1. The applicants have 28 days from the date the respondent files its submissions on costs to file with the Tribunal and give to the respondent, any written submissions, and any supporting documentation in reply.
2. Subject to any further order of the Tribunal, the 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.

ACT : BUILDING SERVICES (COMPLAINT RESOLUTION AND ADMINISTRATION) ACT 2011 (WA)

CITATION : FERRARA and WEBB & BROWN-NEAVES PTY LTD [2021] WASAT 155 (S)

Building Services (Compliant Resolution and Administration) Act 2011 (WA) - Costs - Conduct of owners (applicant) unnecessarily increased time of hearing - No costs where there was a genuine dispute

Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 5, s 11, s 49(1)

State Administrative Tribunal Act 2004 (WA)

Ferrara and Webb & Brown-Neaves Pty Ltd [2021] WASAT 155

McLerie and Koleszko [2014] WASAT 160 (S)

Medical Board of Australia and Costley [2013] WASAT 2

Teissier and Commissioner of State Revenue [2016] WASAT 40

Western Australian Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32

1. On 8 December 2021, we published our reasons for decision Ferrara and Webb & Brown-Neaves Pty Ltd [2021] WASAT 155 (Reasons) dismissing the claim of Ms Patricia and Mr Darryl Ferrara (owners) against Webb & Brown-Neaves Pty Ltd (builder).
2. The dispute was regarding the cause and extent of cracking in the house constructed by the builder for the owners and the scope of any further remedial work that might be required.
3. The builder was substantially successful in defending the claim. The builder was unsuccessful in its submission in relation to jurisdiction. The builder now makes a claim for its costs.
4. The owners deny that the builder is entitled to either its expert fees or its solicitor and counsel costs and says that each party should bear their own costs.

1. At the hearing it was not in issue between the parties that during the construction of the house remedial work had been carried out by the builder. The remedial work had been necessary to remedy cracking in the house caused by structural problems. The owners were not satisfied that the remedial work carried out by the builder was sufficient to remedy all issues. They raised concerns that the remedial works either caused further damage (in relation to the piles) or was inadequate (steel columns and cracked brickwork).
2. On 6 February 2020, the owners made a complaint (Complaint) to the Building Commissioner under s 5 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BSCRA Act).
3. The Complaint read:

location - ground floor and first floor of the building.

description - cracked brickwork on opposite ends of the canal facing side of the building signifying major structural defects of the building and concerns with the remedial works being undertaken by the builder and the way the builder seeks to proceed with the building works.

1. On or about 18 February 2020, pursuant to s 11 of the BSCRA Act, the Building Commissioner referred the matter to the Tribunal. At the time of the referral the remedial works were either under way or had been completed.
2. On 24 March 2020, the owners lodged with the Tribunal a Statement of Issues Facts and Contentions (SIFC).
3. An expert conferral was held at the Tribunal on 28 April 2020, and on 27 May 2020 the signed joint report was filed with the Tribunal (Exhibit 1, page 321).
4. In their report, the experts identified four areas of concern in relation to the cracking and structural integrity of the house. They were:

1. The owners did not suggest that there were any further issues regarding their claim of faulty or unsatisfactory workmanship that would need to be considered by the Tribunal.
2. The owners in their 'Minute Final Orders by the Applicants' dated 26 February 2021 only sought remedial works to be carried out in respect of the four issues identified by the experts. We determined the four issues as identified by the experts in the joint report.
3. We dismissed the owners' claims in respect of all four issues and, for the reasons set out below, have determined that the owners should pay a contribution to the builder's costs in respect of Issues 1, 2 and 4.

1. The builder and owners say,[20] and we agree, that there is no presumption that the parties bear their own costs.
2. We are at all times required to exercise our costs discretion judicially with regard to the objectives of the Tribunal[21] and in the interests of justice.[22]

1. The Tribunal has previously considered the factors and circumstances it might take into consideration when determining whether to exercise its discretion to award a party some or all of its costs.[23] The builder in its submissions[24] sets out the factors it says are relevant to our determination of a costs order.
2. The owners do not challenge the builder's submissions as to the factors relevant for us to consider if a costs order should be made.[25]
3. They include:

(a) where the complexity of the matter justifies legal representation to prepare and present the matter to the Tribunal;

(b) where a party conducts itself unreasonably, particularly where the conduct leads to unnecessary costs to the other party;

(c) where a party has conducted itself inappropriately, particularly where the conduct leads to unnecessary costs to the other party;

(d) where credibility of evidence is at the heart of a matter;

(e) where the application undermines the integrity of proceedings under the relevant Act;

(f) where the case is weak, being incredible or implausible or obviously unmeritorious;

(g) where a party has to embark in proceedings to vindicate its clear contractual entitlement; and

(h) the circumstances of the case having regard to the above, or other, factors are such that the justice of the case merits it.

