O'Brien v Building Professionals Board

Court of Appeal (NSW)|2011-01-28

Introduction 16The basis for this aspect of the costs application is that the Board, as a State agency, is required to act as a model litigant. In AT v Commissioner for Police [2010] NSWCA 131 Basten JA (Giles and Bell JJA agreeing) stated at [32] that 'a further factor to be taken into account [under s 88(1A)(e)] is that the respondent, being a State agency, was also required to act as a model litigant.' However, his Honour noted at [33] that 'that approach does not diminish the force of the general principle that each party should bear its own costs in the Tribunal.' 17Section 88(1A)(b) and (c) provide that relevant factors in determining whether it is fair to make a costs order include whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings and the relative strengths of each party's claim. 18In Sheppard v Commissioner for Fair Trading, NSW Office of Fair Trading [2010] NSWADT 192 the Tribunal ordered a State agency to pay the applicant's costs because it did not reconsider its position even after it was apparent that the assumption on which the decision was based was "without any substance". In awarding costs, the Tribunal relied on the principles relating to model litigants and the power in s 88(1A)(b) (prolonging unreasonably the time taken to complete the proceedings). 19In Mr O'Brien's view, certain statements made by the Board's senior counsel support the view that the Board was determined to make somebody liable for the Northmead project. 20Mr O'Brien also submitted that the Board should have known shortly after its application for amendment was refused that Mr Cohen was not a credible witness and that the Tribunal would reject his evidence. If his evidence was rejected then it was highly likely that the Tribunal would find that Mr O'Brien was not exercising functions as a certifying authority at the time and that a disciplinary finding could not be made against him.

Board's motivation 21During the adjournment application on 3 March 2009, Mr Robertson SC on behalf of the Board said (taken from transcript prepared on behalf of Mr O'Brien's solicitors): So we don't want to be in a situation as the Board having responsibilities to the public obviously of having the seminal example of poor certification practise (sic) not being capable of having some sort of disciplinary outcome and we said as to Mr O'Brien for participation (sic) but we considered that he may not have been primarily responsible for the decisions that were made within the certification of the firm to give this degree of leniency to the developer, but nonetheless he is the person - he is the only person who actually signed, physically signed and issued or was responsible for issuing the CC, but we don't want to be in a situation where we fall between two stools as a consequence of the clever and carefully instructed legal submissions that defends (sic) Counsel has prepared. 22According to Mr O'Brien, the submissions which senior counsel for the Board referred to were that: (1)when the construction certificate was issued, there were, contrary to the Board's finding, no requirements/items identified in Mr Cohen's facsimile of 1 September 2000 which still remained outstanding; and (2)Mr Cohen's evidence on the issue could not be accepted; and (3)the Board's case must fail because Mr O'Brien was not performing functions as a certifying authority of the project. 23The Board denied Mr O'Brien's assertion that it was determined to make someone liable for the project. The oral submissions of Mr Robertson SC were made in the context of a proposed amendment of the Board's reasons for decision to ensure all relevant issues were before the Tribunal. 24The Board further submitted that Mr O'Brien did not complete Mr Robertson's sentence which, according to his transcript, continued as follows: ...hence we say if they're right and we're wrong, nevertheless, even if he [O'Brien] acted administratively, you could say under the general concept of unsatisfactory professional conduct that it fell below the standards the public would expect someone in his position to perform because he signed a certificate that was just not dated correctly. 25According to the Board, this made it clear that their submissions were restricted to the policy position behind the amendment and the public interest in ensuring unsatisfactory professional conduct is dealt with.

