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[2006] WASAT 117
State Administrative Tribunal (WA)
2006-05-12
Original judgment source is linked above.
ACT : BUILDERS' REGISTRATION ACT 1939 (WA)
CITATION : LAI & ANOR and COSTA [2006] WASAT 117
Review of decision of Building Disputes Tribunal Whether hearing unfair Applicable principles Adequacy of reasons for decision Application for extension of time, leave to review decision and review heard together
Home Building Contracts Act 1991 (WA), s 3, s 25B, cl 9, cl 18(h)
1 The applicants applied for leave to review a decision of the Building Disputes Tribunal reflected in an Order to Pay made on 5 May 2005. They also sought an extension of time for the making of the application. Although the matter was set down initially only for a hearing of the application for an extension of time and for leave to review the decision, by consent, the review was dealt with at the same time.
2 The Tribunal extended time for the making of the application because the application was only 11 days late, the reasons for the delay were cogently explained, the application for review itself had merit and the respondent did not suffer any particular prejudice.
3 In relation to the leave application, the Tribunal found that the Disputes Tribunal had so controlled the hearing that it had confused the applicants, and had resulted in the applicants not being given a fair opportunity to present their case. Further, the reasons for decision were seriously deficient. There was no reference to any of the material evidence. The Tribunal's total considerations, including the orders made, were contained in nine short paragraphs, without any rationale from which the intellectual processes resulting in the decision could be discerned. The Tribunal referred to principles governing the adequacy of reasons for decision, and in particular, the requirement that reasons for decision be sufficient to disclose the intellectual process by which the decision had been reached. In addition, a number of the Disputes Tribunal's findings were manifestly wrong.
4 The Tribunal accordingly granted leave to review the decision, save in respect of particular new claims raised on the review and in respect of some particular claims which the applicants wrongly asserted had not been assessed by the Disputes Tribunal.
5 In the review, the Tribunal considered all of the claims that were dealt with by the Disputes Tribunal, in addition to a claim for the cost of moving an airconditioning unit which the Disputes Tribunal omitted to deal with. The claims were for damages for delay in the completion of the subject works in the form of loss of rental, a lost opportunity claim, and compensation for various items of faulty or unsatisfactory work and breaches of the building contract, by failing to complete the works in accordance with the contract drawings. Based on the Tribunal's assessment of those claims, the compensation awarded by the Disputes Tribunal of $11 838.54 was increased to $31 839.99. The decision under review was accordingly set aside and the Tribunal's decision was substituted, save for an order made by the Disputes Tribunal concerning the release to the applicants of monies which had been paid into the Disputes Tribunal's trust account.
6 The Tribunal made comment about steps which could have been taken at the commencement of the hearing to identify clearly the issues for determination and the basis of each claim. Further, that an explanation of the procedure to be followed by the Disputes Tribunal would have assisted an orderly addressing of the issues.
7 On 13 June 2005, the applicants lodged an application seeking review of a decision made by the Building Disputes Tribunal (Disputes Tribunal) reflected in an Order to Pay made on 5 May 2005 and in particular seeking an extension of time for the bringing of the application and compensation for:
8 At a directions hearing on 30 June 2005, the application was amended to include an order for leave to be granted to review the decision.
9 The grounds set out in the application are as follows:
"After we have received the decision from [the] Building Disputes Tribunal we wrote to ask for the reasons for the decision. We only received this on 9th May 2005.
We were treated unfairly during the Tribunal Hearing.
10 On 12 July 2005, the applicants filed a joint affidavit, sworn on 9 July 2005, deposing to the circumstances which resulted in the application being lodged outside the period of 28 days from the date on which the decision is made.
11 The applicants deposed to having received the Order to Pay dated 5 May 2005 on 9 May 2005. On 10 May 2005, they requested reasons for decision in writing. Those reasons for decision were received on 9 June 2005 and, as stated above, the application was lodged on 13 June 2005.
12 The application for an extension of time and leave to review the decision of the Tribunal was set down for hearing on 12 September 2005. During the course of argument on that day, it became apparent that it was not possible to determine the matter satisfactorily, because a transcript of the evidence of the hearing before the Disputes Tribunal was not available. The matter was accordingly adjourned to a further hearing on 17 January 2006. On that date, the hearing was concluded, save that leave was granted for the applicants to file written submissions identifying the evidence before the Disputes Tribunal said to establish the date when the last approval from the relevant statutory authorities for the building works had been obtained. Leave was granted to the respondent to file written submissions in reply on or before 31 January 2006, and the decision was reserved effective from receipt of such written submissions. The written submissions from the respondent were received on 1 February 2006.
The hearing before the Disputes Tribunal and reasons for decision
13 The Disputes Tribunal has no set rules which govern its procedures. By s 36(1) of the Builders' Registration Act 1939 (WA) (BR Act), the Disputes Tribunal is required to act according to equity, good conscience and the substantial merits of the case, without regard to technicality and legal forms, and is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks fit.
14 The chairperson presiding, by virtue of s 35(2)(a) read with s 36(2) of the BR Act, may determine any question relating to the admissibility of evidence and any other question of law or procedure. Further, by s 36(5), to the extent that it is not prescribed by the BR Act or the regulations, the Disputes Tribunal shall determine its own procedure.
15 There were no pleadings filed in this matter. The parties were selfrepresented. A directions hearing was held on 1 December 2004 at which the issues were broadly defined, orders were made for the exchange of documents, the applicants were ordered to pay an amount of money into the Disputes Tribunal's trust account and an order was made for a further inspection of the subject property prior to the hearing of the matter. The issues were defined as being:
16 The matter was thereafter set down for hearing on 21 April 2005.
17 The transcript of evidence makes difficult reading. Without the benefit of pleadings, one would have thought that the Disputes Tribunal would have asked the applicants at the commencement of the hearing to address the issues summarised at the directions hearing, outline briefly what was being claimed under each issue and the basis for each claim. Further, that there was some explanation of the procedure which the Disputes Tribunal intended to follow for the purpose of conducting the hearing to ensure that each party would be able to properly address each issue in an orderly way.
18 Instead of proceeding in the above manner, the chairperson identified the persons appearing and then proceeded, without any explanation, to say "[P]erhaps if we can deal with the Order to Remedy first (INAUDIBLE). When you came to the directions hearing there was some dispute about how much the Order to Remedy had been complied with or not, as the case may be, and I asked Mr Aitken (the Builders Registration Board Inspector parenthesis added) to go and conduct another inspection".
19 The chairperson then proceeded to control the proceeding in an inquisitorial fashion. While it is understandable that a more inquisitorial approach might be taken where parties are selfrepresented where there is a need to draw issues out from them, the manner in which the hearing was undertaken left the applicants in a position in which they simply followed the lead of the chairperson. This led to a degree of confusion and, as is apparent from the transcript, uncertainty on the part of the applicants as to how they were to proceed with their case. Some examples are set out below.
20 The chairperson directed the hearing to deal with particular items referred to in an Order to Remedy which had been made on 6 August 2004. The issue was whether or not the respondent had complied with the Order to Remedy.
21 After spending some time examining a number of items with neither the applicants nor the respondent giving sworn evidence, the chairperson inquired of the applicant (at page 48 of the transcript):
"Chairperson: Okay. Now did you want to call any evidence about these particular items that we've just gone through? For example, you say that for the breakfast bar it's your contention that the plans show height etcetera then [sic] Mr Costa says it doesn't.
22 Mr Lai: Yes, I would like to call the witnesses.
Mr Lai: And the balcony and things like that as well."
"Member: The loss of rent and so forth, did you have any evidence as far as that's concerned?
Member: Loss of rent? You provide us with rent receipts or invoices or anything for what you might be receiving in rent now?
Member: Have we got those dates exact, Madam Chair?
Chairperson: Well, we've got to work all that out, but what I'm ... I just want to isolate what issues of the order to remedy and the contractual issues in respect of the actual construction we've got to sort out as opposed to other more general issues, and what witnesses anybody wants to call about those issues. Because if we want to call the inspector well I presume he's available now but if the other ones have to come, and I thought we might be able to discuss some of these issues for a few minutes now while you organise ... have you got any witnesses to call?
Mr Costa: No, Madam Chair, I don't have any witnesses."
24 The chairperson then stated (at page 49), obviously to the applicants, as follows:
"Chairperson: So how long is it going to take? I don't really ... I can see some limited value in your quantity surveyor being here. So far as Mr Knowles, there's not really that much in dispute and the contractual issues, he can't give evidence about the contract because that's my job to determine what the contract says and what the contract should be interpreted as. So the only evidence that we'd hear from them is that Mr Bray as a builder member of the Tribunal is here to say well, you know, I'm an experienced builder and I read the plans this way, for example. According ... Mr Bray can't see that there's a sliding door at the balcony. Right?
Mr Lai: For that sliding door? There's no sliding door to the balcony?
Chairperson: On the plan. And then you say that somebody told you that the plan does show a sliding door.
Chairperson: ... you've got to think about what witnesses you want to call and how long you need for them to get here.
Member: See there was only one person that indicated to you that that was a door, that was the salesman.
Chairperson: No, no, he said that Barry Knowles told him it was a door. (Mr Knowles was a building consultant employed by the applicants parenthesis added).
Mr Lai: Yes, the building inspector employed and also other architects that I have showed [sic] the plan to. I've not got any [of] them as witness[es] anyway but just Barry Knowles is.
Chairperson: I actually would like to call the building inspector (in context a reference to the Building Registration Board inspector parenthesis added). So how about we adjourn to 11:00 and I'll arrange for the building inspector to be here and at 11:00 we'll hear some evidence from him and you get Mr Knowles to be here by 11:30."
25 It is apparent at this relatively early stage of the hearing that the applicants had very little sense of the direction in which the hearing was to proceed. There had been a discussion of some items of the Order to Remedy, but not all. The chairperson was now requiring formal evidence to be called, which in itself, was unobjectionable, save for the removal of the opportunity for the applicants to proffer how they would have liked to present their case. Further, without any procedure being laid out for them, they were left in a position where they had little alternative but to follow the direction adopted by the chairperson.
26 In the result, the Builders Registration Board inspector, Mr Aitken, was not available at 11 am and instead evidence was taken from Mr Knowles, the building inspector or consultant engaged by the applicant. Again, the witness' attention was directed by the Tribunal to particular items. The chairperson then asked Mr Lai whether he wished to address any further questions to Mr Knowles (from page 80 of the transcript onwards). As issues were raised, members of the Tribunal intervened so that discussion proceeded through various items. At page 88, the following exchange commenced:
"Chairperson: Okay. Did you want to ask Mr Knowles anything else?
