Candale v Grindrod [2026] QCAT 117

DAMAGES - MEASURE OF DAMAGES - EVIDENCE - where claim for loss of opportunity to vary contract or terminate - where loss of chance - value of loss of chance - whether evidence establishes value of loss of chance

Queensland Building and Construction Commission Act 1991 (Qld), Schedule 2

Queensland Civil and Administrative Tribunal Act 2009 (Qld), Schedule 3

Billingham & Anor v Schluter t/as Better Building Inspections Qld [2018] QCATA 165

Brinin v Kasabel Investments Pty Ltd t/as Twin Cities Building and Pest Inspections [2021] QCAT 114

Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288 [2014] HCA 36

Mallonland Pty Ltd v Advanta Seeds Pty Ltd [2024] HCA 25

[1] In January 2020 the applicant contracted with Australian Property and Building Inspections Pty Ltd ("APBI") to carry out a pre-purchase building and pest inspection, and provide a report, of a house in Morningside that she had contracted to buy and ultimately purchased. The inspection was carried out by Troy Grindrod, an employee of APBI, who prepared an inspection report. The fact he was an employee is not disputed.

[2] The applicant contends that the pre-purchase report was deficient in that it failed to identify the defective roof and drainage system over the garage area of the house. There was a significant rain event in Brisbane in February 2022. During this event, there was water ingress into the home caused by the defective roof resulting in water damage to the internal habitable space of the house. The cost of repair/rectification to the roof was $7,480.00. Repairs were carried out in May 2022 by Borg's roofing.

[3] In January 2023 the applicant commenced a proceeding in the Tribunal against APBI to recover the cost of the repairs. APBI filed a response. However, as the matter was proceeding to a hearing APBI was placed under external administration on 20 December 2023. Subsequently, APBI was removed as a respondent to the proceeding and the employee, Mr Grindrod, was substituted as a respondent.

[4] There are a number of issues to be considered in this matter:

(a) Does the Tribunal have jurisdiction to decide a claim between the applicant and an employee of APBI as a building dispute?

(b) Did Mr Grindrod, as an employee of APBI, owe the applicant a separate duty of care in carrying out the pre-purchase inspection?

(c) If a duty of care was owed, did Mr Grindrod breach the duty by reference to pre-purchase inspection report?

(d) If a duty of care existed, is Mr Grindrod liable for damages for pure economic loss?

(e) If damages are payable for pure economic loss in the circumstances, what is the measure of damages?

[5] On 13 January 2020 the applicant signed a contract to purchase a home in Morningside. The contract was subject to a building and pest inspection report to the satisfaction of the purchaser. The applicant engaged APBI to undertake a pre-purchase inspection. The inspection was carried out by the respondent. A comprehensive report ("the APBI report"), dated 14 January 2020, was provided to the applicant. The applicant proceeded with the purchase of the property. The date of settlement of the contract is uncertain, but presumably it was within about a month of the inspection.

[6] In November 2021, the applicant noticed some minor water penetration into the closed in garage space due to a rain event. On 26 and 27 February 2022 there was a major rain event in Brisbane resulting in widespread flooding.[1] As a result of this rain event there was significant water penetration into the garage and adjacent areas of the house.

[7] The evidence from Borg's Roofing establishes that the water damage was caused by a defective and inefficient roof and box gutter drainage system above the garage. A photograph of the subject roof is shown on page 29 of the APBI report. The photo shows a roof covered with corrugated sheeting with fall to a box gutter. Where the sheeting ends at the box gutter there is a quantity of white silicone at the edge of the sheeting. It is unclear the purpose of the silicone, but it is reasonable to suppose it was to seal the space between the top of the box gutter and the underside of the sheeting.[2] In respect of this area the APBI report notes (at page 29):

Repair work has been carried out on the roof above the garage. Painting is recommended.

[8] The applicant made a claim under her home insurance policy but before any repair works could be carried out internally, the roof had to be rectified to prevent any further water ingress. The applicant was referred to Edgeline Roofing by the Insurer. After an inspection a report on the cause of the water ingress was provided to the applicant. The report is critical of the roof drainage system as a whole. In summary it stated:[3]

(a) The Garage roof leak appears to be a combination of the following in heavy rain events. Water is overflowing at the back of the Gutter and running down the internal wall.

