KOS and DND BUILDING CO PTY LTD
[2022] WASAT 32
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: BUILDING SERVICES (COMPLAINT RESOLUTION AND ADMINISTRATION) ACT 2011 (WA)
CITATION: KOS and DND BUILDING CO PTY LTD [2022] WASAT 32
MEMBER: MS P LE MIERE, MEMBER
MR W GREGORY, SESSIONAL MEMBER
HEARD: DETERMINED ON THE DOCUMENTS
DELIVERED : 28 APRIL 2022
PUBLISHED : 28 APRIL 2022
FILE NO/S: CC 1699 of 2020
BETWEEN: SAFETA KOS
First Applicant
JUSUF KOS
Second Applicant
MUSTAFA KOS
Third Applicant
FADILA KOS
Fourth Applicant
AND
DND BUILDING CO PTY LTD
Respondent
Catchwords:
Building services - Section 51 application - No attendance by respondent - Costs - Turns on its own facts
Legislation:
Building Services (Complaint Resolution and Administration) Act 2011 (WA), s11(1)(d), s 49, s 51(2)(a), s 51(2)(b)
State Administrative Tribunal Act 2004 (WA), s 60(2), s 87(1), s 88(2)
State Administrative Tribunal Rules 2004 (WA), r 42
Result:
Application allowed
Category: B
Representation:
Counsel:
| First Applicant | : | N/A |
| Second Applicant | : | N/A |
| Third Applicant | : | N/A |
| Fourth Applicant | : | N/A |
| Respondent | : | N/A |
Solicitors:
| First Applicant | : | Vogt Graham Lawyers |
| Second Applicant | : | Vogt Graham Lawyers |
| Third Applicant | : | Vogt Graham Lawyers |
| Fourth Applicant | : | Vogt Graham Lawyers |
| Respondent | : | N/A |
Case(s) referred to in decision(s):
Kos and DND Building Co Pty Ltd [2020] WASAT 95
Kos and DND Building Co Pty Ltd [2020] WASAT 95 (S)
Lai & Anor and Costa [2006] WASAT 117 (S)
Marvelle Investments Pty Ltd and Argyle Holdings Pty Ltd [2010] WASAT 125 (S)
McLerie and Koleszko [2014] WASAT 160 (S)
Medical Board of Australia and Costley [2013] WASAT 2
Pearce & Anor and Germain [2007] WASAT 291 (S)
Sanders and Gemmill Homes Pty Ltd [2017] WASAT 41 (S)
Western Australian Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction
This matter was heard on 19 October 2021 before Sessional Member Gregory and I. Reasons for decision were delivered orally on 1 November 2021. This is an application for costs by the applicants.
On 1 November 2021 we ordered:
1)the order of the Tribunal dated 19 August 2020 be revoked;
2)the respondent to pay the applicants the sum of $104,182.62 within 14 days;
3)the applicants have liberty to apply for a costs order within 21 days;
4)in the event the applicants make an application for costs, the respondent has 14 days from the date of the applicants filing their submissions, to file submissions in reply; and
5)any application for costs be determined entirely on the documents pursuant to s 60(2) of the State Administrative Tribunal Act 2004 (WA) (SAT Act).
Various extensions of time were given to both the applicants and respondent to file their submissions with final submissions of the respondent being due on 26 January 2022.
Relevant Background
The respondent did not attend the final hearing on 19 October 2021 and for the reasons given in the substantive matter, we determined to proceed to hear the matter in its absence.
Safeta Kos, Jusuf Kos, Mustafa Kos and Fadila Kos (applicants) lodged a building service complaint with the Building Commissioner on 23 November 2018 alleging faulty or unsatisfactory work in respect of a building service carried out by the respondent at the applicants' property in Yokine. The compliant comprised of 13 separate items of complaint.
The Building Commissioner referred the complaint to the Tribunal pursuant to s 11(1)(d) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BSCRA Act)
This matter was heard by the Tribunal on 17 March 2020, 29 April 2020 and 26 May 2020 and reasons for decision and a Building Remedy Order made on 18 August 2020 (BRO). Kos and DND Building Co Pty Ltd [2020] WASAT 95.
On 11 December 2020 the applicants filed an application in the Tribunal alleging non-compliance by the respondent with the BRO.
Sessional Member Gregory and I revoked the BRO on 1 November 2021 and made the orders as set out in [2] above.