Mr Lai: There's a few other issues as well regarding the metal garden shed which was in place of the what should be the masonry (INAUDIBLE) ...
Chairperson: Wait a minute. Where's that coming from? We are only looking for things that our building inspector said weren't done properly.
Mr Lai: Yes. Will we be going through the reinspection report at all?
Chairperson: Well with the builder ... I don't know; do you want to go through it with Mr Knowles?
Mr Lai: The reinspection report is mainly items addressed that needs to be done, actions required by the builder.
Chairperson: No, they are only the ones that we made a list of this morning. That's what we went through this morning and listed all the ones that need to be done and most of them were contractual and the other ones have been mentioned by Mr Costa at the last page of the items that he's prepared to fix up.
Mr Lai: No, that's not everything in there that ...
Mr Lai: (INAUDIBLE) items require action. I will have a look through, one by one.
Chairperson: Well we can't ... well the inspector will be here after lunch ...
Chairperson ..: to speak to the report. But I want to know if you want to ask Mr Knowles anything or whether you want to keep him here till after lunch or whether you ...
Mr Lai: Yes, there's one particular thing regarding the (INAUDIBLE) windows in bedroom 2. According to Peter he has written to me that he would replace the clear glass with glazed windows in (INAUDIBLE) but he just merely apply [sic] a layer of film on it.
Chairperson: Wait a minute. Can we just know what item we're talking about? We didn't look at these items this morning. That's why we started off this morning to try and clarify exactly what we're talking about. Now you want to change it. This morning we said some of the items on the order to remedy are still not completed. Others were referred to the Tribunal. 17, 34, 35, 44, 61 and 66, they were referred to the Tribunal.
Chairperson: Item 22 is that window that he's paying you $700 to replace.
Mr Lai: Not that one. There's so many issues that we are losing track of it. Can I find it after lunch?
27 The tape ends at that point and starts again with the chairperson announcing that it is the recommencement of the owners' application 15325 and that "Having heard the evidence of Mr Knowles we are now going to hear the evidence of the inspector. If you'd like to swear in?"
28 Mr Aitken was then sworn in. Again, it is apparent that the applicants had lost any control they might have had over the hearing. The applicants were not asked to identify whether there were any issues that had "been lost track of".
29 A similar process was followed with Mr Aitken's evidence so that once the Tribunal had finished directing his evidence to particular matters, the chairperson asked the applicants whether there were "any other questions?" (at page 115 of the transcript).
"Mr Lai: I need to go through the reinspection list because I'm not sure how the items that required attention it's [sic] gone through. Can I go through those?
Chairperson: I thought we went through that and got the item numbers of all the ones that hadn't been done.
30 The hearing proceeded in this manner to also address contractual issues.
31 It is apparent that the chairperson took a firm control of the proceedings from the commencement of the hearing. The chairperson was assertive in the manner in which she dealt with matters generally. But, in my view, there is nothing to suggest that the Tribunal patronised the applicants. It is obviously not possible to assess from the transcript that the chairperson had discouraged the applicants by showing impatience, verbally and through body language, as alleged in the grounds of the application. There is also nothing to suggest that decisions were made while one of the panel members was not present, or that "the speech was condescending towards" the applicants. I was not directed to any particular part of the transcript to support the grounds to that effect. There is nothing to suggest there was anything deliberate, or "unscrupulous", in the Disputes Tribunal omitting to deal with any issue.
32 There is a passage on page 125 of the transcript where the chairperson describes a proposition being advanced by Mr Lai concerning his responsibilities on the possible sale of the property as being "rubbish". Such direct language is impolite and not what one would expect. But, the transcript reflects that an equally direct approach was taken with the respondent. At page 133, the respondent was taken to task in a forthright manner about why the applicants had not received a copy of his offer to pay for certain items set out in a letter dated 14 March 2005 (at page 153 of the Disputes Tribunal's papers). A similar approach was taken to the respondent's argument about the effect of a letter which he had allegedly sent during April 2003 which he contended constituted a notice entitling him to an extension of time of the date for practical completion.
33 Nevertheless, I consider that the failure of the Disputes Tribunal to extract a clear outline of the issues for determination at the commencement of the hearing and a summary of the basis of each claim, together with the degree of control thereafter exercised by the chairperson over the conduct of the hearing, was such as to impact upon the presentation of the applicants' case. I shall revert to the consequences of this conclusion after examining the reasons for the decision under review.
34 The applicants are critical of the way in which some of the evidence has been summarised and of certain conclusions stated.
35 In the course of the findings necessary to demonstrate that the complaint had been made within the three year statutory time limit applicable under the Home Building Contracts Act 1991 (WA) (HBC Act), the Disputes Tribunal stated:
"It was common ground that the building licence was not granted until April 2003 and the slab laid on 30 June 2003. For this reason it was agreed that the time for completion did not commence to run until this date."
36 The applicants dispute that the building licence was not granted until April 2003. While they do not dispute that the slab was laid on 30 June 2003, they place very much in issue the date on which work should have commenced.
37 The Disputes Tribunal also stated, under a subheading "The Contract" to the main heading "Facts, Issues and Evidence", that "there was no evidence produced by either party to define 'commencement'. However, it appeared to be common ground that the slab was laid on 30 June 2003. This was therefore deemed to have been the 'date of commencement', making the date of completion (that is, 90 calendar days) 28 September 2003".
38 The applicants dispute the above conclusions and point to the terms and conditions as to when work was to commence.
39 Under the heading "Faulty and unsatisfactory workmanship", the Disputes Tribunal found that "in evidence, Mr Aitken said that, in his opinion, the property had reached practical completion as at the date of his inspection, ie, 21 July 2004".
40 The applicants dispute the above finding and now submit that practical completion occurred on 21 February 2005. At the hearing before the Disputes Tribunal, Mr Lai confirmed that the applicants had received the keys for the property on 17 December 2004 and that no claim was being made beyond that date. 21 February 2005 is the date on which the premises were let to tenants and on which a gas plumber engaged by the applicants had to carry out some work to achieve a connection.
41 The Disputes Tribunal then proceeded, under the same heading, to set out the parties' respective claims and submissions. There are some brief references to the effect that Mr Knowles supported the applicants' views.
42 Under the heading "Compensation for financial loss", the Tribunal stated shortly that the owners had sought compensation for their time, but that the Disputes Tribunal did not have the power to grant such compensation. Further, that the owners sought compensation for reports prepared by Mr Knowles "but these were for the owners' (that is, the applicants parenthesis added) use and not vital to their case." The applicants persist with those claims.
43 The Disputes Tribunal then set out its findings and orders as follows:
"1 The contract commenced on 30 June 2003 and the date of practical completion was 21 July 2004.
3 Items 17, 44 and 61 are dismissed for lack of evidence.
44 The applicants challenge the above findings, save where liability of the respondent is reflected, in relation to which their challenge is to the quantum of compensation allowed. They also do not challenge the gas connection fee ordered to be reimbursed to them of $267.54.
45 The respondent's position can be simply stated. The application for an extension of time was opposed, as was the application for leave. As to the merits of the review, the respondent supported all the findings of the Disputes Tribunal and did not advance any contentions for any varied outcome.
46 In order to persuade the Tribunal that an extension of time for the bringing of the application should be granted, the criteria which apply are set out in Esther Investments Pty Ltd v Markalinga Pty Ltd 2 WAR 196; Palata Investments Ltd v Burt and Sinfield Ltd (1985) 1 WLR 942 at 946; Jackamarra v Krakouer [1998] HCA 27 (22 April 1998), this being an application to extend time for lodging a review against a decision determining the substantive rights of the parties. Those criteria are the length of the delay, the reasons for the delay, whether there is an arguable case and the extent of any prejudice suffered by the respondent.
47 The criteria to be established for the grant of leave to review the decision are set out in Tangent Nominees Pty Ltd and Edwards & Anor [2005] WASAT 119, namely, that the decision in respect of which leave is sought is wrong, or at least attended with sufficient doubt to justify the grant of leave and, in addition, that substantial injustice would be done by leaving the decision unreversed. The latter criterion is expressed to be no more than a guideline for the exercise of what must necessarily be and remain a broad discretion. Leave should also be granted where fundamental rules of natural justice have been breached by preventing a party from adequately being heard.
48 Although not raised by the grounds of review, in a consideration of the reasons for decision, it is essential that the Tribunal must be able to discern the rationale for the decision. While overly elaborate reasons are not required, where one set of evidence is accepted over a conflicting set of evidence, it is necessary to set out how it is that one has been accepted over the other. It is essential that the reasons adequately disclose the intellectual processes which have resulted in the decision. Where there is a right of appeal, the reasons must be sufficient to give effect to that right. If the basis for the decision is not apparent, the losing party cannot know whether there has been a mistake of law or of fact: see Riley v The State of Western Australia [2005] WASCA 190 (5 October 2005) and the authorities there cited.
Consideration of application for extension of time and leave
49 The application should have been lodged on 2 June 2005. It was lodged 11 days late. The circumstances are cogently explained, and that is that the applicants were awaiting the written reasons for decision of the Disputes Tribunal. Once the written reasons were received, the applicants acted with more than sufficient expedition. The respondent has pointed to no particular prejudice and as will be apparent, the application for leave and the review application have merit. The Tribunal will accordingly order that the time for bringing of the application be extended.
50 I turn to consideration of the question of whether leave should be granted. In the proceedings before this Tribunal, the applicants have filed a comprehensive statement of the basis of their claim which has been set out, subject to one or two minor exceptions, in a clear and logical manner. The quality of the presentation of documentation before this Tribunal stands in stark contrast to the way in which the applicants' case was investigated before the Disputes Tribunal. I say "investigated" deliberately, because what occurred in the Disputes Tribunal could, by no stretch of the imagination, be considered a presentation by the applicants of their case. The confusion which resulted, particularly in the minds of the applicants, is a good example of the dangers of an adjudicator entering into the arena. It is difficult not to have a greater involvement when parties are not represented, but any necessary assistance should be aimed at facilitating the parties presenting their case, rather than the Tribunal attempting to take the carriage thereof. I consider that, on this ground alone, the applicants are entitled to leave because, in the manner in which the hearing was conducted, the applicants did not have a fair opportunity to present their case.
51 Further, an attempt to consider the merits of the matter involves the Tribunal in assessing whether the conclusions reached by the Disputes Tribunal were reasonably open, such that no error can be demonstrated. The reasons for the decision are totally inadequate for this purpose.