(b) All water from the upper level roof is dispersing in one small area from the down pipe spreader causing water ingress.

(c) All apron flashings have been sealed to the roof sheets.

(d) Left hand corner where the downpipe spreader from the top roof is, had been previously attempted to make safe/waterproof and scribing has been completely sealed to the roof sheets. This does not allow any condensation or water to escape once behind the flashing.

(e) Foot traffic dents visible along the edge of the sheets - roof pitch is unsuitable for this profile on the lower roof.

(f) Multiple readings below 5° were found across this roof. Corrugated profile cannot be installed on pitches below 5°.

(g) Apron flashing against wall cladding only extends 15 millimetres above bottom toe mould flashing.

(h) Apron flashing against rendered wall is over sealed. No chase flashing or K flashing to correctly seal and make water type present.

[9] Edgeline Roofing did not carry out any rectification work; this was done by Borg's Roofing. The 11 May 2022 report from Borg's Roofing makes similar comments about the fall of the roof being under the minimum of 5°. The roof has incorrect pitch. The custom orb corrugated roof sheeting is inappropriate for this type of roof with minimum fall. The bottom of the sheeting, at the box gutter is completely flat causing water to pond.

[10] The reports from both Edgeline and Borg are much more detailed than what could be expected from a visual pre-purchase building report. Clearly the building inspector does not have the experience or expertise of a licenced roofing contractor who carries out roofing work on ongoing basis. The respondent did not challenge the content of these reports other than to comment that the differential in fall of between 4.2° and 5° would be difficult to discern by a visual inspection. However to the trained eye, like Mr Borg, it would be noticeable.

[11] What I glean from both reports, is that the whole of the roof drainage system, upper and lower, was inadequate as initially designed. In particular the top roof draining down onto the smaller garage roof and then being dispersed into the box gutter with a spreader, means significantly more rainwater is being dispersed than just the rainwater that might fall just on the garage roof as depicted in the APBI report at page 29. In other words, if the garage roof was designed solely to disperse the water from that roof, it is reasonable to assume the roof as inspected would cope. In the significant rain event that occurred in February 2022, it simply could not cope with the quantity of rainwater which backed up in the gutter and overflowed into the cavity wall.

[12] It is also of note that there was no visible sign of water ingress in the garage at the time of inspection by the respondent. Apart from the pitch and the silicon there was nothing to alert him to the likelihood of water ingress in heavy rain, in particular with the volume of rainwater from the upper roof. It seems that the drainage system worked adequately until November 2021. It was not Mr Grindrod's function to make an assessment of the overall rainwater drainage system and design. However, the existence of all the silicone (white) at the gutter end perhaps should have prompted further investigation.

[13] Rectification work was carried out by Borg's Roofing and an invoice for $7,480.00 was presumably paid by the applicant in late May 2022. She then filed an application in the Tribunal on 19 January 2023 against APBI to recover this cost. The amount sought is a little confusing. The claim is for $7,480.00 plus excess of $500.00 totalling $7,980.00. This would suggest that a claim was made on her home insurance policy and she paid the excess. There is no evidence about what the insurance covered but presumably not the roof, but the excess paid for the claim stemmed from the failure of the drainage system. In any event it does not matter because there are other difficulties with the claim.

[14] Although not particularised in the application, it is reasonable to assume the applicant's original claim against APBI was for damages for breach of contract. The breach being a failure to identify the defective roof over the garage. If a breach of the contract can be established the applicant would be entitled to an award of damages for the breach. There is also an alternative claim in negligence, but this has difficulties because the claim would be for pure economic loss.

[15] APBI filed a response which contested the claim. It relied on exclusions in the terms and conditions contained in the report itself, in particular "adequacy of roof drainage as installed" was excluded. It also challenged the quantum of the repair cost as being excessive. However, as matters transpired its response is not now relevant to the issues in dispute except that Mr Grindrod does not have the benefit of those exclusions.

