On 9 December 2014, the State Administrative Tribunal (Tribunal) published a guide with respect to costs orders and the calculation of costs which may arise out of proceedings.
In this Alert, Special Counsel Karen Browne and Solicitor Catherine Smith provide an overview of circumstances and factors which may result in the Tribunal making costs orders, as well as the method of calculating costs.
Section 87 of the State Administrative Tribunal Act 2004 (WA) (SAT Act) gives the Tribunal the power to order costs. While the general starting point is that each party bears its own costs (section 87(1) SAT Act), the Tribunal does have the discretion to order a party to pay any or all of the costs of another party (section 87(2) SAT Act).
Though section 87 of the SAT Act does not specify any circumstances or factors the Tribunal is bound to take into account under section 87(2), a costs order may be appropriate due to:
- the conduct of the parties; or
- the nature of the matter.
Conduct of the parties
While there is no exhaustive list as to when and why the Tribunal may order costs, some reasons may include:
- where the proceedings were vexatious or frivolous;
- where a party has conducted itself unreasonably or inappropriately in its conduct of the proceedings;
- where a party’s case has been shown to be weak or without merit; or
- where a party has been found to have been dishonest in its dealings with the other party or the Tribunal.
Nature of the matter
There are areas in which the Tribunal has jurisdiction to order costs, such as:
- vocational regulation matters – when a vocational regulation body (such as the Medical Board of Australia) succeeds in disciplinary action against a practitioner;
- compulsory land acquisition matters – when the compensation arising from the compulsory acquisition of a property is assessed; or
- Guardianship and Administration Act 1990 (WA) (“Act”) matters – section 16(4) of the Act allows the Tribunal to award costs when a party has acted in the best interests of a proposed represented person.
The obligation to minimise costs
Parties should approach Tribunal proceedings in a manner which minimises costs. In addition, the work performed by a legal representative should be proportionate to the value of the subject matter.
Where costs are ordered, any costs for work considered to have been unnecessary or disproportionate are likely to be unrecoverable.
Additionally, the Tribunal may order that a party’s representative, rather than the party itself, pay costs incurred. This would be the case where the representative has acted in a way that has resulted in unnecessary costs being incurred or delay to proceedings (section 87(6) SAT Act). The Tribunal can also order costs in favour of any party, including the party who engaged the representative.
Method of determining costs
When the Tribunal orders costs payable, the amount may be “fixed” or “assessed”.
Where costs can be easily determined and where there is no need for the Tribunal to examine the amount of costs claimed in detail, the costs will usually be fixed.
Where fixed costs are not possible or where the parties are unable to reach an agreement, costs will be assessed. The assessment will require an application to be made to the Tribunal. This will incur an application fee and an assessment fee equal to 2.5% of the costs claimed in the application.
Considerations when quantifying costs
The Tribunal has the power to order costs in respect to legal costs incurred, and is also able to order compensation for expenses, loss, inconvenience or embarrassment (section 87(3) SAT Act). The compensation will be assessed having regard to the nature and importance of the matter, its complexity and the time frame and effort required to present a party’s case.
When quantifying the order as to costs, the Tribunal will consider either the current SAT Costs Determination issued by the Legal Costs Committee or, alternatively, the Legal Costs Committee’s current Supreme Court (Contentious Business) Determination (Supreme Court Determination). The Tribunal may choose to refer to the Supreme Court Determination for guidance in complex matters or where the matter is of importance to a party.