QEST HOLDINGS PTY LTD and HIRSCHBERG
[2012] WASAT 182
•29 AUGUST 2012
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: COMMERCIAL & CIVIL
ACT: BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA)
CITATION: QEST HOLDINGS PTY LTD and HIRSCHBERG [2012] WASAT 182
MEMBER: MR R TRAVERS (SESSIONAL MEMBER)
MS K LANG (SESSIONAL MEMBER)
HEARD: DETERMINED ON THE DOCUMENTS
DELIVERED : 29 AUGUST 2012
FILE NO/S: CC 258 of 2012
BETWEEN: QEST HOLDINGS PTY LTD
Applicant
AND
PHILLIP HIRSCHBERG
First respondentNATALIE HIRSCHBERG
Second respondent
Catchwords:
Building Services (Complaint Resolution and Administration) Act 2011 (WA) Costs
Legislation:
Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 41(2)(b), s 49
Home Building Contracts Act 1991 (WA), s 17
State Administrative Tribunal Act 2004 (WA), s 9, s 87
Result:
Applicant's application successful
Category: B
Representation:
Counsel:
Applicant: Ms Lazarou
First respondent : Selfrepresented
Second respondent : Ms Breach
Solicitors:
Applicant: GV Lawyers
First respondent : N/A
Second respondent : Hunter Cook
Case(s) referred to in decision(s):
Hoskins and Daniel Vinci T/as D’Vinci Contracting [2011] WASAT 188
J & P Metals Pty Ltd and Shire of Dardanup [2006] WASAT 282 (S)
Lai & Anor and Costa [2006] WASAT 117 (S)
Marvelle Investments Pty Ltd and Argyle Holdings Pty Ltd [2010] WASAT 125 (S), 7
Pearce & Anor and Germain [2007] WASAT 291 (S)
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
The complaint in relation to a breach of a home building work contract was referred by the Building Commission to the State Administrative Tribunal under the Building Services (Complaint Resolution and Administration) Act 2011 (WA). The applicant builder was successful at the hearing and was granted leave to apply for costs.
The Tribunal allowed costs to the applicant, as the respondent owners acted unreasonably by failing to comply with their clear contractual obligations to pay the applicant. The applicant was justified in engaging a legal practitioner to represent it at the hearing, as the respondents cited their complicated family law proceedings as a reason for nonpayment under the contract, and the amount of the claim was substantial.
Although Ms Hirschberg did not attend the final (half day) hearing, the late notice of her intention not to oppose the orders sought did not significantly reduce the applicant's costs. Ms Hirschberg's conduct caused the adjournment of the first hearing date. The respondents are equally liable for the costs awarded to the applicant.
The proceedings and application for costs
In November 2011, the builder (applicant) lodged a complaint with the Building Commission, pursuant to s 17 of the Home Building Contracts Act 1991 (WA), alleging the owners (respondents) were in breach of a home building works contract by failing to make the final payment.
The matter was referred to this Tribunal pursuant to the provisions of the Building Services (Complaint Resolution and Administration Act 2011 (WA) (BS(CRA) Act). A directions hearing was held on 6 March 2012 at which time the matter was listed for hearing on 27 March 2012.
The hearing was adjourned on the application of Ms Hirschberg, represented in her absence by recentlyengaged counsel with instructing solicitors, who submitted that the matter should be referred to mediation as they were unaware of any legal basis for their client's defence. Ms Hirschberg was on holiday, and her counsel had no instructions. Counsel referred to complicated family law proceedings between the respondents.
Neither respondent had filed submissions as directed.
The Tribunal refused the application for mediation, and adjourned the hearing for 14 days with directions that the respondents file submissions within seven days.
The respondents again failed to comply with the Tribunal's directions.
The hearing proceeded on 17 April 2012 without Ms Hirschberg, whose legal representatives notified the Tribunal on 16 April 2012 that she would not attend, but that she did not oppose the orders sought. Mr Hirschberg appeared in person.
The applicant claimed that it achieved practical completion of the respondents' home on 18 April 2011. The respondents failed to pay the variations component of the final invoice, in breach of the contract. The applicant sought $108,250.08 plus interest, with legal costs.
Mr Hirschberg submitted that he was happy with the builder's work, and agreed that practical completion was achieved on 18 April 2011. He agreed to pay the applicant $90,000, but had issues with the bifold doors and grano works. He conceded that none of the issues raised affected the date of practical completion and he had not filed a complaint against the applicant.
Mr Hirschberg also submitted that he assumed that payment of the variations was due at handover. He never realised that full payment was due at practical completion. The applicant referred to the contract, which provides that variations will be invoiced at the next progress payment.
The Tribunal found that the respondents were in breach of the contract, with no credible excuse for failing to make the final payment. The Tribunal ordered the respondents to pay to the applicant $119,212, pursuant to s 41(2)(b) of the BS(CRA) Act, and the applicant was granted liberty to apply for costs.
The applicant subsequently made written application for costs, and a directions hearing was held on 19 June 2012 at the request of the respondents. The applicant was directed to file submissions by 10 July 2012 and the respondents were directed to file any responsive submissions by 31 July 2012. The parties agreed that the Tribunal would make its decision on the papers.
The applicant filed submissions, with a bill of costs on 10 July 2012, seeking legal expenses and disbursements of $10,340.