[16] On 20 December 2023 an external administrator was appointed to APBI. Subsequent to that the ABN was cancelled. On 12 August 2025 the Tribunal ordered that the applicant be removed as a respondent to the application. In the same order Mr Grindrod was added as a respondent. The applicant was directed to file and serve an amended application on Mr Grindrod.

[17] The order was complied with but the only change in the application was the name of the respondent. The substance of the claim as articulated in the original application filed remained the same (unaltered). That claim was for damages for breach of contract. Therefore the claim against Mr Grindrod is the same. However, there is no contract between Mr Grindrod and the applicant.

[18] Although the cause of action against Mr Grindrod was not clearly identified in the application, it is couched in terms of a claim in negligence. It alleges the respondent failed to "pick up on the poor condition of the roof over the garage when the building inspection was done". As a consequence, in the significant rain event water damage penetrated the internal liveable spaces of the house.

[19] The narrative goes on to say that had the poor condition of the roof been picked up she would have "either chosen not to proceed with the purchase of the house or requested the repairs be made by the owner at the time".

[20] Assuming it can be established that the respondent did owe a duty of care to the applicant, then the narrative does identify the negligence, the resultant damage, and the damages claimed in Part C - 1 of the application. Although not a formal pleading as one might expect to see in the courts applying the Uniform Civil Procedure Rules 1999 (Qld), the narrative does include the basic elements of a claim in negligence.

[21] No submissions have been made about the Tribunal's jurisdiction to determine the negligence claim against the respondent in his personal capacity. That is not unexpected where the parties are self-represented. On a review of previous cases, in particular, Brinin v Kasabel Investments Pty Ltd t/as Twin Cities Building and Pest Inspections[4] it has been held that a contract for the provision of a building inspection report falls within the definition a commercial building dispute between a building owner and a building contractor. That is because carrying out a completed building inspection is building work and included in tribunal work.[5] Even though the inspection relates to a domestic building, the learned member concluded it fell within commercial building work. He said at [13] that:

Commercial building, referred to in the QBCC Act as 'reviewable commercial work', means 'tribunal work' other than domestic building work. 'Tribunal work has a particular meaning. Importantly for present purposes, tribunal work includes 'the inspection of a completed building'. A person who carries out the inspection of a completed building is a 'building contractor'. This is because the inspection of a completed building is 'building work' and a person who carries on business that consists of carrying out building work is a 'building contractor'.[6]

[22] The claim against APBI is based on both contract and in negligence in respect of the inspection of a domestic building. That is not the case with respect to the claim against Mr Grindrod. Although at the time the contract was entered into with APBI the applicant was not the building owner, she would fall within the definition of building owner in Schedule 2 of the QBCC Act.

[23] By reference to the definition of "building contractor" in Schedule 2, Mr Grindrod was not a building contractor because he was not a person who carries on a business that consists of or includes the carrying out of building work. That was, in this case, APBI. Mr Grindrod was not a subcontractor but an employee. Therefore this is not a building dispute, in particular a commercial building dispute, because that means a dispute arising between a building owner and a building contractor.[7]

[24] What follows is that the relationship between the applicant and the respondent does not fall within a building dispute, whether it be a domestic dispute or a commercial dispute. As stated above in Brinin, the respondent was not a person who carries on the business of providing building inspection reports, that was APBI. He did not assume any personal contractual responsibility (or liability) to the applicant. Accepting Brinin is correct in establishing the basis of the tribunal's jurisdiction, that does not apply in a situation where, as here, the respondent was not the building contractor. Therefore, the tribunal lacks the jurisdiction to determine this claim.

[25] However, if the tribunal does have jurisdiction, then the question is whether the claim in negligence is maintainable against the respondent. Having regard to the evidence of Mr Borg, both in his report and his testimony at the hearing I find that the report in respect of the garage roof was deficient.

[26] Firstly, as noted in the response filed by APBI, Mr Grindrod is a licenced builder and therefore the lack of fall in the roof should have been apparent to him or at the very least he could have checked the fall with a level. Secondly, the presence of silicone at the end of the sheeting also should have been further investigated. Having regard to the photograph, there did not appear to be any safety issues with going onto the roof to check the purpose of the silicone. Had he done so, the problems identified by Mr Borg would have become apparent. These are obviously needed more than painting.

