Tan v Hii

ex tempore Judgment 1Janice Tan was interested in buying her first home. In the course of her enquiries she came across a unit in Beach Road, Bondi Beach. She decided to make an offer. Her first offer was not accepted but ultimately the vendor agreed to accept $455,000. 2Michael Kiang was a friend of Ms Tan. Mr Kiang operated the law firm known as Sydney Legal Practice. Ms Tan retained Mr Kiang to act for her on the conveyance of the unit. She authorised him to get the standard searches and to get a pre-purchase inspection. 3Mr Kiang sent an email to John Hii, who operated a business known as PacRicon Consultants. Dr Hii is an engineer with a PhD. He conducted building inspections. The email from Mr Kiang to Dr Hii reads as follows (exhibit F): "Dear John Can you please order a building, pest and strata report for [particular unit specified] Beach Road Bondi Beach 2026. Folio ID is ... Strata Management is Abadeen Strata... Vendor's agent is Raine & Horne - Kensington... Vendor Details are..." 4Dr Hii said that he sent back to Mr Kiang a building and timber pest inspection agreement. That document had an agreement number, a blank space opposite "client" and gave the client's address as care of Sydney Legal Practice with the address, phone number and email of Mr Kiang's firm. It also left blank the details of "purchaser" but recorded the address at Beach Road, Bondi Beach. It made no reference to the name of the vendor. The agreement document stated (exhibit 3): "Inspection and Report: The inspection will be of the Building Elements as outlined in Appendix C of AS4349.1-2007 except for Strata title properties where the inspection will be according to Appendix B of AS4349.1-2007 and AS4349.3-1998 Timber Pest Inspection. A copy of the appropriate Standard with Appendices may be obtained from Standards Australia at Your cost. Upon receipt of the copy of the Agreement, We will carry out the inspection and report ordered by You in accordance with this agreement and You agree to pay for the inspection and the report on delivery of the report. In ordering the inspection, You agree that the inspection will be carried out in accordance with the following clauses, which define the scope and limitations of the inspection and the report. SCOPE OF THE INSPECTION & THE REPORT 1. The Inspection will be carried out in accordance with AS4349.1-2007 & AS4349.3-1998. The purpose of the inspection is to provide advice to a prospective purchaser regarding the condition of the property at the date and time of inspection. Areas of Inspection shall cover all safe and accessible areas." [Emphasis in original] 5The agreement document also stated certain limitations including: "6. The Inspector will conduct a non-invasive visual inspection which will be limited to those accessible areas and sections of the property to which Safe and Reasonable Access ... is both available and permitted on the date and time of the inspection. Areas where reasonable entry is denied to the inspector, or where safe and reasonable access is not available, are excluded from and do not form part of, the inspection. Those areas may be the subject of an additional inspection upon request following the provision of reasonable entry and access. 7. The Inspection WILL NOT involve any invasive inspection including cutting, breaking apart, dismantling, removing or moving objects including, but not limited to, roofing, wall and ceiling sheeting, ducting, foliage, mouldings, debris, roof insulation, sarking, sisalation, floor or wall coverings, sidings, fixtures, floors, pavers, furnishings, appliances or personal possessions." 6The agreement document also had an arbitration clause, although no party raises this as an issue. There was also a disclaimer in the following form: "24. Third party disclaimer: We will not be liable for any loss, damage, cost or expense, whatsoever, suffered or incurred by any Person other than You in connection with the use of the Inspection Report provided pursuant to this agreement by that Person for any purpose or in any way, including the use of this report for any purpose connected with the sale, purchase, or use of the Property or the giving of security over the Property, to the extent permissible by law. The only Person to whom We may be liable and to whom losses arising in contract or tort sustained may be payable by Us is the Client named on the face page of the Agreement." 7As I said, no client was named on the front page. The agreement document defined "client" in the following terms: "Client means the person(s) or other legal entity for which the inspection is to be carried out. If ordered by the person(s)'s agent then it is agreed that the agent represents the person(s) and has the authority to act for and on their behalf ..." 8The agreement document was not signed or dated but it included a clause which said: "If You fail to sign and return a copy of this agreement to Us and do not cancel the requested inspection then You agree that You have read and understand the contents of this agreement and that We will carry out the inspection on the basis of this agreement and that We can rely on this agreement." 9Mr Kiang did not recall receiving the agreement document. He had used the services of Dr Hii many times, although he had not met him. Mr Kiang said that he had received on earlier occasions agreements in the same or similar form but could not be sure that they were in precisely the same terms as the agreement document referring to the unit. 10Dr Hii performed an inspection at the unit on 3 March 2010. He forwarded a report of that inspection and a statement of account to Mr Kiang on that date. The report listed the property address and the name of the vendor on its coversheet. On the second page it listed the following details (exhibit 1): "Account to: C/O Sydney Legal Practice Phone: ... Fax: ... Email address: ... Client: Sydney Legal Practice Invoice No: 204864 Purchaser: N/A Vendor: ... Re: Building at: ... Beach Road, Bondi Beach 2026". 11The report also stated (at pp 2-3 of exhibit 1): "Details of the Inspection Agreement Agreement No. B2720P2674 Date of Agreement: 01.03.10. Time Agreement: 5pm The Purpose of the Inspection: The purpose of the inspection is to provide advice to a prospective purchaser or other interested party regarding the condition of the property at the time of the inspection. The advice is limited to the reporting of the condition of the Building Elements in accordance with Appendix C AS4349.1-2007" and "The Scope of the Inspection was to cover: The subject unit and the common area in the vicinity of the subject unit ...