52 As the merits of the review are dealt with more fully below, there is no need to deal with this aspect of the matter in any length in relation to the leave application. I will refer to the issues briefly.
53 There is at least some evidence to support the findings in relation to the date of commencement and completion of the contract works. However, there is no reference to the contract which defined when the works were to commence, nor any consideration of the conditions which needed to be met to trigger that commencement. The issue raised by the applicants concerning the delay in obtaining HIA indemnity insurance was simply referred to as part of the background to the dispute and received no further consideration. Once the practical completion issue is investigated further, it becomes apparent that Mr Aitken's evidence was not as unequivocal as expressed in the reasons for decision.
54 In relation to the compensation of $2863, stated to be as set out in the letter at page 153 of the Disputes Tribunal's hearing book, the computation is totally unexplained. The arithmetic total of those items is $2800. While the hourly rates established by the applicants' quantity surveyor were accepted by the respondent for the purposes of the offer, no allowance was made in respect of preliminaries, profit mark-up or GST as allowed for by the quantity surveyor. No reason is given for not taking those factors into account.
55 Items 17, 44 and 61 were said to be dismissed for lack of evidence. The transcript demonstrates that there was evidence on those issues. Items 17, 44 and 61 involve interpreting the contractual drawings. Evidence was given by Mr Knowles on all of these issues, but ultimately, the Disputes Tribunal needed to make a determination based on a proper construction of the contract documents, including the drawings. That task is undertaken below.
56 There is no reasoning provided to support the findings set out in par 4 of the findings which are expressed as an order.
57 Similarly, there is no disclosure of the process by which the findings set out in par 5 were reached.
58 The short consideration of the applicants' claim for compensation "for reports prepared by Mr Knowles" which was not upheld on the basis that "these were for the owners' use and not vital to their case" is manifestly wrong. It also ignores completely the costs incurred in respect of the surveyor's report. During the course of the hearing, the chairperson had made it clear that she thought that the applicants had acted prematurely in commissioning that report. Firstly, it is obvious that the Knowles report formed the basis for the Board Inspector's report. It could never have been expected that the applicants would be able to identify the issues contained in the Knowles report, most of which were dependent upon knowledge of building practice and standards and interpretation of drawings. It is noted that Mr Aitken did not identify any faulty or unsatisfactory work himself at any stage but reported on issues raised by Mr Knowles for the applicants. Whether a complainant to the Disputes Tribunal should be entitled to recover such costs must be assessed carefully on the merits of each case, but there should be a good reason for rejecting such costs when the complainant is not in a position himself or herself to identify the issues of complaint.
59 Secondly, the surveyor's report was not premature. The applicants and respondent were locked in dispute. An Order to Remedy had been issued by the Disputes Tribunal and had, to all intents and purposes, been ignored. There was nothing to indicate to the applicants that the respondent intended to carry out any further work once the period of the Order to Remedy had lapsed. Given that further work was carried out, it would have been open to the applicants to obtain a supplementary report from the quantity surveyor to deal with the change of circumstances, and I cannot see that there would have been any good argument to oppose the additional costs thereby incurred.
60 In relation to the above matters, the applicants are entitled to leave to review the decision. There are also additional matters raised by the applicants for determination in the review.
61 During the course of the hearing, it became readily apparent that the matter was one in which it was appropriate to grant leave. Once that point was reached, the parties consented to the leave application being expanded into the review itself. That consent was reflected in the directions orders made by the Tribunal at the conclusion of the hearing on 17 January 2006.
62 In these circumstances, it is convenient to address the additional matters raised by the applicants in the context of the review itself but on the basis that if the matters cannot be properly advanced, leave to raise such issues must be refused.
63 By virtue of s 27 of the State Administrative Tribunal Act 2004 (WA) (SAT Act), once leave to review a decision has been granted on particular grounds, the review in respect of those grounds is by way of a hearing de novo: s 27 of the SAT Act Tangent Nominees Pty Ltd v Edwards & Anor [2006] WASC 45. Accordingly, the Tribunal will have regard to all of the evidence provided by the parties.
64 The applicants entered into a building contract with the respondent on 29 March 2002. The contract was for the construction of a three bedroom, two bathroom twostorey apartment for a total consideration of $114 000. The contract is a home building works contract within the meaning of the HBC Act. The contract was in the standard MBA form. Clause 9 required that the respondent commence the works within ten days of the issue of all the necessary approvals by authorities concerned and complete the works within the number of days stated in the particulars of contract at item E. Item E of the particulars of contract provided that the period of 90 calendar days from the date of commencement be allowed for the construction period.
65 Clause 18(h) provided that, where the total amount payable under the contract exceeds $10 000, the respondent is to obtain a policy of home indemnity insurance with respect to the works that complies with s 25B of the HBC Act (home indemnity insurance).
66 A letter from the City of Canning dated 22 July 2005 establishes that the building licence was approved and ready for collection on 28 November 2002. It was collected on 17 April 2003.
67 The applicants had contended in the Disputes Tribunal proceedings and in this Tribunal that the respondent had represented that he was able to get insurance without difficult. A certificate of insurance to the effect that a policy of insurance was in place which complied with the requirements of the HBC Act was issued only on 14 April 2003.
68 The obtaining of home indemnity insurance was not the obtaining of a necessary approval by an Authority within the meaning of cl 9.
69 Clause 19 of the contract deals with delays and extensions of time. It sets out circumstances in which, if the progress of the works is delayed, the builder may make a variation by way of an extension of time subject to meeting the notice requirements set out in cl 16 of the contract.
70 The respondent did contend that he sent a letter dated 15 April 2003 claiming extensions of time. That was the subject of considerable attention before the Tribunal. The applicants denied receiving any such notice but, in any event, it would have been for the respondent to prove that commencement of the works was delayed by virtue of cl 19(a)(vii) by any matter, cause or thing whatsoever beyond the control of the builder. That was not done.
71 Further, I consider that cl 19 only operates once the works had commenced. The progress of the Works could not be delayed if work had not commenced see the definition for "progress" in the Australian Oxford Dictionary, 2nd ed., 2004:
"v intr 1 move or be moved forward or onward; continue. 2 advance or develop towards completion".
72 The commencement of the works may have been delayed, but without work having been commenced, the progress, the continuation, or advancement, of the carrying out of the works was not delayed.
73 The Disputes Tribunal relied on evidence from the respondent that the slab had been laid on 30 June 2003 and took that as the date of commencement of the works. That was clearly erroneous. Siteworks would have had to be carried out prior to that date. In any event, I do not consider that the inquiry as to the actual commencement date was strictly necessary. Clause 9(a) of the contract read with item E of the Particulars of Contract required the respondent to commence work within 10 days of the issue of all necessary approvals by Authorities concerned, or the date on which evidence of title to the land was provided and the construction period was 90 calendar days from the date of commencement. There was no issue in relation to title, but I note from the additional evidence provided by the applicants that settlement of the purchase of the property occurred on 2 October 2002.
74 In my view, on a proper interpretation of the contract, the actual date of commencement becomes relevant only if the respondent had commenced work within 10 days of the issue of all necessary approvals by the Authorities concerned. If the respondent failed to commence work within that period, as is the case, then he is in breach of contract by not doing so. The damages for that delay are precisely the same as the damages which flow from a failure to complete the works within the stated construction period. The calculation for damages for delay therefore runs 90 days after the end of the period within which the works must have commenced under the contract.
75 The further evidence provided by the applicants from the City of Canning establishes that the respondent made application for the building licence on 18 October 2002 and that the licence was approved and ready for collection on 28 November 2002. The applicants' evidence of inquiries from the Water Authority is to the effect that the respondent made application for approval on 28 April 2003 and that the approval was granted on the same day.
76 There is no evidence which establishes that the respondent was in any way dilatory in applying for the building licence on 18 October 2002. The building licence was available for collection from 28 November 2002, which was a Thursday. As the obtaining of the building licence is necessary prior to applying to the Water Authority, a reasonable time period must be allowed to the respondent to collect the building licence and then make application to the Water Authority. I consider that 10 calendar days is a reasonable period for that purpose and, therefore, that the approval from the Water Authority could have been obtained by 9 December 2002 which is the next working day after expiry of that period. The works, therefore, had to be completed 90 calendar days thereafter, that is, 9 March 2003.
77 The Disputes Tribunal found that Mr Aitken of the Builders Registration Board had expressed the opinion that the property had reached practical completion as at the date of his inspection on 21 July 2004. His evidence was far too equivocal to support a conclusion that practical completion had occurred on that date. The transcript reflects the following:
"Chairperson: So we've covered the windows, the painting, the shed. When you went the first time (21 July 2004 parenthesis added), was the extent of work that needed to be done sufficient to make it impractical to move in?
Mr Aitken: That's a very tricky question inasmuch as if I can just say that it just ... in my opinion?
Mr Aitken: Okay, I wouldn't find it difficult to move in.
Chairperson: As it was even with the things that you found wrong with it?
Mr Aitken: Yes. Madam Chair, I could say that I could move in.
Mr Aitken: Yes, and that, keeping in mind, without going through the whole of my first inspection, that's not like, you know with connection of services and so forth. I'm taking it that everything was connected, everything was in order and that the way I initially inspected it and I could move in."
78 Firstly, the issue of whether or not it was impractical to move in does not accurately raise the criteria necessary to constitute practical completion. Clause 26(a) of the contract provides that practical completion is that stage when the works are completed except for any omissions and/or defects which do not prevent the works from being reasonably capable of being used for their intended purpose by the owner and such testing or certification by any authority having jurisdiction having been complied with.
79 The evidence shows that when the owners took possession on 17 December 2004, the gas had still not been connected. They had to engage their own gas plumber to attend to this, and consequently were awarded compensation by the Disputes Tribunal for the costs of the gas connection in the amount of $267.54. But, in addition to that, it could not be properly determined that practical completion had been achieved when there had been contractual disputes relating to the size of windows. Ignoring all other complaints, and bearing in mind that the external walls were constructed in concrete tilt up panels, the remedial work necessary would have involved the cutting of concrete or part bricking up of the window opening and would have seriously impacted on the applicants' ability to use the works for their intended purpose. This conclusion is fortified by the extensive number and nature of items which were made the subject of an order to remedy issued by the Registrar of the Disputes Tribunal on 6 August 2004 and the number of additional contractual issues which were referred to a hearing of the Disputes Tribunal.
