OLYMPIC HOLDINGS PTY LTD and BEGLEY
[2009] WASAT 30
•23 FEBRUARY 2009
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: COMMERCIAL & CIVIL
ACT: BUILDERS' REGISTRATION ACT 1939 (WA)
CITATION: OLYMPIC HOLDINGS PTY LTD and BEGLEY [2009] WASAT 30
MEMBER: MR T CAREY (MEMBER)
HEARD: 3 FEBRUARY 2008
PARTIES' WRITTEN SUBMISSIONS FILED 4 FEBRUARY 2008
DELIVERED : 23 FEBRUARY 2009
FILE NO/S: CC 1737 of 2008
BETWEEN: OLYMPIC HOLDINGS PTY LTD
PETER BACICH
ApplicantsAND
PATRICK BEGLEY
FRANCINE BEGLEY
Respondents
Catchwords:
Building disputes - Respondents successful in opposing application for leave to review - Application for costs - Principles for award of costs
Legislation:
Builders' Registration Act 1939 (WA)
Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA)
State Administrative Tribunal Act 2004 (WA), s 87(1), s 87(2)
Result:
Respondents' application for costs upheld
Category: B
Representation:
Counsel:
Applicants: Mr M de Kerloy
Respondents : Mr R Shaw
Solicitors:
Applicants: Mony De Kerloy
Respondents : Lavan Legal
Case(s) referred to in decision(s):
Gill & Ors and Wildnight Pty Ltd [2008] WASAT 135
Lai and Costa [2006] WASAT 117
Pearce & Anor and Germain [2007] WASAT 291 (S)
Perth Central Holdings and Doric Constructions [2008] WASAT 302
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
The respondents successfully opposed the applicants' application for leave to review a decision of the Building Disputes Tribunal requiring them to perform a variety of building works to the respondents' residence. They consequently sought their costs of the application in a particular amount. The applicants opposed the making of any costs order.
The Tribunal considered the principles applying to the making of costs orders, both generally and in the context of building disputes. Based on those principles, it determined that the nature of the dispute and the lack of merit of the claims advanced by the applicants combined to make this an appropriate occasion for a costs order.
Relevant Background
On 3 March 2009, the State Administrative Tribunal (SAT or the Tribunal) refused the applicants leave to review a decision of the Building Disputes Tribunal (BDT) reflected in Order to Remedy No 105/2008‑09 and dismissed their application (SAT decision). The reasons for the SAT decision were delivered orally by me at the conclusion of the hearing on 3 February 2009. Following the delivery of the reasons and pronouncement of orders, the respondents sought an order for costs in the sum of $2,400.
The respondents made short oral submissions in support of their costs application. The applicants indicated that, although the amount of $2,400 was not the subject of challenge, this was not a matter where it was appropriate for any costs order to be made. The parties were permitted leave to file any written submissions on the costs question by 6 February 2009, and each party has filed short written submissions.
I will refer in broad terms to the respondents' complaint before the BDT, the BDT's decision insofar as it related to matters the subject of the leave application in SAT, the leave application and the reasons for its refusal. I will then provide a summary of the general principles applying to awards of costs in SAT, before applying those principles to this case so as to determine the application for costs.
Nature of complaint to the BDT, the BDT decision and the application for leave to this Tribunal
The respondents' complaint concerned aspects of the construction by the applicants of the respondents' residence in Mosman Park, having a contract price of $1.3 million. Of a total of 40 claims by the respondents, a significant number concerned a problem with water in the basement of the residence, which was located at the low end of the driveway, whilst another related to the condition of timber decking at the front of the house. The basement water problem was attributable to two broad causes:
1)ingress through the basement wall; and
2)inadequacy of the stormwater drainage system in a number of respects.
The BDT found for the respondents on the basement water problem, to which paras 1(a) ‑ 1(e) of the Order to Remedy relate, and, by para 1(f), ordered the replacement and coating of the timber decking.
