SANDERS and GEMMILL HOMES PTY LTD
[2017] WASAT 41 (S)
•25 OCTOBER 2017
SANDERS and GEMMILL HOMES PTY LTD [2017] WASAT 41 (S)
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2017] WASAT 41 (S) | |
| BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA) | |||
| Case No: | CC:1205/2016 | DETERMINED ON THE DOCUMENTS | |
| Coram: | MR C RAYMOND (SENIOR SESSIONAL MEMBER) MR R AFFLECK (SENIOR SESSIONAL MEMBER) | 25/10/17 | |
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Application for costs dismissed | ||
| B | |||
| PDF Version |
| Parties: | GEOFFREY FRANK SANDERS GEMMILL HOMES PTY LTD |
Catchwords: | Building Services (Complaint Resolution and Administration) Act 2011 (WA) Application for costs by successful party in review of proceedings Applicable principles Consideration of offer of settlement |
Legislation: | Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 36(1)(a), s 36(1)(b), s 39, s 58 State Administrative Tribunal Act (WA), s 83(1)(b) State Administrative Tribunal Rules 2004 (WA), r 40, r 41, r 42 |
Case References: | Ampezzo Pty Ltd and Franken [2009] WASAT 109 (S) Cachia v Hanes & Anor (1994) 179 CLR 403 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 (S) Pearce & Anor and Germain [2007] WASAT 291 (S) Sanders and Gemmill Homes Pty Ltd (2017) WASAT 41 |
Orders | For the above reasons, the Tribunal will issue an order as follows:,1. The applicant's application for costs to be awarded in relation to the application for leave and the review proceedings is dismissed. ,2. Each party shall bear their own costs of the application for leave and the review proceedings. |
Summary | The applicant having succeeded in review proceedings under s 58 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) applied for costs in the sum of $39,650.60. The respondent opposed the application relying upon a written offer of settlement offering payment of $33,785.22 in settlement.,The Tribunal considered that the applicant's nonacceptance of the offer of settlement was not unreasonable because the applicant had succeeded in persuading the Tribunal that the appropriate remedy was not a monetary order but rather an order that the respondent carry out the necessary remedial work. ,The Tribunal determined that most of the costs claimed were not recoverable. The Tribunal found that the applicant as a lay person could not claim costs for his own time spent in relation to the proceedings. Further, that the costs claimed in respect of time spent by his brother in relation to the proceedings had not been charged and could not be legally charged as he was not a legal practitioner, while other costs did not relate to the review proceedings. The Tribunal rejected the various bases upon which the applicant criticised the conduct of the respondent and its legal representative.,The Tribunal found that the respondent would have incurred substantial legal costs because of the manner in which the applicant had conducted the proceedings based on incorrect expert advice, so that the justice of the case did not call for an award of costs in favour of the applicant, but rather that each party should bear their own costs. Orders were made accordingly. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL ACT : BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA) CITATION : SANDERS and GEMMILL HOMES PTY LTD [2017] WASAT 41 (S) MEMBER : MR C RAYMOND (SENIOR SESSIONAL MEMBER)
- MR R AFFLECK (SENIOR SESSIONAL MEMBER)
- Applicant
AND
GEMMILL HOMES PTY LTD
Respondent
Catchwords:
Building Services (Complaint Resolution and Administration) Act 2011 (WA) - Application for costs by successful party in review of proceedings - Applicable principles - Consideration of offer of settlement
Legislation:
Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 36(1)(a), s 36(1)(b), s 39, s 58
State Administrative Tribunal Act (WA), s 83(1)(b)
State Administrative Tribunal Rules 2004 (WA), r 40, r 41, r 42
Result:
Application for costs dismissed
Summary of Tribunal's decision:
The applicant having succeeded in review proceedings under s 58 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) applied for costs in the sum of $39,650.60. The respondent opposed the application relying upon a written offer of settlement offering payment of $33,785.22 in settlement.
The Tribunal considered that the applicant's nonacceptance of the offer of settlement was not unreasonable because the applicant had succeeded in persuading the Tribunal that the appropriate remedy was not a monetary order but rather an order that the respondent carry out the necessary remedial work.
The Tribunal determined that most of the costs claimed were not recoverable. The Tribunal found that the applicant as a lay person could not claim costs for his own time spent in relation to the proceedings. Further, that the costs claimed in respect of time spent by his brother in relation to the proceedings had not been charged and could not be legally charged as he was not a legal practitioner, while other costs did not relate to the review proceedings. The Tribunal rejected the various bases upon which the applicant criticised the conduct of the respondent and its legal representative.
The Tribunal found that the respondent would have incurred substantial legal costs because of the manner in which the applicant had conducted the proceedings based on incorrect expert advice, so that the justice of the case did not call for an award of costs in favour of the applicant, but rather that each party should bear their own costs. Orders were made accordingly.