Substantive proceedings
The applicants had legal representation throughout the proceedings and engaged the following experts to provide reports and attend the hearing:
a)Mr Machell;
b)Mr Chris Jones of Estimating Services Australia;
c)Mr Lance Karapetkov;
d)Mr Stephen Goulson; and
e)Mr Santiago Abueva also provided a report but did not attend the hearing.
The starting point in any analysis of the circumstances in which the Tribunal will make an order for costs is s 87(1) of the SAT Act which creates the presumption of a 'no costs jurisdiction'. This is, however, subject to the broad discretion in s 88(2) of the SAT Act and s 49 of the BSCRA Act.
Although s 49 of the BSCRA Act broadens the Tribunal's discretion in relation to costs, the provision should not be understood as providing that costs will generally follow the result. It is neutral in effect and should be applied in the manner which is consistent with and reinforces the objectives and procedures of the Tribunal, and any factors will be relevant which point to the justice of the case requiring an award of costs.[1]
[1] Pearce & Anor and Germain [2007] WASAT 291 (S) (Pearce).
These principals include:
a)where a party conducts itself inappropriately or unreasonably, particularly where the conduct leads to unnecessary costs to the other party;
b)where credibility of evidence is at the heart of a matter;
c)where the application undermines the integrity of proceedings under the relevant Act;
d)where the case is weak, being incredible or implausible or obviously unmeritorious;
e)where a party has to embark in proceedings to vindicate its clear contractual entitlement; and
f)the circumstances of the case having regard to the above, or other factors, are such that the justice of the case supports moving away from the initial position that each party should bear their own costs.[2]
[2] McLerie and Koleszko [2014] WASAT 160 (S) at [3] and Sanders and Gemmill Homes Pty Ltd [2017] WASAT 41 (S) at [8] and [9].
Whilst the above are some of the factors the Tribunal will look at and may take into account when making costs orders, the underlying consideration for the Tribunal when determining an application for a costs order will be whether the justice of the case supports moving away from the initial position that each party should bear their own costs.[3]
Applicants' submissions
[3] Marvelle Investments Pty Ltd and Argyle Holdings Pty Ltd [2010] WASAT 125 (S) (Marvelle) at [15] and Western Australian Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32.
The proceedings in this matter[4] were necessitated in the first instance because the respondent did not comply with the BRO made by the Tribunal to carry out remedial work at the applicants' property.
[4] An application pursuant to s 51(2)(a) and s 51(2)(b) of the BSCRA Act to convert a work order to a monetary order due to the respondent's failure to comply with the BRO.
We should exercise our discretion in the applicants' favour because of the manner in which the respondent conducted itself during the proceedings, and the respondent's case was weak or unmeritorious.
By letter dated 18 October 2021 an offer of settlement was made to the respondent that was more favourable than the order made by the Tribunal.
The settlement proposal was made at a stage of the proceedings in which the parties had exchanged all the evidence relied upon. Whilst the offer was not made in compliance with the State Administrative Tribunal Rules 2004 (WA) (SAT Rules) as the respondent did not have 14 days prior to the hearing to accept the offer, it was nevertheless an offer which was open to the respondent to accept rather than continue to the hearing.
The respondent had addressed its mind to settlement having itself made an offer of settlement on 15 October 2021.
Respondent's submissions
The respondent's submissions dated 24 December 2021 alleged the applicants' claim for costs was made out of time, and therefore should not be considered by the Tribunal.
By order dated 7 December 2021[5] the time for the applicants to file their application and submissions on costs was extended to 13 December 2021 (thus the application was not filed out of time). The time for the respondent to respond was also extended to 27 December 2021.
[5] This order was sent to the respondent.
The respondent submitted it had not had sufficient time to respond to the claim and sought an extension of time to respond to the applicants' claim for costs.
The respondent made the following submissions:
… the costs sought by the applicants are excessive - particularly as they appear to apply to the entirety of the proceedings and are not specifically referable to the respondent's alleged conduct purportedly giving rise to the applicant's claim under the relevant criteria[.]
…
To the extent that the applicants seek to rely upon the respondent's alleged conduct in failing to comply with the Remedy Order, the relevant award should only apply to costs incurred subsequent to the Remedy Order.[6]
[6] Respondent's submissions dated 24 December 2021, para 9.2 and para 9.2(b).
The respondent did not otherwise make submissions as to whether a costs order should be made in favour of the applicants.
