| JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : COMMERCIAL & CIVIL ACT : BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA) CITATION : OWNERS OF STRATA PLAN 52843 and PSAROS BUILDERS PTY LTD [2013] WASAT 46 (S) MEMBER : MS A DAVIES (SENIOR SESSIONAL MEMBER) MR J FISHER (SENIOR SESSIONAL MEMBER)
MR P MITTONETTE (SESSIONAL MEMBER)
HEARD : 2 AUGUST 2013 DELIVERED : 6 SEPTEMBER 2013 FILE NO/S : CC 602 of 2012 BETWEEN : OWNERS OF STRATA PLAN 52843 Applicant
AND
PSAROS BUILDERS PTY LTD
Respondent
Catchwords: Building Services (Complaint Resolution and Administration) Act 2011 (WA) Application for costs Principles to be applied
(Page 2)
Legislation: Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 36(1), s 38(1) s 49
Legal Practitioners (State Administrative Tribunal) Report and Determination 2010
Legal Practitioners (Supreme Court) (Contentious Business) Report and Determination 2010
Legal Practitioners (Supreme Court) (Contentious Business) Report and Determination 2012
State Administrative Tribunal Act 2004 (WA), s 9, s 87, s 87(1), Pt 4 Div 5 Result: Application successful in part
Summary of Tribunal's decision: The Owners of Strata Plan 52843 were successful in their complaint concerning water ingress into the basement car park of a mixed use development in Perth known as Tyne Square and sought costs against Psaros Builders Pty Ltd.
The Owners of Strata Plan 52843claimed that $219,758.12 was payable to them by Psaros Builders Pty Ltd.
The Tribunal reiterated the principles applicable to costs applications, including that the power to award costs under s 49 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) represents a departure from the provisions for the award of costs under the SAT Act and that the initial predisposition against an award of costs has been removed. Of course, however, while s 87(1) of the State Administrative Tribunal Act 2004 (WA) requires that the provisions of s 49 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) apply, s 49 should be construed in a manner which promotes the objectives and procedures of the Tribunal. These objectives would not be fostered by an approach that costs should follow the result as a general rule, but there will be cases in which it will be appropriate to exercise a discretion to enable the successful party to recover all costs which may be properly recovered in proceedings before the Tribunal.
The Tribunal also reiterated the kinds of considerations that may be relevant to the exercise of the Tribunal’s broad discretion under s 49 of the Building Services (Complaint Resolution and Administration) Act2011 (WA). The considerations referred to in previous cases are, however, not exhaustive.
(Page 3)
The Tribunal concluded that in this case, the complexity of the dispute, the importance of the proceedings to the Owners of Strata Plan 52843, the necessary representation by lawyers and the considerable costs incurred, combined to create a circumstance in which the justice of the case pointed to the need for costs to be awarded. The remedy granted by the Tribunal would not be truly effective if costs could not be recovered.
The Tribunal emphasised that where the Tribunal does award costs, the Tribunal is concerned to meet its obligation to minimise the cost to the parties by ensuring that any costs awarded are proportionate to the nature of the proceedings. It is also, of course, necessary to be satisfied that the costs claimed were reasonable.
The Tribunal found that the total amount of costs payable by Psaros Builders Pty Ltd to the Owners of Strata Plan 52843 was $182,260.66.