Ms Hirschberg filed submissions in response on 31 July 2012. Mr Hirschberg did not file submissions, but requested a hearing in September 2012, in order to crossexamine Ms Hirschberg and the applicant. This application was refused as being inconsistent with the objectives of s 9 of the State Administrative Tribunal Act 2004 (WA) (SAT Act), which provides that the Tribunal is required to act speedily and with as little formality and technicality as is practicable, and to minimise the cost to the parties.
We give no weight to any of the unproven, and largely irrelevant, accusations batted between the respondents concerning each other's behaviour and the Family Court proceedings.
The applicable principles for the award of costs
The starting point when dealing with a costs application is that each party bears its own costs of a proceeding before the Tribunal.
Section 87 of the SAT Act provides:
(1)Unless otherwise specified in this Act, the enabling Act, or an order of the Tribunal under this section, parties bear their own costs in a proceeding of the Tribunal.
(2)Unless otherwise specified in the enabling Act, the Tribunal may make an order for the payment by a party of all or any of the costs of another party or of a person required to produce a document or other material on the application of the party under section 35.
…
This provision must be read with the enabling legislation. Section 49 of the BS(CRA) Act provides as follows:
(1)Subject to this section, the Building Commissioner or the State Administrative Tribunal may make such orders for costs as they think fit in relation to proceedings arising from a building service complaint or a HBWC complaint.
(2)The Building Commissioner must not award costs to a party for the services of a representative of that party unless, in the opinion of the Building Commissioner, it is fair to do so, having regard to
(a)whether a party has acted in relation to a complaint in a way that unnecessarily disadvantaged another party; or
(b)whether a party has been responsible for prolonging unreasonably the time taken to deal with the complaint; or
(c)the relative strengths of the claims made by each of the parties; or
(d)any other matter the Building Commissioner considers relevant.
…
There are a range of factors that the Tribunal may take into account in deciding whether or not to exercise its discretion to make a costs order, including the nonexhaustive list from Pearce & Anor and Germain [2007] WASAT 291 (S) (Pearce) at [22] [24]:
a)where a party conducts itself unreasonably, particularly where the conduct leads to unnecessary costs to the other party;
b)where a party has conducted itself inappropriately, particularly where the conduct leads to unnecessary costs to the other party;
c)where credibility of evidence is at the heart of a matter;
d)where the application undermines the integrity of proceedings under the relevant Act;
e)where the case is weak, being incredible or implausible or obviously unmeritorious; and
f)where a party has to embark in proceedings to vindicate its clear contractual entitlement,
and Lai & Anor and Costa [2006] WASAT 117 (S) which held that the costs of conducting the case might be allowed when the costs were such that an injustice would result by not allowing costs.
The Tribunal is required, by s 9 of the SAT Act, to act speedily and with as little formality and technicality as is practicable, and to minimise the cost to the parties. Those objectives would not be fostered by an approach that costs should follow the result as a general rule: Hoskins and Daniel Vinci T/as D’Vinci Contracting [2011] WASAT 188 at [17].
Consideration of the costs claim
The principles identified above must be applied to the consideration of this application for costs.
The applicant was compelled to institute these proceedings in order to enforce its clear contractual rights. The complaint was complicated by the marital breakdown and family law proceedings of the respondents, which justified the applicant engaging legal representatives. The applicant succeeded in obtaining, effectively, all the relief it claimed, but has legal costs in excess of $10,000.
It is relevant to take into account that the respondents made no genuine effort to resolve the matter prior to the hearing. Mr Hirschberg put forward various arguments and excuses without merit. Ms Hirschberg engaged counsel to appear on her behalf and went on holiday for the first hearing without providing clear instructions, causing the proceedings to be adjourned. Ms Hirschberg's counsel unsuccessfully requested that the matter be referred to mediation, whilst conceding that Ms Hirschberg had no obvious defence. The day before the final hearing, Ms Hirschberg advised that she would not attend, and did not oppose the orders sought. The respondents' position was weak and obviously unmeritorious throughout the proceedings.
We find that both respondents conducted themselves unreasonably, causing the applicant to incur unnecessary costs.
In these circumstances, the interests of justice support allowing the costs application.
The applicant submitted a bill of costs in the amount of $10,340. This sum represents the solicitor and client costs, being the amount payable by the applicant to its legal representatives. We are mindful of the Tribunal's stringent approach to costs, as outlined in J & P Metals Pty Ltd and Shire of Dardanup [2006] WASAT 282 (S) and Marvelle Investments Pty Ltd and Argyle Holdings Pty Ltd [2010] WASAT 125 (S) at [35]. Any rare costs awarded by the Tribunal will be very significantly lower than the solicitor and client costs incurred as a disincentive for parties to allocate unnecessary resources and time to litigate in a manner inconsistent with the SAT Act objectives.
We give regard to the simple nature of the claim, which was only complicated by the personal circumstances of the respondents. Preparation for the final halfday hearing should have been straightforward, with only one witness and minimal legal argument. We take into account that the first hearing was adjourned, causing some duplication in preparation time, and the applicant was represented at the adjournment and two directions hearings.
We find that it is fair to award approximately 50% of the bill of costs to the applicant. We decline to apportion liability between the respondents for the reasons outlined above.
Conclusion
For the above reasons the Tribunal allows costs to the applicant fixed in the amount of $5,000 and an order will be made to that effect.
Order
The Tribunal will accordingly cause an order to issue as follows:
1.The respondents are to pay the applicant's costs in respect of the proceedings, fixed at $5,000.
2.Such payment to be made within 21 days of the date of this order.
I certify that this and the preceding [33] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MR R TRAVERS, SESSIONAL MEMBER
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