McLerie and Koleszko
[2014] WASAT 160 (S)
•3 JUNE 2015
McLERIE and KOLESZKO [2014] WASAT 160 (S)
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2014] WASAT 160 (S) | |
| BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA) | |||
| Case No: | CC:489/2013 | DETERMINED ON THE DOCUMENTS | |
| Coram: | MR C RAYMOND (SENIOR SESSIONAL MEMBER) MR J FISHER (SENIOR SESSIONAL MEMBER) | 3/06/15 | |
| 12 | Judgment Part: | 1 of 1 | |
| Result: | Application partially successful | ||
| B | |||
| PDF Version |
| Parties: | MARK McLERIE MARGO ZIMMER SARINA KOLESZKO |
Catchwords: | Building Services (Complaint Resolution and Administration) Act 2011 (WA) Successful respondent applying for costs Whether justice of the case supports an award of costs Effect of offer to settle |
Legislation: | Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 39 Dividing Fences Act 1961 (WA) Legal Practitioners (State Administrative Tribunal) Determination 2012 (WA) Limitation Act 2005 (WA), s 13 State Administrative Tribunal Rules 2004 (WA), r 40, r 41, r 42(2) |
Case References: | Ampezzo Pty Ltd and Franken [2009] WASAT 109 (S) Hoskins and Daniel Vinci t/as D'Vinci Contracting [2011] WASAT 188 Marvelle Investments Pty Ltd and Argyle Holdings Pty Ltd [2010] WASAT 125 (S) McLerie and Koleszko [2014] WASAT 160 Pearce & Anor and Germain [2007] WASAT 291 (S) Teo and Gojko Maricic t/as G & Ms Maricic Building Co [2013] WASAT 166 The Owners of 3840 Onslow Road, Shenton Park & Anor and C&I Constructions Pty Ltd [2014] WASAT 123 The Owners of Strata Plan 41133 and Lendlease Project Management Construction (Australia) Pty Ltd [2014] WASAT 6 |
Orders | On the application determined on the documents by Senior Sessional Member Clive Raymond and Senior Sessional Member John Fisher, it is on 3 June 2015 ordered that:,1. The applicants must, on or before 30 June 2015, pay to the respondent a contribution to the respondent's costs which the Tribunal fixes in the sum of $10,500. |
Summary | The respondent, as the successful party to the proceedings, made an application for costs in the total sum of $27,392.20. The applicants opposed the order for costs.,The Tribunal referred to the principles applicable to the order for costs in respect of proceedings brought under the Building Services (Complaint Resolution and Administration) Act 2011 (WA) as outlined in Hoskins and Daniel Vinci t/as D'Vinci Contracting [2011] WASAT 188 and in relation to an offer made in accordance with r 40 and r 41 of the State Administrative Tribunal Rules 2004 (WA) as discussed in Ampezzo Pty Ltd and Franken [2009] WASAT 109 (S).,The Tribunal found that the failure of the respondent to address the dispute in a responsible and neighbourly way, together with the fact that she had escaped legal liability due to a technicality, namely the claim having being made out of time, as well as the fact that the applicants had probably lost the right to enforce any contractual claim for the reconstruction of the works in question, militated strongly against any award of costs.,On the other hand, the Tribunal found that the applicants should have become aware of decisions of the Tribunal pointing to the likelihood that their claim was out of time and should certainly have focused on that issue when an offer of settlement was received some six weeks prior to the hearing. In all the circumstances, the Tribunal determined that the applicants should be ordered to pay a contribution to the respondent's costs based on the costs incurred from the date on which the offer of settlement was made.,Because the nature of the dispute did not warrant an award of costs at the maximum rates set out in the Legal Practitioners (State Administrative Tribunal) Determination 2012 (WA), the Tribunal fixed the rates at a level approximating 80% of the maximum under that Determination. An order was made that the applicants contribute an amount fixed in the sum of $10,500 towards the respondent's costs. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL ACT : BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA) CITATION : McLERIE and KOLESZKO [2014] WASAT 160 (S) MEMBER : MR C RAYMOND (SENIOR SESSIONAL MEMBER)
- MR J FISHER (SENIOR SESSIONAL MEMBER)
- MARGO ZIMMER
Applicants
AND
SARINA KOLESZKO
Respondent
Catchwords:
Building Services (Complaint Resolution and Administration) Act 2011 (WA) Successful respondent applying for costs Whether justice of the case supports an award of costs Effect of offer to settle
Legislation:
Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 39
Dividing Fences Act 1961 (WA)
Legal Practitioners (State Administrative Tribunal) Determination 2012 (WA)
Limitation Act 2005 (WA), s 13
State Administrative Tribunal Rules 2004 (WA), r 40, r 41, r 42(2)
Result:
Application partially successful
Summary of Tribunal's decision:
The respondent, as the successful party to the proceedings, made an application for costs in the total sum of $27,392.20. The applicants opposed the order for costs.