Category: B
Representation: Counsel:
Applicant : Mr AW Buchan
Respondent : Mr BG Grubb
Solicitors:
Applicant : Hotchkin Hanly
Respondent : Metaxas & Hager
Case(s) referred to in decision(s):
Chew and Director General of The Department of Education and Training [2006] WASAT 248
Craig & Ors v Troy & Ors (unreported, WASC Library No 950549, 28 September 1995)
Frankowiak and Chambers [2012] WASAT 175
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)
JCorp Pty Ltd and Ly [2008] WASAT 242
(Page 4)
Kitching and Top Class Renovations Pty Ltd [2013] WASAT 102
Lai & Anor and Costa [2006] WASAT 117 (S)
Mannix v Loumbos Pty Ltd [2000] NSWCA 32
Marvelle Investments Pty Ltd and Argyle Holdings Pty Ltd [2010] WASAT 125 (S)
Owners of Strata Plan 52843 and Psaros Builders Pty Ltd [2013] WASAT 46
Pearce & Anor and Germain [2007] WASAT 291 (S)
Rainbow Pty Ltd and Hawkins [2007] WASAT 216 (S)
(Page 5)
REASONS FOR DECISION OF THE TRIBUNAL:
The original proceedings and application for costs 1 In the original proceedings Owners of Strata Plan 52843 (Owners) sought building remedy orders pursuant to s 36(1) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BS(CRA) Act) against Psaros Builders Pty Ltd (Psaros Builders). The dispute concerned water ingress into the basement car park of a mixed use development in Perth known as Tyne Square. 2 The hearing was held over six days on 8, 9, 11 and 12 October and 6 and 7 December 2012. The Owners were successful in obtaining all of the orders sought. The Tribunal's reasons for decision were delivered on 5 April 2013 as Owners of Strata Plan 52843 and Psaros Builders Pty Ltd [2013] WASAT 46 (original decision). 3 In June 2013 the Owners applied for costs on the basis of: a) the complexity of the case and its importance to the Owners; b) the strength of the Owners' case; c) Psaros Builders' refusal to carry out appropriate remedial works which left the Owners with no choice but to commence proceedings; and d) the fact that the Owners could not have conducted the matter without incurring substantial costs, such that an injustice would result if costs were not awarded (Owners' written submissions dated 10 July 2013 (Owners' submissions), paragraph 8). 4 The Owners submitted that the appropriate analogy to costing of legal work is the appropriate Legal Practitioners (Supreme Court) (Contentious Business) Determination and claimed $219,758.12 comprising $100,441.05 in solicitors' fees and $119, 317.07 in disbursements.
The applicable principles for the award of costs 5 Section 87 of the State Administrative Tribunal Act 2004 (WA) (SAT Act) provides: Costs of parties and others (Page 6)
6 Section 49 of the BS(CRA) Act provides as follows: Costs and expenses (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. … (3) If the Building Commissioner or the State Administrative Tribunal is of the opinion that the costs and expenses were unnecessarily incurred due to the conduct of a party, the Building Commissioner or Tribunal may make an order requiring the party to pay all or any specified part of the costs and expenses incurred under this Act in investigating the complaint. (4) An order may be made under subsection (3) even where no building remedy order or HBWC remedy order is made. (5) In determining costs to be paid the Building Commissioner or State Administrative Tribunal may take into account any refusal or failure by a party to comply with an order or direction of the Building Commissioner or Tribunal. (6) When any costs or expenses are ordered to be paid under subsection (3): (7) This section does not limit the powers of the State Administrative Tribunal under the State Administrative Tribunal Act 2004 Part 4 Division 5. (Page 7)
7 Part 4 Div 5 of the SAT Act is the division dealing with costs and includes s 87 of the SAT Act. 8 As was observed by the Tribunal in Hoskins and Daniel Vinci T/As D'Vinci Contracting [2011] WASAT 188 (Hoskins) at [11], the power to award costs under s 49 of the BS(CRA) Act represents a departure from the provisions for the award of costs under the SAT Act. The Tribunal also observed at [14] that under the BS(CRA) Act the initial predisposition against an award of costs has been removed. Of course, as was also observed in Hoskins at [16], while s 87(1) of the SAT Act requires that the provisions of s 49 of the BS(CRA) Act apply, s 49 should be construed in a manner which promotes the objectives and procedures of the Tribunal. 9 Section 9 of the SAT Act provides as follows: Main objectives of Tribunal The main objectives of the Tribunal in dealing with matters within its jurisdiction are (a) to achieve the resolution of questions, complaints or disputes, and make or review decisions, fairly and according to the substantial merits of the case; and (b) to act as speedily and with as little formality and technicality as is practicable, and minimise the costs to parties; and (c) to make appropriate use of the knowledge and experience of Tribunal members. 10 The Tribunal concluded in Hoskinsat [18] and [19] that these objectives would not be fostered by an approach that costs should follow the result as a general rule, but that there will be cases in which it will be appropriate to exercise a discretion to enable the successful party to recover all costs which may be properly recovered in proceedings before the Tribunal. Without in any way attempting to define the circumstances in which the discretion may be exercised in that way, the Tribunal said such an outcome might be achieved where: … the successful party is legally represented and the complexity of the case required it to be prepared and presented in a more structured way than most building disputes coming before the Tribunal. Similarly, the Tribunal might more readily allow recovery of all disbursements properly incurred where the total disbursements, usually relating to the costs of expert witnesses, are such that the costs represent a significant proportion of the monetary value of the relief obtained. In such cases the remedy (Page 8)