The application to SAT sought leave to review each of paras 1(b) ‑ 1(f) of the Order to Remedy. The terms of paras 1(b) ‑ 1(e) required the applicants to perform quite specific tasks, such as installation of pumps of a particular capacity and installation of additional soakwells of particular dimensions. Paragraph 1(a), which was not challenged, is in terms that the applicants 'rectify the water ingress into the basement area of the residence'.
As disclosed in the applicants outline of submissions filed in the leave application, the following grounds for the grant of leave were relied upon:
•an asserted redundancy of the order to remedy paras 1(b) ‑ 1(e), given the terms of para 1(a) (the first ground);
•an asserted impossibility of performance of, and preference for an alternative solution to that contemplated in, paras 1(b) ‑ 1(d) (a claim that para 1(e) was incapable of being understood was withdrawn at the hearing) (the second ground); and
•the BDT's decision on the timber decking reflected in para 1(f) was said to have lacked any discernible basis (the third ground).
Each of the grounds raised was rejected in the SAT decision. I will not repeat the reasons for doing so ‑ the parties may seek the transcript of those reasons if they wish ‑ but suffice to say that the first and third grounds were dealt with in very concise terms, in the main by reference simply to the BDT's reasons for decision which lent no credence to them; to the contrary, those reasons, on a fair reading, indicated quite the opposite of what was being argued.
As for the second ground, the applicants had sought to rely upon fresh evidence in the form of an engineer's report to support their case of the existence of alternative solutions superior to those reflected in the order to remedy. At the commencement of the hearing, counsel for the applicants sought an adjournment to enable it to obtain a supplementary report from the same engineer, which would deal with two matters:
(a)the respondents' submission that, in at least one respect, the original report proceeded on a wrong assumption;
(b)to provide evidence, absent from the original report, of the alleged impossibility of performance.
The adjournment application was refused, amongst other reasons, because the impossibility allegation had been the subject of evidence and submission before the BDT, which had rejected it. The same reasoning also supported the rejection of the (substantive) second ground to the extent that it referred to the impossibility of performance, whilst, insofar as the desirability of an alternative solution was relied upon, this was found to be an impermissible attempt to have a matter dealt with by the BDT reheard.
Costs in the Tribunal ‑ general principles
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 State Administrative Tribunal Act 2004 (WA) (SAT Act), which creates the presumption of a 'no costs jurisdiction'. This is, however, subject to the broad discretion in s 87(2) of the SAT Act to award costs in appropriate cases.
The most recent authoritative discussion of the Tribunal's costs discretion can be found in Pearce & Anor and Germain [2007] WASAT 291 (S) (Pearce). A useful summary of that discussion appears in another Tribunal decision, Gill & Ors and Wildnight Pty Ltd [2008] WASAT 135 at [20] (Gill), as follows:
In Pearce, his Honour set out the following principles for the consideration of costs applications by the Tribunal:
(i)The starting point of the Tribunal is that it is a "no cost" jurisdiction ([8]).
(ii)The cost regime that was applicable to the previous Commercial Tribunal does not apply to the State Administrative Tribunal ([11]).
(iii)The objectives of the State Administrative Tribunal are furthered by its being essentially a "no cost" jurisdiction ([17]).
(iv)Where there is a genuine dispute and the respective rights are unclear and parties seek a determination, the "starting point remains that each party should expect to pay their own costs" ([24]).
(v)The Tribunal does have the power to award costs, and it is not appropriate to "delineate the particular circumstances" in which the discretion to award costs would be exercised favourably ([22]).
