Punt v Sands
[2021] QCAT 248
QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL
CITATION:
Punt v Sands [2021] QCAT 248
PARTIES: NEIL PUNT (applicant/appellant)
v
ROBERT SANDS (respondent)
APPLICATION NO/S:
BDL069-20
MATTER TYPE:
Building matters
HEARING DATE:
29 March 2021
HEARD AT:
Brisbane
DECISION OF:
A/Member Bertelsen
DELIVERED ON:
1 July 2021
ORDERS:
1. The application is dismissed.
CATCHWORDS:
PREPURCHASE BUILDING INSPECTION REPORT – whether breach of agreement – whether report failed to comply with Australian Standard 4349.1-2007 – where report purports to be structural only – where report failed to report certain issues – whether defects were reportable – where defects discerned some years later – whether measure of loss is loss of chance to negotiate reduction in purchase price.
Queensland Building and Construction Commission Act 1991 (Qld) s 75, s 77, Schedule 2
Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 102.
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
Billingham & Anor v Schluter trading as Better Building Inspections Qld [2018] QCATA 165
Sellars v Adelaide Petroleum NL (1994) 179 CLR 332APPEARANCES & REPRESENTATION:
Applicant:
Self represented
Respondent:
J Rigney of Clyde & Co Lawyers for Robert Sands
REASONS FOR DECISION
On 25 March 2020 Mr Neil Punt filed a domestic building dispute application claiming $31,019 consequent on liability arising on the part of Mr Robert Sands of Access Building Services in respect of an allegedly defective prepurchase building inspection report dated 15 July 2016 and furnished to him at the time of his and his wife, Maria Punt’s purchase of a property at Wurtulla. There are three defects asserted by Mr Punt not identified in Mr Sands’ inspection report but latterly identified in a QBCC report dated 3 September 2019 by inspector Danny Hayes. These are:
(a)Item 8 of QBCC Report – a timber post does not support an end of the rear patio roof beam and there is a significant gap between the scarfed joint in the beam. The beam is only supported and fixed by a single bolt located at the top end most portion of the beam.
(b)Item 12 of QBCC Report - the rear patio roof is sheeted with a corrugated profiled iron roof sheeting. The roof has a rise of 25mm in 1,200mm which is a roof pitch of 1.2 degrees. Manufacturers of iron roof sheeting with a corrugated profile require a minimum 5 degrees roof pitch.
(c)Item 13 of QBCC Report – front patio roof has no roof sheeting installed. Sealant on the main roof eaves gutter identifies that a corrugated profile roof sheeting was installed on the patio roof at some time. Claimant advised QBCC that the roof was sheeted with a polycarbonate type roof sheeting with a corrugated profile that they have removed since purchasing the property. The front patio roof structure has a rise of 15mm in 1,050mm which is a roof pitch of 0.8 degrees. Manufacturers of iron roof sheeting or polycarbonate roof sheeting with a corrugated profile require a minimum 5 degrees roof pitch.
In each instance Mr Hayes was of the opinion the prepurchase inspection report did not satisfy the requirements of the Australian Standard 4349.1-2007 (herein after the Standard) in that it did not report on an item that was a significant item at the time of inspection.
Mr Punt paid $275 for the prepurchase inspection report.
The chronology is not controversial to the extent the contract for the purchase by Mr and Mrs Punt of the property at Wurtulla is signed and dated 13 July 2016 with an initial deposit paid that day. It was conditional on a building and pest inspection report five days after the contract date. Mr Sands inspected the premises on 14 July 2016. Mr Sands’ terms and conditions of inspection together with his invoice for $275 inspection fee were furnished to Mr Punt on 15 July 2016. Mr Sands’ written inspection report was furnished to Mr Punt on 19 July 2016. The purchase contract was completed in due course. Subsequently and initially at Mr Punt’s request the carport at the premises was inspected by QBCC inspector Chris Coombes on 25 September 2017. QBCC inspector Mr Coombes prepared a report dated 28 September 2017 recording structural defects associated with the carport. On 3 November 2017 Mr Punt filed an application BDL265-17 in the Tribunal about structural issues associated with the carport.