Mr Cohen's credibility 26Mr O'Brien said that the Board should have reconsidered its position once doubt had been cast on the accuracy of the information that was given to it by Mr Cohen. He said that the matter was unnecessarily prolonged from late July 2009, when the Board's application for amendment had been rejected, until the end of the proceedings. In all the circumstances, he submitted that it is fair that he should receive his costs from 1 August 2009, being ten days after the Board learnt that its application to amend had been refused. 27The Tribunal ultimately rejected the Board's finding that Mr O'Brien was exercising functions as a certifying authority at the time: O'Brien v Building Professionals Board (No 2) [2010] NSWADT 250 at [55]. At [23] the Tribunal found that Mr Cohen, not Mr O'Brien, was the certifying authority on the Northmead project. That conclusion was based on several findings including the following: a) Mr Cohen's name and accreditation number appeared on the certificate; b) despite the fact that the construction certificate named Essential Certifiers Pty Ltd as the certifying authority, the certifying authority must be an individual who is an accredited certifier; c) the functions of a certifying authority cannot be delegated nor can another accredited certifier act as agent for a certifying authority; d) Mr Cohen met with the developer and the architect and told them he could certify the plans; e) after the builders applied for the construction certificate, Mr Cohen assessed some plans for compliance with the BCA and the development consent and requested six further items to be attended to before the construction certificate could be issued; f) Mr Cohen did not transfer the file for the Northmead project to Mr O'Brien; and g) the construction certificate was printed by administration staff on Mr Cohen's instructions. 28Mr O'Brien submitted that these matters were known to the Board at a very early stage in the proceedings. Only items (d), (f) and possibly (g) were matters that were in dispute. 29Mr O'Brien submitted that the Board appreciated that by failing to reconsider its position after the amendment application had been refused, their case was "...largely a question of testing the evidence given by only one witness, a Mr Cohen" (Transcript, 26 August 2009, page 1.15-20). Yet at the same time, the Board knew the following: (1)that Mr Cohen had not co-operated with the Board in providing a witness statement, contrary to a direction in relation to the serving of witness statements (Transcript 26 August 2009, page 1.20); (2)that the evidence of an independent witness, Mr Whitely (the quantity surveyor appointed by the mortgagee) was directly contrary to Mr Cohen's claim that he did not say that the construction certificate could issue (Transcript 27 August 2009, page 16-17); (3)Mr Cohen's evidence would also be contradicted by Messrs Finianos, Hefren and Drummond. The Board never intended to suggest that the evidence of these witnesses was wrong (Transcript 26 August 2009, page 27.25); (4)that Mr Cohen had received the most cautions, fines and reprimands in the Board's register of disciplinary action (Transcript 27 August 2009, page 2.35); (5)that in the 10 years since the incident, Mr O'Brien's conduct as an accredited certifier had been exemplary and he posed no risk to the public. 30According to Mr O'Brien, this information was sufficient for the Board to appreciate that he was not the certifying authority. At that stage the Board (acting as a model litigant) should have reconsidered its position and accepted that the finding of unsatisfactory professional conduct should be set aside.

Conclusion 31Where it is clear that a respondent has refused to reconsider its decision in the face of clear evidence or legal argument that the decision is wrong, an award of costs may be fair. A decision to that effect may be supported on the basis of s 88(1A)(b) or (c) or because a State agency is expected to act as a model litigant: s 88(1A)(e). However, it would not be fair to award costs in these proceedings. After the Tribunal had refused the application for amendment, the Board would have known that the chances of its decision being affirmed were less than if the amendment had been granted. That was the case because the Board knew that there was a risk that Mr Cohen would give evidence that was inconsistent with the evidence he gave during the Board's earlier investigation. 32However, because Mr Cohen refused to provide a witness statement prior to the hearing, the Board did not know exactly what his evidence would be. The Board decided not to cross-examine Mr Diab Finianos, Mr Drummond or Mr Hefren. Ultimately, the Tribunal found that Mr Cohen's evidence had been comprehensively discredited in cross examination and that it was inconsistent with the evidence of Mr Diab Finianos, Mr Drummond and Mr Hefren: O'Brien v Building Professionals Board (No 2) [2010] NSWADT 250 at [28]). That is not an outcome which the Board could have predicted with any certainty. 33Nor are we persuaded that Mr Robertson's observations during the application for adjournment, mean that the Board was determined to make someone liable regardless of culpability. His comments, which I accept were made, do not constitute a basis for concluding that it is fair to award costs against the Board. One of the Board's aims is to uphold the public interest in ensuring that unsatisfactory professional conduct of accredited certifiers is addressed. Although the Board must act as a model litigant, that does not prevent it from acting firmly and properly to protect the public interest.