granted by the Tribunal would not be truly effective if costs could not be recovered. These are the type of cases in which the justice of the case points to the need for costs to be awarded. At the other end of the scale, parties will always need to incur lodgement fees, travel costs and the cost of photocopying. It in no way furthers the objectives of the Tribunal to encourage or to have to entertain applications for such costs when they are really quite incidental to the benefit obtained from the proceedings. (emphasis added) Accordingly, s 49 of the BS(CRA) Act should not be understood as providing that costs will generally follow the result. It grants the Tribunal the broadest possible discretion in relation to costs and should be regarded as being entirely neutral in effect, but should be applied in a manner which is consistent with and reinforces the objectives and procedures of the Tribunal. In the exercise of that discretion all of the considerations identified above in relation to the exercise of the discretion under s 87 of the SAT Act remain relevant. Those considerations are however not exhaustive and any other factors will be relevant which point to the justice of the case requiring an award of costs. 11 Those other considerations referred to by the Tribunal in Hoskinsat [19] include the factors discussed in Pearce & Anor and Germain [2007] WASAT 291 (S)at [22] - [24] that might contribute to the Tribunal making a costs order. 12 The Tribunal has also recognised that costs might be awarded in the context of the review of decisions of the Building Disputes Tribunal (BDT) if, in a particular case, an injustice would otherwise result. The principles were reiterated by the Tribunal, for example, in JCorp Pty Ltd and Ly [2008] WASAT 242 (J-Corp) where the Tribunal relied upon Lai & Anor and Costa [2006] WASAT 117 (S) (Lai), Rainbow Pty Ltd and Hawkins [2007] WASAT 216 (S) (Rainbow) and Chew and Director General of The Department of Education and Training [2006] WASAT 248. 13 Lai concerned an application for costs in the context of a review of a decision of the BDT having been allowed. The review had resulted in the substitution of a new decision, which awarded increased compensation, but otherwise dismissed the complaint, save in respect of costs. The Tribunal ordered that the applicants be awarded the sum of $3,641.63 in respect to the costs of the proceedings before the BDT, but that each party bear its own costs in respect of the review proceedings. In relation to the review proceedings the Tribunal concluded at [22] and [23] that the costs of the review were relatively incidental to the benefit obtained from the order on review and therefore, there was no sufficient reason for the (Page 9)
Tribunal to move from the starting position that each party should bear its own costs. 14 In Lai the Tribunal's discretion in this particular area of jurisdiction was explained at [18] and [19] as follows: 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 affect 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. At the other end of the spectrum, the complexity of issues raised or the value of a claim the subject of a complaint to the Disputes Tribunal, may have the result that the applicant, or even both parties, wish to have legal representation from the outset. If there is sufficient at stake, consideration will be given to the possibility that whatever the result, one of the parties will wish to have the decision reviewed. In such circumstances, the inability to recover costs may be an important consideration, so that an applicant may prefer to commence proceedings in a court, rather than before the Disputes Tribunal. The Disputes Tribunal was established in the public interest to provide a cost effective and prompt method of dispute resolution in building cases. The Disputes Tribunal is a specialist tribunal which requires that its chair be a legal practitioner and that the other members be drawn from two panels, one representing consumer interests and the other representative of the interest of builders, to facilitate that purpose. If the cost of legal representation, and even expert witness fees, could not be recovered in the review proceedings, that may therefore, impact on the use of the Disputes Tribunal, and deny any review role by this Tribunal. It is relevant in considering an application for costs for the Tribunal to take such factors into account. 15 These principles were applied in J-Corp. In JCorp the Tribunal considered that an injustice would result if costs were not to be awarded by reason: a) of the complexity and importance to the owners of the proceedings; and b) that the case was quite clearly beyond the capacity of most laypersons to run, such that the owners could not have run the proceedings without legal representation. Accordingly the Tribunal ordered that the owners' costs, comprising legal fees and disbursements and expert (Page 10)
witness costs, be fixed in the sum of $53,256.74 and paid by the builder by a specified date. 16 These principles were also applied in Frankowiak and Chambers [2012] WASAT 175 (Frankowiak), another case referred to by the Owners. 17 Both the Owners and Psaros Builders referred to Kitching and Top Class Renovations Pty Ltd [2013] WASAT 102 (Kitching) as the most recent reported decision of the Tribunal regarding the applicable principles for an award of costs. In Kitching a building contractor, who had been successful in defending an application under the BS(CRA) Act was awarded costs against the applicant. This case is an example of the application of the Tribunal's broad discretion in this jurisdiction, albeit in a different factual scenario.