Then on 29 January 2018 Mr Punt’s Tribunal application was settled and recorded in a hand written settlement agreement on Mr Sands’ then solicitors’ letterhead. That settlement agreement stated, amongst other things, “without any admission as to liability the respondent agrees to pay to the applicant within 14 days in full and final satisfaction of a claim against the respondent the sum of $20,000”.
It was suggested by Mr Rigney for Mr Sands that the settlement agreement was a bar to all future claims against Mr Sands. But the settlement agreement is clear. It refers to settlement of a claim i.e. the carport not all claims. If that agreement was meant to be a bar to all future claims it would have, or should have, said so particularly as the agreement itself is written on a printed Thynne & Macartney letterhead attendance sheet and written in long hand by Mr Sands’ solicitor. The present claim concerns issues separate from any issue associated with the carport and which only subsequently came to the knowledge of Mr Punt. That said it is difficult to see how it can be argued that the settlement agreement could ever be a complete bar such as to preclude the present claim from being instituted.[1]
[1]Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589.
Mr Punt stated subsequently some 13 or 14 months later in February 2019 there were several days of rain. The front patio leaked, spotlights blew out and electrics were disconnected. The roof, damaged, was removed. Builders’ assistance was sought resulting in Mr Punt being informed the front patio was incorrectly built. That was when Mr Daryl Baker of Jim’s Building Inspections was called in.
Mr Baker conducted a general assessment of the premises that resulted in his report of 5 March 2019 identifying some 16 building defects.
Mr Punt asserted that he never denied Mr Sands access to the premises at the time. He said at the request of Mr Sands’ lawyer, a Ms Crowther at the time, a Mr Don Dixon attended the premises in June 2019 spending some two hours on site.
Mr Punt referred the issues raised in Jim’s Building Inspections report to the QBCC. On 2 August 2019 Mr Danny Hayes, QBCC Inspector, attended the premises. He identified three items where the prepurchase inspection report in his view did not satisfy the requirements of the Standard, in that such report did not report on items that were significant items at the time of the prepurchase inspection.
On about 7 November 2019 the rear patio was removed and replaced by a contractor Signature Industries. The cost was $14,200. The new rear patio featured a new elevated patio roof with fan and downlights, a considerable improvement on the original old rear patio.
Mr Punt claimed $10,965 prospective replacement of the front patio. He referenced an entity A Rolley & Sons quote of 7 March 2019 for $25,165 for replacement of both front and rear patios. As he had retained Signature Industries for replacement of the rear patio for $14,200 he then estimated the difference would apply to the replacement of the front patio. That is $10,965. But the front patio has never been replaced.
Evidence of QBCC inspector Danny Hayes
Mr Hayes stated his role as an inspector was to inspect and try to establish whether there was defective work carried out or something that had not been done in accordance with an Act.
He inspected the premises on 2 August 2019 in the presence of Mr and Mrs Punt. His report is dated 3 September 2019. He stated that to the best of his recollection that Mr Sands had not produced any evidence of a signed agreement prior to his inspection on 14 July 2016 as required by the Standard.
The Standard reads:
an inspection agreement between the client and inspector shall be entered into prior to the inspection taking place. The inspection agreement shall include the defined purpose, scope and acceptance criteria in accordance with this section… the inspection agreement should be in writing and signed by all parties to the agreement.
Mr Hayes confirmed he had received 16 complaint items. He worked through them one by one discussing each item with Mr and Mrs Punt as he went and photographing as necessary to establish what should have been reported bearing in mind it was over three years later. Mr Hayes confirmed that of 16 complaint items 13 satisfied Australian Standards and three did not, identified in his report as items 8, 12 and 13.
