VC BUILD PTY LTD and THE OWNERS OF 27 POLLARD STREET, GLENDALOUGH STRATA PLAN 69356

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL
ACT: BUILDING SERVICES (COMPLAINT RESOLUTION AND ADMINISTRATION) ACT 2011 (WA)
CITATION:   VC BUILD PTY LTD and THE OWNERS OF 27 POLLARD STREET, GLENDALOUGH STRATA PLAN 69356 [2022] WASAT 35
MEMBER:   MS C BARTON, MEMBER
MR R WOODFORDE, SESSIONAL MEMBER

HEARD:   14, 15 AND 16 MARCH 2022
DELIVERED          :   4 MAY 2022
FILE NO/S:   CC 1212 of 2021
BETWEEN:   VC BUILD PTY LTD
Applicant
AND
THE OWNERS OF 27 POLLARD STREET, GLENDALOUGH STRATA PLAN 69356
Respondent

Catchwords:

Building service complaint - Regulated building service - Original builder in liquidation - Review of building remedy order - Commissioner's decision affirmed

Legislation:

Building Act 2011 (WA), s 3
Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 3, s 5(1), s 6, s 11(1)(c), s 37, s 57(1)(c)
Building Services (Registration) Act 2011 (WA), s 3, s 17, s 18
Evidence Act 1906 (WA)
State Administrative Tribunal Act 2004 (WA), s 17, s 18, s 27, s 27(1), s 29(3), s 31(1), s 32(2)(a), s 32(2)(b)

Result:

Application dismissed

Category: B

Representation:

Counsel:

Applicant	:	Mr V Pindoria
Respondent	:	Mr G Costello

Solicitors:

Applicant	:	N/A
Respondent	:	N/A

Case(s) referred to in decision(s):

Shami and Teo [2017] WASAT 73

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

On 29 July 2021, VC Building Pty Ltd (applicant/builder) commenced proceedings in the Tribunal under s 57(1)(c) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (Building Services Act) seeking a review of a building remedy order BC2021-137 made on 5 July 2021 (BRO).
The Building Commissioner (Commissioner) made the BRO under s 11(1)(c) and s 37 of the Building Services Act in respect of four complaint items concerning a regulated building service not being carried out in a proper or proficient manner or being faulty or unsatisfactory at 27 Pollard Street, Glendalough (property).
The applicant took over the completion of the building work at the property after the original builder, MI Construct Pty Ltd, went into liquidation (original builder).
The respondent in the proceedings is The Owners of 27 Pollard Street, Glendalough Strata Plan 69356 (respondent/Strata Company). The Commissioner is not required by the Building Services Act to participate as a respondent in review proceedings.
For the reasons that follow, we find that the applicant carried out a regulated building service in relation to the four complaint items in a manner that was not proper or proficient or was faulty or satisfactory and, therefore, we will affirm the Commissioner's decision to make the BRO without variation.

The issues for determination

The issues for determination by the Tribunal are as follows:
1)Did the applicant carry out a regulated building service in respect of the complaint items?
2)If the answer to 1) is in the affirmative, was the building work the subject of each of the complaint items carried out in a proper or proficient manner or was it faulty or unsatisfactory?; and
3)Should the terms of the BRO in respect of each of the complaint items be set aside, affirmed or varied?

The Tribunal's review jurisdiction

Pursuant to s 57(1)(c) of the Building Services Act, a person aggrieved by a building remedy order made by the Commissioner may apply to the Tribunal for a review of the order. By reason of s 17 of the State Administrative Tribunal Act 2004 (WA) (SAT Act), the application falls within the Tribunal's review jurisdiction. In exercising the Tribunal's review jurisdiction, the Tribunal is to deal with a matter in accordance with the SAT Act and the Building Services Act (referred to as the 'enabling Act' for the purposes of the Tribunal's review jurisdiction, which may modify the operation of the SAT Act in relation to the matter).[1]
[1] Section 18, SAT Act.
The Tribunal is to review the Commissioner's decision by way of a hearing de novo for the purposes of producing the correct and preferable decision based on the information and evidence before it.[2] The Tribunal is not bound to apply the Evidence Act 1906 (WA), the rules of evidence, or any practices and procedures of courts of record[3] but is bound by the rules of natural justice unless authorised expressly or by implication to depart from those rules by the SAT Act or the enabling Act.[4]
[2] Section 27, SAT Act.
[3] Section 32(2)(a), SAT Act.
[4] Section 31(1), SAT Act.
The Tribunal is not limited to the material before the Commissioner as the original decision-maker but may consider new material.[5] The Tribunal is to act according to equity, good conscience, and the substantial merits of the case without regard to technicalities and legal forms.[6]
[5] Section 27(1), SAT Act.
[6] Section 32(2)(b), SAT Act.
Section 29(3) of the SAT Act confers specific power on the Tribunal to make any order that it considers appropriate, including an order to set aside the original decision, affirm that decision or vary that decision.