Whether costs should be awarded 18 Psaros Builders vigorously opposed the award of costs principally because, it contended, the Owners had conducted themselves unreasonably and it would therefore be unfair to award costs. Psaros Builders submitted that the report of Mr Richard Machell dated 2 October 2012 (Machell Report), which the Tribunal relied upon in making 'crucial findings of liability' (Psaros Builders written submissions dated 26 July 2013 (PB submissions), paragraph 7.1.15) and which should have been served on them by 31 July 2012, was served on them three days before the commencement of the hearing (PB submissions, paragraph 7.1.5). This led to Psaros Builders not knowing until 29 October 2012, when it engaged Mr Andrew Booth, a registered builder, to prepare a responsive report (Booth Report), that it could not challenge the findings in the Machell Report (PB submissions, paragraph 7.1.12). Accordingly, Psaros Builders concluded that the presentation of their case before the Tribunal and any possible settlement discussions prior to the hearing were fundamentally prejudiced, such that the Owners should be disentitled to an award of costs (PB submissions, paragraph 7.1.17). 19 Psaros Builders relied upon Mannix v Loumbos Pty Ltd [2000] NSWCA 32 at [13], [21] and [22] (Mannix) and Craig & Ors v Troy & Ors (unreported, WASC Library No 950549, 28 September 1995) (Craig) (PB submissions, paragraph 7.1.19). 20 Mr Grubb, counsel for Psaros Builders, added during oral submissions that service of a very significant report three days before the (Page 11)
hearing would not have been allowed in the Supreme Court of Western Australia. He submitted that in the Tribunal, however, there is 'this safeguard of no costs' because of the objectives in s 9 of the SAT Act which include to act speedily. 21 The Tribunal does not accept Psaros Builders' submissions regarding the Machell Report. 22 In the week before the commencement of the hearing, the Owners applied to the Tribunal for leave to rely on the Machell Report. On the first day of the hearing, Mr Buchan, counsel for the Owners, explained the following to the Tribunal (T:3; 08.10.12): BUCHAN, MR: In addition to Mr [Ullner's] statement, supplementary statement, is a report from Mr Richard [Machell], dated 2 October 2012. Mr [Machell] is a registered builder. Last Thursday, Member Ward allowed the applicant owner to lead additional evidence consistent with Mr [Machell's] 2 October 2012 report. It was agreed that the respondent builder should be given an opportunity to respond to the [Machell] report. On that basis it was also agreed last Thursday that there would need to be an additional day's hearing, separate to the currently listed dates, so that the respondent builder's given an adequate opportunity to respond to this evidence, which has been raised late and outside the terms of the orders originally made by the SAT. I understand my friend will make a submission about appropriate programming orders, but I think it will be to the effect that the respondent builder have 21 days possibly from the conclusion of the hearing dates for this sitting, to put up responsive evidence. Then after that responsive evidence has been put up the matter be relisted for an additional day for Mr [Machell] and any responsive evidence be given by the respondent builder. 23 Mr McGowan for Psaros Builders later said as follows (T:28; 08.10.12): DAVIES, MS:Yes. Then there's the issue of Mr [Machell] and the respondent's additional expert in reply. Who is that? McGOWAN, MR: The order was only made last Thursday. DAVIES, MS: Right. McGOWAN, MR:We haven't engaged a responding expert which is why, as my friend suggests, we wanted a direction today. We have 21 days from the conclusion of this part of the hearing to arrange for the person to be engaged and for a report to be provided. (Page 12)
DAVIES, MS:Okay. And then do you imagine the additional day of hearing to address that aspect? McGOWAN, MR:That's a matter for the tribunal, but that evidence wouldn't take a whole day, so if the tribunal was minded we would deal with that evidence and then deal with closing submissions on that one day. Whether the tribunal wants written submissions either in place of or supplementary to oral submissions is a matter for the tribunal. 24 A key aspect of Mr Machell's opinion was that: a) in respect of the installation of 15 floor wastes (meaning the relief vents) in the car park as a solution to groundwater pressure, the concept provided a solution to the structural issues only, without consideration of the practical considerations of compliance with the other provisions of the Building Code of Australia (Building Code); and b) this would be immediately apparent to a competent builder faced with floor wastes in a basement, a site that required dewatering and had a maximum groundwater level of 10.5 AHD, with a floor installed at 9.8 AHD and in the absence of the subdrainage system. 