SANDERS and GEMMILL HOMES PTY LTD
[2018] WASAT 24
•10 APRIL 2018
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: BUILDING SERVICES (COMPLAINT RESOLUTION AND ADMINISTRATION) ACT 2011 (WA)
CITATION: SANDERS and GEMMILL HOMES PTY LTD [2018] WASAT 24
CORAM: MS H LESLIE (MEMBER)
HEARD: DETERMINED ON THE DOCUMENTS
DELIVERED : 10 APRIL 2018
FILE NO/S: CC 1141 of 2014
BETWEEN: GEOFFREY FRANK SANDERS
Applicant
AND
GEMMILL HOMES PTY LTD
Respondent
Catchwords:
Building Services (Complaint Resolution and Administration) Act 2011 (WA) - Application for costs by partly successful party - Application principles - Consideration of offer of settlement
Legislation:
Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 5(1), s 5(2), s 36(1)(a), s 36(1)(b), s 49(1), s 49(2), s 49(7), s 58
Home Building Contracts Act 1991 (WA), s 17
State Administrative Tribunal Act 2004 (WA), s 87
Result:
Application for costs dismissed
Category: B
Representation:
Counsel:
| Applicant | : | In Person |
| Respondent | : | Mr P Monaco |
Solicitors:
| Applicant | : | N/A |
| Respondent | : | GV Lawyers |
Case(s) referred to in decision(s):
Sanders and Gemmill Homes Pty Ltd [2017] WASAT 41
Sanders and Gemmill Homes Pty Ltd [2017] WASAT 41 (S)
REASONS FOR DECISION OF THE TRIBUNAL:
Background and the application for costs
There has been protracted litigation between the parties relating to a dispute concerning alleged defective work and breaches of contract relating to the construction of a residential house by Gemmill Homes Pty Ltd (the respondent) for Geoffrey Frank Sanders (the applicant).
On 12 July 2016, following a hearing which took place on 14 March 2016, the original Tribunal delivered reasons for decision in respect of a complaint made by the applicant pursuant to s 5(1) and s 5(2) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BSCRA Act), in respect of the construction of a dwelling at 24 Tolworth Way, Embleton in the State of Western Australia. The building service complaint brought pursuant to s 5(1) of the BSCRA Act related to an allegation that cold water taps in the dwelling were supplying water of an excessive temperature due to the plumbing pipes having been run through the roof space and hence that the work had been performed in a faulty or unsatisfactory manner. The second complaint item was brought as either a breach of contract claim pursuant to s 5(2) of the BSCRA Act and s 17 of the Home Building Contracts Act 1991 (WA), and/or a building service complaint pursuant to s 5(1) of the BSCRA Act and related to an allegation of cracking to plaster and ceiling cornices throughout the dwelling.
On 12 July 2016, the original Tribunal dismissed the complaint in respect of the cold water service on the basis that the applicant had not established that the regulated building service had been performed in a faulty or unsatisfactory manner, or was work performed which was not proper or proficient. The original Tribunal also dismissed the complaint in respect of the cracking of plaster and cornices on the basis of an alleged breach of contract. However, the original Tribunal did find the respondent liable in respect of the plaster and cornices complaint pursuant to s 5(1) of the BSCRA Act on the basis that the work was faulty or unsatisfactory.
Although the applicant sought an order from the original Tribunal that the respondent undertake the necessary remedial work, the original Tribunal declined to exercise its discretion to make an order of that nature and instead ordered payment of $15,305.40 by the respondent to the applicant. On 17 July 2016, the Tribunal made an order that, pursuant to s 36(1)(b) of the BSCRA Act the respondent pay to the applicant the sum of $15,305.40 within 28 days (the original decision).
The respondent was given 14 days to make any application for costs that it wished to make. The respondent did seek costs order in the sum of $10,752 in respect of its costs from the date of the making of a formal offer of settlement (the respondent's initial costs application) and made a supporting submission. That application was opposed by the applicant who also provided a submission, albeit brief.
It is to be noted that immediately after the original decision, the applicant sought leave to review the original decision and, on 8 March 2017, in Sanders and Gemmill Homes Pty Ltd [2017] WASAT 41, he was granted leave pursuant to s 58 of the BSCRA Act by the Tribunal (differently constituted). The leave to review was limited to the appropriate remedy to be granted for faulty and unsatisfactory regulated building services resulting in cracked cornices and ceilings within the house. Leave in relation to all other aspects was refused.
The respondent's initial costs application was held over pending the determination of the leave application and the review proceedings.
The applicant ultimately was successful in the subsequent review proceedings before the Tribunal (differently constituted) in achieving his desired form of remedy order that the respondent carry out remedial work pursuant to s 36(1)(a) of the BSCRA Act (a works order), rather than pay the costs of that remedial work being done by another party, pursuant to s 36(1)(b) of the BSCRA Act (a payment order), as had been ordered in the original decision. Orders were made in August 2017.
The applicant subsequently applied for costs in relation to the application for leave and the review totalling $39,650.60 (the applicant's review costs application). The respondent opposed the award of costs.
In September 2017, the respondent applied to the Supreme Court for leave to appeal the decision of the Tribunal in the review proceedings. Notwithstanding that application, the Tribunal (differently constituted) determined that the applicant's review costs application should proceed without awaiting the outcome of the appeal leave and any appeal decision and, on 25 October 2017, in Sanders and Gemmill Homes Pty Ltd [2017] WASAT 41 (S) (the SGH review costs decision), the applicant's review costs application was dismissed.
The respondent's initial costs application remains to be determined.