The conduct of the hearing and expert evidence

Prior to the hearing, the parties filed with the Tribunal and gave to each other written submissions and the documents on which they intended to rely.
The applicant relied on the evidence of Mr Calvin Koh, the architect who designed the building. Mr Koh gave oral testimony at the hearing but did not prepare a report or expert witness statement. The applicant also relied on an investigation report dated 22 September 2021 prepared by Mr Brian Connor of ABBC Building Inspectors (ABBC report). The applicant did not call Mr Connor as an expert witness. Because Mr Connor was not available for crossexamination, the weight that we can give his findings is limited.
The respondent relied on the oral testimony of Mr Andrew Chadbund, a building and energy inspector (BEI) with the Building & Energy Division of the Department of Mines, Industry Regulation and Safety (DMIRS). Mr Chadbund attended the property and prepared inspection reports dated 1 June 2021 and 2 July 2021 in relation to the four complaint items. The respondent also relied on the oral testimony of Mr Brian Gray, a building inspector with Houspect. The respondent commissioned a report from Houspect during the defects liability period, entitled Strata - Builders Liability Construction Report (Houspect report). The Houspect report was based on inspections of the property conducted by Mr Gray on 14 January 2019 and February 2019. In addition, the respondent called Mr Adrian Snape, Building Surveyor-Compliance, with the City of Stirling and Mr Andrew Lowery, a case manager with Sedgewick, whose evidence was limited to complaint item 1.

The Tribunal's consideration

Did the applicant carry out a regulated building service?

Section 5(1) of the Building Services Act provides that a person may make a complaint to the Commissioner about a regulated building service not being carried out in a proper and proficient manner or being faulty or unsatisfactory. A complaint made under s 5(1) of the Act is defined as a 'building service complaint'.[7]
[7] Section 3, Building Services Act.
A 'regulated building service' is defined in s 3 of the Building Services Act to be a building service carried out by a registered building service provider or an approved owner builder. A 'building service' includes 'building work' as defined in s 3 of the Building Act 2011 (WA) (Building Act) which includes, amongst other things, the construction, erection, assembly or placement of a building or an incidental structure (being a structure attached to or incidental to a building). Relevantly, a 'registered building service provider' has the meaning given in s 3 of the Building Services (Registration) Act 2011 (WA) (Registration Act), being a building service practitioner or a building service contractor registered under s 17 and s 18 of the Registration Act respectively.
In the decision of Shami and Teo [2017] WASAT 73 (Shami), the Tribunal concluded that a building remedy order can only be made against the person who had the role of ensuring that the entire building project, which includes the work, which is the subject of a building service complaint, is brought to completion. The Tribunal stated at [48]:
For the purposes of s 36(1), s 37(1) and s 38(1) of the BSCRA Act, it is the entirety of the work of the building project which is carried out, not the components of it. What follows from that construction is that a building remedy order can only be made against the person who had the role of ensuring that the entire building project which includes the work which is the subject of a building service complaint was 'carried out', or in other words 'brought to completion'. It does not matter whether the work was done personally by that person or by persons whom they arranged to perform the various components of the overall work[.]
There was no dispute, and we find, that the applicant is a registered builder. We further find that the applicant entered into a cost plus contract on 25 June 2014 to complete the building work at the property after the original builder went into liquidation.[8] For these reasons, we are satisfied that the applicant was responsible for ensuring the building work at the property was brought to completion and, therefore, we find that the applicant carried out a regulated building service in respect of the building work that is the subject of the complaint items.

Was the building work the subject of each complaint item faulty or unsatisfactory?

Complaint item 1 - tiling and waterproofing of balconies

[8] Exhibit 1, pages 116-123.

In relation to complaint item 1, the BRO provides:
1.Complaint
Tiling and waterproofing of balconies. Damp to patio walls unit 7 and carpark walls as a result of poor waterproofing and tiling.
Action required
The respondent is to remedy the cause and effect of the dampness to the walls. All work is to be carried out in a proper and proficient manner, including protecting and making good affected surfaces.
The respondent is to remove all building rubbish associated with the remedial work from the site.
There are two issues in relation to dampness. The first concerns the absence of weepholes affecting the patio walls of unit 7 and the higher section of the garage wall, and the second concerns the slope of the garage floor causing water to pool at the base of the carpark wall.