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):
Ampezzo Pty Ltd and Franken [2009] WASAT 109 (S)
Cachia v Hanes & Anor (1994) 179 CLR 403
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 (S)
Pearce & Anor and Germain [2007] WASAT 291 (S)
Sanders and Gemmill Homes Pty Ltd (2017) WASAT 41
Background and the application for costs
1 There has been protracted litigation between the parties relating to a dispute concerning alleged defects and breaches of contract for the construction of a residential house by Gemmil Homes Pty Ltd (the respondent) for Geoffrey Frank Sanders (the applicant).
2 The history of that dispute is reported in the decision of Senior Member Wallace in Sanders and Gemmill Homes Pty Ltd (2017) WASAT 41 in which the applicant was granted leave pursuant to s 58 of the Building Services (Complaint Resolution and Administration) Act 2011(WA) (BSCRA Act) to review the decision of the Tribunal (the Original 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 alleged breaches of contract was refused.
3 The applicant was successful in the subsequent review proceedings before the Tribunal as currently constituted, in achieving his desired remedy that the respondent carry out remedial work pursuant to s 36(1)(a) of the BSCRA Act, rather than pay the costs of that remedial work pursuant to s 36(1)(b) of the BSCRA Act, as had been ordered by the Original Tribunal.
4 The applicant has applied for costs in relation to the application for leave and the review totalling $39,650.60. The respondent opposes the award of costs. The respondent relies upon a written offer to settle dated 6 July 2017 made without prejudice save as to costs offering to pay $33,785.82 in compliance with r 40 and r 41 of the State Administrative Tribunal Rules 2004 (WA) (the SAT Rules). The respondent has also informed the Tribunal that it intends to pursue a pending application for costs in respect of the proceedings before the Original Tribunal. That application had been adjourned pending the determination of the review proceedings.
5 The respondent has applied to the Supreme Court for leave to appeal the decision of the Tribunal in the review proceedings. Often in these circumstances it is appropriate to adjourn the application for costs pending the outcome of the Supreme Court proceedings. In this instance, it is clear to us, for the reasons which follow, that this is not a case in which costs should be awarded to the successful party. As there is no risk, if the respondent were to be successful in the Supreme Court proceedings that our decision on costs might be affected, we have proceeded with our determination of the applicant's costs application in the review proceedings. In addition neither party has applied to adjourn or stay the costs application.
6 Before doing so we wish to correct an error which is not apparent on the record of the review decision.
7 At the conclusion of oral argument in the review hearing the Tribunal, as presently constituted, advised the parties that the Tribunal would adjourn for a short period with a view, if possible, that oral reasons for decision be delivered. The Tribunal members conferred and agreed the substance of the reasons for decision, but reconvened the hearing, to inform the parties that there was insufficient time to adequately formulate the reasons for decision, and accordingly, the Tribunal would reserve the decision and provide oral reasons for decision at a later date. The Tribunal thereafter agreed the reasons. The matter was listed for hearing for the delivery of reasons on 15 August 2017. In accordance with the Tribunal's usual practice only the presiding member delivered the reasons. In doing so, however, the presiding member omitted to record that the reasons were those of the Tribunal as constituted by both members. The order issued also incorrectly reflected that the order was made by the Tribunal constituted only by the presiding member, rather than both members appointed to constitute the Tribunal in the review proceedings. The order will be amended pursuant to s 83(1)(b) of the State Administrative Tribunal Act 2004 (WA).
The principles to be applied
8 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).
9 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
10 The central issue in the review was whether or not the relationship between the parties had so broken down that it was preferable to break that relationship by making a monetary order so that the applicant could employ a third party contractor to undertake the repairs. The applicant argued strongly that the relationship should be maintained so that if the repair methodology, on which the respondent's pricing was based, was ineffective, there would be no confusion about where responsibility lay. The Tribunal addressed these issues at length and found in favour of the applicant. This is a sufficient basis upon which to conclude that it was reasonable for the applicant to not accept the offer of settlement.
Consideration of the merits of the application for costs
11 The applicant has provided a schedule of costs detailing the items of costs claimed and being:
1) Building Commission and Tribunal charges items 1.1 to 1.5.
2) SHS Building Consultants Christian Rees-Mogg items 2.1 to 2.4;
3) Expenses to implement Tribunal initial order to pay decision items 3.1 to 3.3;
4) Expenses of Mark Alan Sanders items 4.1 to 4.7;
5) Expenses of the applicant items 5.1 to 5.7.
12 The costs claimed under headings 4 and 5 represent the bulk of the costs claimed and represent the time spent in preparation for and attendance at hearings by the applicant and his brother, Mark Sanders, neither of whom are legal practitioners, at a rate of $100 and $120 per hour, respectively. There is no suggestion that Mark Sanders has charged for his services which he would not be entitled to do in law. The work undertaken by him constitutes the practice of law for which only a legal practitioner is entitled to charge. The costs claimed for the applicant's own time are not recoverable as determined by the High Court in Cachia v Hanes & Anor (1994) 179 CLR 403.
