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[2020] ACAT 76
ACT Civil and Administrative Tribunal
2020-09-28
Original judgment source is linked above.
SWAN & ANOR v RESIDENTIAL REPORTS PTY LTD ACN 609 880 122 (Civil Dispute) [2020] ACAT 76
Catchwords: CIVIL DISPUTE - dispute about building report provided for purchase of property - guarantees under Australian Consumer Law - whether there was a lack of due care and skill and not fit for purpose - whether misleading and deceptive conduct under the Australian Consumer Law - whether building report complied with statutory requirements and Australian Standards - damages awarded
Legislation cited: ACT Civil and Administrative Act 2008 ss 39, 74
Civil Law (Sale of Residential Property) Act 2003 ss 9, 19, 36
Subordinate
Legislation cited: Australian Standard AS4349.1 - 2007 Inspection of Buildings (Pre-purchase inspections - Residential buildings)
Civil Law (Sale of Residential Property) Regulation 2004 s 7
Cases cited: Alexandrou v Pacific Pest Control [2016] NSWDC 193
Delaney v Winn [2015] NSWCA 124
Selby v Expedia Australia Pty Ltd & Anor [2018] ACAT 124
Date of Reasons for Decision: 28 September 2020
The parties' attention is drawn to sections 39, 48 and 49 the ACT Civil and Administrative Act 2008.
The parties are prohibited from the publication of evidence given at any hearing in these proceedings, and are also prohibited from the publication of matters contained in documents filed with the Tribunal or received in evidence by the Tribunal for any hearings in these proceedings (refer to s39 ACT Civil and Administrative Tribunal Act 2008). If either party or Mr Bunn has to date published material referred to in this Order on any website that they control, then they are required to make every reasonable attempt to stop its ongoing publication by removing it by COB 1 April 2020.
This order is set aside as part of the final orders - no request for this order to continue was made and in any case the decision is public.
It is our role to conduct a thorough visual inspection of the property and report only on areas of concern, identifying critical defects for an intending purchaser, insofar as an inspector can reasonably identify those defects. When reading this report, the age of the building must be taken into consideration. Some items may not have been detailed as they are considered a normal occurrence or general wear and tear for a building of this age...The report is not designed to quantify features of the property, generally, ongoing maintenance items, upgrading, cosmetic works and minor defects or faults will not be detailed.
The inspection shall comprise visual assessment of the property to identify major defects and to form an opinion regarding the general condition of the property at the time of the inspection.
Bedroom Two...doors and windows internal - fair to good-there is minor impact damage to the door, repairs are considered discretionary
Bedroom Three... doors and windows internal - good
Bedroom Four... doors and windows internal - good, the cupboard doors are binding with the floor-adjustments are recommended
Kitchen and Dining area... doors and windows internal - good...
Living Room... doors and windows internal - good...
Roof waterproof integrity and roof drainage is not tested....it is not possible to determine the effectiveness of the roof cover and drainage system...
Eaves, Fascia and Barge Ends- Overall condition: no significant defects...
Doors and Windows external-Overall condition: no significant defects"
No significant defects: inspector has not identified any defects that are considered to be significant from a structural or functional perspective. The subject area may present with minor defects. Remedial action, if required, is discretionary,
Good: The feature subject to comment is, in the inspector's opinion, of sufficient standard to not require any significant remedial action. There may be imperfections", and in a note "[T]he features and finishes considered 'good' in a 50 year old building are not necessarily going to be so in a modern dwelling, and
Fair: The feature subject to comment is in the inspector's opinion, is usable but has deteriorated and would benefit from cosmetic or remedial repair work. For instance, painting may be required, render may require patching, and door fittings may require adjustments or repair, and
Poor: The feature subject to comment is, in the inspector's opinion, requires remedial action. Repairs or replacement are considered necessary rather than discretional.
The report is only an opinion of [the respondent] and is valid for [180 days] from the date of inspection...No liability will be accepted or claims considered after the expiration of this period of liability...If it is claimed that a defect has not been documented or it is claimed that there is any other omission...[the respondent] must be notified in writing before ANY action is taken, NO LIABILITY shall be accepted where costs for remedial action or professional advice are incurred by the claimant prior to [the respondent] receiving written notification of the defect or omission, given a reasonable opportunity to re-inspect the property, identify the defect or omission, obtain professional advice and propose a resolution. Unless costs are specified and agreed in writing, no liability will be accepted...
Please feel free to contact our inspector at any time if you have questions or require clarification prior to acting on this report.