The absence of weepholes

Mr Chadbund observed, during his BEI inspection of the unit 6 balcony to the first floor above, that weepholes above the junction of the external cavity wall and the balcony had been omitted.[9] He also observed that no weepholes were installed above the same junction on the opposing first floor unit 5 balcony that shares a dividing cavity wall. In Mr Chadbund's opinion, the lack of weepholes in these locations is contrary to drawing no. 11.05-A4 of the architectural plans.[10]
[9] Exhibit 1, page 126.
[10] Exhibit 1, page 126.
In his oral testimony, Mr Chadbund expressed the opinion that the absence of weepholes is also the likely cause of the high moisture readings at the higher section of the garage wall, which is exhibited as moisture up to about 1.8 metres off the ground in the courtyard of unit 7.[11]
[11] ts 58, 14 March 2022.
Whilst the applicant acknowledged that the architectural plans show the weepholes, it says that the original builder failed to install them and, therefore, the applicant is not responsible for remedying this complaint item. In support of its position, the applicant relied on the ABBC report which confirmed that no weepholes had been installed by the original builder as required by a notation on the structural drawings.[12] The applicant also relied on an email from its insurance broker dated 15 July 2021 which stated that the applicant was not responsible for any faulty or incomplete works before it took over the contract because the Strata Company had the benefit of the original builder's home warranty insurance.[13] The applicant observed that QBE, the relevant insurer, had already carried out remedial works at the property in 2019.[14]
[12] Exhibit 1, page 89.
[13] Exhibit 1, page 177.
[14] Exhibit 1, page 65.
It is the respondent's position that the applicant had the opportunity and capability as a registered builder to identify and remediate the lack of weepholes when it assumed responsibility for completing the build. The respondent relied on the evidence of Mr Chadbund and Mr Gray who agreed that the applicant had failed to install weepholes and flashing in the walls of balcony 5 and 6.[15]
[15] Exhibit 1, page 126; Exhibit 1, pages 335-336; ts 58, 14 March 2022; ts 105, 15 March 2022.

The garage floor

It is the applicant's position that the slope of the garage floor cannot be avoided because of the gradient of the site (which slopes from front to rear). The applicant says it installed a gully to minimise water pooling towards the garage wall, which was not part of the architectural drawings, but completed at the applicant's cost.[16] The applicant also says that it was advised by waterproofing specialists that the most likely reason for the rising damp was the inadequate installation of a barrier during the bricklaying/structural works.[17] The ABBC report states that the high moisture readings along the base of the garage wall indicates that the damp-proof course has failed.[18]
[16] Exhibit 1, page 64.
[17] Exhibit 1, page 64.
[18] Exhibit 1, page 89.
In contrast, the respondent says that the applicant undertook the installation of the carpark concrete floor and, therefore, should have been aware of the damp-proof/moisture management measures necessary to complete the works proficiently. In support of its position, the respondent relies on the evidence of Mr Chadbund and Mr Gray who were both of the opinion that there was faulty or unsatisfactory damp-proof protection to the lower parts of the garage walls to accommodate water flow in the carpark.

Findings - complaint item 1

We accept the uncontested evidence of Mr Chadbund and Mr Gray, and we find, that there is an absence of a weephole above the junction of the external cavity wall and unit 6 balcony. We further find that the location of the weephole is shown on drawing no. 11.05-A4 of the architectural plans with a notation that provides: 'Allow weephole to bottom of wall at balcony area'.
Mr Chadburn and Mr Gray agreed, and we find, that the dampness to the patio walls of unit 7 and at the higher section of the garage walls may be attributed to the omission of the weepholes.
Whilst we acknowledge that the omission of the weepholes occurred before the applicant took over the build, the weepholes are shown on the architectural plans for the building. Based on the evidence of Mr Chadbund and Mr Gray, which we accept, we find that the applicant's failure to install the weepholes shown on the architectural plans constitutes unsatisfactory workmanship.
There was no dispute, and we find, that the garage (carpark) floor was installed by the applicant. We accept the uncontested evidence of Mr Chadbund and Mr Gray, and we find, that the damp-proof protection between the garage walls and floor is faulty or unsatisfactory.[19] The applicant says that it has attempted to address the dampness issues in the garage by the installation of a formed gully on the garage floor. Based on the evidence of Mr Gray, which we accept, we are satisfied that there is no formed gully on the garage floor[20] and, consequently, we find that the applicant has not remedied this aspect of complaint item 1.
[19] ts 59, 14 March 2022; ts 106, 15 March 2022.
[20] ts 111, 15 March 2022.
The applicant did not adduce any expert evidence in support of alternative actions to remedy the dampness issues in the patio walls of unit 7 and the carpark. In the absence of any alternative proposed actions, we are satisfied that the actions specified in the BRO are reasonable and necessary to remedy the faulty or unsatisfactory workmanship carried out by the applicant in respect of complaint item 1.

