No costs for either side after a building claim failed on a backdated contract (SAT, 2026)

What happened

The owner and the building company, Sincerity Building Group Pty Ltd, signed a contract to build a house on 19 January 2021. The contract was backdated to 31 December 2020. The man who signed for the company sent the owner information about how to apply for government building grants on the same day the contract was signed. Those grants were available for construction contracts signed on or before 31 December 2020.

The builder later raised the price. The owner signed a variation accepting the first increase on 4 February 2022. On 22 November 2022 the builder notified a further increase, which the owner disputed. She lodged a complaint with the Building Commissioner in December 2022 about that increase, and a second complaint in May 2023 saying the builder had repudiated (walked away from) the contract. Both were referred to the Tribunal in July 2023. At a directions hearing on 7 May 2024 her solicitor told the Tribunal she had terminated the contract that day, and those two earlier matters were withdrawn. A fresh complaint was lodged on 30 July 2024 and referred to the Tribunal in September 2024.

The final hearing was first listed for June 2025. It was vacated after the builder's director said he had to travel overseas for an international trade delegation on behalf of another company, that he was the only person who could instruct the solicitors, and that his English was not good enough to give evidence without an interpreter, which had never been raised before. The hearing was relisted for August 2025. On the afternoon before it began, the builder lodged opening submissions conceding that the November price increase was invalid and in breach of contract and that the owner had validly terminated. The only matters it still pressed were that the contract was void and unenforceable and that the owner had overstated her damages.

The hearing ran on 14, 18 and 19 August 2025. On 3 December 2025 the Tribunal dismissed the owner's claim in full, finding the contract was unenforceable by her because it had been backdated for the purpose of a fraudulent application for government building grants. The builder wrote to the Tribunal seeking costs on 12 December 2025, and the owner did the same on 22 December 2025, both also reaching back to the two withdrawn 2023 matters.

What each side wanted

The owner asked for costs caused by the builder's successful application to vacate the June 2025 hearing and by its abandonment of parts of its defence on the eve of the hearing, arguing the late concessions saved nothing because the preparation was already done and that this conduct undermined the Tribunal's objectives. The builder asked for costs of the whole dispute, arguing the claim was untenable and doomed because it rested on a contract backdated for a fraudulent purpose, that the owner had not disclosed the backdating to the Building Commissioner, and that it had made three settlement offers she refused, including $30,000 on 30 July 2025 and $50,000 on 7 August 2025, against her counteroffer of $150,000 and her stated damages of more than $200,000. The owner replied that her rejections were not unreasonable at the time, that costs are compensatory rather than a punishment, and that losing a case does not by itself show a party behaved unreasonably. Both sides also asked the Tribunal to let them apply for costs in the two withdrawn 2023 matters, long after the 21-day deadline.

What the tribunal decided

The Tribunal made two orders in all of the proceedings: "The applicant's application for costs is dismissed" and "The respondent's application for costs is dismissed." No money was ordered to be paid either way, and no deadlines were set.

The Tribunal also refused to extend the time for either side to apply for costs in the two withdrawn 2023 matters. Measured from the date each party first told the Tribunal it intended to apply, the owner was 596 days late and the builder 563 days late.

Why the tribunal decided it that way

Under section 87(1) of the State Administrative Tribunal Act 2004 (WA), each party bears its own costs unless the Tribunal orders otherwise. Section 49 of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) lets the Tribunal make a costs order in a home building work contract complaint, but the Tribunal set out the settled principles: there is no presumption that a winner gets costs, there is no presumption that a party who withdraws pays costs, and the party asking for costs must show an order is fair and reasonable in all the circumstances. Simply losing does not show a party behaved badly.

On the late applications, the Tribunal explained that rule 42A of the State Administrative Tribunal Rules 2004 (WA) gives 21 days to apply for costs, and that it can extend or dispense with that time limit under section 92 of the Act and rules 22 and 46, looking at the length of the delay, the reasons for it, whether there is an arguable case and any prejudice to the other side. Here the delay was very long, both sides had lawyers at the May 2024 hearing where costs were openly discussed, neither asked for costs or for costs to be reserved, and neither appeared to have a strong costs claim because those matters ended early. Reopening them would not serve the Tribunal's objectives in section 9 of the Act.

On the owner's costs application, the Tribunal accepted that the builder's conduct had worked against the Tribunal's objectives of resolving matters quickly and keeping costs down. It found the builder had not explained the late change of position, that leaving key issues out of its statement of facts, issues and contentions and answering them for the first time the day before the hearing breached Tribunal orders and was not conducive to a fair and orderly hearing, and that another company's interests appeared to have been put ahead of its obligations to the Tribunal. Even so, no costs were awarded to the owner, because she had come to the Tribunal to enforce a contract the Tribunal found she could not enforce due to her own fraudulent intention and conduct.

On the builder's application, the Tribunal said costs are compensatory, not a punishment for the illegality, and that the punishment for the illegality was the contract becoming unenforceable. It did not accept the builder was an innocent party responding to fraud; it was responding to a breach of contract claim, and the Tribunal had made no finding that the man who signed for the company was unaware of the backdating or its purpose, noting that a principal is generally taken to know what its agent knows. On the settlement offers, rules 40 to 42 of the Rules require a compliant offer to be taken into account, but the Tribunal said that does not by itself justify costs. The first offer gave no compromise at all and in fact sought a higher price. Although the later refusals looked imprudent with hindsight, judged at the time they were not unreasonable: the gap between the offers and her claimed loss was large, she had been advised she had a reasonable chance, the builder did not engage with her detailed reply, and it never actually explained why refusal was unreasonable. The Tribunal also found her breach of contract claims were strong and her argument about the illegality, while weak, was not hopeless, so the case was not an abuse of process.

What this means if you are in a similar position

If you are in a similar position in a building dispute at the State Administrative Tribunal in Western Australia, this decision shows that costs do not follow the result the way many people expect. The starting point in the Act is that each side pays its own legal costs, and the party asking for a costs order has to persuade the Tribunal it would be fair and reasonable. Winning outright is not enough on its own, and neither is the other side withdrawing or losing.

It also shows how settlement offers and deadlines are treated. A properly made offer must be taken into account, but the Tribunal looks at whether refusing it was unreasonable at the time it was made, not with hindsight, and the party seeking costs has to explain why. Separately, a costs application is meant to be made within 21 days of the orders it relates to; the Tribunal can extend that, but a long unexplained delay, especially where costs were already discussed and nothing was asked for, may mean the chance is gone. The decision also illustrates that how a contract was created, including anything done to qualify for a grant, can decide whether it can be enforced at all.

In disputes of this kind about a price increase, a variation or work stopping, most people begin with a written notice to the builder that sets out the contract terms and exactly what is disputed, and only then lodge a complaint or a tribunal application if it is not resolved.

How to apply: our step-by-step guide to a SAT application. More decisions: SAT cases and builders and building defects.

Source: Catapang and Sincerity Building Group Pty Ltd [2025] WASAT 137 (S) (read the full decision). This summary was prepared from the published decision for general information. It is not legal advice, and the tribunal’s own reasons are the authoritative record.