1. The builder seeks an order for both the legal costs and expert costs it incurred in defending the owners' claim.
2. The builder engaged the following experts to provide reports and attend the hearing:
   • Mr Gervase Purich of Structerre (builder's civil engineer);
   • Mr Shane Just of Structerre (builder's civil engineer); and
   • Mr Eric Hudson-Smith of Geosite Pty Ltd (builder's geotechnical engineer).
3. The builder asserts, and it is not contested by the owners, that the matter was complex and warranted the engagement by the builder (and owners) of suitably qualified legal representation.[26] The owners challenge the builder's claim for the costs of an instructing solicitor to attend the hearing on the basis it was not a matter for which an instructor was necessarily required. The owners say it was optional.[27]
4. The builder alleges the owners conducted the proceedings in a manner that significantly and unnecessarily increased the complexity, length and expense of the proceedings in that:[28]
   • The issue in relation to the jet grout piles (Issue 1) was originally raised (requiring expert conferral and preparation) but was ultimately not pressed at the hearing and we should infer it was not pressed as a result of its factual weakness.
   • The demolition of the house (remedy issue) remained a remedy up until 7 days prior to the hearing, namely 26 February 2021. That was an unwarranted and dramatic remedy which unnecessarily increased the potential commercial liability of the builder and, in turn, justified requiring an increased level of legal costs being incurred in defending the proceedings.
   • The cracking to masonry (Issue 4) was an issue pressed by the owners in the absence of any evidence that there was any such cracking and was put on the basis that there might be cracking.
   • As a result of the above, there were aspects of the conduct of the owners which served to increase the complexity, length and cost of the proceedings and the preparation required.

1. The builder has set out the quantum of the costs it seeks in a schedule annexed to its submissions.
2. The builder seeks an order for costs from a date prior to the commencement of the Tribunal proceedings (being 19 February 2021) on the basis that it required legal representation during and before the complaint was lodged with the Building Commissioner and then subsequently referred to the Tribunal.
3. The builder's total party/party costs incurred in relation to the matter are in the sum of $76,502.50. The builder does not seek an order for the entire amount but for an amount in the sum of $50,000.
4. The reduced amount, the builder says, takes into account the fact that the hourly rate charged was an amount in excess of the amount provided for in the relevant Tribunal determination. Further, the builder was substantially unsuccessful in pressing an argument that the Tribunal lacked jurisdiction.
5. The builder filed further information/submissions in relation to the quantum of the expert fees it sought which reduced its claim for expert fees from $31,608.50 to $25,630.

1. The owners submit that the builders conduct of the matter caused unnecessary expense to the parties.
2. The issues or conduct the owners says caused unnecessary expense are:
   • The builder effectively locked the owners out of the property from about November 2019 to April 2020.
   • The builder did not consult with or otherwise keep the owners informed of how the builder intended to rectify the structural issues raised by the owners, other than by informing the owners that the remedial works had already commenced.
   • The builder was of no assistance in facilitating the owners' experts to properly inspect the premises to satisfy themselves the structural issues of concern had been rectified.
   • The builder covered up and applied finishes to the surfaces which would have otherwise indicated any structural issues that may have continued to be exacerbated following the remedial works.
   • As a consequence of the builder's conduct in preventing access and covering up the surfaces referred to above, the owners' experts were unable to give their opinion in relation to Issues 1, 2 and 4.
   • In unnecessarily prolonging the hearing by failing to provide further evidence (the computer modelling) at an early stage of the proceedings in respect of Issue 3.
3. In response to the builder's submissions:
   • Issue 1 - the decision to not press Issue 1 was reasonable having regard to the evidence of the experts' opinions during the first day of hearing.
   • The remedy issue - it was not possible to specifically identify the remedy sought as the owners had not had access to the property and had not been informed of the remedial works being undertaken. It was only after the owners obtained further information, after the experts had carried out a site inspection, that they were able to narrow the remedies sought.
   • Issue 4 - it was reasonable to be concerned that the extent of the cracking had progressed after the remedial work had been carried out. Possible cracking could not be visible as the builder had applied gyprock and other finishings to the surfaces which could have shown cracking to masonry.
   • The Tribunal should not exercise its discretion to award costs as the owners had not acted unreasonably in bringing their claims and should have regard to the nature of the dispute and the need to rely upon experts.