[27] If in the circumstance a duty of care can be imposed on the respondent, I find that his failure to further investigate or bring these obvious concerns to the attention of the applicant would constitute a breach of that duty.

[28] Turning then to whether Mr Grindrod as employee owes an independent duty of care to the applicant is more problematic for her where the damages sought are for pure economic loss. In Mallonland Pty Ltd v Advanta Seeds Pty Ltd[8] the majority said at [30]:

As a general rule, damages are not recoverable in negligence for pure economic loss, that is, for loss that is not consequential upon injury to person or property. Ordinarily, a person does not owe a duty to take reasonable care to avoid causing reasonably foreseeable pure economic loss to another.

[29] The Court accepted that pure economic loss is recoverable in limited circumstances, one such circumstance is building cases of the Bryan v Maloney type where a builder owed a duty of care to a subsequent purchaser of the house he built.[9] This case was considered and distinguished in Brookfield Multiplex Ltd v Owners Corporation Strata Plan 61288.[10] The issue raised in Brookfield Multiplex was whether the builder owed a duty of care to the Owners Corporation in the construction of the apartment building to avoid the Owners Corporation from causing it to suffer pure economic loss resulting from latent defects in the common property. The Court held that at [35]:

.......... the relationship between Brookfield and the Corporation is not analogous to the relationship in Bryan v Maloney between the builder of a dwelling house and the downstream, arms-length purchaser of the house, who suffered economic loss by reason of latent defects in the construction. It is analogous, although not identical, to the position of the purchaser of the complex in Woolcock. There was no duty of care in respect of pure economic loss flowing from latent defects owed by Brookfield to Chelsea. Nor was there a duty of care owed by Brookfield to the subsequent owners. There was therefore no duty of care owed to the Corporation.

[30] Although the defects here are not latent, the general principle as to the claim for pure economic loss still applies. Similarly, this case is not analogous to Bryan v Maloney because as between these parties this is not a building dispute. The building dispute relied upon by the applicant is under the contract with APBI.

[31] Because of that contractual relationship, the respondent here did not assume any personal responsibility to the applicant.[11] Nor, did he have the opportunity of negating or limiting any responsibility to the applicant as did APBI under the terms of the contract, in particular with the exclusion of reporting on the "adequacy of roof drainage as installed".

[32] Accepting for the purposes of the argument the respondent was negligent in carrying out the inspection and not identifying the defect in the garage roof, the claim is not maintainable because the damages claimed are pure economic loss.

[33] The applicant's claim is properly based on the damages resulting from the loss of a chance to negotiate a price reduction or have the seller rectify the garage roof. In her submissions dated 17 March 2024 the applicant set out her claim for compensation as follows:

The APBI building inspector inspected the garage roof and should have been able to report on these issues in his report but did not. Had I been made aware of these issues I would have either taken one or three courses of action:

• Decided not to purchase the property.

• Requested the seller to repair the roof to the same standard as was done when I repaired the roof.

• Offered a lower sum of money to purchase the property and taken on the repairs myself.

As a result of not being aware of these issues I lost the opportunity (loss of chance) to take one of the above courses of action and consequently had to pay $7,480 to repair the roof in May 2022. I am requesting a loss of chance claim for the full amount to be reimbursed as well as the $500 excess fee I had to pay my insurer and the QCAT application fee $347. Total is $8,347.

[34] The applicant relies on the Invoice from Borg's Roofing which is for repairs to two separate parts of the roof. The invoice notes the repair the "lower garage roof and flashings" the cost of which is $4,300.00 plus GST. To repair the "top level" the cost was $2,500 plus GST. The applicant's claim only relates to the garage roof. The respondent did not inspect the "upper level roof" due to height and safety restrictions.[12] There was no explanation by the applicant as to why she included the claim for the "top roof". Therefore, in the absence of any causal connection between this part of the claim and the alleged negligence, this total sum representing the value of the loss of a chance cannot be taken into account.