Complaint item 2 - tiling of walkways

In relation to complaint item 2, the BRO provides:
2.Complaint
Tiling of walkways. Common area tiling has a number of areas where the movement has caused the drumming of the tiles and potential compromise of waterproofing.
Action Required
The respondent is to remedy the cause and effect of the drummy tiles. All work is to be carried out in a proper and proficient manner, including protecting and making good affected surfaces. Tile and grout colour is to match adjacent tiling, and the water-proofing is not to be compromised as a result of the remedial work.
The applicant contends that the issue with the drummy tiles was first raised in November 2020, more than six years after the tiles were laid. Because the issue was not picked up in the defects liability report prepared by Houspect in January 2019,[21] it is the applicant's position that it is a normal maintenance item to be rectified by the respondent.[22] In support of its position, the applicant relies on the ABBC report which states that two drummy and one cracked tile after six years is not considered faulty or unsatisfactory workmanship.
[21] Exhibit 1, page 65.
[22] Exhibit 1, page 65.
It is the respondent's position that the drummy tiles are symptomatic of a more fundamental issue concerning the absence of control joints. In support of its position, the respondent relied on the evidence of Mr Chadbund who stated that the applicant had failed to comply with the relevant standards for the installation of control/movement joints. In Mr Chadbund's opinion, the omission of control joints at the prescribed points and distance is unsatisfactory and an unapproved departure from the relevant standards.
There was no dispute, and we find, that control joints were not installed when the walkways were tiled.[23] Based on the uncontested evidence of Mr Chadbund, which we accept, we find that the installation of tiling to the walkway is faulty and unsatisfactory due to the applicant's omission of control joints.
[23] ts 6, 16 March 2022.
We do not accept the applicant's contention that the time period for raising complaint item 2 has expired. A complaint is made out of time if it is made more than six years after the completion of the regulated building service to which the complaint relates.[24] We find that the certificate of practical completion was issued by Mr Koh on 15 May 2015.[25] We further find that the respondent's building complaint, which includes complaint item 2, was received by DMIRS on 17 January 2021.[26] Consequently, we are satisfied that the respondent's complaint in respect of item 2 was made within the statutory timeframe.
[24] Building Services Act, s 6.
[25] Exhibit 1, page 115.
[26] Exhibit 1, pages 638-641.
The applicant did not adduce any expert evidence in support of alternative actions to remedy the drummy tiles. In the absence of any alternative proposed actions, we are satisfied that the actions specified in the BRO are reasonable and necessary to remedy the faulty or unsatisfactory workmanship carried out by the applicant in respect of complaint item 2.

Complaint item 3 - cracking of carpark concrete flooring

In relation to complaint item 3, the BRO provides:
3.Complaint
Carpark concrete flooring. Extensive cracking and lack of appropriate joints.
Action Required
The respondent is required to remedy cause and effect of the cracking to the floor of the carpark, where the cracking exceeds the tolerance as specified in AS 3727-1993 Guide to residential pavements; Section 5 Performance Objectives; 5.2 Cracking, subsidence and stepping - Table 1. The surface finish is to be consistent in colour, texture and trowelling pattern with adjacent areas.
All work is to be carried out in a proper and proficient manner, including making good affected surfaces.
The respondent is to remove all building rubbish associated with the remedial work from the site.

The applicant contends that the engineering drawings specified 100 millimetre concrete but no reinforcement fabric, such as fabricated steel mesh. Because the spacing of control joints was not specified in the drawings, the applicant says that the joints were laid according to the architect's decision on site.[27] The applicant acknowledged that some of the cracks in the concrete are in excess of tolerances in the AS3727-1993 guide to residential pavements (AS3727-1993).[28] The applicant produced an invoice to demonstrate that the soil was compacted prior to laying of the contract.[29]
[27] Exhibit 1, page 66.
[28] Exhibit 1, page 66.
[29] Exhibit 2.
The respondent says that the applicant's work in relation to the concrete installed in the carpark is faulty and unsatisfactory because it does not comply with the maximum control joint spacing for medium traffic under AS3727-1993. The respondent relied on the evidence of Mr Chadbund who identified that the control joints were not consistent with the prescribed spacing or depth and, therefore, were not compliant with the relevant standards.[30] The respondent also pointed to the evidence of Mr Gray who observed that the location of the control joints on site departed from their position as shown on the architectural plans.[31] In Mr Gray's opinion, the cracking has been caused by the expansion and contraction of the concrete without appropriate control joints to allow for movement.[32]
[30] Exhibit 1, page 132; ts 70, 14 March 2022.
[31] ts 114, 15 March 2022.
[32] ts 115, 15 March 2022.
There is no dispute, and we find, that the applicant supplied and installed the carpark concrete without fabricated steel mesh. Based on the uncontested evidence of Mr Chadbund and Mr Gray, which we accept, we find that the location of the control joints is not consistent with industry standards, and that the absence of control joints in certain locations has resulted in significant cracking. We observe that the expert testimony of Mr Chadbund and Mr Gray is consistent with the findings of the ABBC report which identified similar faults with the carpark concrete. Consequently, for these reasons, we find that the applicant's work in relation to the installation of the concrete flooring for the carpark is faulty or unsatisfactory.
The applicant did not adduce any expert evidence in support of alternative actions to remedy this complaint item. In the absence of any alternative proposed actions, we are satisfied that the actions specified in the BRO are reasonable and necessary to remedy the faulty or unsatisfactory workmanship carried out by the applicant in respect of complaint item 3.