25 Psaros Builders tendered the opinion of Mr Bradley Pike, a building surveyor, dated 7 November 2012 in response to the Machell Report, although Mr Pike expressly declined to express an opinion on this particular issue on the basis that it was beyond his expertise. 26 While the Tribunal had some difficulty with the notion of 'a competent builder' and made the point that even a competent builder may suffer an error of judgment (see [211] of the original decision), the Tribunal accepted Mr Machell's opinion in the above respect. The Tribunal concluded, based in part on this evidence (see [320] of the original decision), that the puncturing of the vapour barrier by Psaros Builders in the construction of the relief vents had the consequence that the building service, comprising the waterproofing in the construction of the basement, was not carried out in a proper or proficient manner within the meaning of s 38(1) of BS(CRA) Act and that the puncturing of the vapour barrier by the respondent rendered the vapour membrane faulty or unsatisfactory within the meaning of s 38(1) of BS(CRA) Act. 27 As Psaros Builders submitted, the significance of these findings in the Machell Report and the reliance upon it by the Tribunal in making (Page 13)
crucial findings of liability against Psaros Builders could not be downplayed by the Owners (PB submissions, paragraph 7.1.15). 28 In response to a question by the Tribunal during the costs application, MrGrubb confirmed that Psaros Builders was not contending that the original proceedings could have been avoided, although it does appear implicit in Psaros Builders' submissions that their position is that it might have been reduced. However, there was no submission as to by how much. The submission was made simply as a basis to justify the exercise of the Tribunal's discretion in such a way as to decline to award costs at all. 29 The problem with the submission made on behalf of Psaros Builders is that the substance of the Machell Report, that a competent builder would not have proceeded to construct the basement slab as Psaros Builders had, must have been understood by Mr Psaros well before receipt of the Booth Report. Mr Psaros is himself a registered builder. 30 Further, the authority cited as supporting Psaros Builders' submission that in circumstances such as these, costs should not be awarded, (PB submissions, paragraph 7.1.19) does not provide such support. 31 In Craig, in relation to Supreme Court proceedings, where the plaintiffs had been successful in recovering two thirds of the amount of damages sought, Anderson J held, relevantly, that the first and third defendants pay the plaintiffs' costs but that the plaintiffs be deprived of the costs of three days (of the 36 day trial) and 10 witness fees be excluded because the plaintiffs' conduct had prolonged the trial and caused unnecessary expense. His Honour explained at 8 and 9 that: … In this case, the first and third defendants say and of course I accept that they were given some 15 statements on 28 February but that by the end of the trial some 55 statements had been served or handed across the bar table during the course of the trial and that many of these were provided only shortly before the witness was to be called. Whilst there may have been good reason for that in the case of a few witnesses, I cannot accept that it was unavoidable in every case and I have no doubt that, overall, it unnecessarily lengthened the trial. Having heard the witnesses and observed how their evidence was received bythe defendants, I have little doubt that if the order of Ipp J had beencomplied with, or substantially complied with, the time taken in givingevidence would have been reduced and a number of witnesses would not have hadto be called.[.] (Page 14)
32 In Mannixat[12] Foster AJA, with whom Priestley and Fitzgerald JJA agreed, allowed an appeal against an order that each party bear its own costs on the basis that there was no misconduct which would disentitle the successful party to costs. 33 These authorities deal with circumstances in which a successful party, in a jurisdiction where a successful party is ordinarily entitled to costs, may be deprived of costs. 34 The question in this application is whether, in the exercise of the broad jurisdiction of the Tribunal in building disputes, the successful party is entitled to an award of costs. 35 The Tribunal does not accept Psaros Builders' submission that, in seeking to rely on the Machell Report being received late, the Owners conducted themselves in a way that in itself justifies the exercise of the Tribunal's discretion in such a way as to decline to award costs. 