The principles to be applied
Section 49(1) of the BSCRA Act provides that:
Subject to this section, the … [SAT] may make such orders for costs as [it] think[s] fit in relation to proceedings arising from a building service complaint or a HBWC complaint.
Section 49(2) of the BSCRA Act provides that costs should not be awarded unless:
… 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 [relevant] matter.
Section 49(7) of the BSCRA Act provides that:
This section does not limit the powers of the State Administrative Tribunal under the State Administrative Tribunal Act 2004 Part 4 Division 5.
The latter reference is in particular to s 87 of the State Administrative Tribunal Act 2004 which provides that:
(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.
(3)The power of the Tribunal to make an order for the payment by a party of the costs of another party includes the power to make an order for the payment of an amount to compensate the other party for any expenses, loss, inconvenience, or embarrassment resulting from the proceeding or the matter because of which the proceeding was brought.
(4)Without limiting anything else that may be considered in making an order for the payment by a party of the costs of another party where the matter that is the subject of the proceeding comes within the Tribunal's review jurisdiction, the Tribunal is to have regard to
(a)whether the party (in bringing or conducting the proceeding before the decision maker in which the decision under review was made) genuinely attempted to enable and assist the decision maker to make a decision on its merits;
(b)whether the party (being the decision maker) genuinely attempted to make a decision on its merits.
(5)The rules may deal with the effect of certain offers to settle, and responses, if any, to the offer, on the making of an order for the payment by a party of the costs of another party.
(6)The Tribunal may order that the representative of a party, rather than the party, in the representative's own capacity compensate that or any other party for costs incurred because the representative acted in, or delayed, the proceeding in a way that resulted in unnecessary costs.
The relevant principles are conveniently set out by Senior Sessional Member Raymond in the SGH review costs decision at [8] [9]:
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 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 a manner which is consistent with and reinforces the objectives and procedures of the Tribunal. Further, 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); Hoskins and Daniel Vinci t/as D'Vinci Contracting [2011] WASAT 188 and McLerie and Koleszko [2014] WASAT 160 (S) (McLerie).
In the case of an offer of settlement, whether or not the offer complies with r 40 and r 41 of the SAT Rules the Tribunal, in determining the costs that may be awarded, is required by r 42 thereof to 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) and McLerie.
The settlement offer
In the original proceedings, the respondent had filed two offers to settle which are relevant to costs. The final one of these dated 24 February 2016 was in the sum of $16,067.04. Clearly this amount exceeds the amount awarded in the original decision.
The respondent claimed in the costs submission filed that it was unreasonable for the applicant to refuse this offer. Notwithstanding the outcome of the review proceedings, the respondent appears to continue to advance this submission.
The Tribunal disagrees. As appears to have been the central issue in the review proceedings, the applicant's position in the original proceedings was that a works order rather than a payment order should be made against the respondent so that if there continued to be issues about the repair methodology or the work done in remediation, there would be no confusion as to where the responsibility lay. He was ultimately successful in obtaining such an order.
A finding was made in the review proceedings that there was a sufficient basis for the Tribunal to conclude that it was reasonable for the applicant to not accept the offer of settlement.
The Tribunal as presently constituted respectfully agrees with that proposition.
Consideration of the merits of the application for costs
Ultimately, The Tribunal is not persuaded that the justice of the case warrants the making of a costs order.
The respondent has successfully defended part of the applicant's claim in relation to faulty and defective workmanship, that is, in relation to some parts of the works. It has successfully defended the claims in contract.
The applicant has succeeded in his claim for faulty and defective workmanship in relation to other parts of the work, namely the plaster and cornice cracking. Proportionally this aspect was a significant part of the claim and the hearing.
The respondent claims to have always been prepared to remedy the plaster and cornicework defects, but only by undertaking the remedial steps of its choosing. The applicant has at all times been opposed to the respondent's proposed remediation methodology, claiming that it will not work to fix the problem. The original Tribunal took the view that because of the applicant's objection to the remediation method and his lack of faith in the respondent's likely ability to succeed in their chosen method, including a stated refusal by the applicant to allow the respondent's tradesmen onto the property if they intended to persist with their methodology against his wishes, a payment order should be made, as sought by the respondent. In the end, upon review, the Tribunal (differently constituted) determined that notwithstanding the differences of view, the relationships between the parties were not so broken as to justify a payment order, and a works order was made.
There was a genuine dispute about the remediation method. The outcome of the original proceedings was largely based on an acceptance of the evidence of the respondent's experts' evidence in all significant respects and the rejection of the applicant's expert Mr ReesMogg's evidence. It is accepted that the applicant was at all times guided by the opinion of his expert. If the applicant had been better advised, this case should have been easily resolved.
In the view of the Tribunal, neither party has behaved unreasonably or inappropriately. Each side had an argument based on expert advice, and potentially with some merit. Each succeeded in part at least.
In any event, in the view of the Tribunal, this is not a case the complexity of which required that it be prepared and presented in any more structured way than most of the building disputes coming before the Tribunal. It is noted that the applicant represented himself. The respondent of course has the right to legal representation but does not have the automatic right to a costs order to meet the cost of that representation even if 100% successful. To the contrary, the starting position in the Tribunal is that it is a costs neutral jurisdiction.
Upon a consideration of the factors required to be taken into account, there is nothing about this case that supports the Tribunal moving away from the general position adopted in the Tribunal's proceedings that each party should bear their own costs.
The just outcome is that each party bear their own costs in respect of the original proceedings.
Orders
For the above reasons, the Tribunal will issue an order as follows:
1.The respondent's application for costs to be awarded in relation to the original proceeding is dismissed.
2.Each party shall bear their own costs of the original proceedings.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
H LESLIE
10 APRIL 2018
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