[T]he following pages show (but do not limit) aspects of the property that may be examined where visual inspection is possible. These items have been extracted from the Australian standard AS4349.1-2007 Inspection of buildings (Pre-purchase Inspections - Residential buildings)...The Inspector did not move or remove any wall coverings, floor coverings, furnishings, equipment, appliances, pictures, or other household goods. In an occupied property, these items may be concealing defects...
Internal & external Doors and Door Frames-Binding doors, defective hardware - significant, rotting. corroded frames, loose fitting doors, damage...
...Metal Windows - ...corrosion (metal) sills, fittings/hardware, damage. In most cases access to windows is restricted by window treatments or security locks...Sash windows sometimes require maintenance to the window balance mechanism or sash cords. We are not able to guarantee that windows will operate smoothly. Sometimes window runners, sashes and balance mechanisms will require maintenance or replacement...
External ...Fascias...barge ends- It is important to note that a visual inspection of the roof...may not identify roof leakages...Repainting of timber can mask the existence of timber rot. We cannot guarantee that all timbers are sound. A visual inspection may not in some circumstances, detect roofing affected by rot
This report has been prepared as a result of a VISUAL INSPECTION with reference to the requirements of Australian Standard AS4349.0-007 Inspection of Buildings (General requirements), AS4349.1-2007 (Inspection of Buildings (Pre-purchase inspections - Residential Buildings) [and another for pest inspections]. It is limited to the condition of those areas that were fully accessible (see Safety and Reasonable Access) and visible to the inspector at the time of the inspection
The report is valid on the date of inspection. No responsibility is accepted for any matter not existing or evident or for any deterioration occurring after the inspection date...
The inspection is completely visual. Concealed areas where access is unavailable are unable to be inspected and are not reported on; such defects could include but are not limited to ...broken window mechanisms (sash cords)...
No responsibility can be accepted for defects which are latent or otherwise not reasonably detected on a visual inspection without interference with or removal of any of the structure including fixtures, fittings, furniture, insulation or stored items within and around the building."
Under the heading "Safety & Reasonable Access", it sets out the following:[19]
The extent of accessible areas shall be determined by the inspector at the time of the inspection.... The inspection shall include only accessible areas and areas that are within the inspector's line of sight and close enough to enable reasonable appraisal. Australian Standard 4349.3 defines reasonable access as 'areas where safe, unobstructed access is provided and the minimum clearances are available, or, where these clearances are not available, areas within the consultant's unobstructed line of sight and within arm's length. Note, Reasonable access does not include removing screws and bolts to access covers.'
Reasonable access [to a roof exterior includes] accessible from a 3.6m ladder.
The purpose of this Report is to identify major defects or faults in the building...Generally, ongoing maintenance items, upgrading requirements, cosmetic works and minor defects or faults have not been included.
Visible timbers have not been destructively probed or hit
A defect of sufficient magnitude where rectification has to be carried out in order to avoid unsafe conditions, loss of utility or further deterioration of the property.[34]
Where reports involving standard clauses are used...care should be taken to ensure that sufficient and unambiguous detail, relevant to the particular inspection, is included.[41]
the majority of the window runners were missing or damaged beyond repair, and the windows in bedroom 3 and the family room were not functional...the track to bedroom 3 window was also damaged...the lock on the family room window was not functional and a ...security issue,....recommend installing a lock...to the family room window and undertaking repairs including replacement of the runners,... note: [t]he runners for these windows may no longer be available ...there was timber decay to the corner of the fascia board, [r]ecommend repairs and repainting of this area.[68]
shall comprise a visual assessment of the property to identify major defects and to form an opinion regarding the general condition of the property...at the time of the inspection, and not as to some future date.[77]
Sash windows sometimes require maintenance to the window balance mechanisms or sash cords. We are not able to guarantee that windows will operate smoothly. Sometimes window runners, sashes and balance mechanisms will require maintenance or replacement...
