Written by Sindri Bergsson and Sophia Kozlowski
On 19 March 2024, the Supreme Court of New South Wales handed down its decision in Coulter v Bush; Coulter v Domain Residential Northern Beaches Pty Ltd [2024] NSWSC 267.
Ligeti Partners acted for the successful First Defendant and First Cross-Claimant, Peter Alan Bush.
Facts
Bush’s house burnt down while real estate agent Julie Bundock, employed by the real estate agency Domain, was preparing to supervise an open house. The house was tenanted at the time.
The tenants (being the Plaintiffs in the proceedings) initially commenced proceedings in the Local Court against Domain in tort and Bush in contract, for the loss of their contents as a result of the fire. The claim against Bush, which was based on the alleged failure of Bush to give quiet enjoyment of the house, was abandoned by the tenants at the hearing of the matter.
Bush, by cross-claim, sued Domain in tort and under sections 60 and 236 of the Australian Consumer Law for damages, being the cost of restoring the house. Since the cross-claim against Domain exceeded the jurisdiction of the Local Court, the proceedings were transferred to the Supreme Court.
The Supreme Court Judgment
There were two primary defences run by Domain. Firstly, Domain did not accept the evidence proved the fire was caused by the real estate agent placing bed sheets on top of a metal shelf underneath a light and switching on the light. Secondly, even if that was proven, Domain did not accept that the real estate agent was negligent in causing the fire.
It was an agreed fact that some 20 minutes before the fire broke out, the real estate agent had taken a damp quilt cover and two damp queen size bedsheets (the bedding) which had been hanging on a clothesline and put them in a downstairs room on a steel shelf beneath a light fitting, and then turned the light on.
The tenants and Bush contended the real estate agent putting the bedding on the shelf against a wall mounted light caused the material to ignite from the heat generated by the light. Domain argued that, while that was a possibility, it had not been established on the balance of probabilities that this was the cause of the fire.
Cross-Examination of Witnesses
The Court considered the evidence of witnesses, including the tenants, Bush, Bush’s de facto partner Lynne Emanuel, and the real estate agent.
The tenants, Bush and Emanuel, gave evidence of various statements made by the real estate agent contemporaneously with the incident. The evidence indicated she threw the bedding on top of the shelf against the light. Domain made the decision to not cross examine Bush or Emanuel at the hearing, and their evidence was therefore unchallenged.
The real estate agent was cross examined and gave evidence that she carefully draped the bedding over the front of the shelf and did not place any articles on the shelf on top of the bedding to prevent it from falling or sliding off the shelf. The Court did not believe her evidence and considered her an untruthful witness.
Expert Evidence
Bush and Domain each called a forensic fire investigating expert.
Mr Phillip Glover, who was called by Bush, determined the probable origin of the fire was the real estate agent placing the bedding on or near the light and turning it on. Domain’s expert, Peter Jeffrey, found that the cause of fire must be considered undetermined due to a lack of sufficient data.
The Court preferred the opinion of Mr Glover, and held that the real estate agent’s actions were the probable (if not the certain) cause of the fire because there was no basis to conclude that any of the other supposed possible ignition sources were the probable cause of fire. The Court said it would “border on the fanciful” to suggest that, following the real estate agent’s actions, the fire was a mere coincidence.
Decision
The Court entered judgment for the tenants and Ligeti Partners’ client, Bush. Domain was ordered to pay damages to Bush in the sum of $740,842.93 plus interest and costs.
Domain has agreed to pay part of Bush’s costs on an indemnity basis.
Following the Court judgment, the case has received widespread media attention in Australia and globally.
The Takeaways
The Court’s decision is a good example of the type of recovery that can be available to property insurers in circumstances where a real estate agent has acted negligently.
In addition, the case demonstrates that where there is a factual dispute between witnesses, it is imperative to cross examine an opposing witness on the truthfulness of their evidence. If a witness is not cross examined, their evidence on those factual matters is likely to be accepted by the Court as it is unchallenged.
If you wish to discuss this decision, please contact Sindri Bergsson on 02 9044 3263 or any member of our property team.