The Tribunal referred to the principles applicable to the order for costs in respect of proceedings brought under the Building Services (Complaint Resolution and Administration) Act 2011 (WA) as outlined in Hoskins and Daniel Vinci t/as D'Vinci Contracting [2011] WASAT 188and in relation to an offer made in accordance with r 40 and r 41 of the State Administrative Tribunal Rules 2004 (WA) as discussed in Ampezzo Pty Ltd and Franken [2009] WASAT 109 (S).
The Tribunal found that the failure of the respondent to address the dispute in a responsible and neighbourly way, together with the fact that she had escaped legal liability due to a technicality, namely the claim having being made out of time, as well as the fact that the applicants had probably lost the right to enforce any contractual claim for the reconstruction of the works in question, militated strongly against any award of costs.
On the other hand, the Tribunal found that the applicants should have become aware of decisions of the Tribunal pointing to the likelihood that their claim was out of time and should certainly have focused on that issue when an offer of settlement was received some six weeks prior to the hearing. In all the circumstances, the Tribunal determined that the applicants should be ordered to pay a contribution to the respondent's costs based on the costs incurred from the date on which the offer of settlement was made.
Because the nature of the dispute did not warrant an award of costs at the maximum rates set out in the Legal Practitioners (State Administrative Tribunal) Determination 2012 (WA), the Tribunal fixed the rates at a level approximating 80% of the maximum under that Determination. An order was made that the applicants contribute an amount fixed in the sum of $10,500 towards the respondent's costs.
Category: B
Representation:
Counsel:
Applicants : In person
Respondent : Mr V Dangubic
Solicitors:
Applicants : N/A
Respondent : Frichot & Frichot
Case(s) referred to in decision(s):
Ampezzo Pty Ltd and Franken [2009] WASAT 109 (S)
Hoskins and Daniel Vinci t/as D'Vinci Contracting [2011] WASAT 188
Marvelle Investments Pty Ltd and Argyle Holdings Pty Ltd [2010] WASAT 125 (S)
McLerie and Koleszko [2014] WASAT 160
Pearce & Anor and Germain [2007] WASAT 291 (S)
Teo and Gojko Maricic t/as G & Ms Maricic Building Co [2013] WASAT 166
The Owners of 3840 Onslow Road, Shenton Park & Anor and C&I Constructions Pty Ltd [2014] WASAT 123
The Owners of Strata Plan 41133 and Lendlease Project Management Construction (Australia) Pty Ltd [2014] WASAT 6
Introduction
1 The applicants, Mr Mark McLerie and Ms Margo Zimmer and the respondent, Mrs Sarina Koleszko (formerly known as Ms Sarina Fezio), are neighbours, residing respectively at 12 and 14 Beach Street, Bicton in the State of Western Australia. The parties were in a dispute concerning whether the applicants were entitled to require the respondent to demolish and reconstruct a limestone wall dividing the properties and to recover the costs which the applicants were obliged to contribute towards the costs of reconstructing an extension of the same wall dividing the applicants' property and a property created by subdivision, known as 14A Beach Street, Bicton. The Tribunal dismissed the application as reported in McLerie and Koleszko [2014] WASAT 160 (the Principal proceedings or Principal decision). The respondent has applied for costs totalling $27,392.20 and both parties have filed written submissions.