[35] In Billingham & Anor v Schluter t/as Better Building Inspections Qld[13] the Appeal Tribunal considered the damages sought both for breach of contract and in negligence where there was a failure to identify a defect or advise of a potential issue with part of the inspected works the subject of a building report. At paragraph [33]:

In order to recover substantial, as distinct from nominal, damages the Billinghams were required to establish that the breach of contract or breach of duty by Mr Schluter led to the loss of an opportunity that had some value. An opportunity will have value where there is a substantial, and not merely a speculative, prospect that a benefit will be acquired or a detriment avoided. If the loss of the chance had no more than a theoretical or negligible value, then the Billinghams were unable to establish any compensable loss. In other words, there was an initial question of causation. Did the breach of contract or breach of duty by Mr Schluter cause the loss of an opportunity by the Billinghams to terminate the contract or negotiate with the vendor more favourable terms? This issue was required to be determined on the balance of probabilities. If the Billinghams were able to establish that it was more probable than not that Mr Schluter's breach caused a loss of an opportunity of more than negligible or theoretical value it then became a question of assessing the loss.

[36] I am prepared to accept that the applicant did lose the opportunity to negotiate a reduction in price or to not proceed with the purchase contract. In respect to the latter, if this eventuated her only loss is the cost of the building inspection report which is not recoverable because that is what she paid for. As for the former the only evidence to support any assessment of this loss is the cost of repair. As for getting the seller to agree to carry out repairs before purchase, presumably of the type carried out by Borg's Roofing, would be fanciful without some evidence of the possibility this was achievable.

[37] However, the determination of the value of the loss of the chance is not solely based on the cost of repairs but whether bringing the defect to the attention of the sellers would have resulted in a benefit to the purchaser in accepting the defect with a price reduction, and that the benefit has been lost. Returning to Billingham the Appeal Tribunal said:

Merely identifying the lost opportunities does not establish that the Billinghams in fact suffered the loss of an opportunity which had some substantial value. There is no direct evidence of the likelihood that any of the opportunities identified by the Billinghams would have been taken up or otherwise come to fruition for the benefit of the Billinghams if the limitation on inspection of the western retaining wall had been included. Similarly, the weight of the evidence does not compel any inference so be drawn to this effect. The loss of opportunity asserted by the Billinghams was, at best, speculative.

[38] It is difficult for an applicant, some years after purchase when the defect manifests itself, to then identify the evidence to support the real probability that there would have been reduction in the purchase price. There is no evidence to support that, other than what the applicant contends. Such evidence might be, hypothetically: the length of time the property had been on the market for sale; the negotiations in respect of the purchase price and conditions; competition in the market for similar properties and whether properties in an area like Morningside were in demand at the time of purchase. All of these indicia might lead to an inference that could reasonably be drawn that a price reduction may be achievable, or not. There is no evidence as to the purchase price of subject house. If the price was substantial, then a small discount might be achievable or the converse.

[39] As a result of the lack of evidence as to the circumstances of the purchase, or any other evidence that might lead to an inference to that the loss of a chance had value, I have come to the view that any assessment of damages for loss of a chance would be purely speculative and not based on any evidence that the loss had any real value.

[40] I would therefore dismiss the claim in negligence.

[41] I have concluded that the claim against Mr Grindrod is not a building dispute such as to confer jurisdiction under the QBCC Act. The applicant's cause of action does not fall within the definition of a minor civil dispute under Schedule 3 of the QCAT Act.

[42] In respect of the applicant's claim in negligence, it fails for two reasons. As the claim is for pure economic loss it is not maintainable. Even so, the evidence does not establish on the balance of probability, the compensable loss sustained by the applicant.

[43] Therefore, the amended application is dismissed.

[2] Whether that supposition is correct or not does not, in the end, impact the outcome.

[3] Summarised in applicant statement dated 17 March 2023 Exhibit 2.

[4] [2021] QCAT 114 ("Brinin").

[5] Queensland Building and Construction Commission Act 1991 (Qld) sch 2 ("QBCC Act").

[8] [2024] HCA 25 ("Mallonland").

[9] Bryan v Maloney [1995] HCA 17. Discussed at length in Mallonland.

[10] [2014] HCA 36

[13] [2018] QCATA 165 ("Billingham").