Item 8 – the rear patio beam
In his report Mr Hayes commented “there was a significant gap between the scarfed joint in the beam supported by a single bolt”. He surmised the significant gap would have been present in July 2016. Mr Hayes further surmised on the assumption there was a significant gap and one bolt supporting the beam at the time that Mr Sands ought to have highlighted such in his report as a significant item in compliance with the Standard Appendix C table C2 that the exterior of a building requires the structural integrity and safety issues to be inspected and reported on.
Mr Hayes agreed the rear patio beam and bolt were still in situ as of August 2019 but held concerns about their functionality due to lateral horizontal separation of the two members. He noted there was no visible movement in paint finishes that suggested the beam had moved since the prepurchase inspection in July 2014. He also held concerns about the bolt due to its proximity to end grain.
Mr Hayes said he focused on the actual fixing of the timber beam.
It was put to Mr Hayes that if rectification of the scarfed joint was required, warranted, it would take a builder half a day to fix inclusive of materials. Mr Hayes answered “yes that sounds about right. Something similar to that, brackets or adding extra bolts for brackets”.
Asked if the cost would be no more than $500 he said it could be approximately that, or more expensive if someone else did it.
Items 12 & 13 – rear and front patios
Mr Hayes quoted from his report that the standard required that an inspector inspect and report on significant items, major defects or extensive minor defects that are visible from a visual appraisal. Appendix C building elements and services to be inspected, table C (3), roof exterior and table C (4), roof space, requires the roof coverage to be inspected and reported on for structural defects.
Mr Hayes confirmed that whilst his report was based on Mr Punt’s 16 complaint items those items were the items referred to in Jim’s Building Inspection Report compiled a significant length of time after Mr Sands’ report.
Mr Hayes stated with respect to the inspection on 14 July 2016 and provision of terms and conditions on 15 July 2016 they were matters of comment that the standard had not been complied with. Mr Hayes confirmed that a prepurchase building report is not intended to act as a certificate of compliance with local government laws nor is it intended to record that the property complies with any Act, regulation, ordinance or by-law and is not a warranty against problems developing with the building in the future. He said that is what the Standard stated.
Mr Hayes agreed the Standard stated, “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 inspection.”
Mr Hayes was not willing to comment on some of his report items given the passage of time.
Mr Hayes agreed the purpose of the standard was to have prepurchase inspectors look at and pick up major defects not to look at compliance with the standard.
With respect to the back patio item 12 Mr Hayes agreed that the standard required “any major defect observed to be identified in report with a location of the description of each major defect as specified in table 3.3 shall be recorded in the report” and that a major defect was defined as “a defect of significant magnitude where rectification has to be carried out in order to avoid unsafe conditions, loss of utility or further deterioration of the property”.
But Mr Hayes stated that while major defects were required to be reported by a pre purchase inspector that requirement was to be read in combination with table 3.3 and appendix C building elements & services to be inspected, the latter being a guide as to what should be expected to be actually reported on. He said the definition of major defect ought to be read in combination with appendix C.
It was put to Mr Hayes “just because something is a type of defect as per that table (meaning appendix C table) does not mean that it is a major defect”. Mr Hayes answered, “I would believe it does… you could very well say it’s going to be potentially a major defect” then “it should be referenced in a report”.
It was put to Mr Hayes “just because something is referenced in that table (meaning appendix C table) does not automatically mean it’s a major defect”. Mr Hayes answered, “I disagree, I believe it does”.
Mr Hayes considered the pitch of the rear patio roof to be well under the minimum 5 degrees, an industry yard stick and that Mr Sands should have been able to discern that visually without the use of tools. He considered the minimal pitch roof fell within table 3.3 as an element or component subject to improper or ineffective installation.
But Mr Hayes also said the roof was significantly different in its pitch from one end to the other. He did not recall any water penetration but did recall that the rear patio roof did not appear to be going under the eaves of the house.
With respect to the front patio Mr Hayes was not able to tell if there had been prior water leakage because the roof had been removed prior to his inspection; but because the roof had been affixed to a baton he could determine whether the fall of the roof was adequate. He surmised it was not.
