owner claimed damages from the contractor in excess of $101,000.

2. The complaints were referred to this Tribunal under s 11 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BS(CRA) Act). The final hearing was held on 11 and 12 March 2013. The Tribunal delivered its decision on 13 March 2013, dismissing the complaints and granting leave to the contractor to apply for costs.

3. The contractor filed an application for legal costs of $10,122.75 supported by submissions and a bill of costs.  The owner filed submissions in response, and the Tribunal determined the application on the papers.

The applicable principles for the award of costs

1. The starting point when dealing with a costs application is that each party bears its own costs of a proceeding before the Tribunal.

2. Section 87 of the State Administrative Tribunal Act 2004 (WA) (SAT Act) 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.

   …

3. This provision must be read with the enabling legislation. 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.

   …

4. There are a range of factors that the Tribunal may take into account in deciding whether or not to exercise its discretion to make a costs order, including the non­exhaustive list from Pearce & Anor and Germain [2007] WASAT 291 (S) (Pearce) at [22] ­ [24]:

   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 a 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 in proceedings to vindicate its clear contractual entitlement,

5. The Tribunal is required, by s 9 of the SAT Act, to act speedily and with as little formality and technicality as is practicable, and to minimise the cost to the parties. Those objectives would not be fostered by an approach that costs should follow the result as a general rule: Hoskins and Daniel Vinci T/As D'Vinci Contracting [2011] WASAT 188 at [17]. However, we are mindful of the Tribunal's ruling in Lai & Anor and Costa [2006] WASAT 117 (S) (Lai & Anor and Costa), that the costs of conducting the case might be allowed when the costs were such that an injustice would result by not allowing costs.

Consideration of the costs claim

1. The principles identified above must be applied to the consideration of this application for costs.

2. The owner disputes the necessity for the contractor's engagement of legal counsel.  The contractor's bill of costs shows the first consultation with Doyles Construction Lawyers was on Friday, 8 March 2013.  The hearing commenced on Monday, 12 March 2013.  The owner noted the lack of fresh issues to signal the need to engage a legal representative for the hearing.  The owner also submitted that the complaints were not legally complex.

3. The owner made various detailed claims against the contractor.  The owner had obtained legal advice and supported his complaints with legal submissions, although he was not represented at the hearing.  The owner's claim exceeded $100,000.

4. The contractor acted reasonably in the circumstances in seeking legal representation.  It was unusual that the contractor took this step so late in the day, but he was within his rights to do so.  As a result of his legal representation at the hearing, the contractor's defence was properly conducted.

5. The contractor was entirely successful but has the burden of significant legal costs.  As in Lai & Anor and Costa, we hold that an injustice would result in not allowing costs to the contractor. The owner's pursuit of these complaints was unreasonable and forced the applicant to incur unnecessary costs. We hold that the interests of justice support allowing the costs application. The owner's claim was weak and unmeritorious and we therefore specifically rely on s 49(2)(c) and s 49(2)(d) of the BS(CRA) Act in concluding that it is fair to award costs to the contractor.

6. The contractor incurred $13,389.75 in legal fees.  This sum represents the solicitor/client costs, being the amount payable by the contractor to its legal representatives.  We are mindful of the Tribunal's stringent approach to costs, as outlined in J & P Metals Pty Ltd and Shire of Dardanup [2006] WASAT 282 (S); Marvelle Investments Pty Ltd and Argyle Holdings Pty Ltd [2010] WASAT 125 (S) at [35]. Any rare costs awarded by the Tribunal will be very significantly lower than the solicitor/client costs incurred, as a disincentive for parties to allocate unnecessary resources and time to litigate in a manner inconsistent with the SAT Act objectives.

7. The Legal Practitioners (State Administrative Tribunal) Determination 2012 provides a maximum scale of fees of $275 per hour on a solicitor/client basis.  For the purposes of this application, the contractor's bill of costs is reduced (where applicable) to the scale rate, with legal costs claimed at $10,122.75.

8. Having regard to the complaint and the filed submissions, we find that it is fair and reasonable to award costs for the attendances before the Tribunal and all preparation, with a small adjustment to take into account double handling of the file by the two legal representatives.  We see fit to allow four hours for the preparation of the costs application.  

Conclusion

1. The Tribunal allows costs to the contractor, fixed in the amount of $8,112.50.

Order

1.The respondent's costs, comprising legal fees in respect of the proceedings, are fixed at $8,112.50.

2.The applicant must pay to the respondent the sum of $8,112.50 on or before 12 June 2013.

I certify that this and the preceding [17] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

___________________________________

MS K LANG, SENIOR SESSIONAL MEMBER