Edwards and Froud Building Services Pty Ltd v Hulst [2021] NSWCATAP 408

Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Edwards and Froud Building Services Pty Ltd v Hulst [2021] NSWCATAP 408 Hearing dates: 14 December, 2021 Date of orders: 17 December 2021 Decision date: 17 December 2021 Jurisdiction: Appeal Panel Before: The Hon F Marks, Principal Member R Titterton OAM, Senior Member Decision: (1) To the extent that leave to appeal is necessary, it is refused. (2) The appeal is dismissed. Catchwords: APPEAL – consumer claim – availability of defence set out in s 61(3) of the Australian Consumer Law Legislation Cited: Australian Consumer Law - s 61 Cases Cited: Moore v Scenic Tours Pty Limited (No.2) [2017] NSWSC 733 Category: Principal judgment Parties: Edwards and Froud Building Services Pty Ltd (Appellant) Mitchel Hulst and Malcolm Jull (Respondents) Representation: Solicitors: Rapid Solutions (Appellant) M Jull (Self-represented for Respondents) File Number(s): 2021/00258980 Publication restriction: Nil Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 31 August, 2021 Before: K Rickards, General Member File Number(s): GEN 21/26874

reasons for decision

Background 1. The appellant Edwards and Froud Building Services Pty Ltd was retained by the respondents Mitchel Hulst and Malcolm Jull to conduct a pest and building inspection on a property consisting of a block of three residential units for the purpose of a prospective purchase. The respondents brought an application in the Consumer and Commercial Division of this Tribunal claiming the sum of $40,000 compensation against the appellant. The application alleged that the building which they had purchased, relying on the report, "had systemic, ongoing and current water leaks that are not highlighted in the pest and building report." They asserted that waterproofing in four bathrooms/ensuites "had broken," resulting in water seeping under the bathrooms and saturating the floor joists throughout the complex. 2. A hearing of the application was conducted by a Member of this Tribunal who made orders on 31 August 2021 that the appellant pay to the respondents the sum of $39,942.20 being the cost of rectification of water leaks and associated damage. Written reasons for decision issued that day said that "The evidence provided in this matter has been reviewed and considered but will not be recited within these Reasons". We observe that ordinarily the recitation of relevant facts is essential in reasons for decisions, but fortunately in these proceedings their absence does not affect the outcome of the appeal. 3. The Member based his decision on a failure by the appellant to comply with the provisions of s 61 of the Australian Consumer Law. 61 Guarantees as to fitness for a particular purpose etc. (1) If: (a) a person (the supplier) supplies, in trade or commerce, services to a consumer; and (b) the consumer, expressly or by implication, makes known to the supplier any particular purpose for which the services are being acquired by the consumer; there is a guarantee that the services, and any product resulting from the services, will be reasonably fit for that purpose. (2) If: (a) a person (the supplier) supplies, in trade or commerce, services to a consumer; and (b) the consumer makes known, expressly or by implication, to: (i) the supplier; or (ii) a person by whom any prior negotiations or arrangements in relation to the acquisition of the services were conducted or made; the result that the consumer wishes the services to achieve; there is a guarantee that the services, and any product resulting from the services, will be of such a nature, and quality, state or condition, that they might reasonably be expected to achieve that result. (3) This section does not apply if the circumstances show that the consumer did not rely on, or that it was unreasonable for the consumer to rely on, the skill or judgment of the supplier. (4) This section does not apply to a supply of services of a professional nature by a qualified architect or engineer. 1. In his reasons for decision the Member said 4. It was reasonable in the circumstances of this matter to the applicants to rely upon the professional skill and judgement of the respondent in inspecting the property and reporting as to its condition. The clear purpose of the inspection and report was to allow the applicants to make their decision whether or not to purchase the subject property and, if so, upon what terms, upon a properly informed basis. 5. The respondent seeks to rely upon the liability exclusion provisions which are set out in fine print at the end of the subject report. However, such exclusions cannot operate to exclude statutory liability such as the guarantee provided by section 61 of the Australian Consumer Law. 6. The evidence establishes that there were significant defects in the nature of water leaks and absence of waterproofing at the property which were present at the time of the inspection and the report, which were reasonably discoverable. The resulting report did not properly identify these problems and indicated the evidence of water ingress related to "past" issues. 1. The Member concluded that the service provided by reason of the inspection and report did not meet the guarantee provided in s 61, and the evidence established that the respondents had incurred loss and expense in the amount claimed. 2. We note that in his oral submissions Mr Harmon, solicitor for the appellant, specifically stated that his client did not challenge the finding of the Member set out in par [6] of the decision. We were asked to consider the appeal in this context. We shall return to this matter later in these reasons for decision.