80 Further, Mr Knowles gave evidence (at page 69 of the transcript) in response to a question about whether practical completion had been achieved at the time of a further inspection by him in November 2002 in the following terms:
"Mr Knowles: Well setting aside the contractual issues, as you reminded me of, and possibly the extensive list that was still outstanding, one would concede that ... or have to concede it may have been fit for occupation at that stage but it would ... there would be some considerable impact on the occupiers when the builder was carrying out the works still in dispute."
81 There is no reason evident why that evidence should be rejected, or for Mr Aitken's evidence to be preferred given its equivocal nature. Mr Knowles' evidence should be accepted in the light of the further findings of this Tribunal below.
82 Having regard to the further findings of this Tribunal below, in relation to the contractual issues referred for determination together with the respondent's failure to have the gas connected, I find that strictly the works had not reached the stage at which the criteria for practical completion were met as at the date on which the respondent was given possession on 17 December 2004. However, having accepted possession on that date, it is not open to the applicants to contend that the respondent is liable for any delay in the carrying out of any necessary works thereafter, particularly as the applicants had by then elected to claim compensation rather than to further delay handover while the respondent carried out remedial work.
83 There was no issue that the applicants were entitled to damages assessed on the basis of the delay in being able to rent out the dwelling which had been acquired for investment purposes.
84 The evidence put before the Disputes Tribunal tended to show that properties of an apparently comparable nature were being offered for rental as at February 2003. One of the premises relied on by the applicants was being offered at a rental of $220 per week but on the face of the advertisement, it had a patio, which suggests it offered some outdoor living not available in respect of the applicants' property. The Disputes Tribunal assessed damages based on a rental of $190 per week. It was clearly open to the Tribunal to come to that conclusion. Before this Tribunal, the applicants put forward additional evidence showing a range of rentals over a period of time from 1 January 2003 to 3 April 2004 as reflected in advertisements appearing in the West Australian newspaper and with a rental ranging from $190 to $225 per week.
85 It is not possible on evidence of this nature to make a proper assessment of the rental value of the applicants' property. The applicants have simply taken an average of these rentals to assert that the lost rental should be based on an amount of $204 per week to the period of 31 March 2004 and for the period thereafter at the rate of $220 per week. It would have been more appropriate to provide evidence from an experienced real estate agent assessing the rental value. It is also surprising that the applicants have not tendered the lease which they entered into when the premises were eventually let out on 21 February 2005.
86 In these circumstances, a Tribunal having to assess damages must do the best it can on the evidence which is provided, but in the event of doubt, should err in favour of the respondent.
87 On my above findings, the date on which practical completion should have been achieved is 9 March 2003. The applicants obtained possession on 17 December 2004 and explained that it had taken until 21 February 2005 to let the property because some remedial work had to be undertaken on an access gate and that the December/January period was a bad period for the letting of properties. If the works had been completed in March 2003, I accept that it would probably not have taken as long to let the property. Nevertheless, I consider that the applicants' explanation for delay would not hold any force from at least midJanuary 2005 and it still took just over a month from then to let the property. In the circumstances, I consider that the applicants' claim for loss of rental should run from 15 April 2003. The Disputes Tribunal assessed that the claim should run from September 2003 and, as at that date, applied a rental value of $190 per week. I consider that to be a correct assessment and that the same rate should apply from 15 April 2003. I think it is reasonable to assume that the rental would have increased so that from 1 April 2004 to 20 February 2005, the rental loss should be asessed at a level of $200 per week to:
88 Before the Disputes Tribunal, as above stated, the applicants indicated that they would not claim for delay beyond 17 December 2004 when they received possession of the works. As this is a hearing de novo, and under s 27 of the SAT Act the Tribunal may consider additional material to arrive at the correct and preferable decision upon the review, there is no bar on the applicants expanding the claim as they have done.
89 The applicants further based their claim on the basis that they asserted that construction should have commenced with effect from the date on which they obtained transfer of property, that is, 2 October 2002. For the above reasons, I reject that contention. I can find no basis for criticising the respondent in applying for the building licence as he did on 18 October 2002, and thereafter the necessary course for obtaining approvals had to be followed as canvassed above.
90 I accordingly find that the applicants are entitled to compensation for delay in the sum of $18 700.
91 The applicants asserted before this Tribunal that they were entitled to an amount of $43 316 as a result of loss suffered due to other investments which they would have made but for the delay in completion of the works. The applicants assert that the Disputes Tribunal "had expressed that they do [sic] not have the power to award the lost opportunity" claim. I was not directed to any part of the transcript which reflects that the Disputes Tribunal declined to consider such a claim. I note that the issue of lost opportunity was raised by the applicants in a letter dated 15 March 2004 (page 10 of the Disputes Tribunal's book of papers). It may be that there was some consideration of this at a directions hearing but there was nothing within the reasons for decision which refers to the claim, nor could I find any reference to it in the transcript of the evidence.
92 It may be arguable that the letter dated 15 March 2004 constituted substantial compliance with the obligation to give a Preliminary Notice of any claim, and that it is therefore open to the applicants in a hearing de novo to raise the claim before this Tribunal. I will assume for present purposes that is the case, without deciding the issue.
93 There are three separate lost opportunity claims advanced. The first is that the applicants lost the opportunity to start a franchising toner recycling business on 16 October 2003. The evidence is that the applicants signed a contract with other parties with the intention to start the business on 16 October 2003 but withdrew five days later due to the financial strain and psychological pressure caused by the delayed completion of the works in question. The other two claims concern the lost opportunity to purchase an investment property in 2003 and a further investment property in 2004. The evidence is that the applicants had adopted an investment strategy in terms of which they intended to purchase an investment property each year.
94 It is common cause that the slab of the works was poured in July 2003. Siteworks must have commenced prior to that date. When completing the complaint form to the Disputes Tribunal on 5 March 2004, the applicants stated that work had commenced in May 2003. They also gave an obviously erroneous date for the date of practical completion of the building as being October 2002. On 7 April 2004, the respondent wrote to the Disputes Tribunal commenting on the complaint as follows:
"Having reviewed Mr Lai and Mrs Chong's complaint form it is advised that the building is due for practical completion this week, with the exception of items 1, 3, 4 and 5. The date of practical completion shown in section 6 of the complaint is not correct."
95 It was within s 6 of the complaint form that the applicants had also stated that the works had commenced in May 2003 and the respondent did not suggest that was incorrect. Commencement of the works in May 2003 would also be consistent with the last date on which the necessary approvals from the Authorities concerned were obtained.
96 This chronology presents an insurmountable difficulty for the applicants' lost opportunity claims in respect of the franchise business and the purchase of an investment property in 2004. The applicants were well aware of the delays in completion prior to these opportunities arising. While there may have been some concern about the risk of cancelling the contracts based on the date on which approvals were issued, there can be no doubt that the applicants would have been entitled to terminate the contract by reason of the delay in obtaining housing indemnity insurance. By not doing so, the applicants must be regarded as having affirmed the contract. They could have avoided the opportunity losses by terminating the contract and therefore are not entitled to advance those claims.
97 This difficulty does not arise in respect of the lost opportunity to purchase an investment property in 2003, because it is at least arguable that early in 2003 the applicants were not aware that the delay would be as extensive as it was. However, to succeed with the claim the applicants must demonstrate that the loss suffered flows as an ordinary consequence of the breach concerned, or was within the contemplation of the parties at the time of contract. It obviously does not flow naturally from the delay of a building contract that the owner would be prevented from purchasing another investment property, and that basis of claim is therefore not established. Nor is there any evidence to suggest that there had been any prior discussions between the applicants and the respondent, or any correspondence between them, prior to entering into the contract, which would establish that the respondent was aware of the applicants' investment strategy. In these circumstances, this claim could not succeed.
98 In any event, in the absence of demonstrated error by the Disputes Tribunal and no substantial injustice resulting from the conduct of the hearing because the claims would, in any event, have failed, leave to review is refused in respect of the above lost opportunity claims.
Issues said not to be covered by the Disputes Tribunal
99 The applicants contend that the following matters were not considered by the Disputes Tribunal. Regardless of the merits of these claims, the fact that the applicants did not raise them is a consequence of the case being conducted in a manner which virtually required the respondent to respond to issues as and when they were raised by the Disputes Tribunal.
100 The applicants wished to have warranties extended because of the delay in completion. It is not clear that the applicants have any contractual right in this respect, but in any event, I have not been able to find any evidence that this claim was raised in the complaint form or any correspondence prior to the commencement of the proceedings. It was also not identified as an issue for determination at the directions hearing heard on 1 December 2004. There is therefore nothing to indicate that the Disputes Tribunal erred in any respect and therefore, the leave to review must not include this issue.
101 The applicants assert that they had raised at an inspection their concern that the junction of the wall and the floor for the whole upper floor was possibly not adequately sealed. Mr Aitken recorded in an internal memorandum, addressed to the Acting Senior Inspector of the Builders' Registration Board, Mr Gronow, on 4 August 2004 that the respondent had stated that he would provide the applicants with a written statement that the junction of the wall and floor in bedroom 3 is adequately sealed.
102 It appears that this matter was left on this basis. It is likely, therefore, that if the matter had been raised before the Disputes Tribunal, that the Disputes Tribunal would not have provided any determination favourable to the applicants. This is because, in the same memorandum, Mr Aitken states that there was no evidence of faulty or unsatisfactory building work along the junction of the wall and the floor in bedroom 3. The present complaint, of course, relates to the whole floor, not just bedroom 3, and it appears that the issue raised at the inspection may not have gone that far. In any event, if there was no evidence of defective work and no demonstrated breach of contract, if the matter had been dealt with, the claim could not have succeeded. The Disputes Tribunal could not enforce an agreement that the respondent provide a written statement that the sealing was adequate.
103 In the event that any defect materialises within six years of the completion of the building, the applicants will be entitled to raise a complaint before the Disputes Tribunal.
104 There being no demonstrated error by the Disputes Tribunal and no substantial injustice resulting from the conduct of the hearing because the claim would have failed, leave to review in respect of these issues is refused.
105 These issues will be addressed when considering the defective workmanship claims as a whole. The defects said not to have been addressed are identified as items 68, 77 and 62 from the original inspector's report.
106 There are then additional issues raised concerning letters which the respondent alleges to have sent to the applicants which they deny having received. It is not necessary to make any determination in respect of these issues because the Disputes Tribunal and this Tribunal have been concerned only to deal with matters relevant to breaches of contract or defective workmanship.
107 There are then additional issues raised which are identified as having arisen after the Disputes Tribunal hearing on 21 April 2005.
108 As those matters do not form any part of the decision under review or of the matters referred to determination in that decision, this Tribunal has no jurisdiction to deal with those matters, which need to be raised by way of a new claim before the Disputes Tribunal. It may be open to the applicants to lodge a fresh claim with the Disputes Tribunal in relation to these matters.