1. The owners challenge the rate charged by Mr Pino Monaco being that of a senior practitioner and claim it should instead be that of counsel.
2. The owners submit that the builder is not entitled to claim costs prior to the builders notice of lodgement of representation in the proceedings. Further it should not be entitled to any costs in relation to Issue 3 given the lateness of the provision of the evidence in respect of the computer modelling.

1. Although the Tribunal has a broad discretion to award costs, it is clear that it needs a good reason to depart from the general principle that parties will bear their own costs.[29]
2. We find there was a genuine dispute between the parties up to and at the commencement of the proceedings in the Tribunal for the following reasons.
3. Firstly, before and when the complaint was made to the Building Commissioner, the owners' expert was advising them that he was not satisfied the remedial work conducted by the builder had resolved the various issues (faulty workmanship) identified by the owners' expert engineer.
4. Secondly, the owners were continuing to obtain evidence about what remedial work had been carried out by the builder to assess its acceptability.
5. Thirdly, the nature of the unsatisfactory workmanship that required remedial work to be undertaken - the pilings being insufficient to support the house - warranted careful investigation.
6. As there was a genuine dispute between the parties and neither party had acted unreasonably before the commencement of the proceedings, we are not satisfied it is in the interests of justice to award costs to the owners before the builder's legal representative filed its notice of acting.
7. Accordingly, we do not need to consider if s 49(1) of the BSCRA Act enables us to award costs before the proceedings commenced in the Tribunal.

1. We accept that the case was complex. We also accept that it was reasonable, if not necessary, for the owners and the builder to be legally represented to ensure the case was presented in a more structured way than many building disputes before the Tribunal.

1. The credibility of evidence could not be said to be at the heart of this matter and neither party argued that it was.

1. The builder did not suggest that the owners undermined the integrity of proceedings under the relevant Act.

1. This was not a matter that related to contractual rights or entitlements.

1. The owners submit that as a consequence of the conduct of the builder in not allowing them access and completing remedial works without them having an opportunity to inspect the property, the owners' experts were unable to give their opinion in relation to Issues 1, 2 and 4.
2. We do not accept this submission. It was the owners that raised Issues 1, 2 and 4. If their expert could not opine on them and they had no other evidence of cracking or damage that their experts attributed to the work of the builder there was no reasonable basis to pursue the allegation of unsatisfactory or faulty workmanship.
3. The owners also say the builder unnecessarily prolonging the hearing by failing to provide further evidence (the computer modelling) at an early stage of the proceedings in respect of Issue 3.
4. Again, we do not accept this submission as the owners do not say how the late filing increased the time of the hearing.
5. We accept that the issue of the computer modelling increased slightly the time of the hearing, but this was unrelated to the late filing of the further expert report.
6. At hearing the owners' expert stated he could have conducted similar computer modelling as the builder but was not asked to do so by his client, the owners.
7. We are not satisfied that the conduct of the builder either before or during the proceedings unnecessarily prolonged the hearing or increased costs.

1. Below we consider the conduct of the owners in relation to several of the items of complaint which may have led to unnecessary costs to the builder.
2. We consider whether their case was weak, or obviously unmeritorious or they conducted themselves unreasonably and or inappropriately.

1. At hearing the owners pressed the issue of soil testing despite their expert agreeing with the builder's expert that the builder had done all that was necessary to comply with the note on the canal wall drawing.[30]
2. The owners did not articulate at hearing what they considered were the consequences of the alleged failure to test the soil.[31]
3. We were unable to conclude there was any issue with the failure to test the soil and this should have been apparent to the owners given they submitted no evidence as to how this alleged failure meant the regulated building service carried out by the builder was faulty or unsatisfactory.
4. Pursuing this matter in the absence of leading any evidence as to the alleged consequence of not doing so or alternatively why it was necessary to do so (other than a note on the canal wall drawing) unnecessarily prolonged the hearing and increased costs.