Concealed areas where access is unavailable are unable to be inspected and are not reported on; such defects could include but are not limited to ...broken window mechanisms (sash cords).[117]
Where reports involving standard clauses are used...care should be taken to ensure that sufficient and unambiguous detail, relevant to the particular inspection, is included.[118]
we've now realised that there are certain requirements within the process that we weren't compliant with...for instance, mechanical testing...limited testing...We haven't been doing that...we have amended our processes to take that into account.[128]
So there isn't legislation that says, 'A pre-sale building report in Canberra has to look like this'. Therefore, it's to the discretion of each building inspector to make a decision about what their document and therefore the contract will look like between ourselves and our clients...[With the 2007 Standard] there were very few changes, so we've worked to the same document...for the last...20 years...I can't find any...law that dictates how we should write our report and what our processes and procedures should be...we cannot inspect to the letter... because... there are some variables in the standard...[O]n one aspect they're talking about a visual inspection. On another they talk about sash operation...We are letting people know the mechanisms of windows isn't part of what we [do] - it is a visual inspection [referring to Building Report page 16].[129]
we've basically used the same format for almost 20 years...And what we say very clearly is that we referenced the Australian standard - not that its written to the Australian standard...We've been basically using the same formula for almost 20 years...And we have made very little change to our format. We will occasionally work out a way that we can say it better.[130]
There is choices to be made about how you repair something...A botch repair is just slap a bit of bog into it, paint over it and hope for the best which is obviously what's been done before...the proper repair is to remove the fascias and replace them.
If there is a breach, what compensation is payable?
[2] Transcript of proceedings 15 May 2020, page 22
[3] Applicants' Second Amended Civil Dispute Application 15 April 2020, page 3
[4] Applicants' Second Amended Civil Dispute Application 15 April 2020, Annexure 16
[5] Transcript of proceedings 11 June 2020
[6] Transcript of proceedings 15 May 2010, pages 9, 24, 30-32
[7] Transcript of proceedings 4 December 2019, pages 106-107, 114-118
[8] Respondent's Further Submission, at [19]
[9] Respondent's Submission, dated 1 May, page 14; Transcript of proceedings 15 May 2020, pages 72, 76
[22] Applicants' Second Amended Civil Dispute Application 15 April 2020, Annexure 2
[23] Applicants' Second Amended Civil Dispute Application 15 April 2020, Annexure 2
[34] The Standard, Definitions, 1.4.10, page 8
[42] Applicants' Second Amended Civil Dispute Application 15 April 2020, [2]
[43] Applicants' Second Amended Civil Dispute Application 15 April 2020, [18] and Annexure 7B; Transcript of proceedings 15 May 2020, page 14
[44] Transcript of proceedings 4 December 2019, page 14, line 47; Transcript of proceedings 15 May 2020, pages 13, 28
[45] Transcript of proceedings 4 December 2019, page 23; Transcript of proceedings 15 May 2020, page 13
[46] Transcript of proceedings 4 December 2019, page 48-49; Transcript of proceedings 15 May 2020, page 65
[47] Transcript of proceedings 4 December 2019, page 48-49
[48] Transcript of proceedings 15 May 2020, page 12
[49] Applicants' Second Amended Civil Dispute Application 15 April 2020, [22]
[50] Transcript of proceedings 15 May 2020, page 66
[51] Applicants' Second Amended Civil Dispute Application 15 April 2020, [18.5, 22-23], Annexure 11
[52] Applicants' Second Amended Civil Dispute Application 15 April 2020, [19]
[53] Applicants' Second Amended Civil Dispute Application 15 April 2020, [53]
[54] Applicants' Second Amended Civil Dispute Application 15 April 2020, [27] Annexure 14
[55] Applicants' Second Amended Civil Dispute Application 15 April 2020, [30] Annexure 16
[56] Applicants' Second Amended Civil Dispute Application 15 April 2020, [28] and Annexure 15
[57] Transcript of proceedings 4 December 2019, page 32
[58] Applicants' Second Amended Civil Dispute Application 15 April 2020, [35] and Annexure 19
[59] Transcript of proceedings 4 December 2019, page 21
[60] Applicants' Second Amended Civil Dispute Application 15 April 2020
[61] Applicants' Second Amended Civil Dispute Application 15 April 2020, [47]