Evidence of Robert Sands
In evidence Mr Sands agreed his inspection was carried out in accordance with the standard and that his inspection concentrated on the presence of timber decay, metal corrosion, structural deficiencies and that the Standard defined structural defect as “fault or deviation from the intended structural performance of a building element”.
Mr Sands stated he conducted his pre purchase report in accordance with the definition of a major defect.
With respect to item 8 - scarfed joint gap and bolt, Mr Sands stated that the gap visible in the QBCC report was not visible at the time he inspected the property and prepared his report. He did not consider it to be structurally unsafe at the time.
With respect to item 13 – the front patio, Mr Sands said the roof pitch as inspected was meant to be that way purposely as otherwise there would be insufficient head height adding he did not consider there was any yard stick to be able to say it was incorrectly built. He was looking for water leaks, decay and corrosion at the time.
Mr Sands confirmed his understanding of the scope of a pre purchase inspection to be that recited in the Standard, namely “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 inspection,” and with respect to extent of reporting as recited in the standard namely, “significant items to be reported as follows:
(a)Major defects
(b)A general impression regarding the extent of minor defects
(c)Any major defect that is an urgent and serious safety hazard.”
Evidence of Jason Lindsay – civil engineer
Mr Lindsay confirmed his report of 22 July 2020 produced to the Tribunal.
Mr Lindsay further confirmed:
(a)That a pre purchase report in accordance with the Standard was not a certificate of compliance of the property within the requirements of any Act, Regulation, Ordinance, local law or by-law and was not a warranty against problems developing in the future.
(b)He confirmed the Standard’s scope of inspection underpinned the whole Standard.
(c)That a pre purchase inspection is to report on major defects, minor defects, major defects - urgent and serious safety hazards.
(d)That a pre purchase inspector is not required to identify every single minor defect.
(e)A pre purchase inspector is not required to identify anything where there’s a deviation from the Standard or informed manufacturer’s installation.
(f)A pre purchase inspector is only required to report with respect to table 3.3 – the first two types of defects to the extent they constitute a major defect.
(g)That the standard did not require Mr Sands to check that the works were in accordance with the Building Code of Australia or other Australian Standards.
With respect to Item 8 – scarfed joint gap and bolt Mr Lindsay agreed there was a scarfed joint with one bolt but disagreed that such was a major defect; nor could he say whether the gap was there three years prior to Mr Hayes report. He stated the scarfed joint could be rectified to bring it into compliance with Australian Building Code and Australian Standards if that’s what one wanted to do by the provision of two no angles one either side of the post with two M12 bolts through the post and two M12 bolts through each beam.
Mr Lindsay said it would be half a day for a builder, $500 plus GST adding just because something is not in accord with the Standard does not mean that it is not working satisfactorily.
He said there may be many things in a property which might be incorrectly installed but they still function and are not major defects.
Mr Lindsay went on to confirm/reiterate that a pre purchase inspector was not required to report on structural issues nor to report on all instances of defects.
Conclusions
The Tribunal has already made it clear it considers Mr Punt able to bring the present application.
Flawed inspection chronology
Mr Punt asserted noncompliance with the Standard in that the correct chronology was not followed by Mr Sands in July 2014, that is, written agreement then inspection then the report.
Here, Mr and Mrs Punt signed the purchase contract on 13 July 2016, Mr Sands conducted his inspection on 14 July 2016 and presented his terms and conditions as well as his invoice on 15 July 2016 followed by written report on 19 July 2016. Perhaps the reversed chronology was brought on by a degree of urgency, the purchase contract providing for inspection within five days after the purchase contract date.
It was not clear what Mr Punt hoped to achieve in asserting noncompliance. Mr Hayes recalled Mr Sands had not provided any evidence of a signed agreement prior to his inspection but that is as far as he took it. Nor was it clear even on a reading of the Standard what was the consequence of noncompliance. In any case it is Mr Punt who relies on the defective nature of Mr Sands’ report to pursue this claim.