1. The conduct of the owners with respect to the jet grout piles was perplexing.
2. Originally the owners alleged they could not be certain of the depth of the installation of the jet grout piles and raised concerns as to whether they were sufficient to support the footings.[32]
3. At the expert conferral the owners' expert's comment in relation to this item was that he had not seen evidence of the depth of the jet grout piles.
4. As is usually the practice in the Tribunal, all the experts gave their evidence concurrently at the hearing. At this time the owners' expert, Mr Fred Davenport, after considering Mr E Hudson-Smith's answers to matters Mr Davenport raised, said he was satisfied the depth of the installation of the jet grout piles was sufficient to support the footings.[33] This issue of the depth of the jet grout piles was not pressed further at hearing.
5. Mr Davenport also confirmed that the testing of the jet grout piles as sought in the owners' 'Minute Final Orders by the Applicants' dated 26 February 2021 would not tell you anything about the condition of the canal wall.[34]
6. Indeed, the owners sought to raise an entirely new issue in respect of screw piles in their closing submissions that did not relate to the matter of complaint about the jet grout piles. This was not allowed by the Tribunal.[35]
7. We found there was no evidence before us that the use of the screw piles or the jet grout piles meant the regulated building service carried out by the builder was not carried out in a proper or proficient manner or was faulty or unsatisfactory.[36]
8. The owner in pursuing the complaint (depth of the jet grout piles) of which they produced no evidence and attempting to raise a new issue (the use of screw piles instead of jet grout piles and its effect on the canal wall) unnecessarily increased the length and cost of the hearing.

1. The determination of this issue required us to evaluate the differing opinions of the parties' experts.
2. The issue of the steel columns was determined in favour of the builder because we preferred the evidence of the builder's expert not because the owners' position was untenable.
3. We are satisfied there was a genuine dispute between the parties with respect to this matter. The owners and builder agreed this issue took up approximately half a day of hearing time.

1. During evidence at hearing no expert was able to say there was any cracking that indicated the remedial works carried out by the builder had not been successful.[37]
2. What the owners sought at hearing was an order for destructive testing to find out if the remedial works had resolved the problem(s) without leading any evidence to suggest the remedial works had not satisfactorily resolved the problem(s).
3. The jurisdiction of the Tribunal to make a building remedy order is only enlivened upon it making a finding of unsatisfactory or faulty workmanship.
4. There was no evidence put at the hearing that there is any problem with the brickwork in any area of the house. The owners do not suggest there was.[38]
5. Put simply, we have no power to make this order sought by the owners in the absence of any evidence of faulty workmanship.
6. It should have been obvious to the owners that mere conjecture, without evidence, that there might still be a problem despite the remedial works, could not satisfy the Tribunal that the builder's work was faulty or unsatisfactory.

1. We are satisfied that the conduct of the owners or the manner in which they conducted the proceedings in the Tribunal in respect of Issues 1, 2 and 4 unnecessarily increased the costs and duration of the hearing.
2. We are satisfied and find that the owners should pay a contribution to the builder's costs in respect of those items of complaint.

1. In assessing costs, the Tribunal takes a 'robust and broad-brush approach' and bases its determination on what reasonable allowance should be made for the work necessarily done to bring the proceedings to a conclusion.[39]
2. The Tribunal accepts that the costs awarded are compensatory and not punitive in nature.
3. In assessing what is an appropriate quantum of legal costs, we have had regard to the:
   • submissions by the owners;
   • submissions of the builder;
   • fact that the builder was unsuccessful in its application in relation to jurisdiction;
   • fact there was a genuine dispute between the parties in respect of Item 3; and
   • our knowledge of the proceedings generally.
4. We are also aware that what is sought by way of costs is not the full costs charged to the builder and have had regard to costs on a party/party basis.
5. The builder has claimed costs from the commencement of the matter or at least from the time the matter was in the Building Commission. For the reasons set out earlier we find that until about the time of the expert report the position of the owners in respect of the items of complaint was not unreasonable or unarguable.
6. We note that both parties considered it was necessary to have an instructing solicitor. We have allowed the builder the costs of the instructing solicitor as his presence allowed for the smoother running of the hearing which also meant a saving in time.
7. As the Tribunal has said previously, we are required to exercise our discretion in relation to costs with regard to the objectives of the Tribunal and in the interests of justice.