Order The Building Professionals Board is to pay Mr O'Brien's costs of the adjournment of the hearing listed for 5 and 6 March 2009 as agreed or assessed. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 June 2011

Introduction 1Mr O'Brien has applied for a costs order against the Building Professionals Board (the Board). The application has been determined 'on the papers' following written submissions from each party: Administrative Decisions Tribunal Act 1997 ( ADT Act ), s 76. 2The Board found Mr O'Brien, who is an accredited certifier, guilty of unsatisfactory professional conduct, reprimanded him and fined him $11,000. Mr O'Brien applied to the Tribunal for a review of the disciplinary finding and the action taken by the Board: Building Professionals Act 2005 ( BP Act ), s 33. The Tribunal set aside the Board's decision: O'Brien v Building Professionals Board (No 2) [2010] NSWADT 250. 3The factual background to these proceedings, which is relevant to Mr O'Brien's application for costs, is summarised in the Tribunal's decision at [2] to [5]: 2 In 2000 Mr O'Brien, Mr Bernie Cohen and Mr Richard Moy, were all accredited certifiers and directors of Essential Certifiers Pty Ltd (Essential Certifiers). The proceedings before the Tribunal relate to a construction certificate for a 26 unit residential apartment building in Campbell Street, Northmead (the Northmead project). . . 3 On 2 November 1999 the Land and Environment Court granted development consent for the Northmead project. On 29 June 2000, Austcorp No 459 Pty Ltd became the registered proprietor of the land. Diab Finianos was the developer and his son Ray Finianos (through Silky Constructions Pty Ltd) was the builder. In early 2000 Mr Diab Finianos engaged Richard Drummond of Drummond & Rosen Pty Ltd, architects, to prepare construction plans for the Northmead project. On 21 August 2000 Silky Construction Pty Ltd applied to Essential Certifiers for a construction certificate to enable building work to begin. Mr Cohen assessed some plans in relation to the Northmead project on or about 21 August 2000 and sent a facsimile to the builders on 1 September 2000 saying that he had assessed the plans for compliance with the BCA and the development consent. In the same facsimile Mr Cohen listed six further items that needed to be provided before the construction certificate could be issued. On 11 September 2000 Mr Cohen went on leave to attend the Olympic Games in Sydney. The following day an administrative employee of Essential Certifiers printed the construction certificate. The certificate named "Essential Certifiers Pty Ltd" as the Certifying Authority and "Bernie Cohen" as the accredited certifier. 4 Some time between 12 September 2000 and 26 September 2000 Mr O'Brien endorsed the construction certificate with following words: 'B Cohen per ROB' (his initials). The certificate was released to the builders on 26 September 2000 after the six outstanding items referred to in Mr Cohen's facsimile of 1 September 2000 had been provided. 5 The Northmead project was completed on 26 October 2001. The owners, Austcorp No 459 Pty Ltd, applied to the Baulkham Hills Shire Council for strata subdivision approval. Council refused that application because the development did not comply with the development consent. Among other things, the project had been built with only one level of car parking instead of two, as shown on the construction plans. Litigation in the Land and Environment Court and the Supreme Court followed. The building was unoccupied for over four years before rectification works were completed. 4The substantive application for review was listed for two days on 5 and 6 March 2009. Two days before the hearing the solicitors for the Board sought to amend the reasons for decision so as to plead an alternative ground for the disciplinary finding. The necessity to amend the reasons was said to have arisen on the advice of Mr Robertson SC. Mr O'Brien opposed that application. The hearing dates were vacated so that the Board's amendment application could be determined. The Tribunal decided not to allow the Board to amend its reasons for decision: O'Brien v Building Professionals Board [2009] NSWADT 189.