110 The applicants have raised numerous matters which are alleged to constitute offences either under the Builders' Registration Act 1939 (WA) or Home Building Contracts Act 1991 (WA). Neither the Disputes Tribunal nor this Tribunal has any role to play in relation to prosecution proceedings for offences. The applicants need to raise these matters with the Registrar of the Builders' Registration Board.
112 We turn now to address the acknowledged defective workmanship and contractual claims.
Acknowledged liability for contractual and defective workmanship claims
113 By letter dated 14 March 2005, the respondent acknowledged liability for a number of items relating to either contractual issues or defective workmanship claims. A copy of the letter appears at page 153 of the Disputes Tribunal's book of papers. The respondent stated in this letter "I accept the following items as outstanding and the cost to make good is listed below. Items are inclusive of GST". At the hearing, the respondent stated that he accepted the hourly rates applied by the applicants' quantity surveyor. The Disputes Tribunal appears to have allowed all of the amounts offered by the respondent (although the amount actually awarded may reflect an arithmetic error) without any justification as to why those amounts were allowed in preference to the detailed costings provided by the quantity surveyor. In the circumstances, it is necessary to address each item, or group of items, being the item numbers identified in the Building Registration Board's initial inspection report.
114 The respondent offered an amount of $420. Under the heading "Item detail", the respondent stated "allow $105 per item 4" (this is taken to be a reference to the quantity surveyor's note "4. I have added 25% markup to the costs to allow for margin associated with minor works and works of a remedial nature". It is apparent, therefore, that the respondent has accepted the quantity surveyor's estimate of the time to be taken, the labour cost and materials, but has not accepted responsibility for the 25% margin which the quantity surveyor has said should be added. The quantity surveyor also stated that the rates used included builder's margin but "I have added to the rates at the end of the costs a percentage to cover the cost of builder's preliminaries". The term "preliminaries" has a well understood meaning and covers items such as mobilisation, supervision, site facilities, insurance and the like: Hudson's Building and Engineering Contracts, 11th ed., London, Sweet and Maxwell at par 2.223.
115 At the conclusion of the quantity surveyor's report, the quantity surveyor has therefore added the 25% margin for minor works referred to in the above note plus 6% for preliminaries and 10% of the total then provided for goods and services tax.
116 As stated above, in consideration of whether or not leave to review the decision should be granted, the Disputes Tribunal gave no reasons whatsoever as to why the respondent's offer was to be preferred to the detailed costings provided by the quantity surveyor. The Disputes Tribunal had recognised the relationship between the parties had broken down and that the applicants had clearly lost faith in the respondent.
117 In these circumstances, the cost to be allowed to an owner for remedial work is to be assessed in accordance with the principles set out in Nelson v Mardesic (1999) 22 SR 42 at 49. Given the respondent's poor performance of the works which is reflected in the delay in completion and the extensive list of defective work identified, the applicants cannot be criticised for electing to seek compensation to have the necessary work carried out by a third party rather than the respondent. In these circumstances, the addition of a minor works margin by the quantity surveyor is fully justified together with an allowance for preliminaries. No logical reason was advanced by the respondent for adopting the quantity surveyor's estimate of time and labour costs, but then to state that the GST was included, when that had not been included in the quantity surveyor's estimate.
118 It follows that the correct amount to be awarded to the applicants should be the sum of $525 plus an allowance for preliminaries, minor works margin and GST. For convenience, those elements will be added after the total amount in respect of all of the acknowledged claims has been assessed.
119 The quantity surveyor offered no detailed costings in relation to this item, but recorded that the applicants accepted an offer made by the respondent of $700 to settle this item. That is the amount offered. In the circumstances, it is not appropriate that the additional margins, referred to above, should be added in respect of this claim so that the total amount to be allowed to the applicant should be that offered of $700.
120 The applicants assert that they are entitled to an amount of $967.30, as notated in the quantity surveyor's report, plus the margins referred to above. However, the evidence establishes that this complaint was remedied by the respondent so that the quantity surveyor's estimates were no longer relevant. While the applicants were not satisfied with the repairs, Mr Aitken regarded them as satisfactory, and there was no evidence of further deterioration. Mr Lai did refer to some cracking of the grout but previously, a tile under the end baluster had shattered. In these circumstances, there is no basis upon which to start with a base for compensation any different to the amount offered by the respondent of $22.50 which covered the sanding of the edge of a tile. However, it is apparent that the respondent's offer has been made on the basis that GST is inclusive and that the margins discussed above are excluded. For the reasons previously indicated, that approach is wrong. The compensation to be awarded should include the margins referred to above and GST thereon. However, as the amount offered is inclusive of GST, the net amount allowed to the applicants should be reduced to $20.45.
121 This item is similar to item 22 in that it concerns a window which is of the wrong size. As with item 22, the quantity surveyor has offered no detailed costings. Whereas in relation to item 2 the parties had agreed compensation in an amount of $700, there is no agreement in respect of this item. The applicants have indicated by the quantity surveyor's report that they would accept an amount of $700 in settlement. The respondent has offered an amount of $103, which is based on an assumed additional energy cost for heating and cooling due to the larger size of the window.
122 The proper measure of damages for defective building work is either the reasonable and necessary remedial cost or the diminution in value of the works as a result thereof: Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613 (HC). As there is no evidence to assess damages on either basis, the only amount that can be awarded is that offered by the respondent of $103 inclusive of GST. As this does not involve building work being carried out, it must be awarded on that basis, without further adjustment.
123 The quantity surveyor estimated the cost net of the margins previously referred to and GST in an amount of $485. The respondent has offered that amount. For the reasons previously stated, it is appropriate that the margins and GST be added, so that the net amount awarded, subject to those additions in due course, is $485.
124 The quantity surveyor provided a base estimate of $291 in relation to the fitting of saddle clips to water pipes adjacent to the hot water unit. The respondent has offered an amount of $111, covering labour and materials consistent with the quantity surveyor's estimate but excluding a scaffolding cost of $180.
125 As far as I can ascertain, this matter was not properly investigated before the Disputes Tribunal. The respondent commenced giving evidence about how he had arrived at his costings at page 153 of the book of papers. He dealt with some items and then came to item 59. He explained (at page 7 of the transcript) that he had sought to get the plumber back to attend to the saddle clips to the water pipes, but he had been unable to get his plumber back and therefore he had accepted the amount, which is presumably an estimate to the quantity surveyor's estimated cost. He did not explain why he had made no allowance for scaffolding which appears to account for the difference between the amount offered and the quantity surveyor's base estimate. The respondent referred superficially to item 41 immediately thereafter and a more detailed investigation was then sidetracked because the chairperson asked the applicant, Mr Lai:
"Chairperson: Well perhaps if I can just ask the owners, the figure is at a [sic] 153. What do you say about those? Some of them are consistent with what the quantity surveyor said.
Mr Lai: I'm fully dependent on the quantity surveyor as he has got the knowledge for the industry. I myself do not. That's why I employ him.
Chairperson: Well what Mr Costa's saying is, for example, one of the items he suggested the whole wall needs to be repainted but he says well it's only a small area of the wall."
126 The raising of that further issue resulted in a wide-ranging discussion which was never taken back to any detailed examination of item 59, in particular.
127 In these circumstances, the best evidence of what is required is set out in the quantity surveyor's report and I find that the applicants are entitled to that base estimate of $291 to which must be added the margins previously referred to and GST.
128 The respondent offered an amount of $239 which coincides precisely with the base estimate of the quantity surveyor. In the circumstances, I allow that amount but, for the same reasons as stated above, subject to the addition of the margins stated and GST.
129 The respondent has offered $445, being the same amount as estimated by the quantity surveyor and, for the same reasons as previously stated, the applicant should be allowed that amount, plus the margins stated and GST.
130 The quantity surveyor provided a base estimate of $1 032.15 for remedial work to address the standard of finish to the applied coating on the front elevation of the building. The respondent has offered $275 on the basis that it should not be necessary to paint the entire wall and that only approximately 10.0 square metres of wall needed repainting.
131 It is apparent from a further inspection carried out by Mr Aitken, which is the subject of his report dated 10 February 2005, that contrary to his initial findings, "on the front wall, the textured coating on the front elevation appeared to be uniform in texture, colour and finish on the day of reinspection.
132 It is the inspector's considered opinion that the band around the window on the right side of the front wall is the result of alterations to the window opening."
133 Further painting will not remedy this problem. In the circumstances, without any evidence to quantify the remedial work which is necessary, I can only award the amount offered by the respondent of $275.
134 Items 3, 13, 27, 46, 38, 45, 59, 64 and 72 above have been allowed in the total base sum of $2 005.45. In accordance with the quantity surveyor's report, a minor works margin of 25% should be added, taking the total to $2 506.81. That amount must then be increased by an allowance for preliminaries of 6%, which takes the total to $2 657.22, plus 10% GST equals $2 922.94. To that amount must be added the total of the amount allowed under items 22, 41 and 75, which for the reasons given above are not subject to any adjustment for margins and which already include GST, which total the sum of 1 078. The total amount to be allowed the applicants in respect of remedial work for which the respondent admitted liability is therefore the sum of 4 000.94.
135 I turn to address items 17, 44 and 61 which were dismissed for lack of evidence.
136 Clause 1(a) of the general conditions of the building contract provided as follows:
"(a) The builder shall in a workmanlike manner and subject to these Conditions execute and complete the Works shown on the Contract Drawings and described in the Specification shall ensure that the Works are adequately supervised for this purpose."
137 Each of the items disallowed by the Disputes Tribunal for lack of evidence involves an interpretation of the contract. Although not bound by the rules of evidence, the Tribunal should apply certain fundamental rules such as the parol evidence rule and should be slow to admit evidence outside the exceptions permitted to that rule. Evidence would generally be permitted to explain any technical or scientific term and techniques used in drawings, but subject to that, the Disputes Tribunal was obliged to arrive at a proper construction of the contract itself. On that basis, I examine each item.
138 The contract drawing no 10603_A01 revision C shows the floor plan of the dwelling. The kitchen sink has what appears to be two cupboards immediately to the right of it, but between the sink and the living area, there appears to be a benchtop which runs the full length of the kitchen sink and the two cupboards and has a curved finish at the edge abutting the second cupboard. A more detailed plan of the kitchen and wet areas is drawing no 10603_A12. This contains a number of plan and elevation drawings. The plan of the kitchen is consistent with the description just given save that the second cupboard can be seen to be a dishwasher recess. The elevation drawing marked "View 8" does not depict what is described above as the benchtop with the curved edge adjacent to the end cupboard/dishwasher recess. This suggests one of two things. Either that section is a benchtop at the same level or, for some reason, the surface of this portion of "benchtop" is lower than the sink. If it was intended to be higher than the sink, one would expect that it would be depicted in "View 8" but it is not.