2 The respondent asserts that in the general exercise of the Tribunal's discretion, costs should be awarded, alternatively, costs should be awarded by reason of the applicant's refusal of an offer to settle dated 26 September 2014 which was expressed in the standard 'Calderbank' offer form as having been made without prejudice save as to costs.
The principles to be applied
3 There are a range of factors that might contribute to the Tribunal making a costs order, including the following nonexhaustive list:
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;
f) where a party has to embark in proceedings to vindicate its clear contractual entitlement;
g) 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; and
h) in the case of proceedings conducted under the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BSCRA Act), although s 39 thereof 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;
as discussed in Pearce & Anor and Germain [2007] WASAT 291 (S) at [22] [24]; Marvelle Investments Pty Ltd and Argyle Holdings Pty Ltd [2010] WASAT 125 (S) and Hoskins and Daniel Vinci t/as D'Vinci Contracting [2011] WASAT 188.
4 In the case of an offer of settlement, whether or not the offer complies with r 40 and r 41 of the State Administrative Tribunal Rules 2004 (WA) (SAT Rules) the Tribunal, in determining the costs that may be awarded, must take into account that a party did not accept an offer more favourable than the Tribunal's order. In deciding whether the rejection of an offer was unreasonable, regard should ordinarily be had to, at least the following:
a) the stage of the proceedings which the offer was received;
b) the time allowed for the offeree to consider the offer;
c) the extent of the compromise offered;
d) the offeree's prospects of success, assessed at the date of the offer;
e) the clarity with which the terms of the offer was expressed; and
f) whether the offer foreshadowed an application for costs in the event of the offeree rejecting it;
as discussed in Ampezzo Pty Ltd and Franken [2009] WASAT 109 (S).
Considerations
5 On any measure, the effort required to resolve the dispute between the parties has been disproportionate.
6 The applicants commenced proceedings in the Magistrates Court under the Dividing Fences Act 1961 (WA). Those proceedings were dismissed and resulted in a costs award in favour of the respondent in an amount of $11,246.30. The applicants unsuccessfully appealed that decision.
7 As a result of complaints made by the applicant, the City of Melville (City) issued a building order for the removal of the dividing wall based on the City having determined that the wall was structurally unsafe. The respondent applied for a review of that decision in Matter No CC 310 of 2013. The matter was settled in mediation on the basis that the respondent was to carry out structural repairs.
8 As found in the Principal decision at [17]:
The applicants were incensed that the City [of Melville] had only taken up the structural inadequacies of the wall because they had also established that the wall encroached into their property, contrary to the building licence and approved plans[.]
- Ultimately the City issued a further building order for the removal of the wall based on the encroachment. The respondent again applied to the Tribunal for a review of the decision. Ultimately, that matter was resolved in mediation as well, with the respondent consenting to an order for the demolition of the wall. That concession was reflected in mediation orders made by the Tribunal on 23 September 2014.
9 There are a number of factors which have contributed to the intractable dispute which still exists between the parties. The prime cause of the dispute, as is so often the case, is a complete breakdown in communication between the parties. The respondent has been less than forthcoming in her dealings with the applicants. Prior to the determination of the Tribunal in the Principal proceedings there may have appeared to be a number of technical arguments available to the respondent. But, morally, and if there had been any inclination on her part to be a good neighbour, she should have recognised that the wall constructed on her behalf, by her father, was defective and should have accepted a responsibility to rectify the situation by causing the wall to be reconstructed in accordance with the originally agreed terms. She has never done so and even now, as reflected in the settlement offered to which reference will be made later, she has done no more than to buckle under irresistible pressure to demolish the wall. She has given no indication of any willingness to reconstruct the wall in a proper manner. It is legitimate for the Tribunal to take this into account: see the discussion in GE Dal Pont, Law of Costs (2nd ed, 2009) at [8.51].