36 On the other hand, the Tribunal also does not accept the Owners' submission that its original case was so strong that it amounted to embarking on proceedings to vindicate its clear legal entitlement. Among other considerations, the construction contract was complex and unclear. Nor does the Tribunal consider that Psaros Builders' refusal to carry out appropriate remedial works supports an entitlement to an order for costs, in the circumstances, as Psaros Builders' position at that point was that it was not responsible for doing so. 37 However, the Tribunal accepts the Owners' submission that the case involved complexity and was of importance to the Owners. 38 The complexity of the case was selfevident from the Tribunal's original reasons for decision which comprises 86 pages. This was in part a consequence of the joint venture involved and the different roles of Mr Psaros, but it was also because determining the builders' obligations under the BS(CRA) Act involved ascertaining the cause of the water ingress and interpreting a complex and unclear construction contract. 39 The importance of the proceedings to the Owners is also selfevident. Considerable water ingress had occurred which was causing unhealthy and dangerous conditions in the basement car park and fixing it was a difficult exercise. 40 The Tribunal also accepts the Owners' submission that the case could not have been conducted without incurring substantial costs. The (Page 15)
complexity of the case required it to be prepared and presented in a more structured way than most building disputes coming before the Tribunal and both parties chose to have legal representation. Further expert witnesses were warranted and the total costs of expert witnesses amounted to almost $115,000 in circumstances where the value of the remedy was $736,477. 41 The Tribunal considers that these factors combine to create a circumstance in which the justice of the case points to the need for costs to be awarded because the remedy granted by the Tribunal would not be truly effective if costs could not be recovered. 42 The Tribunal does not accept Psaros Builders' submission (PB submissions, paragraph 8) that there is no injustice if the complexity and importance of the case is balanced against the Owners' conduct in seeking to rely on the Machell Report late in the proceedings and that cost to the Owners will be divided amongst 45 individual owners. The complexity and importance of the case outweighs these other considerations.
The quantum of costs to be awarded 43 In Frankowiakat [15] the Tribunal made the point that, in cases where the Tribunal does award costs, the Tribunal is concerned to meet its obligation to minimise the cost to the parties by ensuring that any costs awarded are proportionate to the nature of the proceedings, and referred to the approach taken in Rainbow and J & P Metals Pty Ltd and Shire of Dardanup [2006] WASAT 282 (S) (J&P Metals). Further at [32] the Tribunal stated that it is, of course, necessary to be satisfied that the costs claimed were reasonable. 44 The Owners submitted that the appropriate analogy to costing of legal work is the appropriate Legal Practitioners (Supreme Court) (Contentious Business) Report and Determination (Owners' submissions, paragraph 1). The Legal Practitioners (Supreme Court) (Contentious Business) Report and Determination 2010 (WA) operated from 1 July 2010 to 1 November 2012 (2010 Supreme Court Scale) and the Legal Practitioners (Supreme Court) (Contentious Business) Report and Determination 2012 (WA) has operated since 1 November 2012 (2012 Supreme Court Scale). 45 Psaros Builders submitted that, contrary to the Owners' submission, the appropriate scale is the Legal Practitioners (State Administrative Tribunal) Report and Determination 2010 (SAT Scale) which, relevantly, (Page 16)
specifies the maximum allowable rate for Counsel as $275 per hour (PB submissions, paragraph 9). 46 Regulation 3 of the SAT Scale provides that it applies, inter alia, to the remuneration of legal practitioners in respect of advice given by legal practitioners in, or for the purpose of, proceedings before the Tribunal. It is therefore clearly applicable. 47 However, in appropriate cases, the Tribunal may also have regard to other scales. The Tribunal did so, for example, in Marvelle Investments Pty Ltd and Argyle Holdings Pty Ltd [2010] WASAT 125 (S) (Marvelle). The Tribunal explained at [48] that in the circumstances of that case, having regard to the complexity and importance to the parties, it was appropriate to use the Supreme Court Scale as an additional guide. The Tribunal also confirmed in Marvelle at [47] that the SAT Scale is no more than a guide of the maximum amount which might be allowed on a party and party basis for an hourly or daily rate, as the case may be. 48 In these circumstances, as the original proceedings involved complexity and is of importance to the Owners, it is also appropriate to use the 2012 Supreme Court Determination as an additional guide. 49 In Marvelle at [35] the Tribunal acknowledged that, as a result of the level of costs set, the costs recoverable will be very significantly lower than the solicitor and client costs incurred. Further, the Tribunal said at [36] that this disparity will always operate as a disincentive for parties to allocate unnecessary resources and time to litigate in a manner which is inconsistent with the simplified and expeditious procedures which should be the paradigm in the Tribunal. 