Complaint item 4 - driveway pavement and subsidence

In relation to complaint item 4, the BRO provides:
4.Complaint
Driveway paving and subsidence. Driveway subsiding and visible movement indicating insufficient reinforcement and/or compaction for appropriate use of driveway.
Action Required
The respondent is to remedy the subsidence to the common area brick paving so that the alignment of all segmental units are consistent, and all edge restraints are appropriate for the loads to be imposed upon the paving by vehicular traffic. All work is to be carried out in a proper and proficient manner, including making good affected surfaces and associated landscaping.
The respondent is to remove all building rubbish associated with the remedial work from the site.
The applicant contends that there was no mention of any sub-base requirements in the design documentation for the driveway. Because the driveway was installed over seven years ago, the applicant says that the subsidence and displaced concrete edging are maintenance issues for the respondent.[33] The applicant further contends that the driveway was designed for light vehicular traffic and not for removalists or commercial trucks.[34] The applicant says that the replacement of the fence adjacent to the driveway was the cause of or contributed to the subsidence. However, Mr Koh was unable to confirm that this was the case because 'the fencing was carried out much later in the job'.[35]
[33] Exhibit 1, page 66.
[34] Exhibit 1, page 66.
[35] ts 53, 14 March 2022.
The respondent says that the installation of the driveway paving is faulty or unsatisfactory and observed that the faults are not aligned and could be multiple. In support of its position, the respondent relied on the evidence of Mr Gray who stated that the lack of edge support contributed to the movement of the driveway paving and subsidence.[36] The respondent also relied on the evidence of Mr Chadbund who attributed the subsidence to the lack of appropriate sub-base.[37]
[36] ts 115, 15 March 2022.
[37] ts 78, 14 March 2022.
There was no dispute, and we find, that the driveway was installed by the applicant. Based on the evidence of Mr Chadbund and Mr Gray, which we accept, we find that the driveway paving is faulty or unsatisfactory due to a range of factors which include the lack of edge support and inappropriate sub-base. We do not accept the applicant's contention that the subsidence was caused by the installation of a replacement fence adjacent to the driveway. We find, based on photographs of the driveway taken in 2018, that subsidence around the soak wells and movement in the brick paving was present before the installation of the replacement fence.[38]
[38] Exhibit 3.
The applicant did not adduce any expert evidence in support of alternative actions to remedy the subsidence and movement in the driveway paving. In the absence of any alternative proposed actions, we are satisfied that the actions specified in the BRO are reasonable and necessary to remedy the faulty or unsatisfactory workmanship carried out by the applicant in respect of complaint item 4.

Conclusion

Having regard to the evidence before us, we find that the applicant's workmanship in respect of the four complaint items is faulty or unsatisfactory. We further find that the actions specified in the BRO are reasonable and necessary to remedy the complaint items.
Accordingly, we are satisfied that the correct and preferable decision is to dismiss the application. We will affirm the Commissioner's decision made on 5 July 2021 and the terms of the BRO without variation.

Orders

The Tribunal orders:
1.The application for review is dismissed.
2.The decision of the Building Commissioner to make building remedy order BC2021-137 dated 5 July 2021 requiring the applicant to rectify building services not carried out in a proper or proficient manner or being faulty or unsatisfactory at 27 Pollard Street, Glendalough, is affirmed.
3.The respondent may within 21 days from the date of this order file with the Tribunal and give to the applicant an application for costs including written submissions and any supporting documentation.
4.If the respondent elects to make an application for costs, the applicant has 14 days from the date of the application to file with the Tribunal and give to the respondent written submissions and any supporting documentation in reply.
5.Subject to any further order an application for costs will be determined entirely on the documents pursuant to s 60(2) of the State Administrative Tribunal Act 2004 (WA).

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.

MS C BARTON, MEMBER

4 MAY 2022

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: BUILDING SERVICES (COMPLAINT RESOLUTION AND ADMINISTRATION) ACT 2011 (WA)
CITATION: VC BUILD PTY LTD and THE OWNERS OF 27 POLLARD STREET, GLENDALOUGH STRATA PLAN 69356 [2022] WASAT 35 (S)
MEMBER: MS C BARTON, MEMBER
MR R WOODFORDE, SESSIONAL MEMBER

HEARD:   DETERMINED ON THE DOCUMENTS
DELIVERED          :   22 JULY 2022
FILE NO/S:   CC 1212 of 2021
BETWEEN:   VC BUILD PTY LTD
Applicant
AND
THE OWNERS OF 27 POLLARD STREET, GLENDALOUGH STRATA PLAN 69356
Respondent

Catchwords:

Practice and procedure - Building dispute - Review of building remedy order - Costs - Conduct of parties

Legislation:

Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 49, s 49(7), s 57(1)(c)
State Administrative Tribunal Act 2004 (WA), s 9, s 60(2), s 46(3), s 47, s 48, s 49, s 87, Pt 4, Div 5

Result:

Costs application successful in part

Category: B

Representation:

Counsel:

Applicant	:	N/A
Respondent	:	N/A

Solicitors:

Applicant	:	N/A
Respondent	:	N/A

Case(s) referred to in decision(s):

Barnett and Barrier Reef Pools (WA) Pty Ltd [2016] WASAT 50
Carey and Commissioner for Consumer Protection [2012] WASAT 237 (S)
Firestar Enterprises Pty Ltd and Town of Vincent [2007] WASAT 100
Medical Board of Western Australia and Kyi [2009] WASAT 22
Sanders and Gemmill Homes Pty Ltd [2017] WASAT 41 (S)
Summerville and Department of Education and Training & Ors [2006] WASAT 368 (S)
VC Build Pty Ltd and The Owners of 27 Pollard Street, Glendalough Strata Plan 69356 [2022] WASAT 35
WA Country Builders Pty Ltd and Hathersage Nominees Pty Ltd [2016] WASAT 70
Western Australian Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

On 4 May 2022, the Tribunal affirmed the decision of the Building Commissioner (Commissioner) made on 29 July 2021 that VC Build Pty Ltd (applicant/builder) carried out a regulated building service in a manner that was not proper and proficient or was faulty or unsatisfactory in respect of four complaint items. The Tribunal concluded that the builder was responsible for remedying the four complaint items as specified in building remedy order BC2021-137 made on 5 July 2021 (BRO) and published its reasons for decision in VC Build Pty Ltd and The Owners of 27 Pollard Street, Glendalough Strata Plan 69356 [2022] WASAT 35.
On 27 May 2022, The Owners of 27 Pollard Street, Glendalough Strata Plan 6935629 (respondent/strata company) filed an application for costs against the builder following orders made by the Tribunal on 4 May 2022. Pursuant to those orders, we have determined the application for costs entirely on the documents under s 60(2) of the State Administrative Tribunal Act 2004 (WA) (SAT Act).
We have concluded that the application for costs should be allowed in part. In reaching our decision, we have considered the written submissions (with invoices and receipts annexed) filed by the respondent on 27 May 2022 and the responsive written submissions filed by the builder on 10 June 2022.

The issue for determination

The issue for determination by the Tribunal is whether the respondent is entitled to an order against the builder for legal costs and expert fees incurred by the respondent in respect of proceeding CC 1212 of 2021 (review proceeding).

The legal framework and principles

The parties to a proceeding before the Tribunal must bear their own costs unless otherwise specified in the SAT Act, the enabling Act, or an order of the Tribunal under s 87 of the SAT Act.[39]
[39] Section 87(1), SAT Act.
Section 49 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) Act (Building Services Act), the enabling Act in the review proceeding, provides:
(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.
(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) -
(a)the amount ordered to be paid is recoverable by the Building Commissioner in a court of competent jurisdiction as a debt due to the State; and
(b)any amount paid or recovered must be credited to the Building Services Account.
(7)This section does not limit the powers of the State Administrative Tribunal under the State Administrative Tribunal Act 2004 Part 4 Division 5.
The Tribunal may make an order for the payment by a party of all or any of the costs of another party under s 87(2) of the SAT Act (which falls within Pt 4, Div 5 of the SAT Act).[40] The Tribunal's discretion under s 87(2) of the SAT Act is not limited by s 49 of the Building Services Act.[41]
[40] Section 87(2), SAT Act.
[41] Section 49(7), Building Services Act.
The principles relevant to the exercise of the Tribunal's discretion under s 87(2) of the SAT Act, in the context of building disputes, were summarised in Barnett and Barrier Reef Pools (WA) Pty Ltd [42] and WA Country Builders Pty Ltd and Hathersage Nominees Pty Ltd [43] having regard to several authorities including Western Australian Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32 (Questdale).
[42] [2016] WASAT 50 at [14]-[15].
[43] [2016] WASAT 70 at [10]-[15].
In Questdale, the WA Court of Appeal observed that s 87(2) of the SAT Act is to be construed in the context that the legal rationale for an order for costs is to compensate the party in whose favour it is made and not to punish the party the subject of the order.[44] This rationale is evident in s 87(3) of the SAT Act which provides that the power of the Tribunal to make an order for the payment of costs 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'. The discretion to award costs is to be exercised judicially; not arbitrarily or capriciously or so as to frustrate the legislative intent.[45]
[44] Questdale at [51]
[45] Questdale at [48].
There are a range of factors that might contribute to the Tribunal making a costs order, including the non-exhaustive list set out in Sanders and Gemmill Homes Pty Ltd.[46] One such factor is where a party conducts itself unreasonably or inappropriately, particularly where the conduct leads to unnecessary costs to the other party. In a review proceeding, whether or not there was a genuine attempt by a party to assist the original decision-maker to make a decision on its merits is also relevant to the exercise of the Tribunal's discretion to award costs.[47]
[46] [2017] WASAT 41 (S) at [8].
[47] See s 87(4), SAT Act.
In Medical Board of Western Australia and Kyi [2009] WASAT 22 (Kyi), the Tribunal referred to the general principles regarding costs discussed in Summerville and Department of Education and Training & Ors [2006] WASAT 368 (S) at [23] - [44] and observed as follows:[48]
… If a party has conducted itself in such a way as to unnecessarily prolong the hearing, has acted unreasonably or inappropriately in its conduct of the proceedings, has been capricious, or the proceedings in some other way constitute an abuse of process, then this may give rise to an exercise of the discretion to award costs. This encompasses a situation where proceedings should not have been maintained against a party because it is clearly untenable and no reasonable person would have believed they could be successful[.]
[48] Kyi at [73].
It follows that conduct of a kind referred to in s 46(3), s 47 and s 48 of the SAT Act (which includes failure on the part of an applicant to prosecute a matter, frivolous proceedings and vexatious conduct) is relevant to the exercise of the Tribunal's discretion under s 87(2) of the SAT Act.[49] The question for the Tribunal is whether it is fair and reasonable in the circumstances of the case that a party should be compensated for the costs it has incurred. The onus of proof is on the party seeking an order in its favour.[50]