[62] Applicants' Second Amended Civil Dispute Application 15 April 2020, [48]; Transcript of proceedings 15 May 2020, page 29
[63] Applicants' Second Amended Civil Dispute Application 15 April 2020, [50-51]; Transcript of proceedings 15 May 2020, page 50
[64] Transcript of proceedings 4 December 2019, page 65
[65] Applicants' Second Amended Civil Dispute Application 15 April 2020, page 70
[66] Applicants' Second Amended Civil Dispute Application 15 April 2020, [50], Annexure 28
[67] Applicants' Second Amended Civil Dispute Application 15 April 2020, [52]
[68] Applicants' Second Amended Civil Dispute Application 15 April 2020, [38-39] and Annexure 20
[69] Applicants' Second Amended Civil Dispute Application 15 April 2020, [40-41] and Annexure 21, and Applicant's Material in Reply, dated 3 May, Annexure 2 which is a missing page to Annexure 21 in the Applicants' Second Amended Civil Dispute Application, 15 April 2020
[70] Applicants' Second Amended Civil Dispute Application 15 April 2020, [55]
[71] Applicants' Second Amended Civil Dispute Application 15 April 2020, [43] and Annexures 24 and 25
[72] Applicants' Second Amended Civil Dispute Application 15 April 2020, [44, 55] and Annexures 24 and 25,
[73] Applicants' Second Amended Civil Dispute Application 15 April 2020, [52, 55] and Annexure 33
[74] Transcript of proceedings 4 December 2019, page 9
[75] Respondent's Further Submissions, 9 June 2020, [34-36]
[76] Respondent's Further Submissions, 9 June 2020, [14]
[77] Respondent's Further Submissions, 9 June 2020, [16, 37-40]
[78] Transcript of proceedings 15 May, page 15
[79] Transcript of proceedings 15 May, page 48
[80] Transcript of proceedings 15 May, page 59
[81] Transcript of proceedings 15 May, page 61
[82] Respondent's Further Submissions, 9 June 2020, [17-19]
[83] Respondent's Further Submissions, 9 June 2020, [17-19]
[84] Transcript of proceedings 4 December 2019, page 18
[85] Transcript of proceedings 4 December 2019, page 112
[86] Transcript of proceedings 4 December 2019, page 111-112
[87] Transcript of proceedings 15 May, page 55
[88] Respondent's Submission 1 May 2020, page 16
[89] Transcript of proceedings 15 May 2020, page 68
[90] Transcript of proceedings 4 December 2019, page 19, 99; Transcript of proceedings 15 May 2020, page 80
[91] Respondent's Submission 1 May 2020, page 20
[92] Transcript of proceedings 4 December 2019, page 59; Transcript of proceedings 15 May 2020, page 47
[93] Transcript of proceedings 4 December 2019, page 59; Respondent's Submission 1 May 2020, page 20
[94] Transcript of proceedings 4 December 2019, page 63-64
[95] Transcript of proceedings 4 December 2019, page 92, 95
[96] Transcript of proceedings 4 December 2019, page 70
[98] Transcript of proceedings 4 December 2019, page 73
[99] Transcript of proceedings 4 December 2019, page 78-79
[100] Transcript of proceedings 4 December 2019, page 70, 83, 96
[102] Transcript of proceedings 4 December 2019, page 85
[103] Transcript of proceedings 4 December 2019, page 72, 76
[104] Transcript of proceedings 4 December 2019, page 72
[105] Transcript of proceedings 4 December 2019, pages 73-74
[106] Transcript of proceedings 4 December 2019, page 93
[107] Transcript of proceedings 4 December 2019, page 73, 102
[108] Transcript of proceedings 4 December 2019, page 72
[109] Transcript of proceedings 4 December 2019, pages 76-77
[110] Transcript of proceedings 4 December 2019, page 95
[111] Transcript of proceedings 4 December 2019, page 87
[113] The Standard, Appendix C1, page 20
[114] The Standard, Appendix C1, Table C1, page 20
[116] Respondent's Submissions, dated 9 June, [46]
[123] The Standard, Definitions, 1.4.10, page 8
[124] Respondent's Submissions dated 9 and 19 June 2020
[125] Respondent's Further Submissions 19 June 2020, at [9]
[127] Respondent's Submissions dated 1 May 2020, page 24
[128] Transcript of proceedings 15 May, pages 46-47
[129] Transcript of proceedings 4 December 2019, page 53, 98, 100-101
[130] Transcript of proceedings 4 December 2019, page 20, 98
[131] The Standard, Appendix C1, Table C2, page 22
[132] The Standard, Definitions, 1.4.10, page 8
[133] The Standard, Appendix C1, Table C1, page 21
[134] The Standard, Appendix C1, Table C2, page 23
[135] Applicants video, filmed 4 May 2020, Annexure AMR
[136] Respondent's Final Submission dated 1 May 2020, page 25
[137] Applicant's Second Amended Application, Annexure 16
[138] Applicant's Second Amended Application, Annexure 21
[139] _Alexandrou v Pacific Pest Contro_l [2016] NSWDC 193
[140] Transcript of proceedings 4 December 2019, page 13
SWAN & ANOR
RESIDENTIAL REPORTS PTY LTD ACN 609 880 122