13 The costs claimed under heading 2 relate to the attendances of the applicant's expert witness Mr ReesMogg. These costs related to the proceedings before the Original Tribunal and had nothing to do with the review hearing. The repair methodology accepted as appropriate during the review hearing was that proposed by the respondent's witnesses. If costs were to be awarded in the review proceedings the costs awarded would not include any of Mr ReesMogg's charges.
14 The costs claimed under heading 3 include, under item 3.2, $1,200 claimed for time spent by the applicant in liaising with prospective builders from whom the applicant required costings for remedial works in the event the Tribunal was not prepared to order the respondent to carry out the work. This cost is not recoverable for the reasons given above in respect of the claim for the applicant's time under heading 4.
15 Item 3.3 relates to the costs of obtaining an expert report from a Mr Brent Wyatt (a licenced building practitioner) in the sum of $3,000. Mr Wyatt was not called as a witness. His report added nothing to the proceedings. The report did identify particular defects with the roof framing which the respondent investigated through its own expert. The respondent accepted the need for remedial work. This was not the subject of the current proceedings. If costs were to be allowed this item would therefore in any event not be included.
16 Items 1.1 and 1.2 relate to costs incurred before the Building Commission and do not form part of the review proceedings. If costs were to be allowed these items would therefore in any event not be included.
17 This leaves for consideration only items 1.3, 1.4 and 1.5 being claims for $100 under each item for the application for leave filing fee, and transcript costs and item 3.1 claiming $1,492.10 being the cost of an advertisement in the West Australian newspaper for builders who might be interested in quoting for the remedial costs to be considered at the review hearing. The total cost which might therefore be allowed is $1,792.10.
18 The applicant submits that costs should be awarded because of the conduct of the respondent in:
• failing to honour commitments to the applicant;
• failing to honour commitments to the Tribunal;
• failing to comply with orders made by the Tribunal;
• presenting untruthful evidence to the applicant and to theTribunal; and
• making unwarranted personal attacks on the character of the applicant and his wife.
19 We have carefully considered the applicant's submissions attempting to develop the above criticisms of the respondent. The criticisms about commitments to the applicant were not canvassed before the review Tribunal. The reference to commitments made to the Tribunal relates to a directions hearing concerning temperature readings, an issue on which the applicant failed in the original proceedings, was not the subject of leave to review and was not canvassed in any way during the review. The failure to comply with the Tribunal's orders relates only to the respondent being late in completing a Scott Schedule and in providing an expert report. There is insufficient information before the Tribunal as currently constituted to assess the blameworthiness and gravity of these issues.
20 There are a number of criticisms and instances cited to suggest untruthful evidence was presented to the Tribunal. We are not satisfied that there has been any deliberate and actual misleading of the Tribunal in any way. Statements made at one time may later be shown to be incorrect in some way. Views change over time. Criticisms about inaccuracy of the respondent's expert witnesses are in our view not justified. We understand, and commented in the reasons for the review decision on how the applicant thought that the respondent's expert witnesses were unsatisfactory, as a reason for justifying the applicant's persistence. But we did not reject that evidence. To the contrary the outcome of the original proceedings and the review was based on an acceptance of their evidence in all significant respects and the rejection of the applicant's expert Mr ReesMogg's evidence insisting that the sole cause of the cracking was that the cornices had been fixed to the final float coat rather than the set coat and that a strip of the set coat adjoining the cornices needed to be removed.
21 If the applicant had been better advised this case should have been easily resolved. While we concluded that the applicant's persistence in going to the lengths which he did with this matter did not justify the making of a monetary rather than a remedial order, it does not follow that the respondent could not form a view that that the applicant was demonstrated to be completely unreasonable. We also do not agree that the respondent's counsel's submissions in this regard can be labelled as vitriolic as asserted by the applicant. The criticisms made were made in a measured and professional manner. It was readily conceded that there were no behavioural issues involved in dealing with the applicant.
22 Ultimately, we are not persuaded that the justice of the case warrants the making of a costs order. The respondent will have incurred very substantial legal costs because of the manner in which this case has been conducted based on the advice on which the applicant relied, which was incorrect. The just outcome is that each party bear their own costs in respect of the review proceedings.
Order
23 For the above reasons, the Tribunal will issue an order as follows:
1. The applicant's application for costs to be awarded in relation to the application for leave and the review proceedings is dismissed.
2. Each party shall bear their own costs of the application for leave and the review proceedings.
I certify that this and the preceding [23] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MR C RAYMOND, SENIOR SESSIONAL MEMBER
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