139 The dimensions shown on the kitchen diagram show that the "benchtop" is 2.4 metres in length and 380 millimetres wide. A Specification describes the "benchtop" under item 21 as a breakfast bar with upstand.
140 There is therefore ambiguity between the Specification and the drawings. Subclause 2(d) of the contract provides for an order of precedence in the event of ambiguity in the contracted documents, and in terms thereof, the Specification is to have precedence over the drawings.
141 The applicants have produced a photograph of the kitchen sink and benchtop as constructed. This shows that an upstand has been constructed consisting of two cylindrical stainless steel poles standing approximately 25 centimetres high on which there is what appears to be a pine timber board approximately 2.5 centimetres in depth. The photograph has marked on it measurements of the length of the board and its width, being 80 centimetres and 14 centimetres respectively. This upstand has been placed on a section of the benchtop immediately opposite the sink which appears to conform with drawing no 10603_A01 and drawing no 10603_A12. It appears, therefore, to be a benchtop 2.4 metres in length and 38 centimetres in width.
142 The respondent's evidence was that this board/upstand had been fitted to meet the applicants' complaint but had not been supplied to any of the other units within the development as a whole.
143 The applicants have been provided with a wide benchtop on the basis that this was the respondent's interpretation of the drawings. If the applicants contend that they are to have an upstand which runs the full length of the kitchen cupboards and dishwasher recess, then they cannot also be entitled to a wider benchtop beyond the width or limit of the kitchen sink. To accede to the applicants' claim would mean that the benchtop would have to be cut back. The quantity surveyor appears to have recognised this by providing for relaminating the existing benchtop where the unacceptable benchtop has been removed. I understand that to mean once the existing benchtop has been removed to accommodate the breakfast bar. But the breakfast bar costed by the quantity surveyor is one which is 175 millimetres high and 200 millimetres wide. There is nothing in the contract documents from which these measurements can be extracted. The quantity surveyor does make reference to an advertising brochure dated 26 March 2002, but that was not tendered in evidence.
144 The respondent should have discussed the ambiguity and the contract documents with the applicants in order to obtain their instructions. But on any basis, the applicants were not entitled to what they now contend for, because if the extra portion of "benchtop" was intended to represent the upstand, it would be considerably wider than 200 millimetres and would commence from a point immediately adjacent to the edge of the sink. Nevertheless, to achieve proper conformity with the contract would involve cutting away more of the existing benchtop and the construction of a larger upstand than that costed by the quantity surveyor. In the circumstances, I allow the amount so costed in the sum of $750 to which must be added the same margins and GST as previously canvassed.
145 This relates to a failure to provide pavers to an area underneath bedroom 3 of the dwelling. The reasons for this according to the respondent, was that the engineer had required it because it needed to hold the toe of the tilt up panels in position.
146 Building consultant, Mr Knowles, responded to this by testifying (at page 79 of the transcript) that:
"I couldn't argue the point about what the engineer needed to stabilise his building, however, it would be news to me that an engineer overrode an architectural detail without consultation. I would suggest that the engineer, if he had a problem with that detail, the paving, should have consulted with the architect and determined that to ensure that the paving could be installed there should have been a step down provided in the engineering detail to give the stability to the wall that he required but also to facilitate the finish that the architect had designed into the documents."
147 The quantity surveyor has priced this claim by simply asserting that the applicants should be entitled to a credit for the pavers which were not supplied in a base amount of $304.64 subject to the adjustment for margins and GST as previously discussed. I find that the applicant is entitled to compensation on that basis.
148 This relates to a claim that the respondent was obliged to provide a reticulation system to the lawn area for which the quantity surveyor's base estimate cost is $388.80. The site plan drawing no 10603_A08 has a legend which includes a series of dots to reflect seeded lawn and a blank white block to indicate reticulated lawn. The section of the property near the driveway is marked with dots to indicate a seeded lawn. The verge on either side of a brickpaved crossover is shown in blank white. The respondent's evidence was that this was not reticulated lawn because it was on the council verge and outside the lot itself. However, Mr Knowles gave evidence, which was not contradicted, to the effect that it is a usual requirement for council approval of unit developments that the verges are landscaped in some acceptable way. The fact that it is reticulated lawn and that one area was to be seeded lawn suggests that lawn would be laid if there was not existing lawn retained on the verge. But there remains an anomaly that the seeded lawn area has nothing to indicate that it would be reticulated as well. As I understand, the applicants claim it is for the area marked "seeded lawn" to be reticulated.
149 The applicants submitted that it had to be understood that seeded lawn would also be reticulated, because it could not be shown to be seeded by use of dots, without by doing so changing the marking of what would otherwise be a blank white area. In effect, the intention was to have the garden reticulated, but the legend is confusing.
150 It would indeed be surprising if, as I find, lawn was to be provided to the verge area, and was to be reticulated, that a seeded lawn, which would require just as much watering and care, if not more, was not reticulated. I find that the seeded lawn area is also to be reticulated. That conclusion can be supported in two ways. Firstly, any ambiguity in the contract documents should be construed against the respondent under the contra proferentem rule of construction. Secondly, a term can be implied to that effect in accordance with the principles set out in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266.
151 It is not clear whether the quantity surveyor's costings cover both the verge area and that area designated as seeded lawn. In view of my findings, any error operates against the applicants.
152 In these circumstances, I am prepared to allow the claim in the base sum of $388.80 plus margins and GST.
153 The total base amounts allowed in respect of the above items 17, 44 and 61 is therefore $1 433.44 to which must be added the 25% margin of $360.86, preliminaries on that total at 6%, being $108.26 plus 10% on the total of those amounts, which is $2 103.82, and that amount is allowed to the applicants.
154 I turn now to deal with additional items in relation to which the Disputes Tribunal awarded compensation but in amounts which the applicants challenge.
155 This claim relates to the balcony off the lounge area. The applicants asserted that it was intended to be used as a Juliet balcony and that a sliding door should have been provided to grant access to it. The respondent contends the balcony was at all times intended to be purely ornamental and that the contract drawings show a window, not a sliding door. The quantity surveyor has assessed a base cost for the removal of the existing windows and the installation of a new sliding door in the sum of $1 069.20 and a base sum of $905 for removing the existing balcony and providing a steelframed balcony capable of use. The Disputes Tribunal awarded compensation in an amount of $500 in respect of both items. There is no breakdown of that amount nor any reasoning as to how the assessment was made.
156 Drawing no 10603_A01 and drawing no 10603_A08 clearly show a sliding door. This is done in the usual way in which two lines overlap but a clear space is left between the edge of one line and the opening to which it relates. In the case of a window, a thinner continuous line across the opening is used. On the other hand, drawing no 10603_A013 does not show a sliding door. It shows nothing at all in the same place. Because of this apparent inconsistency, to which Mr Aitken referred in his first report dated 21 July 2004, he advised that this issue should be referred to a hearing before the Disputes Tribunal. He made the same recommendation in relation to the balcony dispute which is obviously closely interrelated because if a sliding door is included, it would indicate an intention to use the balcony.
157 During the hearing before the Disputed Tribunal, the respondent was taken to item 29 of the Specification which referred to a sliding door in bedroom 1. He explained that item 29 there referred to a sliding door to the bedroom cupboard.
158 There are, however, other indications in the specification which refer to sliding doors. Under H.11 door furniture, it is provided "by builder, deadlock to front door, lock to sliding doors". Under H.18, it is stated "Vertical blinds To all windows and sliding doors except laundry bathroom and WC's". On the other hand, there is a specific reference under I.7 "Built in wardrobes In bedrooms 1 and 2 complete with one shelf and rail in each and sliding mirror door in bedroom 1".
159 The reference to vertical blinds to sliding doors could obviously not relate to sliding doors to the cupboards. In my view, it is possible on this documentation alone to conclude that it was intended that there should be a sliding door between the lounge room and balcony. However, if there is any ambiguity, it should be resolved against the respondent under the principle of construction that contracts should be interpreted contra proferentem, that is, against the person responsible for the preparation of the contract. It was within the power of the respondent to provide unambiguous documentation and he failed to do so.
160 I accordingly determine that the applicants were entitled to the installation of a sliding door and it then follows, and I find, that the balcony was intended for personal use. The respondent endeavoured to meet this by suggesting that it was strong enough to bear the weight of ordinary use.
161 It is noted that Mr Knowles, in his report dated 20 April 2004 commissioned on behalf of the applicant, raised the issue concerning the sliding door but made no comment about the adequacy or otherwise of the balcony. I have not been able to find any evidence which suggests that the balcony is unsafe and would not bear the weight of normal use. The applicants have tendered a photograph of the balcony. It is extremely narrow, and in depth, could not hold more than one person. There is therefore very limited leverage of that weight against the fulcrum point where the balcony meets the wall. The vertical balcony end rail on each side has at least three visible bolts joining it to the wall. Underneath the balcony is a right-angled bar which is, in turn, bolted into the wall and to the floor structure of the balcony.
162 It was for the applicants to put satisfactory evidence before the Disputes Tribunal and this Tribunal to support the assertion that the balcony needs to be replaced. I dismiss the claim under item 35 for the removal and replacement of the balcony.
163 I find that the applicants are entitled to compensation in respect of item 34 in the sum assessed of $1 069.20. To that must be added the minor works margin of 25%, that is, $167.30 and 6% for preliminaries thereon of $80.19, making a total of $1 416.69. The total, therefore, with 10% GST is $1 558.36.
164 This relates to the applicant's claim that a store to be provided within the carport area was to be constructed of the same material as the building itself. The respondent at first installed a metal shed of wider dimensions than that shown on the plan and after the applicants objected, replaced that with a metal shed to the same width as that shown on the plan but of a shorter length. The length was shortened to allow for an airconditioning unit having been installed against the wall whereas the plans showed that the airconditioning unit was supposed to have been installed on the side of the shed.
165 The contract drawing no 10603_A01 shows an area marked as "store" in the carport. The sides of the store are drawn in lines the same thickness as the external and internal walls of the building.
166 I accordingly uphold the applicants' claim. The quantity surveyor has estimated the cost of achieving compliance with the contract in the base sum of $1 986.71, and I allow that amount plus the 25% minor works margin, a 6% allowance for preliminaries thereon and GST in the total sum of $2 895.63.