By order dated 5 January 2022 the time for the respondent to file submissions in response to the applicants' claim for costs was extended to 26 January 2022. No further submissions have been received by the Tribunal.
Consideration
During directions hearings leading up to the final hearing, the respondent intimated that it would challenge the cost of the works the applicants claimed was necessary to comply with the BRO.
The respondent did not attend the hearing. The respondent neither admitted it had not complied with the BRO nor filed any evidence in response to the claim it had not complied with the BRO. We found that the respondent had not complied with the BRO.
Just prior to the final hearing, the respondent filed some costings it had filed in Kos and DND Building Co Pty Ltd [2020] WASAT 95 (S). We found these quotes to not be helpful and did not rely upon them in determining what the costs of work required to comply with the BRO was.
The respondent chose, as it was entitled to, to put the applicants to proof of all of their claims. The applicants had to go to hearing and expend the money on legal fees and expert fees to put them in the position they would have been in if the respondent had performed the work the subject of the BRO.
The respondent's choice to require the applicants to go to hearing, required the applicants to prove their claim where, in many instances, there was clear expert evidence supporting the applicants' claim, and the respondent did not call any expert evidence to challenge the applicants' claim.
The applicants made an offer in writing dated 18 October 2021 that was more favourable to the respondent than it achieved at hearing.
It did not comply with r 42 of the SAT Rules, in that it was not open for acceptance for a minimum of 14 days. The effect of noncompliance with the SAT Rules is that the Tribunal is not obliged to have regard to the offers of settlement and their nonacceptance.
However, it is nevertheless in the public interest that offers of settlement that do not comply with the SAT Rules be given careful consideration.[7]
[7] Marvelle at [15].
At the time this offer was made by the applicants, the respondent had had an opportunity to review all the applicants' evidence and knew it had not filed any contrary evidence with the Tribunal.
On 18 October 2021 the respondent still had the benefit of legal representation and the opportunity to be advised on the possible consequences of not accepting the offer and proceeding to hearing without any substantial contrary evidence.
The offer made to settle the proceedings was better than the respondent achieved at hearing.
By the respondent putting the applicants to the cost of proving their case without contesting any of their evidence, it acted contrary to one of the main objectives of the Tribunal - to minimise the cost to the parties.
The Tribunal in Lai & Anor and Costa [2006] WASAT 117 (S) at [18] said:
There will be some cases in which an injustice could result by not allowing costs to be recovered. In this particular area of jurisdiction, it is frequently the case that costs have to be incurred in engaging engineering or building consultants. The inability to recover costs may, in some circumstances, have the practical [effect] of precluding an application being made because even when the prospects of success are considered to be high, the final benefit achievable after deduction of irrecoverable costs may not justify the proceedings. Such a result would not be in the public interest.
This is one such case.
We find it is fair and reasonable that the respondent pay a contribution to the applicants' legal and expert costs for the reasons set out above.
What should that contribution be?
In assessing costs, the Tribunal takes a 'robust and broad brush approach' and bases its determination on what a reasonable allowance should be made for the work necessarily done to bring the proceedings to a conclusion.[8]
[8] Medical Board of Australia and Costley [2013] WASAT 2 at [66].
The Tribunal accepts that the costs awarded are compensatory and not punitive in nature.
The applicants' legal costs claim appears to be based on the Supreme Court of Western Australia costs scale. We have used the hourly rate claimed by their counsel of $396 per hour but have not had regard to the Supreme Court costs scale otherwise.
In assessing what is an appropriate quantum of legal costs, we have had regard to the submissions by the applicants and respondent and our knowledge of the proceedings.
We have not allowed for the preparation of the witness statements of Mr Jusuf Kos or Ms Stafeta Kos as we did not rely upon their evidence in determining the matter.
We find that a reasonable allowance as a contribution to legal costs is $18,667.80, rounded to $18,668, together with disbursements claimed of $4,881 being a total $23,549.
Orders
The Tribunal orders:
1.The respondent is to pay to the applicants a contribution to their legal costs in the sum of $18,668 together with disbursements of $4,881 being a total of $23,549 within 14 days of the date of this order.
2.The respondent has liberty to apply to the Tribunal within 14 days of the date of this order to be heard with respect of the issue of the time to pay the costs set out above.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MS P LE MIERE, MEMBER
28 APRIL 2022
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