10 The applicants have contributed to the breakdown in communication by an over legalistic approach to all matters. Mr McLerie is a sophisticated person, clearly familiar with commercial contracts, as evident by his drafting of many documents that were before the Tribunal, and has endeavoured to ensure that dealings are recorded in writing and in some detail. On the other hand, the respondent presents as a far less sophisticated person. When challenged during the hearing about her failure to respond to Mr McLerie's many written communications, the respondent replied to the effect that Mr McLerie should simply have come to speak to her rather than to write in such a legal manner. We considered that to be a genuine and understandable response but it does not excuse, at least morally, her failure to rectify the situation by agreeing at an early stage to a demolition of the wall and its reinstatement in accordance with the terms originally agreed with her father, on her behalf. The respondent has escaped legal liability in these proceedings before the Tribunal on a technicality, namely, that the claim was made out of time.
11 The above weighs against an award of costs in favour of the respondent particularly as, contrary to the applicants' submissions we do not consider that the applicants established any point in the proceedings before the Tribunal which will be of assistance to them. The applicants submit that as a result of the Tribunal's findings that a contract was entered into between them and the respondent, represented by her father, that they will be able to enforce this contract and have thereby established a claim having a value, based on estimated replacement cost, of approximately $40,000 and an estimated claim for damages in excess of $40,000. This overlooks that a contractual claim for breach cannot be enforced by an action commenced if six years have elapsed since the cause of action accrued pursuant to s 13 of the Limitation Act 2005 (WA). It is therefore doubtful that the applicants have gained any benefit out of the Tribunal's determination in the Principal proceedings.
12 By pure chance therefore the respondent may well escape any legal liability to reconstruct the wall and any possible claim for damages. If a sensible attitude had been adopted by the respondent, this dispute could have been resolved as easily as the new owners of the lot at the rear of the respondent's lot were able to resolve the matter with the applicants, as referred to at [15] of the Principal decision. While these circumstances militate strongly against any award of costs in favour of the respondent, there are other factors which need to be considered.
13 Firstly, we consider that the applicants should have realised at some time prior to the hearing that they were unlikely to succeed on the grounds that the application was out of time. They were alerted to the issue because it had been raised in the proceedings when still before the Building Commissioner. Prior to the hearing there had been decisions of the Tribunal which cut across what appears to have been a significant basis for the applicants contending that the wall had never been completed because it had not been constructed in accordance with the agreed terms and that their claim was therefore not out of time: see The Owners of Strata Plan 41133 and Lendlease Project Management Construction (Australia) Pty Ltd [2014] WASAT 6; The Owners of 3840 Onslow Road, Shenton Park & Anor and C&I Constructions Pty Ltd [2014] WASAT 123 and Teo and Gojko Maricic t/as G & Ms Maricic Building Co [2013] WASAT 166. This argument was not pressed at the hearing although it has been revived at paragraph 11 of the applicants' opposing submissions. Otherwise, the applicants' argument concerning the date of completion had to rest on the evidence of the second applicant, Ms Zimmer, which fell far short of establishing their case. This evidence was examined in detail in the Principal decision.
14 Given the way in which Mr McLerie has conducted the litigation, we consider that it was well within his capability to have researched the above decisions and to have properly analysed them. The applicants should have been further focused on their proper consideration of this weakness in their case once they received the respondent's offer of settlement dated 26 September 2014. The offer, as already stated, is expressed in Calderbank form, but it also complies with r 40 and r 41 of the SAT Rules. It specifies that it is an offer made without prejudice and it provides for a period of consideration of the offer which complied with the minimum period specified of 14 days.
15 The offer was made approximately six weeks prior to the date on which the matter was set down for final hearing. The content of the offer was expressed as follows:
With respect to the issues relating to the Building Service Complaint comprising State Administrative Tribunal Action Number CC 489 of 2013, our client, Sarina Koleszko, herby offers to resolve all issues that you have raised in those proceedings on the basis that:
1. She will not enforce the costs order made in her favour in the Fremantle Magistrates Court Action Number FRE/GEN/888/2013 which entitlement is $11,246.30. Further, she will not take any steps in future to enforce a costs order arising out of those proceedings.
2. She will proceed to comply with the building order in accordance with the consent order that has been made in the proceedings involving herself and the City of Melville.
3. Your claims otherwise be dismissed.
In making this order we make the following observations:
1. The effect of the order she has consented to in the City of Melville proceedings to demolish the wall removes all of the remedial work issues from your claim.