The respondent's contentions

[49] Questdale at [64].

[50] Questdale at [51].

The respondent says it has incurred significant costs in the total amount of $36,144 (inclusive of GST) as set out in the table below.

Item	Nature and purpose of costs	Cost ($)
1	DMIRS application fees	119.00
2	Legal Fees (Atkinson Legal) – DMIRS/SAT process and preparation	4,290.00
3	Expert Witness/Attendance – Houspect	250.00
4	Expert Witness/Attendance – Sedgwick	385.00
5	Attendance/Owner Representation (Lost Income)	30,800.00
6	Strata Management Costs - VC Build Defect Mgt	300.00
Total	36,144.00

The respondent's position in support of its application for costs may be summarised as follows:
1)The builder acted frivolously in failing to adduce any evidence, expert or otherwise, in support of its position or proposed remedial action. The evidence adduced by the respondent went largely uncontested by the builder.
2)The Tribunal found the builder's case to be without merit. During the course of the final hearing, the builder's representative acknowledged the unsatisfactory nature of the items of complaint and advised the Tribunal that '[we] thought we would wait and see how this went before addressing the items'.
3)The respondent incurred unnecessary expenses, loss, and inconvenience for the purposes of s 87(3) of the SAT Act because the builder failed to act in good faith and genuinely participate in the review proceeding. In contrast, the builder's decision to review the BRO meant the respondent incurred additional costs in engaging expert witnesses and commissioning technical reports in defence of its position. The respondent has also incurred costs in preparing and representing its interests at the final hearing.
4)The respondent contends that the builder has adopted a course of action with the intention of protracting the resolution of the complaint items. The respondent's participation in the review proceeding, and the failure of the builder to address the complaint items in a timely manner, has resulted in an extended period of stress for the respondent owners and continued deterioration of the property.
5)The respondent says that it engaged meaningfully in the review proceeding and genuinely assisted the Tribunal to make a decision on its merits.

The builder's contentions

The builder does not accept that the respondent is entitled to any order for costs in its favour. The contentions in support of the respondent's position may be summarised as follows:
1)The usual practice of the Tribunal is that each party bear their own costs of the proceeding: Carey and Commissioner for Consumer Protection [2012] WASAT 237 (S) at [15]. There must be some exceptional reason for departing from the usual practice: Firestar Enterprises Pty Ltd and Town of Vincent [2007] WASAT 100 at [15]. No exceptional circumstances have been demonstrated by the respondent for departing from the usual practice about costs.
2)The builder rejects the respondent's contention that it failed to engage in the process of decision making or the conduct of the review proceeding. There is nothing in the Tribunal's reasons for decision to support an argument that the application was frivolous or that the review proceeding was without merit.
3)The builder says it is not enough to say that expenses were incurred unnecessarily. Each time an application fails it could be said expenses were incurred unnecessarily simply because the applicant lost.
4)The claim for loss of wages by Mr Costello, the respondent's representative, should be dismissed as there is no evidence provided in support. The invoice claiming $30,800 (incl GST) in lost wages contains insufficient detail for a proper assessment of the costs incurred by Mr Costello and, on its face, is unreasonable.
5)The respondent refers to 'stress' without any medical or other evidence to support its claim and, therefore, this claim should be rejected.
6)The strata management fees sought by the respondent are not within the jurisdiction of the Tribunal to award.