50 In relation to item 1 of the Owners' Schedule of Costs, $1,716 is claimed for the drafting by a senior practitioner of the notice of complaint and schedules between 8 February and 26 March 2012. This is calculated on the basis of a total of four hours at $429 per hour. 51 The Owners submitted that this task was analogous to drafting a writ of summons and statement of claim, and hence rely upon item 1 of the Supreme Court Scale. 52 The Tribunal accepts that item 1 of the 2010 Supreme Court Scale is a useful guide; however, it considers that 1 hour and 30 minutes is reasonable, given that there was not a statement of issues, facts and contentions in this matter. Also, the appropriate hourly rate is $352 as (Page 17)
specified for a senior practitioner under the SAT Scale. The total amount allowed for this item is therefore $528. 53 In relation to items 2 - 6 of the Owners' Schedule of Costs, an hour or less than an hour is claimed for preparation to attend a directions hearing and, similarly, an hour or less than an hour is claimed for attending a directions hearing. 54 The Tribunal considers this reasonable but, again, that the appropriate hourly rate is $352. The total amount allowed for these items is therefore $2,745.60 (being $704 plus $457.60 plus $492.80 plus $633.60 plus $457.60). 55 In relation to item 7 of the Owners' Schedule of Costs, 11 hours and 30 minutes is claimed for submissions, preparation and attendance of the directions hearing on 4 October 2012. The Owners submit that this involved a preliminary issue relating to jurisdiction and was akin to a complex chamber summons so that item 10 of the Supreme Court Scale is analogous. 56 The Tribunal accepts that this is reasonable but, again, that the appropriate hourly rate is $352. The total amount allowed for this item is therefore $4,048. 57 In relation to item 8 of the Owners' Schedule of Costs, $62,413.55 is claimed for getting up and preparation of the case. 58 As Psaros Builders submitted, this is more than the maximum of $51,480 under the 2010 Supreme Court Scale (PB submissions, paragraph 11). 59 The Tribunal appreciates that the original proceedings involved considerable complexity but nevertheless considers that this is more than Psaros Builders can reasonably be required to bear. In particular, the Tribunal considers that: • 23 hours and 6 minutes for the proofing of Mr Ullner's witness statement, which amounts to almost three (8 hour) days, is excessive. Bearing in mind that he was the witness on behalf of the strata company and was a key witness in terms of events including where and when water ingress has occurred, the Tribunal considers that 15 hours is reasonable. (Page 18)
• 22 hours and 30 minutes for proofing Mr Swift's witness statement is also excessive. Even though he was involved in the circumstances surrounding the installation of the relief vents, the Tribunal considers that only 10 hours is reasonable. • Psaros Builders should not bear the costs of basic research into the law and therefore all items relating to research should be excluded except in relation to the Building Code of Australia (Building Code). Whether the relief vents complied with the Building Code was a key issue in the original proceedings and involved complex issues of fact and law. • Psaros Builders should not bear the costs of two hours and six minutes of drafting joint statements of experts, including arranging and review, as this was principally a secretarial task given they were agreed and written at the Tribunal. • Collating bundles of documents for trial is a task for a junior practitioner not a senior practitioner. 60 The total amount allowed for item 8 is therefore $39,789.85 (being $3,696 for proofing Mr Airey plus $4,329.60 for Mr Martens plus $457.60 for Mr Collins plus $3,291.20 for Mr Sebbes plus $739.20 for Mr Watts plus $2,393.60 for Mr Machell plus $5,280 for Mr Ullner plus $1,512.60 for Mr Grose plus $3,520 for Mr Swift plus $1,232 for Mr Malie plus $352 for the drawing of subpoenas plus $352 for drafting chronology of events plus $123.20 for twenty one minutes of reading the Building Code but at $352 per hour plus $290.40 for lodgment of witness statements but for a clerk/paralegal at $121 per hour plus $581.90 for considering Building Code obligations but for a junior practitioner at $253 per hour plus $1,606.55 for collating documents for trial but for a junior practitioner at $253 per hour plus $10,032 for preparation for trial but at $352 per hour). 61 In relation to items 9 12 of the Owners' Schedule of Costs, six hours or less is claimed for attendance at each day of the first four days of trial, together with three hours for opening submissions. 62 The Tribunal considers this reasonable but, again, that the appropriate hourly rate is $352 per hour for a senior practitioner. Mr Buchan appeared as counsel but is a partner in a law firm and (Page 19)