Costs applications and relevant provisions 5Mr O'Brien has applied for the following costs orders: (1)that the Board pay Mr O'Brien's costs thrown away by reason of the adjournment of the hearing listed for 5 and 6 March 2009 ( costs for causing an adjournment ); (2)that the Board pay Mr O'Brien's costs of the Board's unsuccessful application to amend ( costs of unsuccessful amendment application ); (3)that the Board pay Mr O'Brien's costs of the proceedings from 1 August 2009 to date ( costs of the principal proceedings ). 6The Tribunal has power to award costs under s 88 of the ADT Act in relation to these proceedings: Building Professionals Act 2005, s 35. Section 88 relevantly provides that: 88 Costs (1) Each party to proceedings before the Tribunal is to bear the party's own costs in the proceedings, except as provided by this section. (1A) Subject to the rules of the Tribunal and any other Act or law, the Tribunal may award costs in relation to proceedings before it, but only if it is satisfied that it is fair to do so having regard to the following: (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings by conduct such as: (i) failing to comply with an order or direction of the Tribunal without reasonable excuse, or (ii) failing to comply with this Act, the regulations, the rules of the Tribunal or any relevant provision of the enactment under which the Tribunal has jurisdiction in relation to the proceedings, or (iii) asking for an adjournment as a result of a failure referred to in subparagraph (i) or (ii), or (iv) causing an adjournment, or (v) attempting to deceive another party or the Tribunal, or (vi) vexatiously conducting the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, (d) the nature and complexity of the proceedings, (e) any other matter that the Tribunal considers relevant. 7The general rule is that each party to proceedings pays his or her own costs. The Tribunal has a discretion to award costs 'but only if it is satisfied that it is fair to do so' having regard to the matters listed at (a) to (e). Those matters include 'any other matter that the Tribunal considers relevant'. A relevant factor in this case is that the Board, being a state agency, is required to act as a model litigant: AT v Commissioner for Police [2010] NSWCA 131 at [32]; Mahenthirarasa v State Rail Authority of NSW (NSW) (No 2) [2008] NSWCA 201 at [15] to [22]; Galea v Commonwealth (No 2) [2008] NSWSC 260 at [18] to [21]. The Court of Appeal has held that s 88 sets "a relatively low hurdle for an applicant seeking an order": AT v Commissioner of Police, NSW [2010] NSWCA 131 , per Basten JA at [33].

Costs for causing an adjournment 8The first part of Mr O'Brien's application relates to the costs incurred by the Board's application for an adjournment, two days before the hearing. The adjournment was necessary in order for the Tribunal to hear its application to amend its reasons for decision. The Tribunal granted the adjournment but refused the application to amend. In its reasons for decision ( O'Brien v Building Professionals Board [2009] NSWADT 189), the Tribunal made the following comment at [28], in relation to the adjournment application; In my view, the delay in notifying Mr O'Brien of the alternative basis for its decision arose because, until it received Mr O'Brien's detailed submissions, the Board was firmly of the view that he had signed the construction certificate on 12 September as the certifying authority. The Board apparently did not regard Mr O'Brien's submissions as tenable until close to the hearing date. It was at that stage that it sought to amend the Reasons for Decision. 9Mr O'Brien submitted that the Board should pay his costs because it caused an adjournment and thereby unnecessarily disadvantaged him: ADT Act , s 88(1A)(a)(iv). 10The Board submitted that while it had caused an adjournment, the adjournment did not "unnecessarily disadvantage" the other party: s 88(1A)(a). The Board submitted that Mr O'Brien has not shown actual disadvantage beyond referring to unspecified costs thrown away. Secondly, the Board submitted that Mr O'Brien's conduct was relevant to the question of whether he had been unnecessarily disadvantaged. The Board said that he was responsible for the first hearing date being vacated one week prior to the hearing. Thirdly, Mr O'Brien failed to comply with the Tribunal's directions in relation to the filing of evidence, so it was not until 28 November 2008 that the Board was in a position to assess his evidence and respond. 11The adjournment meant that Mr O'Brien was unnecessarily disadvantaged because the resolution of his application was delayed. He does not need to adduce evidence for me to be satisfied that he was unnecessarily disadvantaged by the adjournment. The extent of any legal costs he may have incurred is for him to establish if those costs are not agreed. 12Secondly, even if Mr O'Brien's previous conduct caused unnecessary delays, it is nevertheless fair for the Board to pay the costs of the adjournment. The Board had all Mr O'Brien's evidence three months before the hearing. The adjournment was requested two days before the hearing following advice from senior counsel. There is no doubt that the Board caused the adjournment and that Mr O'Brien was unnecessarily disadvantaged as a result. We are satisfied that in all the circumstances it is fair to order the Board to pay Mr O'Brien's costs for causing the adjournment.

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