Exercise of discretion in this case

The fact that a party is unsuccessful or fails on a contention advanced during the course of the hearing does not automatically support the making of a costs order unfavourable to that party. The presumptive position is that each party will bear its own costs in a proceeding before the Tribunal.[51] Although the Tribunal is a 'no cost' jurisdiction, the Tribunal has power under s 87(2) of the SAT Act to order the payment by a party of all or any of the costs of another party unless otherwise specified in the enabling Act. The Building Services Act does not limit the Tribunal's power under s 87(2) of the SAT Act.
[51] Section 87(1), SAT Act.
It is relevant to the exercise of the Tribunal's discretion under s 87(2) of the SAT Act whether, and to what extent, the party who bears the onus on costs can establish that the other party's conduct has impaired the attainment of the Tribunal's objectives.[52] One of the objectives of the Tribunal in s 9 of the SAT Act is to achieve the resolution of disputes, fairly, and according to the substantial merits of the case. A further objective is to act speedily and with as little formality and technicality as is practicable and minimise the costs to the parties.
[52] Questdale at [54].
There was no evidence before us to support a finding that the builder failed to genuinely assist the Commissioner in making a decision on its merits in respect of the BRO. As a person aggrieved by the Commissioner's decision, the builder was entitled to seek a review of the BRO by making an application to the Tribunal under s 57(1)(c) of the Building Services Act. However, in doing so, the builder should have been fully prepared to prosecute its case. Whilst the builder acknowledged certain deficiencies with the quality of the work that was the subject of the complaint items, it failed to make its expert witness available to be examined on alternative actions to remedy those deficiencies. Consequently, we find that the builder acted inappropriately in the conduct of the review proceeding and in a manner that was inconsistent with the objectives in s 9 of the SAT Act to assist the Tribunal in the resolution of the complaint items and minimise the costs to the parties. In the absence of the builder's expert witness, the evidence of the expert witnesses engaged by the respondent was of assistance to the Tribunal in determining whether or not to affirm the decision of the Commissioner. For these reasons, we accept the respondent's claim for the costs of the attendance of its expert witnesses at the final hearing in the amount of $635 (including GST).
Although we have found that the respondent should be compensated for the attendance of its expert witnesses at the final hearing, we do not accept the respondent's claim for loss of wages by Mr Costello in the amount of $30,800. The claim relates to the time spent by Mr Costello preparing for and attending directions hearings and the final hearing being a total of 20 days at a rate of $1,400 per day (excluding GST). Because Mr Costello appeared at the final hearing as a representative of the respondent and not as a party to the proceeding, we do not consider that it would be fair or reasonable for the builder to be ordered to pay compensation to the respondent for Mr Costello's time.
The respondent was not legally represented at the final hearing but did obtain legal advice on 10 March 2022 in relation to the Tribunal's hearing procedure in the amount of $1,650 (including GST). Given our finding that the builder's conduct during the final hearing was inappropriate and inconsistent with the objectives in s 9 of the SAT Act, we are satisfied that the builder should pay to the respondent the amount of $1,650 (including GST) in legal fees because those fees relate to the respondent's attendance at the final hearing. We are further satisfied that the legal fees of $1,650 are reasonable and not excessive having regard to the nature of the dispute. The balance of the legal fees claimed by the respondent in the amount of $2,640 is in respect of invoices dated 23 August 2020 and 28 October 2020 and, therefore, the fees were incurred before the builder lodged its application with the Tribunal on 29 July 2021. Because those legal fees were incurred before the review proceeding was commenced by the builder, we do not consider it would be fair or reasonable for the builder to be ordered to pay them.
The respondent seeks the cost of a Department of Mines, Industry Regulation and Safety (DMIRS) application fee in the amount of $119 which it incurred on 18 January 2021. We do not accept the respondent's claim for the DMIRS application fee because it was incurred by the respondent before the review proceeding was commenced by the builder on 29 July 2021. For the same reason, we do not accept the respondent's claim for $300 in strata fees for the management of building defects incurred in November 2020.
We are unable to make a finding in respect of the respondent's claims relating to stress and the deterioration of the property because the claims are unquantified and unsupported by any evidence. We also consider that the respondent's stressrelated costs claim is misconceived because neither Mr Costello nor the respondent owners are parties to the review proceeding in their individual capacities.

Conclusion

The presumptive position is that parties to a review proceeding before the Tribunal will bear their own costs. However, the Tribunal can order a party to pay all or any of the costs of another party under s 87(2) of the SAT Act. In the circumstances of this review proceeding, we consider it would be fair and reasonable for the respondent to be compensated for its expenses in the amount of $2,285 (including GST).
Accordingly, we will order that the applicant pay to the respondent the amount of $2,285 (including GST) by 5 pm on 31 August 2022.

Orders

The Tribunal orders:
1.By 5 pm on 31 August 2022 the applicant must pay to the respondent the amount of $2,285 (including GST) pursuant to s 49 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) and s 87(2) of the State Administrative Tribunal Act 2004 (WA).

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.

MS C BARTON, MEMBER

22 JULY 2022

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established