therefore has the costs structure applicable to a law firm and not to the independent bar so that counsel's rates in the SAT Scale are not appropriate. 63 The total amount allowed for these items is therefore $8,096 (being $2,816 for day one of the trial plus $1,408 for day two plus $2,112 for day three plus $1,760 for day four). 64 In relation to item 13 of the Owners' Schedule of Costs, $15,785 is claimed for closing submissions. 65 Psaros Builders submitted that this is excessive (PB submissions, paragraph 11.2). 66 While the Tribunal requested written and oral closing submissions, it is considered that Psaros Builders should not bear the cost of 35 hours for this task. Although the Owners were successful in obtaining all of the orders sought, not all of the Owners' contentions were accepted by the Tribunal. Some of the closing submissions were unnecessarily spent trying to persuade the Tribunal on a general justice basis, whereas the requirements in the BS(CRA) Act are quite specific. The Tribunal considers that 20 hours is reasonable at an hourly rate of $352. The total amount allowed for this item is therefore $7,040. 67 In relation to item 14 of the Owners' Schedule of Costs, $451 is claimed for a one hour directions hearing at the Tribunal. 68 The Tribunal considers that one hour is reasonable but that the appropriate hourly rate is $352 per hour. While the 2012 Supreme Court Scale becomes applicable from 1 November 2012, the SAT Scale does not alter and so the appropriate hourly rate remains the same. The total amount allowed for this item is therefore $352. 69 In relation to items 15 and 16 of the Owners' Schedule of Costs, 2 hours 30 minutes is claimed for attendance at day five of the trial and 2 hours for day six. 70 The Tribunal considers this reasonable but, again, that the appropriate hourly rate is $352 per hour for a senior practitioner. The total amount allowed for these items is therefore $1,584 (being $880 for day five of the original proceedings plus $704 for day six). (Page 20)
71 In relation to item 17 of the Owners' Schedule of Costs, a total of $114,224.77 is claimed for expert fees. The Owners submit that item 34 of the Supreme Court Scale is analogous and the Tribunal agrees. 72 Psaros Builders submit that the expert witnesses' disbursements are excessive, unreasonable and unjustifiable and, in particular, that Mr Airey's fees at $70,026.77 are absurd (PB submissions, paragraph 11.3). However, Mr Grubb could not point to an item in the invoices which pertained to unnecessary work or be specific about how or why Mr Airey's fees were absurd. Mr Grubb suggested that, because Mr Airey's invoices do not show a rate per hour, the invoices could not be assessed. 73 The Tribunal does not accept this submission in this particular case. Mr Airey played a very significant role in the case and his invoices describe the work to which each invoice relates. Mr Airey was involved in diagnosing and developing the solution, as well as assisting in assessing other expert witnesses' input over a twelve month period. It must be remembered that, unlike Psaros Builders, the Owners are not themselves builders and had not been involved in the construction of Tyne Square. The Tribunal sees no basis upon which to conclude that any of the expert witness fees are unreasonable or excessive. They do not appear to be so. The total amount allowed for these items is therefore $114,224.77. 74 In relation to items 18 and 19 of the Owners' Schedule of Costs, a total of $614.10 is claimed for court fees and a total of $939.55 for the trial transcript. 75 The Owners submit that item 34 of the Supreme Court Scale is analogous and the Tribunal agrees. The total amount allowed for these items is therefore $614.10 and $939.55 respectively. 76 In relation to item 20 of the Owners' Schedule of Costs, a total of $3,099.65 is claimed for photocopying. The Owners submit that item 31 of the Supreme Court Scale is analogous and the Tribunal agrees. This photocopying occurred prior to 1 November 2012 when the 2012 Supreme Court Scale came into effect. The maximum recoverable amount, according to the 2010 Supreme Court Scale, is $0.11 per page. It appears from the invoices provided that more than $0.11 per page has been charged. Therefore the Tribunal sees fit to discount the amount claimed by 40% and the total amount allowed for these items is therefore $1,859.79. (Page 21)
77 In relation to item 21 of the Owners' Schedule of Costs, a total of $439 is claimed for personal service fees and conduct money. The Owners submit that item 34 of the Supreme Court Scale is analogous and the Tribunal agrees. The total amount allowed for these items is therefore $439.
Conclusion 78 For the above reasons the total amount of costs payable by Psaros Builders to the Owners is fixed, as summarised in table form below. |