(vi)Some of the factors (not an exhaustive list) that may contribute to the Tribunal making a cost order are for example ‑
a.A party has conducted itself unreasonably, particularly where the conduct leads to unnecessary costs to the other party.
b.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 undermine the integrity of proceedings under the relevant Act.
e.The relative weakness of a case, it being incredible or implausible or "obviously unmeritorious".
f.If a party has to embark in proceedings to "vindicate its clear contractual entitlements". ([22] ‑ [24])
Both Pearce and Gill were proceedings under the Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA). The possibility of costs being awarded in the context of proceedings under the Builders' Registration Act 1939 (WA) (BR Act) has been discussed in some detail by the Tribunal in Perth Central Holdings and Doric Constructions [2008] WASAT 302 (Perth Central Holdings), and in the earlier decision (referred to in Perth Central Holdings) of Lai and Costa [2006] WASAT 117 (Lai). What those cases demonstrate is that, in an appropriate case, the costs of either a successful applicant or a successful respondent might be recoverable, having regard to such matters as the complexity of issues, the sums involved, extent of legal representation, the nature of the BDT hearing and the interest in not discouraging applications for review in deserving cases. This latter point was one accepted by the then Deputy President, Judge Chaney (as he then was) in Pearce at [17], where His Honour commented:
In my view, as a general proposition, [the objective of promoting accessibility to the Tribunal] is fostered by the usual 'no costs' position in the Tribunal and adherence to the Tribunal's objectives found in s 9 of the SAT Act.
His Honour then went on to consider circumstances in which a decision might be made one way or the other, including those factors identified in the above excerpt from Gill as tending toward the making of a cost order. At [24], Chaney J said:
… decisions on costs might serve to promote certainty and responsibility in parties to their contractual responsibilities. That does not mean that there is a presumption that costs will follow the event. Rather, where it is necessary for a party to a retail shop lease to take proceedings in the Tribunal to vindicate its clear contractual entitlements, and to incur costs in doing so, it will "often not be unreasonable for an award of costs to be made". The position is the same where costs are incurred in defending an obviously unmeritorious claim. Where, however, there is a genuine dispute between the parties to a lease, their respective rights are unclear and one or both seek determination of their rights in the Tribunal, the starting point remains that each party should expect to pay their own costs …
Although Pearce was a commercial tenancy matter, the decision itself, and a consideration of the nature of building disputes as illuminated by the Perth Central Holdings and Lai decisions, suggest that the passage just reproduced is particularly apposite to the current case. I will develop this further when applying the legal principles to the facts, to which I now turn.
Applying the principles to the facts of this case
I have set out, in some little detail, the nature of the dispute before the BDT, the BDT's decision, and the challenge to that decision sought to be raised in the Tribunal. I did so in order to illustrate that the challenge was one more in hope than resting upon firm foundation. Once exposed to more than the most superficial scrutiny, parts of it fell away. The claim concerning impossibility and preference for alternative solutions was the subject of consideration by the BDT and not accepted. For reasons which were not adequately explained, the same claim was sought to be pursued here based on evidence which was not produced before the BDT and evidence yet to be obtained.
There is no doubt that the subject matter of the dispute ‑ a serious water ingress problem arising from the construction of a $1.3 million residence ‑ is one of great moment to the respondents. Each side was represented before the BDT. The BDT made orders the effect of which was to impose significant obligations upon the applicants within a relatively short period (90 days). The applicants exercised their right to apply for leave to review the BDT's decision, and instructed legal representatives for that purpose. There is no suggestion that the respondents acted unreasonably in instructing their own legal representatives in order to oppose that application. The desire for certainty and responsibility which underlined the exercise of the discretion to order costs in the commercial tenancy context of the Pearce decision applies, in my view, with no less force to building disputes.
Based on the reasons I gave for the SAT decision, the leave application was, to adopt the language in Pearce, 'obviously unmeritorious'. The applicants failed in establishing anything approaching a serious doubt attaching to the BDT decision. That being so, consistent with the passage from Pearce at [24], the respondents' costs of opposing the application were at the applicants' risk. There will be an order for the respondents' costs in the sum sought.
Order
The applicants shall, within 28 days of the date of this order, pay the respondents' costs of the application fixed at $2,400.
I certify that this and the preceding [19] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MR T CAREY, MEMBER
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