Interpretation of the Standard
Mr Hayes’ opinion is clearly based on his interpretation of the Standard, that is, while major defects were required to be reported that requirement was to be read in combination with table 3.3 and appendix C building elements and services to be inspected, these latter being a guide as to what should be inspected and reported on.
Table 3.3 types of defects under installations states, “the element or component is subject to improper or ineffective installation, inappropriate use, or missing components”.
Mr Hayes considered the scarfed joint and bolt and the minimal pitch patio roofs to be elements or components subject to improper or ineffective installation as inspected in accordance with appendix C tables C2, C3 and C4.
But that does not necessarily follow. Simply because an element or component is improperly or ineffectively installed does not place it in the category of significant item major defect.
Improper installation denotes noncompliance with an Act, Regulation, Ordinance, local law, or by law but that is not a report requirement nor are manufacturers’ recommendations or industry yard sticks.
Appendix C tables C2, C3 and C4 is simply a listing of the areas and elements to be inspected and considered, that is all. They are there by way of assistance, a helping hand, nothing more.
What is or is not a major defect is determined by the definition in the Standard.
Major defect is defined as “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.”
There is no evidence here of unsafe conditions apart from Mr Hayes recommending as critical an engineer’s report on the suitability of the beam in item 8. That, it appears, never happened, rather the rear patio was replaced in November 2019. Even on Mr Hayes’ evidence the scarfed joint and bolt would have remained unchanged in the period July 2016 through August 2019.
Nor was any evidence of loss of utility produced to the Tribunal apart from storm event roof damage to the front patio in February 2019.
Nor was any evidence of further deterioration of the property produced to the Tribunal, on the contrary ongoing functionality.
Additionally the evidence of Jason Lindsay, Civil Engineer with extensive experience in prepurchase inspections and the application of the Standard and his report of 22 July 2020 support the interpretation of the Standard:
(a)That a prepurchase report in accordance with the Standard is not a certificate of compliance.
(b)That the Standard’s scope of inspection underpins the whole Standard.
(c)That a prepurchase inspector is to report on major defects.
(d)A prepurchase inspector is not required to identify anything where there is a deviation from the Standard or informed manufacturer’s installation.
(e)A prepurchase inspector is only required to report on table 3.3 to the extent there is a major defect.
(f)The Standard does not require a prepurchase inspector to check that works accord with the Building Code of Australia or other Australian Standards.
The Tribunal finds Mr Lindsay’s evidence report and interpretation compelling, correct and preferred. The prepurchase inspection is standard compliant.
Mr Punt’s loss
Even if it could be construed that Mr Sands failed to report on major defects what loss did Mr Punt suffer?
Irrespective of whether Mr Punt’s loss would have flowed from negligence or breach of contract there is no evidence of what course of action Mr and Mrs Punt would have taken at the time if Mr Sands had reported the three subject items as major defects.
There was no evidence as to whether Mr and Mrs Punt could have or would have terminated the purchase contract at the time, negotiated a purchase price reduction or indeed acted any differently than what they did.
There was no evidence the property was worth any the less per force of the state of the three items in question or that there was otherwise any detrimental effect on the property’s value as stated.
Relying on Billingham & Anor v Schluter t/as Better Building Inspections Qld[2] in order to recover substantial as distinct from nominal damages Mr Punt would be required to establish that the breach of contract or breach of duty by Mr Sands led to a loss of opportunity that had some value.
[2] [2018] QCATA 165.
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 chance had no more than theoretical or negligible value then no compensable loss is established. As stated in Billingham quoting the High Court of Australia in Sellars v Adelaide Petroleum NL[3], “the general standard of proof in civil actions will ordinarily govern the issue of causation and the issue whether the applicant has sustained loss or damage. Hence the applicant must prove on the balance of probabilities that he or she has sustained some loss or damage”.
[3] Sellars v Adelaide Petroleum NL (1994) 179 CLR 332.
Here, there is no evidence of loss or damage consequent on Mr Sands not considering the three items in question to be major defects.
In light of the above the application must be dismissed.
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