1. We are satisfied that the objectives of the Tribunal would be advanced and the justice of the case supports an order for the costs of the experts we relied upon in coming to our decision.
2. The Tribunal finds an appropriate and fair amount of legal costs to be paid by the owners to the builder is $30,000.
3. We were assisted in the parties closing submissions by reference to the transcript and have allowed the costs of the transcript of $4,360.
4. In regards to the expert fees we will allow Mr G Purich, Mr S Just and Mr E Hudson-Smith's fees being a total of $25,630.

1. The owners shall pay to the builder a contribution to its legal and expert costs fixed in the sum of $59,990.
2. The matter is listed for directions at 9.30 am on 6 June 2023 to hear from the parties with respect to time to pay.

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

[1] See Owners of Island Apartments Strata Plan 52597 and Pindan Pty Ltd [2017] WASAT 25 (Pindan) at [67].

[2] Respondent's closing submissions dated 22 July 2021, para 8.

[4] Pindan at [68] and The Owners of 38-40 Onslow Road, Shenton Park & Anor and C&I Constructions Pty Ltd [2014] WASAT 123 at [96].

[5] See the owners' SIFC dated 24 March 2020. The owners' application was lodged on 19 February 2020.

[6] Jet Grouting is a technique of mixing in-situ soil with the energy of high-pressure jet of slurry. A small­diameter rod drills down into the ground for the depth specified by the pile design. Then the rod, while being withdrawn, jets the cement-base slurry and air to produce an improved column/grouted pile.

[7] The SIFC (Issue 2) was specifically amended to remove the word 'soil' before the word 'testing' and replaced with the word 'load'.

[8] An Acrow Prop is a telescopic tubular steel prop, used as a temporary support. Acrow Props are adjustable for height by a large diameter screw thread, formed on the outside of the tube itself. A loose pin through a series of holes in the inner tube gives a wider range of coarse adjustment. Use of a screw thread also allows the props to be tightened when already in place, to adjust the load that each one bears.

[10] A fabric used in the construction of a geogrid. A geogrid is a flexible mesh that is used to create a reinforced coherent mass behind the retaining wall by stabilising the soil.

[11] This is an additional load transferred from the footings of the home onto the canal wall which may cause the canal wall to move.

[12] The witnesses referred to paving, but it is actually exposed aggregate.

[13] De Kauwe v Cohen [No 3] [2021] WASC 286.

[14] Order 21, r 5(2) of the Rules of the Supreme Court 1971 (WA) (RSC).

[15] The Tribunal was shown photographs of other properties in the same position on the waterfront as this house. Indeed, the neighbouring property, also owned by the owners, is so close that the path that was laid for the house went across both properties.

[16] The witnesses referred to paving, but it is actually exposed aggregate.

[17] We note the builder did not submit that it should not be responsible for any damage to the canal wall unless it had a consequential damage on the house.

[20] Respondent's Submissions on Review of Costs Orders dated 1 September 2022 at paras 26 to 37 and Applicants' Submissions in Relation to the Respondent's Application for Costs dated 25 November 2022 at para 3.

[21] As set out in s 9 of the State Administrative Tribunal Act 2004 (WA).

[22] Western Australian Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32.

[23] McLerie and Koleszko [2014] WASAT 160 (S) at [3].

[24] Respondent's Submissions on Review of Costs Orders dated 1 September 2022 at paras 39 to 43.

[25] Respondent's Submissions on Review of Costs Orders dated 1 September 2022 at paras 39 to 43.

[26] Applicant's Submissions in Relation to the Respondent's Application for Costs dated 25 November 2022 at para 13.

[28] Respondent's Submissions on Review of Costs Orders dated 1 September 2022 at para 42.

[29] Teissier and Commissioner of State Revenue [2016] WASAT 40 at [49].

[35] Reasons at [117] to [125] and [143] to [160].

[39] Medical Board of Australia and Costley [2013] WASAT 2 at [66].