167 This relates to a claim for the glass in the windows of bedrooms 1 and 2 on which an opaque film has been applied to be replaced with obscure glass.
168 The contract drawing no 10603_A01 provides that the lower glazing pane of bedroom 1 was to be obscure. The glazing specification P.3 provides other glazing detail "none". In his initial report, Mr Aitken found that the obscure film was not faulty or unsatisfactory and therefore he recommended that no action was required by the respondent. In issuing the Order to Remedy to which previous reference has been made, the Registrar therefore dismissed this claim. No application was made to review the Order to Remedy. I can find nothing in the transcript to indicate that the Disputes Tribunal exercised any discretion to review this aspect of the Order to Remedy. It is therefore particularly unclear as to how the Disputes Tribunal came to award the applicants an amount of $100. I can find no evidence to support a conclusion that the provision of an opaque film does not meet the requirement of providing obscure glass. I accordingly dismiss this claim.
169 Accordingly, in respect of those claims in relation to which the applicants challenge the quantum of compensation provided by the Disputes Tribunal, I find that an amount of $6 557.81 should be substituted for the $800 allowed by the Disputes Tribunal.
170 The applicants assert that there were three claims being identified as items 68, 77 and 62 in relation to which the Disputes Tribunal failed to make any assessment and to allow compensation. It is apparent from the reinspection carried out by Mr Aitken on 10 February 2005 that the respondent had complied with the Order to Remedy in respect of item 68. Although, therefore, the applicants may have intended to raise this claim before the Disputes Tribunal, it would not have succeeded.
172 Item 77 relates to the airconditioning unit having been installed on the internal wall of the carport instead of on the side of the store to which reference has already been made above. The applicants have received compensation in relation to the respondent's failure to provide a store strictly in accordance with the contract. To enable the applicants to have a store constructed to the same dimensions as shown on the contract drawings, it would be necessary to move the airconditioning unit to a position on the side of the store.
173 In the claim to this Tribunal, the applicants have claimed a base amount of $240.14, and that this should then be adjusted as with the claims above for margins and GST. The quantity surveyor dealt with this matter at a time when the first shed was in position, which was wider than the dimensions shown for the store on the plan. The gross cost estimate provided by him was an amount of $144 to provide for the covering of the exposed cabling and conduit to be clipped to the soffit. I can find no evidence to support the amounts currently claimed by the applicants. In the circumstances, I would allow the applicants the base sum of $144 which, when adjusted by the 25% minor works margin and then 6% for preliminaries, amounts to $190.80. The total amount therefore allowed, including GST, is $209.88.
174 This complaint was that clay bricks had been used to fill incorrectly positioned window openings in the front wall of bedroom 3. The applicants' quantity surveyor assessed the cost for addressing the remedial work thought necessary in a base sum of $974, subject to the addition of margins and GST.
175 Mr Aitken, in his initial report, stated that he considered that the finish of the internal east wall in bedroom 3 where the window openings had been eliminated were satisfactory. He recommended that no action be required of the respondent. Consequently, when the registrar issued his Order to Remedy, this claim was dismissed. The applicants did not apply for a review of the registrar's decision as they were entitled to do if they were dissatisfied.
176 Mr Aitken also mentioned in his report that a visual inspection of the external face of the wall was conducted from ground level and that no cracks or failure of the material was evident. Subsequently, in February 2005 when Mr Aitken conducted a further inspection in order to report on whether or not the respondent had complied with the Order to Remedy, he noted the following in respect of complaint item 75. That item related to the standard of finish of the applied coating on the front elevation. He stated in his report of 10 February 2005 that the front elevation faces east, directly in line with the morning sun and that when facing the complex from the street, with the exception of a slight band around a window on the right side of the front wall, the textured coating on the front elevation appears to be uniform in texture, colour and finish. He opined that the band around the window on the right side of the front wall is the result of alterations to the window opening.
177 It appears that the window being discussed is the bedroom 3 window.
178 If the matter had been raised, the Disputes Tribunal would have had to exercise a discretion whether or not to review the matter, on its own motion, as it was entitled to do pursuant to s 33A(3) of the BR Act. Although the respondent would have been entitled to complain that he had no notice that the issue was to be raised, it is apparent that all relevant evidence was before the Disputes Tribunal and there is no apparent reason why the respondent would not have been able to deal with it. Accordingly, leave to review should encompass this issue.
179 When one has regard to the merits of the claim, it is apparent that any imperfection is very difficult to see. In the context of an examination of the paint texture, the inspector attributed "a slight band" around the window to the result of the alterations to the window, not the paintwork. On Mr Aitken's evidence, which I accept, I consider that it is doubtful that any attempt to carry out remedial work to the manner in which the window has been partially infilled could provide a better result. I accordingly dismiss this claim.
180 The applicants have claimed a total sum of $7 870.17 in respect of expenses. No vouchers have been filed in support of the claims. Ordinarily, that might have resulted in the applicants failing. But, this matter was set down for a hearing of the applications for an extension of time within which to apply for a review and for leave to review the decision of the Disputes Tribunal. By consent, the application was converted into the review itself when it became apparent that leave would be granted and it appeared as if the Tribunal had all before it that was necessary for a final determination of the matter.
181 The applicants have gone to considerable trouble to provide the documentation necessary to support the merits of the claim. Neither the applicants nor the respondent specifically addressed the issue of costs. It would not be fair, in all the circumstances, to determine an application for costs. I will make appropriate directions for the filing of an affidavit by the applicants in which they can provide details of the claims, adjusted in light of the comments which are made below and to which they can annexe all relevant vouchers. An opportunity will be provided to the respondent to oppose the costs claimed.
182 The law is clear that a selfrepresented litigant is not entitled to recover costs for his own time in the preparation and conduct of a hearing and may only recover out of pocket expenses; Cachia v Hanes & Anor [1994] HCA 14; (1994) 179 CLR 403. The award of costs has never been intended to be a full indemnity for the actual expenses incurred by a party. This Tribunal is generally intended to be a costs-free jurisdiction in the sense that parties should have to bear their own costs. There is, nevertheless, a broad discretion to award costs. When costs are awarded, there is no scale which has statutory application and the costs can be either fixed by a member or settled by the Executive Officer of the Tribunal.
183 In these circumstances, I consider that it is appropriate that any award of costs should be approached in a broad fashion and should not have to descend into an inquiry into small items of expenditure. On that basis, I would not be inclined to award costs in respect of travelling expenses based on a rate per kilometre for use of the applicants' own vehicles, and in any event, I would not consider that costs incurred in travel during the progress of the works is recoverable as part of the costs of these proceedings. Similarly, I would not be inclined to award costs in respect of postage or for photocopying, unless it involves a more significant cost for the preparation of a bundle of documents for hearing or the like.
184 Subject to the submissions of the respondent, I consider that the applicants should be able to recover the costs of obtaining Mr Knowles' report and for his attendance at the hearing as a witness. In addition, I consider that they were justified in obtaining the quantity surveyor's report when they did and that they should be entitled to the costs of doing so. Indeed, they would not have been able to prove any of their claims without that report.
185 I note that the Disputes Tribunal allowed an amount of $200 for Mr Knowles' attendance as a witness but it is not clear how it arrived at that sum. In the result, all of the claims for expenses will be reviewed in accordance with the directions made below.
186 For the above reasons, I find that the applicants are entitled to compensation as follows:
In respect of the claims for which the respondent admitted liability
In respect of the items of claim dismissed on the basis of the Disputes Tribunal's finding of insufficient evidence
In respect of those claims in relation to which the Disputes Tribunal's quantum of compensation was disputed
In respect of claims not assessed by the Disputes Tribunal
In addition, the applicants are entitled to the gas connection fee as awarded by the Disputes Tribunal
187 The applicants had paid an amount of $11 400, representing the outstanding balance of the contract sum, to the Registrar of the Disputes Tribunal to be held in a trust account. The orders made in the decision under review directed that such amount be repaid together with all interest, and such amount to be credited against the capital amount determined by the Disputes Tribunal to be payable by the respondent to the applicants. The balance then outstanding was ordered to be paid by the respondent to the applicants. The order made that the Disputes Tribunal release the sum of $11 400 to the applicants should be affirmed and the respondent should remain entitled to a credit in respect of that sum and any other amount paid by him pursuant to the Disputes Tribunal's orders.
(a) That Peter Costa pay to Tet Sin Lai and Chee Yin Chong the sum of $31 839.99 subject to Peter Costa being credited against that amount the sum of $11 400 which was held in the Building Disputes Tribunal's trust account and any payment already made by him pursuant to the said Order to Pay;
(b) Save in relation to costs, the subject of further orders below, the complaint is otherwise dismissed.
I certify that this and the preceding [188] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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ACT : BUILDERS' REGISTRATION ACT 1939 (WA)
CITATION : LAI & ANOR and COSTA [2006] WASAT 117 (S)
Review of decision of Building Disputes Tribunal - Award of costs
1 The applicants succeeded in review proceedings in obtaining from the State Administrative Tribunal orders setting aside a decision of the Building Disputes Tribunal, and substituting orders awarding increased compensation, but otherwise dismissing the complaint to the Disputes Tribunal, save in respect of costs. Directions were issued to enable all costs claimed to be identified and determined. The costs claimed fell into two categories. Firstly, the costs of expert witness fees and reports obtained for use in the Disputes Tribunal proceeding and, secondly, costs incurred in the proceedings before the State Administrative Tribunal.
2 The State Administrative Tribunal referred to the provisions of s 87 of the State Administrative Tribunal Act 2004 (WA) which established that the starting point was that each party should bear its own costs but that there was a general discretion nevertheless to make an award of costs. In review proceedings, regard had to be had to whether the applicant had genuinely attempted to enable and assist the decision-maker to make a decision on its merits.
3 The State Administrative Tribunal held that great care should be taken in exercising power to award costs to ensure that accessibility to the State Administrative Tribunal is not affected. Nevertheless there is a distinction between its general review jurisdiction, which relates to decisions made by government, local authorities, and other bodies, and is a true administrative decision review process and the legislative scheme for the review of decisions of the Building Disputes Tribunal. The State Administrative Tribunal recognised that there were circumstances in which an inability to recover costs on review could have the effect of excluding review or, in some circumstances, might discourage use of the Building Disputes Tribunal in favour of the Court system to preserve a right to recover costs on appeal. Such circumstances were held to be relevant in exercising the State Administrative Tribunal's discretion in relation to costs.