2. The quantum of her costs order against you exceeds the monetary amount of your claim as set out in your statement of Submissions, Facts, Issues and Contentions dated 5 August 2014.
If you proceed to a trial of this matter (or proceed generally with it) and do not achieve an outcome before the Tribunal on terms any more favourable than those set out in this offer, we will rely upon the terms of this letter in order to seek a costs order against you for all costs that our client incurs in the proceedings.
The offer contained in this letter may be accepted by you in writing within 14 days of the date of this letter.
We also note that the terms of this offer were communicated to you orally in the Mediation Conference in the State Administrative Tribunal held 23 September 2014[.]
16 The applicants submit that it is not clear what is meant by the phrase 'if you proceed to a trial of this matter (or proceed generally with it)' and therefore they could not properly assess the offer. We do not accept this submission. In context, the reference to 'or proceed generally' covered the position that the matter might be resolved after rejection of the offer, but before trial. This would occur if the applicants had decided to withdraw. It might also have occurred if the applicants had requested a further attempt at mediation and the matter was settled subject to the respondent's right to apply for costs based on the settlement offer.
17 The applicants also submit that the offer of settlement did not address the replacement of the fence and that it was therefore not unreasonable to reject the offer. Again, the submission is not accepted. It was open to the respondent to assess that the applicants were unlikely to succeed with the claim that she would be required to reinstate the dividing fence because the claim had been brought out of time.
18 On any basis, the offer of settlement provides terms which were more favourable than the Tribunal's order dismissing the Principal proceedings. It is therefore necessary, pursuant to r 42(2) of the SAT Rules, that the Tribunal take into account that the applicants did not accept the offer.
19 Taking into account the offer of settlement, but weighing the factors identified above which militate against the award of costs, we find that the justice of the case requires only that the applicants make a contribution towards the respondent's costs.
20 The settlement offer was made on 26 September 2014. As indicated above, it is then, at the very least, at which the applicant should have given close focus to the weakness in their case, namely, that the complaint had been made out of time. We consider that the applicants should be ordered to pay the respondent's costs, to be fixed by the Tribunal, from 26 September 2014.
The fixing of costs
21 The respondent submits that costs should be awarded based on the maximum rates provided for in the Legal Practitioners (State Administrative Tribunal) Determination 2012 (WA) (Determination). This provides a maximum hourly rate for a senior practitioner of $374 per hour inclusive of GST, and in respect of counsel, an hourly rate of $297 and a daily rate of $2,970, inclusive of GST.
22 This submission overlooks that the rates given in the Determination are maximum rates. The Determination is used only as a guide because it reflects the maximum rates which may be charged by a legal practitioner in the absence of a written costs agreement. There is no scale of costs applicable to the Tribunal. We consider that the Determination is an appropriate guide having regard to the nature of this case, but the maximum rates should then only be allowed in cases, which by reason of importance to the client or complexity and such factors, warrant an award at the maximum rate. We do not consider that this is such a case and in the circumstances we will allow costs based at approximately 80% of the relevant maximum rate in respect of attendances subsequent to 26 September 2014. In the case of the respondent's legal practitioner, we have applied a rate of $330 per hour, inclusive of GST, and in respect of counsel, a rate of $270 per hour, and a daily rate of $2,700, inclusive of GST. The schedule of work undertaken provided in support of the cost application shows:
a) that since 26 September 2014 the legal practitioner provided 7½ hours service, which equates to $2,475;
b) counsel provided 9¾ hours of services up to and including preparation for the hearing, which equates to $2,632.50; and
c) counsel's charges for the two day hearing, which equates to $5,400.
23 The total charges calculated in accordance with the above are therefore $10,507.50 which we have rounded down and fixed in the sum of $10,500.
Conclusion and order
24 For the above reasons, we conclude that the applicants should be ordered to pay a contribution to the respondent's costs, fixed in the sum of $10,500. We shall accordingly cause an order to issue as follows:
1. The applicants must, on or before 30 June 2015, pay to the respondent a contribution to the respondent's costs which the Tribunal fixes in the sum of $10,500.
I certify that this and the preceding [24] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MR C RAYMOND, SENIOR SESSIONAL MEMBER
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