| JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : COMMERCIAL & CIVIL ACT : CONSTRUCTION CONTRACTS ACT 2004 (WA) CITATION : SEARLE and KELSO [2009] WASAT 255 (S) MEMBER : MR C RAYMOND (SENIOR MEMBER) MR T CAREY (MEMBER)
MR M SPILLANE (MEMBER)
HEARD : DETERMINED ON THE DOCUMENTS DELIVERED : 23 DECEMBER 2009 SUPPLEMENTARY
DECISION : 15 MARCH 2010 FILE NO/S : CC 1216 of 2009 BETWEEN : ANDREW SEARLE Applicant
AND
KEN KELSO
GWENDA KELSO
Respondents
Catchwords: Construction Contracts Act 2004 (WA) Avocation for costs Exercise of discretion Legislation: Construction Contracts Act 2004 (WA), s 46(1), Sch 1 Div 4
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State Administrative Tribunal Act 2004 (WA), s 87, s 87(1), s 87(2) Result: Application dismissed Category: B
Representation: Counsel:
Applicant : Self-represented
Respondents : Ms GB Visscher
Solicitors:
Applicant : N/A
Respondents : Chris Williams
Case(s) referred to in decision(s):
Lai v Costa [2006] WASAT 117 (S)
Pearce and Germain [2007] WASAT 291 (S)
Searle and Kelso [2009] WASAT 255
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REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision 1 The respondents applied for their costs of an application arising from the Tribunal's dismissal of the application. The application concerned a claim by the applicant to an entitlement to be paid certain amounts as a final payment, which claim was dismissed by an adjudicator. The applicant sought review of the adjudicator's decision. The respondents claimed that the application was obviously unmeritorious and that the applicant acted unreasonably and inappropriately, and, therefore, that they should be awarded their costs. 2 The Tribunal agreed with the circumstances for which the respondents contended as giving rise to an order for costs. However, on considering the nature of the application and the factors upon which the Tribunal was required to adjudicate in reaching its decision, it disagreed that the application could be regarded as obviously unmeritorious. It also found against the respondents on whether the applicant had acted unreasonably or inappropriately in the formulation of his case. Alternatively, to the extent that the applicant did so act, the respondents were able to discriminate so that most of the time spent was allocated to those issues deserving of substantive responses. 3 Accordingly, the Tribunal dismissed the respondents' costs application.
Introduction 4 On 23 December 2009, the Tribunal as currently constituted dismissed Mr Searle's application under s 46(1) of the Construction Contracts Act 2004 (WA) (CC Act) and affirmed the decision of the adjudicator to dismiss an adjudication application brought before him without a determination on the merits: Searle and Kelso [2009] WASAT 255 (principal decision). 5 The basis upon which the adjudicator reached his decision is summarised in the principal decision at [25] and [26]. That basis consisted of a number of strands or alternatives. 6 On its review of the adjudicator's decision, the Tribunal adopted a course of reasoning which, although differing from that of the adjudicator in a number of respects, contained a number of findings in common. (Page 4)
7 Following the dismissal of the application, Mr and Mrs Kelso applied for their costs of the proceedings. The amount sought is $8,976, based upon the work performed by the Kelsos' counsel, together with a photocopying charge.
Matters relied upon to ground costs order 8 Mr and Mrs Kelso described the application as 'obviously unmeritorious', being a circumstance identified in a leading decision in the Tribunal on costs, Pearce and Germain [2007] WASAT 291 (S) (Pearce) as a possible contributing factor to the Tribunal ordering costs. The unmeritorious character of the case was said to arise from: 9 Mr and Mrs Kelso further relied on two other factors identified in Pearce, namely, that Mr Searle had conducted himself 'unreasonably' and 'inappropriately'. Incidents of such conduct were said to be: a) the large number of grounds relied upon and their lack of particularity and/or relevance; b) the prolixity, and lack of particularity and/or relevance of the applicant's submission; and c) the reliance by Mr Searle on interpretations which were not reasonably open, bearing in mind the adjudicator's determination, to the same effect, in respect of the same arguments.
Our consideration 10 Section 87 of the State Administrative Tribunal Act 2004 (WA) provides for both a presumption that parties bear their own costs in a proceeding in the Tribunal (s 87(1)) and the ability of the Tribunal to make an order for payment by a party of costs (s 87(2)). It was in respect (Page 5)
of the provisions just mentioned that Senior Member Raymond said in Lai v Costa [2006] WASAT 117 (S) at [15]: Having regard to the provisions of s 87 of the SAT Act to which reference has been made above, the intent of the legislation is clear that the starting point in any consideration of an application for costs, is that each party should bear their own costs. It is intended that the Tribunal should remain readily accessible to the public at relatively low cost, and in particular, that the Tribunal should act as speedily and with as little formality and technicality as is practicable and minimise the costs to parties as is expressly prescribed in s 9 of the SAT Act. Accordingly, great care should be taken in exercising a power to award costs to ensure that accessibility to the Tribunal is not affected. 11 The test for 'obviously unmeritorious' proceedings is necessarily high. It would be inimical to the objects of the Tribunal of providing an efficient and relatively informal review process if parties were actively discouraged from bringing claims or raising arguments which exhibited some novelty. On the other hand, if untenable or unarguable positions are relied upon, that may well result in a costs order being made. 12 We are not satisfied that the application was so lacking in merit as to be regarded as 'obviously unmeritorious'. Although the legislation is now some six years old, applications under the CC Act to the Tribunal are still relatively rare, and some of the issues raised by Mr Searle's application had not previously come before the Tribunal. Nor does the fact that the Tribunal ultimately agreed with the adjudicator in relation to most (although not all) of his substantial findings mean that the application was obviously unmeritorious. 13 In its determination of the application, the Tribunal needed to consider the way in which the adjudication scheme under the CC Act applied to the facts. In doing so, the fact that some parts of the 2009 invoice were being claimed for the first time, taken with the somewhat problematic contractual terms governing termination of the contract, presented some challenges for the Tribunal. 14 We do not consider that the ultimate decision to dismiss the application was the obvious outcome from the start. It was the result of careful consideration, largely unassisted by previous decided cases. 15 In all the circumstances, we do not believe that the 'obviously unmeritorious' obloquy can apply to the application. (Page 6)
16 The allegations of unreasonable and inappropriate conduct by Mr Searle would, if upheld, presumably lead to an award of costs reflective of the extent to which the unreasonable and inappropriate conduct relied upon led to an increase in work for the Kelsos' legal representative, rather than to an award of the whole amount claimed. The main complaints concern: 17 Whilst it is fair to say that Mr Searle left no stone or, more accurately, argument unturned in pursuing his case, we would expect the legally represented respondents to be able to discriminate between grounds or submissions which were relevant, pertinent and deserving of a substantive response, and those which were not. It is the former class to which the bulk of the time and energy spent by the Kelsos' legal representative on opposing the application ought to have been directed. 18 The proceedings were dealt with expeditiously. Subsequent to the filing of the application and supporting documents on 12 August 2009, there was a directions hearing on 27 August 2009, when the parties were ordered to file successive written submissions. The applicant's written submissions, and the hearing was fixed for 30 September 2009. The hearing took place on the scheduled day. Both parties relied on submissions which did not form part of the Tribunal's reasons for decision, meaning that they were, by inference, not accepted. We would regard this as a normal part of the cut and thrust of litigation. 19 We do not regard that there is a sufficient basis to move from the starting position in this Tribunal that each party should bear its own costs. (Page 7)
Order 20 For the reasons given above, the Tribunal orders: The respondents' application for costs is dismissed. |