4 The State Administrative Tribunal concluded that the costs incurred in the review proceedings were relatively incidental to the benefit obtained from the order on review and were insignificant when account was taken of all claims made in the review process. In these circumstances, the State Administrative Tribunal held that there was no sufficient reason for the State Administrative Tribunal to move from the starting position that each party should bear their own costs.
5 The State Administrative Tribunal assessed the costs claimed in respect of expert witness fees and reports in respect of the proceedings before the Disputes Tribunal and made an order in substitution for the decision under review, awarding the applicants the costs of the proceedings before the Disputes Tribunal in the sum of $3641.63. It was further ordered that each party bear its own costs in respect of the review proceedings.
6 On 12 May 2006, the State Administrative Tribunal (the Tribunal) made orders in favour of the applicants, setting aside a decision of the Building Disputes Tribunal (the Disputes Tribunal) reflected in an order to pay, dated 5 May 2005, substituting its own decision, and awarding increased compensation but otherwise dismissing the complaint, save in respect of costs.
7 Orders were made giving the applicants leave to file and serve an affidavit setting out fully all costs and expenses claimed by them and annexing vouchers for the same. The respondent was granted leave to file and serve written submissions opposing the application for costs, either in whole or in respect of particular costs and expenses claimed. It was further ordered that unless the Tribunal directed otherwise, that the amount of costs and expenses to which the applicants may be entitled shall be determined on the documents.
8 The parties having complied with the above directions. It is for the Tribunal to determine the application for costs, and if granted, fix the sum to which the applicants are entitled.
9 Under s 87(1) of the State Administrative Tribunal Act 2004 (WA) (SAT Act) it is provided that unless otherwise specified in the SAT Act, the enabling act, or an order of the Tribunal under this section, parties bear their own costs in a proceeding of the Tribunal. However, a broad discretion is granted to the Tribunal under s 87(2) to the effect that unless otherwise specified in the enabling act, the Tribunal may make an order for the payment by a party of all or any of the costs of another party.
10 Under s 87(4) of the SAT Act, the Tribunal is directed that in relation to proceedings within its review jurisdiction, the Tribunal is to have regard to whether the applicant genuinely attempted to enable and assist the decision-maker to make a decision on its merits.
11 In proceedings before the Disputes Tribunal under the Builders' Registration Act 1939 (WA) (BR Act), s 38(3) specifically empowers the Disputes Tribunal to make such order for costs, other than costs for the service of a legal practitioner, as it thinks fit. Subsection 38(4) to which subsection (3) is expressed to be subject, provides that costs are not to be awarded to any party for the services of any legal practitioner except in circumstances which are prescribed in that section.
12 Prior to the coming into effect of the SAT Act on 1 January 2005, the review of decisions of the Building Disputes Tribunal lay by way of an appeal to the District Court of Western Australia. In accordance with the rules of that Court, costs were awarded in accordance with the usual cost principles.
13 In this matter, the applicants were not legally represented before the Disputes Tribunal or this Tribunal. But the extent of matters in dispute, and the need to establish remedial costs, required the engagement of a building consultant, Mr Knowles, and a quantity surveyor, Mr Rafferty, at a not considerable expense. The total amount of costs claimed in respect of these persons, the obtaining of a transcript of the proceedings before the Disputes Tribunal and various sundry charges amount to $4929.07.
14 The respondent was legally represented before this Tribunal.
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.
16 It is however, relevant that the Disputes Tribunal has an unfettered discretion to award costs (other than costs of a legal practitioner) in proceedings before it. Some of the costs now claimed are properly costs which could have been awarded by the Disputes Tribunal. In the order made by this Tribunal on 12 May 2006, the decision under review was set aside, and substituted by orders for the payment of compensation and otherwise dismissing the complaint, save in relation to costs. The Tribunal will identify those costs which, if they are to be awarded, will be awarded as part of the principal order substituted for that of the Disputes Tribunal. But even so, there is approximately $1000 in costs claimed in respect of the obtaining of a transcript and copying of documents which do properly form part of the costs of these proceedings.
17 The legislative scheme for the review of decisions of the Disputes Tribunal is different to the Tribunal's general review jurisdiction which relates to decisions made by government, local authorities, and other bodies, which is a true administrative decision review process. The parties in proceedings before the Disputes Tribunal are private persons engaged in adversarial litigation.
18 There will be some cases in which an injustice could result by not allowing costs to be recovered. In this particular area of jurisdiction, it is frequently the case that costs have to be incurred in engaging engineering or building consultants. The inability to recover costs may, in some circumstances, have the practical affect of precluding an application being made because even when the prospects of success are considered to be high, the final benefit achievable after deduction of irrecoverable costs, may not justify the proceedings. Such a result would not be in the public interest.
19 At the other end of the spectrum, the complexity of issues raised or the value of a claim the subject of a complaint to the Disputes Tribunal, may have the result that the applicant, or even both parties, wish to have legal representation from the outset. If there is sufficient at stake, consideration will be given to the possibility that whatever the result, one of the parties will wish to have the decision reviewed. In such circumstances, the inability to recover costs may be an important consideration, so that an applicant may prefer to commence proceedings in a court, rather than before the Disputes Tribunal. The Disputes Tribunal was established in the public interest to provide a cost effective and prompt method of dispute resolution in building cases. The Disputes Tribunal is a specialist tribunal which requires that its chair be a legal practitioner and that the other members be drawn from two panels, one representing consumer interests and the other representative of the interest of builders, to facilitate that purpose. If the cost of legal representation, and even expert witness fees, could not be recovered in the review proceedings, that may therefore, impact on the use of the Disputes Tribunal, and deny any review role by this Tribunal. It is relevant in considering an application for costs for the Tribunal to take such factors into account.
20 Subject therefore to the starting position being that in proceedings before this Tribunal each party should bear its own costs, it must be recognised that the Tribunal nevertheless has a broad discretion in relation to costs, in the exercise of which, factors such as the above, may be taken into account, together with the particular circumstances of each case.
21 In this matter there can be no doubt that the applicant endeavoured to put its case properly before the Disputes Tribunal, and thereby genuinely attempted to enable and assist the Disputes Tribunal to make a decision on its merits.
22 The Disputes Tribunal awarded the applicants compensation in an amount of $11 400. On review by this Tribunal that compensation was increased to almost $32 000. The applicants claimed far in excess of that amount, so that the costs incurred in these proceedings, excluding in relation to Messrs Rafferty and Knowles, which were incurred in the proceedings before the Disputes Tribunal, amount to $1097.70. This is relatively incidental to the benefit obtained from the order on review. When the additional claims advanced on review by the applicants, which were dismissed, are taken into account, the costs are insignificant.
23 In these circumstances, there appears to be no sufficient reason for the Tribunal to move from the starting position that each party should bear their own costs. An order will be made to that effect, in relation to the review proceedings.
24 In relation to the costs incurred before the Disputes Tribunal, the respondent submits that the fees claimed in respect of Messrs Knowles and Rafferty are extravagant and not catered for within the earlier decision of this Tribunal made on 12 May 2006. The latter aspect of this submission is rejected. The Tribunal stated quite clearly in the earlier decision that subject to the submissions of the respondent, the applicants should be able to recover the costs of obtaining Mr Knowles' report and for his attendance in the hearing as a witness. Further, it was stated that the applicants were justified in obtaining the quantity surveyor's report when they did, and that they should be entitled to the costs for doing so. It was noted that the applicants would not have been able to prove any of their claims without that report.
25 The applicants claim reimbursement for three invoices rendered by Mr Knowles. The first invoice, dated 22 April 2004, was for the carrying out of a building inspection and preparation of a report, in a total amount, inclusive of GST, of $374. There is no rate per hour given for the preparation of the report but it was a comprehensive document raising many items of dispute. It formed the basis upon which the entire case was structured. Having regard to the number of items, the Tribunal considers that the inspection is likely to have taken some hours, probably two to three hours, and that the report itself would have taken at least one to two hours to draft and settle. In the circumstances, the fee charged is considered to be modest and is clearly fair and reasonable. The full amount will be allowed.
26 The next account from Mr Knowles is dated 16 November 2004 in an amount of $664.12. It relates to a site inspection conducted on 4 November 2004 for which a charge has been raised for three hours time at $105 per hour plus GST. It also includes a meeting with the quantity surveyor on 15 November 2004 for which 2.7 hours at $105 per hour plus GST has been charged.
27 The purpose of the meeting on 4 November 2004 is not explained. The respondent had not then carried out any remedial work which needed to be checked. It may be that Mr Knowles considered it to be prudent to review the site in the context of his earlier April report, in preparation for the meeting with Mr Rafferty. Although the meeting with Mr Rafferty is not explained, it was prudent and reasonable for Mr Knowles to meet the quantity surveyor on site because it is fundamental to the preparation of cost estimates that the methodology for remedial work be properly understood. That would have required liaison between Mr Knowles and Mr Rafferty. The rate charged and the time spent at the meeting with Mr Rafferty was reasonable and necessary and will be allowed in full. In relation to the site inspection on 4 November 2004, an amount of $105, plus GST, equivalent to 1 hour of time will be allowed on the basis that due to the lapse of time preparation and refreshing for the hearing which Mr Rafferty was justified. In respect of the 16 November 2004 account therefore a total amount of $543.13 will be allowed.
28 The next claim in respect of Mr Knowles is for an amount of $288.75 which is sworn to relate to his witness fee for attendance before the Disputes Tribunal. No account from Mr Knowles has been produced, but the applicants have provided a copy of a bank statement which shows a debit on 3 May 2005 in the amount claimed and with the description "ordersdisputetribltetlai". It is noted that the Disputes Tribunal allowed an amount of $200 in respect of Mr Knowles' witness fee. It is impossible to assess accurately from the transcript the amount of time for which Mr Knowles was present at the hearing. The Disputes Tribunal was in a good position to assess an appropriate allowance and in all the circumstances the same amount of $200 will be allowed.
29 The amount claimed in respect of Mr Rafferty's fees is $2524.50. Mr Rafferty's account, dated 22 December 2004, reflects that his fee is based on 17 hours of time charged at a rate of $135 per hour plus GST. It relates to a site visit and the preparation of his written report on the cost of remedial and rectification works. The amount charged is considered fair and reasonable and will be allowed in full.
30 The total amount therefore to be allowed the applicants in respect of the costs which should have been awarded in the Disputes Tribunal is $3641.63.
31 For the above reasons, the Tribunal orders as follows.
I certify that this and the preceding [31] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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(1954) 90 CLR 613
(1994) 179 CLR 403
(1977) 180 CLR 266